Exhibit 10.20
EXECUTION COPY
STOCK PURCHASE AGREEMENT
between
STARMEDIA NETWORK, INC.
and
NATIONAL BROADCASTING COMPANY, INC.
Dated as of May 4, 1999
TABLE OF CONTENTS
Page
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ARTICLE I
THE PURCHASED SHARES
Section 1.1 Issuance, Sale and Delivery of the Purchased Shares 1
Section 1.2 Closing 1
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1 Organization; Corporate Power 1
Section 2.2 Authorization of Agreement 2
Section 2.3 Validity 2
Section 2.4 Authorized Capital Stock 2
Section 2.5 Financial Statements 2
Section 2.6 Litigation; Compliance with Law 3
Section 2.7 Intellectual Property 3
Section 2.8 Taxes 3
Section 2.9 Governmental Approvals 3
Section 2.10 Brokers 4
Section 2.11 Foreign Corrupt Practices Act 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Section 3.1 Organization Corporate Power 4
Section 3.2 Authorization of Agreements 4
Section 3.3 Validity 5
Section 3.4 Accredited Investor 5
Section 3.5 Sufficient Knowledge 5
Section 3.6 Investment 5
Section 3.7 No Registration 5
Section 3.8 Brokers 5
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
AND THE COMPANY
Section 4.1 Conditions to the Obligations of the Purchaser on the
Closing Date 5
(a) Representations and Warranties to be True and Correct 6
(b) Performance 6
(c) Supporting Documents 6
(d) Registration Rights Agreement 6
Section 4.2 Condition to the Obligations of the Company on the
Closing Date 7
(a) Representations and Warranties to be True and Correct 7
(b) Performance 7
(c) Lockup Agreement 7
ARTICLE V
MISCELLANEOUS
Section 5.1 Registration Rights Agreement 7
Section 5.2 Lockup Agreement 7
Section 5.3 Expenses 7
Section 5.4 Brokerage 7
Section 5.5 Notices 7
Section 5.6 Governing Law 8
Section 5.7 Entire Agreement 8
Section 5.8 Counterparts 8
Section 5.9 Amendments 8
Section 5.10 Severability 8
Section 5.11 Titles and Subtitles 8
Section 5.12 Certain Defined Terms 8
STOCK PURCHASE AGREEMENT dated as of May 4, 1999, between StarMedia
Network, Inc., a Delaware corporation (the "Company"), and National
Broadcasting Company, Inc. (the "Purchaser").
WHEREAS, the Company wishes to issue and sell to the Purchaser an
aggregate of 454,545 shares (the "Purchased Shares") of the authorized but
unissued common stock, $0.001 par value, of the Company (the "Common Stock");
and
WHEREAS, the Purchaser wishes to purchase the Purchased Shares on the
terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
THE PURCHASED SHARES
ISSUANCE, SALE AND DELIVERY OF THE PURCHASED SHARES.
The Company agrees to issue and sell to the Purchaser, and the Purchaser
hereby agrees to purchase from the Company, the Purchased Shares in exchange
for an amount equal to $5,000,000 (the "Purchase Price").
CLOSING.
The closing (the "Closing") shall take place at the offices of Winthrop,
Stimson, Putnam and Roberts, One Battery Park Plaza, New York, New York 10004
on May 5, 1999, at 10:00 a.m., New York time, or at such other date and time
as may be agreed upon between the Purchaser and the Company (the "Closing
Date").
At the Closing, the Company shall issue and deliver to the Purchaser a
stock certificate or certificates in definitive form, registered in the name
of the Purchaser representing the Purchased Shares. As payment in full for
the Purchased Shares, and against delivery of the stock certificate or
certificates therefor as aforesaid, on the Closing Date the Purchaser shall
deliver to the Company the Purchase Price, payable by (i) delivery to the
Company of a certified check payable to the order of the Company, or (ii)
wire transfer of immediately available funds to the account of the Company.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that, except as set
forth in the Disclosure Schedule attached as SCHEDULE I:
ORGANIZATION; CORPORATE POWER.
The Company and each of its subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the corporate power and
authority to execute and deliver this Agreement, and perform its obligations
hereunder.
AUTHORIZATION OF AGREEMENT.
The execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations hereunder have been duly
authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government, any
agreement, instrument, judgement, decree, statute, regulation, rule (except
to the extent that any violation of the foregoing would not have a Material
Adverse Effect (as defined in Section 2.6)), the Certificate of Incorporation
of the Company, as amended (the "Charter"), or the By-laws of the Company, as
amended.
The Purchased Shares have been duly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued, fully
paid and nonassessable shares of Common Stock and will be free and clear of
all liens, charges, restrictions, claims and encumbrances imposed by or
through the Company.
VALIDITY.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by general equitable principles.
AUTHORIZED CAPITAL STOCK.
The authorized capital stock of the Company consists of (i) 60,000,000
shares of Preferred Stock, $0.001 par value (the "Preferred Stock"), of which
7,330,000 shares have been designated Series A Convertible Preferred Stock,
8,000,000 shares have been designated Series B Convertible Preferred Stock
and 16,666,667 shares have been designated Series C Convertible Preferred
Stock, and (ii) 100,000,000 shares of Common Stock, $0.001 par value. Prior
to the Closing and to any other sale of Common Stock occurring on the Closing
Date, (A) 13,245,181 shares of Common Stock will be validly issued and
outstanding, fully paid and nonassessable,
(B) 7,330,000 shares of Series A Convertible Preferred Stock, 8,000,000 shares
of Series B Convertible Preferred Stock and 16,666,667 shares of Series C
Convertible Preferred Stock will be validly issued and outstanding, fully paid
and non-assessable, all of which were issued in compliance with all applicable
Federal and state securities laws. An aggregate of 31,996,667 shares of Common
Stock has been reserved for issuance upon conversion of the Series C Convertible
Preferred Stock, the Series B convertible Preferred Stock and the Series A
Convertible Preferred Stock. Options to purchase 8,579,100 shares of Common
Stock have been granted and are currently outstanding. The designations, powers,
preferences, rights, qualifications, limitation and restrictions in respect of
each class and series of authorized capital stock of the Company are as set
forth in the Charter. Subject to the accuracy of the representations and
warranties of the Purchaser set forth in Article III, all of the Purchased
Shares are being issued in compliance with all applicable Federal and state
securities laws.
FINANCIAL STATEMENTS.
The Company has furnished to the Purchaser (i) the audited balance sheet of
the Company as of December 31, 1998 (the "Balance Sheet"), and the related
audited statements of income and stockholders' equity for the year then ended,
and (ii) the unaudited balance sheet of the Company as of March 30, 1999 and the
related unaudited statements of income and stockholders' equity for the three
months then ended (the "Unaudited Balance Sheet"). All such financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the financial position and results of
operation of the Company and its subsidiaries, on a consolidated basis, for and
as of the dates set forth therein. Since the date of the Unaudited Balance
Sheet, there has been no material adverse change in the assets, liabilities or
financial condition of the Company and its subsidiaries, on a consolidated
basis, from that reflected in the Unaudited Balance Sheet, except for changes in
the ordinary course of business.
LITIGATION; COMPLIANCE WITH LAW.
There is no action, suit, claim or proceeding pending or, to the Company's
knowledge, threatened against the Company or any of its subsidiaries, at law or
in equity, or before or by any foreign or domestic Federal, state, municipal or
other governmental department, commission, board, bureau agency or
instrumentality, except to the extent that any of the foregoing, if determined
adversely to the Company or its subsidiaries, would not have a material and
adverse effect on the business, financial condition, operations or property of
the Company ("Material Adverse Effect"). The Company and each of its
subsidiaries (i) has complied with all foreign and domestic laws, rules,
regulations and orders applicable to its business, operations, properties,
assets, products and services, (ii) has all necessary permits, licenses and
other authorizations required to conduct its business as conducted, and (iii)
has been operating its business pursuant to and in compliance with the terms of
all such permits, licenses and other authorizations, except to the extent that
the failure to do any of the foregoing would not have a Material Adverse Effect.
INTELLECTUAL PROPERTY.
Except as set forth in the Disclosure Schedule, no claim is pending or, to
the best of the
Company's knowledge, threatened to the effect that any domestic or foreign
patents, patent rights, patent applications, trademarks, trademark applications,
service marks, service mark applications, trade names or copyrights owned or
licensed by the Company or any of its subsidiaries or which the Company or any
of its subsidiaries otherwise has the right to use, is invalid or unenforceable
by the Company or any such subsidiary, except to the extent that any of the
foregoing, if determined adversely to the Company, would not have a Material
Adverse Effect.
TAXES.
The Company and each of its subsidiaries has filed all tax returns,
Federal, state, foreign, county and local, required to be filed by it, and the
Company and each of its subsidiaries has paid all taxes shown to be due by such
returns as well as all other taxes, assessments and governmental charges which
have become due or payable, other than those being contested in good faith. The
Company and each of its subsidiaries has established adequate reserves for all
taxes accrued but not yet payable.
GOVERNMENTAL APPROVALS.
Subject to the accuracy of the representations and warranties of the
Purchaser set forth in Article III, no registration or filing with, or consent
or approval of or other action by, any foreign or domestic Federal, state or
other governmental agency or instrumentality is or will be necessary for the
valid execution, delivery and performance by the Company of its obligations
hereunder, other than filings pursuant to Federal and state securities laws in
connection with the sale of the Purchased Shares which will be made in
accordance with applicable Federal and state securities laws.
BROKERS.
Except as set forth on the Disclosure Schedule, the Company has no
contract, arrangement or understanding with any broker, finder or similar agent
with respect to the transactions contemplated by this Agreement.
FOREIGN CORRUPT PRACTICES ACT.
Neither the Company nor any of its subsidiaries has taken any action which
would cause it to be in violation of the Foreign Corrupt Practices Act of 1977,
as amended, or any rules and regulations thereunder. To the best of the
Company's knowledge, there is not now, and there has never been, any employment
by the Company or any of its subsidiaries of, or beneficial ownership in the
Company or any of its subsidiaries by, any governmental or political official in
any country in the world.
ADDITIONAL PURCHASERS.
Within the fifteen (15)-day period ending on the Closing Date, the Company
has issued to those investors set forth on Section 2.12 of the Disclosure
Schedule, in the aggregate, 3,272,726
shares of Common Stock at a purchase price per share of $11.00, on terms and
conditions substantially similar to those set forth in the drafts dated May 3,
1999 of this Agreement, the Registration Rights Agreement (as defined herein),
and the Lockup Agreement (as defined herein).
REGISTRATION STATEMENT. The Company has filed with the U.S. Securities and
Exchange Commission (the "SEC") a Registration Statement on Form S-1,
Registration No. 333-746659 (as amended by all amendments thereto filed with the
SEC through the date hereof, the "Registration Statement") in connection with
the proposed initial public offering of the Common Stock of the Company. The
information contained in the Registration Statement is true, complete and
correct and such information does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except with respect to
those items specified in Section 2.13 of the Disclosure Schedule and except with
respect to changes made by amendment to the Registration Statement filed with
the SEC after the date hereof to comply with disclosure obligations of the
Securities Act of 1993 in response to comments of the SEC to the Registration
Statement, and changes relating to the pricing of the Common Stock in such
initial public offering.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
ORGANIZATION; CORPORATE POWER.
The Purchaser is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
AUTHORIZATION OF AGREEMENTS.
The execution and delivery by the Purchaser of this Agreement, and the
performance by the Purchaser of its obligations hereunder have been duly
authorized by all requisite corporate action and will not violate any provision
of law, any order of any court or other agency of government, or the Purchaser's
articles of incorporation or by-laws.
VALIDITY.
This Agreement has been duly executed and delivered by the Purchaser and
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by general equitable principles.
ACCREDITED INVESTOR.
The Purchaser is an "accredited investor" within the meaning of Rule 501
under the Securities Act of 1993 (the "Securities Act") and was not organized
for the specific purpose of acquiring the Purchased Shares.
SUFFICIENT KNOWLEDGE.
The Purchaser has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the
Company and it is able financially to bear the risks thereof. The Purchaser has
had an opportunity to discuss the Company's business, management and financial
affairs with the Company's management.
INVESTMENT. Except with respect to any transfer of the Purchased Shares to
an affiliate of the Purchaser, the Purchaser is acquiring the Purchased Shares
being purchased by it hereunder for its own account, not as a nominee or agent,
for the purpose of investment and not with a view to the resale or distribution
of any part thereof, and the Purchaser does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Purchased Shares.
NO REGISTRATION.
The Purchaser understands that (i) the Purchased Shares have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act, (ii) except
with respect to any transfer of the Purchased Shares to an affiliate of the
Purchaser, the Purchased Shares must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration, (iii) the Purchased Shares will bear a legend to such effect
and (iv) the Company will make a notation on its transfer books to such effect.
BROKERS.
The Purchaser has no contract, arrangement or understanding with any
broker, finder or similar agent with respect to the transactions contemplated by
this Agreement.
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
AND THE COMPANY
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER ON THE CLOSING DATE.
The obligation of the Purchaser to purchase the Purchased Shares from the
Company on the Closing Date is subject to the satisfaction or waiver, on or
before the Closing Date, of the following conditions:
REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT.
The representations and warranties contained in Article II shall be true,
complete and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date, and the President of the Company shall have certified to
such effect to the Purchaser in writing.
PERFORMANCE.
The Company shall have performed and complied with all agreements contained
herein required to be performed or complied with by it prior to or on the
Closing Date, and the President of the Company shall have certified to the
Purchaser in writing to such effect and to the further effect that all of the
conditions set forth in this Section 4.1 have been satisfied.
SUPPORTING DOCUMENTS.
The Purchaser shall have received copies of the following documents:
(A) the Charter, certified as of a recent date by the Secretary of State of
the State of Delaware, (B) a certificate of said Secretary, dated as of a recent
date, as to the due incorporation and good standing to of the Company, the
payment of all excise taxes by the Company and listing all documents of the
Company on file with said Secretary and (C) a certificate of the Secretary of
State of the State of New York, dated as of a recent date, as to the good
standing of the Company in such state; and
a certificate of the Secretary or an Assistant Secretary of the Company
dated the Closing Date and certifying: (A) that attached thereto is a true and
complete copy of the By-laws of the Company as in effect on the date of such
certification; (B) that attached thereto is a true and complete copy of all
resolutions adopted by the Board of Directors or the stockholders of the Company
authorizing the execution, delivery and performance of this Agreement, including
the issuance, sale and delivery of the Purchased Shares, and that all such
resolutions are in full force and effect and are all the resolutions adopted in
connection with the transactions contemplated hereby; (C) that the Charter has
not been amended since the date of the last amendment referred to in the
certificate delivered pursuant to clause (i)(B) above; and (D) to the incumbency
and specimen signature of each officer of the Company executing this Agreement,
the stock certificates representing the Purchased Shares and any certificate or
instrument furnished
pursuant hereto, and a certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate referred to in
this clause (ii).
REGISTRATION RIGHTS AGREEMENT.
The Company shall have executed and delivered to the Purchaser a
registration rights agreement substantially in the form attached hereto as
EXHIBIT A (the "Registration Rights Agreement").
CONDITION TO THE OBLIGATIONS OF THE COMPANY ON THE CLOSING DATE.
The obligation of the Company to sell the Purchased Shares to the Purchaser
is subject to the satisfaction or waiver, on or before the Closing Date, of the
following conditions:
REPRESENTATION AND WARRANTIES TO BE TRUE AND CORRECT.
The representations and warranties contained in Article III shall be true,
complete and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date, and the Purchaser shall have certified to such effect to
the Company in writing.
PERFORMANCE.
The Purchaser shall have performed and complied with all agreements
contained herein required to be performed or complied with by it prior to or at
the Closing Date, and the Purchaser shall have certified to the Company in
writing to such effect and to the further effect that all of the conditions set
forth in this Section 4.2 have been satisfied.
LOCKUP AGREEMENT.
The Purchaser shall have executed and delivered to the Company a lockup
agreement substantially in the form attached hereto as EXHIBIT B (the "Lockup
Agreement").
MISCELLANEOUS.
REGISTRATION RIGHTS AGREEMENT.
On or prior to the Closing Date, the Company shall execute and deliver to
the Purchaser the Registration Rights Agreement.
LOCKUP AGREEMENT.
On or prior to the Closing Date, the Purchaser shall execute and deliver to
the Company
the Lockup Agreement.
EXPENSES.
Each party hereto will pay its own expenses in connection with the
transactions contemplated hereby, whether or not such transactions shall be
consummated.
BROKERAGE.
Each party hereto will indemnify and hold harmless the other against and
in respect of any claim for brokerage or other commissions relative to this
Agreement or to the transactions contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to have been made
by such party with any third party, other than as described in Section 2.10
of the Disclosure Schedule.
NOTICES.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be delivered in person, mailed by certified or registered
mail, return receipt requested, or sent by telecopier, addressed as follows:
if to the Company, to it at StarMedia Network, Inc., 29 West 36th
Street, 5th Floor, New York, New York 10018, Attention: President;
if to the Purchaser, to it at National Broadcasting Company, Inc., 30
Rockefeller Plaza, New York, New York 10112, Attention: Kenneth Krushel;
and
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
ENTIRE AGREEMENT.
This Agreement, including the Schedules and Exhibits hereto, constitutes
the sole and entire agreement of the parties with respect to the subject matter
hereof. All Schedules and Exhibits hereto are hereby incorporated herein by
reference.
COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
AMENDMENTS.
This Agreement may not be amended or modified, and no provisions hereof may
be waived, without the written consent of the Company and Purchaser.
SEVERABILITY.
If any provision of this Agreement shall be declared void or unenforceable
by any judicial or administrative authority, the validity of any other
provisions and of the entire Agreement shall not be affected thereby.
TITLES AND SUBTITLES,
The titles and subtitles used in this Agreement are for convenience only
and are not to be considered in construing or interpreting any term or provision
of this Agreement.
CERTAIN DEFINED TERMS.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"PERSON" shall mean an individual, corporation, trust, partnership,
joint venture, unincorporated organization, government or any agency or
political subdivision thereof, or other entity.
"SUBSIDIARY" shall mean, as to the Company, any corporation of which more
than 50% of the outstanding stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned by the Company, or by one or more of
its subsidiaries, or by the Company and one or more of its subsidiaries.
WAVIER OF JURY TRIAL.
Each party hereto hereby waives its rights to a jury trial of any claim or
cause of action (including, without limitation, contract claims, tort claims,
breach of duty claims, and all other common law claims and statutory claims)
based upon or arising out of this Agreement, the Registration Rights Agreement,
the Lockup Agreement, the Purchased Shares or the subject matter hereof or
thereof.
AMENDMENT TO REGISTRATION STATEMENT.
The Company shall provide, during normal business hours, to the
Purchaser a true and complete copy of, and an opportunity to comment on, any
amendment to the Registration Statement which first discloses, or reflects a
revision to the disclosure of, the sale of the Purchased Shares or any other
disclosure regarding the Purchaser, SNAP! LLC, or any entity the name of
which incorporates "NBC," "General Electric" or "GE," not less than two (2)
hours prior to the filing of such amendment with the SEC.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
STARMEDIA NETWORK, INC.
By:
Name:
Title:
NATIONAL BROADCASTING COMPANY, INC.
By:
Name:
Title: