Exhibit 10.24
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT dated as of May 3, 1999, between
STARMEDIA NETWORK, INC., a Delaware corporation (the "Company"), and Europortal
Holding S.A., a corporation organized and existing under the laws of Luxembourg
(the "Purchaser").
WHEREAS, the Company and the Purchaser have entered into a
Stock Purchase Agreement dated as of April 30, 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
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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 commercial 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.
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
commercial 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 commercial 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;
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(d) use reasonable commercial 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 commercial 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 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 agree.
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
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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.
(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 specifically
for use in such registration statement or prospectus; 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.
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(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.
(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
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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.
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(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. (a) Neither party may assign this Agreement without
the prior written consent of the other, and any attempt to do so shall be null
and void.
(b) 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 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: President;
if to the Purchaser, to it at
____________________________________, Attn: ___________;
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.
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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:
EUROPORTAL HOLDING S.A.
By:
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Name:
Title:
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