Exhibit 10.1
Conformed Copy
LOAN AGREEMENT
dated as of
May 25, 2001
among
BELMARKEN HOLDING B.V.
and
UNITED PAN-EUROPE COMMUNICATIONS N.V.
as Obligors
and
UPC INTERNET HOLDING B.V.
as Guarantor
and
LIBERTY-BELMARKEN, INC.
as Lender
$1,225,000,000
6% Guaranteed Discount Notes due 2007
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...........................................................................................1
Section 1.1 Definitions..................................................................................1
Section 1.2 Rules of Interpretation.....................................................................21
ARTICLE II AMOUNT, TERMS OF CREDIT AND NOTES...................................................................21
Section 2.1 The Loan....................................................................................21
Section 2.2 Accretion and Interest......................................................................22
Section 2.3 Amounts Due.................................................................................22
Section 2.4 Taxes.......................................................................................22
Section 2.5 Payments....................................................................................25
Section 2.6 The Notes...................................................................................25
Section 2.7 Legends and Special Conditions for Transfer.................................................25
ARTICLE III REPRESENTATIONS AND WARRANTIES.....................................................................26
Section 3.1 Representations and Warranties of UPC, the Company and the Guarantor........................26
Section 3.2 Representations and Warranties of Lender....................................................34
ARTICLE IV EXCHANGE OF LOAN FOR ORDINARY SHARES................................................................35
Section 4.1 Exchange of Loan for Ordinary Shares at Option of Lender....................................35
Section 4.2 Exchange of Loan for Ordinary Shares at Option of UPC.......................................37
Section 4.3 Adjustments.................................................................................42
Section 4.4 Additional Rights...........................................................................48
Section 4.5 Reorganization and Similar Transactions.....................................................48
Section 4.6 Change of Control...........................................................................49
Section 4.7 Certain Allocations.........................................................................51
Section 4.8 Reservation of Shares.......................................................................51
Section 4.9 Taxes and Charges...........................................................................51
Section 4.10 Fractional Shares...........................................................................51
Section 4.11 Regulatory Matters..........................................................................52
Section 4.12 Other Regulatory Matters........................................................................53
ARTICLE V PREPAYMENT...........................................................................................55
Section 5.1 Optional Prepayment.........................................................................55
Section 5.2 Mandatory Prepayment........................................................................57
ARTICLE VI AFFIRMATIVE COVENANTS...............................................................................61
Section 6.1 Provision of Financial Statements...........................................................61
Section 6.2 Compliance with Laws........................................................................65
Section 6.3 Maintenance of Properties...................................................................65
Section 6.4 Insurance...................................................................................65
Section 6.5 Corporate Existence.........................................................................65
Section 6.6 Payment of Taxes and Other Claims...........................................................65
Section 6.7 Syndication Efforts.........................................................................65
Section 6.8 Use of Proceeds.............................................................................66
ARTICLE VII NEGATIVE COVENANTS.................................................................................67
Section 7.1 Limitation on Certain Indebtedness..........................................................67
Section 7.2 Limitation on Certain Restricted Payments...................................................68
Section 7.3 Company Funds...............................................................................68
Section 7.4 Financial Covenants.........................................................................69
Section 7.5 Liens.......................................................................................70
Section 7.6 Asset Sales.................................................................................70
Section 7.7 Indenture Covenants.........................................................................70
Section 7.8 No Merger...................................................................................70
Section 7.9 No Amendments...............................................................................71
Section 7.10 Transactions with Affiliates................................................................71
Section 7.11. Prohibited Covenants........................................................................71
ARTICLE VIII EVENTS OF DEFAULT.................................................................................72
Section 8.1 Events of Default Defined; Acceleration of Maturity; Waiver of Default......................72
ARTICLE IX ASSIGNMENT..........................................................................................74
Section 9.1 Assignment of Loan; Register................................................................74
Section 9.2 UGC's Right of First Offer..................................................................75
Section 9.3 Replacement Notes...........................................................................76
ARTICLE X GUARANTEE............................................................................................76
Section 10.1 Unconditional Guarantee.....................................................................76
Section 10.2 Severability................................................................................77
Section 10.3 Limitation of Guarantor Liability...........................................................77
Section 10.4 Waiver of Subrogation.......................................................................77
Section 10.5 Evidence of Guarantee.......................................................................78
Section 10.6 Waiver of Stay, Extension or Usury Laws.....................................................78
ARTICLE XI MISCELLANEOUS.......................................................................................78
Section 11.1 Notices.....................................................................................78
Section 11.2 Amendments and Waivers......................................................................78
Section 11.3 Survival of Warranties and Certain Agreements...............................................79
Section 11.4 Fees and Expenses; Indemnification..........................................................79
Section 11.5 Successors and Assigns......................................................................81
Section 11.6 New York Law; Submission to Jurisdiction; Waiver of Immunities; Waiver of
Jury Trial; Service of Process; Currency....................................................81
Section 11.7 Requirements of Law.........................................................................83
Section 11.8 Illegality..................................................................................83
Section 11.9 Severability................................................................................84
Section 11.10 Counterparts................................................................................84
Section 11.11 Confidentiality.............................................................................84
Section 11.12 Construction................................................................................84
Section 11.13 Headings....................................................................................85
Section 11.14 Joint and Several Obligations; Several Obligations..........................................85
Section 11.15 Acknowledgement and Agreement...............................................................85
Section 11.16 Savings Clause..............................................................................85
EXHIBIT A FORM OF NOTE........................................................................................A-1
EXHIBIT B NOTATION ON NOTE RELATING TO GUARANTEE..............................................................B-1
THIS LOAN AGREEMENT (this "Agreement"), dated as of May 25, 2001, is
entered into by and among Belmarken Holding B.V., a limited liability company
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under the
laws of The Netherlands, as an obligor (the "Company"), United Pan-Europe
Communications N.V., a public limited liability company (naamloze vennootschap)
incorporated under the laws of The Netherlands, as an obligor ("UPC"), UPC
Internet Holding B.V., a private limited liability company (besloten
vennootschap met beperkte aansprakelijkheid) incorporated under the laws of The
Netherlands, as guarantor ("chello Holdings"), and Liberty-Belmarken, Inc., a
Delaware corporation (the "Lender").
The parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein, have the
following meanings:
"15-Day Election Period" is defined in Section 9.2(a).
"Accretion Calculation Date" means July 31, 2001, and each October 31,
January 31, April 30 and July 31 thereafter (or, if any such date is not a
Business Day, the next succeeding Business Day).
"Accreted Value" of a Note means, as of any date of determination, (i)
prior to May 29, 2007, the sum (rounded to the nearest whole dollar) of (a) the
initial offering price ($699.4285 per $1,000 in principal amount at maturity of
the Note) of the Note, plus (b) the portion of the excess of the then
outstanding principal amount of the Note over such original offering price that
shall have accreted thereon through the date of determination, such amount to be
accreted on a daily basis at the rate of 6% per annum (on the basis of a 360-day
year of twelve 30-day months) compounded quarterly on each Accretion Calculation
Date from the date of the issuance of the Note through the date of
determination, and (ii) on and after May 29, 2007, 100% of the principal amount
at maturity of the Note.
"Acquiror" is defined in Section 4.5(c).
"Actual Invested Capital" means, as of the date of this Agreement, the
greater of (a) EUR 5.0 billion and (b) that amount equal to Certified Invested
Capital of the Company established pursuant to a certificate of the chief
financial officer or a director of finance or treasury of UPC delivered to the
Lender pursuant to Section 6.1(l), but in no event shall Actual Invested Capital
be greater than EUR 5.4 billion.
"ADS" means American Depositary Share.
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"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For purposes of this definition, the term
"control" means the power to direct the management and policies of a Person,
directly or through one or more intermediaries whether through the ownership of
voting securities, by contract, or otherwise; provided that with respect to
ownership interest in the Company and its Subsidiaries, a Beneficial Owner of
10% or more of the total voting power normally entitled to vote in the election
of directors, managers or trustees, as applicable, shall for such purposes be
deemed to constitute control; provided further that for purposes of clause
(I)(B) the definition of "Invested Capital," "Affiliate" of the Company will not
include its Subsidiaries.
"Agreement" means this Loan Agreement, as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Asset Sale" means the conveyance, sale, transfer, assignment or other
disposition of, directly or indirectly, any of UPC's or any of its Subsidiaries'
Property or business (including by merger or consolidation in the case of a
Subsidiary of UPC) other than the application of cash in payments that are not
otherwise restricted by the terms of this Agreement; and including any sale or
other transfer or issuance of any Equity Interests of a Subsidiary of UPC,
whether by UPC or a Subsidiary of UPC, or the issuance, sale or transfer of
Equity Interests by a Subsidiary of UPC, and including any sale and leaseback
transaction.
"Asset Sale Amount" is defined in Section 5.2(a)(iii)(C).
"Asset Sale Prepayment Shortfall" is defined in Section 5.2(a)(iii)(B).
"Beneficial Owner" or "beneficial owner" has the meaning attributed to
it in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the date
hereof), whether or not applicable, except that a "person" shall be deemed to
have "beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Bridge Loan Agreement" means the Amended and Restated Bridge Loan
Agreement dated 28 July 2000 among the Company, UPC, chello Holdings, ▇▇▇▇▇▇▇
▇▇▇▇▇ Credit Partners, LP and others.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Denver, London or Amsterdam are authorized or required
by law to close.
"Capital Stock" has the meaning ascribed to such term in the Indenture
and all defined terms used in the definition of such term in the Indenture have
the meanings ascribed to them in the Indenture.
"Cash Equivalents" has the meaning ascribed to such term in the
Indenture and all defined terms used in the definition of such term in the
Indenture have the meanings ascribed to them in the Indenture.
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"Certified Invested Capital" means, as of the date of this Agreement,
without duplication, the sum of (i) the total euro amount contributed in cash,
plus the value of all property contributed (valued at fair market value at the
time of contribution, determined in good faith by the Supervisory Board of UPC)
to the Company, in each case, since the date of its creation to the date of this
Agreement, in the form of common equity, plus (ii) the total euro amount
contributed in cash, plus the value of all property contributed (valued at fair
market value at the time of contribution, determined in good faith by the
Supervisory Board of UPC) to the Company, in each case, since the date of its
creation to the date of this Agreement, by the holders (and Affiliates of the
holders) of the common equity of the Company in consideration of the issuance of
preferred equity or Indebtedness that is unsecured and subordinated in right of
payment upon liquidation to the Company's obligations under this Agreement, less
(iii) the value of all interest and returns in respect of such Indebtedness and
dividends and other distributions in respect of such equity (in whatever form
and however designated, valued at fair market value as determined in good faith
by the Supervisory Board of UPC) made by the Company, since the date of its
creation to the date of this Agreement to the holders (and Affiliates of the
holders) of its common equity.
"Change of Control" is defined in Section 4.6(f).
"Change of Control Prepayment Date" is defined in Section 5.2(b).
"chello" means chello broadband N.V., a corporation (naamloze
vennootschap) incorporated under the laws of The Netherlands.
"chello Holdings" is defined in the preamble.
"chello Holdings Restricted Payment" means, without duplication:
(i) the declaration or payment of any dividend or other distribution
in respect of Equity Interests of chello Holdings or any Affiliate
of chello Holdings;
(ii) any payment on account of the purchase, redemption or other
acquisition or retirement for value of Equity Interests of chello Holdings or
any Affiliate of chello Holdings;
(iii) (A) any purchase, redemption, or other acquisition or retirement
for value of, any payment in respect of, or any defeasance of, any Indebtedness
that is (1) contractually or structurally subordinated or pari passu in right of
payment to the Guarantee of chello Holdings, directly or indirectly, by chello
Holdings or any Affiliate of chello Holdings or (2) structurally senior in right
of payment to such Guarantee, directly or indirectly, by chello Holdings or any
Affiliate of chello Holdings, other than payments in respect of such
structurally senior Indebtedness by the primary obligor on or maker of such
Indebtedness as and when the same becomes due and payable, other than by
acceleration as a result of the occurrence or nonoccurrence of any event, and
payments on revolving Indebtedness, payments on working capital lines of credit
and payments in respect of refinancings of such Indebtedness that is not Debt
Securities and (B) any purchase, redemption, or other acquisition or retirement
for value of, any payment in respect of, or any defeasance of, any other
obligation that is (1) contractually or structurally subordinated in right of
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payment to the chello Holdings Guarantee, directly or indirectly, by chello
Holdings or any Affiliate of chello Holdings or (2) contractually or
structurally senior or pari passu in right of payment to the chello Holdings
Guarantee, directly or indirectly, by chello Holdings or any Affiliate of chello
Holdings other than payments in respect of such structurally senior obligations
by the primary obligor on or maker of such obligation as and when the same
becomes due and payable or otherwise in the ordinary course of business other
than as a result of acceleration as a result of the occurrence or nonoccurrence
of any event;
(iv) any Investment by chello Holdings or any of its Subsidiaries in
any Affiliate of the Company;
(v) any Asset Sale (other than an issuance of Equity Interests) by
chello Holdings or any of its Subsidiaries to any Affiliate of the Company other
than chello Holdings, its Subsidiaries or the Company;
(vi) the granting of any Lien to any Affiliate of the Company (the
value of such Lien being the greater of (A) the initial book value of the
Property (other than cash) subject to such Lien and (B) the fair market value of
such Property at the time the Lien is created as determined in good faith by the
Supervisory Board of UPC); or
(vii) any consolidation or merger of chello Holdings with or into any
Affiliate of chello Holdings;
provided, however, that the term "chello Holdings Restricted Payment"
does not include (A) any dividend or distribution or payment of the type
referred to in clause (ii) immediately above on the Equity Interests of chello
Holdings to the extent payable solely in shares of Qualified Capital Stock of
chello Holdings; (B) any dividend, distribution or other payment to, or
Investment in, the Company or in or to chello Holdings or any of its
Subsidiaries if before or after giving effect thereto no Default exists under
Section 7.4, Section 8.1(a) or Section 8.1(b) or to or in any of its Wholly
Owned Subsidiaries if after giving effect thereto no Default would exist under
Section 8.1(a) or (b); (C) any dividend, distribution or other payments on its
Equity Interests by any Subsidiary of chello Holdings to chello Holdings or a
Subsidiary of chello Holdings or to the Company.
"Closing Price" of an Ordinary Share or any other security, as the case
may be, means for each day the last sales price (expressed in euros) or in case
no such reported sales take place on such day, the average of the last reported
bid and asked price, in case of an Ordinary Share on the principal Dutch
national securities exchange or in case of other securities the principal U.S.
or non U.S. national securities exchange on which Ordinary Shares or other
securities, respectively, are admitted to trading or listed, or if not listed or
admitted to trading on such exchange, the representative closing bid price as
reported by the Nasdaq National Market, or if the Nasdaq National Market is no
longer reporting such information, or if not so available, the fair market price
as determined, in good faith, by the Supervisory Board of UPC.
"Code" means the U.S. Internal Revenue Code of 1986, as amended from
time to time.
4
"Common Stock" has the meaning ascribed to such term in the Indenture
and all defined terms used in the definition of such term in the Indenture have
the meanings ascribed to them in the Indenture.
"Company" is defined in the preamble.
"Continuing Director" means during any period of 12 consecutive months
after the date hereof, individuals who at the beginning of such 12-month period
constituted the Supervisory Board of UPC (together with any new supervisory
directors whose election by the shareholders was from a list of candidates drawn
up by the holder or holders of UPC's priority shares and new supervisory
directors designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all
of the assets of UPC or UGC, if such agreement is approved by a vote of such
majority of supervisory directors).
"Controlling Person" is defined in Section 11.4(b).
"Credit Agreement" means the UPCD Facility Agreement, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, as such agreement and/or related documents may
be amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or Holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Agreement" shall
include agreements in respect of Interest Swap and Hedging Obligations with
lenders party to the Credit Agreement and shall also include any amendment,
amendment and restatement, renewal, extensions, restructuring, supplement or
modification to any Credit Agreement and all refunding, refinancings and
replacements of any Credit Agreement, including any agreement:
(i) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby;
(ii) adding or deleting borrowers or guarantors thereunder, so long as
borrowers and guarantors may include one or more of UPC and its Subsidiaries and
their respective successors and assigns;
(iii) increasing the amount of Indebtedness incurred thereunder or
available to be borrowed thereunder, provided that on the date such Indebtedness
is incurred it would not be prohibited by Section 10.11 of the Indenture; or
(iv) otherwise altering the terms and conditions thereof in a manner
not prohibited by other terms of the Indenture.
"Debt Incurrence" means any issuance or incurrence by UPC or any of its
Subsidiaries of Debt Securities.
"Debt Securities" means any notes or any other debt securities (other
than any notes or debt securities rated BBB- or higher by S&P and Baa3 or higher
by ▇▇▇▇▇'▇ having a stated maturity more than 90 days after the Maturity Date),
5
or preferred stock (of a type customarily sold into the "high yield" markets) of
UPC or any of its Wholly Owned Subsidiaries or any its non-wholly owned
Subsidiaries that are directly or indirectly controlled by it, which are issued
for cash or cash equivalents, excluding, for the avoidance of doubt, (i)
Indebtedness under the Credit Agreement or similar bank financings (including
the institutional tranche of such financings), including any refinancings
thereof, (ii) Indebtedness or preferred stock that is convertible into common
equity of UPC or any of its Subsidiaries that is not being offered or sold to
traditional "high yield" buyers, (iii) vendor financings, (iv) working capital
financings, and (v) Indebtedness incurred by UPC or any of its Subsidiaries, on
the one hand, from UPC or any of its Subsidiaries, on the other hand, pursuant
to an Intercompany Loan Document in accordance with the terms of this Agreement.
"Default" means any Event of Default or any event or condition which,
with the giving of notice or lapse of time or both, would, unless cured or
waived, become an Event of Default.
"Disqualified Capital Stock" means with respect to any Person, Equity
Interests of such Person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event or the passage of time or both would be, required to be redeemed or
repurchased (including at the option of the holder thereof) by such Person or
any of its Subsidiaries, in whole or in part, on or prior to 91 days following
the Maturity Date.
"Distribution Business" means
(i) the business of upgrading, constructing, creating, developing,
acquiring, operating, owning, leasing and maintaining cable television networks
(including for avoidance of doubt master antenna television, satellite master
antenna television, single and multi-channel microwave single or multi-point
distribution systems and direct-to-home satellite systems) for the transmission,
reception and/or delivery of multi-channel television and radio programming,
telephony and internet and/or data services to the residential markets; or
(ii) any business (other than any business of providing multi channel
television and radio programming, telephony and internet and/or data services
itself) which is incidental to or related to and, in either case, material to
such business.
"DOJ" has the meaning set forth in Section 4.11.
"dollars" or "$" means lawful money of the United States of America.
" Dollar To Euro Spot Rate" means, as of any date of determination, the
offer (or buy) rate expressed in euros published on Bloomberg Financial Services
as of 11:00 a.m. New York time for the exchange of dollars for euros in New
York.
"Environmental Laws" means international, national and local laws and
regulations relating to the protection of human health or the environment or
imposing liability or standards of conduct concerning hazardous substances,
including laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment (including, without
6
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"Equity Interest" has the meaning ascribed to such term in the
Indenture and all defined terms used in the definition of such term in the
Indenture have the meanings ascribed to them in the Indenture.
"Equity Issuance" means the issuance of any Equity Interests for cash
or Cash Equivalents by UPC (including, without limitation, any equity securities
issued pursuant to the exercise of stock options or warrants or the Permanent
Financing), but excluding the issuance of any Equity Interests of UPC to any
current, former or future officer, director, consultant or employee of UPC or
their Affiliates, the principal purpose of which is not to raise capital for
UPC.
"Equity Issuance Amount" is defined in Section 4.2(a)(i).
"Equity Issuance Event" is defined in Section 4.2(a)(i).
"Equity Securities" is defined in Section 4.12.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA Affiliate" means any trade or business, whether or not
incorporated, that, together with UPC, is under common control, as described in
Section 414(b) or (c) of the Code.
"euros" or "[sign for euros]" or "EUR" means the single currency of
participating member states of the European Union.
"Euro to Dollar Spot Rate" means, as of any date of determination, the
offer (or buy) rate expressed in dollars published as Bloomberg Financial
Services screen rate as of 11:00 a.m. New York time for the exchange of euros
for dollars in New York.
"Event of Default" is defined in Section 8.1.
"Event of Loss" has the meaning ascribed to such term in the Indenture.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended (or any successor act), and the rules and regulations thereunder (or
respective successors thereto).
"Exchange Date" means (i) in the case of an exchange pursuant to
Section 4.1, the date UPC receives the related notice of exchange from the
Holder pursuant to Section 4.1(b), or (ii) in the case of an exchange pursuant
to Section 4.2, the date of UPC's related notice of exchange given to the Holder
pursuant to Section 4.2(a)(ii), 4.2(b)(iii) or 4.2(c)(iii), provided that if the
date the notice is received or the date of the notice, as the case may be, is
not a Business Day, then the Exchange Date shall be deemed to be the Business
7
Day immediately following the date of receipt or the date of the notice, as the
case may be.
"Exchange Notes" means one or more notes evidencing a loan obligation
of the Obligors having exchange rights, accretion rights and other terms and
conditions that are identical, or as nearly so as is practicable in the good
faith judgment of UPC's Supervisory Board, to those of the Notes and Loan for
which such Exchange Notes are exchanged, except that (i) the initial Accreted
Value of the Exchange Notes will be determined as provided in Section 4.3(i),
(ii) the running of any time periods pursuant to the terms of the Notes and this
Agreement shall be tacked to the corresponding time periods in the Exchange
Notes and related loan agreement and (iii) the Exchange Notes will not be
exchangeable for, and the Holders will have no exchange rights thereunder with
respect to, the Spinoff Securities.
"Exchange Offer" means an issuer tender offer (within the meaning of
Rule 13e-4(a)(2) of the rules and regulations promulgated by the SEC under the
Exchange Act, as such rule is in effect on the date hereof), including, without
limitation, one that is effected through the distribution of rights or warrants,
made to holders of Ordinary Shares (or to holders of other stock of UPC
receivable by the Holders upon exchange of the Notes) to issue stock of UPC or
of a subsidiary of UPC and/or other property to a tendering stockholder in
exchange for Ordinary Shares (or such other stock) validly tendered pursuant to
such issuer tender offer.
"Exchange Price" means $6.85 as adjusted from time to time pursuant to
Article IV.
"Exchange Price Adjustment Events" are those events specified in
Section 4.3(a).
"Exchange Securities" means stock of UPC or of a subsidiary of UPC that
is issued in exchange for Ordinary Shares (or other stock of UPC receivable by
Holders of the Notes) pursuant to an Exchange Offer.
"Exchange Shares" is defined in Section 4.4.
"Existing High Yield Notes" means the $300,000,000 11 1/2 % Senior
Notes due 2010, $600,000,000 11 1/4 % Senior Notes due 2010, the ?200,000,000 11
1/4 % Senior Notes due 2010 and the $1,000,000,000 13 3/4 % Senior Discount
Notes due 2010, in each such case, issued pursuant to an indenture dated as of
January 20, 2000 between UPC and Citibank, N.A. (London Branch), as Trustee; the
$200,000,000 107/8 % Senior Notes due 2007, the ?100,000,000 107/8 % Senior
Notes Due 2007, the $252,000,000 11 1/4 % Senior Notes due 2009 and the
?101,000,000 11 1/4% Senior Notes due 2009, the $478,000,000 133/8 % Senior
Discount Notes due 2009 and the ?191,000,000 133/8 % Senior Discount Notes due
2009, in each case, issued pursuant to an indenture dated as of October 29, 1999
between UPC and Citibank N.A. (London Branch); the $800,000,000 107/8 % Senior
Notes due 2009, the ?300,000,000 107/8 % Senior Notes due 2009 and the
$735,000,000 12 1/2 % Senior Discount Notes due 2009, in each case, issued
pursuant to an indenture dated as of July 30, 1999 between UPC and Citibank N.A.
(London Branch).
"Expiration Date" has the meaning set forth in Section 4.6(c).
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"Extension Period" is defined in Section 4.12(b).
"Fair Value" is defined in Section 4.3(i).
"Financing Documents" means this Agreement, the Notes, the Pledge
Agreement and the Registration Rights Agreement.
"Foreign Plan" means any pension, welfare, deferred compensation,
incentive or other compensation plan or arrangement, or other material employee
fringe benefit plan presently maintained by, or contributed to by UPC, its
Subsidiaries or its Affiliates for the benefit of any employee of UPC, its
Subsidiaries or its Affiliates, and any plan required to be maintained or
contributed to by the law of the relevant jurisdiction (but excluding plans
maintained by a governmental entity and any Plan or other employee benefit plan
subject to ERISA or the Code).
"FTC" is defined in Section 4.11.
"Funding Date" means the date on which the conditions set forth in
Schedule 2.1(a) are satisfied in the sole discretion of the Lender or waived in
writing by the Lender.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
"Guarantee" means the guarantee to the Holders by the Guarantor
pursuant to Article X.
"Guarantor" means chello Holdings and any other Person that becomes a
Guarantor after the date hereof.
"Hazardous Materials" means (i) asbestos; (ii) polychlorinated
biphenyls; (iii) petroleum, its derivatives, by-products and other hydrocarbons;
and (iv) any other toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.
"Hazardous Materials Contamination" means contamination (whether now
existing or hereafter occurring) of the improvements, buildings, facilities,
personality, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or on or of any
other property as a result of Hazardous Materials, or any derivatives thereof,
generated on, emanating from or disposed of in connection with the relevant
property.
"Holder" of a Note means the Person in whose name the Note is
registered in the Register.
"HSR Act" has the meaning set forth in Section 4.11.
9
"HSR Report" has the meaning set forth in Section 4.11.
"incur" is defined in Section 7.1(a).
"Indebtedness" has the meaning ascribed to such term in the Indenture,
and all defined terms used in the definition of such term in the Indenture have
the meanings ascribed to them in the Indenture.
"Indemnified Party" and "Indemnified Parties" have the meanings set
forth in Section 11.4(b).
"Indenture" means that certain indenture dated as of January 20, 2000
entered into between UPC and Citibank, N.A. (London branch), as trustee, with
respect to UPC's $600,000,000 11 1/4% Senior Notes Due 2010 and its ?200,000,000
11 1/4% Senior Notes due 2010, as such indenture is in effect on the date
hereof, without giving effect to any amendment, waiver, supplement or other
modification thereto, any consent granted thereunder, any defeasance,
redemption, repayment or prepayment thereunder or termination thereof.
"Indenture Covenant" is defined in Section 11.16.
"Initial Notes" means, collectively, the original $1,225,000,000 Note
or Notes evidencing the Loan.
"Intercompany Loan Document" means the UPC/Company Master Loan
Agreement, UPC/chello Master Loan Agreement, any Qualified Loan Agreement and
any other agreement, instrument or document evidencing Indebtedness owing to or
by the Company or any Affiliate of the Company to or by any other Affiliate of
the Company, in each case, the terms and provisions of which, including terms of
subordination, are approved by the Majority Holders.
"Interest Swap and Hedging Obligations" has the meaning ascribed to
such term in the Indenture, and all defined terms used in the definition of such
term in the Indenture have the meanings ascribed to them in the Indenture.
"Invested Capital" means, as of any date: Actual Invested Capital,
(I) without duplication, plus the sum of (A) the total euro amount
contributed in cash to the Company since the date of this Agreement in the form
of common equity, plus (B) the total euro amount contributed in cash to the
Company since the date of this Agreement by the holders, and Affiliates of the
holders, of the common equity of the Company in consideration for the issuance
of preferred equity or Indebtedness that is unsecured and subordinated on the
same subordination terms as set forth in the UPC/Company Master Loan Agreement
(or on other terms reasonably acceptable to the Majority Holders) to the
Company's obligations under the Financing Documents, plus (C) cash payments to
the Company since the date of this Agreement of principal and interest on
Qualified Loans made by the Company since the date of this Agreement the amount
of which have been deducted from Invested Capital (other than then Qualified
Loans constituting the initial use of the proceeds of the Loan); and
10
(II) without duplication, less the sum of (A) the value of all payments
(whether in cash or Property) made by the Company since the date of this
Agreement in respect of Indebtedness contributed by or initially incurred to the
holders, and Affiliates of the holders, of common equity in the Company, whether
or not such Indebtedness is then held by any such Person and in whatever form
and however designated (any such Property (other than cash) being valued at the
greater of (1) initial book value and (2) the fair market value at the time of
such payment as determined in good faith by the Supervisory Board of UPC), made
by the Company since the date of this Agreement, plus (B) the Restricted Payment
Reduction Amount since the date of this Agreement, plus (C) the Company Asset
Sale Reduction Amount since the date of this Agreement, plus (D) the chello
Holdings Restricted Payment Reduction Amount since the date of this Agreement,
plus (E) the chello Holdings Asset Sale Reduction Amount since the date of this
Agreement; and,
(III) without duplication, less the sum of (A) the initial principal
amount of any Indebtedness of the Company and its Subsidiaries and chello
Holdings and its Subsidiaries held by any Affiliate of the Company that does not
comply with Section 7.1(b) and (c), disregarding for purposes of this clause (A)
the application of Section 11.16 thereto, plus (B) an amount equal to the
initial principal amount of all Indebtedness of an Affiliate of the Company
owing to the Company or any Subsidiary of the Company or to chello Holdings or
any Subsidiary of chello Holdings that is not a Qualified Loan, other than any
such Indebtedness owing by UPCD, any Subsidiary of UPCD, UPC Financing
Partnership, any Subsidiary of chello or chello (if chello's immediate parent
(other than chello Holdings) has executed and delivered a Qualified Loan
Agreement), plus (C) the dollar amount of any cash and the value of any Property
(any such Property (other than cash) being valued at the greater of (1) initial
book value and (2) the fair market value of such Property at the time of the
subject Restricted Payment or chello Holdings Restricted Payment, as the case
may be, as determined in good faith by the Supervisory Board of UPC) received by
any Person as a result of a Restricted Payment or chello Holdings Restricted
Payment prohibited by Section 7.2, disregarding for purposes of this clause (C)
the application of Section 11.16 thereto, plus (D), the value of the
consideration (any Property (other than cash) so received being valued at its
fair market value as determined in good faith by the Supervisory Board of UPC)
received in respect of an Asset Sale prohibited by Section 7.6(a), disregarding
for the purposes of this clause (D) the application of Section 11.16 thereto.
For the avoidance of doubt, "Invested Capital" shall not be increased
as a result of the Company or chello Holdings merging or consolidating with or
into UPC. Notwithstanding anything in the definition of "Invested Capital" to
the contrary, the Company's planned Investment in Tevel of up to $23 million
shall not reduce Invested Capital by more than $23 million. Notwithstanding
anything in the definition of "Invested Capital" to the contrary, the Company's
planned Investment in Tevel shall reduce Invested Capital by the actual amount
of such Investment only once.
For the purposes of the foregoing, the following terms shall have the
following meanings:
(1) "chello Holdings Asset Sale Reduction Amount" means the total
amount by which the consideration received by chello-Holdings and its
Subsidiaries from any Asset Sale (other than the issuance of Equity Interests)
that is not a chello Holdings Restricted Payment, or an Asset Sale to chello
Holdings or from any Wholly Owned chello Holdings Subsidiary to another such
11
Subsidiary, is below the greater of (x) the fair market value at the time of
such Asset Sale of the subject Property or business (as determined in good faith
by the Supervisory Board of UPC) and (y) the initial book value of such
Property;
(2) "chello Holdings Restricted Payment Reduction Amount" means the
total value of any chello Holdings Restricted Payments made by chello Holdings
or its Subsidiaries (the value of any Property (other than cash) comprising such
chello Holdings Restricted Payment being valued at the greater of (x) the fair
market value of such Property at the time of such chello Holdings Restricted
Payment, as determined in good faith by the Supervisory Board of UPC, and (y)
the initial book value of such Property);
(3) "Company Asset Sale Reduction Amount" means the total amount by
which the consideration received by the Company and its Subsidiaries for any
Asset Sale (other than an issuance of Equity Interests) that is not a Restricted
Payment or an Asset Sale to the Company or from one Wholly Owned Subsidiary of
the Company to another such Subsidiary is below the greater of (x) the fair
market value at the time of such Asset Sale of the subject Property or business
(as determined in good faith by the Supervisory Board of UPC) and (y) the
initial book value of the subject Property; and
(4) "Restricted Payment Reduction Amount" means the total value of all
Restricted Payments made by the Company or its Subsidiaries (the value of any
Property (other than cash) comprising such Restricted Payment being valued at
the greater of (x) the fair market value of such Property at the time of such
Restricted Payment as determined in good faith by the Supervisory Board of UPC
and (y) the initial book value of such Property); provided that the initial
application by the Company of the proceeds of the Loan consistent with Section
6.8 will not constitute a Restricted Payment for purposes of this definition.
"Investment" by any Person in any other Person means (without
duplication):
(i) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such Person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other Person or any agreement to make any such acquisition;
(ii) the making by such Person of any deposit with, or advance, loan
or other extension of credit to, such other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such other Person) or any
commitment to make any such advance, loan or extension (but excluding accounts
receivable, endorsements for collection or deposits arising in the ordinary
course of business);
(iii) to the extent permitted by Section 10.11 of the Indenture, the
entering into by such Person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other Person; and
(iv) the making of any capital contribution by such Person to such
other Person.
12
For the avoidance of doubt, any direct or indirect purchase, redemption or other
acquisition for value of, any payment in respect of, or any defeasance of, any
Indebtedness or other obligation of a Person in respect of which such Person is
not the primary obligor shall constitute an Investment.
"Judgment Currency" is defined in Section 11.6(d).
"Lender" is defined in the preamble.
"Lender Party" is defined in Section 9.2(a).
"Liberty Agreement" means the Agreement dated June 25, 2000, among UPC,
UGC, Liberty Media International, Inc. and Liberty Media Corporation as the same
has been amended from time to time.
"Lien" has the meaning ascribed to such term in the Indenture and all
defined terms used in the definition of such term in the Indenture have the
meanings ascribed to them in the Indenture.
"Loan" means the loan advanced under this Agreement.
"Majority Holders" means, as of any date, Holders (other than any
Holder that is a UGC Party) of Notes that have an aggregate Accreted Value at
such date in excess of 50% of the aggregate Accreted Value at such date of all
Notes (other than any Holder that is a UGC Party).
"Market Capitalization" as of any date means, with respect to an
Ordinary Share, the product of the Closing Price on such date of an Ordinary
Share times the total number of Ordinary Shares then outstanding.
"Market Value" as of any date means, with respect to an Ordinary Share,
the average of the daily Closing Price of such share for the five consecutive
Trading Days ending on such date.
"Market Value Amount" of a security means, as of any date, 97% of the
Market Value of that security.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, results of operations, properties, assets, liabilities,
financial condition or prospects of UPC and its Subsidiaries, taken as a whole,
except to the extent arising out of a condition disclosed in the respective
Annual Reports on Form 10-K for the fiscal year ended December 31, 2000 of UGC
and UPC, in the form publicly available on April 2, 2001 (the "United Commission
Filings"), the downgrade of UPC's corporate rating and the rating of its
outstanding debt securities announced by Moody's on April 20, 2001, the
announcement on March 20, 2001 by the Netherlands Competition Authority and the
Independent Post and Telecommunication Authority of their conclusion that there
are separate markets for narrowband Interest access and broadband Internet
access and for narrowband network access and broadband network access in the
Netherlands, changes affecting the securities or capital markets or economic
conditions generally in the countries in which UPC and its Subsidiaries conduct
13
their businesses, changes affecting the industries in which UPC and its
Subsidiaries operate generally (as opposed to UPC or any such subsidiary
specifically or predominantly), or the public announcement of this Agreement or
(ii) the material impairment of the ability of the Company and UPC to perform
their material obligations under the Financing Documents, or of the Holders to
enforce such obligations.
"Maturity Date" means May 29, 2007 or if such date is not a Business
Day the next succeeding Business Day.
"Minimum Invested Capital Amount" is defined in Section 7.4.
"Mirror Notes" means one or more notes evidencing a loan obligation
entered into by (i) in the case of Spinoff, the issuer of the applicable Spinoff
Securities, and (ii) in the case of an Exchange Offer, the issuer of the
applicable Exchange Securities; and having exchange rights, accretion rights and
other terms and conditions that are identical, or as nearly so as practicable in
the good faith judgment of the UPC's Supervisory Board, to those of the Notes
for which such Mirror Notes are exchanged, except that (A) the aggregate initial
Accreted Value of the Mirror Notes will be determined as provided in Section
4.3(i) or 4.3(j), as applicable, (B) the running of any time periods pursuant to
the terms of the Notes and this Agreement shall be tacked to the corresponding
time periods in the Mirror Notes, and (C) the Mirror Notes shall be exchangeable
into the kind and amount of Spinoff Securities or Exchange Securities, as
applicable, and other securities, property, and cash that the Holders of such
Notes pursuant to the terms hereof would have received (1) in the case of a
Spinoff, in such Spinoff had such Note been converted immediately prior to the
record date for such Spinoff, and (2) in the case of an Exchange Offer, upon
consummation thereof had the Notes that such holders elect to tender been
converted and Ordinary Shares received upon such conversion been tendered in
full pursuant to such Exchange Offer prior to the expiration thereof and the
same percentage of such tendered shares had been accepted for exchange as the
percentage of validly tendered Ordinary Shares were accepted for exchange
pursuant to such Exchange Offer, as the case may be. The initial Exchange Price
of the Mirror Note shall be initially established to effectuate the foregoing.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc., or its successor.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA and to which UPC or any of its ERISA
Affiliates is obligated to make contributions.
"Net Cash Proceeds" means the aggregate amount of cash or cash
equivalents received by UPC and its Subsidiaries in respect of an Asset Sale
less (i) the sum of all payments, fees, commissions and reasonable and customary
expenses (including, without limitation, the fees and expenses of legal counsel
and investment banking fees and expenses) incurred by UPC and its Subsidiaries
in connection with such Asset Sale and (ii) the amount (estimated reasonably and
in good faith by UPC) of income, franchise, sales and other applicable taxes
required to be paid by UPC or any of its respective Subsidiaries in connection
with such Asset Sale in the taxable year that such sale is consummated or in the
immediately succeeding taxable year, the computation of which shall take into
account the reduction in tax liability resulting from any available operating
14
losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes.
"Net Debt Proceeds" means cash received by a Person from a Debt
Incurrence after (i) provision for all income or other taxes measured by or
resulting from such Debt Incurrence and (ii) payment of all commissions and
other fees and expenses related to such Debt Incurrence.
"Net Equity Proceeds" means cash received by a Person from an Equity
Issuance after (i) provision for all income or other taxes measured by or
resulting from such Equity Issuance and (ii) payment of all commissions and
other fees and expenses related to such Equity Issuance.
"New UGC" means a corporation or other entity to be formed as
contemplated by the Liberty Agreement to directly or indirectly hold shares of
UGC.
"Non-Participating Holder" is defined in Section 5.2(a)(iii)(A).
"Non-UGC Notes" means any Notes not directly, or indirectly through its
Subsidiaries, held by UGC.
"Note Exchange Amount" means with respect to the Notes or a portion
thereof, the Accreted Value as of the relevant Exchange Date of the Notes to be
exchanged for Ordinary Shares, as specified in a notice of exchange given by a
Holder pursuant to Section 4.1(b) or by the Company pursuant to Section 4.2(b)
or 4.2(c).
"Notes" is defined in Section 2.1(a). The term "Notes" shall refer, as
of any date, to Notes that are outstanding on such date. For avoidance of doubt,
the term "Notes" shall not include Exchange Notes or Mirror Notes.
"Obligors" means the Company and UPC.
"Offered Notes" is defined in Section 9.2(a).
"Offeror" is defined in Section 4.3(j).
"Operative Date" is defined in Section 6.7(c).
"Ordinary Shares" means UPC's Ordinary Shares A.
"Other Taxes" is defined in Section 2.4(a).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permanent Financing" means any Debt Incurrence or Equity Issuance
occurring after the Funding Date of this Agreement for the purpose of
refinancing the Loan.
15
"Permits" means all domestic and foreign licenses, permits and
approvals required for the full operation of UPC and its Subsidiaries, taken as
a whole, including, without limitation, provincial, state, federal, city and
county permits and approvals.
"Permitted Application" is defined in Section 5.2(a)(iii)(D).
"Permitted Assignee" is defined in Section 9.1.
"Person" means an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or any agency or political subdivision
thereof) or other entity of any kind.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which UPC or any of its ERISA Affiliates could reasonably be expected
to incur any liability.
"Pledge Agreement" means an agreement and deed of pledge of shares
between UPC as pledgor, the Company and the Lender as pledgee, an agreement and
deed of pledge of shares between UPC as pledgor, chello Holdings and the Lender
as pledgee, and on agreement and deed of pledge of shares between the Company as
pledgor, UPCH and the Lender as pledgee, as amended, restated, supplemented or
otherwise modified from time to time.
"Prepayment Date" means the date of prepayment determined in accordance
with Section 5.1(b) or 5.1(c), as the case may be.
"Principals" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Investments, Ltd. (so long
as it is controlled by ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇▇ Holdings, Co. and The ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Family Trust (so long as each
is controlled by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or trustees appointed by him), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and with respect to any such Persons means: (i) any
controlling stockholder or 80% (or more) owned Subsidiary of such Person, or
with respect to each individual Person, (A) family partnerships, corporations or
other entities holding equity interests in the Company, the transferee(s) or the
surviving entities or entities solely for the benefit of such Person or any of
the Persons listed in clause (B), (C), (D) or (E) below, (B) such Person's
spouse, (C) such Person's children, grandchildren, stepchildren,
step-grandchildren and their spouses, (D) heirs, legatees and devisees, and (E)
trusts solely for the benefit of any of the foregoing; or (ii) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Person and/or such other Persons referred to
in the immediately preceding clause (i).
"Process Agent" is defined in Section 11.6(b).
"Property" means any and all property of any character whatsoever,
whether real property, personal property, tangible, intangible or mixed.
16
"Qualified Capital Stock" means with respect to any Person any Capital
Stock of such Person that is not Disqualified Capital Stock.
"Qualified Loan" means a loan which (i) bears interest at a rate equal
to or greater than the interest rate on the Loan (unless such loan is owing by
the Company to its Subsidiaries), (ii) may be accelerated in the event of a
Default under this Agreement and (iii) is issued or made pursuant to a Qualified
Loan Agreement.
"Qualified Loan Agreement" means a loan agreement in substantially the
form of Exhibit C attached hereto or such other agreement as the Majority Holder
shall approve.
"Register" is defined in Section 9.1(b).
"Registration Rights" means the registration rights applicable to the
Ordinary Shares on the terms set forth in the Registration Rights Agreement.
"Registration Rights Agreement" means a registration rights agreement
to be entered into in relation to the Ordinary Shares in substantially the form
of Exhibit D attached hereto, as amended, restated, supplemented or otherwise
modified from time to time.
"Related Business" has the meaning ascribed to such term in the
Indenture and all defined terms used in the definition of such term in the
Indenture have the meanings ascribed to them in the Indenture; provided that at
the time of determination thereof, the Related Business of a Person shall be one
or more of the lines of business described in such Indenture definition in which
such Person is principally engaged at that time and any business reasonably
related to any of the foregoing.
"Release" is defined in Section 11.15.
"Reorganization Securities" means capital stock of UPC or another
issuer that is issued in exchange for Ordinary Shares (or other capital stock of
UPC receivable by Holders of the Notes) pursuant to a Transaction described in
Section 4.5(a)(ii) or (iii).
"Restricted Payment" means, without duplication:
(i) the declaration or payment of any dividend or other distribution
in respect of Equity Interests of the Company or any Affiliate of the Company;
(ii) any payment on account of the purchase, redemption or other
acquisition or retirement for value of Equity Interests of the Company or any
Affiliate of the Company;
(iii) (A) any purchase, redemption, or other acquisition or retirement
for value of, any payment in respect of, or any defeasance of, any Indebtedness
that is (1) contractually or structurally subordinated or pari passu in right of
payment to the Loan, directly or indirectly, by the Company or any Affiliate of
the Company or (2) structurally senior in right of payment to the Loan, directly
or indirectly, by the Company or any Affiliate of the Company, other than
payments in respect of such structurally senior Indebtedness by the primary
obligor on or maker of such Indebtedness as and when the same becomes due and
17
payable, other than by acceleration as a result of the occurrence or
nonoccurrence of any event, and payments on revolving Indebtedness, payments on
working capital lines of credit and payments in respect of refinancings of such
Indebtedness that is not Debt Securities and (B) any purchase, redemption, or
other acquisition or retirement for value of, any payment in respect of, or any
defeasance of, any other obligation that is (1) contractually or structurally
subordinated in right of payment to the Loan, directly or indirectly, by the
Company or any Affiliate of the Company or (2) contractually or structurally
senior or pari passu in right of payment to the Loan, directly or indirectly by
the Company or any Affiliate of the Company other than payments in respect of
such structurally senior obligations by the primary obligor on or maker of such
obligation as and when the same becomes due and payable other than as a result
of acceleration as a result of the occurrence or nonoccurrence of any event;
(iv) any Investment by the Company or any of its Subsidiaries in any
Affiliate of the Company;
(v) any Asset Sale (other than the issuance of Equity Interests) by
the Company or any of its Subsidiaries to any Affiliate of the Company other
than the Company or a Subsidiary of the Company;
(vi) the granting of any Lien to any Affiliate of the Company (the
value of such Lien being the greater of (A) the initial book value of the
Property (other than cash) subject to such Lien and (B) the fair market value of
such Property at the time the Lien is created as determined in good faith by the
Supervisory Board of UPC); or
(vii) any consolidation or merger by the Company with or into any
Affiliate of the Company;
provided, however, that the term "Restricted Payment" does not include (A) any
dividend or distribution or payment of the type referred to in clause (ii)
immediately above on Equity Interests of the Company to the extent payable
solely in shares of Qualified Capital Stock of the Company, (B) any dividend,
distribution or other payment to, or Investment in, the Company or any of its
Subsidiaries if before or after giving effect thereto no Default exists under
Section 7.4, Section 8.1(a) or Section 8.1(b) or in any of its Wholly Owned
Subsidiaries if after giving effect thereto no Default would exist under Section
8.1(a) or (b); or (C) any dividend, distribution or other payments on its Equity
Interests by any Subsidiaries of the Company to the Company or other Subsidiary
of the Company.
"Rights" is defined in Section 4.3(b)(ii).
"Rights Distribution Date" is defined in Section 4.4(a).
"S&P" means Standard & Poors Rating Service, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor.
"SEC" means the United States Securities and Exchange Commission.
18
"Section 5.2(b) Change of Control" is defined in Section 5.2(b).
"Section 4.2(b) Accretion Difference" is defined in Section 4.2(b)(ii).
"Section 4.2(b) Additional Accreted Value" is defined in Section
4.2(b)(ii).
"Section 4.2(b) Additional Period" is defined in Section 4.2(b)(ii).
"Section 4.2(c) Accretion Difference" is defined in Section 4.2(c)(ii).
"Section 4.2(c) Additional Accreted Value" is defined in Section
4.2(c)(ii).
"Section 4.2(c) Additional Period" is defined in Section 4.2(c)(ii).
"Securities Act" means the United States Securities Act of 1933, as
amended (or any successor act), and the rules and regulations thereunder (or
respective successors thereto).
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X of the Securities Act as in effect on the Funding Date.
"Spinoff" means the distribution of stock of a subsidiary of UPC as a
distribution or dividend to all holders of Ordinary Shares.
"Spinoff Securities" means stock of a subsidiary of UPC that is
distributed to holders of Ordinary Shares in a Spinoff.
"Subsidiary" with respect to any Person, means (i) a corporation a
majority of whose Equity Interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person, or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of determination thereof has majority ownership interest, or (iii) a
partnership in which such Person or a Subsidiary of such Person is, at the time,
a general partner and in which such Person, directly or indirectly, at the date
of determination thereof has a majority ownership interest.
"Supervisory Board" has the meaning ascribed to such term in the
Indenture and all defined terms used in the definition of such term in the
Indenture have the meanings ascribed to them in the Indenture.
"Taxes" is defined in Section 2.4(a).
"The European Community Merger Regulation" is defined in Section 4.12.
"Trading Day" shall mean any business day on which the Nasdaq National
Market (or any U.S. national securities exchange or quotation system on which
the Ordinary Shares are then listed) or the Euronext Amsterdam Stock Exchange is
open for the transaction of business.
19
"Transaction" is defined in Section 4.5(a).
"UGC" means UnitedGlobalCom, Inc., a Delaware corporation.
"UGC Indentures" means the Indenture dated as of February 5, 1998
between United International Holdings, Inc. (n/k/a UGC) and Firstar Bank of
Minnesota N.A., as Trustee and the Indenture dated as of April 29, 1999, between
United International Holdings, Inc. (n/k/a UGC) and Firstar Bank of Minnesota
N.A., as Trustee.
"UGC Notes" means any Notes directly, or indirectly through its
Subsidiaries, held by UGC.
"UGC Party" means New UGC, UGC, UPC or any of their respective
Subsidiaries.
"United Commission Filings" means the respective Annual Reports on Form
10-K for the fiscal year ended December 31, 2000 of UGC and UPC, in the form
publicly available on April 2, 2001.
"UPC" is defined in the preamble.
"UPC/chello Master Loan Agreement" means the Amended and Restated
Master Loan Agreement between UPC and chello Holdings dated as of the date
hereof, as amended, restated, supplemented or otherwise modified from time to
time to the extent permitted by this Agreement.
"UPC/Company Master Loan Agreement" means the Amended and Restated
Master Loan Agreement between UPC and the Company dated as of the date hereof,
as amended, restated, supplemented or otherwise modified from time to time to
the extent permitted by this Agreement.
"UPCD" means UPC Distribution Holding B.V., a private limited liability
company (besloten vennootschap met beperkte aansprakelijkheid) incorporated
under the laws of The Netherlands.
"UPCD Facility Agreement" means the facility agreement dated October
26, 2000, among UPC Financing Partnership, UPC Distribution Holding B.V. and
Subsidiaries of UPCD and Chase Manhattan plc, TD Bank Europe Limited, ABN AMRO
Bank N.V. and other parties, as amended, restated, supplemented or otherwise
modified from time to time; provided that such modifications shall be effective
with respect to the covenants of the Obligor and Guarantor hereunder only so
long as the financial covenants contained in the UPCD Facility Agreement are
based on the performance and financial condition of UPCD and its Subsidiaries
only.
"UPC Financing Partnership" means UPC Financing Partnership, a Delaware
general partnership.
"UPC Form 10-K" is defined in Section 3.1(l).
20
"UPC Form 10-Q" is defined in Section 3.1(l).
"UPCH" means UPC Holding B.V., a private limited liability company
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under the
laws of The Netherlands.
"UPC SEC Filings" is defined in Section 3.1(l).
"Wholly Owned Subsidiary" means with respect to any Person a Subsidiary
all the Equity Interests of which (other than directors' qualifying shares) are
owned by such Person or one or more Wholly Owned Subsidiaries of such Person.
Section 1.2 Rules of Interpretation. Except as otherwise specifically
provided herein, all references herein to agreements, contracts or documents
shall mean such agreements, contracts or documents as amended, restated,
supplemented or otherwise modified from time to time. All references herein to a
Person shall include such Person's successors and permitted assigns. Unless
otherwise specified or the context otherwise requires, references herein to any
Article, Section, Exhibit or Schedule shall refer to an Article, Section,
Exhibit or Schedule of this Agreement. All terms, covenants and provisions of
the Indenture incorporated or referred to herein shall, unless otherwise
provided herein, continue to apply to this Agreement and the obligations of the
Obligors and Guarantor hereunder notwithstanding any defeasance or other
discharge of the Indentures. All terms, covenants and other provisions of the
UPCD Facility Agreement incorporated or referred to herein shall, unless
otherwise provided herein, continue to apply to this Agreement and the
obligations of the Obligors and Guarantor hereunder notwithstanding the
termination of that agreement or the refinancing of that agreement such that it
no longer applies solely to UPCD and its Subsidiaries. On any such termination
or refinancing of the UPCD Facility Agreement, the terms, covenants and
provisions of the UPCD Facility Agreement applicable to this Agreement shall be
those that were in existence at the time immediately prior to such termination
or refinancing.
ARTICLE II
AMOUNT, TERMS OF CREDIT AND NOTES
Section 2.1 The Loan.
(a) Subject to the terms of this Agreement and satisfaction or written
waiver of the Lender of the conditions set forth in Schedule 2.1(a), the Lender
agrees to fund, and the Obligors agree to borrow, $856,800,000 on the Funding
Date, the offering price of the Notes. Such amount of the Loan to be paid by
wire transfer of immediately available funds to one or more accounts specified
by the Company. The Loan will be evidenced by one or more notes issued under
this Agreement from time to time pursuant to the terms hereof and any
replacement notes with respect thereto or notes issued in exchange therefor
pursuant to this Agreement (other than Exchange Notes or Mirror Notes), each
substantially in the form attached hereto as Exhibit A (the "Notes").
21
(b) Against delivery to the Lender on the Funding Date of the Initial
Notes and satisfaction or written waiver by the Lender of the conditions set
forth in Schedule 2.1(a), which Notes shall be registered in the name of the
Lender, the Lender shall make the Loan as set forth in Section 2.1(a).
Section 2.2 Accretion and Interest.
(a) The initial Accreted Value of the Notes will increase on a daily
basis commencing on the Funding Date at the rate of 6% per annum (based on a
360-day year of twelve 30-day months) compounded quarterly on each Accretion
Calculation Date until the Maturity Date.
(b) Payment of the principal of or premium, if any, on the Notes prior
to the Maturity Date (whether pursuant to Section 2.4(i), 5.1 or 5.2, by
acceleration or otherwise) will be at the Accreted Value of the Notes or portion
thereof, being repaid as of the date of repayment.
(c) Overdue principal on the Notes shall bear interest from the date so
due to the date paid at a rate per annum (based on a 360-day year of twelve
30-day months) equal to the sum of (i) 3% plus, (ii) after the Maturity Date,
6%. Any such interest shall be immediately due and payable in cash upon demand
by the Holder entitled thereto.
Section 2.3 Amounts Due. Each of the Obligors hereby unconditionally
promises to pay in full when and as due to the Holder of each Note all amounts
that become due and payable to the Holder under any Financing Document,
including the Accreted Value of such Note as of the Maturity Date, and any
accrued and unpaid interest, fees, premium and other obligations that are then
due and payable on the Note or to which such Holder is then entitled under any
other Financing Document.
Section 2.4 Taxes.
(a) For the purposes of this Section, the following terms have the
following meanings:
"Tax" or "Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any payment
(including a deemed payment by reason of an exchange of any Notes in accordance
with the terms of Article IV of this Agreement) by the Obligors or the Guarantor
pursuant to this Agreement (including accreted amounts) or any other Financing
Document or with respect to any adjustment to the Exchange Price made pursuant
to this Agreement, and all liabilities with respect thereto, excluding taxes
(including franchise and similar taxes) imposed on the net income or gains of
any Holder (other than any such taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 2.4), by the jurisdiction under the laws of
which such Holder is organized or in which its principal executive office or the
office holding any Financing Document is located.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise taxes, or similar taxes, charges or levies, which arise
from any payment (including a deemed payment by reason of an exchange of any
Notes in accordance with the terms of Article IV of this Agreement), or
adjustment to the Exchange Price, made pursuant to this Agreement or any other
22
Financing Document or from the execution, delivery, registration, recordation or
enforcement of, or otherwise with respect to, this Agreement or any other
Financing Document.
(b) All payments (or deemed payments by reason of an exchange of any
Notes in accordance with Article IV of this Agreement) by the Obligors to or for
the account of any Holder under any Financing Document shall be made without
withholding or deduction for any Taxes or Other Taxes; provided that, if the
Obligors shall be required by law to withhold or deduct any Taxes or Other Taxes
from any such payment, the sum payable shall be increased as necessary so that
after making all required withholdings and deductions (including withholdings
and deductions applicable to additional sums payable under this Section) the
Obligors shall make such withholdings and deductions such that each Holder
receives an amount equal to the sum it would have received had no such
withholdings or deductions been made. The Obligors shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law and the Obligors shall promptly furnish to the
Lender the original or a certified copy of a receipt or other documentation
available to the Obligors evidencing payment thereof.
(c) The Obligors agree to indemnify each Holder for the full amount
of Taxes and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed or asserted (whether or not correctly) by any jurisdiction on
amounts payable under this Section 2.4(c)) paid by such Holder, including
penalties, interest and expenses arising therefrom or with respect thereto. For
purposes of determining the amount of any indemnification payment hereunder, it
shall be assumed that the Holder will pay U.S. federal, state or local or any
foreign taxes at the highest applicable corporate tax rate, without regard to
the availability of any loss, deduction, credit or other offset against tax,
subject to the requirements of Section 2.4(f). After any Holder receives written
notice of the imposition of Taxes or Other Taxes, such Holder will act in good
faith to notify the Obligors of their obligations hereunder as soon as
reasonably possible.
(d) The Obligors shall have no obligation for Taxes under Section
2.4(b), Section 2.4(c) or any other provision of this Agreement for or on
account of:
(i) any Taxes (other than Other Taxes or Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 2.4) that
would not have been so imposed but for the existence of any present or former
connection between a Holder or the beneficial owner of a Note (or between a
fiduciary, settlor, beneficiary, member, or shareholder of, or possessor of a
power over, such Holder or beneficial owner, if such Holder or beneficial owner
is an estate, a trust, a partnership or a corporation) and the jurisdiction
imposing the Tax, other than merely holding the Note or any Financing Document,
or the receipt of payments in respect thereof or the exchange thereof in
accordance with the terms of this Agreement, including, without limitation, in
such present or former connection such Holder or beneficial owner (or such
fiduciary, settlor, beneficiary, member, shareholder, or possessor) being or
having been a citizen or resident thereof, or being or having been engaged in a
trade or business or having a permanent establishment or other fixed base
therein, or making or having made an election the effect of which is to subject
such Holder or beneficial owner (or such fiduciary, settlor, beneficiary,
member, shareholder, or possessor) to such Tax;
(ii) any Taxes in the nature of estate, inheritance or gift
taxes;
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(iii) any Tax that is imposed or withheld by reason of the
failure of a Holder or beneficial owner of a Note to comply with a reasonable,
written request by the Company or UPC, addressed to such Holder or beneficial
owner, to provide information concerning the nationality, residence or identity
of such Holder or beneficial owner, if providing such information under a
statute, treaty, regulation or administrative practice of the jurisdiction
imposing such Tax would result in a complete or partial exemption from such Tax;
(iv) any Taxes imposed on any payment on the Loan to a Holder
that is a fiduciary or partnership or other than sole beneficial owner of such
payment to the extent a beneficiary or settlor with respect to such fiduciary or
a member of such partnership or a beneficial owner would not have been subject
to the payment of Taxes had such beneficiary, settlor, member or beneficial
owner directly received its beneficial or distributive share of such payment;
and
(v) any combination of items (i) through (iv) above.
(e) If the Obligors determine in good faith that a reasonable basis
exists for contesting the imposition of a Tax or Other Tax with respect to a
Holder, such Holder shall cooperate with the Obligors in challenging such Tax or
Other Tax at the Obligors' expense (including, without limitation, any
additional costs, expenses or Taxes incurred by such Holder as a result of such
contesting of such Taxes) if requested by the Obligors; provided, however, that
nothing in this Section 2.4(e) shall require such Holder to submit to the
Obligors any tax returns or any part thereof, or to prepare or file any tax
returns other than as such Holder in its sole discretion shall determine.
(f) In the event that a Holder determines in its reasonable judgment
that any payment of additional amounts to or on behalf of such Holder under
Section 2.4(b), or payment of any amount for which indemnification for Taxes
under Section 2.4(c) was required, resulted in a tax credit or deduction
becoming available to such Holder, such Holder shall, upon the realization of
any actual tax benefit directly resulting from such credit or deduction,
promptly notify the Obligors and pay to the Obligors an amount equal to such
actual tax benefit.
(g) Each Holder agrees, to the extent reasonable and without material
cost or prejudice to it, to cooperate with the Obligors to minimize any amounts
payable by the Obligors under this Section 2.4.
(h) The obligations set forth in Sections 2.4(b), (c), (e), (f) and
(g) shall (i) survive the termination of this Agreement and the payment in full
or exchange of the Notes and (ii) remain operative and in full force and effect
until the expiration of all applicable statutory periods of limitation for the
assessment of Tax or Other Taxes or, in the case of Section 2.4(f), utilization
of credits or deductions.
(i) If, as a result of any change in law or treaty occurring after
the date of this Agreement, an additional obligation for Taxes or Other Taxes is
imposed on an Obligor with respect to Notes held by a Holder, and such
additional obligation for Taxes or Other Taxes aggregates at least 15% of the
Accreted Value of the Notes held by such Holder, subject to Section 5.1(c), the
24
Obligors shall have the right, but not the obligation, to prepay in full in cash
all Notes of such Holder, together with a premium thereon at the premium rate on
the aggregate Accreted Value of the Notes to be prepaid provided for in Section
5.1(c). Any such prepayment shall not relieve the Obligors from their
obligations for Taxes and Other Taxes accruing under this Agreement prior to the
date of such prepayment. Notwithstanding the foregoing, the affected Holder
agrees to the extent reasonable and without material cost or prejudice to it, to
cooperate with the Obligors to minimize any amounts payable by the Obligors
under this Section 2.4.
(j) In the event of a conflict between this Section 2.4 and Section
11.4 or 11.7 of this Agreement, the provisions of this Section 2.4 shall
control.
(k) The Obligors and the Lender agree that the Loan is intended to
constitute debt and not equity and will be characterized as debt and not equity
by the Obligors and the Lender for all purposes of United States and Netherlands
tax law.
Section 2.5 Payments.
(a) Each payment required to be made on any day by an Obligor or the
Guarantor to any Holder of the Notes or under this Agreement (whether of
principal, premium or interest, if any, or otherwise) or under any other
Financing Document (except to the extent otherwise provided therein) shall be
paid to the Person in whose name the related Note is registered at the close of
business on the Business Day immediately preceding date of payment on the
Register by wire transfer in immediately available funds to an account
designated by such Person on or prior to 12:00 noon at the location of such
designated account on the due date of such payment. Any amounts received after
such time on any date may, in the discretion of the Holder entitled thereto, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest which
is payable in cash, such interest thereon shall be payable for the period of
such extension. All payments hereunder or under any other Financing Document
(except to the extent otherwise provided therein) shall be made in dollars.
(b) If at any time insufficient funds are received by the Holders to
pay fully all amounts of the Accreted Value of the Notes and interest then due
and payable in cash hereunder, such funds shall be applied (i) first, to pay
interest, premium and other obligations (other than principal) then due and
payable hereunder, if any, and (ii) second, to pay the principal then due and
payable hereunder, ratably among the parties entitled thereto.
Section 2.6 The Notes. The Notes will be issuable in registered form
without coupons and only in denominations of $100,000 principal amount at
maturity or any integral multiple of $1,000 principal amount at maturity above
such amount. The Notes shall not be issuable in bearer form.
Section 2.7 Legends and Special Conditions for Transfer. Each Note
issued hereunder shall, upon issuance, bear the legends set forth in the form of
Note attached hereto as Exhibit A. By its acceptance of any Note bearing
legends, each Holder of such Note acknowledges the restrictions on transfer of
25
such Note set forth in this Agreement and in the legends and agrees that it will
transfer such Note only as provided in this Agreement. If a Holder proposes to
transfer a Note pursuant to any exemption from the registration requirements of
the Securities Act, UPC shall only register such transfer or exchange if such
transferor delivers to UPC an opinion of counsel reasonably satisfactory to UPC
that such transfer is in compliance with the Securities Act and the terms of
this Agreement; provided that UPC may refuse to register such transfer in any
case where the proposed transferee is not an "accredited investor" as defined in
Regulation D of the Securities Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of UPC, the Company and the
Guarantor. Each of UPC, the Company and the Guarantor represents and warrants to
the Lender as set forth below, as of the date hereof and as of the Funding Date:
(a) Incorporation. UPC is a public limited liability company (naamloze
vennootschap) and each of the Company and the Guarantor is a private limited
liability company (besloten vennootschap met beperkte aansprakelijkheid), duly
incorporated and validly existing under the laws of The Netherlands and has all
corporate power and capacity to own its assets and to carry on its business as
presently conducted and as proposed to be conducted. The Guarantor and each of
the Obligors has all corporate power and capacity to execute, deliver and
perform its obligations under this Agreement and the other Financing Documents
to which it is a party and the Obligors have all corporate power and capacity to
borrow the Loan in the manner and for the purposes contemplated by this
Agreement.
(b) Authorization, Execution and Enforceability. Each of the Financing
Documents (other than the Notes) to which it is a party constitutes its valid
and binding agreement enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and equitable principles of general applicability. When
executed and delivered by UPC and the Company against payment therefor in
accordance with the terms hereof, the Notes will constitute valid and binding
obligations of each of UPC and the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally and equitable principles of general
applicability.
(c) Governmental Authorizations. None of the execution and delivery by
it of this Agreement and the other Financing Documents to which it is a party,
or the consummation of the transactions contemplated hereby and thereby
(including the borrowing of the Loan) requires any action by or with respect to,
or filing with, any governmental body, agency or official authority except such
actions or filings as shall have been undertaken or made, as the case may be, on
or prior to the Funding Date, all of which are in full force and effect on and
as of the Funding Date and except such actions or filings as may be required in
connection with Section 4.1(e), Section 4.2(g) and the Registration Rights,
provided that, such actions or filings shall be undertaken or made as necessary
in order to permit the exercise of Section 4.1(e), Section 4.2(g) and the
Registration Rights in accordance with the terms thereof.
26
(d) Non-Contravention. The execution and delivery of this Agreement and
the other Financing Documents to which it is a party do not, the borrowing by
the Obligors under this Agreement and the consummation of the transactions
contemplated by the Financing Documents will not, contravene or constitute a
material default under or violation of the UGC Indentures, the Indenture, the
indentures in respect of the Existing High Yield Notes, the Credit Agreement,
any provision of any applicable law, rule or regulation, its charter or any of
its other organizational documents or any agreement, judgment, injunction,
order, decree or other instrument binding upon it or any of its Subsidiaries or
any of its or their properties, or result in the creation or imposition of any
Lien on any asset of it or any of its Subsidiaries.
(e) Financial Information. The consolidated financial statements of
each of UPC and UPCH (inclusive of its Subsidiaries) including balance sheets
and income and cash flow statements as of the end of and for the fiscal year
ended December 31, 2000 audited by independent public accountants of recognized
international standing, together with the report thereon, fairly present in
conformity with GAAP the consolidated financial position of such entities as of
such date and their consolidated results of operations, changes in stockholders'
equity and cash flows for such period. The unaudited consolidated financial
statements of UPCH (inclusion of its Subsidiaries) including a balance sheet and
income and cash flow statement as of and for the fiscal quarter ended March 31,
2001, fairly present in conformity with GAAP the consolidated financial position
of UPCH, as of such date and its consolidated results of operations for the
quarterly period then ended. The unaudited unconsolidated balance sheets of
chello Holdings and the Company as of March 31, 2001, and the unaudited
consolidated balance sheet of chello as of March 31, 2001, fairly present the
unconsolidated, or consolidated as the case may be, financial position of such
entities as of such date. The unaudited quarterly unconsolidated management
accounts of UPCD for the three months as of the end of and for the fiscal
quarter ended December 31, 2000 have been prepared as required by the UPCD
Facility Agreement.
(f) Litigation, Proceedings, Defaults. Except as disclosed in UPC's or
UPCH's consolidated financial statements for the fiscal year ended December 31,
2000, there is no action, suit or proceeding pending against or, to the
knowledge of UPC, threatened against or affecting UPC, the Company, the
Guarantor or any Significant Subsidiaries of UPC, before or by any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable likelihood of an adverse decision that would (individually or in the
aggregate) have a Material Adverse Effect. None of UPC, the Company, the
Guarantor or any Significant Subsidiary of UPC is in violation of, or in default
under, its charter or other organizational documents. None of UPC, the Company,
the Guarantor or any Significant Subsidiary of UPC is in violation of, or in
default under, any provision of any applicable law, rule or regulation or of any
agreement (including without limitation the indentures in respect of the
Existing High Yield Notes (including the Indenture) and the UPCD Facility
Agreement), judgment, injunction, order, decree or other instrument binding upon
it which violation or default would (individually or in the aggregate)
reasonably be expected to (i) affect the validity of any of the Financing
Documents or the Loan or any other document or agreement executed or to be
executed by the Obligors or the Guarantor pursuant hereto or in connection
herewith or (ii) have a Material Adverse Effect.
27
(g) Tax Returns and Payment.
(i) UPC, the Company, the Guarantor and the Significant
Subsidiaries of UPC have filed all tax returns required by law to be filed by
them and have paid all taxes, assessments and other governmental charges levied
upon them and any of their respective properties, assets, income or franchises
that are due and payable, other than those presently payable without penalty or
interest or those that are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and for which adequate
reserves have been established on their books in accordance with GAAP. The
charges, accruals and reserves on the books of UPC, the Company, the Guarantor
and the Significant Subsidiaries of UPC with respect to income taxes or other
governmental charges for all fiscal periods have been established in accordance
with GAAP and are adequate, and there are no unpaid assessments for additional
taxes for any period or any basis for any such assessment for which adequate
provision has not been made in its accounts in accordance with GAAP.
(ii) There is no tax, levy, impost, deduction, charge or
withholding, excluding taxes (including franchise and similar taxes) imposed on
the net income or gains of any Holder by the jurisdiction under the laws of
which such Holder is organized or in which its principal executive office or the
office holding any Financing Document is located, and excluding any Taxes
described in Section 2.4(d), imposed by any governmental instrumentality either
(A) on or by virtue of the execution, delivery, performance (including without
limitation the exchange of Notes into Ordinary Shares), enforcement or
admissibility into evidence of any Financing Document or (B) on any payment to
be made by an Obligor or the Guarantor pursuant to any Financing Document.
(iii) No "notice of lien" or similar document or instrument
with respect to any tax has been filed or recorded except with respect to any
taxes not yet due or payable.
(h) Investment Company. None of UPC, UGC or any of their respective
Subsidiaries is, or after giving effect to the Loan will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(i) Employee Benefit Plan Matters. Except as disclosed in UPC's or
UPCH's consolidated financial statements for the fiscal year ended December 31,
2000, (a) UPC, each of its Subsidiaries and each of its respective ERISA
Affiliates has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Plan and (b) UPC, each of its Subsidiaries and each of its
respective Affiliates has fulfilled its obligations with respect to each Foreign
Plan and is in compliance in all material respects with the applicable laws of
the jurisdiction to which such Foreign Plan is subject. None of UPC, any of its
Subsidiaries or any of its respective ERISA Affiliates has (i) sought a waiver
of the minimum funding standard under Section 412 of the Code in respect of any
Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan, or made any amendment to any Plan, which has resulted or
could result in the imposition of a Lien or the posting of a bond or other
security under ERISA or the Code, (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA or (iv) with respect to any Foreign Plan, taken any action, failed to take
any action or allowed any condition to exist that could give rise to (x) any
28
material liability that has not been properly accrued on the financial
statements of UPC, each of its Subsidiaries or each of their respective
Affiliates, as applicable, or (y) the imposition of a Lien or other security
interest on the assets of UPC, its Subsidiaries or their respective Affiliates.
(j) Environmental Matters. Except as disclosed in UPC's or UPCH's
consolidated financial statements for the fiscal year ended December 31, 2000:
(i) Other than the generation, use and storage of Hazardous
Materials in compliance with all applicable Environmental Laws: (A) no Hazardous
Materials are located on any properties owned, leased or operated by UPC or any
of its Subsidiaries; (B) no Hazardous Materials have been released into the
environment or deposited, discharged, placed or disposed of, at, on, under or
near any of such properties; (C) no portion of any such property is being used
for the disposal, storage, treatment, processing or other handling of Hazardous
Materials; (D) no such property is affected by Hazardous Materials
Contamination; (E) to the best of UPC's knowledge, no previous owner or occupant
of such properties has used any portion of the properties for the treatment,
storage, disposal, processing or other handling of Hazardous Materials; (F) with
respect to properties previously owned, leased or operated by UPC or any of its
Subsidiaries, to the best of UPC's knowledge, no Hazardous Materials have been
released into the environment, or deposited, discharged, placed or disposed of,
at, on, under or near any such properties during the time of UPC's or any of its
Subsidiaries' ownership, lease or operation thereof.
(ii) No asbestos or asbestos-containing materials are present on
any of the properties now or previously owned, leased or operated by UPC or any
of its Subsidiaries.
(iii) No polychlorinated biphenyls are located on or in any
properties now or previously owned, leased or operated by UPC or any of its
Subsidiaries, in the form of electrical transformers, fluorescent light fixtures
with ballasts, cooling oils or any other device or form.
(iv) No underground storage tanks are located on any properties now
or previously owned, leased or operated by UPC or any of its Subsidiaries, or
were located on any such property and subsequently removed or filled.
(v) No notice, notification, demand, request for information,
complaint, citation, summons, investigation, administrative order, consent order
and agreement, litigation or settlement directed at UPC, the Company, the
Guarantor or any Significant Subsidiaries of UPC or, to the best knowledge of
UPC, any property owned, leased or operated by UPC, the Company, the Guarantor
or any Significant Subsidiaries of UPC with respect to Hazardous Materials or
Hazardous Materials Contamination is in existence or, to UPC's knowledge,
proposed, threatened or anticipated with respect to or in connection with the
operation of any properties now or previously owned, leased or operated by UPC,
the Company, the Guarantor or any Significant Subsidiaries of UPC. All such
properties and their existing and prior uses comply and at all times have
complied with any applicable governmental requirements relating to environmental
matters or Hazardous Materials and there is no condition on any of such
properties which is in violation of any applicable governmental requirements
relating to Hazardous Materials, and none of UPC, the Company, the Guarantor or
any Significant Subsidiaries of UPC has received any communication from or on
29
behalf of any governmental authority that any such condition exists.
(vi) There has been no environmental investigation, study,
audit, test, review or other analysis conducted of which UPC has knowledge in
relation to the current or prior business of UPC or any of its Subsidiaries or
any property or facility now or previously owned, leased or operated by UPC or
any of its Subsidiaries which has not been delivered to the Lender.
(vii) For purposes of this Section 3.1(j), the term "UPC and
its Subsidiaries" shall include any business or business entity (including a
corporation) which is, in whole or in part, a predecessor of UPC or such
Subsidiary.
(k) Permits. Except to the extent any of the following could not
reasonably be expected to result in a Material Adverse Effect: (i) UPC and each
of its Subsidiaries have all Permits as are necessary for the conduct of their
respective businesses as they have been conducted; (ii) all such Permits are in
full force and effect, and UPC and each of its Subsidiaries have fulfilled and
performed all material obligations with respect to such Permits; (iii) no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination by UPC thereof or which results in any other
impairment of the rights of the holder of any such Permit; and (iv) UPC has no
reason to believe that any governmental body or agency is considering limiting,
suspending or revoking any such Permit.
(l) Full Disclosure. (i) UPC has heretofore made available to Lender
the following, (A) in the form filed with the SEC (in each case together with
all exhibits and schedules filed therewith and amendments thereto filed prior to
the date of this Agreement): (I) UPC's Annual Reports on Form 10-K for the
fiscal years ended December 31, 1998, 1999 and 2000 (the last such report being
the "UPC Form 10-K"), (II) UPC's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2000, June 30, 2000 and September 30, 2000 (the last
such report being the "UPC Form 10-Q"), (III) all definitive proxy and
information statements relating to meetings of UPC's shareholders since January
1, 1997 to the date of this Agreement and (IV) all other reports, registration
statements, forms and other documents filed by UPC and its Subsidiaries with the
SEC since January 1, 1997 to the date of this Agreement (all such documents
filed in 2000 or 2001, together with the UPC Form 10-K, the UPC Form 10-Q and
the proxy and information statements referred to in clause (III) above relating
to meetings held in 2000, the "UPC SEC Filings") and (B) the financial
statements referred to in Section 3.1(e) above. The filings made available
pursuant to clause (A) of the preceding sentence constitute all of the reports,
registration statements, proxy or information statements, documents and forms
(other than preliminary material) that UPC and its Subsidiaries have been
required to file with the SEC since January 1, 1997; and all such filings and
all reports, registration statements, proxy or information statements (1)
complied with the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations under each such Act, and (2) did not at the time they
were filed with the SEC contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances in which
they were made, not misleading.
30
(ii) There is no fact or circumstance known to either Obligor or
the Guarantor or any other Subsidiary of UPC that, either individually, or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
that has not been disclosed in this Agreement or the other Financing Documents
or other documents, certificates and other writings delivered to the Lender by
or on behalf of UPC, specifically for use in connection with the entry into this
Agreement by the Obligors and the Guarantor and the borrowing by the Obligors of
the Loans pursuant to the terms hereof.
(m) Absence of any Undisclosed Liabilities. There are no liabilities of
UPC or any of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than (i) those liabilities
provided for in the financial statements provided pursuant to Section 3.1(e),
(ii) other undisclosed liabilities which, individually or in the aggregate, do
not exceed $100 million (or its foreign currency equivalent) and (iii)
liabilities incurred in the ordinary course of business.
(n) Governmental Regulation. Neither UPC nor any of its Subsidiaries
are, nor will any of them be upon the advance of the Loan and the use of the
proceeds as described herein, subject to regulation under any law, rule or
regulation (including the Federal Power Act, the Interstate Commerce Act or any
Federal or state statute or regulation) that would prohibit, regulate or
materially limit UPC's or any of its Subsidiaries' ability to perform its
obligations hereunder or under any other Financing Document. Except for the
Securities Act, the Exchange Act, state securities laws, and the securities laws
of The Netherlands, the Company is not subject to any law, rule or regulation
that limits its ability to borrow and perform its obligations hereunder.
(o) Solvency.
(i) Immediately after the consummation of the transactions to
occur on the date hereof and immediately following an advance of the Loan, (A)
the fair value of the assets of each Obligor and its Subsidiaries and the
Guarantor and its Subsidiaries, as the case may be, on a consolidated basis, at
a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of such Obligor and Subsidiaries and the Guarantor and
its Subsidiaries, as the case may be, on a consolidated basis; (B) the present
fair saleable value of the property of each Obligor and its Subsidiaries and the
Guarantor and its Subsidiaries, as the case may be, on a consolidated basis will
be greater than the amount that will be required to pay the probable liability
of such Obligor and Subsidiaries and the Guarantor and its Subsidiaries, as the
case may be, on a consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; (C) each Obligor and its Subsidiaries and the Guarantor
and its Subsidiaries, as the case may be, on a consolidated basis will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (D) each Obligor and
its Subsidiaries and the Guarantor and its Subsidiaries, as the case may be, on
a consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
31
(ii) None of the Obligors or the Guarantor intends to, or to
permit any of its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur Indebtedness beyond its ability to pay such
Indebtedness as it matures, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the Indebtedness
of any such Subsidiary.
(p) Use of Proceeds. The Company shall use the proceeds of the Loan to
make loans to UPC as and when cash interest payments on the Existing High Yield
Notes become due and payable, to make loans to UPC to enable UPC to pay
corporate overhead and information technology expenses and other working capital
purposes of UPC not to exceed $85.0 million in the aggregate during any fiscal
year, to make loans to Subsidiaries of UPC and to make Investments in Tevel not
to exceed $23.0 million.
(q) Margin Stock, Etc. None of the proceeds of the advances under the
Loan will be used for any purpose which, directly or indirectly, would cause any
Financing Document to violate the applicable provisions of Regulation T, U or X,
or any other regulation of the Board of Governors of the Federal Reserve System.
(r) Indebtedness. Except as disclosed in Schedule 3.1(r) attached
hereto, none of the Company or any of its Subsidiaries or chello Holdings or any
of its Subsidiaries has outstanding any Indebtedness owing to Persons other than
UGC and its Subsidiaries. No Fixed Rate Loans (as defined in the Bridge Loan
Agreement) are outstanding under the Bridge Loan Agreement.
(s) Intercompany Indebtedness. (i) As at March 31, 2001 (A) the
Indebtedness owing by the Company to UPC or any Subsidiary of UPC, (B) the
Indebtedness owing by chello Holdings to UPC or any Subsidiary of UPC, (C) the
Indebtedness owing by any Subsidiary of the Company to UPC or any other
Subsidiary of UPC (other than the Company and its other Subsidiaries), (D) the
Indebtedness owing by UPCH to the Company and its other Subsidiaries and (E) the
Indebtedness owing by any Subsidiary of chello Holdings to UPC or any other
Subsidiary of UPC (other than Subsidiaries of chello), is set forth on Schedule
3.1(s). Except as set forth on Schedule 3.1(s), no such Indebtedness is owing by
the Company, chello Holdings or any of their Subsidiaries to UGC, UPC or any of
their respective Subsidiaries.
(ii) All intercompany Indebtedness owing (A) by the Company to UPC
or any other Subsidiary of UPC is evidenced by the UPC/Company Master Loan
Agreement, (B) by chello Holdings to UPC or any other Subsidiary of UPC is
evidenced by the UPC/chello Master Loan Agreement, (C) by UPC or any Subsidiary
of UPC (other than Subsidiaries of UPCD, UPCD and UPC Financing Partnership and
Subsidiaries of chello) to the Company is evidenced by Qualified Loans and (D)
by UPC or any Subsidiary of UPC, other than the Company and Subsidiaries of
chello, to chello Holdings is evidenced by Qualified Loans.
(t) Distribution Business Subsidiaries. Schedule 3.1(t) attached
hereto contains a list of the Subsidiaries of the Company engaged in the
Distribution Business, including the identity of the direct holder of the Equity
Interests of those Subsidiaries.
32
(u) Goldman Engagement Letter; DLJ Fee Letter. The borrowing of the
Loan and the delivery of the Notes will not give rise to any obligation of the
Obligors or the Guarantor under the Engagement Letter, dated as of July 28, 2000
(as amended through the date hereof) among UPC, ▇▇▇▇▇▇▇ Sachs International and
Bear, ▇▇▇▇▇▇▇ & Co. Inc., to ▇▇▇▇▇▇▇ Sachs International or the Investment Banks
named therein, including under Section 8 of such letter, other than any
obligation that has been waived. The borrowing of the Loan and the delivery of
the Notes will not give rise to any obligation of the Obligors or the Guarantor
under the Fee Letter, dated as of April 29, 1999 (as amended through the date
hereof) among United International Holdings, Inc., UIH Funding Corp., ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., TD
Securities (USA) Inc. and Chase Securities Inc., to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation or any of the other parties thereto, other than any
obligation that has been waived.
(v) Invested Capital. As of the date of this Agreement, the Invested
Capital of the Company attributable to the assets, properties and businesses of
the Company and its Subsidiaries is not less than ?5.0 billion.
(w) Ownership of Shares.
(i) The authorized share capital of UPC is one billion six
hundred and fifty-three million euros (EUR 1,653,000,000), divided into one
billion (1,000,000,000) ordinary shares A, having a nominal value of one euro
(EUR 1) each, three hundred million (300,000,000) ordinary shares B, having a
nominal value of one eurocent (EUR 0.01) each, three hundred (300) priority
shares, having a nominal value of one euro (EUR 1) each, forty-nine million nine
hundred and ninety-nine thousand seven hundred (49,999,700) preference shares A
divided into series, having a value of one euro (EUR 1) each and six hundred
million (600,000,000) preference shares B, having a value of one euro (EUR 1)
each. A total of four hundred and forty-one million two hundred and fifty-nine
thousand four hundred and twenty-nine euros (EUR 441,259,429) of the authorized
share capital of UPC is issued and outstanding, in the form of four hundred and
forty-one million, two hundred and forty-six thousand seven hundred and
twenty-nine (441,246,729) ordinary shares A, three hundred (300) priority shares
and twelve thousand four hundred (12,400) Series 1 preference shares A.
(ii) The authorized share capital of the Company is ninety
thousand seven hundred and fifty-six euros and four eurocents (EUR 90,756.04),
divided into two thousand (2000) ordinary shares, having a nominal value of
forty-five euros and thirty-eight eurocents (EUR 45.38) each. A total of
eighteen thousand one hundred and fifty-one euros and twenty-one eurocents (EUR
18,151.21) of the authorized share capital of the Company is issued and
outstanding in the form of four hundred (400) ordinary shares. All of the issued
and outstanding share capital of the Company is (A) owned by UPC, (B) free and
clear of all Liens, (C) fully paid and nonassessable and (D) subject to no
options to purchase or similar rights of any Person.
(iii) The authorized share capital of UPCH is one hundred thousand
euros (EUR 100,000), divided into one thousand (1000) ordinary shares, having a
nominal value of one hundred euros (EUR 100) each. A total of twenty thousand
euros (EUR 20,000) of the authorized share capital of UPCH is issued and
outstanding in the form of two hundred (200) ordinary shares. All of the issued
and outstanding share capital of UPCH is (A) owned by the Company, (B) free and
33
clear of all Liens, (C) fully paid and nonassessable and (D) subject to no
options to purchase or similar rights of any Person.
(iv) The authorized share capital of UPCD is one hundred thousand
euros (EUR 100,000), divided into one thousand (1000) ordinary shares, having a
nominal value of one hundred euros (EUR 100) each. A total of twenty thousand
euros (EUR 20,000) of the authorized share capital of UPCD is issued and
outstanding in the form of two hundred (200) ordinary shares. All of the issued
and outstanding share capital of UPCD is (A) owned by the UPCH, (B) except as
set forth on Schedule 3.1(w)(iv) free and clear of all Liens, (C) fully paid and
nonassessable and (D) subject to no options to purchase or similar rights of any
Person.
(v) The authorized share capital of chello Holdings is one hundred
thousand euros (EUR 100,000), divided into one thousand (1000) ordinary shares,
having a nominal value of one hundred euros (EUR 100) each. A total of twenty
thousand euros (EUR 20,000) of the authorized share capital of UPCD is issued
and outstanding in the form of two hundred (200) ordinary shares. All of the
issued and outstanding share capital of chello Holdings is (A) owned by UPC, (B)
free and clear of all Liens, (C) fully paid and nonassessable and (D) except as
set forth on Schedule 3.1(w)(v) subject to no options to purchase or similar
rights of any Person.
(x) UPC represents and warrants that its Supervisory Board has approved
the grant to Lender (and subsequent Holders) of the right to exchange the Notes
for Ordinary Shares as provided in Article IV and the issuance or delivery of
such Ordinary Shares upon exercise from time to time of such right, and that in
approving such transactions, the Supervisory Board was aware and took into
account that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President of Liberty Media International, Inc., an
Affiliate of the Lender, had been nominated as and was expected to become a
member of the Supervisory Board.
(y) (i) To the best knowledge of the respective Obligor or Guarantor,
neither of the Obligors nor the Guarantor is a credit institution
(kredietinstelling) as defined in Section 1(1)(a) under the Act on the
Supervision of Credit Institutions (Wet Toezicht Kredietwezen) and each of the
Obligors and the Guarantor is in compliance with all stipulations attached to
such determination and (ii) the issuance of the Notes is in compliance with all
requirements under the Supervision of Securities Trade Act (Wet Toezicht
Effectenverkeer 1995). The entering into the Loan Documents is in compliance
with all requirements of the listing and issuing rules (fondsenreglement) of
Euronext.
(z) Neither the Obligors nor the Guarantor has a works council
(ondernemingsraad) as defined in Section 2 of the Works Council Act (Wet op de
Ondernemingsraden) and, to the best knowledge of the respective Obligor or
Guarantor, neither should there have been a works council established pursuant
to Section 3, 4, 5 or 5a of the Works Council Act.
Section 3.2 Representations and Warranties of Lender. The Lender
represents and warrants to UPC and the Company that it is making the Loan, and
acquiring the Lender's rights under this Agreement (including the exchange
rights under Section 4.1) and any Notes and Ordinary Shares issuable pursuant to
this Agreement for investment purposes only and acknowledges that none of the
foregoing may be sold or offered for sale, nor may any exchange of the Loan for
34
Ordinary Shares be effected, without registration under the Securities Act and
applicable state securities laws, unless an exemption therefrom is available.
ARTICLE IV
EXCHANGE OF LOAN FOR ORDINARY SHARES
Section 4.1 Exchange of Loan for Ordinary Shares at Option of Lender.
(a) Subject to the terms and conditions of this Article IV, each Holder
of one or more Notes shall have the right, at its option, at any time and from
time to time after May 29, 2002, to exchange such Notes, or a portion thereof,
in an amount equal to the Note Exchange Amount (as specified by the Holder in
its notice of exchange given pursuant to Section 4.1(b)), on the Exchange Date,
for such whole number of fully paid and nonassessable (volgestort) Ordinary
Shares as is equal to (i) such Note Exchange Amount divided by (ii) the Exchange
Price in effect on the Exchange Date. Notwithstanding the foregoing, if an
Obligor shall have given notice of its intent to prepay the Notes in whole or in
part pursuant to Section 5.1(b) or 5.1(c) or 5.2, such right of exchange with
respect to the portion of the Notes to be repaid shall terminate at the close of
business on the second Business Day prior to the date of prepayment, unless the
Obligor shall default in making the prepayment on the date of prepayment. If the
Holder elects to exchange less than all the Notes then held by it, the portion
of the Notes to be exchanged by the Holder shall be in an integral multiple of
$100,000 (based on Accreted Value at maturity) or any integral multiple of
$1,000 above such amount. Notwithstanding the foregoing, at any time and from
time to time after a Note has been acquired by a UGC Party (whether before or
after May 29, 2002), the Holder of the Note may exercise the exchange right set
forth in this Section 4.1 with respect to such Note.
(b) The Holder's right to require UPC to exchange Notes or a portion
thereof pursuant to Section 4.1(a) shall be exercised by the Holder delivering a
written notice to UPC specifying (i) that the Holder is exercising its right to
cause the exchange of the Notes pursuant to Section 4.1(b), (ii) the Accreted
Value as of the Exchange Date of the Notes or a portion thereof to be exchanged,
which shall be the specified Note Exchange Amount, and (iii) if the Holder
desires to receive bearer shares the securities account with an "Associated
Institution" (referred to in clause 5.4 of UPC's articles of association) to be
credited with the Ordinary Shares, accompanied by (A) the Notes to be exchanged,
and (B) a written instrument of transfer of those Notes in a form reasonably
satisfactory to UPC, duly executed by the Holder. The Holder shall deliver such
notice not later than 3:00 P.M. (Amsterdam time) on any Business Day. If the
notice is received by UPC later than such time on a Business Day, the notice
will be deemed to have been received by UPC on the following Business Day.
(c) Upon receipt of a notice of exchange pursuant to Section 4.1(b),
UPC shall, on the Exchange Date, issue the relevant Ordinary Shares to the
Holder in registered form and, if the Holder has provided UPC with the
information referred to in Section 4.1(b)(iii), commence such actions as are
necessary to cause Necigef to credit the global share certificate of UPC with
the relevant shares and credit a securities account with the "Associated
Institution" (referred to in clause 5.4 of UPC's articles of association)
designated by the Holder with the relevant shares. Immediately prior to the
close of business on any such Exchange Date, (i) a portion of the Accreted Value
35
as of the Exchange Date of the Notes or portion thereof being exchanged equal to
the Note Exchange Amount shall automatically be offset and discharged against
the Holder's obligation to contribute an amount equal to such Note Exchange
Amount as the full subscription price for the Ordinary Shares being issued to
the Holder, all without the transfer of any funds or any further action by the
Obligors or the Holder and (ii) the Holder shall automatically become the holder
of record of such Ordinary Shares, which shall be fully paid up by way of
contribution of the Notes or portion thereof being exchanged, provided that such
offset, discharge and paying up shall not become effective until the relevant
Ordinary Shares have been simultaneously issued to the Holder, and upon issuance
of the relevant Ordinary Shares to the Holder, all rights with respect to the
Notes or portion thereof so exchanged will terminate, except the right of the
Holder to exercise the rights to which it is entitled as a holder of Ordinary
Shares. By accepting such shares, the Holder shall be deemed to have warranted
to the Obligors that the Holder is the legal and beneficial owner of such
portion of the Notes free and clear of all Liens and adverse claims as of the
Exchange Date. By accepting such portion of the Notes, UPC shall be deemed to
have warranted to the Holder that such shares are validly issued, fully paid and
nonassessable (volgestort) and free and clear of all Liens and adverse claims as
of the Exchange Date. Notwithstanding the foregoing, upon UPC's issuance of the
relevant Ordinary Shares and Holder's becoming the record holder of such fully
paid, nonassessable, Ordinary Shares, the Obligors shall be entitled to treat
the exchanged Notes or portion thereof as discharged and cancelled irrespective
of whether such Holder delivers such Notes and instrument of transfer to UPC,
and such Note or portion thereof shall cease to accrue principal or be
outstanding, and the Holder shall be treated by UPC as the holder of such
Ordinary Shares as Holder's property, free and clear of all Liens and adverse
claims, as warranted.
(d) If the Accreted Value as of the Exchange Date of the Notes
delivered to the Company by a Holder in connection with an exchange pursuant to
Section 4.1(b) is greater than the Note Exchange Amount, the Obligors will
execute and deliver a replacement Note to the Holder promptly after the relevant
Exchange Date. The Accreted Value at maturity of the replacement Note shall be
equal to the Accreted Value at maturity of the Notes so delivered less the
Accreted Value at maturity of the portion of such Notes so delivered that have
been exchanged for Ordinary Shares.
(e) UPC agrees to use its best efforts to ensure that, in any exchange
resulting in the issuance of Ordinary Shares to a Holder pursuant to this
Section 4.1, such Shares will, as soon as practicable, be freely tradable and
issued in bearer form, and to that end UPC will use its best efforts to ensure
that: (i) all such Ordinary Shares (in the form of Ordinary Shares or ADSs) when
issued may be resold to the public without restriction or limitation, either (A)
pursuant to Rule 144(k) under the Securities Act, or (B) pursuant to an
effective registration statement relating to the issuance of all of the Ordinary
Shares (in the form of Ordinary Shares or ADSs), and (ii) all such Ordinary
Shares when issued may be traded on the Euronext Amsterdam Stock Exchange
without restriction of any kind. UPC has provided the Registration Rights as set
forth in the Registration Rights Agreement.
(f) Notwithstanding anything to the contrary in this Article IV, any
Holder whose Notes or Note is to be exchanged pursuant to this Section 4.1 or
Section 4.2 below will retain all rights to and under the Notes or Note until
such Holder has actually been issued the registered Ordinary Shares exchanged
for the Notes or Note free and clear of all Liens and adverse claims, and
36
subject to the requirements of either Section 4.1(e) or Section 4.2(g), as the
case may be, with such issuance to be evidenced by an appropriate deed of
issuance.
Notwithstanding the foregoing, the Non-UGC Notes may not be exchanged
for Ordinary Shares pursuant to this Section 4.1 until all UGC Notes have been
repaid or exchanged in full.
Section 4.2 Exchange of Loan for Ordinary Shares at Option of UPC.
(a) (i) Subject to the terms and provisions of this Article IV, at any
time and from time to time upon the occurrence of an Equity Issuance Event, UPC
shall have the right, at its option, to require the Holders to exchange such
Notes, or a portion thereof, in an amount equal to the aggregate Note Exchange
Amount (as specified by UPC in its notice of exchange given pursuant to Section
4.2(a)(ii)), not in excess of the related Equity Issuance Amount multiplied by
the Euro to Dollar Spot Rate as of the Exchange Date, on the Exchange Date, for
such whole number of fully paid and nonassessable (volgestort) Ordinary Shares
as is equal to (A) the aggregate Note Exchange Amount divided by (B) the
Exchange Price in effect on the Exchange Date; provided, however, that UPC may
exercise such right under Section 4.2 only with respect to Notes that have been
acquired by a UGC Party. For purposes of the foregoing, (I) "Equity Issuance
Amount" means, with respect to any Equity Issuance Event, an amount equal to the
aggregate subscription or purchase price of the Ordinary Shares or other equity
securities issued or sold in the relevant Equity Issuance Event; and (II)
"Equity Issuance Event" means an Equity Issuance by UPC of its Ordinary Shares,
or its other equity securities that are convertible into its Ordinary Shares, at
or above the effective per share subscription or purchase prices set forth below
during the periods set forth below:
Period Minimum Price
On or before May 29, 2003 euro8.00
After May 29, 2003 and on or before May 29, 2004 euro10.00
After May 29, 2004 and on or before May 29, 2005 euro12.00
After May 29, 2005 euro15.00
For purposes of the foregoing, (i) the subscription or purchase price will be
deemed to include any underwriters' discount granted by UPC, and (ii) if any
such securities are issued or sold in currencies other than the euro, the
aggregate subscription or purchase price shall for calculation purposes be
converted into euros at the Dollar to Euro Spot Rate for securities issued or
sold in dollars, and for other currencies at the Bloomberg Financial Services
screen rates if one exists for such currency, and otherwise the prevailing rate
of exchange on the date of the issuance or sale.
(ii) UPC's right to require the Holders to exchange the Notes or
portion thereof pursuant to Section 4.2(a)(i) shall be exercised by UPC by
delivery of a written notice to those Holders whose Notes are to be exchanged
specifying (A) that the Notes, or a portion thereof, are to be exchanged
pursuant to Section 4.2(a), (B) that an Equity Issuance Event has occurred,
together with the date thereof, (C) the aggregate Accreted Value as of the
Exchange Date of the Notes or portion thereof, being exchanged as of the
37
Exchange Date, which shall not be in excess of the Equity Issuance Amount
multiplied by the Euro to Dollar Spot Rate as of the Exchange Date and which
shall be the specified aggregate Note Exchange Amount, (D) the aggregate
Accreted Value as of the Maturity Date of the Notes or portion thereof being
exchanged, and the Accreted Value as of the Maturity Date of the Holder's Notes
or portion thereof to be exchanged, (E) the Exchange Price as of the date the
notice is given, (F) the aggregate number of Ordinary Shares to be issued by UPC
in connection with the exchange pursuant to this Article IV and the number of
Ordinary Shares to be issued to the Holder, (G) that the conditions set forth in
Section 4.2(g) have been met and (H) the approximate date and manner upon which
Ordinary Shares will be made available or registered.
(b) (i) Subject to the terms and provisions of this Article IV, on or
after May 29, 2004, if the Closing Price of the Ordinary Shares multiplied by
the Euro to Dollar Spot Rate for such day has equaled or exceeded 130% of the
Exchange Price for at least 20 Trading Days within any 30 consecutive Trading
Days, UPC shall have the right, at its option, to require that the Holder
exchange such Notes, or a portion thereof, in an amount equal to the aggregate
Note Exchange Amount (as specified in UPC's notice of exchange given pursuant to
Section 4.2(b)(iii)), on the Exchange Date, for such whole number of fully paid
nonassessable (volgestort) Ordinary Shares as is equal to (A) the aggregate Note
Exchange Amount divided by (B) the Exchange Price in effect on the Exchange
Date; provided, however, that UPC may exercise such right under Section 4.2 only
with respect to Notes that have been acquired by a UGC Party.
(ii) In the event that UPC undertakes an exchange pursuant to
Section 4.2(b)(i), the aggregate Accreted Value as of the Exchange Date of the
Notes, or portion thereof, being exchanged shall be increased on the Exchange
Date (and consequently the aggregate Note Exchange Amount specified by UPC in
its notice of exchange given pursuant to Section 4.2(b)(iii), also shall be
increased on the Exchange Date) in an amount (the "Section 4.2(b) Additional
Accreted Value") equal to the present value of the Section 4.2(b) Accretion
Difference, if any. The Section 4.2(b) Additional Accreted Value, if any, will
be payable to compensate the Holders for the lost opportunity to receive the
benefits of principal accretion on the Notes through May 29, 2004. For purposes
of this Section 4.2(b)(ii), the "Section 4.2(b) Accretion Difference" on the
Notes or portion thereof being exchanged shall be the remainder of (A) the
Accreted Value of such Notes or portion thereof being exchanged that would exist
as of May 29, 2004 minus (B) the Accreted Value of such Notes or portion thereof
being exchanged as of the relevant Exchange Date, in each case without giving
effect to the Section 4.2(b) Additional Accreted Value (the period from and
including the Exchange Date to but excluding May 29, 2004, the "Section 4.2(b)
Additional Period"). The present value shall be calculated using as the discount
rate the bond equivalent yield on U.S. Treasury notes or bills having a term
nearest in length to that of the Section 4.2(b) Additional Period, calculated as
of the day immediately preceding the date on which a notice pursuant to Section
4.2(b)(iii) is mailed. The Note Exchange Amount specified in UPC's notice of
exchange given pursuant to Section 4.2(b)(iii) shall not include the Section
4.2(b) Additional Accreted Value, but the Section 4.2(b) Additional Accreted
Value, if any, shall be added to the aggregate Note Exchange Amount specified in
such notice of exchange and shall be used to calculate the number of Ordinary
Shares to which the Holders will be entitled pursuant to such exchange. The
Section 4.2(b) Additional Accreted Value shall affect only the Notes or portion
thereof being exchanged, and shall not affect the remaining portion of the Notes
38
in any manner. In lieu of causing the Obligors' obligations under all or a
portion of the Section 4.2(b) Additional Accreted Value to be contributed to UPC
in exchange for Ordinary Shares, the Obligors may elect to discharge all or such
portion of the Section 4.2(b) Additional Accreted Value by delivering cash. If
the Obligors elect to do so, the amount of the Section 4.2(b) Additional
Accreted Value to be contributed for Ordinary Shares shall be reduced in an
amount equal to the cash payment.
(iii) UPC's right to require the Holders to exchange the Notes
or portion thereof pursuant to Section 4.2(b)(i) shall be exercised by UPC by
the delivery of a written notice to those Holders whose Notes are to be
exchanged on a date when the conditions described in Section 4.2(b)(i) are
continuing or within 5 days after the occurrence thereof. The notice shall
specify (A) that UPC is exercising its right to cause the exchange of the Notes
pursuant to Section 4.2(b)(i), (B) that the conditions described in Section
4.2(b)(i) have occurred, (C) the aggregate Accreted Value as of the Exchange
Date of the Notes being exchanged, which shall be the specified aggregate Note
Exchange Amount (without giving effect to Section 4.2(b)(ii)), (D) the aggregate
Accreted Value as of the Maturity Date of the Notes or portion thereof being
exchanged, and the Accreted Value as of the Maturity Date of the Holder's Notes
or portion thereof to be exchanged, (E) the Closing Price of the Ordinary Shares
multiplied by the applicable Euro to Dollar Spot Rate as of the date of the
notice, (F) the Exchange Price as of the date of the notice, (G) the aggregate
number of Ordinary Shares to be issued by UPC in connection therewith pursuant
to this Article IV, (without giving effect to Section 4.2(b)(ii)), and the
number of Ordinary Shares to be issued to the Holder, (H) that the conditions
set forth in Section 4.2(g) have been met, and (I) the approximate date and
manner upon which Ordinary Shares will be made available or registered.
(c) (i) Subject to the terms and provisions of this Article IV, on or
after November 15, 2002, if the Closing Price of the Ordinary Shares multiplied
by the Euro to Dollar Spot Rate as of such day has equaled or exceeded 150% of
the Exchange Price for at least 20 Trading Days within any 30 consecutive
Trading Days, UPC shall have the right, at its option, to require that the
Holders exchange such Notes or a portion thereof, in an amount equal to the
aggregate Note Exchange Amount (as specified in UPC's notice of exchange given
pursuant to Section 4.2(c)(iii)), on the Exchange Date, for such whole number of
fully paid nonassessable (volgestort) Ordinary Shares as is equal to (A) the
aggregate Note Exchange Amount divided by (B) the Exchange Price in effect on
the Exchange Date; provided, however, that UPC may exercise such right under
Section 4.2 only with respect to Notes that have been acquired by a UGC Party.
(ii) In the event that UPC undertakes an exchange pursuant to
Section 4.2(c)(i), the aggregate Accreted Value as of the Exchange Date of the
Notes, or portion thereof, being exchanged shall be increased on the Exchange
Date (and consequently the aggregate Note Exchange Amount specified by UPC in
its notice of exchange given pursuant to Section 4.2(c)(iii) also shall be
increased) in an amount (the "Section 4.2(c) Additional Accreted Value") equal
to the present value of the Section 4.2(c) Accretion Difference, if any. The
Section 4.2(c) Additional Accreted Value, if any, will be payable to Holders to
compensate the Holders for the lost opportunity to receive the benefits of
principal accretion on the Notes through May 29, 2004. For purposes of this
Section 4.2(c)(ii), the "Section 4.2(c) Accretion Difference" on the Notes or
portion thereof being exchanged shall be the remainder of (A) the Accreted Value
39
of such Notes or portion thereof being exchanged that would exist as of May 29,
2004 minus (ii) the Accreted Value of such Notes or portion thereof being
exchanged as of the relevant Exchange Date, in each case without giving effect
to the Section 4.2(c) Additional Accreted Value (the period from and including
the Exchange Date to but excluding May 29, 2004, the "Section 4.2(c) Additional
Period"). The present value shall be calculated using as the discount rate the
bond equivalent yield on U.S. Treasury notes or bills having a term nearest in
length to that of the Section 4.2(c) Additional Period, calculated as of the day
immediately preceding the date on which a notice pursuant to Section 4.2(c)(iii)
is mailed. The Note Exchange Amount specified in UPC's notice of exchange given
pursuant to Section 4.2(c)(iii) shall not include the Section 4.2(c) Additional
Accreted Value, but the Section 4.2(c) Additional Accreted Value, if any, shall
be added to the aggregate Note Exchange Amount specified in such notice of
exchange and shall be used to calculate the number of Ordinary Shares to which
the Holders will be entitled pursuant to such exchange. The Section 4.2(c)
Additional Accreted Value shall affect only the Notes or portion thereof being
exchanged and shall not affect the remaining portion of the Notes in any manner.
In lieu of causing the Obligors' obligations under all or a portion of the
Section 4.2(c) Additional Accreted Value to be contributed to UPC in exchange
for Ordinary Shares, the Obligors may elect to discharge all or such portion of
the Section 4.2(c) Additional Accreted Value by delivering cash. If the Obligors
elect to do so, the amount of the Section 4.2(c) Additional Accreted Value to be
contributed for Ordinary Shares shall be reduced in an amount equal to the cash
payment.
(iii) UPC's right to require the Holders to exchange the Notes
or portion thereof pursuant to Section 4.2(c)(i) shall be exercised by UPC by
the delivery of a written notice to those Holders whose Notes are to be
exchanged on a date when the conditions described in Section 4.2(c)(i) are
continuing or within 5 days after the occurrence thereof. The notice shall
specify (A) that UPC is exercising its right to cause the exchange of the Notes
pursuant to Section 4.2(c)(i), (B) that the conditions described in Section
4.2(c)(i) have occurred, (C) the aggregate Accreted Value as of the Exchange
Date of the Notes being exchanged, which shall be the specified aggregate Note
Exchange Amount (without giving effect to Section 4.2(c)(ii)), (D) the aggregate
Accreted Value as of the Maturity Date of the Notes or portion thereof to be
exchanged and the Accreted Value as of the Maturity Date of the Holder's Notes
or portion thereof to be exchanged, (E) the Closing Price of the Ordinary Shares
(multiplied by the applicable Euro to Dollar Spot Rate) as of the date of the
notice, (F) the Exchange Price as of the date of the notice, (G) the aggregate
number of Ordinary Shares to be issued by UPC in connection therewith pursuant
to this Article IV (without giving effect to Section 4.2(c)(ii)), and the number
of Ordinary Shares to be issued to the Holder, (H) that the conditions set forth
in Section 4.2(g) have been met, and (I) the approximate date and manner upon
which Ordinary Shares will be made available or registered.
(d) Upon receipt of UPC's notice of exchange given pursuant to Section
4.2(a), 4.2(b) or 4.2(c), each Holder shall promptly deliver to UPC the Notes
held by it for exchange and, as to the portion to be exchanged, cancellation,
together with a written instrument of transfer in a form reasonably acceptable
to UPC, duly executed by such Holder and instructions as to the securities
account at an "Associated Institution" (referred to in Section 5.4 of UPC's
articles of association) to be credited with the Ordinary Shares to be issued to
it. On the Exchange Date, UPC shall issue the relevant Ordinary Shares to the
Holder in registered form and, if the Holder has provided UPC with the
information referred to in Section 4.1(b)(iii), commence such actions as are
40
necessary to cause Necigef to credit the global share certificate of UPC with
the relevant shares and credit a securities account with the "Associated
Institution" (referred to in clause 5.4 of UPC's articles of association)
designated by the Holder with the relevant shares. Immediately prior to the
close of business on any such Exchange Date, (i) a portion of the Accreted Value
as of the Exchange Date of the Notes or portion thereof being exchanged equal to
the Note Exchange Amount shall automatically be offset and discharged against
the Holder's obligation to contribute an amount equal to such Note Exchange
Amount as the full subscription price for the Ordinary Shares being issued to
the Holder, all without the transfer of any funds or any further action by the
Obligors or the Holder and (ii) the Holder shall automatically become the holder
of record of such Ordinary Shares, which shall be fully paid up by way of
contribution of the Notes or portion thereof being exchanged, provided that such
offset, discharge and paying up shall not become effective until the relevant
Ordinary Shares have been issued simultaneously to the Holder, and upon issuance
of the relevant Ordinary Shares to the Holder, all rights with respect to the
Notes or portion thereof so exchanged will terminate, except the right of the
Holder to exercise the rights to which it is entitled as a holder of Ordinary
Shares. By accepting such shares, the Holder shall be deemed to have warranted
to the Obligors that the Holder is the legal and beneficial owner of such
portion of the Notes free and clear of all Liens and adverse claims as of the
Exchange Date. By accepting such portion of the Notes, UPC shall be deemed to
have warranted to the Holder that such shares are validly issued, fully paid and
nonassessable (volgestort) and free and clear of all Liens and adverse claims as
of the Exchange Date. Notwithstanding the foregoing, upon UPC's issuance of the
relevant Ordinary Shares and Holder's becoming the record holder of such fully
paid, nonassessable Ordinary Shares, the Obligors shall be entitled to treat the
exchanged Notes or portion thereof as discharged and cancelled irrespective of
whether such Holder delivers such Notes and instrument of transfer to UPC, and
such Note or portion thereof shall cease to accrue principal or be outstanding,
and the Holder shall be treated by UPC as the holder of such Ordinary Shares,
free and clear of all Liens and adverse claims, as warranted.
(e) If UPC elects to cause the exchange of less than all the Notes, (i)
the aggregate portion of the Notes called for exchange shall be in an integral
multiple of $100,000 (based on Accreted Value at maturity) or any integral
multiple of $1,000 above such amount, and (ii) the Notes to be exchanged shall
be determined in the following manner: (A) UGC Notes shall be selected for
exchange prior to the selection of any Non-UGC Notes for exchange; (B) to the
extent that some but not all of the UGC Notes or Non-UGC Notes are selected for
exchange, the particular Notes of such type, or portion thereof, to be exchanged
shall be determined by UPC pro rata or by such method as UPC determines to be
fair and appropriate, including, if so determined, by making allocations so that
the aggregate remaining Accreted Value at maturity of the Notes held by any
Holder shall be in an integral multiple of $1,000.
(f) If the Accreted Value at the Exchange Date of the Notes delivered
to UPC by a Holder in connection with an exchange pursuant to Section 4.2(a),
Section 4.2(b) or Section 4.2(c) is greater that the portion of the aggregate
Note Exchange Amount allocable to such Holder pursuant to Section 4.2(f), the
Company will execute and deliver a replacement Note to such Holder promptly
after the relevant Exchange Date. The Accreted Value at maturity of such
replacement Note shall be equal to the Accreted Value at maturity of the Notes
so delivered by the Holder less the Accreted Value at maturity of the portion of
such Notes so delivered that have been exchanged for Ordinary Shares.
41
(g) Notwithstanding the foregoing, without the consent of the affected
Holder UPC may not effect an exchange of the Notes into Ordinary Shares under
Section 4.2 at any time unless (i) all such Ordinary Shares (in the form of
Ordinary Shares or ADSs) may be immediately resold to the public without
restriction or limitation, either (1) pursuant to Rule 144(k) under the
Securities Act, or (2) pursuant to an effective registration statement relating
to the resale of all such Ordinary Shares (in the form of Ordinary Shares or
ADSs) and (ii) all such Ordinary Shares when issued may be traded on the
Euronext Amsterdam Stock Exchange without restriction of any kind. UPC has
provided the Registration Rights as set forth in the Registrations Rights
Agreement.
Section 4.3 Adjustments.
The relevant Exchange Price shall be subject to adjustment if any
Exchange Price Adjustment Event described in Section 4.3(a) occurs. The
adjustment will be accomplished from time to time as described in Section 4.3(b)
and 4.3(c).
(a) An Exchange Price Adjustment Event will be deemed to have occurred
in case UPC shall at any time or from time to time:
(i) make any payment of a dividend (or other distribution)
payable in Ordinary Shares or any other class of capital stock of UPC to all
holders of Ordinary Shares;
(ii) make any issuance to all holders of Ordinary Shares of rights,
options or warrants entitling them to subscribe for or purchase Ordinary Shares
or securities convertible into or exchangeable for Ordinary Shares at less than
the Market Value of Ordinary Shares as of the date of conversion or exchange;
provided, however, that no adjustment shall be made with respect to such a
distribution if the Holders would be entitled to receive such rights, options or
warrants upon exchange at any time of the Notes into Ordinary Shares, and
provided further, that if such rights, options or warrants are only exercisable
upon the occurrence of certain triggering events, then the Exchange Price will
not be adjusted until such triggering events occur;
(iii) make any subdivision, combination or reclassification of
any class of its Ordinary Shares;
(iv) make any distribution consisting exclusively of cash to
all holders of shares of its Ordinary Shares (which distribution is not also
being made to the Holders based on the number of Ordinary Shares into which the
Notes are then exchangeable) in an aggregate amount that, combined together with
(1) all other such all-cash distributions made within the then-preceding 12
months in respect of which no adjustment has been made and (2) any cash and the
fair market value of other consideration paid or payable in respect of any
tender offer by UPC or any of its Subsidiaries for Ordinary Shares concluded
within the then-preceding 12 months in respect of which no adjustment has been
made, exceeds 12.5% of UPC's Market Capitalization on the record date of such
distribution;
(v) complete a tender or Exchange Offer made by UPC for shares
of any class of its Ordinary Shares that involves an aggregate consideration
that, together with (1) any cash and other consideration payable in a tender or
42
Exchange Offer by UPC for shares of any class of its Ordinary Shares expiring
within the then-preceding 12 months in respect of which no adjustment has been
made and (2) the aggregate amount of any such all-cash distributions referred to
in (iv) above to all holders of shares of its Ordinary Shares within the
then-preceding 12 months in respect of which no adjustment has been made,
exceeds 12.5% of UPC's Market Capitalization just prior to the expiration of
such tender offer; or
(vi) make a distribution to all holders of Ordinary Shares by
way of dividend, a Spinoff or otherwise (which distribution is not also being
made to the Holders based on the number of Ordinary Shares into which the Notes
are then convertible unless the Ordinary Shares do not share pro rata in such
distribution) consisting of evidence of indebtedness, shares of capital stock
other than Ordinary Shares of UPC or any other type of assets (including
securities, but excluding those dividends, rights, options, warrants and
distributions referred to above).
(b) If any Exchange Price Adjustment Event occurs, UPC will calculate
the adjustment to the Exchange Price as follows for each specific event. In the
following descriptions, the variables have the following definitions:
U equals the number of Ordinary Shares underlying rights,
options, or warrants issued entitling the holders to subscribe
for or purchase Ordinary Shares or securities convertible into
or exchangeable for Ordinary Shares issued in the Exchange
Price Adjustment Event;
X equals the total number of shares of Ordinary Shares
outstanding immediately prior to the Exchange Price Adjustment
Event (not including unexercised options, warrants, or
rights);
Y equals the total number of shares of Ordinary Shares
outstanding immediately after the Exchange Price Adjustment
Event (not including unexercised options, warrants, or
rights);
Cash equals any distribution (as denominated in euros) consisting
exclusively of cash to all holders of Ordinary Shares in an
aggregate amount that, combined together with (1) all other
such all-cash distributions (as denominated in euros) made
within the then-preceding 12 months in respect of which no
adjustment has been made and (2) any cash and the fair market
value of other consideration (as denominated in euros) paid or
payable in respect of any tender offer by UPC or any of its
Subsidiaries for Ordinary Shares concluded within the
then-preceding 12 months in respect of which no adjustment has
been made pursuant to Section 4.3(a)(iv);
ExP equals the exercise price or other consideration (as
denominated in euros) to be paid by the holder upon the
exercise of or conversion of rights, options or warrants;
MV equals Market Value per share of the Ordinary Shares as of the
date of conversion or exchange;
43
#Sh equals the number of Ordinary Shares receiving the
distribution contemplated in Section 4.3(a)(iv) or
4.3(a)(vi) or subject to the tender offer contemplated in
Section 4.3(a)(v);
TOff equals the aggregate consideration (as denominated in euros)
in a tender or exchange offer described in Section 4.3(a)(v)
that, together with (1) any cash and other consideration (as
denominated in euros) payable in a tender or exchange offer by
UPC or any of its Subsidiaries for Ordinary Shares expiring
within the then-preceding 12 months in respect of which no
adjustment has been made and (2) the aggregate amount of any
such all-cash distributions (as denominated in euros) referred
to in Section 4.3(a)(iv) to all holders of Ordinary Shares
within the then-preceding 12-months in respect of which no
adjustment has been made;
TOff/S equals the tender offer price, per share (as denominated in
euros);
TPur equals the number of shares purchased in the tender offer;
Value equals the aggregate fair market value of the distribution (as
denominated in euros) described in Section 4.3(a)(vi), as
determined in good faith by the Supervisory Board of UPC;
SPOT equals the Euro to Dollar Spot Rate, which is determined (1)
in the case of an Exchange Price Adjustment Event described in
Section 4.3(a)(iv) or (vi), on the date of the distribution,
and (2) in the case of an Exchange Price Adjustment Event
described in Section 4.3(a)(v), on the day of the completion
of such tender offer or exchange offer.
EP equals the Exchange Price immediately prior to the Exchange
Price Adjustment Event;
AEP equals the Exchange Price immediately after the Exchange Price
Adjustment Event;
(i) In the case of an event described in Section 4.3(a)(i) or
4.3(a)(iii), the Exchange Price in effect immediately before such event shall be
adjusted pursuant to the following formula: X/Y multiplied by EP=AEP.
(ii) In the case of an event described in Section 4.3(a)(ii),
the Exchange Price in effect immediately before such event shall be adjusted
pursuant to the following formula: X/(X+U ((MV-ExP)/MV)) multiplied by EP=AEP.
If any options, warrants, convertible securities, or other rights of the nature
described in Section 4.3(a)(ii) ("Rights") expire without exercise or
conversion, the Exchange Price will be readjusted to the Exchange Price which
would otherwise be in effect had the adjustment made upon the issuance of such
Rights been made on the basis of delivery of only the number of Ordinary Shares
actually delivered upon the exercise or conversion of such Rights.
44
(iii) In the case of an event described in Section 4.3(a)(iv), the
Exchange Price in effect immediately before such event shall be adjusted
pursuant to the following formula: EP-((Cash/#Sh) multiplied by SPOT)=AEP.
(iv) In the case of an event described in Section 4.3(a)(v), and if
the tender offer price or exchange offer price per share is greater than Market
Value, the Exchange Price in effect immediately before such event shall be
adjusted pursuant to the following formula: EP-((TPur multiplied by
(TOff/S-MV))/(#Sh- TPur) multiplied by SPOT)=AEP.
(v) In the case of an event described in Section 4.3(a)(vi), the
Exchange Price in effect immediately before such event shall be adjusted
pursuant to the following formula: EP-((Value/#Sh) multiplied by SPOT)=AEP.
An adjustment made pursuant to this Section 4.3 shall become effective
retroactively: (x) in the case of an Exchange Price Adjustment Event described
in Section 4.3(a)(i), (ii), (iv), or (vi), immediately following the close of
business on the record date for the determination of holders of Ordinary Shares
entitled to participate in such event; or (y) in the case of an Exchange Price
Adjustment Event described in Section 4.3(a)(iii), the close of business on the
day upon which such corporate action becomes effective; or (z) in the case of an
Exchange Price Adjustment Event described in Section 4.3(a)(v), the close of
business on the day of the completion of such tender offer or exchange offer.
(c) Notwithstanding anything herein to the contrary, no adjustment
under this Section 4.3 need be made to the Exchange Price unless such adjustment
would require an increase or decrease of at least 1% of the Exchange Price then
in effect. Any lesser adjustment shall be carried forward and shall be made at
the time, if ever, of and together with the next subsequent adjustment, which,
together with any adjustment or adjustments so carried forward, shall amount to
an increase or decrease of at least 1% of such Exchange Price.
(d) Notwithstanding anything to the contrary contained herein, no
Exchange Price adjustment will be made as a result of the issuance of Ordinary
Shares upon exchange of the Notes.
(e) Each event requiring adjustment to the Exchange Price shall require
only a single adjustment even though more than one of the adjustment clauses set
forth in Section 4.3(a), Section 4.4 or Section 4.5 may be applicable to such
Exchange Price Adjustment Event.
(f) If UPC shall fix a record date for the holders of any class of its
capital stock for the purpose of entitling them to receive a dividend or other
distribution which would otherwise constitute an Exchange Price Adjustment
Event, and shall thereafter and before the distribution to stockholders thereof
legally abandon its plan to pay or deliver such dividend or distribution, then
thereafter no adjustment in the Exchange Price then in effect shall be required
by reason of the fixing of such record date.
(g) Upon any increase or decrease in the Exchange Price, then, and in
each such case, UPC promptly shall deliver to the Lender a certificate signed by
an authorized officer of UPC, setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was calculated
45
and specifying the increased or decreased Exchange Price then in effect
following such adjustment.
(h) UPC reserves the right to make such reductions in the Exchange
Price in addition to those required by this Section 4.3 as it considers to be
advisable in order that any event treated for federal income tax purposes as a
dividend of stock or stock rights will not be taxable to the recipients. In the
event UPC elects to make such a reduction in the Exchange Price, UPC will comply
with the requirements of Rule 14e-1 under the Exchange Act, and any other
securities laws and regulations thereunder if and to the extent that such laws
and regulations are applicable in connection with the reduction of the Exchange
Price.
(i) If UPC effects a Spinoff, UPC shall make appropriate provision so
that the Holders have the right to exchange the Notes on the effective date of
the Spinoff for (i) Exchange Notes of the Obligors and (ii) Mirror Notes of the
issuer of the Spinoff Securities. The sum of the aggregate Accreted Value at
maturity of the Exchange Notes and Mirror Notes delivered in exchange for the
Notes will equal the aggregate Accreted Value at maturity of the Notes on the
effective date of the Spinoff. The Mirror Notes will have an aggregate initial
Accreted Value equal to the product of
(A) the aggregate Accreted Value of the Notes exchanged
therefor as of the Accretion Calculation Date immediately preceding the
effective date of the Spinoff and
(B) the quotient of
(I) the product of (x) the number (or fraction) of
Spinoff Securities that would have been receivable upon such Spinoff by a holder
of the number of Ordinary Shares issuable on exchange of the Accreted Value of
the Notes as of the time immediately prior to the record date for the Spinoff
and (y) the average of the daily Closing Prices of the Spinoff Securities for
the period of ten consecutive trading days commencing on the tenth trading day
following the effective date of the Spinoff, divided by
(II) the sum of the amount determined pursuant to
clause (I), plus the Fair Value of the Ordinary Shares, other securities or
property (other than the Spinoff Securities) that would have been receivable by
the Holder of the Notes upon exchange thereof prior to the record date for the
Spinoff (such "Fair Value" to be determined in the case of Ordinary Shares or
other securities with a Closing Price in the same manner as provided in clause
(I) (y) and otherwise by the Supervisory Board of the Company in the exercise of
its good faith judgment).
The Exchange Notes will have an aggregate initial Accreted Value equal to the
difference between the aggregate Accreted Value of the Notes exchanged therefor
as of the Accretion Calculation Date immediately preceding the effective date of
the Spinoff and the aggregate initial Accreted Value of the Mirror Notes.
Principal accreted on the Notes being exchanged since the immediately preceding
Accretion Calculation Date shall be deemed to have been accrued on the Mirror
Notes and Exchange Notes through the effective date of the Spinoff on the same
proportional basis. From and after the effective date of such Spinoff, the
holders of Notes that have not been exchanged for Mirror Notes and Exchange
46
Notes as provided above shall have no exchange rights under these provisions
with respect to such Spinoff Securities.
(j) If UPC or a Subsidiary of UPC (the applicable of the foregoing
being the "Offeror") makes an Exchange Offer, the Offeror shall concurrently
therewith make an equivalent offer to the Holders pursuant to which the Holders
may tender the Notes based upon the number of Ordinary Shares into which such
tendered Notes are then exchangeable (and in lieu of tendering outstanding
Ordinary Shares), together with any other consideration that may be required to
be tendered pursuant to the Exchange Offer, and receive in exchange therefor, in
lieu of Exchange Securities (and other property, if applicable), Mirror Notes
with an aggregate initial Accreted Value equal to the aggregate Accreted Value
of the portion of the Notes exchanged therefor as of the date of the closing of
the Exchange Offer. If an Exchange Offer is made as discussed above, the Offeror
shall, concurrently with the distribution of the offering circular or prospectus
and related documents to holders of Ordinary Shares, provide the Holders with a
notice setting forth the offer described herein and describing the Exchange
Offer, the Exchange Securities and the Mirror Notes. Such notice shall be
accompanied by the offering circular, prospectus or similar document provided to
holders of Ordinary Shares in respect of the Exchange Offer and a copy of the
documents proposed to be entered into or issued by the Offeror in order to
establish the Mirror Notes. No failure to mail the notice contemplated herein or
any defect therein or in the mailing thereof shall affect the validity of the
applicable Exchange Offer.
(k) If UPC shall issue or sell any Ordinary Shares or securities
convertible into or exercisable or exchangeable for Ordinary Shares (other than
pursuant to employee stock options or pursuant to other rights and warrants
outstanding on May 29, 2001) and regardless of whether the holders of such
convertible or exchangeable securities have the fully vested legal right to
convert, exercise or exchange such securities for Ordinary Shares, for a
consideration per share (or, in the case of convertible or exchangeable
securities having a conversion or exchange price, per Ordinary Share) less than
the Market Value of the Ordinary Shares on the date of such issuance, the
Exchange Price in effect immediately prior to such issuance or sale shall be
reduced effective as of immediately following such issuance or sale by
multiplying such Exchange Price by a fraction,
(i) the numerator of which shall be the sum of (x) the number
of Ordinary Shares outstanding immediately prior to such issuance or sale and
(y) the number of Ordinary Shares which the aggregate consideration receivable
by UPC for the total of additional Ordinary Shares so issued or sold (or
issuable on conversion, exercise or exchange) would purchase at the Market Value
in effect immediately prior to such issuance or sale, and
(ii) the denominator of which shall be the sum of the number
of Ordinary Shares outstanding immediately prior to such issuance or sale and
the number of additional Ordinary Shares to be issued or sold (or, in the case
of convertible or exchangeable securities, issuable on conversion, exercise or
exchange).
For the purpose of the foregoing sentence, the consideration received by UPC for
any Ordinary Shares (in the form of Ordinary Shares or ADSs) or securities
convertible into or exchangeable for Ordinary Shares will be deemed to include
any underwriters' discount, not to exceed 5% of the Market Value of the Ordinary
47
Shares on the date of issue to the purchasers, granted by UPC. No further
adjustment of the Exchange Price shall be made as a result of the actual
issuance of Ordinary Shares upon the conversion, exchange or exercise of such
convertible or exchangeable securities. If any such convertible or exchangeable
securities shall expire without having been exercised or exchanged, the Exchange
Price as adjusted pursuant to this Section 4.3(k) shall be readjusted to the
Exchange Price that would have been in effect had an adjustment been made on the
basis that only the Ordinary Shares actually issued upon such conversion,
exercise or exchange, if any, were issued or sold for the consideration received
by UPC upon such exercise, exchange or conversion, plus the consideration, if
any, actually received by UPC for the granting of the rights or options whether
or not exercised, plus the consideration received for issuing or selling the
convertible or exchangeable securities actually converted or exchanged, plus the
consideration, if any, actually received by UPC (other than by cancellation of
liabilities or obligations evidenced by such convertible or exchangeable
securities) on the conversion or exchange of such convertible or exchangeable
securities.
Section 4.4 Additional Rights. In the event UPC distributes rights or
warrants (other than those referred to in Section 4.3(a)(ii)) pro rata to all
holders of Ordinary Shares, so long as any such rights or warrants have not
expired or been redeemed by UPC, the Holders will be entitled to receive upon
any exchange pursuant to this Article IV, in addition to the Ordinary Shares
then issuable upon such conversion (the "Exchange Shares"), a number of rights
or warrants to be determined as follows:
(a) if such conversion occurs on or prior to the date for the
distribution to holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Rights Distribution Date"), the same
number of rights or warrants to which a holder of a number of Ordinary Shares
equal to the number of Exchange Shares is entitled at the time of such
conversion in accordance with the terms and provisions applicable to the rights
or warrants; and
(b) if such conversion occurs after such Rights Distribution Date, the
same number of rights or warrants to which a holder of the number of Ordinary
Shares of UPC for which the Notes were exchangeable immediately prior to such
Rights Distribution Date would have been entitled on such Rights Distribution
Date in accordance with the terms and provisions of and applicable to the rights
or warrants.
In the event the Holders are not entitled to receive such rights or warrants
pursuant to Section 4.4(a) or 4.4(b), the Exchange Price will be subject to
adjustment upon any declaration or distribution of such rights or warrants
pursuant to Section 4.3 above.
Section 4.5 Reorganization and Similar Transactions.
(a) In case of:
(i) any capital reorganization or reclassification or other
change of outstanding Ordinary Shares (other than a change in par value, or from
par value to no par value, or from no par value to par value), or
48
(ii) any consolidation or merger of UPC with or into another
Person (other than a consolidation or merger in which UPC is the resulting or
surviving Person and which does not result in any reclassification or change of
outstanding Ordinary Shares), or
(iii) any sale, transfer or other conveyance to another Person
of all or substantially all of the assets of UPC computed on a consolidated
basis (other than the sale, transfer, assignment or distribution of shares of
capital stock or assets to a Subsidiary) (any of the events described in Section
4.5(a) being referred to in this Section 4.5 as a "Transaction"), then the
adjustment described in Section 4.5(b) will be made and UPC shall take the
actions described in paragraph (c) hereof.
(b) The Notes then outstanding shall, without the consent of the
Holders, become exchangeable only for the kind and amount of shares of stock or
other securities (of UPC or another issuer) or property or cash receivable upon
such Transaction by a holder of the number of Ordinary Shares into which the
Notes could have been converted immediately prior to such Transaction after
giving effect to any adjustment event.
(c) If UPC effects a Transaction described in clause (ii) or (iii) of
Section 4.5(a) and Reorganization Securities are issued by a Person other than
UPC ("Acquiror"), UPC shall make appropriate provision in connection with such
Transaction to cause Acquiror to become a co-obligor with respect to such Notes
on the effective date of such Transaction.
(d) The provisions of this Section 4.5 shall apply to successive
Transactions. The provisions of this Section 4.5 shall be the sole right of the
Holders in connection with any Transaction.
Section 4.6 Change of Control. Upon a Change of Control, if the Market
Value of an Ordinary Share multiplied by the Euro to Dollar Spot Rate at such
time is less than the Exchange Price, then the Exchange Price will be subject to
a temporary adjustment for a period of 60 days after notice pursuant to Section
4.6(c) has been sent, such that the Exchange Price will be equal to the greater
of:
(i) the Market Value of an Ordinary Share on the date on which
the Change of Control event occurs multiplied by the Euro to Dollar Spot Rate on
the date on which the Change of Control event occurs, and
(ii) 66.67% of the Market Value of an Ordinary Share as of May 29,
2001 multiplied by the Euro to Dollar Spot Rate as of such date.
(b) In lieu of causing all or a portion of the Notes to be exchanged
pursuant to notices of exchange delivered by Holders pursuant to this Section
4.6 to be contributed to UPC in exchange for Ordinary Shares, as would otherwise
be contemplated by Section 4.1, the Obligors may, at their option, discharge all
or a portion of such Notes (i) by making a cash payment equal to the product of
(x) the Accreted Value of the Notes (or portion thereof) with respect to which
the Holder has exercised the Change of Control option described in Section
4.6(d) divided by the greater of 4.6(a)(i) and (ii) above multiplied by (y) the
product of (A) the Market Value of an Ordinary Share determined as of the close
of business on the Business Day immediately prior to making such cash payment
49
multiplied by (B) the Euro to Dollar Spot Rate (at 9:00 a.m. New York time on
the day this Section 4.6(b) cash payment is being made). If the Obligors elect
to exercise this cash option, the Ordinary Shares to be issued pursuant to this
Section 4.6 shall be reduced proportionately.
(c) In the event of a Change of Control, notice of such Change of
Control shall be given, within five Business Days of the date the Change of
Control occurs, by UPC by first-class mail to the Holders, at the Holders'
addresses as the same appear in the Register. Each such notice shall state (i)
that a Change of Control has occurred, (ii) the last day on which the Change of
Control option may be exercised (the "Expiration Date"), (iii) the name and
address of the paying agent, and (iv) the procedures that the Holder must follow
to exercise the Change of Control option.
(d) On or before the Expiration Date, the Holder, if wishing to
exercise the Change of Control option, shall deliver a notice of such exercise,
in the manner and at the place designated in the notice described in Section
4.6(c), and on such date such Notes shall be exchanged by UPC at the Exchange
Price as adjusted and the cash or Ordinary Shares due to the Holder shall be
delivered to the Holder.
(e) The foregoing provisions are not waivable by UPC or the
Company.
(f) For purposes of this Section 4.6, "Change of Control" means any
merger or consolidation of UPC with or into any Person or any sale, transfer,
lease or other conveyance, whether direct or indirect, of all or substantially
all of the assets of UPC, on a Consolidated basis, in one transaction or a
series of related transactions, if, immediately after giving effect to such
transaction(s), either
(i) any "person" or "group" (other than UGC, Liberty Media
Corporation, New UGC and any new entity formed to hold shares of UGC or to serve
other functions as provided in the Liberty Agreement and designated as a Newco
in any amendment to such agreement (a "Newco"), the Principals, or any Person
controlling or controlled by or under common control with UGC, Liberty Media
Corporation, New UGC, a Newco or any of the Principals) is or becomes the
"beneficial owner" (as defined by Rule 13d-3 under the Exchange Act), directly
or indirectly, of more than 35% of the total voting power of all classes of
UPC's securities in the aggregate normally entitled to vote in the election of
directors, managers, or trustees, as applicable, of the transferee(s) or
surviving entity or entities and such "person" or "group" beneficially owns
(after giving effect to such transaction) a greater percentage of the total
voting power than is at that time beneficially owned by UGC, Liberty Media
Corporation, New UGC, a Newco, the Principals, and any person controlling or
controlled by or under common control with UGC, Liberty Media Corporation, New
UGC, a Newco and the Principals (in the aggregate) and none of UGC, Liberty
Media Corporation, New UGC, a Newco, the Principals, or any person controlling
or controlled by or under common control with UGC, Liberty Media Corporation,
New UGC, a Newco, or any of the Principals, has the right or ability by voting
power, contract or otherwise to elect or nominate for election a majority of the
Supervisory Board of UPC or the Company, respectively, or
50
(ii) the Continuing Directors cease for any reason to constitute a
majority of the Supervisory Board of UPC then in office, or
(iii) UPC adopts a plan of liquidation (other than a plan of
liquidation as a consequence of which (A) UGC, Liberty Media Corporation, New
UGC, the Principals, or any Person controlling or controlled by or under common
control with UGC, Liberty Media Corporation, New UGC and the Principals (in the
aggregate) beneficially own at least the same percentage of voting power after
the consummation of such plan as before or otherwise retain the right or
ability, by voting power, to control the Person that acquires the proceeds of
such liquidation, and (B) the Person that acquires the substantial majority of
the proceeds of such liquidation shall have assumed UPC's obligations in respect
of or under the Loan, respectively).
Section 4.7 Certain Allocations. If, as a result of any Exchange Price
Adjustment Event, the Holders become entitled to receive upon exchange shares of
two or more classes of capital stock, UPC shall determine the reasonable
allocation of the adjustment Exchange Price between the classes of capital
stock. After such allocation, the Exchange Price of each class of Capital Stock
shall thereafter be subject to adjustment on terms applicable to the Loan in
this Article IV.
Section 4.8 Reservation of Shares. The Ordinary Shares issued pursuant
to this Article IV in the amount of the Exchange Price shall be paid up by
setting off UPC's obligation to pay the relevant portion of the Accreted Value
as of the Exchange Date of the Notes or the portion thereof being exchanged
equal to the Loan Exchange Amount against the Holders' obligations to fully pay
up the subscription amount in respect of those Ordinary Shares (stortingplicht).
The preemption rights of existing shareholders of UPC shall in this respect be
excluded. UPC shall at all times on and after May 29, 2002 reserve and keep
available for issuance upon the exchange of the Notes, such number of its
authorized but unissued Ordinary Shares as will from time to time be sufficient
to permit the conversion of the Notes, and shall procure that all action
required to be taken to increase the authorized number of Ordinary Shares if at
any time there shall be insufficient authorized unissued Ordinary Shares to
permit such reservation or to permit the exchange of the Notes.
Section 4.9 Taxes and Charges. The issuance of Ordinary Shares upon the
exchange of the Notes shall be made without charge to the Holders for such
shares or for any tax in respect of the issuance or delivery of such shares or
the securities represented thereby, and such shares shall be issued in the name
of the Holders, or in such names as may be directed by the Holders; provided,
however, that UPC shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance of any such certificate in a
name other than that of the Holders, and UPC shall not be required to issue or
deliver such shares unless or until the Person or Persons requesting the
issuance or delivery thereof shall have paid to UPC the amount of such tax or
shall have established to the reasonable satisfaction of UPC that such tax has
been paid.
Section 4.10 Fractional Shares. In UPC's discretion, no fractional
shares of Ordinary Shares or securities representing fractional shares of
Ordinary Shares will be issued upon exchange or prepayment. Any fractional
interest in an Ordinary Share resulting from exchange or prepayment will be paid
in cash based on: (i) the last reported sale price of the Ordinary Shares
51
(either in the form of Ordinary Shares or ADSs), on the Euronext Amsterdam Stock
Exchange or Nasdaq National Market, as applicable (or any national securities
exchange or authorized quotation system on which the Ordinary Shares (either in
the form of Ordinary Shares or ADSs) is then listed at the close of business on
the Trading Day next preceding the date of conversion or such later time as UPC
is legally and contractually able to pay for such fractional shares; and (ii)
the Euro to Dollar Spot Rate on such date.
Section 4.11 Regulatory Matters. If in the reasonable judgment of UPC
or a Holder, the Holder's acquisition of Ordinary Shares or other securities of
UPC or UGC upon exchange or prepayment of the Note would require a filing under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), UPC and the Holder each will take such actions as may be required
promptly to comply with the requirements of the HSR Act relating to the filing
and furnishing of information (an "HSR Report") to the Federal Trade Commission
("FTC") and the Antitrust Division of the Department of Justice ("DOJ"), such
actions to include (i) preparing and cooperating with each other in preparing
the HSR Report to be filed by or on behalf of each of them so as to avoid errors
or inconsistencies between their HSR Reports in the description of the reported
transaction and to permit the filing of their HSR Reports in a timely fashion,
(ii) complying with any request for additional documents or information made by
the FTC or the DOJ or by any court and assisting the other in so complying and
(iii) using its reasonable commercial efforts to cause all Persons which are
part of the same "person" (as defined for purposes of the HSR Act) as such party
to cooperate and assist in such compliance. UPC and the Holder each will pay any
costs that it incurs in complying with the obligations set forth in this Section
4.11, except that each will bear one-half of any fee payable in connection with
the filing of an HSR Report. It will be a condition precedent to the
effectiveness of the exchange or prepayment of the Notes that either (i) no
filing under the HSR Act by the Holder would be required in connection with its
acquisition of Ordinary Shares or other voting securities upon such exercise,
conversion or redemption or (ii) any applicable waiting period under the HSR Act
has expired or been terminated. If an acquisition of securities of UPC or of UGC
by the Holder upon exchange or prepayment of the Notes requires the filing of an
HSR Report, then any time period within which the Holder is required to exchange
or to submit for prepayment the Notes will be deemed extended, up to a maximum
of 90 days, to permit compliance with the HSR Act, including filing of the
requisite HSR Reports and expiration or termination of the applicable waiting
period. If the waiting period has not so expired or been terminated prior to the
end of such period of extension and of the period within which the Holder is
required to exchange the Notes or if the Holder determines to withdraw its HSR
Report, then, if either (a) the Holder was the exercising party or (b) UPC was
the exercising party and indicates to the FTC and DOJ that it no longer intends
to complete the proposed transaction, and the Holder has advised UPC that it
would exercise its exchange rights, if any, under Section 4.1 hereof if UPC
rescinded its notice of exchange, UPC will use its best efforts to afford to the
Holder the benefits intended to be provided by the Notes by (i) granting to the
Holder the right to acquire other securities of UPC having the same rights,
privileges and preferences as the securities originally to be acquired, except
that such other securities will not possess voting rights, or will possess
limited voting rights, on the same terms as the securities originally to be
acquired or (ii) if such replacement right cannot be granted, providing to the
Holder such other right as may reasonably represent the value of the conversion
or exercise right required to be foregone. If the Holder, in its sole opinion,
considers a request from a governmental agency for additional data and
information in connection with the HSR Act to be unduly burdensome, the Holder
52
may withdraw its HSR Report and rescind its exchange of the Notes, in which case
its rights will be the same as existed immediately before such attempted
exchange and in addition, the Holder will have the rights described in the
preceding sentence. Notwithstanding the foregoing, if it is determined that a
filing under the HSR Act is required, the party exercising the exchange right
pursuant to Section 4.1 or Section 4.2 may withdraw its notice of exchange
delivered pursuant to Section 4.1 or 4.2, as the case may be, at any time prior
to clearance by the FTC and the DOJ.
Section 4.12 Other Regulatory Matters. If in the reasonable judgment of
UPC or a Holder, the Holder's acquisition of Ordinary Shares or other Equity
Interests of UPC or an Affiliate thereof or of Spinoff Securities (collectively,
"Equity Securities") pursuant to this Agreement (including upon exchange or
prepayment of any Note or in connection with a Spinoff) would be likely to give
rise to a concentration with a Community dimension as such expression is defined
in Articles 1 and 3 of Regulation (EEC) No. 4064/89 ("The European Community
Merger Regulation") or to trigger an obligation to obtain any merger clearance
or would require any other regulatory action in any jurisdiction:
(a) UPC and the Holder which is to receive the Equity Securities each
promptly will take such actions, and UPC will cause its subsidiaries and
affiliates promptly to take such actions, as are required to comply with the
relevant regulation or legislation, such actions to include (A) preparing and
cooperating with each other in preparing the merger notification or other filing
and (B) complying with any request for additional documents or information made
by the European Commission, any other competition authority or other regulatory
agency or court. UPC and the Holder will each pay any costs that it incurs in
complying with the obligations set forth in this Section 4.12, except that each
will bear one-half of any filing fee or similar charges payable to the European
Commission or to any member state of the European Union payable in connection
with any filing thereby; provided, however that if UPC was the party exercising
its exchange rights and determines to withdraw its merger notifications or
filings, UPC shall bear all costs that it and the applicable Holder incur
(including all fees and similar charges) in connection with such notifications
and filings.
(b) Unless waived by the Holder which is to receive the Equity
Securities and by the issuer thereof, it will be a condition precedent to the
issuance of any Equity Securities and (if applicable) to the exchange or
prepayment of the Notes being converted to Equity Securities that:
(i) if the European Commission has jurisdiction over the
transaction:
(A) the European Commission has reached a decision,
without attaching any conditions, that the acquisition of Equity Securities is a
concentration compatible with the common market; or
(B) the European Commission is deemed to have reached
such a decision; or
(ii) if the European Commission has jurisdiction over the
transaction, the European Commission has reached such a decision attaching
conditions, the terms of which are satisfactory to the applicable Holder in its
sole discretion; and
53
(iii) the applicable Holder has received, in terms satisfactory to
it, all consents and permissions required from any other relevant regulatory
authorities and agencies in respect of the acquisition of the Equity Securities
without any conditions or with only such conditions as are satisfactory to the
applicable Holder in its sole discretion.
All time periods set forth in this Agreement for a party to take any action in
connection with the issuance and acquisition of Equity Securities and the
exchange or conversion of any Note into Equity Securities will be extended for a
period of up to 180 days or such longer period as is reasonably required (the
"Extension Period") to permit the requirements of this Section 4.12 to be
satisfied.
If the European Commission finds that the acquisition of the Equity Securities
raises serious doubts as to its compatibility with the common market and
indicates that it will initiate proceedings under Article 6.1(c) of the European
Community Merger Regulation or if the consents and permissions required from the
European Commission or any other relevant regulatory authorities and agencies in
respect of the acquisition of the Equity Securities are not granted in the
period within which the Holder is required to exchange the Notes or if the
Holder determines to withdraw its merger notifications or filings, if any, then,
if either (a) the Holder was the exercising party, or (b) UPC was the exercising
party and withdraws its merger notifications or filings, and the Holder has
advised UPC that it would exercise its exchange rights, if any, under Section
4.1 hereof if UPC rescinded its notice of exchange, then UPC will use its best
efforts to afford to the Holder on terms which are satisfactory to the
applicable Holder in its sole discretion the benefits intended to be provided by
the Notes by (i) granting to the Holder the right to acquire other securities of
UPC having the same rights, privileges and preferences as the securities
originally to be acquired, except that such other securities will not possess
voting rights, or will possess limited voting rights, on the same terms as the
securities originally to be acquired or (ii) if such replacement right cannot be
granted, providing to the Holder such other right as may reasonably represent
the value of the conversion or exercise right required to be foregone, and if
the Holder, in its sole discretion, is not satisfied with the benefits UPC
attempts to provide to the Holder under the foregoing clauses (i) and (ii), then
the Holder may rescind its exchange of the Notes. If the Holder, in its sole
opinion, considers a request from the European Commission, any other competition
authority or other regulatory agency or court for additional data and
information in connection with obtaining the consents and permissions required
to be unduly burdensome, the Holder may withdraw its merger notifications or
other filings and rescind its exchange of the Notes, in which case its rights
will be the same as existed immediately before such attempted exchange and in
addition, the Holder will have the rights described in the preceding sentence.
Notwithstanding the foregoing, if UPC or the Lender determines that obtaining
merger clearance or other regulatory action in any jurisdiction is required, the
Party exercising the exchange right pursuant to Section 4.1 or Section 4.2 may
withdraw its notice of exchange delivered pursuant to Section 4.1 or 4.2, as the
case may be, at any time prior to the issuance of the required consents,
clearances, and permissions within such jurisdiction, in which case Holder's
rights will be the same as existed immediately before such attempted exchange.
54
Section 4.13 Nasdaq Stock Market Matters. UPC will exercise its best
efforts to comply with all requirements of Nasdaq for shares listed thereon,
with respect to the Ordinary Shares, and other regulatory requirements related
to the Ordinary Shares including using its best efforts to obtain the approval
by holders of a majority of UPC's outstanding Ordinary Shares entitled to vote
thereon of the exchange provisions of Articles 4.1, 4.2 and 4.3 hereof, prior to
the exchange into Ordinary Shares of an aggregate number of Ordinary Shares
greater than 20% of the total number of outstanding Ordinary Shares on the date
hereof. The obligations of this Section 4.13 shall apply even if the Ordinary
Shares are no longer listed on the Nasdaq stock market. To that end, UPC shall
cause an annual or extraordinary shareholder meeting to be held prior to the
date the Notes may first be exchanged and shall submit to its shareholders a
proposal to approve the exchange provisions of this Agreement. The Lender, at
the expense of the Obligors, will take reasonable steps to assist the Obligors
in any such required efforts, but the obligations of UPC under this Article IV
shall not be abrogated or diminished by any provision in this Section 4.13.
ARTICLE V
PREPAYMENT
Section 5.1 Optional Prepayment.
(a) Except as provided in Section 5.1(b) or (c), or Section 2.4(i), the
Obligors shall not be entitled to prepay the Notes.
(b) The Obligors may, by the Company giving the Holders written notice
of prepayment, elect to prepay all but not less than all of the Notes at their
then aggregate Accreted Value, in cash, without premium or penalty of any kind,
at any time on or prior to May 29, 2002.
(c) Subject to Section 4.1, (i) on or after May 29, 2002, at any time
the aggregate Accreted Value of the Notes held by Persons other than UGC Parties
is less than $50,000,000, the Obligors may elect to prepay such Notes in cash in
whole but not in part, (ii) on or after May 29, 2002, and prior to May 29, 2005,
the Obligors may elect to prepay in cash certain of the Notes pursuant to
Section 2.4(i), and (iii) on or after May 29, 2005 (or, after such time as the
Notes are held only by UGC Parties, May 29, 2004), the Obligors may elect to
prepay, in whole or in part (A) Notes held by Holders other than a UGC Party, in
cash, and (B) Notes held by a UGC Party (1) in cash, (2) by way of fully paid
and nonassessable (volgestort) Ordinary Shares, or (3) a combination thereof, in
each case upon written notice of prepayment given by the Company to the Holders
not less than 20 days nor more than 60 days prior to the date of prepayment,
during the 12-month periods commencing on May 29, of the years indicated below,
at the following prepayment premiums, calculated by multiplying (x) the
aggregate Accreted Value, as of the date of the notice, of the Notes being
repaid by (y) the following percentages:
Prepayment Premium as
Percentage of Prepaid
Year Accreted Value
2002.................................................................... 5%
55
2003.................................................................... 4%
2004.................................................................... 3%
2005.................................................................... 2%
2006.................................................................... 1%
2007.................................................................... 0%
(d) If the Obligors elect to prepay less than all the Accreted Value of
the Notes pursuant to Section 5.1(c)(iii), (i) the aggregate portion of the
Notes to be repaid shall be in an integral multiple of $100,000 (based on
Accreted Value at maturity) or any integral multiple of $1,000 above such
amount, and (ii) the Notes to be prepaid shall be determined in the following
manner: (A) UGC Notes shall be repaid or prepaid in full prior to the repayment
or prepayment of any Non-UGC Notes, and (B) to the extent that some but not all
of the UGC Notes or Non-UGC Notes are to be prepaid, the particular Notes of
such type or portions thereof to be repaid shall be determined by the Company
pro rata or by such method as the Company determines to be fair and appropriate,
including, if so determined, allocations so that the aggregate remaining
Accreted Value at maturity of the Notes held by any Holder shall be in an
integral multiple of $1,000.
(e) Upon receipt of the Company's notice of prepayment pursuant to
Section 5.1(b) or 5.1(c), each Holder shall promptly deliver the Notes held by
it for cancellation (in the case of a partial prepayment pursuant to Section
5.1(c)(iii), as to the portion to be prepaid, and for exchange for a replacement
Note, as to the portion not to be repaid), together with a written instrument of
transfer in a form reasonably acceptable to UPC, duly executed by such Holder.
Notwithstanding anything to the contrary contained herein, (i) the Obligors
shall have no obligation to pay to any Holder the amount to which such Holder is
entitled by reason of the prepayment of the Notes or portion thereof held by
such Holder until such time as the Company has received from such Holder Notes
having an Accreted Value at the relevant date of prepayment equal to or greater
than the portion of the aggregate Accreted Value to be repaid on such date of
prepayment that is allocable to such Holder and (ii) the Obligors shall be
entitled to treat the portion of the Notes or portion thereof to be repaid to
such Holder as discharged and cancelled irrespective of whether such Holder
delivers such Notes and instrument of transfer to the Company for cancellation.
Notice of prepayment having been given by the Company as aforesaid with respect
to any Note or portion thereof to be prepaid, such Note or portion thereof shall
(A) become due and payable at the Accreted Value at the date of prepayment of
such Note or portion thereof (together with interest, fees or other amounts due
with respect to the Note or portion thereof being repaid, if any) on the
relevant date of prepayment and (B) from and after the relevant date of
prepayment, cease to accrete principal or be outstanding.
(f) If the Obligors elect to prepay the Notes held by a UGC Party, in
whole or in part, together with prepayment premium thereon, in Ordinary Shares,
the number of Ordinary Shares to be distributed will be calculated by dividing
(i) the sum of the aggregate Accreted Value as of the date of the notice of the
Note, being repaid and the prepayment premium thereon by (ii) the product of (1)
56
the Market Value of an Ordinary Share as of the date of the Obligors' notice of
prepayment and (2) the Euro to Dollar Spot Rate as of the date of the Obligors'
notice of prepayment. In connection with any such election, UPC may elect to pay
cash in lieu of fractional shares, in the manner contemplated by Section 4.10.
Section 5.2 Mandatory Prepayment.
(a) (i) No later than 5 Business Days following the receipt of any Net
Debt Proceeds by UPC or any of its Subsidiaries (other than in the case of a
Debt Incurrence by Primacom (or its immediate parent for the benefit of Primacom
and its Subsidiaries) Priority Telecom N.V. or any of their respective
Subsidiaries if the Net Debt Proceeds therefrom are applied to assets and
property that will constitute or be part of the business of, or Investment in,
Primacom and its Subsidiaries or Priority Telecom N.V. and its Subsidiaries, as
the case may be, or to repay or refinance Indebtedness of Primacom and its
Subsidiaries or Priority Telecom N.V. and its Subsidiaries, as the case may be),
UPC or the Company shall deliver to the Holders a calculation of the amount of
such Net Debt Proceeds. No later than 10 Business Days following the delivery of
such calculation, the Obligors shall prepay those Notes (which the Holders
thereof have not refused prepayment in writing, prior to the date on which
prepayment is required pursuant to this Section 5.2(a)(i)) up to an amount of
such Notes having an aggregate Accreted Value at the date of prepayment equal to
the amount of such Net Debt Proceeds (multiplied by the Euro to Dollar Spot Rate
as of the date of prepayment, if such Net Debt Proceeds are denominated in
euros) at a redemption price of 100% of such Accreted Value so redeemed plus
accrued and unpaid interest and any other amounts due on such Notes. If a Holder
has refused repayment in writing prior to the date on which prepayment is
required pursuant to this Section 5.2(a)(i), the Obligors shall have no
obligation to prepay the Notes of such Holder from such Net Debt Proceeds.
(ii) No later than 5 Business Days following the receipt of any Net
Equity Proceeds by UPC, UPC or the Company shall deliver to the Holders a
calculation of the amounts of such Net Equity Proceeds. No later than 10
Business Days following delivery of such calculation, the Obligors shall prepay
those Notes (which the Holders thereof have not refused prepayment in writing,
prior to the date on which such prepayment is required pursuant to this Section
5.2(a)(ii), and following delivery of such calculation) up to an amount of such
Notes having an aggregate Accreted Value at the date of prepayment equal to the
amount of such Net Equity Proceeds (multiplied by the Euro to Dollar Spot Rate
as of the date of prepayment, if such Net Equity Proceeds are denominated in
euros) at a redemption price of 100% of such Accreted Value so redeemed plus
accrued and unpaid interest and any other amounts due on such Notes. If a Holder
has refused prepayment in writing prior to the date on which prepayment is
required pursuant to this Section 5.2(a)(ii), and following delivery of such
calculation, the Obligors shall have no obligation to prepay the Notes of such
Holder from such Net Equity Proceeds.
(iii) (A) (1) No later than 5 Business Days following the receipt
of any Net Cash Proceeds from an Asset Sale by UPC of any Property or business
held directly by UPC, and (2) no later than 10 Business Days before the end of
the 360-day period following receipt of any Net Cash Proceeds from an Asset Sale
by any Subsidiary of UPC (if such Subsidiary's Net Cash Proceeds have not and
will not be applied within such 360-day period to one or more Permitted
Applications), UPC or the Company shall deliver to the Holders a calculation of
57
the Asset Sale Amount. No later than 10 Business Days following delivery of such
calculation, the Obligors shall prepay those Notes (which the Holders thereof
have not refused prepayment in writing, prior to the date on which such
prepayment is required pursuant to this Section 5.2(a)(iii) and following
delivery of such calculation), up to an amount of such Notes having an aggregate
Accreted Value at the date of prepayment equal to the Asset Sale Amount
(multiplied by the Euro to Dollar Spot Rate as of the date of prepayment, if
such Asset Sale Amount is denominated in euros) at a redemption price of 100% of
such Accreted Value so redeemed plus accrued and unpaid interest and other
amounts due on such Notes. If a Holder (a "Non-Participating Holder") has
refused prepayment in writing prior to the date on which prepayment is required
pursuant to this Section 5.2(a)(iii) and following delivery of such calculation)
the Obligors shall have no obligation to prepay the Notes of such Holder from
such Net Cash Proceeds.
(B) Notwithstanding the foregoing, prepayment of the Notes
pursuant to this Section 5.2(a)(iii) must be made pro rata in the manner
contemplated by Section 10.16 of the Indenture and the comparable provisions of
the indentures in respect of the Existing High Yield Notes. If, after giving
effect to such pro rata prepayment of the Notes and the Existing High Yield
Notes, (i) the amount actually applied to the prepayment of the Notes is less
than (ii) the amount that would have been applied to prepayment of the Notes
pursuant to Section 5.2(a)(iii)(A) (taking into account any refusals to accept
prepayment as contemplated by Section 5.2(a)(iii)(A)) but for the pro rata
prepayment requirement set forth in this Section 5.2(a)(iii)(B) (such shortfall,
the "Asset Sale Prepayment Shortfall"), then the Obligors shall prepay the Notes
held by Holders (other than Non Participating Holders) in an amount equal to the
Asset Sale Prepayment Shortfall. Such payment shall be made no later than 2
Business Days after the end of the relevant offering period and shall be applied
to prepay Notes of such Holders at a redemption price of 100% of the Accreted
Value thereof plus accrued and unpaid interest and other amounts due on such
Notes.
(C) For purposes of the foregoing, the "Asset Sale Amount"
in respect of any Asset Sale means an amount equal to the remainder of (1) the
amount of Net Cash Proceeds received from such Asset Sale, minus (2) the amount
applied to Permitted Applications within 360 days after receipt of Net Cash
Proceeds.
(D) For purposes of the foregoing, "Permitted Application"
means:
(1) with respect to an amount equal to the Net Cash
Proceeds from an Asset Sale by the Company or any of its Subsidiaries or from
the issuance of any Equity Interest in the Company, the application of such
amount first to prepay Qualified Loans owing by such Subsidiary if payment
thereof would constitute an application of "Net Cash Proceeds" (as defined in
the Indenture) permitted under Section 10.16(1)(A)(1) or (2) of the Indenture
and such application would not constitute a default under a material agreement
of such Person or its Affiliates as in effect on the Funding Date and then to
(X) make required prepayments or an offer to purchase Indebtedness (other than
Indebtedness that is contractually or structurally subordinated or pari passu in
right of payment to the Notes) issued by the Company or its Subsidiaries to
third parties (other than Affiliates of the Company) and (Y) acquire assets and
property that will constitute or be a part of a Related Business conducted by
the Company or its Subsidiaries, if before or after giving pro forma effect to
58
such application no Default (without regard to any grace period) exists or would
exist under any Financing Document.
(2) with respect to an amount equal to the Net
Cash Proceeds from an Asset Sale by chello Holdings or any of its Subsidiaries
or from the issuance of any Equity Interest of chello Holdings, the application
of such amount first to prepay Qualified Loans owing by such Person if payment
thereof would constitute an application of "Net Cash Proceeds" (as defined in
the Indenture) permitted under Section 10.16(1)(A)(1) or (2) of the Indenture
and such application would not constitute a default under a material agreement
of such Person or its Affiliates as in effect on the Funding Date and then to
(X) make required prepayments or an offer to purchase Indebtedness (other than
Indebtedness that is contractually or structurally subordinated in right of
payment to the Notes) issued by chello Holdings or its Subsidiaries to third
parties (other than Affiliates of the Company) and (Y) acquire assets and
property that will constitute or be a part of a Related Business of chello
Holdings or its Subsidiaries, if before or after giving pro forma effect to such
application no Default (without regard to any grace period) exists or would
exist under any Financing Document; and
(3) with respect to an amount equal to the Net
Cash Proceeds from an Asset Sale by any Subsidiary of UPC (other than the
Company, chello Holdings and any of their respective Subsidiaries), the
application of such amount first to prepay Qualified Loans owing by such
Subsidiary if payment thereof would constitute an application of "Net Cash
Proceeds" (as defined in the Indenture) permitted under Section 10.16(l)(A)(1)
or (2) of the Indenture and such application would not constitute a default
under a material agreement of such Person or its Affiliates in effect on the
Funding Date and then to (X) make required prepayments or an offer to purchase
Indebtedness (other than Indebtedness that is contractually or structurally
subordinated or pari passu in right of payment to the Notes) issued by UPC's
Subsidiaries to third parties (other than Affiliates of the Company) and (Y)
acquire assets and property that will constitute or be a part of a Related
Business of UPC or its Subsidiaries, if before or after giving pro forma effect
to such application no Default (without regard to any grace period) exists or
would exist under any Financing Document.
Notwithstanding, and without complying with, the foregoing provisions
of this Section 5.2(a)(iii):
(A) UPC and its Subsidiaries may, in the ordinary course of
business, (1) convey, sell, transfer, assign or otherwise dispose of inventory
and other assets acquired and held for resale in the ordinary course of business
and (2) liquidate and otherwise dispose of Cash Equivalents in the ordinary
course;
(B) each of UPC and any of its Subsidiaries may sell or
dispose of its damaged, worn out or other obsolete personal property in the
ordinary course of business so long as such property is no longer necessary for
the proper conduct of its business; and
(C) UPC and its Subsidiaries may surrender or waive contract
rights or settle, release or surrender contract, tort or other claims of any
kind in the ordinary course of business or grant Liens not otherwise prohibited
by this Agreement.
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Notwithstanding anything in this Section 5.2(a) to the contrary, the
Obligors may defer prepaying the Accreted Value of the Notes until the
accumulated Net Debt Proceeds, Net Equity Proceeds and Net Cash Proceeds from
Asset Sales that this Section 5.2(a) concerns exceeds $50,000,000 (or the
foreign currency equivalent thereof).
(b) (i) Upon the occurrence of a Section 5.2(b) Change of Control, the
Company shall prepay the Notes at 100% of the then Accreted Value of the Notes,
plus accrued and unpaid interest, on or before 35 days after such Section 5.2(b)
Change of Control, subject to and in accordance with subsection 5.02(b)(ii)
below.
(ii) Within one Business Days following a Section 5.2(b) Change of
Control, the Company shall send a notice to the Holders. Such notice shall
state, among other things, the prepayment date, which must be not later than 35
Business Days from the date of the Section 5.2(b) Change of Control, other than
as may be required by law (the "Change of Control Prepayment Date"). On the
Change of Control Prepayment Date, Obligors shall prepay those Notes (which the
Holders thereof have not refused prepayment in writing prior to the Change of
Control Prepayment Date) at a redemption price of 100% of the Accreted Value of
such Notes so redeemed plus accrued and unpaid interest and other amounts due on
such Notes. If a Holder has refused prepayment in writing prior to the Change of
Control Prepayment Date, the Obligors shall have no obligation to prepay the
Notes of such Holder. Notwithstanding this paragraph, in no event will the
Company or UPC make a payment with respect to a Section 5.2(b) Change of Control
on any Existing High Yield Notes on a date earlier than a payment to the Holders
hereunder.
(iii) For purposes of this Section 5.2(b), "Section 5.2(b) Change
of Control" means
(A) a Change of Control;
(B) a Change of Control (as defined in the UPCD Facility
Agreement other than pursuant to clause 7.4(a)(ii) thereof) shall have occurred
and be continuing and the Majority Lenders (as defined in the UPCD Facility
Agreement) shall have cancelled each facility under the UPCD Facility Agreement
and declared all outstanding advances thereunder immediately due and payable.
(c) Any partial prepayment of the Notes pursuant to Section 5.2(a)
shall be applied first to any accrued and unpaid interest, then to the Accreted
Value of the Notes at the relevant date of prepayment. In the event that
proceeds are not sufficient to fully repay all amounts owed, the particular
Notes or portion thereof to be repaid shall be determined by the Company pro
rata or by such method as the Company determines to be fair and appropriate,
including, if so determined, allocations so that the aggregate remaining
Accreted Value at maturity of the Notes held by any Holder shall be in an
integral multiple of $1,000.
(d) If any Holder elects not to participate in any prepayment provided
for in this Section 5.2, the amount that would otherwise have been prepaid to
such Holder shall be applied first to retire other Notes in accordance with this
Section 5.2 and then may be used for general corporate purposes as otherwise
permitted by this Agreement.
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(e) Upon receipt by a Holder of the Company's calculation pursuant to
Section 5.2(a)(i), (ii) or (iii), or the Company's notice in respect of a
Section 5.2(b) Change of Control pursuant to Section 5.2(b), that such Holder
shall not have refused or intends to accept, such Holder shall promptly deliver
the Notes held by it to the Company for cancellation, as to the portion to be
prepaid, and for exchange for a replacement Note, as to the portion not to be
repaid, together with a written instrument of transfer in a form reasonably
acceptable to UPC, duly executed by such Holder. Notwithstanding anything to the
contrary contained herein, (i) the Obligors shall have no obligation to pay to
any Holder the amount to which such Holder is entitled by reason of the
prepayment of the Notes or portion thereof held by such Holder until such time
as the Company has received from such Holder Notes having an Accreted Value at
the relevant date of prepayment equal to or greater than the portion of the
aggregate Accreted Value at date of prepayment to be repaid on such date of
prepayment that is allocable to such Holder and (ii) the Obligors shall be
entitled to treat the portion of the Notes or portion thereof to be repaid to
such Holder as discharged and cancelled irrespective of whether such Holder
delivers such Notes and instrument of transfer to the Company for cancellation.
Notice of prepayment having been given by the Company as aforesaid with respect
to any Note or portion thereof to be prepaid, such Note or portion thereof shall
(A) become due and payable at the Accreted Value at the date of prepayment of
such Note or portion thereof (together with interest, fees or other amounts due
with respect to the Note or portion thereof being repaid, if any) on the
relevant date of prepayment and (B) from and after the relevant date of
prepayment, cease to accrete principal.
(f) Notwithstanding anything to the contrary in this Agreement, each of
the Obligors and the Guarantor shall be released from its obligations under
Section 5.2(a)(ii) with respect to any Notes acquired by a UGC Party from and
after the closing of the transaction contemplated by the Liberty Agreement.
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.1 Provision of Financial Statements. From and after
the date hereof and so long as the Loan remains outstanding and unpaid:
(a) UPC shall furnish to the Holders any documents filed by it pursuant
to Section 13, 14 or 15(d) of the Exchange Act; provided that if UPC is not
subject to the requirements of Section 13, 14 or 15(d) of the Exchange Act, UPC
will furnish to the Holders:
(i) as soon as practicable and in any event within 90 days after
the end of each fiscal year of UPC, a consolidated balance sheet of UPC and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, stockholders' equity, and cash flows for such fiscal year,
in each case setting forth comparative figures for the preceding fiscal year,
accompanied by an unqualified opinion of independent public accountants of
nationally recognized standing selected by UPC, as to the fair presentation in
accordance with GAAP; and
61
(ii) as soon as practicable and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of UPC, a
consolidated balance sheet of UPC and its Subsidiaries as of the end of such
quarter and the related consolidated statements of income, stockholders' equity
and cash flows for such quarter and for the portion of UPC's fiscal year ended
at the end of such quarter, in each case setting forth comparative figures for
the corresponding quarter and the corresponding portion of UPC's preceding
fiscal year, all certified (subject to normal year-end audit adjustments and to
the absence of footnotes) as to the fair presentation in accordance with GAAP
and consistency with the audited financial statements most recently delivered
pursuant to clause (i) above by the chief financial officer or a director of
finance or treasury of UPC, except as approved by UPC's independent public
accountants and disclosed therein.
(b) The Company shall furnish to the Holders:
(i) as soon as practicable and in any event within 150 days after
the end of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for such
fiscal year, all certified by the chief financial officer, or director of
finance or treasury of UPC as to the fair presentation in accordance with GAAP
and consistency with the audited financial statements most recently delivered
pursuant to this clause (i), except as approved by UPC's independent public
accountants and disclosed therein; and
(ii) as soon as practicable and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the Company,
a consolidated balance sheet of the Company and its Subsidiaries as of the end
of such quarter and the related consolidated statements of income, stockholders'
equity and cash flows for such quarter and for the portion of the Company's
fiscal year ended at the end of such quarter, in each case setting forth
comparative figures for the corresponding quarter and the corresponding portion
of the Company's preceding fiscal year, all certified (subject to normal
year-end audit adjustments and to the absence of footnotes) by the chief
financial officer or a director of finance or treasury of UPC as to the fair
presentation in accordance with GAAP and consistency with the financial
statements most recently delivered pursuant to clause (i) above, except as
approved by the UPC's independent public accountants and disclosed therein.
(c) For so long as the UPCD Facility Agreement is outstanding, the
Company shall cause UPCD to furnish to the Holders the financial information set
forth in clauses 16.2(a) through (d) and clause (g) of the UPCD Facility
Agreement. After such time as the UPCD Facility Agreement is no longer
outstanding, the Company shall furnish to the Holders:
(i) as soon as practicable and in any event within 150 days after
the end of each fiscal year of UPCH, a consolidated balance sheet of UPCH and
its Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, stockholders' equity and cash flows for such fiscal year,
in each case setting forth comparative figures for the preceding fiscal year,
accompanied by an unqualified opinion of independent public accountants of
nationally recognized standing selected by UPC, as to the fair presentation in
accordance with GAAP; and
62
(ii) as soon as practicable and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of UPCH, a
consolidated balance sheet of UPCH and its Subsidiaries as of the end of such
quarter and the related consolidated statements of income, stockholders' equity
and cash flows for such quarter and for the portion of UPCH's fiscal year ended
at the end of such quarter, in each case setting forth comparative figures for
the corresponding quarter and the corresponding portion of UPCH's preceding
fiscal year, all certified (subject to normal year-end audit adjustments and to
the absence of footnotes) by the chief financial officer or director of finance
or treasury of UPC as to the fair presentation in accordance with GAAP and
consistency with the audited financial statements most recently delivered
pursuant to clause (i) above, except as approved by UPC's independent public
accountants and disclosed therein.
(iii) at the same time that they are delivered to the agent under
the UPCD Facility Agreement, copies of all notices of default, compliance
certificates and other similar notices, certificates and documents.
(d) UPC shall cause chello Holdings to furnish to the Holders:
(i) as soon as practicable and in any event within 150 days after
the end of each fiscal year of chello Holdings, a consolidated balance sheet of
chello Holdings and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and cash flows
for such fiscal year, all certified by the chief financial officer or director
of finance or treasury of UPC as to the fair presentation in accordance with
GAAP and consistency with the audited financial statements most recently
delivered pursuant to this clause (i), except as approved by UPC's independent
public accountants and disclosed therein; and
(ii) as soon as practicable and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the chello
Holdings, a consolidated balance sheet of the chello Holdings and its
Subsidiaries as of the end of such quarter and the related consolidated
statements of income, stockholders' equity and cash flows for such quarter and
for the portion of the chello Holdings' fiscal year ended at the end of such
quarter, in each case setting forth comparative figures for the corresponding
quarter and the corresponding portion of the chello Holdings' preceding fiscal
year, all certified (subject to normal year-end audit adjustments and to the
absence of footnotes) by the chief financial officer or director of finance or
treasury of UPC as to the fair presentation in accordance with GAAP and
consistency with the audited financial statements most recently delivered
pursuant to clause (i) above, except as approved by UPC's independent public
accountants and disclosed therein.
(e) Simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, UPC and the Company shall deliver to
the Holders a certificate of the chief financial officer or the chief accounting
officer of each of UPC and the Company (i) stating whether any Default exists on
the date of such certificate and, if any Default or then exists, setting forth
the details thereof and the action which each of UPC and the Company is taking
or proposes to take with respect thereto and (ii) setting out in reasonable
detail computations establishing, as of the date of such financial statements,
63
whether the financial covenants set forth in Section 7.4 were complied with.
(f) Within 15 Business Days, after the end of each calendar month, UPC
and the Company shall deliver to the Holders supporting schedules showing the
amounts of deletions and additions to Invested Capital, all Restricted Payments
and all chello Holdings Restricted Payments made during such calendar month.
(g) Promptly upon the filing thereof, UPC shall deliver to the Holders
all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on Forms
10-K, 10-Q and 8-K (or their equivalents) which UPC or any of its Subsidiaries
shall have filed with the SEC.
(h) On or before the times required under the Indenture, compliance
certificates and notices of default required to be furnished to the trustees or
holders of the securities under the Indentures and the other certificates and
documents required to be furnished to the trustee or holders of the securities
under the Indenture pursuant to Sections 10.11 through 10.17 and Sections 10.19
through 10.21 of the Indenture; provided that with respect to such other
certificates and documents shall be addressed to and be for the benefit of the
Holders.
(i) Within five days after any officer of UPC or the Company obtains
actual knowledge of any Default, if such Default is then continuing, each of UPC
and the Company shall deliver to the Holders a certificate of its chief
financial officer or chief accounting officer setting forth the details thereof
and the action which each of UPC and the Company is taking or proposes to take
with respect thereto.
(j) Promptly following the commencement of any litigation or proceeding
and at such time subsequent thereto during the course of any litigation or
proceeding when UPC shall have made the determination referred to in this clause
(j), UPC shall deliver to the Holders notice and a description in reasonable
detail of any litigation or proceeding to which UPC or any of its Subsidiaries
is a party that would reasonably be expected to result in a Material Adverse
Effect.
(k) UPC shall cause chello Holdings to deliver to the Holders promptly
after entering into such agreements, any agreements other than agreements with
vendors pursuant to which chello Holdings or any of its Subsidiaries will incur
any material Indebtedness.
(l) On or before 15 Business Days after the date of this Agreement, UPC
shall deliver to the Lender a certificate of the chief financial officer or a
director of finance or treasury of UPC containing sufficiently detailed
financial information establishing and supporting the amount of Certified
Invested Capital of the Company as of the date of this Agreement.
(m) From time to time, UPC or the Company shall deliver such additional
information regarding their respective obligations under this Agreement and the
financial position or business of UPC, the Company, the Guarantor and/or the
Significant Subsidiaries of UPC as the Holders may reasonably request.
64
Notwithstanding the foregoing, none of UPC, the Company, the Guarantor or any
Subsidiaries of UPC shall be required to provide any of the foregoing
information (which is not otherwise publicly available) to any Holder that is a
competitor of UPC or any of its Subsidiaries and not an Affiliate of the Lender.
Section 6.2 Compliance with Laws. The Obligors and the Guarantor shall,
and shall cause their respective Subsidiaries to, comply in all material
respects with all applicable treaties, conventions, laws, ordinances, rules,
regulations, and requirements of governmental authorities (including without
limitation Environmental Laws), except where compliance therewith is contested
in good faith by appropriate proceedings or where the failure to comply could
not reasonably be expected to have a Material Adverse Effect.
Section 6.3 Maintenance of Properties. Section 10.6 of the Indenture,
together with all defined terms used therein which terms shall have the meanings
ascribed to them in the Indenture, is hereby incorporated by reference.
Section 6.4 Insurance. Section 10.7 of the Indenture, together with all
defined terms used therein which terms shall have the meanings ascribed to them
in the Indenture, is hereby incorporated by reference.
Section 6.5 Corporate Existence. Subject to Article 8 of the Indenture,
UPC shall do or cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence, rights (charter and statutory)
and franchises of UPC and each of its Subsidiaries; provided, however, that UPC
shall not be required to preserve, with respect to UPC, any such right or
franchise or, with respect to any Subsidiary of UPC (other than the Company and
the Guarantor and subject to all the other covenants in this Agreement), any
such corporate existence, right or franchise, if the Supervisory Board of UPC
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of UPC and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Lender.
Section 6.6 Payment of Taxes and Other Claims. Section 10.5 of the
Indenture, together with all defined terms used therein which terms shall have
the meanings ascribed to them in the Indenture, is hereby incorporated by
reference.
Section 6.7 Syndication Efforts.
(a) Subject to Sections 6.7(c) and 9.1, the Obligors acknowledge that
the Lender may assign or grant participations in all or any part of the Notes
and the Lender and permitted assignees of the Notes may assign or grant
participations in all or any part of the Notes to one or more other Persons
(such assignment or participations, collectively, the "syndication"). Subject to
Section 6.7(c), UPC and the Company shall actively assist the Lender and
permitted assignees and participants of the Notes in completing a limited
syndication in a manner satisfactory to the Lender and such assignees and
participants. Subject to Section 6.7(c), without limiting the foregoing, upon
the request of any of the Lender or such permitted assignees and participants,
UPC and the Company shall (i) use commercially reasonable efforts to ensure that
the syndication efforts benefit materially from the existing lending and other
financing relationships of UPC and its Subsidiaries, (ii) use commercially
65
reasonable efforts to make certain members of the management of UPC and its
Subsidiaries, as well as their respective consultants, advisors, independent
accountants and legal counsel, are available during regular business hours to
answer questions regarding this Agreement, the Loan and the transactions
contemplated hereby, (iii) assist in the preparation of a confidential
information memorandum and other marketing materials to be used in connection
with the syndication, (iv) host, with the Lender and Affiliates of the Lender,
one or more meetings of prospective lenders and (v) amend this Agreement as
necessary to include customary provisions to accommodate an agented,
multi-lender facility.
(b) Subject to Section 6.7(c), the Lender, in consultation with UPC and
the Company, shall manage all aspects of any syndication, including decisions as
to the selection of potential lenders to be approached and when they will be
approached, when their participations will be accepted, which potential lenders
will participate, and the Accreted Value of the Notes to be transferred to each
such Person. Subject to Section 6.7(c), in order to assist the Lender in any
syndication efforts UPC and the Company shall promptly prepare and provide to
the Lender or such Affiliate all information with respect to UPC and its
Subsidiaries and the other transactions contemplated hereby and thereby,
including all financial information and projections, as the Lender or such
Affiliate may reasonably request in connection with such syndication.
(c) Notwithstanding anything to the contrary in this Section 6.7, (i)
with respect to all the Notes, each of the Obligors shall have no obligation
under the covenants contained in Sections 6.7(a) and (b)(i) at any time before
the later of (A) the date six months after the date of this Agreement and (B)
the date on which the Lender or its parent may terminate the Liberty Agreement
without the consent of UGC (the "Operative Date") or, (ii) with respect to any
Notes that have been acquired by a UGC Party, each of the Obligors shall be
released from its obligations under the covenants contained in Sections 6.7(a)
and (b).
(d) All reasonable expenses and reasonable fees incurred by the Lender,
the Holders, the Obligors and the Guarantor in connection with this Section 6.7,
including without limitation any additional Taxes or Other Taxes that would
otherwise be borne by the Obligors pursuant to Section 2.4, shall be borne by
the Obligors and promptly paid or reimbursed by the Obligors.
Section 6.8 Use of Proceeds. The Obligors will use the proceeds of the
Loans as represented in Section 3.1(p). All such loans to UPC, to the Company's
Subsidiaries (other than UPCD and its Subsidiaries and UPC Financing
Partnership) and to UPC's other Subsidiaries other than Subsidiaries of chello
(or, of chello's immediate parent other than chello Holdings has executed and
delivered the requisite Intercompany Loan Document, chello) shall be made
pursuant to Qualified Loans. UPC shall use the proceeds of the loans from the
Company to make cash interest payments on the Existing High Yield Notes as and
when such interest becomes due and payable and to pay the expenses set out in
Section 3.1(p). Notwithstanding the foregoing, the Company may hold the proceeds
in cash and Cash Equivalents pending application pursuant to this Agreement.
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ARTICLE VII
NEGATIVE COVENANTS
From and after the date hereof and so long as any Note remains
outstanding and unpaid and for the benefit of the Holders:
Section 7.1 Limitation on Certain Indebtedness.
(a) None of the Company, chello Holdings or any of their respective
Subsidiaries will incur, assume or acquire ("incur") any Indebtedness to UPC;
provided that the Company and chello Holdings may incur such Indebtedness if (i)
after giving pro forma effect to such Indebtedness, no Default with respect to
Section 7.4, 8.1(a) or 8.1(b) (without regard to any grace period stated
therein) would exist and (ii) such Indebtedness is evidenced by the UPC/Company
Master Loan Agreement or the UPC/chello Master Loan Agreement, as the case may
be.
(b) (i) Neither the Company nor chello Holdings will incur any
Indebtedness to any Affiliate of the Company (other than, subject to Section
7.1(a), UPC and other than pursuant to this Agreement to any Holder that is also
an Affiliate of the Company) unless (A) after giving pro forma effect to such
Indebtedness, no Default with respect to Section 7.4, 8.1(a) or 8.1(b) (without
regard to any grace period stated therein) would exist; (B) prior to incurring
such Indebtedness, such Indebtedness is evidenced by the UPC/Company Master Loan
Agreement or the UPC/chello Master Loan Agreement or such other Intercompany
Loan Document in the same form as such agreements; and (C) the Lender is
furnished with a copy of such other Intercompany Loan Documents (and such other
documentation as the Majority Holders may reasonably request, including opinions
of counsel).
(ii) None of the Company's Subsidiaries will incur any Indebtedness
to any Affiliate of the Company (other than Indebtedness to UPCD or any of its
Subsidiaries or UPC Finance Partnership) unless (A) after giving pro forma
effect to such Indebtedness, no Default with respect to Section 7.4, 8.1(a) or
8.1(b) (without regard to any grace period stated therein) would exist and (B)
prior to incurring such Indebtedness, the Holders are furnished a copy of the
relevant Intercompany Loan Document and such other documentation as the Majority
Holders may reasonably request (including opinions of counsel) in respect
thereof, including assurances that such Indebtedness is unsecured and has the
requisite priority in respect of all obligations, if any, then or thereafter
existing of such Subsidiary under this Agreement and all obligations, if any,
thereafter existing of such Subsidiary to the Company.
(iii) None of chello Holdings' Subsidiaries will incur any
Indebtedness to any Affiliate of the Company (other than Indebtedness to chello
or any Subsidiary of chello ( or chello's immediate parent if not chello
Holdings) unless (A) after giving pro forma effect to such Indebtedness, no
Default with respect to Section 7.4, 8.1(a) or 8.1(b) (without regard to any
grace period stated therein) would exist and (B) prior to incurring such
Indebtedness, the Holders are furnished a copy of the relevant Intercompany Loan
Document and such other documentation as the Majority Holders may reasonably
request (including opinions of counsel) in respect thereof, including assurances
that such Indebtedness is unsecured and has the requisite priority in respect of
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all obligations, if any, then or thereafter existing of such Subsidiary under
this Agreement and all obligations, if any, thereafter existing of such
Subsidiary to the Company.
(c) The Company will not, and will not permit its Subsidiaries to,
incur Indebtedness to any Person (other than, subject to Sections 7.1(a) and
7.1(b), Indebtedness to any Affiliate of the Company and, if no Default exists
under Section 8.1(a) or (b) after giving effect to the incurrence of such
Indebtedness, Indebtedness under or permitted by the UPCD Facility Agreement)
if, before or after giving pro forma effect to the incurrence of such
Indebtedness, a Default (without regard to any grace period) under any Financing
Document exists or would exist. The Company will not permit its Subsidiaries to,
incur any Indebtedness if such Indebtedness ranks contractually or structurally
senior to the Notes and is subordinate to the claims of the creditors under the
Credit Agreement. The Company will not incur any Indebtedness unless such
Indebtedness is subordinated in right of payment to the Company's obligations
under the Financing Documents on terms reasonably acceptable to the Majority
Holders.
(d) chello Holdings will not, and will not permit its Subsidiaries to,
incur any Indebtedness to any Person (other than, subject to Sections 7.1(a) and
7.1(b), Indebtedness to any Affiliate of the Company), except for (i) the
Guarantee of chello Holdings pursuant to this Agreement, (ii) Indebtedness of
Subsidiaries of chello Holdings, the proceeds of which are received by chello
Holdings, the Company or their respective Subsidiaries and used for working
capital purposes or applied to assets and property that will constitute or be
part of the Related Business of, or Investment in, chello Holdings, the Company
or any of their respective Subsidiaries, if, in each case, before or after
giving pro forma effect to any such Indebtedness no Default (without regard to
any grace period) exists or would exist under any Financing Document, and (iii)
Indebtedness of chello Holdings subordinated in right of payment to chello
Holdings' obligations under the Financing Documents on terms reasonably
acceptable to the Majority Holders.
Section 7.2 Limitation on Certain Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Restricted Payment and chello Holdings will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
make any chello Holdings Restricted Payment, if in either case, before or after
giving pro forma effect to such Restricted Payment or chello Holdings Restricted
Payment, as the case may be, a Default (without regard to any grace period)
exists or would exist under Section 7.4, 8.1(a) or 8.1(b).
Section 7.3 Company Funds.
(a) Except to the extent permitted by Section 7.3(b), the Company will
not, and will not permit its Subsidiaries to, make any Investment in any Person
if before or after giving pro forma effect to such Investment a Default (without
regard to any grace period) exists or would exist under any Financing Document.
Except to the extent permitted by Section 7.3(b), chello Holdings will not, and
will not permit its Subsidiaries to, make any Investment in any Person if before
or after giving pro forma effect to such Investment a Default (without regard to
any grace period) exists or would exist under any Financing Document.
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(b) The Company will not make any Investment in any Affiliate of the
Company if before or after giving pro forma effect to that Investment a Default
exists or would exist under Section 7.4, Section 8.1(a) or Section 8.1(b),
except for Investments in Wholly Owned Subsidiaries of the Company if after
giving effect thereto, no Default under Section 8.1(a) or 8.1(b) would exist.
chello Holdings will not make any Investment in any Affiliate of the Company if
before or after giving pro forma effect to that Investment a Default exists or
would exist under Section 7.4, Section 8.1(a) or Section 8.1(b) except for
Investments in Wholly Owned Subsidiaries of chello Holdings if after giving
effect thereto, no Default under Section 8.1(a) or Section 8.1(b) would exist.
None of the Subsidiaries of the Company or chello Holdings will make any
Investment in an Affiliate of the Company if before or after giving pro forma
effect to that Investment a Default exists or would exist under Section 7.4,
Section 8.1(a) or Section 8.1(b), except that Subsidiaries of chello Holdings
may make Investments in chello Holdings and Wholly Owned Subsidiaries of chello
Holdings and Subsidiaries of the Company may make Investments in Wholly Owned
Subsidiaries of the Company..
Section 7.4 Financial Covenants.
(a) The Company (i) shall at all times maintain an amount of Invested
Capital at least equal to the greater of (A) ?5.0 billion and (B) Invested
Capital of the Company as at the time of any determination thereof, minus ?100
million ("Minimum Invested Capital Amount"), and (ii) shall not take or permit
to be taken any action that would reduce the amount of the Company's Invested
Capital if at the time of taking such action, the Company's Invested Capital is
less than the Minimum Invested Capital Amount or, after giving pro forma effect
thereto, the Invested Capital of the Company would be less than the Minimum
Invested Capital Amount immediately prior to the taking of such action.
(b) As independent covenants for the benefit of the Holders, the
financial covenants contained in Clauses 16.11 (subject to Section 11.16) and 17
(and any additional or replacement financial covenants provided for under the
UPCD Facility Agreement from time to time) of the UPCD Facility Agreement are
incorporated into this Agreement as though set forth herein, all defined terms
used in those covenants have the meanings ascribed to them in the UPCD Facility
Agreement and the Company shall cause the Subsidiaries party to the UPCD
Facility Agreement to comply with the aforementioned covenants and shall not
take or permit any of its Subsidiaries to take any action if after giving pro
forma effect thereto any or all of such Subsidiaries would not be in compliance
with any of the aforementioned financial covenants.
(c) As an independent covenant for the benefit of the Holders, the
financial covenant aspects of clause 16.11 (subject to Section 11.16) (and any
additional or replacement financial covenant provided for under the UPCD
Facility Agreement from time to time) of the UPCD Facility Agreement are
incorporated into this Agreement as though set forth herein, all defined terms
used in such covenant have the meanings ascribed to them in the UPCD Facility
Agreement and shall cause the Subsidiaries party to the UPCD Facility Agreement
to comply with the aforementioned financial covenant aspects and shall not take
or permit any of the Subsidiaries to take any action if after giving pro forma
effect thereto any or all of such Subsidiaries would not be in compliance with
any of the aforementioned financial covenant aspects.
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Section 7.5 Liens.
(a) Except as otherwise provided in this Section 7.5, the Company will
not, and will not permit any of its Subsidiaries, and chello Holdings will not,
and will not permit its Subsidiaries, to grant Liens with respect to any of
their respective Properties now or hereafter acquired.
(b) Notwithstanding any provision of Section 7.5(a) to the contrary:
(i) any Subsidiary of the Company and any Subsidiary of chello
Holdings may grant Liens in favor of Persons other than an Affiliate of the
Company (A) to secure Indebtedness owing to such Persons permitted by this
Agreement or (B) of the type described in clauses (c), (d), (e) and (k) of the
definition of Permitted Lien in the Indenture; and
(ii) Subsidiaries of the Company and chello Holdings and its
Subsidiaries may grant Liens in favor of the Company.
Section 7.6 Asset Sales.
(a) Except to the extent permitted by Section 7.2, if a Default shall
have occurred and be continuing or would have occurred on a pro forma basis
after giving effect to such Asset Sale, the Company and its Subsidiaries and
chello Holdings and its Subsidiaries will not make any Asset Sale.
(b) Notwithstanding any provision of Section 7.6(a) to the contrary,
the Company and its Subsidiaries and chello Holdings and its Subsidiaries may
surrender or waive contract rights or settle, release or surrender contract,
tort or other claims of any kind in the ordinary course of business or grant
Liens not otherwise prohibited by this Agreement.
(c) As an independent covenant for the benefit of the Holders, the
Company will not permit its Subsidiaries that are party to the UPCD Facility
Agreement to fail to comply with the covenants set forth in Section 16.10 of the
UPCD Facility Agreement or other financial covenants that replace or are
hereafter in addition to those included in such Section 16.10 or any other
replacement Section of the UPCD Facility Agreement.
(d) UPC shall not and shall not permit any of its Subsidiaries to
effect any Asset Sale as a result of which UPC shall fail to own directly, or
indirectly through Wholly Owned Subsidiaries all of the issued and outstanding
shares of UPCD or UPC Financing Partnership.
Section 7.7 Indenture Covenants. As an independent covenant for the
benefit of the Holders, UPC will comply with Sections 10.11 through 10.17 and
Sections 10.19 through 10.21 of the Indenture.
Section 7.8 No Merger. UPC shall not consolidate or merge with or into
the Company or any of its Subsidiaries or chello Holdings or any of its
Subsidiaries if any of such other Persons would be the surviving entity. None of
the Company, chello Holdings or any of their respective Subsidiaries shall merge
70
into UPC if UPC will survive and a Default with respect to Section 7.4, 8.1(a)
or 8.1(b) (without regard to any grace period stated therein) shall exist or
would exist on a pro forma basis after giving effect to the merger.
Section 7.9 No Amendments. UPC will not and will not permit any of its
Subsidiaries to amend, waive or otherwise modify any terms or provisions of any
Intercompany Loan Document in any manner adverse to the Holders without
obtaining the prior written consent of the Majority Holders.
Section 7.10 Transactions with Affiliates. The Company and its
Subsidiaries and chello Holdings and its Subsidiaries will not, directly or
indirectly (i) pay any funds to or for the account of any Affiliate, (ii) make
any investment in any Affiliate (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any debt, or
otherwise), (iii) lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to any Affiliate, or (iv) participate in, or effect, any
transaction with any Affiliate, except on an arms-length basis that is fair to
the Company and its Subsidiaries or chello Holdings and its Subsidiaries as is
determined by the Supervisory Board; provided that the foregoing provisions of
this Section 7.10 shall not prohibit (i) any Subsidiary from declaring or paying
any lawful dividend or other payment ratably in respect of all its capital stock
of the relevant class or (ii) transactions between or among the Company and/or
its Subsidiaries and/ or chello Holdings and/or its Subsidiaries.
Section 7.11. Prohibited Covenants. Neither the Company nor UPC will,
or will permit any of their respective Subsidiaries to, enter into any material
agreement with any Person pursuant to which the occurrence or existence of a
"Control Event" (defined below) creates, or permits any person to declare or
effect, a default, event of default, prepayment obligation, repurchase
obligation or acceleration of maturity under, or cancellation or termination of,
any material agreement to which the Company or UPC or any of their respective
Subsidiaries is a party, or create a Lien or right to obtain a Lien on any
property or terminates or permits the termination of a material license, right
or permit, of the Company, UPC or any of their respective Subsidiaries, unless
such Control Event (or the consequences of a Control Event) either: (a) does not
involve a Control Event that takes into account any ownership, management or
control interest of any member of the Liberty Group (defined below), or (b)
contains a "Liberty Exemption" (defined below); provided however, that this
Section 7.11 does not prohibit the Company, UPC or any of their respective
Subsidiaries from having or maintaining any such agreement in the Indenture,
Credit Agreement, any indentures in respect of the Existing High Yield Notes and
any other agreement, document, instrument, license, right, permit, or Lien
pursuant to which the Company, UPC or any of their respective Subsidiaries is
bound, as any such agreement exists on the date hereof with such amendments,
restatements and other modifications from time to time (to the extent such
amendments, restatements or modifications do not (i) amend or change existing
Control Event provisions thereof (other than the elimination thereof), (ii) add
new Indebtedness to its coverage, (iii) increase any commitment to fund or
provide credit, or (iv) expand the geographic territory covered thereby). As
used in this Section 7.11, "Control Event" means any change in ownership,
management, control (however defined) or any sale or purchase of all or
substantially all of the assets of any Person; and "Liberty Exemption" means an
exemption or exclusion from a Control Event of:
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(a) any acquisition, ownership, or disposition of any equity
interest in, or control of, UPC or any of its Subsidiaries by, and
(b) sale of assets of UPC or any of its Subsidiaries to, or
purchase by UPC or any of its Subsidiaries of any assets from, and
(c) participation in management of UPC or any of its Subsidiaries
by, or by any designee of,
Liberty Media Corporation, Liberty Media International, Inc., and their
respective Affiliates (the "Liberty Group").
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1 Events of Default Defined; Acceleration of Maturity; Waiver
of Default. In case one or more of the following (each, an "Event of Default"),
whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall have occurred and be continuing:
(a) failure to pay all or any part of the Accreted Value of or interest
on the Notes as and when the same shall become due and payable in cash either at
maturity, upon any prepayment, redemption, by declaration or otherwise; or
(b) failure to pay any amount payable under Section 2.4 as and when the
same shall become due and payable, and continuance of such failure for a period
of five days; or
(c) failure on the part of any of either Obligor or the Guarantor, as
the case may be, to observe or perform any of the covenants to which it is bound
contained in Section 6.5, Section 6.6, Section 6.8, Section 7.2, 7.3, 7.4(b),
7.6, 7.8 or 7.9 of this Agreement or Section 10.12, Section 10.16, Section 8.1
or Section 8.2 of the Indenture (provided, however, if the requisite lenders
under the UPCD Facility Agreement waive a default under Clause 16.10 or 17 of
the UPCD Facility Agreement, the failure of the Company to observe or perform or
to cause its Subsidiaries to observe or perform such covenants shall be deemed
waived hereunder); or failure on the part of any Obligor or Guarantor, as the
case may be, to observe or perform any of the covenants or agreements to which
it is bound contained in Section 7.1, 7.4(a) or 7.10 if such failure shall
continue for a period of 30 days; or
(d) failure on the part of any Obligor or the Guarantor, as the case
may be, to observe or perform any of the covenants or agreements to which it is
bound contained in the Financing Documents which have not been described in
clauses (a), (b) and (c) of this Section 8.1 or failure on the part of UPC to
observe or perform any of the covenants contained in Section 10.11, Section
10.13, Section 10.14, Section 10.15, Section 10.17, Section 10.19, Section 10.20
or Section 10.21 of the Indenture, if such failure shall continue for a period
of 30 days after the date on which written notice thereof shall have been given
72
to the Obligors and the Guarantor by the Majority Holders; or
(e) there shall be an event of default (howsoever defined) in respect
of any Indebtedness of any Obligor, the Guarantor or any Subsidiary of UPC in an
aggregate principal amount in excess of $50 million (or its foreign currency
equivalent) whether such Indebtedness now exists or shall hereafter be created
if such event of default causes or permits the holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated maturity; or any
Obligor, the Guarantor or any Subsidiary of UPC shall fail to pay when due any
principal or interest on any such Indebtedness whether such Indebtedness now
exists or shall hereafter be created; or
(f) any representation, warranty, certification or statement made or
deemed made by any Obligor, the Guarantor or any Subsidiary of UPC in any
Financing Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
any Financing Document shall prove to have been untrue when made or deemed made
if such failure to be true could reasonably be expected to result in a Material
Adverse Effect; or
(g) any of the Financing Documents to which any Obligor, the Guarantor
or any Subsidiary of UPC is a party shall for any reason fail in any material
respect to constitute the valid and binding agreement of any Obligor or the
Guarantor, as the case may be; or
(h) the rendering of a final judgment or final judgments not covered by
insurance in an amount in excess of $50 million (or its foreign currency
equivalent) at any one time against UPC, any Obligor or the Guarantor or any
Subsidiary of UPC by a court or courts of competent jurisdiction, which judgment
or judgments remain unbonded, undischarged or unstayed for a period of 60 days
after the date on which the right to appeal all such judgments has expired; or
(i) (i) Any Obligor or the Guarantor or any Significant Subsidiary of
UPC shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect in any
jurisdiction or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing; or
(ii) an involuntary case or other proceeding shall be commenced
against any Obligor, the Guarantor or any Significant Subsidiary of UPC seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against UPC or any
Significant Subsidiary under the bankruptcy laws as now or hereafter in effect
in any jurisdiction;
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(k) (i) UPC shall fail to own at any time all of the issued and
outstanding share capital of the Company; or
(ii) UPC shall fail to own at any time all of the issued and
outstanding share capital of chello Holdings;
(l) UPC and the Company shall fail to deliver to the Lender duly
executed Pledge Agreements and, except as otherwise provided therein, to have
taken all steps necessary or appropriate as reasonably requested by the Lender
to perfect the security interests created thereby, together with favorable
opinions of counsel with respect thereto in form and substance reasonably
satisfactory to the Lender, on or before 20 days after the date hereof.
then, and in each and every such case, unless the Accreted Value of the Notes
shall have already become due and payable, the Majority Holders may, by notice
in writing to the Obligors and UPC declare the then Accreted Value of the Notes,
together with accrued interest thereon and premium, if any, to be immediately
due and payable. If a Event of Default described in clause (i) above occurs, the
then Accreted Value of and accrued interest and premium, if any, on the Notes
will be immediately due and payable without any notice, declaration or other act
on the part of any Holder. The Majority Holders may annul any notice of
acceleration or past Defaults (other than monetary Defaults not yet cured) by
delivering a notice of annulment to the Obligors.
ARTICLE IX
ASSIGNMENT
Section 9.1 Assignment of Loan; Register. Subject to Section 9.2, any
Holder shall have the right at any time to sell, assign, transfer, grant
participations or negotiate (an "assignment") all or any portion of its Notes;
provided that (i) except in the case of an assignment to a Holder or an
Affiliate controlled by a Holder (a "Permitted Assignee") or an assignment to a
UGC Party, the Obligors must consent to such assignment, such consent not to be
unreasonably withheld, (ii) except in the case of an assignment to the Lender or
a controlled Affiliate of the Lender or an assignment to a UGC Party, no
assignment shall be made prior to the Operative Date, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all of the
assigning Holder's rights and obligations under this Agreement, (iv) the
assignor shall comply with the provisions of Article II of this Agreement, (v)
the assignment shall not result in there being more than 10 Holders of the
Notes, (vi) the assignment shall not result in an increase in the amount of
Taxes or Other Taxes that would be borne by the Obligors pursuant to Section 2.4
absent such assignment, and (vii) in no event shall any Holder assign all or any
portion of its rights and obligations under this Agreement until the Holder
shall provide evidence reasonably satisfactory to UPC that all securities and
other applicable laws and regulations have been complied with in connection with
any such transfer; provided further that any consent of the Obligors otherwise
required under this Section 9.1(a) shall not be required if any Default has
occurred and is continuing. In the case of any assignment of all or part of the
Notes authorized under this Section 9.1, the assignee, transferee or recipient
shall become a party to this Agreement by execution of an assignment and
assumption agreement in a form reasonably acceptable to the Obligors. In
connection with any assignment, on the Lender's request in writing, UPC and the
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Company shall amend this Agreement as necessary to include customary provisions
to accommodate an agented, multi-lender facility.
(b) Upon its receipt of a duly completed assignment and acceptance
executed by an assigning Holder and an assignee, transferee or recipient and any
written consent to such assignment required by Section 9.1, the Lender shall
promptly accept such assignment and acceptance and record the information
contained therein in the Register (the "Register"). To the extent of any
assignment pursuant to this Section 9.1, the assignor shall be relieved of its
obligations hereunder with respect to its assigned Notes and the assignee,
transferee or recipient may have, to the extent of such assignment, the same
rights, benefits and obligations as it would if it were a Holder with respect to
such assigned Notes, including, without limitation, the right to approve or
disapprove actions which, in accordance with the terms hereof, require the
approval of the Holders.
(c) In the case of any grant of a participation under this Section 9.1,
the Holder granting such participation and the participant shall execute a
participation agreement and (i) such Holder's obligations under this Agreement
and the other Financing Documents shall remain unchanged, (ii) such Holder shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Obligors and the Holders shall continue to deal
solely and directly with such Holder in connection with such Holder's rights and
obligations under this Agreement and the other Financing Documents, and (iv)
such participation agreement shall provide that such Holder shall retain the
sole right to enforce this Agreement and the other Financing documents and to
approve any amendment, modification or waiver of any provision of this Agreement
or any other Financing Document that requires the approval of the Holder,
provided that such agreement may provide that such Holder will not, without the
consent of the participant, agree to any amendment, modification or waiver that
would (x) extend the final scheduled maturity date of any of the Notes in which
such participant is participating or (y) reduce the Accreted Value or interest
rate applicable to any of the Notes in which such participant is participating
or postpone the payment of any interest.
(d) Lender shall maintain a copy of each assignment and acceptance
delivered to it under Section 9.1(b) and shall maintain the Register. The
entries in the Register shall be presumptively conclusive, and the Obligors and
the Holders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Holder hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Obligors and any Holder, at any reasonable time
and from time to time upon reasonable prior notice.
Section 9.2 UGC's Right of First Offer.
(a) If the Lender or a Permitted Assignee (the "Lender Party") desires
to make an assignment of all or a portion of its Notes, to any Person other than
the Lender or a Permitted Assignee, UGC or any Person designated by UGC will
have a right of first offer, respecting the portion of the Notes proposed to be
assigned (the "Offered Notes") at a price specified by the Lender Party in a
written notice to UGC setting forth the terms on which such Offered Notes are
offered. UGC or its designee may then exercise their respective rights of first
offer during the 15-day period after the date the Notice is given (a "15-Day
Election Period").
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(b) A Lender Party may assign the Offered Notes if (i) such right of
first offer is not exercised within the 15-Day Election Period, or (ii) in the
case of a right of first offer that is exercised during a 15-Day Election
Period, UPC or its designee exercising such right of first offer does not
acquire the Offered Notes in whole or in part within 50 days of the date the
notice is given.
(c) Any Transfer by a Lender Party other than to a Permitted Assignee
following a failure to exercise a right of first offer or a failure by UGC or
its designee to acquire the Offered Notes in whole or in part within the
applicable time period will be effective only if, in the case of a failure
either to exercise a right of first offer during a 15-Day Election Period or to
acquire the Offered Notes in whole or in part within 50 days of the date the
notice is given, the assignment occurs at a price equal to or higher than the
first offer price specified by the Lender Party in its notice.
Section 9.3 Replacement Notes. Within five Business days after any
assignment pursuant to this Article IX, the Obligors, at their own expense,
shall execute and deliver to the assignee in exchange for the Notes that are the
subject of such assignment Notes registered in the name of the assignee or in
such name or names as shall be designated by such assignee) in an amount equal
to the aggregate Accreted Value at maturity of the Notes so assigned, and if the
assigning Holder has not assigned all of the Notes held by it, new Notes,
registered in the name of such Holder (or such name or names as shall be
designated by such assigning Holder) equal to the aggregate Accreted Value at
maturity of such Holders' Notes not so assigned and the Guarantor will execute a
Notation of Guarantee in the form of Exhibit B with respect to each such Note.
The new Notes shall be dated the effective date of such assignment and shall
otherwise be substantially in the form of Exhibit A.
ARTICLE X
GUARANTEE
Section 10.1 Unconditional Guarantee. The Guarantor hereby
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee") to the Holders and their respective successors and assigns, that:
(i) the Accreted Value of and interest on the Notes due from the Company to such
respective Persons will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, to the
extent lawful, of the Notes and all other payment obligations of the Company to
the Holders, hereunder or directly related hereto or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of the Notes or
of any such other obligations, the same will be promptly paid in full by the
Company when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 9.3. The Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Agreement, the
absence of any action to enforce the same, any waiver or consent by any of the
Holders with respect to any provisions hereof, the failure to obtain recovery of
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any judgement against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the
obligations contained in this Agreement and in this Guarantee. If any Holder is
required by any court or otherwise to return to the Company, the Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or the Guarantor, any amount paid by the Company or the Guarantor
to such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Guarantor further agrees that, as
between the Guarantor, on the one hand, and any Holder, on the other hand, (x)
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article VIII for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Section 8.1, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the purpose
of this Guarantee. For the avoidance of doubt, the Guarantor guarantees 100% of
all amounts due pursuant to this Guarantee and the Guarantor does not guarantee
the payment or other performance obligations of UPC under this Agreement.
Section 10.2 Severability. In case any provision of this Guarantee
shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.3 Limitation of Guarantor Liability. The Guarantor and, by
its acceptance hereof, the Holders hereby confirm that it is the intention of
all such parties that the guarantee by the Guarantor pursuant to its Guarantee
not constitute a fraudulent transfer or conveyance for purposes of any
bankruptcy or insolvency law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any United States Federal or state law. To effectuate
the foregoing intention, the Holders and the Guarantor hereby irrevocably agree
that the obligations of the Guarantor under the Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of the Guarantor, result in the obligations of the Guarantor
under the Guarantee not constituting such fraudulent transfer or conveyance.
Section 10.4 Waiver of Subrogation. The Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of the Guarantor's obligations under its Guarantee and this Agreement,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to the Guarantor in violation of the preceding sentence and the
Notes or other amounts owing hereunder shall not have been paid in full, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for the benefit of, the Holders, and shall forthwith be paid
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to the Holders, to be credited and applied upon the Notes or other amounts owing
hereunder, whether matured or unmatured, in accordance with the terms of this
Agreement. The Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Agreement and that
the waiver set forth in this Section 10.5 is knowingly made in contemplation of
such benefits.
Section 10.5 Evidence of Guarantee. To evidence its guarantees to the
Holders set forth in this Article X, the Guarantor hereby agrees to execute a
notation of Guarantee in substantially the form of Exhibit B.
Section 10.6 Waiver of Stay, Extension or Usury Laws. The Guarantor
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive the Guarantor from performing its Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Agreement; and (to the
extent that it may lawfully do so) the Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Holders or the
Administrative Agent, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices. Unless otherwise provided herein, any notice or
other communications herein required or permitted to be given shall be in
writing (including facsimile or similar writing) and may be personally served or
telecopied and shall be deemed to have been given or received when delivered in
person, upon receipt of telecopy against receipt of answer back. For the
purposes hereof, the addresses of the parties hereto (until notice of a change
thereof is delivered as provided in this Section 11.1) shall be set forth under
each party's name on the signature pages hereto.
Section 11.2 Amendments and Waivers. No amendment, modification,
termination or waiver of any term or provision of this Agreement, the Notes, the
Guarantee or the form of the Registration Rights Agreement or any waiver of any
term or provision thereof, shall be effective without the written agreement of
the Obligors, the Guarantor and the Majority Holders, provided that no
amendment, modification, termination or waiver of this Agreement, the Notes, the
Guarantees or the form of Registration Rights Agreement shall, without the prior
written consent of each Holder affected thereby: (i) reduce the rate of or
extend the time for payment of the Accreted Value of the Notes of such Holder;
(ii) reduce the Accreted Value of the Notes of such Holder; (iii) make any of
the Notes payable in money other than that stated in the Notes of such Holder;
or (iv) change any of the provisions of this Section 11.2 or the definition of
the term "Majority Holders" or any other provision hereof specifying the number
or percentage of Holders required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given. No notice to or demand on the Obligors in any case shall
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entitle the Obligors to any further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each Holder,
and, if signed by the Obligors or the Guarantor, on the Obligors and the
Guarantor. Notwithstanding the foregoing, the Holders may at any time amend this
Agreement to add customary provisions regarding an administrative agent,
delegating to such agent customary duties regarding the distribution of funds,
the registration of Note transfers, the distribution of documents and
information and similar administrative matters, and limiting the liability of
such agent, all without the approval of the Obligors or the Guarantor, provided
that the Holders shall provide the Obligors with a copy of any such amendment
promptly after it has been entered into and such amendments create no
obligations on the Obligors or the Guarantor.
Section 11.3 Survival of Warranties and Certain Agreements. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement and the making of the Loan hereunder
and, notwithstanding the making of the Loan, the execution and delivery of the
Notes or any investigation made by or on behalf of any party, shall continue in
full force and effect. The closing of the transactions herein contemplated shall
not prejudice any right of one party against any other party in respect of
anything done or omitted hereunder or in respect of any right to damages or
other remedies.
Section 11.4 Fees and Expenses; Indemnification.
(a) Whether or not the transactions contemplated hereby shall be
consummated, the Obligors shall promptly pay (i) all the actual and reasonable
costs and expenses of preparation of the Finance Documents and all the costs of
furnishing all opinions by counsel for the Obligors and Guarantor (including
without limitation any opinions requested by the Lender as to any legal matters
arising hereunder), and of the Obligors' and Guarantor's performance of and
compliance with all agreements and conditions contained herein on their part to
be performed or complied with;(ii) the reasonable fees, expenses and
disbursements of one counsel to the Holders (and any local counsel) in
connection with any amendments, modifications and waivers to this Agreement of
any other Financing Document and consents to departures from the terms hereof
and thereof, in each case as requested or consented to by the Obligors, and
(iii) after the occurrence of a Default, all reasonable costs and expenses
incurred by any Holder (including reasonable attorney's fees of one counsel to
the Holders (and any local counsel)) in enforcing any obligations of or in
collecting any payments due from the Obligors or the Guarantor hereunder or
under the Loan or Notes by reason of such Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings.
(b) Subject to Sections 6.7(d) and 11.4(a), the Obligors agree to
indemnify and hold harmless, on an after-tax basis, the Holders, their
respective Affiliates, and each Person, if any, who controls the Holders, or any
of its respective Affiliates, within the meaning of the Securities Act or the
Exchange Act (a "Controlling Person"), and the respective partners, members,
agents, employees, officers and directors of the Holders, their respective
Affiliates and any such Controlling Person (each an "Indemnified Party," and
collectively, the "Indemnified Parties"), from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation and as
incurred, reasonable costs of investigating, preparing or defending any such
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claim or action, whether or not any Obligor is a party thereto and costs
associated with the unwinding of currency ▇▇▇▇▇▇, swaps or similar arrangements)
other than Taxes and Other Taxes arising out of, or in connection with this
Agreement; provided, that the Obligors will not be responsible for any claims,
liabilities, losses, damages or expenses that are determined by final judgment
of a court of competent jurisdiction to result from the Indemnified Parties'
gross negligence or willful misconduct. The Obligors also agree that (i) the
Indemnified Parties shall have no liability for claims, liabilities, damages,
losses or expenses, including legal fees, incurred by the Obligors in connection
with this Agreement, unless they are determined by final judgment of a court of
competent jurisdiction to result from the Indemnified Parties' gross negligence
or willful misconduct and (ii) no Indemnified Party shall in any event have any
liability to the Obligors on any theory of liability for special, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, or
in connection with, or as a result of this Agreement.
(c) If any action shall be brought against an Indemnified Party with
respect to which indemnity may be sought against the Obligors under this
Agreement, such Indemnified Party shall promptly notify the Obligors in writing
and the Obligors shall, if requested by such Indemnified Party, assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Party and payment of all reasonable fees and expenses. The
failure to so notify the Obligors shall not affect any obligations the Obligors
may have to such Indemnified Party under this Agreement or otherwise unless any
Obligor is materially adversely affected by such failure. Such Indemnified Party
shall have the right to employ separate counsel in such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party, unless: (i) the Obligors have failed to
assume the defense and employ counsel reasonably satisfactory to such
Indemnified Party or (ii) the named parties to any such action (including any
impleaded parties) include such Indemnified Party and the Obligors, and such
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Obligors, in which case, if such Indemnified Party
notifies the Obligors in writing that it elects to employ separate counsel at
the expense of the Obligors, the Obligors shall not have the right to assume the
defense of such action or proceeding on behalf of such Indemnified Party,
provided, however, that the Obligors shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be responsible hereunder for the reasonable fees and expenses
of more than one such firm of separate counsel, in addition to any local
counsel, which counsel shall be designated by the Majority Holders. The Obligors
shall not be liable for any settlement of any such action effected without the
written consent of the Obligors (which shall not be unreasonably withheld) and,
subject to Section 11.4(b), the Obligors agree to indemnify and hold harmless
each Indemnified Party from and against any loss or liability by reasons of
settlement of any action effected with the consent of the Obligors. In addition,
the Obligors will not, without the prior written consent of the Indemnified
Parties, settle or compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened action, claim, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not any Indemnified Party is a party thereto) unless such
settlement, compromise, consent or termination includes an express unconditional
release of the Indemnified Parties, reasonably satisfactory in form and
substance to the Indemnified Parties, from all liability arising out of such
action, claim, suit or proceeding.
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(d) If for any reason the foregoing indemnity is unavailable (otherwise
than pursuant to the express terms of such indemnity) to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying
such Indemnified Party, the Obligors shall contribute to the amount paid or
payable by such Indemnified Party as a result of such claims, liabilities,
losses, damages, or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Obligors on the one hand and by the
Indemnified Parties on the other from the transactions contemplated by this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted under applicable law, in such proportion as is appropriate to reflect
not only the relative benefits received by the Obligors on the one hand and such
Indemnified Parties on the other, but also the relative fault of the Obligors
and such Indemnified Parties as well as any other relevant equitable
considerations. The relative fault of the Obligors on the one hand and the
Indemnified Parties on the other with respect to the transactions contemplated
hereby shall be determined by reference to, among other things, the existence of
any untrue or alleged untrue statement of material fact or the omission or
alleged omission to state a material fact related to information supplied by the
Obligors or by such Indemnified Parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnification, contribution and expense reimbursement
obligations set forth in this Section 11.4 shall (i) be in addition to any
liability the Indemnifying Party may have to any Indemnified Party at common law
or otherwise, (ii) survive the termination of this Agreement and the payment in
full of the Notes and (iii) remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Lender or any other
Indemnified Party.
Section 11.5 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Obligors, the Lender, and their
respective successors and assigns; provided that (i) the Obligors and the
Guarantor may not assign or otherwise transfer its rights or obligations under
this Agreement to any other Person without the prior written consent of the
Majority Holders, and (ii) the Holders may not assign or otherwise transfer
their respective rights under this Agreement, the Notes or the other Finance
Documents other than in accordance with Article IX.
Section 11.6 New York Law; Submission to Jurisdiction; Waiver of
Immunities; Waiver of Jury Trial; Service of Process; Currency.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
ANY EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION IS REQUIRED THEREBY. EACH PARTY
HERETO HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS
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ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL CLAIMS OF IMMUNITY
AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO PERSONAL JURISDICTION OR
VENUE IN ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(b) The Obligors and the Guarantor hereby agree that service of all
writs, process and summonses in any proceeding brought against them relating to
this Agreement or any other Financing Documents in the State of New York may be
made upon Corporation Service Company, presently located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Process Agent"), and the Obligors and the Guarantor
hereby irrevocably appoint the Process Agent as their agent and true and lawful
attorney-in-fact in their names, places and steads to accept such service of any
and all such writs, process and summonses, and agree that the failure of the
Process Agent to give any notice to it of any such service of process shall not
impair or affect the validity of such service or of any judgment based thereon.
The Obligors and the Guarantor agree to maintain at all times an agent with an
office in New York to act as Process Agent as aforesaid. Nothing herein shall in
any way be deemed to limit the ability to serve any such writs, process and
summonses in any other manner permitted by applicable law.
(c) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under the Notes from one currency
into another currency, the Obligors and the Holders agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedures, the Holders could purchase
the first currency with such other currency in the city that is the principal
financial center of the country of issue of the first currency on the day two
Business Days preceding the day on which final judgment is given.
(d) To the extent permitted by applicable law, the obligations of the
Obligors in respect of any sum payable by it to a Holder shall, notwithstanding
any judgment in a currency (the "Judgment Currency") other than dollars, be
discharged only to the extent that on the Business Day following receipt by such
Holder of any sum adjudged to be so due in the Judgment Currency, such Holder
may, in accordance with normal banking procedures, purchase dollars with the
Judgment Currency; if the amount of dollars so purchased is less than the sum
originally due to the Holder in dollars (determined in the manner set forth in
Section 11.6(c) above), the Obligors agree, as a separate obligation and
notwithstanding any such judgment, to indemnify the Holder against such loss,
and if the amount of dollars so purchased exceeds the sum originally due to the
Holder, the Holder agrees to remit to the Obligors such excess, provided that
the Holder shall have no obligation to remit any such excess as long as the
Obligors shall have failed to pay the Holder any obligations due and payable
under this Agreement or the other Financing Documents, in which case such excess
may be applied to such obligations of the Obligors, in accordance with the terms
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of this Agreement or the other Financing Documents.
Section 11.7 Requirements of Law.
(a) Subject to Section 11.7(b), the Obligors shall forthwith on demand
by a Holder pay the Holder the amount of any increased cost incurred by it as a
result of any introduction of or change in the interpretation or application of
any law, directive or official regulation (including any law or regulation
relating to taxation, change in currency of a country or reserve asset, special
deposit, cash ratio, liquidity or capital adequacy requirements or any other
form of banking or monetary control, including any thereof promulgated by the
European Central Bank) whether or not having the force of law but, if not, being
a directive or official regulation with which it is the practice of banks or
other financial institutions in the relevant jurisdiction to comply and which
shall have occurred after the date of this Agreement.
(b) In this Agreement "increased cost" means:
(A) an additional cost incurred by a Holder as a result of
it having entered into, or performing, maintaining or funding its obligations
under, any Financing Document;
(B) a reduction in any amount payable to a Holder or the
effective return to a Holder under any Financing Document; or
(C) the amount of any payment made by a Holder, or the
amount of interest or other return foregone by a Holder, calculated by reference
to any amount received or receivable by such Holder from any other party under
this Agreement.
(c) Section 11.7(a) does not apply to any increased cost:
(i) compensated for by the operation of Section 2.4 (or which
would have been so compensated for but for the operation of Section 2.4); or
(ii) attributable to any change in the rate or applicability of
any tax excluded from the definition of "Tax" or "Taxes" in Section 2.4(a).
(d) The Holders agree to the extent reasonable and without material
cost or prejudice to them, to co-operate with the Obligors to minimize any
amounts payable by the Obligors under this Section 11.7.
Section 11.8 Illegality. If it becomes (or any change in the
interpretation, administration or application of any law makes it apparent that
it is) unlawful in any jurisdiction or contrary to any official regulation (if
not having the force of law, being one with which it is the practice of banks in
the relevant jurisdiction to comply), for any Holder to give effect to any of
its obligations as contemplated by this Agreement or to fund the Loan at any
time after the date of this Agreement then:
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(a) such Holder may notify the Obligors; and
(b) the Obligors shall forthwith, or by such later date as is
immediately prior to the illegality taking effect, prepay the Loan to such
Holder together with all other amounts payable by it to such Holder under this
Agreement; and
(i) the obligations of such Holder to the Obligors hereunder shall
cease.
Section 11.9 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 11.10 Counterparts. This Agreement may be executed in any
number of counterparts and by facsimile, each of which shall be an original with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
Section 11.11 Confidentiality. Each Holder agrees to keep confidential
any information which is marked in the English language as confidential by an
Obligor or chello Holdings; provided that nothing herein shall prevent a Holder
from disclosing any such information (i) to any Person which receives such
information having been made aware of, and which agrees to maintain, the
confidential nature thereof in order to facilitate or enable the Holder to
syndicate, sell, transfer (including, without limitation, the transfer of a
participation in the Notes) or assign any portion of its Notes, (ii) to its
employees, directors, agents, attorneys, accountants and other professional
advisors which receive such information having been made aware of the
confidential nature thereof, (iii) upon the request or demand of any
Governmental Authority having jurisdiction over the Holder or its Affiliates,
(iv) in response to any subpoena or other legal process or order of any court or
other Governmental Authority or as may otherwise be required pursuant to any
applicable law, (v) in connection with any litigation to which the Holder is a
party, (vi) which has been publicly disclosed other than in breach of this
Agreement, or (vii) in connection with the exercise of any remedy hereunder or
in any litigation, arbitration or other proceeding relating hereto.
Section 11.12 Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person. The incorporation by reference of certain provisions
of the Indenture herein is solely a matter of convenience and shall not be
construed to limit the rights or remedies of the Holders to the rights and
remedies set forth in the Indenture. Unless otherwise provided in this
Agreement, any action or decision that may be or is required to be taken or made
by the Obligors in respect of this Agreement or any other Financing Document may
be taken or made by UPC on behalf of the Obligors.
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Section 11.13 Headings. Section headings used herein and in the table
of contents are for convenience only and are not to effect the construction of,
or be taken into consideration in interpreting this Agreement and the other
Financing Documents.
Section 11.14 Joint and Several Obligations; Several Obligations.
Notwithstanding anything to the contrary in this Agreement or any other
document, UPC's obligations under this Agreement and the Financing Document
shall be joint and several in respect of the obligations of the Company under
this Agreement and the other Financing Documents and the Company's obligations
under this Agreement and the other Financing Documents shall be several and the
Company shall have no liability in respect of the performance or non-performance
of any obligation of UPC under this Agreement or any other Financing Document.
Section 11.15 Acknowledgement and Agreement. Reference is made to the
Release, dated as of February 22, 2001, by and among UPC, UGC, Liberty Media
International, Inc. ("LIMIT") and Liberty Media Corporation ("Liberty Media")
(the "Release"). UPC, with effect from and after receipt of the Loan pursuant to
this Agreement, acknowledges and agrees that Liberty Media is causing Lender to
enter into this Agreement and fund the Loan with the understanding that UPC will
continue to be bound by and subject to all of the provisions of the Release,
irrespective of whether UGC actually makes the investment in UPC described in
Section 4 of the Release. UPC, with effect from and after receipt of the Loan
pursuant to this Agreement, acknowledges and agrees that this Agreement and the
Loan constitute adequate consideration for the continued effectiveness of the
agreements and releases made by UPC in the Release. Liberty Media and LMINT are
intended beneficiaries of this Section 11.15. UPC further acknowledges and
agrees that Paragraph 5 of the Release shall, from and after the making of the
Loan pursuant to this Agreement, be no longer of any force or effect.
Section 11.16 Savings Clause. It is the intention of the parties to
this Agreement that the covenants of the Obligors contained in Sections 7.1(b)
and (c), 7.4(c), 7.5(a), 7.6(a), (c) and (d) and 7.10 not constitute a breach of
Section 10.13 of the Indenture and provisions of similar import contained in the
other indentures under which the Existing High Yield Notes are issued or the UGC
Indentures (an "Indenture Covenant"). Consequently, notwithstanding any of the
provisions of any covenant contained in Sections 7.1(b) and (c), 7.4(c), 7.5(a),
7.6(a), (c) and (d) and 7.10 and that, but for this Section 11.16, would
constitute a breach of any Indenture Covenant, the Obligors shall not be
required to comply with such covenants to the extent that to do so would
constitute a breach of an Indenture Covenant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers, as of the date first
above written.
Obligors:
BELMARKEN HOLDING B.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
UNITED PAN-EUROPE COMMUNICATIONS N.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
Guarantor:
UPC INTERNET HOLDING B.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
Address for Notices to the Obligors and/or
the Guarantor:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇-▇▇▇ 9841
Attention: Chief Financial Officer and
General Counsel
with a copy to:
Holme ▇▇▇▇▇▇▇ &Owen
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier: ▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Lender:
LIBERTY-BELMARKEN, INC.
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Assistant Treasurer
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
One Shell Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT A
FORM OF NOTE
THE TRANSFER OF THIS NOTE IS RESTRICTED BY THE LOAN AGREEMENT DATED AS OF
MAY __, 2001 AMONG UNITED PAN-EUROPE COMMUNICATIONS N.V. AND BELMARKEN HOLDING
B.V., AS OBLIGORS, UPC INTERNET HOLDING B.V., AS GUARANTOR, AND THE LENDER NAMED
THEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
THIS NOTE MAY NOT FOLLOWING ISSUANCE BE OFFERED, SOLD OR TRANSFERRED IN, FROM OR
INTO THE NETHERLANDS.
UNITED PAN-EUROPE COMMUNICATIONS N.V.
BELMARKEN HOLDING B.V.
[Date]
$----------
FOR VALUE RECEIVED the undersigned, UNITED PAN-EUROPE COMMUNICATIONS N.V., a
public limited liability company (naamloze vennootschap) incorporated under the
laws of The Netherlands ("UPC") and BELMARKEN HOLDING B.V., a private limited
liability company incorporated under the laws of The Netherlands (the "Company",
and together with UPC, the "Obligors"), promise to pay to the order of
____________________, (the "Holder") the principal sum of $___________ on May
__, 2007, in accordance with the Agreement. The Obligors further promise to pay
to the order of the Holder interest on the unpaid Accreted Value hereof from
time to time outstanding at the rate or rates per annum determined pursuant to
Article II of, or as otherwise provided in, the Agreement, payable on the date
set forth in Article II of, or as otherwise provided in, the Agreement.
This Note is one of the "Notes" referred to in, and is entitled to the benefits
of and subject to the terms of, the Loan Agreement, dated as of May __, 2001 by
and among the Obligors, the Guarantor and the Lender (as amended, modified or
supplemented from time to time, the "Agreement"), which, among other things
A-1
provides for the acceleration of the maturity hereof upon the occurrence of
certain terms and conditions. Terms defined in the Agreement have the same
meanings herein.
All payments of principal and interest, if any, hereunder shall be in dollars in
immediately available funds without setoff, counterclaim or other deduction of
any nature to the Person in whose name the Note is registered at the close of
business on the Business Day immediately preceding date of payment on the
Register by wire transfer in immediately available funds to an account
designated by such Person on or prior to 12:00 noon at the location of such
designated account on the due date of such payment. Any amounts received after
such time on any date may, in the discretion of the Holder entitled thereto, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon.
Except as otherwise provided in the Agreement, if any payment of principal
hereof or interest hereon shall become due on a day which is not a Business Day,
such payment shall be made on the next following Business Day, and such
extension of time shall be included in computing the Accreted Value hereof or
accrued interest hereon, as applicable, in connection with such payment.
The obligations of the Company under this Note are guaranteed, on a senior
basis, by the Guarantor as provided in Article X of the Agreement. Attached
hereto is the notation of the Guarantor evidencing the Guarantee.
The Obligors expressly waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, and an action for amounts due hereunder
shall immediately accrue.
This Note shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to any principles of
conflict of laws to the extent that the application of the laws of another
jurisdiction is required thereby.
UNITED PAN-EUROPE COMMUNICATIONS
N.V.
By:
----------------------------------------------------
Name:
Title:
A-2
BELMARKEN HOLDING B.V.
By:
----------------------------------------------------
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇ NOTE RELATING TO GUARANTEE
The Guarantor has unconditionally guaranteed (i) the prompt payment of the
Accreted Value of and interest on the Notes by the Company to the Holder,
subject to any applicable grace period, whether at maturity, by acceleration or
otherwise, and interest on the overdue Accreted Value, if any, and interest on
any interest, if any, on the Notes, to the extent lawful, and all other payment
obligations of the Company to the Holder all in accordance with the terms set
forth in Article X of the Agreement and (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other payment obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
THE GUARANTOR
UPC INTERNET HOLDING B.V.
By:
--------------------------------------------
Name:
Title:
B-1
EXHIBIT C
FORM OF QUALIFIED LOAN
Loan Agreement
This loan agreement (this "Agreement") is to be effective as of the
date written on the signature page hereof between
[Name of Lender] (the "Lender"), a [public/private] limited liability
company organised and existing under the laws of [ ]; and
[Name of Borrower] (the "Borrower"), a [public/private] limited
liability company organised and existing under the laws of [ ].
WHEREAS
A. This Agreement is a "Qualified Loan" for purposes of the
loan agreement dated ___ May 2001 made among
Liberty-Belmarken, Inc. as Lender, Belmarken Holding B.V.
(the "Company") and United Pan-Europe Communications N.V.
("UPC") as Obligors and UPC Internet Holding B.V. as
Guarantor ("chello Holdings") (the "Belmarken Loan
Agreement").
B. Undefined capitalized terms used in this Agreement shall
have the meanings set forth in the Belmarken Loan Agreement.
NOW THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Term Loan
1.1 The principal amount (the "Principal Amount") hereof is
stated in Appendix I of this Agreement.
1.2 Subject to subclause 3 below, the Borrower will repay the
outstanding Principal Amount on ___ May 2007 (the
"Repayment Date") with unpaid interest thereon in Euros in
immediately available funds at the bank and to the account
that the Lender dictates.
1.3 The Borrower may, at any time prior to the Repayment Date,
prepay the whole or part of the outstanding Principal Amount
and shall without prejudice to clause 3 hereof, immediately
prepay the whole or part of the outstanding Principal
Amount, if the Lender so requests and if the Obligors are
required to make a mandatory prepayment to the Holders
pursuant to Section 5.2 of the Belmarken Loan Agreement. In
addition, the Borrower shall prepay the whole or part of the
outstanding Principal Amount, if payment thereof would
constitute an application of "Net Cash Proceeds" (as defined
in the Indenture) from an "Asset Sale" (as defined in the
Indenture) permitted under Section 10.16(1)(A)(1) or (2) of
C-1
the Indenture and such application would not constitute a
default under a material agreement of the Borrower or its
Affiliates in effect on ___ May 2001.
1.4 Interest shall accrue on the outstanding Principal Amount
at an interest rate to be determined from time to time by
the Lender of not less than 6% per annum (based on a 360-day
year and actual days elapsed). Accrued and unpaid interest
will be payable on the last day of each month and on the
date of each full or partial repayment of the outstanding
Principal Amount. Accrued and unpaid interest which is
overdue will be added to the outstanding Principal Amount
and interest shall accrue upon it as of the first day of
January every year.
1.5 The Lender will endorse from time to time and at such times
as the Lender shall determine the following on Appendix I of
this Agreement (as it may be amended, renewed, restated or
modified from time to time in accordance with the Belmarken
Loan Agreement):
(a) the outstanding Principal Amount on the date hereof
being the outstanding amount of loans, money
transfers, invoices sent and accrued interest owed
by the Borrower to the Lender as of the date of
this Agreement plus the outstanding amount of
loans, money transfers, invoices sent and accrued
interest subsequent to the date hereof;
(b) the amount of any pre-payments of the outstanding
Principal Amount made by the Borrower under Clause
1.3 above;
(c) the applicable interest rate from time to time
(which shall, in any case, be not less than 6% per
annum); and the basis for interest rate calculation
as described in Clause 1.4 above;
(d) the amount of interest accrued on and added to the
outstanding Principal Amount pursuant to Clause 1.4
above;
(e) the amount of money transfers added to the
outstanding Principal Amount pursuant to Clause 1.7
below; and the amount of invoices sent added to the
outstanding Principal Amount pursuant to Clause 1.8
below;
PROVIDED that the failure so to endorse Appendix I shall
not affect the Borrower's obligations hereunder.
1.6 Notwithstanding anything to the contrary in this Agreement,
Appendix I of this Agreement may be endorsed, amended and
modified by the Lender without any consent from or writing
executed by the Borrower.
1.7 Money transfers made from the Lender to the Borrower during
the term of and pursuant to this Agreement shall be added
to the outstanding Principal Amount on the value date that
C-2
money transfers were made and interest shall accrue upon it
as of that date.
1.8 Amounts equal to the amounts of invoices sent from the
Lender to the Borrower will be added to the outstanding
Principal Amount on the last day of the month they were
sent and interest shall accrue upon it as of the first of
the month following.
1.9 Subject to the terms and conditions of this Agreement, the
Lender may make additional loans to the Borrower, following
receipt by the Lender from the Borrower of a drawdown
notice substantially in the form set out in Appendix II of
this Agreement (the "Drawdown Notice")
PROVIDED that the total amount of loans,
(including loans made pursuant to a Drawdown Notice)1,
money transfers and invoices sent added to the outstanding
Principal Amount annually will not exceed the applicable
annual funding requirement budget as determined by the
Lender in its sole discretion.
1.10 All payments under this Agreement to the Lender will be
made by the Borrower without reflecting any deduction for
any set-off, suspension or counterclaim and 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 applicable law, in which case, the
relevant payment shall be increased to the extent necessary
to ensure that, after the making of such withholding or
deduction, the Lender receives (and retains, free from any
liability in respect of such deduction or withholding) a net
sum equal to the sum that it would have received had no such
withholding or deduction been required and the Borrower
shall indemnify the Lender against any losses or costs
incurred by any of them by reason of any failure of the
Borrower to make any such deduction or withholding or by
reason of any increased payment not being made on the due
date for such payment.
2. Representations and Warranties
The Borrower has all necessary corporate power and
authority to execute, deliver and perform its obligations
under this Agreement; the execution, delivery and performance
by the Borrower of this Agreement has been duly authorized by
all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered by the
Borrower and will constitute, its legal, valid and binding
obligations, enforceable against the Borrower in accordance
with its terms.
----------------------
1 Add accrued interest if appropriate.
C-3
3. Events of Default
If one or more of the following events (each herein
called an "Event of Default") shall occur and be continuing:
(a) The Borrower shall default in the payment when due of the
Principal Amount or any interest payable by it hereunder; or
(b) The Borrower shall default in the performance of any of
its other obligations under this Agreement; or
(c) The Borrower shall default in the payment when due of
any principal of or interest on any of its other
indebtedness; or any event specified in any agreement
evidencing or relating to any such indebtedness shall occur,
if the effect of such event is to cause or permit the
lenders in respect of such indebtedness to cause such
indebtedness to become due or to be prepaid in full prior to
its stated maturity;
(d) (i) A "Default" as defined in the Loan Agreement
shall have occurred and be continuing or (ii) the "Notes" as
defined under the Loan Agreement shall have become
immediately due and payable;
(e) The Borrower shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become
due; or
(f) The Borrower shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, administrator or liquidator of itself or
of all or a substantial part of its property, (ii) make a
general assignment for the benefit of its creditors, (iii)
commence a voluntary winding up, (iv) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, receivership, reorganisation,
administration, winding-up, or composition or readjustment
of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary winding up, or (vi) take any
corporate action for the purpose of effecting any of the
foregoing;
(g) A proceeding or case shall be commenced, without the
application or consent of the Borrower, in any court of
competent jurisdiction, seeking (i) its liquidation,
reorganisation, dissolution or winding-up, or the
composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, administrator,
custodian, liquidator or the like of the Borrower or of all
or any substantial part of its assets, or (iii) similar
relief in respect of the Borrower under any law relating to
bankruptcy, insolvency, receivership, reorganisation,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
C-4
judgement or decree approving or ordering any of the
foregoing shall be entered and continue unstated and in
effect, for a period of 120 or more days; or an order for
relief against the Borrower shall be entered in an
involuntary winding up; or
(h) In the opinion of the Lender, a material adverse
change has occurred in the business, operations or the
financial position of the Borrower or any event or
circumstance has occurred that could have a material adverse
effect on the Borrower's ability to perform or observe its
obligations under this Agreement or on the legality,
validity, binding effect or enforceability of this
Agreement.
THEREUPON: (i) in the case of an Event of Default
other than one referred to in paragraph (f) or (g) of this
Clause with respect to the Borrower, the Lender may, by notice
to the Borrower, declare the Principal Amount then
outstanding, and the accrued interest thereon and all other
amounts payable by the Borrower hereunder, to be forthwith due
and payable, whereupon such amounts shall be immediately due
and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly
waived by the Borrower; and (ii) in the case of the occurrence
of an Event of Default referred to in paragraph (f) or (g) of
this Clause with respect to the Borrower the Principal Amount
then outstanding, and the accrued interest thereon and all
other amounts payable by the Borrower hereunder shall
automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
4. Miscellaneous
4.1 Notices
All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers
or consents under, this Agreement) shall be given or made by
telex, facsimile or by hand in writing and telexed, transmitted
by facsimile, mailed or delivered to the intended recipient at
its "Address for Notices" specified below its name on the
signature page hereof; or, as to any party, at such other address
as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telex or facsimile, personally delivered or, in
the case of a mailed notice, upon receipt, in each case, given or
addressed as aforesaid.
4.2 Amendments
Except as otherwise expressly provided in this Agreement, any
provision of this Agreement may be waived, amended or modified
only by an instrument in
C-5
writing duly executed by the party against whom
enforcement is or will be sought.
4.3 Successors and Assigns
(a) The Borrower may neither assign its rights nor delegate
its duties under this Agreement without obtaining the
Lender's prior written consent. The Lender may assign all of
its rights and delegate its duties under this Agreement to
any affiliate or to any other person.
(b) Any reference in this Agreement to a person shall include
such person's successors and permitted assigns. This
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns.
4.4 Effectiveness
This Agreement shall become effective on the date set out on the
signature page hereto.
4.5 Complete Agreement
This Agreement, together with the exhibits and schedules to this
Agreement, is intended by the parties as a final expression of
their agreement regarding the subject matter hereof and is
intended as a complete statement of the terms and conditions of
such agreement and merges and supersedes all prior discussions,
agreements and understandings of every kind and nature among them
as to the subject matter hereof.
4.6 Enforceability
The enforceability or invalidity of any provision or provisions
of this Agreement does not render any other provision or
provisions of this Agreement unenforceable or invalid, and in
lieu of each such illegal, invalid or unenforceable provision
there shall be added automatically as a part of this Agreement a
provision as similar terms to such illegal, invalid or
unenforceable provision as may be possible, which provision shall
be legal, valid and enforceable.
4.7 Further Assurances
The parties shall do all acts and things (including the executing
of additional agreements, instruments and documents) as are
required to give effect to this Agreement (and do nothing to
jeopardise the same).
C-6
4.8 Counterparts
This Agreement may be executed in any number of counterparts with
each party executing different counterparts, each of which, when
executed, shall constitute an original and all of which together
shall constitute one instrument.
4.9 Priority of Borrower's Obligations
(a) If the Borrower is UPC, then the Borrower shall ensure that
the obligations of the Borrower hereunder shall at all times
rank pari passu with the obligations of the Borrower under
the indentures in respect of the Existing High Yield Notes
(including the Indentures).
(b) If the Borrower is a Subsidiary of UPC, then the Borrower
shall ensure that the obligations of the Borrower hereunder
shall at all times rank senior in right of payment upon
liquidation to all Investments of UPC and its Subsidiaries
(other than the Lender) in the Borrower or in any Subsidiary
of the Borrower.
(c) If the Lender is not the Company or chello Holdings, then
the Lender and the Borrower hereby each irrevocably agree
and hereby each irrevocably stipulate within the meaning of
Section 6:253 of the Dutch Civil Code by way of third party
stipulations made for free (bij wijze van onherroepelijke
derdenbedingen om niet gemaakt) for the benefit of (jegens)
the Lender under the Belmarken Loan Agreement (as defined
below) from time to time, that (a) the liabilities,
obligations and indebtedness under, pursuant to, or
evidenced by this Agreement are hereby subordinated in right
of payment upon a bankruptcy (faillissement), moratorium of
payments (surseance van betaling) or dissolution
(ontbinding) in The Netherlands of the Borrower to the prior
payment in full of the liabilities, obligations and
indebtedness under or pursuant to the loan agreement dated
as of ___ May 2001 (as amended, restated, supplemented or
otherwise modified from time to time the "Belmarken Loan
Agreement") and made among Liberty-Belmarken, Inc. as lender
("Liberty"), the Borrower and the Lender as obligors
thereunder and UPC Internet Holding B.V. as guarantor
thereunder, and (b) no payment of the liabilities,
obligations and indebtedness under, pursuant to, or
evidenced by this Agreement will be made if such payment
would result in the Borrower's violation of Section 7.2 of
the Belmarken Loan Agreement; and each of the Borrower and
the Lender confirms that the third party stipulations
contained herein are accepted by execution of the
acknowledgement set out on the execution pages hereof and
C-7
are deemed to be accepted by each third party for whose
benefit they are made once such third party has become aware
of such stipulations and has thereupon not forthwith
(onverwijld) declined (afgewezen) the same (as set out in
Section 6: 253-4 of the Dutch Civil Code).
4.10 Governing Law
This Agreement shall be governed and construed in accordance with
the laws of The Netherlands. Any and all disputes related to this
Agreement and/or any agreements arising out of this Agreement
shall be submitted to the exclusive jurisdiction of the competent
court in Amsterdam, The Netherlands.
C-8
IN WITNESS WHEREOF, the parties hereto cause this Agreement to be duly
executed on the ____ day of ____________.
[NAME OF LENDER]
By _____________________________________________
Name:
Title:
[Address of Lender]
[NAME OF BORROWER]
By _____________________________________________
Name:
Title:
[Address of Borrower]
[Where the Lender is not the Company or chello Holdings]:
ACKNOWLEDGEMENT
The Lender under the Belmarken Loan Agreement hereby acknowledges
and accepts the provisions and third party stipulations set out in clause
4.9 of this Agreement.
[---------------------------------]
as Lender under the Belmarken Loan Agreement
By:_____________________________________________
Name:
Title:
C-9
APPENDIX I
Principal Amount
-----------------------------------------------------
Principal Amount outstanding
------------------------------------------
Basis for interest rate calculation
-----------------------------------
Interest Rate [Not less than 6]%
---------------------------------------------------------
Loans made
-----------------------------------------------------------
Money transfers made
--------------------------------------------------
Invoices sent
---------------------------------------------------------
Interest accrued and added to outstanding Principal Amount
-------------
Prepayments made
------------------------------------------------------
C-10
APPENDIX II
Notice of Drawdown
From: [Name of Borrower]
To: [Name of Lender]
Dated:
Dear Sirs,
1. We refer to the loan agreement dated ______________ between
[name of Lender] and [name of Borrower] from time to time
amended, varied, novated or supplemented the "Agreement".
Terms defined in the Agreement shall have the same meaning in
this notice.
2. We give you notice that, pursuant to the Agreement and on
[date of proposed drawdown], we wish to borrow the amount of
[ ] on the terms and conditions of the Agreement.
3. We confirm that, at the date of this notice, the
representation set out in Clause 2 of the Agreement is true
and correct in all material respects and that no Event of
Default has occurred which is continuing.
Yours faithfully
..................................................
for and on behalf of
[Name of Borrower]
C-11
Schedule 2.1(a)
SCHEDULE 2.1(a)
CONDITIONS PRECEDENT WORKING LIST
The Lender agrees to fund the Loan upon delivery of the following documents,
each in form and substance satisfactory to the Lender in its sole discretion,
and, where applicable, duly executed and in full force and effect:
1. Finance Documents
(a) Loan Agreement;
(b) Notes; and
(c) Registration Rights Agreement.
2. Authorizations
(a) Officer's Certificate of:
(i) Belmarken Holding B.V.,
(ii) United Pan-Europe Communications N.V., and
(iii) UPC Internet Holding B.V.,
each, to the extent relevant, with the following language:
(i) The Company has received all governmental,
shareholder and third party consents and approvals
necessary in connection with the making of the Loan
and the other transactions contemplated by the Loan
Agreement. All applicable waiting periods have
expired without any action being taken by any
competent authority that could restrain, prevent or
impose any materially adverse conditions on the
making of the Loan and no such law or regulation is
applicable which would reasonably be expected to have
any such effect.
(ii) The representations and warranties of the Company
contained in the Loan Agreement are true and correct
in all material respects on and as of the date of the
Loan Agreement and on and as of the date hereof as if
made on and as of such date (unless stated to relate
solely to an earlier date, in which case such
representations and warranties shall be true and
correct as of such earlier date).
(iii) No action, suit, investigation, litigation or
proceeding is pending or threatened in any court or
before any arbitrator or governmental
instrumentality, and no other event or development
has occurred, that could in each case reasonably be
expected to have a Material Adverse Effect.
Schedule 2.1(a)
(iv) No Default has occurred and is continuing.
(v) All fees and expenses due to the Lender have been
paid in full.
(vi) The Company will not use the proceeds of the Loan
advanced under the Loan Agreement in a manner that
will violate Sections 98c or 207c of Book 2 of the
Dutch Civil Code.
(b) Certificates of:
(i) Belmarken Holding B.V., including:
A. Exhibit A: Constitutional Documents
B. Exhibit B: Power of Attorney from
Belmarken Holding B.V.,
Written Resolutions of the
Board of Managing Directors
of Belmarken Holding B.V.
and Written Resolutions of
the Sole Shareholder of
Belmarken Holding B.V.
C. Exhibit C: Specimen Signatures
(ii) United Pan-Europe Communications N.V., including:
A. Exhibit A: Constitutional Documents
B. Exhibit B: Power of Attorney from UPC
and Extract of the
Resolutions adopted on __
May 2001 by the Supervisory
Board of United Pan-Europe
Communications N.V.
C. Exhibit C: Specimen Signatures
(iii) UPC Internet Holding B.V., including:
A. Exhibit A: Constitutional Documents
B. Exhibit B: Power of Attorney from UPC
Internet Holding B.V.,
Written Resolution of the
Board of Managing Directors
of UPC Internet Holding
B.V. and Written
Resolutions of the Sole
Shareholder of UPC Internet
Holding B.V.
Schedule 2.1(a)
C. Exhibit C: Specimen Signatures
(c) Incumbency Certificates of:
(i) Belmarken Holding B.V.,
(ii) United Pan-Europe Communications N.V., and
(iii) UPC Internet Holding B.V.
3. Legal Opinions
Legal opinions of:
(i) Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, Denver, Colorado, legal
advisors to the Obligors; and
(ii) ▇▇▇▇▇▇▇▇ Chance, Amsterdam, The Netherlands, legal
advisors to the Obligors.
4. Other
(a) Financial Statements of UPC and UPCH for the year ended
December 31, 2000;
(b) Renewable Appointment of Agent Agreements (appointing
Corporation Services Company as agent for service of process
for each of United Pan-Europe Communications N.V., Belmarken
Holding B.V. and UPC Internet Holding B.V.)
(c) DLJ Fee Letter Waiver and ▇▇▇▇▇▇▇ Engagement Letter Waiver
(d) Evidence of payment of Bridge Loan
(e) All Requisite Intercompany Loan Documents:
(i) Amended and Restated Master Loan Agreement dated as
of May __, 2001 between UPC and the Company; and
(ii) Amended and Restated Master Loan Agreement dated as
of May __, 2001 between UPC and chello Holdings
(f) Form of Qualified Loan Agreement
(g) Letter from UnitedGlobalCom, Inc. to Liberty-Belmarken, Inc.
regarding obligations under Section 4.13.
(h) Delivery Obligation letter
Schedule 2.1(a)
(i) Such other documents as the Lender shall reasonably require.
Reminder for Liberty: Alert EU Merger Commission to the transaction
just before Agreement signed (call ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇-▇▇▇-▇▇▇-▇▇▇▇) or
▇▇▇▇▇▇ ▇▇▇ (▇▇-▇▇▇-▇▇▇-▇▇▇▇) at ▇▇▇▇▇▇ ▇▇▇▇▇ in London)
Schedule 2.1(a)
SCHEDULE 3.1(r)
INDEBTEDNESS
1. UPCD Facility Agreement
2. Promissory Note dated 9 November 2000 granted by Cable Network
Zuid-Oost Brabant Holding B.V. in favor of Discount Investment Corporation
Limited for the principal amount of ?55,000,000.
Schedule 3.1(r)
SCHEDULE 3.1(s)
INTERCOMPANY INDEBTEDNESS
(A) Indebtedness owing by the Company to UPC or any Subsidiary of UPC.
Amended and restated loan agreement between UPC as lender and the Company as
borrower dated the date hereof.
(B) Indebtedness owing by chello Holdings to UPC or any Subsidiary of UPC.
Amended and restated loan agreement between UPC as lender and chello
Holdings as borrower dated the date hereof.
(C) Indebtedness owing by UPCH to the Company and its other Subsidiaries
Qualified Loan Agreement between the Company as lender and UPCH as
borrower dated the date hereof.
Schedule 3.1(s)
SCHEDULE 3.1(t)
SUBSIDIARIES OF THE COMPANY
UPC Direct or
Name Indirect Direct Owner(s)
Ownership (%)
UPC Distribution Holding B.V. 100 UPCH
Belmarken Holding B.V. 100 UPC
UPCH 100 Belmarken Holding B.V.
UPC Holding II B.V. 100 UPCH
UPC Financing Partnership 100 UPCH and UPC Holding II B.V.
UPC France Holding B.V. 100 UPC Distribution Holding B.V.
UPC Scandinavia Holding B.V. 100 UPC Distribution Holding B.V.
Cable Network Austria Holding B.V. 100 UPC Distribution Holding B.V.
Stipdon Investments B.V. 100 UPC Distribution Holding B.V.
UPC Nederland B.V. 100 UPC Distribution Holding B.V.
UPC Belgium S.A. 100 UPC Scandinavia Holding B.V. and Cable Network
Austria Holding B.V.
UPC Norge A.S. 100 UPC Scandinavia Holding B.V.
NBS Nordic Broadband Services A.B. 100 UPC Scandinavia Holding B.V.
UPC Czech Holding B.V. 100 Stipdon Investments B.V.
Telekabel Hungary N.V. 100 Stipdon Investments B.V.
UPC Slovakia Holding B.V. 100 Stipdon Investments B.V.
UPC Romania Holding B.V. 100 Stipdon Investments B.V.
Telekabel Wien GmbH 95.0 Cable Network Austria Holding B.V.
Telekabel-Fernsehnetz Wiener Neustadt 95.0 Cable Network Austria Holding B.V.
Neunkirchen Betriebsgesellschaft mbH
Telekabel Klagenfurt GmbH 95.0 Cable Network Austria Holding B.V.
Telekabel Graz GmbH 95.0 Cable Network Austria Holding B.V.
Telekabel-Fernsehnetz Region Baden 95.0 Cable Network Austria Holding B.V.
Betriebsgesellschaft mbH
Priority Telecommunication und Internet GmbH 100 Cable Network Austria Holding B.V.
Trnavatel s.r.o. 95.0 UPC Belgium ▇.▇.
▇▇▇▇▇ Net Holding a.s. 100 UPC Czech Holding B.V.
Kabel Net Brno a.s. 100 UPC Czech Holding B.V.
Dattelkabel a.s. 100 UPC Czech Holding B.V.
INNET, spol. s.r.o. 100 Dattelkabel, a.s.
UPC Ceska republika a.s. 99.9 UPC Czech Holding B.V.
Kabel Plus Tel a.s. 99.9 UPC Ceska republika a.s.
(100%)
Sat Net spol. s.r.o. 99.9 UPC Ceska republika a.s.
(100%)
BESY Praha s.r.o. 99.9 UPC Ceska republika a.s.
(100%)
Czech Link s.r.o. 50.0 UPC Ceska republika a.s.
Kabel Plus Bratislava a.s. 99.9 UPC Ceska republika a.s.
(100%)
Schedule 3.1(t)
Kabel Plus, akciova spolocnost (Banska 99.9 UPC Ceska republika a.s.
Bystrica) (100%)
Kabel Plus Rodina s.r.o. (in liquidation) 99.9 UPC Ceska republika a.s. (80.0%) and Kabel Plus,
akciova spolocnost (Banska Bystrica) (20.0%)
Kabel Plus Vychodne Slovensko a.s. 99.9 UPC Ceska republika a.s. (48.0%) and UPC Slovensko
s.r.o. (52.0%)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇.▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ Holding B.V.
Kabeltel s.r.o. 100 Belmarken Holding B.V.
Mediareseaux S.A. 92.0 UPC France Holding B.V.
UPC France S.A. 92.0 Mediareseaux S.A. (100%)
Videopole S.A. 92.0 UPC France S.A. (100%)
A.C. Associes 91.5 Videopole S.A. (99.5%)
Cite Cable 91.7 Videopole S.A. (41.5%) and A.C. Associes (58.5%)
Cite Cable Auvergne 91.5 Cite Cable (99.8%)
Cite Cable Centre Bretagne 91.5 Cite Cable (99.8%)
Cite Cable Caladois 91.5 Cite Cable (99.8%)
Cite Cable Essonne 91.5 Cite Cable (99.8%)
Cite Cable Est 91.5 Cite Cable (99.8%)
Cite Cable Goussainville 91.7 Cite Cable (100%)
Cite Cable Haute-Saone 91.4 Cite Cable (99.7%)
Cite Cable Jurassienne 91.5 Cite Cable (99.8%)
Cite Cable Regions 91.4 Cite Cable (99.7%)
Cite Cable Saintonges 91.5 Cite Cable (99.8%)
Cite Cable Rhone Alpes 91.8 Videopole S.A. (99.8%)
Seine et Marne Videopole 92.0 Videopole S.A. (100%)
SLC Tignes 92.0 Videopole S.A. (100%)
Videopole Services 91.8 Videopole S.A. (99.8%)
Videopole Assistance 91.8 Videopole S.A. (99.8%)
Videopole Publications 91.8 Videopole S.A. (99.8%)
Bearn Bigorre Videopole 59.8 Videopole S.A. (65.0%)
Herault Videopole 92.0 Videopole S.A. (100%)
Nord Videopole 92.0 Videopole S.A. (100%)
SIRC Holding SNC 92.0 UPC France S.A. (100%)
SIRC SNC 88.4 SIRC Holding SNC (96.1%)
Somerco SARL 88.4 SIRC SNC (100%)
Rhone Vision Cable S.A.S. 90.1 SIRC SNC (49.9%) Somerco SARL (2.5%) and UPC
France S.A. (47.6%)
Reseaux Cable Cote d'Azur 92.0 UPC France S.A. (100%)
InterComm France Holding S.A. 92.0 Mediareseaux S.A. (100%)
InterComm France S.A. 92.0 InterComm France Holding S.A. (100%)
Sud Cable Services S.A. 92.0 InterComm France S.A. (100%)
Premiere Cablevision 92.0 Sud Cable Services S.A. (100%)
Cable Services de France S.A. 92.0 InterComm France S.A. (100%)
Cite Interactive 92.0 InterComm France S.A. (100%)
TME France 92.0 InterComm France S.A. (100%)
Hungary Holding Co. 100 Stipdon Investments B.V. (99.0%) and Zomerwind
Holding B.V. (1.0%)
▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ N.V.
Schedule 3.1(t)
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ N.V. (42.4%) and
Kabelkom Holding Co. (57.6%)
Szabinet Kft 100 UPC Magyarorszag Kft
UPC Direct Kft 100 Telekabel Hungary N.V.
Kabelkom Holding Co. 100 Zomerwind Holding B.V. (50.0%) and
Telekabel Hungary N.V. (50.0%)
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ N.V.
Monor Telefon Tarsasag RT 98.9 Paruse B.V. (96.2%) and Tapiotel RT (2.7%)
Tapiotel RT 100 Paruse B.V.
Monor CATV Kft 98.9 Monor Telefon Tarsasag RT (100%)
Zuglo Kft 100 UPC Magyarorszag Kft
Satimax Kft 100 UPC Magyarorszag Kft
UPC Haarlem B.V. 100 UPC Nederland B.V.
A2000 Holding N.V. 100 UPC Nederland B.V.
A2000 Hilversum B.V. 100 A2000 Holding N.V.
Kabeltelevisie Amsterdam B.V. 100 A2000 Holding N.V.
Cable Network Brabant Holding B.V. 100 UPC Nederland B.V.
Telekabel Beheer B.V. 100 UPC Nederland B.V.
Telekabel B.V. 100 Telekabel Beheer B.V.
Algemene Eksploitatie Maatschappij B.V. 100 Telekabel B.V.
Telekabel Omroep Facilitair Bedrijf B.V. 100 Telekabel Beheer B.V.
UniPort Communications B.V. 100 UPC Nederland B.V.
UPC KabelTV & Telecom B.V. 100 UPC Nederland B.V.
UPC Nederland Services B.V. 100 UPC Nederland B.V.
GelreVision Holding B.V. 100 UPC Nederland B.V.
Telekabel Hungary II B.V. 100 UPC Romania Holding B.V.
Somax L.E. 100 Telekabel Hungary II B.V.
UPC Romania Holding VoF 70.0 UPC Romania Holding B.V.
Scan Invest I B.V. 100 UPC Romania Holding B.V.
Diplomatic International Comimpex SRL 100 Scan Invest I B.V.
UPC Romania, Inc. 100 UPC Romania Holding B.V.
Multicanal Holdings SRL 100 UPC Romania, Inc.
UIH Romania Ventures, Inc. 100 UPC Romania Holding B.V.
Control Cable Ventures SRL 100 UIH Romania Ventures, Inc.
Selectronic SRL 100 UPC Romania Holding B.V.
UPC Somax B.V. 100 UPC Romania Holding B.V.
Portal Export Import SRL 100 UPC Romania Holding B.V.
UPC Sverige AB 100 NBS Nordic Broadband Services AB
Starport S.A. 100 UPC Sverige AB
Stjarn TV AB 100 UPC Sverige AB
Space Net AB 100 UPC Sverige AB
Stockholms Stads Television AB 100 UPC Sverige AB
Stjarn TV Natet AB 100 UPC Sverige AB
Stjarnen Multimedia Varlden (Swedish) AB 100 UPC Sverige AB
Binan Investments B.V. 100 Belmarken Holding B.V.
Cable Network Holding B.V. 100 Binan Investments B.V.
United International Investments GP 100 Binan Investments B.V. (50.0%) and Cable Network
Holding B.V. (50.0%)
Schedule 3.1(t)
Cable Network Zuid-Oost Brabant Holding B.V. 100 Binan Investments B.V.
U.C.T. Netherlands B.V. 100 Cable Network Zuid-Oost Brabant Holding B.V.
Tishdoret Achzakot Ltd. 100 U.C.T. Netherlands B.V. (99.3%) and Cable Network
Zuid-Oost Brabant Holding B.V. (0.7%)
Schedule 3.1(t)
SCHEDULE 3.1(w)(iv)
The issued and outstanding share capital of UPCD is subject to the following
Lien:
Share pledge in favour of TD Bank Europe Limited dated 31 October, 2000 executed
by UPCH in respect of its interest in the share capital of UPC Distribution
Holding B.V.
Schedule 3.1(w)(iv)
SCHEDULE 3.1(w)(v)
The issued and outstanding share capital of chello Holdings is subject to the
options contained in the following agreements:
Option Agreement between chello Holdings and the Company dated the date hereof,
granting the Company the option to purchase one ordinary share in chello
Holdings, such option to expire upon termination of this Agreement.
Option Agreement dated 28 July, 2000 between chello Holdings and the Company,
granting the Company the option to purchase one ordinary share in chello
Holdings, such option to expire upon termination of the Bridge Loan Agreement.
Schedule 3.1(w)(v)