EXHIBIT 10.7
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May 16, 2001
United International Properties, Inc.
0000 Xxxxx Xxxxxx Xxxxxx; Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Austar United Communications Limited N.V.
Level 29 AAP Centre
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxx Xxxxx
Xxxxxxxxx, 0000
Re: Exercise and sale of options to pay promissory notes (non-purpose credit)
Ladies and Gentlemen:
The undersigned, Xxxx X. Xxxxxxx ("Borrower"), has executed and delivered
the following promissory notes (the "Notes") to United International Properties,
Inc. ("Lender"): (a) that Promissory Note (Non-Purpose Credit), dated November
22, 2000, in the principal amount of US$1,800,000; and (b) that Promissory Note
(Non-Purpose Credit), dated January 29, 2001, in the principal amount of
US$1,200,000; and (c) that Promissory Note (Non-Purpose Credit), dated April 4,
2001, in the principal amount of US$3,500,000, which Notes are secured by, among
other things, vested stock options and phantom stock options (the "Options")
granted to Borrower by Austar United Communications Limited 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.
Borrower has delivered to the Lender an undated option exercise notice
executed in blank by Xxxxxxxx (the "Exercise Letter"), pursuant to which the
Lender may cause Borrower 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 BORROWER.
(a) Borrower 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 Borrower to exercise some or all of the Options.
(b) Borrower 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 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 Borrower 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 the 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 Borrower is in default under one or more of the Notes,
to cancel those Options granted to Borrower 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 Borrower 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. Xxxxxx 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 Borrower 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. XXXXXXX
By: /s/ Xxxx X. Xxxxxxx
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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
AUSTAR UNITED COMMUNICATIONS LIMITED N.V.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Director/CEO
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