EXHIBIT 10.20
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May 16, 2001
United International Properties, Inc.
0000 Xxxxx Xxxxxx Xxxxxx; Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
chello broadband N.V.
Boeing Ave. 101
1119 PE Schiphol
Rijk
The Netherlands
Re: Exercise and sale of options to pay promissory notes
Ladies and Gentlemen:
This letter agreement is in reference to the following promissory notes
(the "Notes") payable to United International Properties, Inc. ("Lender"): (a)
that Promissory Note, dated November 22, 2000, by Xxxx X. Xxxxxxxxx ("MLS") in
the principal amount of US$1,110,866; (b) that Promissory Note, dated November
22, 2000, by The MLS Family Partnership, LLLP (the "Partnership," and together
with MLS, referred to as a "Borrower") in the principal amount of US$1,916,305;
(c) that Promissory Note, dated December 21, 2000, by MLS in the principal
amount of US$330,801; and (d) that Promissory Note, dated December 21, 2000, by
the Partnership in the principal amount of US$1,349,599, which Notes are secured
by, among other things, vested stock options and phantom stock options (the
"Options") granted to MLS by chello broadband N.V. (the "Company"). In addition,
the Notes provide for the termination of the Options (as defined below) at the
Lender's option upon the occurrence of certain defaults under the Notes.
MLS has delivered to the Lender an undated option exercise notice executed
in blank by MLS (the "Exercise Letter"), pursuant to which the Lender may cause
MLS to exercise some or all of the Options and direct the Company to sell such
Options and apply the proceeds: (a) first to the payment of the option exercise
price; (b) next to pay any required withholding of income, employment and other
taxes with respect to the exercise of such Options; and (c) next to the payment
of the Notes.
1. AUTHORIZATION AND INSTRUCTION OF MLS.
(a) MLS hereby authorizes the Lender to complete and date the Exercise
Letter and submit the Exercise Letter to the Company at any time for
purposes of causing MLS to exercise some or all of the Options.
(b) MLS hereby authorizes and instructs the Company: (i) to accept the
Exercise Letter when submitted by the Lender to the Company; (ii) to sell
the shares of stock covered by the Options exercised pursuant to the
Exercise Letter and apply the proceeds of such sale as described in the
corresponding Exercise Letter, including, without limitation, to remit the
proceeds of the sale to Lender as described in Section 3 of the Exercise
Letter; and (iii) to cancel those Options granted to MLS that are specified
by the Lender in the Default Notice (as defined below).
2. AGREEMENT OF THE COMPANY. The Company hereby agrees: (i) to accept the
Exercise Letter when submitted by the Lender; (ii) to sell the shares covered by
the Options described in Exercise Letter when submitted by the Lender and apply
the proceeds of such a sale as described in the Exercise Letter; and (iii) upon
receipt by the Company of a written notice (a "Default Notice") from the Lender
which states that a Borrower is in default under one or more of the Notes, to
cancel those Options granted to MLS that are specified by the Lender in the
Default Notice as authorized in Section 1(b) above. Upon receipt by the Company
of any request from MLS regarding an exercise of Options, the Company further
agrees to sell the shares covered by such Options and apply the proceeds of such
a sale as set forth in this letter agreement as if the Lender had delivered an
Exercise Notice to the Company.
3. AGREEMENT OF LENDER. Lender agrees: (a) to accept the proceeds of the
sale remitted by the Company to Lender pursuant to Section 2 above; (b) to apply
such proceeds towards payment of outstanding amounts owing under the Notes; and
(c) to remit to MLS any remaining proceeds after application to payment in full
of all outstanding amounts owing under the Notes.
4. MISCELLANEOUS. This letter agreement constitutes the entire
understanding between the parties with respect to the subject matter contained
herein and supersedes all prior discussions or prior agreements and
understandings relating to such subject matter. This letter agreement can not be
altered or amended, nor any rights hereunder be waived, except by an instrument
in writing and executed by the party or parties to be charged with such
amendment or waiver. This letter agreement shall be binding upon the parties
hereto and, except as otherwise prohibited, their respective successors and
assigns. This letter agreement may be delivered by facsimile or similar
transmission and shall be valid as an effective and binding agreement. This
letter agreement shall be governed by and construed in accordance with the laws
of the State of Colorado, without giving effect to any conflict of laws
provisions thereof. This letter agreement may be executed in counterparts and
shall become operative when each party has executed and delivered at least one
counterpart.
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Very truly yours,
XXXX X. XXXXXXXXX
By: /s/ Xxxx X. Xxxxxxxxx
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Date: 5-16-01
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AGREED TO AND ACCEPTED
this 16 day of May, 2001
UNITED INTERNATIONAL PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Vice President
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AGREED TO AND ACCEPTED
this 16 day of May, 2001
CHELLO BROADBAND N.V.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Managing Director
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