Exhibit 10.17
DRAFT
4/30/99
STOCK PURCHASE AGREEMENT
between
STARMEDIA NETWORK, INC.
and
CRITICAL PATH, INC.
Dated as of May 3, 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........................................................................................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 May 3, 1999, between StarMedia
Network, Inc., a Delaware corporation (the "Company"), and Critical Path, Inc.,
a California corporation (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
THE PURCHASED SHARES
Section 1.1 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").
Section 1.2 CLOSING. The closing (the "Closing") shall take place at
the offices of Winthrop, Stimson, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on May 3, 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:
Section 2.1 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.
Section 2.2 AUTHORIZATION OF AGREEMENT. (a) 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.
(b) 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.
Section 2.3 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.
Section 2.4 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) 12,063,363 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.
Section 2.5 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.
Section 2.6 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.
Section 2.7 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 ▇▇▇▇ 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.
Section 2.8 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.
Section 2.9 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.
Section 2.10 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.
Section 2.11 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:
Section 3.1 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.
Section 3.2 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.
Section 3.3 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.
Section 3.4 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.
Section 3.5 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.
Section 3.6 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.
Section 3.7 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.
Section 3.8 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
Section 4.1 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:
(a) 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.
(b) 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.
(c) SUPPORTING DOCUMENTS. The Purchaser shall have received
copies of the following documents:
(i) (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
(ii) 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).
(d) 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").
Section 4.2 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:
(a) 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.
(b) 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.
(c) 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
Section 5.1 REGISTRATION RIGHTS AGREEMENT. On or prior to the Closing
Date, the Company shall execute and deliver to the Purchaser the Registration
Rights Agreement.
Section 5.2 LOCKUP AGREEMENT. On or prior to the Closing Date, the
Purchaser shall execute and deliver to the Company the Lockup Agreement.
Section 5.3 EXPENSES. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated.
Section 5.4 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.
Section 5.5 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:
(a) if to the Company, to it at StarMedia Network, Inc., ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
President;
(b) if to the Purchaser, to it at Critical Path, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇; 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.
Section 5.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 5.7 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.
Section 5.8 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.
Section 5.9 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.
Section 5.10 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.
Section 5.11 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.
Section 5.12 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):
(a) "PERSON" shall mean an individual, corporation, trust,
partnership, joint venture, unincorporated organization, government or any
agency or political subdivision thereof, or other entity.
(b) "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:
CRITICAL PATH, INC.
By:
Name:
Title: