EX-10.24 9 a2043693zex-10_24.txt EXHIBIT 10.24 EXHIBIT 10.24 Dated as of December 28, 2000 Dear Mr. Steven J. Heller: 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 $2,000,000 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: Justin Macedonia, 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. 2 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. 3 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 financial 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 4 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 5 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 6 (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 3.3 and 6.1 of the Employment Agreement. 7 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, StarMedia Network, Inc. By /s/ JACK C. CHEN ----------------------------- Name: Jack C. Chen Title: President AGREED TO AND ACCEPTED AS OF THE DATE WRITTEN ABOVE: /s/ STEVEN J. HELLER ------------------------------------ Steven J. Heller