EXHIBIT 10.40
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May 16, 2001
United International Properties, Inc.
0000 Xxxxx Xxxxxx Xxxxxx; Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
UnitedGlobalCom, Inc.
0000 Xxxxx Xxxxxx Xxxxxx; Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Re: Exercise and sale of options to pay promissory notes (purpose credit)
Ladies and Gentlemen:
This letter agreement is in reference to the following promissory notes
(the "Notes") executed and delivered to United International Properties, Inc.
("Lender"): (a) that Promissory Note (Purpose Credit), dated November 22, 2000,
in the principal amount of US$186,941, from Xxxxxxx X. Xxxxx ("MTF") payable to
Lender, (b) that Promissory Note (Purpose Credit), dated November 22, 2000, in
the principal amount of US$236,819, from The Fries Family Partnership LLLP (the
"Partnership") payable to Lender, (c) that Promissory Note (Purpose Credit),
dated December 21, 2000, in the principal amount of US$205,376, from MTF payable
to Lender, (d) that Promissory Note (Purpose Credit), dated December 21, 2000,
in the principal amount of US$159,596, from the Partnership payable to Lender,
and (e) that Promissory Note (Purpose Credit), dated April 4, 2001, in the
principal amount of US$97,488, from the Partnership payable to Lender, which
Notes are secured by, among other things, (collectively, the "Options") (i)
stock options to purchase 15,000 shares of Class A common stock of
UnitedGlobalCom, Inc. (the "Company"), granted by the Company to MTF on July 22,
1993, (ii) stock options to purchase 20,000 shares of Class A common stock of
the Company, granted by the Company to MTF on December 20, 1996, (iii) stock
options to purchase 30,000 shares of Class A common stock of the Company,
granted by the Company to MTF on September 18, 1998, (iv) stock options to
purchase 25,000 shares of Class A common stock of the Company, granted by the
Company to MTF on July 22, 1993, (v) stock options to purchase 45,000 shares of
Class A common stock of the Company, granted by the Company to MTF on July 22,
1993, (vi) stock options to purchase 25,000 shares of Class A common stock of
the Company, granted by the Company to MTF on June 16, 1995, (vii) stock options
to purchase 14,208 shares of Class A common stock of the Company, granted by the
Company to MTF on July 22, 1993, (viii) stock options to purchase 45,000 shares
of Class A common stock of the Company, granted by the Company to MTF on June
16, 1995, and (ix) stock options to purchase 50,000 shares of Class A common
stock of the Company, granted by the Company to MTF on September 18, 1998. 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.
MTF has delivered to the Lender undated option exercise notices executed in
blank by MTF (the "Exercise Letters"), pursuant to which the Lender may cause
MTF 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 MTF.
(a) MTF hereby authorizes the Lender to complete and date the Exercise
Letters and submit the Exercise Letters to the Company from time to time
and at any time for purposes of causing MTF to exercise some or all of the
Options.
(b) MTF hereby authorizes and instructs the Company: (i) to accept the
Exercise Letters when submitted by the Lender to the Company; (ii) to sell
the shares of stock covered by the Options exercised pursuant to the
Exercise Letters and apply the proceeds of such sale as described in the
Exercise Letters, including, without limitation, to remit the proceeds of
the sale to Lender as described in Section 3 of the Exercise Letters; and
(iii) to cancel those Options granted to MTF 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 Letters when submitted by the Lender; (ii) to sell the shares covered
by the Options described in the Exercise Letters when submitted by the Lender
and apply the proceeds of such a sale as described in the Exercise Letters; and
(iii) upon receipt by the Company of a written notice (a "Default Notice") from
the Lender which states that MTF is in default under one or more of the Notes,
to cancel those Options granted to MTF that are specified by the Lender in the
Default Notice as authorized by Section 1(b) above. Upon receipt by the Company
of any request from MTF 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 MTF 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.
Very truly yours,
XXXXXXX X. XXXXX
By: /s/ Xxxxxxx X. Xxxxx
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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
UNITEDGLOBALCOM, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: SR. Vice President
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