EXHIBIT-10.7
SERIES B CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
between
STARMEDIA NETWORK, INC.
and
THE SEVERAL PURCHASERS NAMED IN SCHEDULE I HERETO
Dated as of February 20, 1998
- 1 -
ARTICLE I THE PREFERRED SHARES ............................................ 1
Section 1.1 Issuance, Sale and Delivery of the Preferred Shares .... 1
Section 1.2 Closing ................................................ 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ................. 2
Section 2.1 Organization, Qualifications and Corporate Power ....... 2
Section 2.2 Authorization of Agreements, Etc ....................... 3
Section 2.3 Validity ............................................... 4
Section 2.4 Authorized Capital Stock ............................... 4
Section 2.5 Financial Statements ................................... 5
Section 2.6 Events Subsequent to the Date of the Balance Sheet ..... 5
Section 2.7 Litigation; Compliance with Law ........................ 5
Section 2.8 Proprietary Information ................................ 6
Section 2.9 Proprietary Rights ..................................... 7
Section 2.10 Title to Properties ................................... 7
Section 2.11 Leasehold Interests ................................... 8
Section 2.12 Insurance ............................................. 8
Section 2.13 Taxes ................................................. 8
Section 2.14 Other Agreements ...................................... 9
Section 2.15 Loans and Advances .................................... 11
Section 2.16 Assumptions, Guaranties, Etc. of
Indebtedness of Other Persons ........................ 11
Section 2.17 Significant Customers and Suppliers ................... 11
Section 2.18 Governmental Approvals ................................ 11
Section 2.19 Disclosure ............................................ 11
Section 2.20 Offering of the Preferred Shares ...................... 12
Section 2.21 Brokers ............................................... 12
Section 2.22 Officers .............................................. 12
Section 2.23 Transactions With Affiliates .......................... 12
Section 2.24 Employees ............................................. 13
Section 2.25 U.S. Real Property Holding Corporation ................ 13
Section 2.26 Environmental Protection .............................. 13
Section 2.27 ERISA ................................................. 14
Section 2.28 [RESERVED] ............................................ 15
Section 2.29 Qualified Small Business .............................. 15
Section 2.30 Foreign Corrupt Practices Act ......................... 15
Section 2.31 Federal Reserve Regulation ............................ 15
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS ............. 15
ARTICLE IV. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS ............... 17
4.1 Conditions to the Obligations of the Purchasers
on the First Closing Date ..................................... 17
Section 4.2 Condition to the Obligations of the Purchasers
on the Second Closing Date ............................ 19
ARTICLE V. COVENANTS OF THE COMPANY ....................................... 19
Section 5.1 Financial Statements, Reports, Etc ..................... 20
Section 5.2 [RESERVED] ............................................. 21
Section 5.3 Reserve for Conversion Shares .......................... 21
Section 5.4 Corporate Existence .................................... 21
Section 5.5 Properties, Business, Insurance ........................ 21
Section 5.6 Inspection, Consultation and Advice .................... 22
Section 5.7 Restrictive Agreements Prohibited ...................... 22
Section 5.8 Transactions with Affiliates ........................... 22
Section 5.9 Expenses of Directors .................................. 22
Section 5.10 Use of Proceeds ....................................... 22
Section 5.11 Board of Directors Meetings ........................... 22
Section 5.12 Compensation .......................................... 22
Section 5.13 By-laws ............................................... 23
Section 5.14 Performance of Contracts .............................. 23
Section 5.15 [RESERVED] ............................................ 23
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Section 5.16 Employee Nondisclosure and Developments Agreements .... 23
Section 5.17 Activities of Subsidiaries ............................ 23
Section 5.18 Compliance with Laws .................................. 24
Section 5.19 Keeping of Records and Books of Account ............... 24
Section 5.20 Change in Nature of Business .......................... 24
Section 5.21 Rule 144A Information ................................. 24
Section 5.22 Compensation and Audit Committees ..................... 24
Section 5.23 Termination of Covenants .............................. 25
ARTICLE VI. MISCELLANEOUS ................................................. 25
Section 6.1 Expenses ............................................... 25
Section 6.2 Survival of Representations; Termination
of Agreements ......................................... 25
Section 6.3 Brokerage .............................................. 25
Section 6.4 Parties in Interest .................................... 25
Section 6.5 Lock-Up Agreement ...................................... 26
Section 6.6 Notices ................................................ 26
Section 6.7 Governing Law .......................................... 26
Section 6.8 Entire Agreement ....................................... 26
Section 6.9 Counterparts ........................................... 26
Section 6.10 Amendments ............................................ 26
Section 6.11 Severability .......................................... 26
Section 6.12 Titles and Subtitles .................................. 27
Section 6.13 Certain Defined Terms ................................. 27
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SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT dated as of
February 20, 1998, between StarMedia Network, Inc., a Delaware corporation (the
"Company"), and the several purchasers named in the attached Schedule I
(individually a "Purchaser" and collectively the "Purchasers").
WHEREAS, the Company wishes to issue and sell to the Purchasers up to an
aggregate of 8,000,000 shares (the "Purchased Shares") of the authorized but
unissued Series B Convertible Preferred Stock, $0.001 par value, of the Company
(the "Series B Convertible Preferred Stock"); and
WHEREAS, the Purchasers, severally but not jointly, wish to purchase the
number of Purchased Shares set forth below, 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 PREFERRED SHARES
Section 1.1 Issuance, Sale and Delivery of the Purchased Shares. (a) The
Company agrees to issue and sell to each Purchaser, and each Purchaser hereby
agrees to purchase from the Company, on the First Closing Date (as hereinafter
defined), the number of Purchased Shares set forth opposite the name of such
Purchaser under the heading "Number of Purchased Shares" on Schedule I (said
aggregate number of Purchased Shares being hereinafter collectively referred to
at times as the "Initial Purchased Shares").
(b) The Company may also issue and sell on the Second Closing Date
(as hereinafter defined), on the terms and conditions of this Agreement, up to a
number of additional shares of Series B Convertible Preferred Stock equal to (i)
8,000,000 minus (ii) the number of Initial Purchased Shares purchased at the
First Closing (such aggregate number of Purchased Shares sold in accordance with
this subsection (b) being hereinafter collectively referred to at times as the
"Additional Purchased Shares"), at the price of $1.50 per share, to one or more
additional purchasers mutually acceptable to the Company, on the one hand, and a
majority in interest of the Purchasers of Initial Purchased Shares (said
additional purchasers being hereinafter collectively referred to at times as the
"Additional Purchasers"). Any Additional Purchaser who or which purchases any of
the Additional Purchased Shares shall, as a condition to his or its purchase of
Additional Purchased Shares, execute and deliver to the Company and the
Purchasers of the Initial Purchased Shares a written instrument, in form and
substance acceptable to the Company and a majority in interest of such
Purchasers, by which such Additional Purchaser agrees to become, and be bound by
the obligations of, and entitled to the benefits of, a Purchaser under this
Agreement and, in the case of an Additional Purchaser who shall purchase at
least 666,667 Additional Purchased Shares, a holder of Restricted Stock under
the Registration Rights Agreement (as hereinafter defined).
Section 1.2 Closing. Each of the closings of the purchase and sale of
Purchased Shares (individually, a "Closing" and collectively the "Closings")
shall take place at the offices of Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP,
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The first closing for the
purchase and sale of the Initial Purchased Shares (the "First Closing") shall be
held on February 20, 1998, at 10:00 a.m., New York time, or at such other date
and time as may be agreed upon between the applicable Purchasers and the Company
(such date and time being called the "First Closing Date"). The second closing,
if any, for the purchase and sale of the Additional Purchased Securities (the
"Second Closing"; each of the First Closing and the Second Closing being at
times referred to herein as a "Closing") shall be at such date and time as may
be agreed upon between the Additional Purchasers and the Company, provided that
the Second Closing shall not be later than March 19, 1998 (such date and time
being called the "Second Closing Date"; each of the First Closing Date and the
Second Closing Date being at times referred to herein as a "Closing Date").
At each Closing, the Company shall issue and deliver to each Purchaser
participating in such Closing a stock certificate or certificates in definitive
form, registered in the name of such Purchaser, representing the Purchased
Shares being purchased by it at such Closing. As payment in full for the
Purchased Shares being purchased by it on a Closing Date under this Agreement,
and against delivery of the stock certificate or certificates therefor as
aforesaid, on such Closing Date, each Purchaser shall (i) deliver to the Company
a certified check payable to the order of the Company, in the amount set forth
opposite the name of such Purchaser under the heading "Aggregate Purchase Price
for Purchased Shares" on Schedule I, (ii) transfer such sum to the account of
the Company by wire transfer, (iii) deliver to the Company for cancellation
promissory notes issued by the Company in the amount of such sum, or (iv)
deliver or transfer such sum to the Company by any combination of such methods
of payments.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers that, except as set
forth in the Disclosure Schedule attached as Schedule II (which Disclosure
Schedule makes explicit reference to the particular representation or warranty
as to which exception is taken, which in each case shall constitute the sole
representation and warranty as to which such exception shall apply):
Section 2.1 Organization, Qualifications and Corporate Power.
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and is duly
licensed or qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification, except where the failure to be so
licensed or qualified
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would not have material and adverse effect on the business, prospects, financial
condition, operations, property or affairs of the company ("Material Adverse
Effect"). The Company has the corporate power and authority to own and hold its
properties and to carry on its business as now conducted and as proposed to be
conducted, to execute, deliver and perform this Agreement and that certain
Amendment No. 1 to Registration Rights Agreement with the Purchasers, Xxxxxxxx
Xxxxxxxx, and Xxxx Xxxx in the form attached as Exhibit A (the "Registration
Rights Amendment" and together with this Agreement, the "Transaction
Documents"), to issue, sell and deliver the Purchased Shares and to issue and
deliver the shares of Common Stock, $0.001 par value, of the Company ("Common
Stock") issuable upon conversion of the Purchased Shares (the "Conversion
Shares").
(b) Except as set forth in the attached Disclosure Schedule, the
Company does not (i) own of record or beneficially, directly or indirectly, (A)
any shares of capital stock or securities convertible into capital stock of any
other corporation or (B) any participating interest in any partnership, joint
venture or other non-corporate business enterprise or (ii) control, directly or
indirectly, any other entity.
Section 2.2 Authorization of Agreements, Etc.
(a) The execution and delivery by the Company of the Transaction
Documents; the performance by the Company of its obligations hereunder and
thereunder, the issuance, sale and delivery of the Purchased Shares and the
issuance and delivery of the Conversion Shares 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, or any provision of any indenture, agreement or other instrument to
which the Company 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, restriction, claim or
encumbrance of any nature whatsoever upon any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company. To the Company's knowledge, without having
investigated such matter, no provision of the Registration Rights Amendment
violates, conflicts with, results in a breach of or constitutes (with due notice
or lapse of time or both) a default by any other party under any other
indenture, agreement or instrument.
(b) The Purchased Shares have been duly authorized and, when issued
in accordance with this Agreement, will be validly issued, fully paid and
nonassessable shares of Series B Convertible Preferred Stock, with no personal
liability attaching to the ownership thereof, and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company except as set forth in the Registration Rights Agreement dated as of
July 25, 1997, as amended by the Registration Rights Amendment, between the
Company and the other persons named therein as signatories (as so amended, the
"Registration Rights Agreement"). The Conversion Shares have been duly reserved
for issuance upon conversion of the Purchased Shares and, when so issued, will
be duly authorized, validly issued,
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fully paid and nonassessable shares of Common Stock, with no personal liability
attaching to the ownership thereof, and except as set forth in the Disclosure
Schedule will be free and clear of all liens, charges, restrictions, claims and
encumbrances imposed by or through the Company. Except as set forth in the
Disclosure Schedule, neither the issuance, sale or delivery of the Purchased
Shares nor the issuance or delivery of the Conversion Shares is subject to any
preemptive right to stockholders of the Company or to any right of first refusal
or other right in favor of any person, and all such rights have been exercised
or waived by all such persons with respect to the transactions contemplated
hereby.
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. The Registration Rights
Amendment, when executed and delivered in accordance with this Agreement, will
constitute the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms.
Section 2.4 Authorized Capital Stock. The authorized capital stock of the
Company consists of (i) 40,000,000 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 and 8,000,000 shares have been designated Series B
Convertible Preferred Stock, and (ii) 70,000,000 shares of Common Stock, $0.001
par value. Immediately prior to the First Closing, 10,012,000 shares of Common
Stock will be validly issued and outstanding, fully paid and nonassessable, with
no personal liability attaching to the ownership thereof, and 7,330,000 shares
of Series A Convertible Preferred Stock will be validly issued and outstanding,
fully paid and nonassessable, with no personal liability attached to the
ownership thereof. An aggregate of 15,330,000 shares of Common Stock has been
reserved for issuance upon conversion of the Series A Convertible Preferred
Stock and the Series B Convertible Preferred Stock. An aggregate of 5,000,000
shares of Common Stock (the "Reserved Employee Shares") has been reserved for
issuance pursuant to the Company's Stock Option Plan, of which options to
purchase 1,656,000 shares have been granted to date. 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, a copy of which is attached as Exhibit B, and all such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all
applicable laws. Except as set forth in the attached Disclosure Schedule, (i) no
person owns of record or is known to the Company to own beneficially any share
of Common Stock or Preferred Stock, (ii) no subscription, warrant, option,
convertible security, or other right (contingent or other) to purchase or
otherwise acquire equity securities of the Company is authorized or outstanding
and (iii) there is no commitment by the Company to issue shares, subscriptions,
warrants, options, convertible securities, or other such rights or to distribute
to holders of any of its equity securities any evidence of indebtedness or
asset. Except as provided for in the Charter or as set forth in the attached
Disclosure Schedule, the Company has no obligation (contingent or other) to
purchase, redeem or otherwise acquire any of its equity securities or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. Except as set forth in the Disclosure Schedule, neither the
Company nor, to the Company's knowledge, without having investigated such
matter, any other person is party to any voting trusts or agreements,
stockholders' agreements, pledge agreements,
4
buy-sell agreements, rights of first refusal, preemptive rights or proxies
relating to any securities of the Company (whether or not the Company is a party
thereto), and all such rights under any such agreement have been waived or
exercised by all such persons with respect to the transactions contemplated
hereby. All of the outstanding securities of the Company were issued in
compliance with all applicable Federal and state securities laws.
Section 2.5 Financial Statements. The Company has furnished to the
Purchasers the balance sheet of the Company as of December 31, 1997 (the
"Balance Sheet"), and the related unaudited 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 (except for the absence of footnotes) and fairly present
the financial position of the Company and results of operation for and as of the
dates set forth therein. Since the date of the Balance Sheet, except as set
forth in the attached Disclosure Schedule, (i) there has been no 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 which in
the aggregate have not been materially adverse and (ii) none of the business,
prospects, financial condition, operations, property or affairs of the Company
has been materially adversely affected by any occurrence or development,
individually or in the aggregate, whether or not insured against.
Section 2.6 Events Subsequent to the Date of the Balance Sheet. Since the
date of the Balance Sheet, except as set forth in the attached Disclosure
Schedule, the Company has not (i) issued any stock, bond or other corporate
security, (ii) borrowed any amount or incurred or become subject to any
liability (absolute, accrued or contingent), except current liabilities incurred
and liabilities under contracts entered into in the ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or incurred or paid any
obligation or liability (absolute, accrued or contingent) other than current
liabilities shown on the Balance Sheet and current liabilities incurred since
the date of the Balance Sheet in the ordinary course of business, (iv) declared
or made any payment or distribution to stockholders or purchased or redeemed any
share of its capital stock or other security, (v) mortgaged, pledged, encumbered
or subjected to lien any of its assets, tangible or intangible, other than liens
of current real property taxes not yet due and payable, (vi) sold, assigned or
transferred any of its tangible assets except in the ordinary course of
business, or canceled any debt or claim, (vii) sold, assigned, transferred or
granted any exclusive license with respect to any patent, trademark, trade name,
service xxxx, copyright, trade secret or other intangible asset, (viii) suffered
any loss of property or waived any right of substantial value whether or not in
the ordinary course of business, (ix) made any change in officer compensation
except in the ordinary course of business and consistent with past practice, (x)
made any material change in the manner of business or operations of the Company,
(xi) entered into any transaction except in the ordinary course of business or
as otherwise contemplated hereby or (xii) entered into any commitment
(contingent or otherwise) to do any of the foregoing.
Section 2.7 Litigation; Compliance with Law. Except as set forth on the
attached Disclosure Schedule, there is no (i) action, suit, claim, proceeding or
investigation pending or, to the best of the Company's knowledge, threatened
against or affecting the Company, at law or in
5
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 Adverse Effect, (ii)
arbitration proceeding relating to the Company pending under collective
bargaining agreements or otherwise or (iii) foreign or domestic governmental
inquiry pending or, to the best of the Company's knowledge, threatened against
or affecting the Company (including without limitation any inquiry as to the
qualification of the Company to hold or receive any license or permit), and
there is no basis for any of the foregoing. The Company has not received any
opinion or memorandum or legal advice from foreign or domestic legal counsel to
the effect that it is exposed, from a legal standpoint, to any liability or
disadvantage which may be material to its business, prospects, financial
condition, operations, property or affairs. The Company is not in default with
respect to any order, writ, injunction or decree known to or served upon the
Company of any court or of any foreign or domestic Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign. There is no action or suit by the Company
pending, threatened or contemplated against others. The Company has complied
with all foreign and domestic laws, rules, regulations and orders applicable to
its business, operations, properties, assets, products and services, the Company
has all necessary permits, licenses and other authorizations required to conduct
its business as conducted and as proposed to be conducted, and the Company 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.
There is no existing law, rule, regulation or order, and the Company is not
aware of any proposed law, rule, regulation or order, whether foreign or
domestic. Federal, state, county or local, which would prohibit or restrict the
Company from, or otherwise materially adversely affect the Company in,
conducting its business in any jurisdiction in which it is now conducting
business or in which it proposes to conduct business.
Section 2.8 Proprietary Information. (a) To the best of the Company's
knowledge, no third party has claimed or has reason to claim that any officer or
director or other person employed by or engaged by the Company has (i) violated
or may be violating any of the terms or conditions of his employment,
non-competition or non-disclosure agreement with such third party, (ii)
disclosed or may be disclosing or utilized or may be utilizing any trade secret
or proprietary information or documentation of such third party or (iii)
interfered or may be interfering in the employment relationship between such
third party and any of its present or former employees. No third party has
requested information from the Company which suggests that such a claim might be
contemplated. To the best of the Company's knowledge, no officer or director or
other person employed by or engaged by the Company has employed or proposes to
employ any trade secret or any information or documentation proprietary to any
former employer, and to the best of the Company's knowledge, no officer or
director or other person employed by or engaged by the Company has violated any
confidential relationship which such person may have had with any third party,
in connection with the development, manufacture or sale of any product or
proposed product or the development or sale of any service or proposed service
of the Company, and the Company has no reason to believe there will be any such
employment or violation. To the best of the Company's knowledge, none of the
execution or delivery of this Agreement, or the carrying on of the business of
the Company as officers,
6
employees or agents by any officer, director or key employee of the Company, or
the conduct or proposed conduct of the business of the Company, will conflict
with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract, covenant or instrument under which any
such person is obligated.
Section 2.9 Proprietary Rights. Set forth in the Disclosure Schedule is a
list of (i) all domestic and foreign patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service xxxx
applications, trade names and copyrights, and all applications for such which
have been filed, owned by or registered in the name of the Company, or of which
the Company is a licensor or licensee or in which the Company has any right, and
(ii) all licenses and other agreements with third parties (the "Third Party
Licenses") relating to any software, copyrights, technology, know-how or
processes that the Company has licensed or is otherwise authorized by such third
parties to use, market, distribute or incorporate into products distributed or
services provided by the Company (such software, technology, know-how and
processes being collectively referred to as "Third Party Technology"). The
Company owns or possesses adequate licenses or other rights to use all patents,
patent applications, trademarks, trademark applications, service marks, service
xxxx applications, trade names, copyrights, manufacturing processes, formulae,
trade secrets, customer lists and know-how, including without limitation the
Third Party Technology (collectively, "Intellectual Property") necessary or
desirable to the conduct of its business as conducted and as proposed to be
conducted, free and clear of all liabilities, charges, liens, pledges,
mortgages, restrictions, adverse claims, security interests, rights of others
and encumbrances (including, without limitation, distribution rights). The
foregoing representation as it relates to Third Party Technology is limited to
the Company's interest pursuant to the Third Party Licenses, all of which are
valid and enforceable and in full force and effect and which grant the Company
such rights to Third Party Technology as are employed in or necessary to the
business of the Company as conducted or proposed to be conducted. All of the
Company's registered patents, trademarks and copyrights in any of the Company
Products and applications therefor, if any, are valid and in full force and
effect, and consummation of the transactions contemplated hereby will not alter
or impair any such rights. Except as set forth in the attached disclosure
schedule, no claim is pending or, to the best of the Company's knowledge,
threatened to the effect that the operations of the Company infringe upon or
conflict with, constitute misappropriation of or in any way involve unfair
competition with respect to, the asserted rights of any other person under any
Intellectual Property, and there is no basis for any such claim (whether or not
pending or threatened). Except as set forth in the attached disclosure schedule,
no claim is pending or, to the best of the Company's knowledge, threatened to
the effect that any such Intellectual Property owned or licensed by the Company
or which the Company otherwise has the right to use, is invalid or unenforceable
by the Company, and there is no basis for any such claim (whether or not pending
or threatened). To the best of the Company's knowledge, all trade secrets
developed by and belonging to the Company which has not been patented has been
kept confidential.
Section 2.10 Title to Properties. The Company has good, clear and valid
title to its properties and assets reflected on the Balance Sheet or acquired by
it since the date of the Balance Sheet (other than properties and assets
disposed of in the ordinary course of business since the date of the Balance
Sheet), and all such properties and assets are free and clear of
7
mortgages, pledges, security interests, liens, charges, claims, restrictions and
other encumbrances (including without limitation, easements and licenses),
except for liens for or current taxes not yet due and payable and minor
imperfections of title, if any, not material in nature or amount and not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company, including, without limitation, the ability of the Company to secure
financing using such properties and assets as collateral. To the best of the
Company's knowledge, there are no condemnation, environmental, zoning or other
land use regulation proceedings, either instituted or planned to be instituted,
which would adversely affect the use or operation of the Company's properties
and assets for their respective intended uses and purposes, or the value of such
properties, and the Company has not received notice of any special assessment
proceedings which would affect such properties and assets.
Section 2.11 Leasehold Interests. Each lease or agreement to which the
Company is a party under which it is a lessee of any property, real or personal,
is a valid and subsisting agreement, duly authorized and entered into, without
any default of the Company thereunder and, to the best of the Company's
knowledge, without any default thereunder of any other party thereto. No event
has occurred and is continuing which, with due notice or lapse of time or both,
would constitute a default or event of default by the Company under any such
lease or agreement or, to the best of the Company's knowledge, by any other
party thereto. The Company's possession of such property has not been disturbed
and, to the best of the Company's knowledge, no claim has been asserted against
the Company adverse to its rights in such leasehold interests.
Section 2.12 Insurance. The Company holds valid policies covering all of
the insurance required to be maintained by it under Section 5.5.
Section 2.13 Taxes. The Company has filed all tax returns, Federal, state,
county and local, required to be filed by it, and the Company 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, including without
limitation all taxes which the Company is obligated to withhold from amounts
owing to employees, creditors and third parties. The Company has established
adequate reserves for all taxes accrued but not yet payable. All material tax
elections of any type which the Company has made as of the date hereof are set
forth in the financial statements referred to in Section 2.5. The Federal income
tax returns of the Company have never been audited by the Internal Revenue
Service. No deficiency assessment with respect to or proposed adjustment of the
Company's Federal, state, county or local taxes is pending or, to the best of
the Company's knowledge, threatened. There is no tax lien (other than for
current taxes not yet due and payable), whether imposed by any Federal, state,
county or local taxing authority, outstanding against the assets, properties or
business of the Company. Neither the Company nor any of its present or former
stockholders has ever filed an election pursuant to Section 1362 of the Internal
Revenue Code of 1986, as amended (the "Code") that the Company be taxed as an S
corporation. The Company's net operating losses for Federal income tax purposes,
as set forth in the financial statements referred to in Section 2.5, are not
subject to any limitations imposed by Section 382 of the Code and the full
amount of such net operating losses are available to offset the taxable income
of the Company for the current fiscal year and, to the extent not so used,
succeeding fiscal years. Consummation of the transactions contemplated by this
Agreement or
8
by any other agreement, understanding or commitment (contingent or otherwise) to
which the Company is a party or by which it is otherwise bound will not have the
effect of limiting the Company's ability to use such net operating losses in
full to offset such taxable income.
Section 2.14 Other Agreements. Except as set forth in the attached
Disclosure Schedule, the Company is not a party to or otherwise bound by any
written or oral agreement, instrument, commitment or restriction which
individually or in the aggregate could materially adversely affect the business,
prospects, financial condition, operations, property or affairs of the Company.
Except as set forth in the attached Disclosure Schedule, the Company is not a
party to or otherwise bound by any written or oral:
(a) distributor, dealer, manufacturer's representative or sales
agency agreement which is not terminable on less than ninety (90) days'
notice without cost or other liability to the Company (except for
agreements which, in the aggregate, are not material to the business of
the Company);
(b) sales agreement which entitles any customer to a rebate or right
of set-off, to return any product to the Company after acceptance thereof
or to delay the acceptance thereof, or which varies in any material
respect from the Company's standard form agreements;
(c) agreement with any labor union (and, to the knowledge of the
Company, no organizational effort is being made with respect to any of its
employees);
(d) agreement with any supplier containing any provision permitting
any party other than the Company to renegotiate the price or other terms,
or containing any pay-back or other similar provision, upon the occurrence
of a failure by the Company to meet its obligations under the agreement
when due or the occurrence of any other event;
(e) agreement for the future purchase of fixed assets or for the
future purchase of materials, supplies or equipment in excess of its
normal operating requirements;
(f) agreement for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable
on notice without cost or other liability to the Company, except normal
severance arrangements and accrued vacation pay;
(g) bonus, pension, profit-sharing, retirement, hospitalization,
insurance, stock purchase, stock option or other plan, agreement or
understanding pursuant to which benefits are provided to any employee of
the Company (other than group insurance plans which are not self-insured
and are applicable to employees generally);
(h) agreement relating to the borrowing of money or to the
mortgaging or pledging of, or otherwise placing a lien or security
interest on, any asset of the Company;
9
(i) guaranty of any obligation for borrowed money or otherwise;
(j) voting trust or agreement, stockholders' agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights
agreement relating to any securities of the Company;
(k) agreement, or group of related agreements with the same party or
any group of affiliated parties, under which the Company has advanced or
agreed to advance money or has agreed to lease any property as lessee or
lessor;
(l) agreement or obligation (contingent or otherwise) to issue, sell
or otherwise distribute or to repurchase or otherwise acquire or retire
any share of its capital stock or any of its other equity securities;
(m) assignment, license or other agreement with respect to any form
of intangible property;
(n) agreement under which it has granted any person any registration
rights, other than the Registration Rights Agreement;
(o) agreement under which it has limited or restricted its right to
compete with any person in any respect;
(p) other agreement or group of related agreements with the same
party involving more than $50,000 or continuing over a period of more than
six months from the date or dates thereof (including renewals or
extensions optional with another party), which agreement or group of
agreements is not terminable by the Company without penalty upon notice of
thirty (30) days or less, but excluding any agreement or group of
agreements with a customer of the Company for the sale, lease or rental of
the Company's products or services if such agreement or group of
agreements was entered into by the Company in the ordinary course of
business; or
(q) other agreement, instrument, commitment, plan or arrangement, a
copy of which would be required to be filed with the Securities and
Exchange Commission (the "Commission") as an exhibit to a registration
statement on Form S-1 if the Company were registering securities under the
Securities Act of 1933, as amended (the "Securities Act").
Any agreement specified in the Disclosure Schedule pursuant to this Section 2.14
is hereinafter referred to as a "Material Agreement". The Company, and to the
best of the Company's knowledge after due inquiry, each other party thereto have
in all material respects performed all the obligations required to be performed
by them to date (or such non-performing party has received a valid, enforceable
and irrevocable written waiver with respect to its non-performance), have
received no notice of default and are not in default (with due notice or lapse
of time or both) under any Material Agreement. The Company has no present
expectation or intention of not
10
fully performing all its obligations under each such Material Agreement, and the
Company has no knowledge of any breach or anticipated breach by the other party
to any Material Agreement, to which the Company is a party. The Company is in
full compliance with all of the terms and provisions of its Charter and By-laws,
as amended.
Section 2.15 Loans and Advances. The Company does not have any outstanding
loans or advances to any person and is not obligated to make any such loans or
advances, except, in each case, for advances to employees of the Company in
respect of reimbursable business expenses anticipated to be incurred by them in
connection with their performance of services for the Company.
Section 2.16 Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons. The Company has not assumed, guaranteed, endorsed or otherwise become
directly or continently liable on any indebtedness of any other person
(including, without limitation, liability by way of agreement, contingent or
otherwise, to purchase, to provide funds for payment, to supply funds to or
otherwise invest in the debtor, or otherwise to assure the creditor against
loss), except for guaranties by endorsement of negotiable instruments for
deposit in collection in the ordinary course of business.
Section 2.17 Significant Customers and Suppliers. Except as set forth in
the Disclosure Schedule, no customer or supplier which was significant to the
Company during the period covered by the financial statements referred to in
Section 2.5 or which has been significant to the Company thereafter has
terminated, materially reduced or threatened to terminate or materially reduce
its purchases from or provision of products or services to the Company, as the
case may be.
Section 2.18 Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchasers set forth in Article III, no
registration or filing with, or consent or approval of or other action by, any
Federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance by the Company of
the Transaction Documents, the issuance, sale and delivery of the Purchased
Shares or the issuance and delivery of the Conversion Shares, other than (i)
filings pursuant to Federal and state securities laws (all of which filings have
been made by the Company, other than those which are required to be made after
the Closing and which will be duly made on a timely basis) in connection with
the sale of the Purchased Shares and (ii) with respect to the Registration
Rights Agreement, the registration of the shares covered thereby with the
Commission and filings pursuant to state securities laws.
Section 2.19 Disclosure. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement, nor the Offering Memorandum of the Company dated
November, 1997 (the "Offering Memorandum"), contains an untrue statement of a
material fact or omits a material fact necessary to make the statements
contained herein or therein not misleading. None of the statements, documents,
certificates or other items prepared or supplied by the Company with respect to
the transactions contemplated hereby contains an untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
not misleading. There is
11
no fact which the Company has not disclosed to the Purchasers and their counsel
in writing and of which the Company is aware which materially and adversely
affects or is reasonably likely to materially and adversely affect the business,
prospects, financial condition, operations, property or affairs of the Company.
The financial projections and other estimates contained in the Offering
Memorandum were prepared by the Company based on the Company's experience in the
industry and on assumptions of fact and opinion as to future events which the
Company, at the date of the issuance of the Offering Memorandum, believed to be
reasonable, but which the Company cannot and does not assure or guarantee the
attainment of in any manner. Except as set forth in the Disclosure Schedule, as
of the date hereof no facts have come to the attention of the Company which
would, in its opinion, require the Company to revise or amplify the assumptions
underlying such projections and other estimates or the conclusions derived
therefrom.
Section 2.20 Offering of the Purchased Shares. Neither the Company nor any
person authorized or employed by the Company as agent, broker, dealer or
otherwise in connection with the offering or sale of the Purchased Shares or any
security of the Company similar to the Purchased Shares has offered the
Purchased Shares or any such similar security for sale to, or solicited any
offer to buy the Purchased Shares or any such similar security from, or
otherwise approached or negotiated with respect thereto with, any person or
persons, and neither the Company nor any person acting on its behalf has taken
or will take any other action (including, without limitation, any offer,
issuance or sale of any security of the Company under circumstances which might
require the integration of such security with the Purchased Shares under the
Securities Act or the rules and regulations of the Commission thereunder), in
either case so as to subject the offering, issuance or sale of the Purchased
Shares or the Conversion Shares to the registration provisions of the Securities
Act.
Section 2.21 Brokers. 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 2.22 Officers. Set forth in the Disclosure Schedule is a list of
the names of the officers of the Company, together with the title or job
classification of each such person and the total compensation anticipated to be
paid to each such person by the Company in 1997. Except as set forth in the
Disclosure Schedule, none of such persons has an employment agreement or
understanding, whether oral or written, with the Company, which is not
terminable on notice by the Company without cost or other liability to the
Company.
Section 2.23 Transactions With Affiliates. Except as set forth in the
Disclosure Schedule, no director, officer, employee or stockholder of the
Company, or member of the family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or any member of
the family of any such person, has a substantial interest or is an officer,
director, trustee, partner or holder of more than 5% of the outstanding capital
stock thereof, is a party to any transaction with the Company, including any
contract, agreement or other arrangement providing for the employment of,
furnishing of services by rental of real or personal property from or otherwise
requiring payments to any such person or firm, other than employment-at-will
arrangements in the ordinary course of business.
12
Section 2.24 Employees. Except as set forth on the Disclosure Schedule,
each of the officers of the Company, each key employee and each other employee
now employed by the Company or any consultant retained by the Company who has
access to confidential information of the Company has executed a nondisclosure
agreement in a form previously approved by the counsel to the Purchasers
described in Section 6.1 hereof (the "Nondisclosure and Developments
Agreement"), and such agreements are in full force and effect. To the best
knowledge of the Company, no employee or former employee of the Company is in
violation of any term of any employment contract, patent disclosure agreement,
confidentiality agreement or any other contract or agreement relating to the
relationship of any such employee with the Company. No officer or key employee
of the Company has advised the Company (orally or in writing) that he intends to
terminate employment with the Company. The Company has complied in all material
respects with all applicable laws relating to the employment of labor, including
provisions relating to wages, hours, equal opportunity, collective bargaining
and the payment of Social Security and other taxes.
Section 2.25 U.S. Real Property Holding Corporation. The Company is not
now and has never been a "United States real property holding corporation", as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the
Regulations promulgated by the Internal Revenues Service, and the Company has
filed with the Internal Revenue Service all statements, if any, with its United
States income tax returns which are required under Section 1.897-2(h) of such
Regulations.
Section 2.26 Environmental Protection. The Company has not caused or
allowed, or contracted with any party for, the generation, use, transportation,
treatment, storage or disposal of any Hazardous Substances (as defined below) in
connection with the operation of its business or otherwise. The Company, the
operation of its business, and, to the best knowledge of the Company, any real
property that the Company owns, leases or otherwise occupies or uses (the
"Premises"), are in compliance with all applicable Environmental Laws (as
defined below) and orders or directives of any governmental authorities having
jurisdiction under such Environmental Laws, including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances. The
Company has not received any citation, directive, letter or other communication,
written or oral, or any notice of any proceeding, claim or lawsuit, from any
person arising out of the ownership or occupation of the Premises, or the
conduct of its operations, and the Company is not aware of any basis therefor.
The Company has obtained and is maintaining in full force and effect all
necessary permits, licenses and approvals required of it by all Environmental
Laws applicable to the Premises and the business operations conducted thereon
(including operations conducted by tenants on the Premises), and is in
compliance with all such permits, licenses and approvals. The Company has not
caused or allowed a release, or a threat of release, of any Hazardous Substance
unto, at or near the Premises, and, to the best of the Company's knowledge,
neither the Premises nor any property at or near the Premises has ever been
subject to a release, or a threat of release, of any Hazardous Substance. For
the purposes of this Agreement, the term "Environmental Laws" shall mean any
Federal, state or local law or ordinance or regulation pertaining to the
protection of human health or the environment,
13
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq., the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et seq., and
the Resource Conservation and Recovery Act, 42 U.S.C Sections 6901, et seq. For
purposes of this Agreement, the term "Hazardous Substances" shall include oil
and petroleum products, asbestos, polychlorinated biphenyls, urea formaldehyde
and any other materials classified as hazardous or toxic under any Environmental
Laws.
Section 2.27 ERISA.
(a) Except as set forth on the Disclosure Schedule, the Company,
prior to the date of this Agreement, has not maintained, adopted or established,
contributed to or been required to contribute to, or otherwise participated in
or been required to participate in, and, as of the date of this Agreement, has
not adopted or established, does not maintain, does not contribute to an is not
required to contribute to, and does not otherwise participate in and is not
required to participate in,
(i) any "employee welfare benefit plan" or "welfare plan" as
defined under Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA");
(ii) any "employee pension benefit plan" or "pension plan" as
defined under Section 3(2) of ERISA;
(iii) any "excess benefit plan" as defined under Section 3(36)
of ERISA;
(iv) any "multiemployer plan" as such term is defined under
Section 3(37)(A) of ERISA;
(v) any multiple employer welfare arrangement" as defined
under Section 3(40) of ("ERISA");
(vi) any plan, fund, program, agreement or arrangement which
is unfunded and which is maintained primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees as such term is referred to in Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA; or;
(vii) any other plan, fund program, agreement of arrangement,
whether oral or written, which was or could have been prior to the
date of this Agreement, or which is or could be as of the date of
this Agreement, subject to any of the provisions of ERISA or the
Code:
(b) The Company has not committed itself, orally or in writing, to
create,
14
establish, adopt, maintain or participate in any plan, fund, program, agreement
or arrangement described in paragraph (a) hereof. In addition, except as
disclosed in the Disclosure Schedule, the Company has not committed itself,
orally or in writing, to provide or to cause to be provided any severance,
salary continuation, termination, disability, death, retirement, health or
medical benefit, or similar benefit to any person (including, without
limitation, any former or current employee).
(c) Notwithstanding anything else set forth herein, except as set
forth in the Disclosure Schedule, there exists no condition or set of
circumstances which has resulted in, or which could result in the imposition of
liability under ERISA, the Code, or other applicable law with respect to any
plan, fund, program agreement or arrangement described in paragraph (a) of this
Section 2.
Section 2.28 [RESERVED]
Section 2.29 Qualified Small Business. The Company represents that, as of
the date of this Agreement, it qualifies as a "Qualified Small Business" as
defined in Section 1202(d) of the Code and covenants that so long as its shares
are held by the Purchasers (or a transferee in whose hands the shares are
eligible to qualify as Qualified Small Business Stock as defined in Section
1202(c) of the Code), it will use its reasonable efforts to cause the shares to
qualify as Qualified Small Business Stock; provided that, notwithstanding the
foregoing, the Company shall not be obligated to take any action, or refrain
from any action, which in its good faith business judgment is not in the best
interests of the Company or its stockholders.
Section 2.30 Foreign Corrupt Practices Act. The Company has not 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 of, or beneficial ownership in the Company by, any
governmental or political official in any country in the world.
Section 2.31 Federal Reserve Regulation. The Company is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
securities (within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of the Purchased Shares
will be used to purchase or carry any margin security or to extend credit to
others for the purpose of purchasing or carrying any margin security or in any
other manner which would involve a violation of any of the regulations of the
Board of Governors of the Federal Reserve System.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents and warrants to the
Company that:
(a) such Purchaser, if not a natural person, is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and has the power and
15
authority to execute, deliver and perform its duties and obligations under the
Transaction Documents to which it is a party, and to purchase the Purchased
Shares being purchased by it hereunder;
(b) the execution and delivery by such Purchaser of the Transaction
Documents, the performance by such Purchaser of its obligations hereunder and
thereunder, and the purchase of the Purchased Shares have been duly authorized
by all requisite organizational action;
(c) this Agreement has been duly executed and delivered by such
Purchaser and constitutes the legal, valid and binding obligation of such
Purchaser, enforceable in accordance with its terms. The Registration Rights
Amendment, when executed and delivered in accordance with this Agreement, will
constitute the legal, valid and binding obligation of such Purchaser executing
the same, enforceable in accordance with its terms;
(d) such Purchaser is an "accredited investor" within the meaning of
Rule 501 under the Securities Act and was not organized for the specific purpose
of acquiring the Purchased Shares;
(e) such 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;
(f) such Purchaser has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management;
(g) the Purchased Shares being purchased by such Purchaser are being
acquired for its own account for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof;
(h) such Purchaser understands that (i) the Purchased Shares and the
Conversion 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 505 or 506 promulgated
under the Securities Act, (ii) the Purchased Shares and, upon conversion
thereof, the Conversion 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 and the Conversion Shares will
bear a legend to such effect and (iv) the Company will make a notation on its
transfer books to such effect; and
(i) if such Purchaser sells any Conversion Shares pursuant to Rule
144A promulgated under the Securities Act, it will take all necessary steps in
order to perfect the exemption from registration provided thereby, including (i)
obtaining on behalf of the Company information to enable the Company to
establish a reasonable belief that the purchaser is a qualified institutional
buyer and (ii) advising such purchaser that Rule 144A is being relied upon
16
with respect to such resale.
ARTICLE IV.
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
Section 4.1 Conditions to the Obligations of the Purchasers on the First
Closing Date. The obligation of each Purchaser to purchase and pay for the
Initial Purchased Shares being purchased by it on the First Closing Date is, at
its option, subject to the satisfaction, on or before the First Closing Date, of
the following conditions:
(a) Opinion of Company's Counsel. The Purchasers shall have received
from Winthrop, Stimson, Xxxxxx & Xxxxxxx, counsel for the Company, an opinion
dated the First Closing Date, in form and scope satisfactory to the Purchasers
and their counsel, to the effect set forth in Exhibit D hereto.
(b) Representations and Warranties to be True and Correct. The
representations and warranties contained in Article II shall be true, complete
and correct on and as of the First 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 Purchasers in writing.
(c) 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 at the First Closing Date, and the President and Treasurer of the
Company shall have certified to the Purchasers in writing to such effect and to
the further effect that all of the conditions set forth in this Article IV have
been satisfied.
(d) All Proceedings to be Satisfactory. All corporate and other
proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchasers and their counsel, and the Purchasers and
their counsel shall have received all such counterpart originals or certified or
other copies of such documents as they reasonably may request.
(e) Supporting Documents. The Purchasers and their counsel 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 states.
17
(ii) a certificate of the Secretary or an Assistant Secretary
of the Company dated the First 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 the
Transaction Documents, the issuance, sale and delivery of the
Purchased Shares and the reservation, issuance, sale and delivery of
the Conversion Shares, and that all such resolutions are in full
force and effect and are all the resolutions adopted in connection
with the transactions contemplated by the Transaction Documents; (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 any of the
Transaction Documents, 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); and
(iii) such additional supporting documents and other
information with respect to the operations and affairs of the
Company as the Purchasers or their counsel reasonably may request.
(f) Charter. The Charter shall read in its entirety as set forth in
Exhibit B.
(g) Election of Directors. The number of directors constituting the
entire Board of Directors shall have been fixed at seven and the following
persons shall have been elected as the directors and shall each hold such
position as of the Closing Date: Xxxxxxxx Xxxxxxxx and Xxxx Xxxx as the
directors elected solely by the holders of the Common Stock, Xxxx Xxxxxx, Xxxxx
Xxxxx and _________ as the directors elected solely by the holders of the
Preferred Stock, and Xxxxxxx Xxxxxxxxxx and Xxxxxxxxxxx Linen as the two
directors with relevant industry expertise as the directors elected by both the
holders of a majority of the Common Stock, voting as a separate class, and the
holders of a majority of the Preferred Stock, voting as a separate series.
(h) [Reserved]
(i) Key Person Insurance. The Key Person Insurance (as defined in
Section 5.5) shall be in full force and effect on the First Closing Date.
(j) Preemptive Rights. All stockholders of the Company having any
preemptive, first refusal or other rights with respect to the issuance of the
Purchased Shares or the Conversion Shares shall have exercised or irrevocably
waived the same in writing.
(k) Fees of Purchasers' Counsel and Consultants. The Company shall
have paid in accordance with Section 6.1 the fees and disbursements of
Purchasers' counsel and consultants
18
invoiced at the Closing.
All such documents shall be reasonably satisfactory in form and substance
to the Purchasers and their counsel.
Section 4.2 Condition to the Obligations of the Purchasers on the Second
Closing Date. The obligation of each Additional Purchaser to purchase and pay
for the Additional Purchased Securities being purchased by it on the Second
Closing Date is, at its option, subject to the satisfaction, on or before the
Second Closing Date, of the following conditions:
(a) Opinion of Company's Counsel. The Additional Purchasers shall
have received from Winthrop, Stimson, Xxxxxx & Xxxxxxx, counsel for the
Company, an opinion, dated the Second Closing Date, in form and scope
satisfactory to the Additional Purchasers and their counsel, to the effect
set forth in Exhibit D hereto (except that for purposes hereof, references
therein to the First Closing Date shall be deemed to be references to the
Second Closing Date).
(b) Representations and Warranties to be True and Correct. The
representations and warranties contained in Article II shall be true,
complete and correct on and as of the Second 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 Additional Purchasers in writing.
(c) 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 at the Second Closing Date, and the President and
Treasurer of the Company shall have certified to the Additional Purchasers
in writing to such effect and to the further effect that all of the
conditions set forth in Section 4.1 and Section 4.2 have been satisfied.
(d) No Adverse Change. The Company's business and assets shall not
have been adversely affected in any material respect prior to the Second
Closing Date.
(e) Supporting Documents. The Additional Purchasers and their
respective counsel shall have received copies of the documentation
described in Section 4.1(e), except that all documents required in clause
(ii) therein to have been dated as of the First Closing Date shall be
dated as of the Second Closing Date.
All such documents shall be satisfactory in form and substance to the Additional
Purchasers and their counsel.
ARTICLE V.
COVENANTS OF THE COMPANY
19
The Company covenants and agrees with each of the Purchasers that:
Section 5.1 Financial Statements, Reports, Etc. Until the consummation of
an underwritten public offering of the Company's Common Stock conducted by a
nationally recognized reputable underwriter that results in net proceeds to the
Company of at least $20 million and at a price per share of at least $4.00 (as
adjusted for stock splits, combinations and the like) (a "Qualified Public
Offering"), the Company shall furnish to each Purchaser that shall hold at least
666,667 Purchased Shares:
(a) within ninety (90) days after the end of each fiscal year of the
Company a consolidated balance sheet of the Company and its subsidiaries, if
any, as of the end of such fiscal year and the related consolidated statements
of income, stockholders' equity and cash flows for the fiscal year then ended,
prepared in accordance with generally accepted accounting principles and
certified by a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Company;
(b) within twenty (20) days after the end of each month in each
fiscal year (other than the last month in each fiscal year), a consolidated
balance sheet of the Company and its subsidiaries, if any, and the related
consolidated statements of income, stockholders' equity and cash flows,
unaudited but prepared in accordance with generally accepted accounting
principles and certified by the Chief Financial Officer of the Company, such
consolidated balance sheet to be as of the end of such month and such
consolidated statements of income, stockholders' equity and cash flows to be for
such month and for the period from the beginning of the fiscal year to the end
of such month, in each case with comparative statements for the prior fiscal
year;
(c) at the time of delivery of each annual financial statement
pursuant to Section 5.1(a), a certificate executed by the Chief Financial
Officer of the Company stating that such officer has caused this Agreement and
the Series A and Series B Convertible Preferred Stock to be reviewed and has no
knowledge of any default by the Company in the performance or observance of any
of the provisions of this Agreement or the Series A and Series B Convertible
Preferred Stock or, if such officer has such knowledge, specifying such default
and the nature thereof;
(d) at the time of delivery of each monthly statement pursuant to
Section 5.1(c), a management narrative report explaining all significant
variances from forecasts and all significant current developments in staffing,
marketing, sales and operations;
(e) no later than thirty (30) days prior to the start of each fiscal
year, consolidated capital and operating expense budgets, cash flow projections
and income and loss projections for the Company and its subsidiaries in respect
of such fiscal year, all itemized in reasonable detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing;
(f) promptly following receipt by the Company, each audit response
letter, accountants management letter and other written report submitted to the
Company by its
20
independent public accountants in connection with an annual or interim audit of
the books of the Company or any of its subsidiaries;
(g) promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, investigations and inquiries of the type described
in Section 2.7 that could materially adversely affect the Company or any of its
subsidiaries, if any;
(h) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the Company sends or makes
available to its stockholders or directors or files with the Commission; and
(i) promptly, from time to time, such other information regarding
the business, prospects, financial condition, operations, property or affairs of
the Company and its subsidiaries as such Purchaser reasonably may request.
Section 5.2 [RESERVED]
Section 5.3 Reserve for Conversion Shares. The Company shall at all times
keep available out of its authorized but unissued shares of Common Stock, for
the purpose of effecting the conversion of the Purchased Shares and otherwise
complying with the terms of this Agreement, such number of its duly authorized
shares of Common Stock as shall be sufficient to effect the conversion of the
Purchased Shares from time to time outstanding or otherwise to comply with the
terms of this Agreement. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of the
Purchased Shares or otherwise to comply with the terms of this Agreement, the
Company will forthwith take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes. The Company will use its best
efforts to obtain any authorization, consent, approval or other action by, and
will make any filing with, any court or administrative body that may be required
under applicable state securities laws in connection with the issuance of shares
of Common Stock upon conversion of the Purchased Shares.
Section 5.4 Corporate Existence. The Company shall maintain and, except as
otherwise permitted by Section 5.17 cause each of its subsidiaries (if any) to
maintain their respective corporate existence, rights and franchises in full
force and effect.
Section 5.5 Properties, Business, Insurance. The Company shall maintain
and cause each of its subsidiaries (if any) to maintain as to their respective
properties and business, with financially sound and reputable insurers,
insurance against such casualties and contingencies and of such types and in
such amounts as is customary for companies similarly situated, which insurance
shall be deemed by the Company to be sufficient. The Company shall also maintain
in effect "key person" life insurance policies, payable to the Company, on the
lives of Xxxxxxxx Xxxxxxxx and Xxxx Xxxx (so long as they remain employees of
the Company) (collectively, the "Founders"), in the amount of $2,000,000 each
(the "Key Person Insurance"). The Company shall not cause or permit any
assignment or change in beneficiary and shall not borrow against
21
any such policy. If requested by Purchasers holding at least a majority of the
outstanding Preferred Stock, the Company will add one designee of the Purchasers
as a notice party for each such policy and shall request that the issuer of each
policy provide such designee with ten (10) days' notice before such policy is
terminated (for failure to pay premiums or otherwise) or assigned or before any
change is made in the beneficiary thereof.
Section 5.6 Inspection, Consultation and Advice. The Company shall permit
and cause each of its subsidiaries (if any) to permit each Purchaser which holds
at least 666,667 Purchased Shares and covenants to preserve the confidentiality
of the Company's proprietary information and its agents and representatives, at
such Purchaser's expense, to visit and inspect any of the properties of the
Company and its subsidiaries, examine their books and take copies and extracts
therefrom, discuss the affairs, finances and accounts of the Company and its
subsidiaries with their officers, employees and public accountants (and the
Company hereby authorizes said accountants to discuss with such Purchaser and
such designees such affairs, finances and accounts), and consult with and advise
the management of the Company and its subsidiaries as to their affairs, finances
and accounts, all at reasonable times and upon reasonable notice.
Section 5.7 Restrictive Agreements Prohibited. Neither the Company nor any
of its subsidiaries shall become a party to any agreement which by its terms,
restricts the Company's performance of either of the Transaction Documents or
the Charter.
Section 5.8 Transactions with Affiliates. Except for transactions
contemplated by this Agreement or as otherwise approved by the Board of
Directors, neither the Company nor any of its subsidiaries shall enter into any
transaction with any director, officer, employee or holder of more than 5% of
the outstanding capital stock of any class or series of capital stock of the
Company or any of its subsidiaries, member of the family of any such person, or
any corporation, partnership, trust or other entity in which any such person, or
member of the family of any such person, is a director, officer, trustee,
partner or holder of more than 5% of the outstanding capital stock thereof,
except for transactions on customary terms related to such person's employment.
Section 5.9 Expenses of Directors. The Company shall promptly reimburse in
full each director of the Company who is not an employee of the Company and who
was elected as a director solely or in part by the holders of Preferred Stock,
for all of his reasonable out-of-pocket expenses incurred in attending each
meeting of the Board of Directors of the Company or any Committee thereof.
Section 5.10 Use of Proceeds. The Company shall use the proceeds from the
sale of the Purchased Shares solely for working capital.
Section 5.11 Board of Directors Meetings. The Company shall use its best
efforts to ensure that meetings of its Board of Directors are held at least once
per month.
Section 5.12 Compensation. The Company shall not pay to its management
compensation in excess of that compensation customarily paid to management in
companies of
22
similar size, of similar maturity, and in similar businesses without the
unanimous written consent of the members of the Compensation Committee of the
Company's Board of Directors.
Section 5.13 By-laws. The Company shall at all times cause its By-laws to
provide that, (a) unless otherwise required by the laws of the State of
Delaware, (i) any two directors and (ii) any holder or holders of at least
1,500,000 shares of Preferred Stock shall have the right to call a meeting of
the Board of Directors or stockholders and (b) the number of directors fixed in
accordance therewith shall in no event conflict with any of the terms or
provisions of the Preferred Stock as set forth in the Charter. The Company shall
at all times maintain provisions in its By-laws and/or Charter indemnifying all
directors against liability and absolving all directors from liability to the
Company and its stockholders to the maximum extent permitted under the laws of
the State of Delaware.
Section 5.14 Performance of Contracts. The Company shall not amend,
modify, terminate, waive or otherwise alter, in whole or in part any of the
Employee Nondisclosure and Developments Agreements or the Founders Agreements
dated as of July 25, 1997, between the Company and each of the Founders, without
the unanimous written consent of those members of the Company's Board of
Directors elected solely by the holders of Preferred Stock.
Section 5.15 [RESERVED].
Section 5.16 Employee Nondisclosure and Developments Agreements. The
Company shall use its best efforts to obtain, and shall cause its subsidiaries
(if any) to use their best efforts to obtain, an Employee Nondisclosure and
Developments Agreement from all future officers, key employees and other
employees who will have access to confidential information of the Company or any
of its subsidiaries, upon their employment by the Company of its subsidiaries,
and, within 30 days following the Closing Date, from all current employees who
have not previously provided such agreement.
Section 5.17 Activities of Subsidiaries. The Company will not organize or
acquire any entity that is a subsidiary unless such subsidiary is wholly-owned
(directly or indirectly) by the Company (other than qualifying shares owned by
nominees to the extent required by the jurisdiction in which such subsidiary
shall be domiciled) without the approval of a majority vote of the Board of
Directors which majority must include at least one director elected solely by
the holders of Preferred Stock. The Company shall not permit any subsidiary to
consolidate or merge into or with or sell or transfer all or substantially all
its assets, except that any subsidiary may (i) consolidate or merge into or with
or sell or transfer assets to any other subsidiary, or (ii) merge into or sell
or transfer assets to the Company. The Company shall not sell or otherwise
transfer any shares of capital stock of any subsidiary, except to the Company or
another subsidiary, or permit any subsidiary to issue, sell or otherwise
transfer any shares of its capital stock or the capital stock of any subsidiary,
except to the Company or another subsidiary. The Company shall not permit any
subsidiary to purchase or set aside any sums for the purchase of, or pay any
dividend or make any distribution on, any shares of its stock, except for
dividends or other distributions payable to the Company or another subsidiary.
23
Section 5.18 Compliance with Laws. The Company shall comply, and cause
each subsidiary to comply, with all applicable laws, rules, regulations and
orders, noncompliance with which could materially adversely affect its business
or condition, financial or otherwise.
Section 5.19 Keeping of Records and Books of Account. The Company shall
keep, and cause each subsidiary to keep, adequate records and books of account,
in which complete entries regarding its transactions will be made in accordance
with generally accepted accounting principles consistently applied, reflecting
all financial transactions of the Company and such subsidiary, and in which, for
each fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.
Section 5.20 Change in Nature of Business. The Company shall not make, or
permit any subsidiary to make, any material change in the nature of its business
as set forth in the Offering Memorandum.
Section 5.21 Rule 144A Information. The Company shall, at all times during
which it is neither subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide
in writing, upon the written request of any Purchaser or a prospective buyer of
Purchased Shares or shares of Common Stock issued upon conversion of the
Preferred Stock ("Conversion Stock") from any Purchaser, all information
required by Rule 144A(d)(4)(i) of the General Regulations promulgated by the
Commission under the Securities Act ("Rule 144A Information"). The Company also
shall, upon the written request of any Purchaser, cooperate with and assist such
Purchaser or any member of the National Association of Securities Dealers, Inc.
PORTAL system in applying to designate and thereafter maintain the eligibility
of the Preferred Stock or Conversion Stock, as the case may be, for trading
through PORTAL. The Company's obligations under this Section 5.21 shall at all
times be contingent upon the relevant Purchaser's obtaining from the prospective
buyer of Purchased Shares or Conversion Shares a written agreement to take all
reasonable precautions to safeguard the Rule 144A Information from disclosure to
anyone other than a person who will assist such buyer in evaluating the purchase
of any Purchased Shares or Conversion Shares.
Section 5.22 Compensation and Audit Committees. The Company shall, by
amending its By-laws or otherwise, maintain a Compensation Committee and an
Audit Committee of the Board of Directors, each of which shall consist of two
non-management directors and which currently consist of Xxxx Xxxxxx and
Xxxxxxxxxxx Linen on the Compensation Committee and Xxxxxxx Xxxxxxxxxx and Xxxx
Xxxxxx on the Audit Committee. No increase in compensation, bonuses or other
remuneration shall be paid to, and no capital stock or options to acquire
capital stock of the Company shall be issued or granted to, any director or
executive officer of the Company or any of its subsidiaries, without the
approval of the Compensation Committee. No employee stock option plan, employee
stock purchase plan, employee restricted stock plan or other employee stock plan
shall be established without the approval of the Compensation Committee. The
Audit Committee shall select (subject to the approval of the Board of Directors)
and provide instructions to the Company's auditors and shall approve the
Company's annual audit
24
prior to its issuance each year.
Section 5.23 Termination of Covenants. The covenants contained in this
Article V will terminate and be of no further force or effect upon the earlier
of (i) the date of a Qualified Public Offering and (ii) the date on which at
least 2,700,000 Conversion Shares have been sold in one or more public
offerings.
ARTICLE VI.
MISCELLANEOUS
Section 6.1 Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated, provided, however, that upon closing the
Company shall pay the fees of the Purchasers' special counsel, Xxxxx Raysman
Xxxxxxxxx Xxxxxx & Xxxxxxx LLP, and X'Xxxxxxxx Graev & Karabell, LLP, in
connection with such transactions and any subsequent amendment, waiver, consent
or enforcement thereof, and all related disbursements incurred by any of such
counsel.
Section 6.2 Survival of Representations; Termination of Agreements. All
covenants, agreements, representations and warranties made in this Agreement or
the Registration Rights Amendment or any certificate or instrument delivered to
the Purchasers pursuant to or in connection with the Transaction Documents,
shall survive the execution and delivery of the Transaction Documents, the
issuance, sale and delivery of the Purchased Shares, and the issuance and
delivery of the Conversion Shares (i) in the case of covenants and agreements,
an indefinite period of time (subject to the provisions of Section 5.23 hereof),
and (ii) in the case of representations and warranties, for a period of five (5)
years, and all statements contained in any certificate or other instrument
delivered by the Company hereunder or thereunder or in connection herewith or
therewith shall be deemed to constitute representations and warranties made by
the Company.
Section 6.3 Brokerage. Each party hereto will indemnify and hold harmless
the others 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. If the party to be
indemnified shall be a Purchaser, then such indemnification shall include
without limitation losses which may be suffered as a result of diminution in
value of such Purchaser's investment hereunder in the case of loss.
Section 6.4 Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. Without limiting the
generality of the foregoing, all representations, covenants and agreements
benefiting the Purchasers shall inure to the benefit of any and all subsequent
holders from time to time of Purchased Shares or Conversion Shares, unless the
Conversion Shares were
25
purchased by such subsequent holders in a public offering.
Section 6.5 Lock-Up Agreement. Each Purchaser and its successors and
assigns will agree, to the extent reasonably requested by any underwriter of
securities of the Company in connection with an initial public offering of the
Company's Common Stock, to enter into an agreement consistent with then market
practice for major bracket underwriters not to sell or otherwise transfer or
dispose of any shares of Common Stock for such period of time (not to exceed 180
days) following the effective date of a registration statement of the Company
filed under the Securities Act, which agreement shall also bind the Founders,
executive officers, directors, and other shareholders on terms and conditions
substantially similar to those which shall apply to the Purchasers and said
successors and assigns.
Section 6.6 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 or telex, addressed as follows:
(a) if to the Company, to it at StarMedia Network, Inc., 00 Xxxx
00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President, with a
copy to Xxxxxx X. Macedonia, Esq., Winthrop, Stimson, Xxxxxx & Xxxxxxx, Xxx
Xxxxxxx Xxxx Xxxx, Xxx Xxxx, XX 00000; and
(b) if to any Purchaser, at the address of such Purchaser set forth
in Schedule I, with a copy to Xxx X. Xxxx, Esq., Xxxxx Raysman Xxxxxxxxx Xxxxxx
& Xxxxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
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 6.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section 6.8 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 6.9 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 6.10 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 holders of at least two-thirds of the outstanding shares of
Common Stock issued or issuable upon conversion of the Purchased Shares.
Section 6.11 Severability. If any provision of this Agreement shall be
declared void or
26
unenforceable by any judicial or administrative authority, the validity of any
other provision and of the entire Agreement shall not be affected thereby.
Section 6.12 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 6.13 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the Company and the Purchasers have executed this
Agreement as of the day and year first above written.
STARMEDIA NETWORK, INC.
By: /s/ XXXX XXXX
---------------------------------
Name: XXXX XXXX
Title: PRESIDENT
Purchasers named in Schedule I to the
Purchase Agreement:
THE FL@TIRON FUND LLC
By: /s/ [ILLEGIBLE]
---------------------------------
Title: Managing Member
------------------------------
CHASE VENTURE CAPITAL
ASSOCIATES, L.P.
By: Chase Capital Partners, its
General Partner
By: /s/ [ILLEGIBLE]
---------------------------------
Title:
------------------------------
28
NEW YORK CITY INVESTMENT FUND, LLC
By: /s/ [ILLEGIBLE]
---------------------------------
Title: PRESIDENT & CEO
/s/ Xxxxxx X. Xxxxxx, Ph.D.
------------------------------------
Xxxxxx X. Xxxxxx, Ph.D.
/s/ Xxxxx Xxxxxxxxxxx
------------------------------------
Xxxxx Xxxxxxxxxxx
29
SCHEDULE I
Purchasers
Number of Purchased Aggregate Purchase
Name and Shares Price for
Address of Purchaser to be Purchased Purchased Shares
-------------------- --------------- ----------------
Chase Venture Capital Associates, L.P. 2,393,333 $3,590,000
000 Xxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. I. Xxxxxx Xxxxxx
The fl@tiron Fund LLC 273,333 $ 410,000
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. Xxxx Xxxxxx
New York City Investment Fund, LLC 166,667 $ 250,000
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Xxxxx Xxxxxxxxxxx 666,667 $1,000,000
Rockefeller & Co.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
--------- ----------
TOTAL: 3,500,000 $5,250,000
Schedule II: Disclosure Schedule
Section 2.1
The Company owns capital stock of the following corporations:
StarMedia Network Americas S.A.
Section 2.2
With respect to the Purchased Shares of those Purchasers which are party
thereto, the Registration Rights Agreement, as amended.
Section 2.4
8% Convertible Subordinated Note Payable in the amount of $3,590,000 to Chase
Venture Capital Associates, L.P. dated January 21, 1998, due July 21, 1998 and
8% Convertible Subordinated Note Payable in the amount of $410,000 to Flatiron
Fund, LLC dated January 21, 1998, due July 21, 1998 (the "Bridge Notes").
There are twenty (20) holders of Common Stock whom in the aggregate hold
10,012,000 shares of Common Stock.
There are twenty-nine (29) holders of Series A Preferred Stock whom in the
aggregate hold 7,330,000 shares of Preferred Stock.
There are thirty-six (36) holders of options on Common Stock whom in the
aggregate hold options to purchase 1,656,000 shares of Common Stock.
Stockholders Agreement, dated as of July 25, 1997, among the Company and certain
stockholders of the Company named therein (the "Stockholders Agreement").
Section 2.5
The Bridge Notes.
Section 2.6
The Bridge Notes.
Section 2.7
Company has recently applied for incorporation in Brazil, Colombia and Chile.
Confidential Page 1
Section 2.9
(i)
REGISTERED TRADEMARKS
-----------------------------------------------------------------------------------------
Xxxx Country Registration No. Registration Date
-----------------------------------------------------------------------------------------
STARMEDIA United Stares 2,123,636 12/23/97
-----------------------------------------------------------------------------------------
STARMEDIA and United States 2,121,588 12/16/97
design
-----------------------------------------------------------------------------------------
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Xxxx Country Serial No. Filing Date
-----------------------------------------------------------------------------------------
STARMEDIA Argentina 2,111,343 10/28/97
-----------------------------------------------------------------------------------------
Bolivia
-----------------------------------------------------------------------------------------
Brazil 8203336 11/5/97
-----------------------------------------------------------------------------------------
Chile 396794 11/12/97
-----------------------------------------------------------------------------------------
Colombia 97-0661 11/11/97
-----------------------------------------------------------------------------------------
Costa Rica 01/14/98
-----------------------------------------------------------------------------------------
Cuba
-----------------------------------------------------------------------------------------
Dominican Republic
-----------------------------------------------------------------------------------------
Ecuador 84003 12/30/97
-----------------------------------------------------------------------------------------
El Salvador
-----------------------------------------------------------------------------------------
Guatemala
-----------------------------------------------------------------------------------------
Honduras 000-00 00/09/98
-----------------------------------------------------------------------------------------
Xxxxxxxxx
-----------------------------------------------------------------------------------------
Xxxxxx 000000 12/11/97
-----------------------------------------------------------------------------------------
Panama
-----------------------------------------------------------------------------------------
Paraguay 26121 12/23/97
-----------------------------------------------------------------------------------------
Xxxx 00000 12/30/97
-----------------------------------------------------------------------------------------
Portugal
-----------------------------------------------------------------------------------------
Spain
-----------------------------------------------------------------------------------------
Uruguay 300399 12/22/97
-----------------------------------------------------------------------------------------
Venezuela 97-0223 11/04/97
-----------------------------------------------------------------------------------------
Confidential Page 2
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Xxxx Country Serial No. Filing Date
-----------------------------------------------------------------------------------------
STARMEDIA and Argentina 2,120,115 12/11/97
design
-----------------------------------------------------------------------------------------
Bolivia
-----------------------------------------------------------------------------------------
Brazil 8204342 12/29/97
-----------------------------------------------------------------------------------------
Chile 400806 12/19/97
-----------------------------------------------------------------------------------------
Colombia 0000000 12/26/97
-----------------------------------------------------------------------------------------
Costa Rica 01/14/98
-----------------------------------------------------------------------------------------
Cuba
-----------------------------------------------------------------------------------------
Dominican Republic
-----------------------------------------------------------------------------------------
Ecuador 83999 12/30/97
-----------------------------------------------------------------------------------------
El Salvador
-----------------------------------------------------------------------------------------
Guatemala
-----------------------------------------------------------------------------------------
Honduras 000-00 00/09/98
-----------------------------------------------------------------------------------------
Xxxxxxxxx
-----------------------------------------------------------------------------------------
Xxxxxx 000000 12/18/97
-----------------------------------------------------------------------------------------
Panama
-----------------------------------------------------------------------------------------
Paraguay 26122 12/23/97
-----------------------------------------------------------------------------------------
Xxxx 00000 12/30/97
-----------------------------------------------------------------------------------------
Portugal
-----------------------------------------------------------------------------------------
Spain
-----------------------------------------------------------------------------------------
Uruguay 300400 12/22/97
-----------------------------------------------------------------------------------------
Venezuela 97-0253 12/15/97
-----------------------------------------------------------------------------------------
Confidential Page 3
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Xxxx Country Serial No. Filing Date
-----------------------------------------------------------------------------------------
TALK PLANET United States 75/212492 12/13/96
-----------------------------------------------------------------------------------------
Argentina 2115045 11/17/97
-----------------------------------------------------------------------------------------
Bolivia
-----------------------------------------------------------------------------------------
Brazil 8203570 11/18/97
-----------------------------------------------------------------------------------------
Chile 398407 11/26/97
-----------------------------------------------------------------------------------------
Colombia 116662 11/21/97
-----------------------------------------------------------------------------------------
Costa Rica 01/14/98
-----------------------------------------------------------------------------------------
Cuba
-----------------------------------------------------------------------------------------
Dominican Republic
-----------------------------------------------------------------------------------------
Ecuador 84007 12/30/97
-----------------------------------------------------------------------------------------
El Salvador
-----------------------------------------------------------------------------------------
Guatemala
-----------------------------------------------------------------------------------------
Honduras 000-00 00/09/98
-----------------------------------------------------------------------------------------
Xxxxxxxxx
-----------------------------------------------------------------------------------------
Xxxxxx 000000 12/11/97
-----------------------------------------------------------------------------------------
Panama
-----------------------------------------------------------------------------------------
Paraguay 26123 12/23/97
-----------------------------------------------------------------------------------------
Xxxx 00000 12/30/97
-----------------------------------------------------------------------------------------
Portugal
-----------------------------------------------------------------------------------------
Spain
-----------------------------------------------------------------------------------------
Uruguay 300401 12/22/97
-----------------------------------------------------------------------------------------
Venezuela 97-0232 11/17/97
-----------------------------------------------------------------------------------------
Confidential Page 4
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Country Serial No. Film Date
-----------------------------------------------------------------------------------------
XXXXXXXXXXX.XXX United States 75/396626 11/26/97
-----------------------------------------------------------------------------------------
Argentina 2,120,116 12/11/97
-----------------------------------------------------------------------------------------
Bolivia
-----------------------------------------------------------------------------------------
Brazil 820412317 12/12/97
-----------------------------------------------------------------------------------------
Chile 400809 12/19/97
-----------------------------------------------------------------------------------------
Colombia 97,072,337 12/11/97
-----------------------------------------------------------------------------------------
Costa Rica
-----------------------------------------------------------------------------------------
Cuba
-----------------------------------------------------------------------------------------
Dominican Republic
-----------------------------------------------------------------------------------------
Ecuador 84004 12130/97
-----------------------------------------------------------------------------------------
El Salvador
-----------------------------------------------------------------------------------------
Guatemala
-----------------------------------------------------------------------------------------
Honduras
-----------------------------------------------------------------------------------------
Xxxxxxxxx
-----------------------------------------------------------------------------------------
Xxxxxx 000000 12/15/97
-----------------------------------------------------------------------------------------
Panama
-----------------------------------------------------------------------------------------
Paraguay
-----------------------------------------------------------------------------------------
Peru
-----------------------------------------------------------------------------------------
Portugal
-----------------------------------------------------------------------------------------
Spain
-----------------------------------------------------------------------------------------
Uruguay 300402 12/22/97
-----------------------------------------------------------------------------------------
Venezuela 97-025196 12/12/97
-----------------------------------------------------------------------------------------
Confidential Page 5
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Xxxx Country Serial No. Filing Date
-----------------------------------------------------------------------------------------
XXXXXXXXXXX.XXX United States 75/396625 11/26/97
-----------------------------------------------------------------------------------------
Argentina 2123249 12/30/97
-----------------------------------------------------------------------------------------
Bolivia
-----------------------------------------------------------------------------------------
Brazil 820,412,317 12/12/97
-----------------------------------------------------------------------------------------
Chile
-----------------------------------------------------------------------------------------
Colombia
-----------------------------------------------------------------------------------------
Costa Rica
-----------------------------------------------------------------------------------------
Cuba
-----------------------------------------------------------------------------------------
Dominican Republic
-----------------------------------------------------------------------------------------
Ecuador
-----------------------------------------------------------------------------------------
El Salvador
-----------------------------------------------------------------------------------------
Guatemala
-----------------------------------------------------------------------------------------
Honduras
-----------------------------------------------------------------------------------------
Nicaragua
-----------------------------------------------------------------------------------------
Mexico
-----------------------------------------------------------------------------------------
Panama
-----------------------------------------------------------------------------------------
Paraguay
-----------------------------------------------------------------------------------------
Peru
-----------------------------------------------------------------------------------------
Portugal
-----------------------------------------------------------------------------------------
Spain
-----------------------------------------------------------------------------------------
Uruguay
-----------------------------------------------------------------------------------------
Venezuela
-----------------------------------------------------------------------------------------
PENDING APPLICATIONS
-----------------------------------------------------------------------------------------
Xxxx Country Serial No. Filing Date
-----------------------------------------------------------------------------------------
INFORMATICA HOY United States 12/19/97
-----------------------------------------------------------------------------------------
INFORMATICA HOJE United States 12/19/97
-----------------------------------------------------------------------------------------
(ii)
See Section 2.14 below.
Section 2.14
Licensing Agreement with eShare Technologies for chat software dated January 7,
1998.
Agreement with Excite for cobranding and content and technology dated November
17, 1997.
Agreement with CBS Telenoticias for cobranding and content dated June 20, 1997.
Confidential Page 6
Letter of Intent with Agence France Presse for use of content dated January 19,
1998.
Agreement with Reuters for use of content dated December 18, 1997.
Letter of Intent with Xxxx-Xxxxx for cobranding and content dated July 24, 1997
Agreement with America Economia for use of content dated May 14, 1997
Agreement with Xxxxx.xxx for use of content dated November 25, 1996
Agreement with Citibank Colombia for development and advertising of promotional
site dated January 23, 1998.
Letter of Intent with Lucid Media for development of games dated January 20,
1998.
Agreement with Fox Latin America for co-marketing dated January 22, 1997.
Agreement with Compaq for e-commerce of computers dated October 22, 1997.
Agreement with Xxxxxx & Xxxxx for e-commerce of books dated September 13, 1997.
Agreement with N2K Entertainment for e-commerce of compact disks dated October
20, 1997.
Agreement with Snickelways Interactive for web design and development dated
November 14, 1997.
Agreement with ANS for hosting services dated September 16, 1997.
Agreement with ANS for sublicense of NetGravity advertising management software
dated September 16, 1997.
Software license with Oracle Corporation for database software dated September
1997
Software license with Vignette Corporation for Story Server translation software
dated September 1997
Oral agreement with Exodus Communications for hosting services dated February 6,
1998 (expected to be formalized within thirty days).
Agreement with Internet Profiles Corporation for Netline Reporting Services
dated January 15, 1997.
Agreement with Internet Profiles Corporation for Xxxxxxx-I/PRO I/COUNT Software
dated January 21, 1997.
8% Convertible Subordinated Note Payable in the amount of $3,590,000 to Chase
Venture Capital Associates, L.P. dated January 21, 1998, due July 21, 1998.
8% Convertible Subordinated Note Payable in the amount of $410,000 to Flatiron
Fund, LLC dated January 21, 1998, due July 21, 1998.
Stockholders Agreement.
Registration Rights Agreement.
Employment Agreement with Xxxxxxxx Xxxxxxxx dated July 25, 1997.
Employment Agreement with Xxxx Xxxx dated July 25, 1997.
Confidential Page 7
Compensation Agreement with Xxxx Xxxxxxxx, Senior Vice President, Corporate
Relations dated June 1, 1997.
Office Lease for New York City offices with Xxxxxxxxx Real Estate dated
September 15, 1997.
Office Lease for Bogota, Colombia offices with Cemco dated June 1, 1997.
Office Lease for Santiago, Chile offices with HQ Business Centers dated November
14, 1997.
Agreement with Ifrontier to do web advertising buying dated October 28, 1997.
Oral Agreement with Ogilvy & Xxxxxx to represent StarMedia as advertising agency
dated October 1997.
"Key-man" life insurance policy for Xxxxxxxx Xxxxxxxx dated February 6, 1998.
"Key-man" life insurance policy for Xxxx Xxxx dated February 6, 1998.
Medical insurance plan available to all employees. Stock option plan available
to certain employees and directors. Disibility insurance for Xxxxxxxx Xxxxxxxx
and Xxxx Xxxx.
Section 2.17
Oral agreement with Spelling/TeleUno for co-marketing has expired. Renewal
discussions in progress.
Oral agreement with USA Networks for co-marketing has expired. Renewal
discussions in progress.
Section 2.22
Xxxxxxxx Xxxxxxxx
Chairman and CEO
$81,500
Xxxx X. Xxxx
President
$81,500
Xxxx Xxxxxxxx
Senior Vice President, Corporate Relations
$185,774
Xxxxxx X. Xxxxxx
Vice President, Finance & Administration
$15,726
Xxxxx Xxxxx
Vice President, Marketing & Product Development
$32,167
Xxxxxxxx Xxxxxxxxx
Vice President, Technology & Operations
$36,667
Xxxxx Xxxx
Vice President, Sales
$15,417
Confidential Page 8
Adziana Kampfner
Vice President, General Manager, Mexico
$20,833
Employment Agreement with Xxxxxxxx Xxxxxxxx dated July 25, 1997.
Employment Agreement with Xxxx Xxxx dared July 25, 1997.
Compensation Agreement with Xxxx Xxxxxxxx, Senior Vice President, Corporate
Relations dated June 1, 1997.
Section 2.24
The majority of employees have not yet executed a non-disclosure agreement.
Consistent with Section 5.16, the Company will use its best efforts to have all
current employees execute non-disclosure agreements within thirty days. The
founders (Xxxxxxxx Xxxxxxxx and Xxxx Xxxx) have executed non-disclosure
agreements.
Xxxxxxx Xxxxxxxx, General Manager, Colombia is no longer an employee of the
company.
Section 2.27
Medical insurance plan available to all employees. Disability insurance for
Xxxxxxxx Xxxxxxxx and Xxxx Xxxx.
Employment Agreement with Xxxxxxxx Xxxxxxxx dated July 25, 1997.
Employment Agreement with Xxxx Xxxx dated July 25, 1997.
The company has made oral commitments to its employees regarding the provision
of dental and vision insurance as well as a 401(k) plan. Employee contribution
is intended and communicated. The 401(k) plan will not contain employer
"matching". Implementation is expected in mid-1998.
Confidential Page 9
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXX XXXXXXXX
-------------------------------------------
Signature
XXXX XXXXXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXX X. XXXXXXXX
-------------------------------------------
Signature
XXXXX X. XXXXXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXX X. XXXXX
-------------------------------------------
Signature
XXXXX X. XXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ A. Xxxxxx Xxxxxxxx & /s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------------------------------
Signature
A. Xxxxxx Xxxxxxxx & Xxxxxxxxx X. Xxxxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Signature
Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxxxx Xxxx
-------------------------------------------
Signature
Xxxxxxx Xxxx III
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxx X. Xxxxxx
-------------------------------------------
Signature
Xxxx X. Xxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx Xxxxxxxxxxx
-------------------------------------------
Signature
Xxxxx Xxxxxxxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s): THE PAPAGENO TRUST
/s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------------
Signature
Xxxxxxx X. Xxxxxxxxxx, Trustee
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ [ILLEGIBLE]
-------------------------------------------
Signature
The Grapa Trust
-------------------------------------------
Print Name Xxxxxxx Xxxxxxxxxx, Trustee
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
Signature
XXXXXX X. XXXXXX
Xxxxx X. Xxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXXXXX X. XXXXX XX.
-------------------------------------------
Signature
XXXXXXXX X. XXXXX XX.
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXX XXXXX
/s/ Xxxx X. Xxxxxxx
-------------------------------------------
Signature
XXXXX XXXXX
Xxxx X. Xxxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ E. Xxxx Xxxx Jr.
-------------------------------------------
Signature
E. Xxxx Xxxx Jr.
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER(S):
/s/ U. Xxxxxxx Xxxxx
-------------------------------------------
Signature
U. Xxxxxxx Xxxxx, Xx.
-------------------------------------------
Print Name:
30
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ [ILLEGIBLE]
-------------------------------------------
Signature
Bayview Investors, Ltd
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
PURCHASER(S):
XXXXX INVESTMENT PARTNERS, L.P.
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Signature
Xxxxxx X. Xxxxxxxx, General Partner
-------------------------------------------
Print Name:
30
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ XXXXX XXXXX
-------------------------------------------
Signature
XXXXX XXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
Signature
Xxxxx X. Xxxxxx
-------------------------------------------
Print Name:
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx Xxxxxx
-------------------------------------------
Signature
Xxxxx Xxxxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
Signature
XXXXX X. XXXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx End
-------------------------------------------
Signature
Xxxxx End
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxx Xxxx
-------------------------------------------
Signature
Xxxxx Xxxx
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s): XXXXXX XXXXXXX
XXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
-------------------------------------------
Signature
XXXXXX XXXXXXX
XXXXXX XXXXXXX
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE 2
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
STARMEDIA NETWORK, INC.
By:
----------------------------------------
Name:
Title:
Purchaser(s):
/s/ Xxxxxx X. Wash
-------------------------------------------
Signature
Xxxxxx X. Wash
-------------------------------------------
Print Name
28
COUNTERPART SIGNATURE PAGE TO
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
FOR STARMEDIA NETWORK, INC.
PURCHASER(S):
INTEL CORPORATION
/s/ Xxxxxx Xxxxxxx
----------- -------------------------------------------
LEGAL OK Signature
-----------
[ILLEGIBLE]
-----------
XXXXXX XXXXXXX
-------------------------------------------
Print Name
Vice President and Treasurer
30
