Exhibit 10.14
EXECUTION COPY
STOCK PURCHASE AGREEMENT
between
STARMEDIA NETWORK, INC.
and
REUTERS HOLDINGS SWITZERLAND SA
Dated as of April 30, 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 2
Section 2.7 Intellectual Property 3
Section 2.8 Taxes 3
Section 2.9 Governmental Approvals 3
Section 2.10 Brokers 3
Section 2.11 Foreign Corrupt Practices Act 3
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 4
Section 3.4 Accredited Investor 4
Section 3.5 Sufficient Knowledge 4
Section 3.6 Investment 4
Section 3.7 No Registration 4
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 5
(b) Performance 5
(c) Supporting Documents 5
(d) Registration Rights Agreement 6
Section 4.2 Condition to the Obligations of the Company on the Closing Date 6
(a) Representations and Warranties to be True and Correct 6
(b) Performance 6
(c) Lockup Agreement 6
ARTICLE V
MISCELLANEOUS
Section 5.1 Registration Rights Agreement 6
Section 5.2 Lockup Agreement 6
Section 5.3 Expenses 6
Section 5.4 Brokerage 6
Section 5.5 Notices 7
Section 5.6 Governing Law 7
Section 5.7 Entire Agreement 7
Section 5.8 Counterparts 7
Section 5.9 Amendments 7
Section 5.10 Severability 7
Section 5.11 Titles and Subtitles 7
Section 5.12 Certain Defined Terms 7
STOCK PURCHASE AGREEMENT dated as of April 30, 1999, between StarMedia
Network, Inc., a Delaware corporation (the "Company"), and Reuters Holdings
Switzerland SA (the "Purchaser").
WHEREAS, the Company wishes to issue and sell to the Purchaser an
aggregate of 272,727 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:
ARTICLE I
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 $3,000,000 (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 April 30, 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.
ARTICLE II
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 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, 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)
10,427,000 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. An aggregate
of 31,996,667 shares of Common Stock has been reserved for issuance upon
conversion of the Series A Convertible Preferred Stock, the Series B Convertible
Preferred Stock and the Series C 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.
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. All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied and fairly present
the financial position of the Company and its results of operation for and as of
the dates set forth therein. Since the date of the Balance Sheet, there has been
no material adverse change in the assets, liabilities or financial condition of
the Company from that reflected in the 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, 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, 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.
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.
ARTICLE III
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 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
organizational documents.
VALIDITY.
This Agreement has been duly executed and delivered by the Purchaser
and constitutes the legal, valid and binding obligation of the Purchaser,
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.
ACCREDITED INVESTOR.
The Purchaser is an "accredited investor" within the meaning of Rule
501 under the Securities Act of 1933 (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.
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 pursuant to
Section 4(2) thereof or Rule 506 promulgated under the Securities Act, (ii) 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.
ARTICLE IV
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 and Treasurer 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 and Treasurer 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 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:
REPRESENTATIONS 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").
ARTICLE V
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 Reuters Holdings Switzerland SA,
5, Rue de Jargonnant, 1207 Geneva, Switzerland, Attention: Director,
with a copy to Reuters Limited, 85 Fleet Street, London EC4P 4AJ,
England, Attention: General Counsel;
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 the 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 provision 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
STARMEDIA NETWORK, INC.
By:
Name:
Title:
REUTERS HOLDINGS SWITZERLAND SA
By:
Name:
Title: