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Exhibit 8
To the Noteholders listed on
Schedule I hereto (the "NOTEHOLDERS")
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Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated as of
the date hereof (the "PURCHASE AGREEMENT"), between StarMedia Network, Inc.
(the "PURCHASER") and Obsidiana, Inc. (the "COMPANY"). For convenience,
capitalized terms used but not otherwise defined in this letter agreement (the
"Letter Agreement") have the meanings given to them in the Purchase Agreement.
Pursuant to the terms of the Purchase Agreement, the Purchaser
will purchase (the "PURCHASE") the Acquired Assets of the Company. In exchange
for the Acquired Assets, the Purchaser shall pay the Company 1,125,000 shares
of StarMedia Common Stock (the "Consideration Shares").
Pursuant to SECTION 2.5 of the Purchase Agreement, 112,500
Consideration Shares (the "Holdback Shares") will be placed in an escrow
account as security for potential indemnity claims by the Purchaser. In
accordance with the terms of the Escrow Agreement among the Purchaser, the
Company and the Escrow Agent (as defined therein) (the "Escrow Agreement"), all
or some of the Holdback Shares may eventually be distributed to the Company (the
"Escrow Refund Shares").
Immediately after consummation of the Purchase, the Company
shall distribute the Consideration Shares less the Holdback Shares (the
"Payment Shares") to the Noteholders as more fully described below. Anytime
Holdback Shares are released to the Company from the escrow account, the
Company shall distribute the Escrow Refund Shares to the Noteholders as more
fully described below.
Notwithstanding anything to the contrary contained in the
Purchase Agreement, the Company and the Noteholders agree as follows:
1. Upon the consummation of the Purchase, all of the
outstanding promissory notes (the "NOTES") listed
opposite the name of each Noteholder on Schedule I shall
automatically convert into (i) the number of Payment
Shares equal to the quotient obtained by dividing a
fraction, the numerator of which is ninety percent (90%)
of the total outstanding principal amounts of the Notes
multiplied by the total number of Consideration Shares,
and the denominator of which is the total outstanding
principal amounts of the Notes, rounded to the nearest
whole share (the "Note Payment Shares") and (ii) the
right to receive the Escrow Refund Shares, if any.
2. Immediately after the consummation of the Purchase, the
Company shall distribute to each Noteholder such
Noteholder's PRO RATA share of the Note Payment Shares.
3. Anytime the Holdback Shares are released to the Company,
the Company shall distribute to each Noteholder such
Noteholder's PRO RATA share of the Escrow Refund Shares,
if any.
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IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of
the date first written above.
OBSIDIANA, INC.
By: /S/ XXXXX XXXX
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Name: Xxxxx Xxxx
Title: Chief Executive Officer
X.X. XXXXXX PARTNERS (BHCA), L.P.
By: JPMP MASTER FUND MANAGER, L.P.,
ITS GENERAL PARTNER
By: JPMP CAPITAL CORP.,
ITS GENERAL PARTNER
By: /S/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Title:
THE FLATIRON FUND 2001, LLC
By: /S/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Managing Member
THE FLATIRON FUND 2000, LLC
By: /S/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Managing Member
FLATIRON ASSOCIATES II, LLC
By: /S/ XXXX XXXXXX
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Name: Xxxx Xxxxxx
Title: Managing Member
XXXXXXX/X.X. XXXXXX PARTNERS, L.P.
By: Quetzal/X.X. Xxxxxx Partners (GP),LLC,
its General Partner
By: /S/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Managing Member
