EXHIBIT 10.1
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PROMISSORY NOTE
(Purpose Credit)
US$2,200,000 Denver, Colorado
November 22, 2000
FOR VALUE RECEIVED, the undersigned, Xxxx X. Xxxxxxx, (the "Borrower"),
hereby promises to pay, on demand at any time, to the order of UNITED
INTERNATIONAL PROPERTIES, INC., a Colorado corporation (the "Company"), and
together with any of its successors or assigns (the "Holder"), at 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, or at such other place as
Holder may designate in writing from time to time, the principal sum of Two
Million Two Hundred Thousand Dollars (US$2,200,000) or, if less, the unpaid
principal balance of such amount, with interest as set forth in this Note and
any expenses incurred by Holder in transferring the funds to Borrower
("Expenses").
This Note is one of two notes being issued in modification and
rearrangement of, but not in extinguishment of, the outstanding indebtedness
originally evidenced by the Promissory Note in the original principal amount of
$4,000,000, dated November 22, 2000, from Borrower to UnitedGlobalCom, Inc.
("UGC") (which note has been assigned to the Company). A payment of the entire
outstanding principal amount, plus all accrued but unpaid interest thereon and
Expenses incurred in connection therewith shall in all events be due and payable
on November 22, 2002.
From the date of this Note and until paid in full, interest on the
outstanding principal amount of this Note shall accrue at a variable rate per
annum equal to (i) 2.5% plus the 90-Day LIBOR Rate (as defined below), if the
Coverage Ratio (as defined below) is 200% or greater, or (ii) 3.5% plus the
90-Day LIBOR Rate, if the Coverage Ratio is less than 200%. The Coverage Ratio
must at all times be no less than 100%. The 90-Day LIBOR Rate applicable to any
interest payment date shall be determined as of the date of this Note, for the
period November 22, 2000 though February 21, 2001, and thereafter shall be
redetermined every May 22, August 22, November 22 and February 22. If any
interest determination date is not a Business Day (as defined below), the 90-Day
LIBOR Rate shall be determined on the next Business Day. All interest shall be
calculated on the basis of a three hundred sixty (360) day year consisting of
twelve 30-day months and the actual number of days elapsed (including the first
day but excluding the last day) in the period for which interest is payable and
shall be payable in cash.
The "90-Day LIBOR Rate" shall mean, as of any date on which such 90-Day
LIBOR Rate is to be determined, the rate for 90-day deposits of United States
Dollars that appears as of 11:00 a.m., London time, on the display of the Dow
Xxxxx Telerate Service (or any successor service), for the purpose of indicating
the London interbank rates of major banks for United States Dollars. If more
than one such rate appears on such service, the 90-Day LIBOR Rate shall be the
arithmetic mean of such rates.
The "Coverage Ratio" shall mean, as of any date on which a 90-Day LIBOR
Rate is to be determined, 100% multiplied by a fraction, the numerator of which
is the aggregate spread between exercise prices and closing market prices (as
quoted on the principal stock exchange for a particular security) as of the date
for which the Coverage Ratio is determined for all of the Purpose Credit Stock
Options (as defined below) and the denominator of which is the unpaid principal
balance and interest due but unpaid, as of the close of business on any interest
payment date, under this Note and any other note evidencing purpose credit of
Borrower in favor of Xxxxxx.
"Stock Options" shall be defined to include all vested stock options and
phantom stock options granted to Borrower as of this date and any granted in the
future with respect to UGC, United Pan-Europe Communications N.V. ("UPC"),
chello broadband N.V. and Austar United Communications Limited ("Austar").
"Purpose Credit Stock Options" shall mean the Stock Options described on
Schedule I to this Note and any Stock Options directly or indirectly securing
any promissory note hereafter executed by Borrower evidencing indebtedness to
the Company that constitutes purpose credit under Regulation U. "Non-Purpose
Credit Stock Options" shall mean all of the Stock Options other than the Purpose
Credit Stock Options. "Regulation U" shall mean Regulation U promulgated by the
Board of Governors of the Federal Reserve System, as amended from time to time,
and any successor or replacement law or regulation. "Business Day" shall mean
any day other than Saturday, Sunday and a day on which banks are required or
permitted to close in Denver, Colorado or London, England.
Until this Note has been paid in full, the Borrower shall in no event (i)
exercise any of the Purpose Credit Stock Options, unless all of the proceeds of
such exercise are applied toward payment of due but unpaid interest or the
outstanding principal balance of this Note or any other promissory note from
Borrower payable to the Company evidencing purpose credit under Regulation U, or
(ii) take any steps to transfer any of the Purpose Credit Stock Options.
Borrower hereby instructs UGC, UPC, chello broadband N.V. and Austar not to
permit the exercise of any Purpose Credit Stock Options unless the proceeds are
sent directly to the Company in payment of amounts owing under this Note or any
other promissory note from Borrower payable to the Company evidencing purpose
credit under Regulation U. If the terms of the applicable stock option plans are
amended to permit Borrower to pledge any of the Purpose Credit Stock Options,
Borrower shall immediately pledge such Purpose Credit Stock Options to the
Company. The Non-Purpose Credit Stock Options shall not constitute collateral or
other direct or indirect security for the repayment of this Note.
The Borrower further promises that, upon the release from collateral of any
margin stock pledged by the Borrower in connection with any margin account,
Borrower shall inform Holder of such release and if Holder so requests, Borrower
shall promptly pledge such margin stock to the Holder, free and clear of any
other lien, as security for the payment of this Note, and shall in connection
with such pledge surrender to the Holder one or more certificates evidencing
such margin stock and take such other action as may be necessary or desirable to
perfect the Holder's security interest therein. Borrower further promises that
Xxxxxxxx will use best efforts to repay this Note from the proceeds of the sale
of any UGC or UPC stock other than stock acquired through Stock Options since
the date of this Note (the application of proceeds from the sale of UGC or UPC
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stock acquired through the exercise of Stock Options being covered by the
preceding paragraph). This Note is non-recourse to the Borrower or any assets of
the Borrower except that the Holder shall have recourse to the Purpose Credit
Stock Options and proceeds from the exercise thereof (whether or not
identifiable from other funds of the Borrower), proceeds of the sale of personal
UGC or UPC stock (whether or not identifiable from other funds of the Borrower),
and any margin stock subsequently pledged hereunder or otherwise to secure this
Note.
The Borrower may use the proceeds of any loan evidenced by this Note for
the purpose of buying or carrying margin stock (as such terms are used in
Regulation U).
Upon failure of the Borrower to pay the unpaid principal amount of this
Note within thirty (30) days of the date when such amount becomes due and
payable, or failure of the Borrower to pay interest on the unpaid principal
amount of this Note within thirty (30) days of the date such interest is due and
payable, in addition to any other rights and remedies that Holder may have
hereunder or otherwise at law or in equity, Holder shall have the right to take
any or all of the following actions: (a) cause the Purpose Credit Stock Options
to be exercised to the extent necessary for payment in full hereof, and (b)
cause any unexercised Purpose Credit Stock Options to immediately terminate and
be of no further force or effect. Notwithstanding such termination, Borrower
shall remain liable for all amounts due and owing under this Note subject to the
non-recourse provisions specified above.
All payments under this Note shall be credited first toward interest then
due and the remainder toward principal. The Borrower may prepay interest on
and/or principal of this Note, in whole or in part, at any time without premium
or penalty. All payments of the unpaid principal balance and interest will be
made without withholding or deduction for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever nature, unless
the withholding of such taxes or duties is required by law.
If an attorney is engaged by the Holder to enforce or construe any
provision of this Note and the Holder prevails in any related court proceeding,
the Borrower shall pay, on demand, all attorneys' fees and all other costs
incurred by the Holder, together with interest on such amount from the date of
such demand until paid, at the rate of interest then payable under this Note,
plus an additional three (3) percent, subject to the non-recourse provisions
specified above.
Except as expressly provided in this Note, the Borrower and all endorsers
waive presentment, demand, and notice of dishonor.
No delay or failure of the Holder in the exercise of any right or remedy
under this Note shall be deemed a waiver of such right, and no exercise or
partial exercise of any right or remedy shall be deemed a waiver of any other
right or remedy that the Holder may have.
This Note (including, without limitation, Schedule I hereto) shall not be
amended, and no collarteral or other direct or indirect security for repayment
of this Note shall be withdrawn, released or substituted, except in compliance
with Regulation U.
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This Note shall be governed by and construed in accordance with the laws of
the State of Colorado. The Borrower hereby submits to the jurisdiction of the
United States District Court for the District of Colorado and of any court of
the State of Colorado sitting in Denver, Colorado, for purposes of all legal
proceedings arising out of or related to this Note. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that the Borrower
may now or later have to the lack of personal jurisdiction or laying of the
venue of any such proceeding brought in such a court and any claim that any such
proceeding brought in a court has been brought in an inconvenient forum.
Notwithstanding the preceding two sentences, the Holder retains the right to
bring any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with this Note in any court
that has jurisdiction over the Borrower and subject matter.
IN WITNESS WHEREOF, the Borrower has duly executed this Note to be
effective as of November 22, 2000, but executed this 16 day of May 2001.
BORROWER:
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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SCHEDULE I
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(to Promissory Note (Purpose Credit) dated November 22, 2000)
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Purpose Advances
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Date of Advance Amount of Advance
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November 22, 2000 $2,200,000
Purpose Stock Options
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Description of Stock Options Valuation Date Value on Valuation Date
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United Pan-Europe Communications 11/22/00 $2,408,764
N.V. Stock Options for 295,312
ordinary shares (vested)
UnitedGlobalCom, Inc. Stock 11/22/00 $ 227,386
Options for 18,802 shares of
Class A Common (vested)
chello broadband N.V. Stock 11/22/00 $1,898,332
Options for 55,000 ordinary
shares (vested)
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