Exhibit 10.28
REGISTRATION RIGHTS 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 and the Purchaser have entered into a Stock
Purchase Agreement dated as of May 4, 1999 (the "STOCK PURCHASE AGREEMENT")
pursuant to which, subject to the terms and conditions set forth therein, the
Purchaser has agreed to acquire, and the Company has agreed to sell, certain
shares of Common Stock (as defined herein);
WHEREAS, it is a condition to the Purchaser's obligations to purchase
such shares of Common Stock under the Stock Purchase Agreement that the Company
enter into this Agreement to provide certain registration rights;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and subject to and
on the terms and conditions herein set forth, the parties hereto agree as
follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall
have the following respective meanings:
"COMMON STOCK" shall mean the Common Stock, par value $0.001 per share,
of the Company.
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"PUBLIC SALE" shall mean any sale of Common Stock to the public
pursuant to an offering registered under the Securities Act or pursuant to the
provisions of Rule 144 (or any successor or similar rule) adopted under the
Securities Act.
"PURCHASED SHARES" shall mean those shares of Common Stock purchased by
the Purchaser pursuant to the Stock Purchase Agreement.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 6 hereof.
"RESTRICTED STOCK" shall mean the Purchased Shares, the certificates
for which are required to bear the legend set forth in Section 2 hereof,
excluding Purchased Shares which have
been (i) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (ii) publicly sold pursuant to Rule 144
under the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 6
hereof.
2. RESTRICTIVE LEGEND. Each certificate representing one or more
shares of Restricted Stock, and each certificate issued upon exchange or
transfer thereof, other than in a Public Sale or as otherwise permitted by
clause (ii) of Section 3, shall be stamped or otherwise imprinted with a
legend substantially in the following form:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY
TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
any share of Restricted Stock (other than under the circumstances described
in Section 4 hereof), the Purchaser shall give written notice to the Company
of its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel reasonably satisfactory to the Company
to the effect that the proposed transfer of the Restricted Stock may be
effected without registration under the Securities Act, whereupon the holder
of such Restricted Stock may transfer such Restricted Stock in accordance
with the terms of its notice; PROVIDED, HOWEVER, that no such opinion or
other documentation shall be required if such notice shall cover a
distribution by a partnership to its partners or by a limited liability
company to its members. Each certificate of Restricted Stock transferred as
above provided shall bear the legend set forth in Section 2, unless (i) such
transfer is to the public in accordance with the provisions of Rule 144 (or
any other rule permitting Public Sale without registration under the
Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee (other than
an affiliate of the Company) would be entitled to transfer such securities in
a Public Sale without registration under the Securities Act. The restrictions
provided for in this Section shall not apply to securities that are not
required to
bear the legend prescribed by Section 2 in accordance with the provisions of
that Section.
4. REGISTRATION. If the Company at any time during the period
commencing on the first anniversary of the date hereof and ending on the
third anniversary of the date hereof proposes to register any of its Common
Stock under the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4 or S-8, any successors
thereto or any other form not available for registering the Restricted Stock
for sale to the public or a Form S-1 covering solely an employee benefit
plan), it will give written notice at such time to the Purchaser of its
intention to do so. Upon the written request of the Purchaser, given within
twenty (20) days after receipt of any such notice by the Company, to register
any of its Restricted Stock (which request shall state the intended method of
disposition thereof), the Company will use reasonable efforts to cause the
Restricted Stock as to which registration shall have been so requested, to be
included in the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent requisite to permit
the sale or other disposition by the Purchaser (in accordance with its
written request) of such Restricted Stock to be so registered; PROVIDED that
nothing herein shall prevent the Company from abandoning or delaying any such
registration at any time. In the event that any registration pursuant to this
Section 4 shall be, in whole or in part, an underwritten public offering of
Common Stock, any request by the Purchaser pursuant to this Section 4 to
register Restricted Stock shall specify that either (i) such Restricted Stock
is to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration or (ii) such Restricted Stock is to be sold in the open market
without any underwriting, on terms and conditions comparable to those
normally applicable to offerings of common stock in reasonably similar
circumstances. The number of shares of Restricted Stock to be included in
such registration may be reduced, if and to the extent that the managing
underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company in such
underwriting; PROVIDED, HOWEVER, that the percentage of such shares of
Restricted Stock so reduced shall be no greater than the greatest percentage
of shares of Common Stock proposed to be included in such registration by any
entity specified in Section 2.12 of the Disclosure Schedule to the Stock
Purchase Agreement similarly reduced in such registration.
5. REGISTRATION PROCEDURES. Subject to the Company's right to
abandon or delay any such registration at any time and for any reason, if and
whenever the Company is required by the provisions of Section 4 hereof to use
reasonable efforts to effect the registration of any of the Restricted Stock
under the Securities Act, the Company will:
(a) prepare and file with the Commission a registration
statement with respect to such securities and use reasonable efforts to
cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby
(determined as hereinafter provided);
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
to comply with the provisions of the Securities Act with respect to the
disposition of all Restricted Stock covered by such registration
statement in accordance with the Purchaser's intended method of
disposition set forth in such registration statement for such period;
(c) furnish to the Purchaser such number of copies of the
registration statement and the prospectus included therein (including
each preliminary prospectus) as the Purchaser may reasonably request in
order to facilitate the Public Sale or other disposition of the
Restricted Stock covered by such registration statement;
(d) use reasonable efforts to register or qualify the
Restricted Stock covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Purchaser
shall reasonably request, provided that the Company will not be
required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
paragraph (d), (ii) subject itself to taxation in any such jurisdiction
or (iii) consent to general service of process in any jurisdiction;
(e) use reasonable efforts to list the Restricted Stock
covered by such registration statement with any securities exchange on
which any Common Stock of the Company is then listed;
(f) immediately notify the Purchaser at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing.
For purposes of paragraphs (a) and (b) above and of Section 4(c) hereof, the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities
purchased by it, and the period of distribution of Restricted Stock in any other
registration shall be deemed to extend until the earlier of the sale of all
Restricted Stock covered thereby or three months after the effective date
thereof.
In connection with each registration hereunder, the Purchaser will
furnish to the Company in writing such information with respect to itself and
the proposed distribution by them as shall be reasonably necessary in order to
assure compliance with federal and applicable state securities laws.
6. EXPENSES. All expenses incurred by the Company in complying with
Section 4 and 5 hereof, including without limitation all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer
agents and registrars and costs of insurance, but excluding any Selling
Expenses, are herein called "Registration Expenses". All underwriting
discounts and selling commissions applicable to the sale of Restricted Stock
are herein called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Section 4 hereof. All Selling Expenses
in connection with any registration statement filed pursuant to Section 4 hereof
shall be borne by the Purchaser, or by such persons other than the Company as
may so agree with the Purchaser.
7. INDEMNIFICATION. (a) In the event of a registration of any of
the Restricted Stock under the Securities Act pursuant to Section 4, the
Company will indemnify and hold harmless the Purchaser and each officer,
director and each other person, if any, who controls the Purchaser within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser or such controlling
person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Restricted Stock was registered under the Securities Act pursuant
to Section 4, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Purchaser and each such controlling person
for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that the Company will not be liable in any such
case if and to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished by the Purchaser or such controlling person in writing
for inclusion
therein.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Section 4, the Purchaser will indemnify and
hold harmless the Company and each officer, director and each other person, if
any, who controls the Company within the meaning of the Securities Act, each
officer of the Company who signs the registration statement, each director of
the Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer or director
or underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Restricted Stock was registered under the Securities
Act pursuant to Section 4, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Purchaser will
be liable hereunder in any such case if and only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with information pertaining to the Purchaser,
furnished in writing to the Company by the Purchaser for inclusion in such
registration statement; PROVIDED, FURTHER, HOWEVER, that the Purchaser shall not
be liable to and does not indemnify any underwriter in the offering or sale of
Restricted Stock, or any person who, within the meaning of the Securities Act,
controls any underwriter, in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such person's failure to send or give a copy of the final
prospectus, as the same may be supplemented or amended, to the person asserting
an untrue statement or omission or alleged untrue statement or omission at or
prior to the written confirmation of the sale of Restricted Stock to such
person, if such statement or omission was corrected in such final prospectus.
Notwithstanding the foregoing, the Purchaser shall not be obligated under this
Section 7(b) to pay more than the proceeds realized by it upon its sale of
Restricted Stock included in such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 7. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 7 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so selected;
PROVIDED, HOWEVER, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the indemnifying
party, or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party will consent to entry of any judgment or enter into any
settlement (i) without the consent of the indemnified party, which consent shall
not be unreasonably withheld or (ii) which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability with respect to such claim or litigation.
(d) If the indemnification provided for in paragraphs (a) and (b)
of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under such paragraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein,
then each indemnifying party shall in lieu of indemnifying such indemnified
party contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or actions in such
proportion as appropriate to reflect the relative fault of the Company, on
the one hand, and the Purchaser, on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under paragraph (c)
of this Section 7. The relative fault shall be determined by reference to,
among
other things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Company, on the one hand, or the
Purchaser, on the other hand, and to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Purchaser agree that it would not be just and
equitable if contributions pursuant to this paragraph were determined by PRO
RATA allocation or by any other method of allocation which did not take account
of the equitable considerations referred to above in this paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or action in respect thereof, referred to above in this
paragraph, shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act), shall be entitled
to contribution from any person who is not guilty of such fraudulent
misrepresentation.
The indemnification of underwriters provided for in this Section 7 shall be
on such other terms and conditions as are at the time customary and reasonably
required by such underwriters.
8. CHANGES IN RESTRICTED STOCK. If, and as often as, there are any
changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof, as may be required, so
that the rights and privileges granted hereby shall continue with respect to
the Common Stock as so changed and shall apply to any securities received in
any such transaction.
9. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchaser as follows:
(a) The execution, delivery and performance of this Agreement by the
Company 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, the Certificate of Incorporation or By-laws of the Company, or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company.
(b) 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, subject to general equity principles
and to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws from time to
time in effect affecting the enforcement of creditors' rights generally
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
10. RULE 144 REPORTING. The Company agrees as follows:
(a) The Company shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section 13(a)
or 15(d) of the Exchange Act at any time after the Company has become subject to
such reporting requirements of the Exchange Act.
(c) The Company shall furnish to the Purchaser promptly upon request
(i) a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after the date it first becomes
subject to such reporting requirements), and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents so filed as the Purchaser
may reasonably request to avail itself of any rule or regulation of the
Commission allowing it to sell any Restricted Stock without registration.
11. MISCELLANEOUS. Neither party may assign this Agreement to any
person other than an affiliate thereof without the prior written consent of
the other, and any attempt to do so shall be null and void.
(c) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class registered mail, postage
prepaid, addressed as follows:
if to the Company, to it at 29 West 36th Street, New York, New
York 10018, Attn: President;
if to the Purchaser, to it at National Broadcasting Company, Inc.,
30 Rockefeller Plaza, New York, New York 10112, Attention: Kenneth Krushel;
or, in either case, at such other address or addresses as shall have been
furnished in writing to the other party.
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
(d) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or amended
except in writing executed by the Company and the Purchaser.
(e) This Agreement may be executed in two or more counterparts, by
original or facsimile signature, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
(f) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or
render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
STARMEDIA NETWORK, INC.
By:
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Name:
Title:
NATIONAL BROADCASTING COMPANY, INC.
By:
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Name:
Title: