EXHIBIT 10.38
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PROMISSORY NOTE
(Purpose Credit)
US$400,946 Denver, Colorado
June 25, 2001
FOR VALUE RECEIVED, the undersigned, The Fries Family Partnership LLLP, a
Colorado limited liability limited partnership (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 Four Hundred Thousand Nine
Hundred Forty Six Dollars (US$400,946) or, if less, the unpaid principal balance
of such amount and any interest as set forth in this Note. A payment of the
entire outstanding principal amount, plus all accrued but unpaid interest
thereon 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 shall be determined as
of the date of this Note for the period June 25, 2001 through August 21, 2001,
and thereafter shall be redetermined every November 22, February 22, May 22 and
August 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 Stock (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 Xxxxxxxx
or Xxxxxxx X. Xxxxx in favor of Xxxxxx.
"Stock" shall be defined to include all shares of Class A Common Stock and
shares of Class B Common Stock of UnitedGlobalCom, Inc. ("UGC") beneficially
owned by the Borrower. "Purpose Stock" shall mean the Collateral (as defined
below) and any Stock directly or indirectly securing any promissory note or
guaranty heretofore or hereafter executed by Borrower or Xxxxxxx X. Xxxxx
evidencing or guaranteeing indebtedness to the Company that constitutes purpose
credit under Regulation U. "Collateral" shall mean 91,580 shares of Class B
Common Stock of UGC and 5,620 shares of Class A Common Stock of UGC owned by the
Borrower. "Non-Purpose Stock" shall mean all of the Stock beneficially owned by
Borrower other than the Purpose Stock. "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.
The Borrower hereby grants to the Company a security interest in the
Collateral to secure all obligations under this Note, and Borrower shall execute
such further documents and take such further action as the Company may request
to perfect said security interest. Until this Note has been paid in full, the
Borrower shall in no event (i) sell any of the Collateral, unless all of the
proceeds of such sale are applied toward payment of due but unpaid interest or
the outstanding principal balance of this Note or any other note evidencing
purpose credit from Borrower or Xxxxxxx X. Xxxxx payable to the Company, or (ii)
take any steps to transfer any of such Collateral. The Non-Purpose Stock 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.
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 the 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 Collateral to be sold to a
third party on behalf of Borrower to the extent necessary for payment in full
hereof, and (b) cause the Collateral to immediately be canceled and be no longer
outstanding for any reason. Notwithstanding such sale, Borrower shall remain
liable for all amounts due and owing under this Note.
All payments under this Note shall be credited first toward interest then
due and the remainder toward principal. The Borrower may prepay interest on
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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.
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 shall not be amended, and no collateral or other direct or
indirect security for repayment of this Note shall be withdrawn, released or
substituted, except in compliance with Regulation U.
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.
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IN WITNESS WHEREOF, the Borrower has duly executed this Note to be
effective as of June 25, 2001.
THE FRIES FAMILY PARTNERSHIP LLLP
By: The Xxxxx X. Xxxxx Trust
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx., Trustee
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Limited Partner
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