EXHIBIT 10.16
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GUARANTY FOR PURPOSE CREDIT
(Xxxx X. Xxxxxxxxx)
Denver, Colorado November 22, 2000
In consideration of the loan made to The MLS Family Partnership LLLP, a
Colorado limited liability limited partnership ("Borrower"), and acquired by
United International Properties, Inc. ("Lender"), as evidenced by that certain
demand Promissory Note (the "Note") in the principal amount of $1,916,305 of
even date herewith, executed by Borrower and payable to Lender, and in order to
induce Lender to make and maintain such loan to Borrower, the undersigned, Xxxx
X. Xxxxxxxxx ("Guarantor"), does hereby unconditionally and irrevocably
guarantee the punctual and complete payment and performance when due to Lender
of each and all of Borrower's obligations under the Note, together with interest
thereon and any and all expenses which may be incurred by Lender in collecting
all or any of Borrower's obligations under the Note and in enforcing any rights
hereunder, including, without limitation, reasonable attorneys' fees and
expenses.
Guarantor hereby (i) guarantees that the Note will be paid to Lender
strictly in accordance with the terms and provisions of the Note, and (ii)
agrees that, in the event Borrower fails to make any payment due Lender in
accordance with the terms of the Note, Guarantor shall, upon demand of Lender,
immediately pay such amount on behalf of Borrower.
"Stock Options" shall be defined to include all vested stock options and
phantom stock options granted to Guarantor as of this date and any granted in
the future with respect to UnitedGlobalCom, Inc. ("UGC"), United Pan-Europe
Communications N.V. ("UPC"), chello broadband N.V. and Austar United
Communications Limited ("Austar"). "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 the Note has been paid in full, the Guarantor shall in no event (i)
exercise any of the 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 the Note or any other promissory note from Borrower or
Guarantor payable to Lender evidencing purpose credit under Regulation U, or
(ii) take any steps to transfer any of the Stock Options. Guarantor hereby
instructs the UGC, UPC, chello broadband N.V. and Austar not to permit the
exercise of any Stock Options unless the proceeds are sent directly to the
Company in payment of amounts owing under the Note or any other promissory note
from Borrower or Guarantor payable to Lender evidencing purpose credit under
Regulation U. If the terms of the applicable stock option plans are amended to
permit Guarantor to pledge any of the Stock Options, Guarantor shall immediately
pledge such Stock Options to the Company, excluding a number of UPC Stock
Options that Guarantor has agreed to pledge to Xxxx X. Xxxxxxxxx, which number
of options has a net value of US$4,000,000.
The Guarantor further promises that, upon the release from collateral of
any margin stock pledged by the Guarantor in connection with any margin account,
Guarantor shall inform Lender of such release and if Lender so requests,
Guarantor shall promptly pledge such margin stock to the Lender, free and clear
of any other lien, as security for this Guaranty and the payment of the Note,
and shall in connection with such pledge surrender to the Lender one or more
certificates evidencing such margin stock and take such other action as may be
necessary or desirable to perfect the Lender's security interest therein.
Guarantor further promises that Guarantor 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 stock acquired through the exercise of
Stock Options being covered by the preceding paragraph). This Guaranty is
non-recourse to the Guarantor of any assets of the Guarantor except that Lender
shall have recourse to the Stock Options and proceeds of the exercise thereof
(whether or not identifiable from other funds of the Guarantor), proceeds of the
sale of UGC or UPC stock (whether or not identifiable from other funds of the
Guarantor), and any margin stock subsequently pledged hereunder or otherwise to
secure this Guaranty or payment of the Note.
Upon failure of the Borrower to pay the unpaid principal amount of the 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 the
Note within thirty (30) days of the date such interest is due and payable, in
addition to any other rights and remedies that Lender may have hereunder or
otherwise at law or in equity, Lender shall have the right to take any or all of
the following actions: (a) cause the Stock Options to be exercised to the extent
necessary for payment in full of the Note, and (b) cause any unexercised Stock
Options to immediately terminate and be of no further force or effect.
Notwithstanding such termination, Guarantor shall remain liable for all amounts
due and owing under the Note.
This Guaranty shall not be amended, and no collateral or other direct or
indirect security for this Guaranty shall be withdrawn, released or substituted,
except in compliance with Regulation U.
Guarantor hereby waives notice of acceptance of this Guaranty, and also
presentment, demand, protests and notice of dishonor of any and all of the
obligations under the Note. No act or omission of any kind on Lender's part
shall affect or impair this Guaranty. This Guaranty shall be governed as to
validity, interpretation, construction, effect, and in all other respects, by
the laws and decisions of the State of Colorado, without regard to conflicts of
laws principles.
Executed by Guarantor to be effective as of the date set forth above, but
executed this 16 day of May 2001.
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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