UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 13)
America Online Latin America, Inc.
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(Name of Issuer)
Class A Common Stock, par value $0.01 per share
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(Title of Class of Securities)
02365B100
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(CUSIP Number)
Paul T. Cappuccio, Esq.
Executive Vice President and General Counsel
Time Warner Inc.
One Time Warner Center
New York, New York 10019
(212) 484-8000
Copy to:
Peter S. Malloy, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 25, 2005
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box |_|.
CUSIP No. 02365B100 Page 2 of 18
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
Time Warner Inc. 13-4099534
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [x]
(b) [ ]
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3 SEC USE ONLY:
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4 SOURCE OF FUNDS:
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 114,229,758 (1)
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BENEFICIALLY -----------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 136,551,706 (2)
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REPORTING -----------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
114,229,758
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10 SHARED DISPOSITIVE POWER
136,791,706 (3)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
251,021,464
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[x]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
72.5% (4)
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(1) Represents 44,150,105 shares of Class A Common Stock, par value $0.01 per
share ("Class A Common Stock"), of America Online Latin America, Inc.
("AOL-LA") into which (ultimately) the $160,000,000 11% senior convertible
notes owned by Time Warner Inc. ("Time Warner"), are immediately
convertible at an initial conversion price of $3.624 plus 70,079,653 shares
of Class A Common Stock into which (ultimately) 70,079,653 shares of Series
B Redeemable Convertible Preferred Stock ("Series B Preferred Stock") owned
by Time Warner are immediately convertible on a one-for-one basis.
(2) Calculated pursuant to Rule 13d-3, includes (i) 40,169,780 shares of Class
A Common Stock owned by America Online, Inc. ("AOL"), (ii) 79,840,676
shares of Class A Common Stock into which (ultimately) 79,840,676 shares of
Series B Preferred Stock owned by AOL are immediately convertible on a
one-for-one basis and (iii) 16,541,250 shares of Class A Common Stock
issuable upon exercise of AOL's immediately exercisable warrant.
(3) Calculated pursuant to Rule 13d-3, includes the 136,551,706 shares
described in number 8 above plus 240,000 shares of Class A Common Stock
issuable upon exercise of certain stock options issued by AOL-LA.
(4) For purposes of beneficial ownership calculation under Rule 13d-3, the
number of outstanding shares includes: (i) the 135,260,715 shares of Class
A Common Stock outstanding (including 40,169,780 shares of Class A Common
Stock owned by AOL) as of May 10, 2005 based on AOL-LA's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2005, filed on May 16, 2005,
(ii) 79,840,676 shares of Class A Common Stock into which (ultimately)
79,840,676 shares of Series B Preferred Stock owned by AOL are immediately
convertible on a one-for-one basis, (iii) 16,541,250 shares of Class A
Common Stock issuable upon exercise of AOL's immediately exercisable
warrant, (iv) 240,000 shares of Class A Common Stock issuable upon exercise
of certain AOL-LA stock options, (v) 44,150,105 shares of Class A Common
Stock issuable upon conversion of Time Warner's $160,000,000 11% senior
convertible notes and (vi) 70,079,653 shares of Class A Common Stock into
which (ultimately) 70,079,653 shares of Series B Preferred Stock owned by
Time Warner are immediately convertible on a one-for-one basis.
CUSIP No. 02365B100 Page 3 of 18
14 TYPE OF REPORTING PERSON:
HC, CO
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CUSIP No. 02365B100 Page 4 of 18
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
America Online, Inc. 54-1322110
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) [x]
(b) [ ]
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3 SEC USE ONLY:
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4 SOURCE OF FUNDS:
Not Applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
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BENEFICIALLY
8 SHARED VOTING POWER
OWNED BY
136,551,706 (1)
EACH -----------------------------------------------------------
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REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 0
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10 SHARED DISPOSITIVE POWER
136,791,706 (2)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
136,791,706
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ x ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
59.0% (3)
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14 TYPE OF REPORTING PERSON:
CO
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(1) Calculated pursuant to Rule 13d-3, includes (i) 40,169,780 shares of Class
A Common Stock owned by AOL, (ii) 79,840,676 shares of Class A Common Stock
in which (ultimately) 79,840,676 shares of Series B Preferred Stock owned
by AOL are immediately convertible on a one-for-one basis and (iii)
16,541,250 shares of Class A Common Stock issuable upon exercise of AOL's
immediately exercisable warrant.
(2) Calculated pursuant to Rule 13d-3, includes the 136,551,706 shares
described in number 8 above plus 240,000 shares of Class A Common Stock
issuable upon exercise of certain AOL-LA stock options.
(3) For purposes of beneficial ownership calculation under Rule 13d-3, the
number of outstanding shares includes: (i) the 135,260,715 shares of Class
A Common Stock outstanding (including 40,169,780 shares of Class A Common
Stock owned by AOL) as of May 10, 2005 based on AOL-LA's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2005, filed on May 16, 2005,
(ii) 79,840,676 shares of Class A Common Stock into which (ultimately)
79,840,676 shares of Series B Preferred Stock owned by AOL are immediately
convertible on a one-for-one basis, (iii) 16,541,250 shares of Class A
Common Stock issuable (ultimately) upon exercise of AOL's immediately
exercisable warrant and (iv) 240,000 shares of Class A Common Stock
issuable upon exercise of certain AOL-LA stock options.
CUSIP No. 02365B100 Page 5 of 18
Time Warner Inc., a Delaware corporation that was formerly named AOL Time
Warner Inc. ("Time Warner"), and its wholly-owned subsidiary, America Online,
Inc., a Delaware corporation ("AOL") (collectively, the "Reporting Persons"),
hereby file this Amendment No. 13 to amend the statement on Schedule 13D (as so
amended, this "Statement") originally filed on August 22, 2000 and amended on
January 22, 2001 and February 27, 2001, further amended and restated in its
entirety on April 13, 2001 and further amended on April 5, 2002, June 17, 2002,
August 29, 2002, October 18, 2002, January 24, 2003, May 6, 2003, October 14,
2003 and further amended and restated in its entirety on July 16, 2004 and
further amended on January 13, 2005, with respect to the shares of Class A
Common Stock, par value $0.01 per share (the "Class A Common Stock"), of America
Online Latin America, Inc., a Delaware corporation ("AOL-LA"). As provided in
the Joint Filing Agreement filed as Exhibit 7 to Amendment No. 1 filed on
January 22, 2001, the Reporting Persons have agreed pursuant to Rule 13d-1(k)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
file one statement on Schedule 13D with respect to their beneficial ownership of
the Class A Common Stock.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of this Statement is hereby amended by deleting the eighth paragraph
thereof and adding the following in lieu thereof:
In accordance with the terms of the Convertible Notes, on September 30,
2002, December 31, 2002, March 31, 2003, June 30, 2003, September 30, 2003,
December 31, 2003, March 31, 2004, June 30, 2004, September 30, 2004, December
31, 2004 and March 31, 2005, AOL-LA issued 5,681,975, 5,183,668, 10,513,739,
6,962,267, 4,037,502, 3,024,732, 2,878,713, 5,945,725, 10,304,678, 5,772,497 and
9,774,157 shares, respectively, of Series B Preferred Stock to Time Warner as
payment of interest due as of such date on the aggregate principal amount of
Convertible Notes outstanding at such time.
Item 4. Purpose of Transaction
Item 4 of this Statement is hereby amended by deleting the second paragraph
thereof and adding the following in lieu thereof:
AOL and Time Warner, along with the Cisneros Group, exercise their control
over AOL-LA through several instruments and agreements, including (i) a Second
Amended and Restated Stockholders' Agreement, dated as of March 8, 2002, among
AOL, ODC and AOL-LA (the "Second Amended and Restated Stockholders' Agreement"),
(ii) an Amended and Restated Registration Rights and Stockholders' Agreement
(the "Banco Itau Registration Rights Agreement"), dated as of March 30, 2001,
among AOL-LA, the Banco Itau Reporting Persons and, for limited purposes, AOL
and ODC, (iii) AOL-LA's Fifth Restated Certificate of Incorporation, as amended
from time to time (the "Charter"), (iv) AOL-LA's Amended and Restated By-laws
(the "By-laws"), and (v) the Note Purchase Agreement (collectively, the
"Governing Documents"). In addition, AOL has entered into various agreements
relating to the equity securities issued by AOL-LA, including the Stock Purchase
Agreement, the Second Amended and Restated Registration Rights Agreement, dated
as of March 8, 2002, by and among AOL-LA, Time Warner, AOL, Aspen, and Atlantis
(the "Second Amended and Restated AOL-ODC Registration Rights Agreement") (as
described in Item 6 of this Statement) and the
CUSIP No. 02365B100 Page 6 of 18
Letter Agreement, dated as of May 25, 2005, by and among Time Warner, AOL,
Aspen, and Atlantis (the "Liquidation Letter Agreement").
Item 4 of this Statement is hereby further amended by deleting the
seventeenth paragraph thereof and adding the following in lieu thereof:
In its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005
("Form 10-Q"), AOL-LA stated that it had $16.6 million of available cash on hand
as of March 31, 2005 and that its available cash will only be sufficient to fund
operations into the third quarter of 2005. AOL-LA further stated in its Form
10-Q that to continue normal operations beyond such time, it would need an
additional, substantial capital infusion and that it will not be able to obtain
such additional financing from any source.
In the Form 10-Q, AOL-LA discussed the strategic alternatives it has
explored and the potential actions it would take if it is not successful in
completing transactions to sell all or part of its businesses. AOL-LA stated
that if it is not successful in selling its businesses in a timely manner, it
expects to cease operating the businesses and that it may determine that it is
advantageous to file a petition for bankruptcy under the U.S. bankruptcy laws or
other jurisdictions in which it operates businesses. AOL-LA stated that any such
voluntary filing would require the consent of its Series B Preferred Stock and
Series C Preferred Stock, in addition to the authorization of its Board of
Directors.
In connection with AOL-LA's stated inability to fund its operations beyond
the third quarter of 2005 and its statements that it expects to sell its
businesses or cease operating them and that it potentially would file a petition
under U.S. bankruptcy laws, the Reporting Persons and ODC began negotiating the
terms of an agreement for their mutual cooperation regarding the wind-down of
AOL-LA. Accordingly, on May 25, 2005, the Reporting Persons and ODC entered into
the Liquidation Letter Agreement, which sets forth the terms and conditions on
which the Reporting Persons and ODC would support the wind-down of AOL-LA.
Pursuant to the Liquidation Letter Agreement, the Reporting Persons and ODC
agreed to cooperate with and support AOL-LA's management in the implementation
of a wind-down and liquidation plan, and agreed to cause their respective
representatives on AOL-LA's Board of Directors, subject to their fiduciary
obligations, to take all necessary actions to implement and execute such plan.
Essentially, the Reporting Persons and ODC agreed that, after distributions on
account of (or reservation for payment of) operating and wind-down expenses,
including Chapter 11 administrative expenses and other priority claims required
to be paid, and certain general unsecured claims against AOL-LA (excluding any
general unsecured claims of AOL against AOL-LA), the proceeds of the liquidation
would be split on a 60-40 basis, with the Reporting Persons receiving 60% of the
distributions and ODC receiving 40% of the distributions. Additionally, the
Reporting Persons agreed to assume ownership of AOL-LA's Puerto Rico assets at
an agreed upon net value of $15 million (subject to certain working capital and
other adjustments as described in the Liquidation Letter Agreement). In exchange
for the Reporting Persons receiving this "value" attributable to AOL-LA's Puerto
Rico assets, ODC would be entitled to receive the first actual dollars generated
by the liquidation of AOL-LA's other assets in an amount up to 40% of the
difference between (x) the value of the Puerto Rico assets and (y) the amount of
general unsecured claims of AOL against AOL-LA. Thus, after the payment of the
unsecured creditor and priority claims described above, the Reporting Persons
would receive 60% of the value generated by the liquidation (including the
Puerto Rico assets, in
CUSIP No. 02365B100 Page 7 of 18
respect of which the Reporting Persons would assume ownership), while ODC would
receive 40% of the value generated by the liquidation. The Reporting Persons and
ODC expect to continue discussions of more detailed terms in connection with a
wind-down of AOL-LA and its businesses consistent with the broader terms of the
Liquidation Letter Agreement, and may enter into additional agreements,
instruments or term sheets to set forth such detailed terms.
The Liquidation Letter Agreement does not require AOL-LA to wind-down or to
file a bankruptcy petition and is not binding on AOL-LA, which is not a party to
the agreement. It is an agreement between the Reporting Persons and ODC. Any
decision to cease operations and begin the wind-down of the businesses of AOL-LA
or for AOL-LA to file a petition in bankruptcy under U.S. insolvency laws would
be made by the Board of Directors of AOL-LA with the consent of the Reporting
Persons and ODC.
Item 4 of this Statement is hereby further amended by deleting the last
paragraph thereof and adding the following in lieu thereof:
References to, and descriptions of, the Note Purchase Agreement, the
Convertible Notes, the Charter, the By-laws, the Second Amended and Restated
AOL-ODC Registration Rights Agreement, the Second Amended and Restated
Stockholders Agreement, the Banco Itau Registration Rights Agreement and the
Liquidation Letter Agreement are qualified in their entirety by reference to the
copies of such documents filed as exhibits to this Statement, and are
incorporated in this Item 4 in their entirety where such references and
descriptions appear.
Item 5. Interest in Securities of the Issuer
Item 5 of this Statement is hereby amended and restated to read in its
entirety as follows:
The information set forth or incorporated by reference in Items 2, 3, 4, 6
and 7 is hereby incorporated herein by reference.
As of May 10, 2005, based on AOL-LA's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2005, filed on May 16, 2005, there were 135,260,715
shares of Class A Common Stock outstanding. No shares of AOL-LA's Class B Common
Stock or Class C Common Stock were outstanding. For purposes of Rule 13d-3 under
the Exchange Act, the Class A Common Stock issuable, directly or indirectly,
upon conversion of the Series B Preferred Stock currently held by AOL, upon
exercise of the AOL Warrant, and upon exercise by the Employees (defined below)
of their options, (i) with respect to percentage ownership calculations made
herein for AOL, increase the number of shares of Class A Common Stock
outstanding to 231,882,641(1) and (ii) together with the 114,229,758 shares of
Class A Common Stock issuable, directly or indirectly, upon conversion of (x)
the Convertible Notes and (y) the 70,079,653 shares of Series B Preferred Stock
issued to Time Warner by AOL-LA as payment of interest due on the Convertible
Notes with respect to percentage ownership calculations made
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(1) Includes (i) the 135,260,715 shares of Class A Common Stock outstanding
(including 40,169,780 shares of Class A Common Stock owned by AOL), (ii)
79,840,676 shares of Class A Common Stock into which (ultimately)
79,840,676 shares of Series B Preferred Stock owned by AOL are immediately
convertible on a one-for-one basis, (iii) 16,541,250 shares of Class A
Common Stock issuable upon exercise of AOL's immediately exercisable
warrant and (iv) 240,000 shares of Class A Common Stock issuable upon
exercise of certain AOL-LA stock options.
CUSIP No. 02365B100 Page 8 of 18
herein for Time Warner, increase the number of Class A Common Stock outstanding
to 346,112,399.
As of the date hereof, the Reporting Persons (i) beneficially own
40,169,780 shares of Class A Common Stock held by AOL and (ii) pursuant to Rule
13d-3(a) promulgated under the Exchange Act, may be deemed to beneficially own
an additional 96,381,926 shares of Class A Common Stock, which are issuable upon
conversion, directly or indirectly, of all of the shares of Series B Preferred
Stock held by AOL and upon exercise of the AOL Warrant. Shares of Series B
Preferred Stock are convertible into shares of Class B Common Stock at any time,
initially on a one-for-one basis, and such Class B Common Stock is convertible
into Class A Common Stock at any time, initially on a one-for-one basis.
Pursuant to Rule 13d-3(a) promulgated under the Exchange Act, the Reporting
Persons may also be deemed to beneficially own options to purchase an aggregate
of 240,000 shares of Class A Common Stock. As stated in Item 6 below, upon
consummation of the Offering, J. Michael Kelly and Gerald Sokol, Jr., employees
of AOL, were each granted an option to purchase 60,000 shares of Class A Common
Stock in connection with their appointment to the Board. In addition, David Gang
and Joseph A. Ripp, employees of AOL, were each granted an option to purchase
60,000 shares of Class A Common Stock in connection with their subsequent
appointment to the Board. On December 20, 2004, J. Michael Kelly and Joseph A.
Ripp resigned as members of the Board and, in connection therewith, the options
to purchase shares of Class A Common Stock issued to them expired on February
18, 2005. Joseph M. Redling and Neil Smit, employees of AOL (each an "Employee"
and along with Messrs. Gang and Sokol, the "Employees"), were appointed to fill
the vacancies created by the resignations of Messrs. Kelly and Ripp. Messrs.
Redling and Smit were each granted an option to purchase 60,000 shares of Class
A Common Stock in connection with their appointment to the Board. On May 17,
2005, David Gang resigned as a member of the Board and, in connection therewith,
the options to purchase shares of Class A Common Stock issued to him will expire
on or around July 16, 2005. Under the Reporting Persons' conflicts of interest
standards, each such Employee must transfer the economic benefit of his options
to AOL. Although each such Employee is the record holder of the option, AOL and
Time Warner hold or share the disposition power with respect to all of the
shares of Class A Common Stock underlying the options. The filing of this
Statement and any amendment, however, shall not be construed as an admission for
the purposes of Sections 13(d) and 13(g) of the Exchange Act and Regulation
13D-G promulgated thereunder that any of such Employees is the beneficial owner
of any securities of AOL-LA other than the options and shares of Class A Common
Stock underlying the options issued to such Employee.
Pursuant to Rule 13d-3(a) promulgated under the Exchange Act, Time Warner
may also be deemed to beneficially own an additional 114,229,758 shares of Class
A Common Stock which are issuable upon conversion, directly or indirectly, of
(i) the Convertible Notes at the conversion price of $3.624 per share, as the
same may be adjusted in accordance with the terms of the Convertible Notes and
(ii) the shares of Series B Preferred Stock issued to Time Warner by AOL-LA as
payment of interest due on the Convertible Notes. As further described in Item
6, the Convertible Notes are convertible at any time into Applicable Shares (as
defined in Item 6 of this Statement), which may be shares of Series B Preferred
Stock or Class A Common Stock, in any case at a conversion price of $3.624 per
share.
CUSIP No. 02365B100 Page 9 of 18
AOL and Time Warner have shared power to vote and dispose of 40,169,780
shares of Class A Common Stock held by AOL, the 79,840,676 shares of Class A
Common Stock issuable upon conversion, directly or indirectly, of all of the
Series B Preferred Stock held by AOL, and 16,541,250 shares of Class A Common
Stock issuable upon exercise of the AOL Warrant. AOL and Time Warner share the
power to dispose of the 240,000 shares of Class A Common Stock issuable upon
exercise of the stock options that were granted to the Employees. Time Warner
has sole power to vote and dispose of the 114,229,758 shares of Class A Common
Stock that are issuable upon conversion, directly or indirectly, of both the
Convertible Notes acquired by Time Warner pursuant to the Note Purchase
Agreement and the shares of Series B Preferred Stock issued to Time Warner as
payment of interest due on the Convertible Notes.
Consequently, under Rule 13d-3(a), upon conversion of the B Stock held by
AOL, the exercise of the AOL Warrant and the exercise of the stock options
granted to the Employees, AOL would beneficially own 136,791,706 shares of Class
A Common Stock in the aggregate, or approximately 59.0% of the 231,882,641
shares of Class A Common Stock that would be issued and outstanding. Upon
conversion of the B Stock held by AOL, the exercise of the AOL Warrant, the
exercise of the stock options granted to the Employees, the conversion of the B
Stock held by Time Warner and the conversion of the Convertible Notes, Time
Warner would beneficially own 251,021,464 shares of Class A Common Stock in the
aggregate, or approximately 72.5% of the 346,112,399 shares of Class A Common
Stock that would be issued and outstanding. However, assuming (i) the conversion
of all B Stock and C Stock, (ii) the conversion of all of the Convertible Notes
and (iii) the exercise and conversion of all outstanding warrants and stock
options held by the Reporting Persons and the Cisneros Group, AOL and Time
Warner would beneficially own approximately 32.1% and 59.0%, respectively, of
the 425,751,101 shares of Class A Common Stock of AOL-LA that would be issued
and outstanding.
Pursuant to Rule 13d-5(b)(1) promulgated under the Exchange Act, to the
extent a "group" is deemed to exist by virtue of the Second Amended and Restated
Stockholders' Agreement and the Second Amended and Restated AOL-ODC Registration
Rights Agreement (each as defined in Item 6 of this Statement), the Reporting
Persons may be deemed to have beneficial ownership, for purposes of Sections
13(d) and 13(g) of the Exchange Act, of all of the equity securities of AOL-LA
beneficially owned by the Cisneros Group. According to the Cisneros Group's
Amendment No. 6 to the statement on Schedule 13D filed on January 17, 2003,
members of the Cisneros Group individually beneficially own 35,895,292 shares of
Class A Common Stock, 79,518,702 shares of Series C Preferred Stock, which
represents all of such Series C Preferred Stock outstanding, and currently
exercisable options to purchase 120,000 shares of Class A Common Stock. Shares
of Series C Preferred Stock are convertible into AOL-LA's Class C Common Stock
at any time, initially on a one-for-one basis, and such Class C Common Stock is
convertible into Class A Common Stock at any time, initially on a one-for-one
basis. Consequently, upon conversion of the C Stock and the exercise of the
options held by the Cisneros Group, the Cisneros Group would beneficially own an
aggregate of 115,533,994 shares of Class A Common Stock. Such beneficial
ownership represents approximately 27.1% of the 425,751,101 shares of Class A
Common Stock that would be issued and outstanding, assuming (i) the conversion
of all B Stock and C Stock, (ii) the conversion of all of the Convertible Notes
and (iii) the exercise and conversion of all outstanding warrants and stock
options held by the Reporting Persons and the Cisneros Group. The Cisneros Group
has sole power to vote and dispose of its 35,895,292 shares of Class A Common
Stock, 79,518,702 shares of Series C
CUSIP No. 02365B100 Page 10 of 18
Preferred Stock and currently exercisable options to purchase 120,000 shares of
Class A Common Stock. The Reporting Persons disclaim beneficial ownership of any
AOL-LA securities owned directly or indirectly by the Cisneros Group.
Pursuant to Rule 13d-5(b)(1) promulgated under the Exchange Act, to the
extent a "group" is deemed to exist by virtue of the Banco Itau Registration
Rights Agreement, the Reporting Persons may be deemed to have beneficial
ownership, for purposes of Sections 13(d) and 13(g) of the Exchange Act, of all
of the equity securities of AOL-LA beneficially owned by the Banco Itau
Reporting Persons. According to Banco Itau's Amendment No. 10 to the statement
on Schedule 13D filed on November 12, 2003, Banco Itau beneficially owns
35,937,840 shares of Class A Common Stock. Such beneficial ownership represents
approximately 8.4% of the 425,751,101 shares of Class A Common Stock that would
be issued and outstanding, assuming (i) the conversion of all B Stock and C
Stock, (ii) the conversion of all of the Convertible Notes and (iii) the
exercise and conversion of all outstanding warrants and stock options held by
the Reporting Persons and the Cisneros Group. The Reporting Persons disclaim
beneficial ownership of any AOL-LA securities owned directly or indirectly by
the Banco Itau Reporting Persons.
Other than as set forth herein, to the best of the Reporting Persons'
knowledge as of the date hereof, (i) neither the Reporting Persons nor any
subsidiary or affiliate of the Reporting Persons nor any of the Reporting
Persons' executive officers or directors, beneficially owns any shares of Class
A Common Stock, and (ii) there have been no transactions in the shares of Class
A Common Stock effected during the past 60 days by the Reporting Persons, nor to
the best of the Reporting Persons' knowledge, by any subsidiary or affiliate of
the Reporting Persons or any of the Reporting Persons' executive officers or
directors.
References to, and descriptions of, the Note Purchase Agreement, the
Convertible Notes, the Second Amended and Restated AOL-ODC Registration Rights
Agreement, the Second Amended and Restated Stockholders Agreement and the Banco
Itau Registration Rights Agreement are qualified in their entirety by reference
to the copies of such documents included as exhibits to this Statement and are
incorporated in this Item 5 in their entirety where such references and
descriptions appear.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer
Item 6 of this Statement is hereby amended by deleting the second paragraph
thereof and adding the following in lieu thereof:
Upon consummation of the Offering, J. Michael Kelly and Gerald Sokol, Jr.,
employees of AOL, were each granted an option to purchase 60,000 shares of Class
A Common Stock in connection with their appointment to the Board at the offering
price of $8.00. In addition, David Gang and Joseph A. Ripp, employees of AOL,
were each granted an option to purchase 60,000 shares of Class A Common Stock in
connection with their subsequent appointment to the Board at the exercise price
of $0.98 and $1.49, respectively. On December 20, 2004, J. Michael Kelly and
Joseph A. Ripp resigned as members of the Board and, in connection therewith,
the options to purchase shares of Class A Common Stock issued to them expired on
February 18, 2005. Joseph M. Redling and Neil Smit, employees of AOL, were
appointed to fill the vacancies created by the resignations of Messrs. Kelly and
Ripp. Messrs.
CUSIP No. 02365B100 Page 11 of 18
Redling and Smit were each granted an option to purchase 60,000 shares of Class
A Common Stock in connection with their appointment to the Board at the exercise
price of $0.85. On May 17, 2005, David Gang resigned as member of the Board and,
in connection therewith, the options to purchase shares of Class A Common Stock
issued to him will expire on or around July 16, 2005.
Item 6 of this Statement is hereby further amended by deleting the
fourteenth paragraph thereof and adding the following in lieu thereof:
Pursuant to the Liquidation Letter Agreement, the Reporting Persons and ODC
agreed to cooperate with and support AOL-LA's management in the implementation
of a wind-down and liquidation plan, and agreed to cause their respective
representatives on AOL-LA's Board of Directors, subject to their fiduciary
obligations, to take all necessary actions to implement and execute such plan.
Essentially, the Reporting Persons and ODC agreed that, after distributions on
account of (or reservation for payment of) operating and wind-down expenses,
including Chapter 11 administrative expenses and other priority claims required
to be paid, and certain general unsecured claims against AOL-LA (excluding any
general unsecured claims of AOL against AOL-LA), the proceeds of the liquidation
would be split on a 60-40 basis, with the Reporting Persons receiving 60% of the
distributions and ODC receiving 40% of the distributions. Additionally, the
Reporting Persons agreed to assume ownership of AOL-LA's Puerto Rico assets at
an agreed upon net value of $15 million (subject to certain working capital and
other adjustments as described in the Liquidation Letter Agreement). In exchange
for the Reporting Persons receiving this "value" attributable to AOL-LA's Puerto
Rico assets, ODC would be entitled to receive the first actual dollars generated
by the liquidation of AOL-LA's other assets in an amount up to 40% of the
difference between (x) the value of the Puerto Rico assets and (y) the amount of
general unsecured claims of AOL against AOL-LA. Thus, after the payment of the
unsecured creditor and priority claims described above, the Reporting Persons
would receive 60% of the value generated by the liquidation (including the
Puerto Rico assets, in respect of which the Reporting Persons would assume
ownership), while ODC would receive 40% of the value generated by the
liquidation. The Reporting Persons and ODC expect to continue discussions of
more detailed terms in connection with a wind-down of AOL-LA and its businesses
consistent with the broader terms of the Liquidation Letter Agreement, and may
enter into additional agreements, instruments or term sheets to set forth such
detailed terms.
The Liquidation Letter Agreement does not require AOL-LA to wind-down or to
file a bankruptcy petition and is not binding on AOL-LA, which is not a party to
the agreement. It is an agreement between the Reporting Persons and ODC. Any
decision to cease operations and begin the wind-down of the businesses of AOL-LA
or for AOL-LA to file a petition in bankruptcy under U.S. insolvency laws would
be made by the Board of Directors of AOL-LA.
References to, and descriptions of, the Note Purchase Agreement, the
Convertible Notes, the Charter, the By-laws, the Second Amended and Restated
AOL-ODC Registration Rights Agreement, the Second Amended and Restated
Stockholders Agreement, the Banco Itau Registration Rights Agreement and the
Liquidation Letter Agreement are qualified in their entirety by reference to the
copies of such documents filed as exhibits to this Statement, which are
incorporated in this Item 6 in their entirety where such references and
descriptions appear.
CUSIP No. 02365B100 Page 12 of 18
Item 7. Material to be Filed as Exhibits
Item 7 of this Statement is hereby amended and restated to read in its
entirety as follows:
Exhibit Description
Number
1. America Online Latin America, Inc.'s Fifth Restated Certificate
of Incorporation (filed as Exhibit 3.1 to America Online Latin
America, Inc.'s Quarterly Report on Form 10-Q filed on August
16, 2004 and incorporated by reference herein).
2. Amendment to America Online Latin America, Inc.'s Fifth Restated
Certificate of Incorporation (filed as Exhibit 99.1 to America
Online Latin America's Current Report on Form 8-K filed on May
5, 2005 and incorporated by reference herein).
3. America Online Latin America, Inc.'s Amended and Restated
By-laws (filed as Exhibit 3.2 to America Online Latin America,
Inc.'s Quarterly Report on Form 10-Q filed on August 14, 2002
and incorporated by reference herein).
4. Note Purchase Agreement, dated as of March 8, 2002, by and
between America Online Latin America, Inc. and Time Warner Inc.
(filed as Exhibit 99.2 to America Online Latin America, Inc.'s
Current Report on Form 8-K filed on March 11, 2002 and
incorporated by reference herein).
5. Amendment No. 1 to the Note Purchase Agreement, dated as of May
20, 2002, between Time Warner Inc. and America Online Latin
America, Inc. (filed as Exhibit 14 to the Reporting Persons'
Amendment No. 6 to Schedule 13D filed on August 29, 2002 and
incorporated by reference herein).
6. Form of Initial Note (filed as Exhibit 10.35 to America Online
Latin America, Inc.'s Annual Report on Form 10-K filed on April
1, 2002 and incorporated by reference herein).
7. Second Amended and Restated Stockholders' Agreement, dated as of
March 8, 2002, by and among America Online, Inc., Aspen
Investments LLC, Atlantis Investments, LLC and America
Online Latin America, Inc. and, for limited purposes, Time
Warner Inc. (filed as Exhibit 10.2 to America Online Latin
America, Inc.'s Annual Report on Form 10-K filed on April 1,
2002 and incorporated by reference herein. Portions of such
Exhibit have been omitted and have been filed separately by AOL-
LA with the Securities and Exchange Commission pursuant
to a request for confidential treatment).
8. Second Amended and Restated Registration Rights Agreement, dated
as of March 8, 2002, by and among America Online Latin America,
Inc., AOL Time Warner Inc., America Online, Inc., Aspen
Investments LLC, and Atlantis Investments LLC. (filed as Exhibit
10.4 to America Online Latin
CUSIP No. 02365B100 Page 13 of 18
America, Inc.'s Annual Report on Form 10-K filed on April 1,
2002 and incorporated by reference herein).
9. Amended and Restated Registration Rights and Stockholders'
Agreement, dated as of March 30, 2001, by and among America
Online Latin America, Inc., Banco Itau S.A., Banco Banerj S.A.,
Banco Itau S.A.-Cayman Branch, Itau Bank Limited, and for
purposes of certain sections thereof, America Online, Inc.,
Atlantis Investments LLC, and Aspen Investments LLC. (filed as
Exhibit 2 to the Reporting Persons' Amendment No. 3 to Schedule
13D filed on April 13, 2001 and incorporated by reference
herein).
10. Stock Purchase Agreement, dated as of March 30, 2001, by and
among America Online Latin America, Inc., America Online, Inc.,
Aspen Investments LLC, Atlantis Investments LLC, and Banco Itau,
S.A.-Cayman Branch. (filed as Exhibit 8 to the Reporting
Persons' Amendment No. 3 to Schedule 13D filed on April 13, 2001
and incorporated by reference herein).
11. Joint Filing Agreement, dated as of January 22, 2001, between
Time Warner Inc. and America Online, Inc. (filed as Exhibit 7 to
the Reporting Persons' Amendment No. 1 to Schedule 13D filed on
January 22, 2001 and incorporated by reference herein).
12. Letter Agreement, dated as of May 25, 2005, between Time Warner
Inc., America Online, Inc., Aspen Investments LLC and Atlantis
Investments LLC.
CUSIP No. 02365B100 Page 14 of 18
SIGNATURES
----------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: June 7, 2005
TIME WARNER INC.
By: /s/ Wayne H. Pace
----------------------------------------
Name: Wayne H. Pace
Title: Executive Vice President and Chief
Financial Officer
AMERICA ONLINE, INC.
By: /s/ Stephen M. Swad
----------------------------------------
Name: Stephen M. Swad
Title: Executive Vice President and
Chief Financial Officer
CUSIP No. 02365B100 Page 15 of 18
SCHEDULE I
ADDRESSES OF THE CISNEROS GROUP AND THE BANCO ITAU
REPORTING PERSONS
------------------
Atlantis Investments LLC
c/o Finser Corporation
550 Biltmore Way, Suite 900
Coral Gables, FL 33134
Aspen Investments LLC
c/o Finser Corporation
550 Biltmore Way, Suite 900
Coral Gables, FL 33134
Banco Itau S.A.
Praca Alfredo Egydio de Souza Aranha, 100
Torre Itausa, Parque Jabaquara
04344-902 Sao Paulo (SP), Brazil
Banco Banerj S.A.
Rua da Alfandega, 28 - 9 andar
20070-000 Rio de Janeiro (RJ), Brazil
Itau Bank Ltd.
P.O. Box 2587 - GT
Ansbacher House - 3rd Floor
20 Genesis Close, Georgetown
Grand Cayman, Cayman Islands, B.W.I.
Banco Itau S.A.- Grand Cayman Branch
P.O. Box 2582 - GT
Ansbacher House - 3rd Floor
20 Genesis Close, Georgetown
Grand Cayman, Cayman Islands, B.W.I.
CUSIP No. 02365B100 Page 16 of 18
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF TIME WARNER
-------------------------------------------------
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
Time Warner. Unless otherwise noted, each such person is a U.S. citizen, and the
business address of each such person is One Time Warner Center, New York, New
York 10019.
Board of Directors
------------------
Name and Title Present Principal Occupation
------------- ----------------------------
Richard D. Parsons Chairman of the Board and Chief Executive
Officer; Time Warner Inc.
Kenneth J. Novack Senior Counsel;
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo PC (law firm)
James L. Barksdale President and Chairman of the Board;
Barksdale Management Corporation
800 Woodland Parkway, Suite 118
Ridgland, MS 39157
Stephen F. Bollenbach Co-Chairman and Chief Executive Officer;
Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
Stephen M. Case Chairman and Chief Executive Officer;
Revolution LLC
1718 M Street, NW
Washington, D.C. 20036
Frank J. Caufield Co-Founder;
Kleiner Perkins Caufield & Byers
Four Embarcadero Center
San Francisco, CA 94111
(a venture capital partnership)
Robert C. Clark Distinguished Service Professor;
Harvard University
1575 Massachusetts Avenue
Cambridge, MA 02138
Jessica P. Einhorn Dean; Paul H. Nitze School of Advanced
International Studies
of John Hopkins University
The Nitze Building
1740 Massachusetts Ave, NW
Washington, D.C. 20036
Miles R. Gilburne Managing Member; ZG Ventures L.L.C.
1250 Connecticut Avenue
Washington, D.C. 20036
CUSIP No. 02365B100 Page 17 of 18
Carla A. Hills Chairman and Chief Executive Officer;
Hills & Company
1200 19th Street, NW
Washington, D.C. 20036
(international trade and investment
consultants)
Reuben Mark Chairman and Chief Executive Officer;
Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022
(consumer products)
Michael A. Miles Former Chairman of the Board and Chief
Executive Officer;
Phillip Morris Companies Inc.;
Director of Various Companies
R.E. Turner Founder; Turner Broadcasting System, Inc.
Francis T. Vincent, Jr. Chairman; Vincent Enterprises
290 Harbor Drive
Stamford, CT 06902
(a private investment firm)
Deborah C. Wright Chairman of the Board, President and
Chief Executive Officer;
Carver Bancorp, Inc. and Carver Federal
Savings Bank
75 West 125 Street
New York, NY 10027-4512
Executive Officers Who Are Not Directors
----------------------------------------
Name Title and Present Principal Occupation
---- --------------------------------------
Jeffrey L. Bewkes Chairman, Entertainment & Networks Group; Time
Warner Inc.
Don Logan Chairman, Media & Communications Group; Time
Warner Inc.
Edward I. Adler Executive Vice President, Corporate
Communications; Time Warner Inc.
Paul T. Cappuccio Executive Vice President and General Counsel;
Time Warner Inc.
Patricia Fili-Krushel Executive Vice President, Administration;
Time Warner Inc.
Robert M. Kimmitt Executive Vice President, Global & Strategic
Policy; Time Warner Inc.
Olaf Olafsson Executive Vice President; Time Warner Inc. *
Wayne H. Pace Executive Vice President and Chief Financial
Officer; Time Warner Inc.
* Citizen of Iceland.
CUSIP No. 02365B100 Page 18 of 18
SCHEDULE III
DIRECTORS AND EXECUTIVE OFFICERS OF AMERICA ONLINE, INC.
--------------------------------------------------------
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
America Online, Inc. Unless otherwise noted, each such person is a U.S. citizen,
and the business address of each such person is 22000 AOL Way, Dulles, Virginia
20166.
Board of Directors
------------------
Name and Title Present Principal Occupation
-------------- ----------------------------
Don Logan Chairman, Media & Communications Group;
Time Warner Inc.
One Time Warner Center
New York, New York 10019
Jonathan F. Miller Chairman and Chief Executive Officer;
America Online, Inc.
Wayne H. Pace Executive Vice President and Chief Financial
Officer;
Time Warner Inc.
One Time Warner Center
New York, New York 10019
Executive Officers Who Are Not Directors
----------------------------------------
Theodore J. Leonsis Vice Chairman and President, AOL Audience Business
John M. Buckley Executive Vice President, Corporate Communications
Stephen M. Swad Executive Vice President and Chief Financial Officer
Randall J. Boe Executive Vice President, General Counsel and
Secretary
John A. McKinley Chief Technology Officer and President, AOL Digital
Services Business
Lance Miyamoto Executive Vice President, Human Resources
Joseph M. Redling Chief Marketing Officer
Michael J. Kelly President, Media Networks
James P. Bankoff Executive Vice President, AOL Audience Business
Michael G. Barrett Executive Vice President, AOL Audience Business
Kevin Conroy Executive Vice President, AOL Audience Business
Joel M. Davidson Executive Vice President, AOL Access Business
Mark. J. Greatrex Executive Vice President, AOL Access Business
Carol J. Kline Chief Information Officer
Matthew R. Korn Executive Vice President, Network Operations
David A. Lebow Executive Vice President, AOL Audience Business
Neil Smit President, AOL Access Business
Gerald Sokol, Jr. Executive Vice President, AOL Access Business
Thomas R. Colan Senior Vice President, Controller and Treasurer