EXHIBIT 10.23
Dated as of December 28, 2000
Dear Mr. Justin K. Macedonia:
We (StarMedia Network, Inc.) are pleased to confirm that,
subject to the terms and conditions set forth below, we have increased your line
of credit (the "Line of Credit") to a maximum aggregate principal amount not to
exceed $1,300,000 which is available until terminated pursuant to section 6 of
this letter.
1. BORROWINGS. You may make a borrowing from time to time
under the Line of Credit by delivering a signed written request for payment to
us at 75 Varick Street, New York, New York 10013, Attention: Jack C. Chen, or to
such other address or other person as we may hereafter specify to you in
writing. Your request for payment must set forth the amount of the requested
borrowing, the date (which must be a business day - a "business day" is a day on
which we are open for business) requested for disbursement of the borrowing and
instructions for the disbursement of the borrowing. If your request for payment
is received by us at least two business days before the requested disbursement
date, we will pay the amount of the borrowing on that disbursement date;
otherwise, we will make payment as soon as reasonably practicable after receipt
of your request for payment.
Each request for payment must be in a minimum amount of $5,000
and in whole multiples of $1,000 if above $5,000.
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You acknowledge that all outstanding loans previously made by
us to you were made in contemplation of this letter and will, as of the date
hereof, be subject to and covered by this letter and be deemed to constitute
borrowings under the Line of Credit.
2. INTEREST RATE. You agree to pay interest at the rate of
seven (7%) percent per annum on any amount borrowed under the Line of Credit
from the date borrowed until the date repaid in full. Interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be, for
the actual number of days elapsed in the applicable period of the calculation.
3. PAYMENTS AND PREPAYMENTS. Subject to sections 8 and 9 of
this letter, you will pay the principal amount of borrowings, together with
accrued and unpaid interest, as provided in section 6 of this letter.
All payments of principal, interest and any other amounts
payable by you under this letter will be made to us at our office at 75 Varick
Street, New York, New York 10013 or at such other place as we direct you. If any
date of payment is not a business day, payment shall be made on the next
succeeding business day.
You may prepay any amounts borrowed in whole or in part in
amounts of at least $1,000 (or, if less, the aggregate principal amount of all
borrowings then outstanding) at any time without premium or penalty. You will
also pay all accrued but unpaid interest on the amount that you prepay. Amounts
so prepaid may be reborrowed so long as the aggregate principal amount of
borrowings outstanding at any one time does not exceed the maximum amount set
forth in the first paragraph of this letter.
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4. SECURITY INTEREST. In order to secure the principal amount
of and all interest owed with respect to any and all borrowings under the Line
of Credit and all other amounts owed to us under this letter, you hereby grant
to us a security interest in all of the shares of common stock of StarMedia
Network, Inc. owned by you as of the date of this letter or acquired by you
after that date, together with any certificates representing or evidencing those
shares, and all cash, interest, dividends, rights, investment property,
distributions, general intangibles and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of those shares, including, but not limited to, any
additional shares, securities or equity interests obtained by virtue of stock
dividends or "splits" on those shares, and all other proceeds of those shares
and the other property previously mentioned; PROVIDED, HOWEVER, that such
security interest shall not be effective if (but only to the extent that) the
granting of such security interest will violate Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System. If at any time the
granting of the security interest with respect to any property would violate
Regulation U or Regulation X, the security interest shall be deemed released and
of no force or effect with respect to that property, but will be automatically
reinstated if and when it becomes permissible to do so under those Regulations.
You will from time to time take all actions requested by us which are reasonably
necessary in order to create, maintain and perfect our valid, first priority
security interest in any and all of the collateral then subject to our security
interest under this letter including, without limitation, obtaining, executing,
delivering and/or filing financing statements, control agreements, security
agreements and other notices, instruments or documents of any kind, and
amendments and renewals thereto, and delivering to us the certificates
representing or evidencing any shares, together with stock powers with respect
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thereto duly executed by you in blank or as we may otherwise request. You
authorize us to execute and file at any time such financing statements
(including, but not limited to, a financing statement in lieu of a continuation
statement pursuant to the Uniform Commercial Code as in effect from time to
time) without your signature and, if upon request you fail to do so, to execute
such control agreements, security agreements or other notices, instruments or
documents on your behalf.
5. MISCELLANEOUS.
(a) AMENDMENTS. No amendment of any provision of this letter
shall be effective unless in writing and signed by both of us.
(b) COSTS AND EXPENSES. You agree to pay all of our reasonable
expenses (including, but not limited to, reasonable legal fees and
disbursements) of every kind in connection with the enforcement of our rights
under this letter.
(c) CONTINUING OBLIGATION. This letter shall be your
continuing obligation, shall survive the termination of the Line of Credit and
shall be binding on you, your legal representatives, executors, administrators,
heirs and successors. You may not sell, assign or otherwise transfer all or any
part of this letter or any rights or obligations hereunder without our prior
written consent, and any attempted sale, assignment or transfer in violation
hereof shall be void.
(d) SUBMISSION TO COURTS. You consent to the jurisdiction of
the courts in the State of New York for all purposes in connection with this
letter.
(e) LAW. This letter is governed by New York law.
6. TERMINATION. If you die or any one or more of the following
events occur, we have the right, at our option, to immediately terminate the
Line of Credit upon written notice
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to you and will then have no obligation to permit any additional borrowings
under this letter and, thirty (30) days (or, with respect to the event described
in paragraph (b) of this section 6, sixty (60) days) after any one or more of
the following events occur, the entire unpaid principal amount of any
borrowings, together with all accrued and unpaid interest and any other amounts
owed under this letter shall become due and payable without any notice,
presentment, protest or demand by you (all of which you agree are waived):
(a) You make an assignment for the benefit of your creditors,
or you file a petition in bankruptcy, or you are adjudicated insolvent or
bankrupt, or an order for relief is entered for you as a debtor under the
federal Bankruptcy Code, or you petition or apply to any court or other
authority for the appointment of a receiver or trustee for all or any
substantial part of your property or assets; or there is commenced against you
any such proceeding which remains undismissed at the end of such thirty (30)
days; or you, by an act or failure to act on your part, indicate your consent,
approval or acquiescence in any such proceeding or the appointment of any
receiver or trustee for all or substantially all of your property or assets and
such receiver or trustee is not discharged at the end of such thirty (30) days;
(b) Your employment with us is terminated pursuant to Section
6.2 of the Employment Agreement, dated as of December 28, 2000, between us and
you (as it may be amended, restated, supplemented or otherwise modified from
time to time, the "Employment Agreement");
(c) Your employment with us is terminated by us for Due Cause
pursuant to (and as such term is defined in) Section 6.3 of the Employment
Agreement;
(d) You terminate your employment with us for a reason other
than for Good Reason (as such term is defined in Section 6.5(c) of the
Employment Agreement); or
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(e) (i) Your employment with us is terminated by us other than
pursuant to Section 6.1, 6.2 or 6.3 of the Employment Agreement or (ii) you
terminate your employment with us for Good Reason; PROVIDED, HOWEVER, that in
either of the foregoing cases, you will be required to pay only fifty (50%)
percent of such principal amount and interest and the balance will be forgiven
and released.
7. REMEDIES. If you do not pay any amounts when they are due
under the terms of this letter, we can take any action that is permitted by law
with respect to any property then covered by the security interest under section
4 of this letter. This may include obtaining the possession of and selling or
otherwise disposing of such property.
8. LIMITED RECOURSE. Regardless of any other provision of this
letter or the Employment Agreement to the contrary, your obligation to pay the
principal amount of and any interest on any borrowings under the Line of Credit,
and any other amounts owing hereunder, are enforceable by us solely against the
property, if any, that is subject to the security interest granted by you to us
under section 4 of this letter, and you will not be personally liable for
payment of such principal, interest or other amounts nor will any of such
principal, interest or other amounts be permitted to be set off against any
amounts that may be due to you under the Employment Agreement.
9. LOAN FORGIVENESS. Your obligation to pay the principal
amount of and interest on any borrowings under the Line of Credit will be
forgiven and released, in whole or in part, as the case may be, as provided in
section 6(e) hereof and in Sections 3.4 and 6.1 of the Employment Agreement.
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10. PRIOR AGREEMENTS SUPERSEDED. This letter shall completely
and fully supersede all prior undertakings or agreements, both written and oral,
between you and us relating to the Line of Credit or any borrowings thereunder,
including those entered into in anticipation of this letter. To the extent of
any conflict between this letter on the one hand and the Employment Agreement or
any other related document on the other hand, this letter shall control as
between you and us.
11. JURY TRIAL WAIVER. BOTH WE AND YOU WAIVE TRIAL BY JURY IN
ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF OR RELATED TO THIS LETTER.
If the foregoing is acceptable to you, please sign and return
to us the enclosed copy of this letter.
Very truly yours,
StarMediaNetwork, Inc.
By /s/ JACK C. CHEN
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Name: Jack C. Chen
Title: President
AGREED TO AND ACCEPTED AS OF THE DATE WRITTEN ABOVE:
/s/ JUSTIN K. MACEDONIA
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Justin K. Macedonia