EXHIBIT 10.15
SALES AGREEMENT
between
Stichting Combivisie Regio
and
Setelco B.V.
and
United Pan-Europe Communications N.V.
dated 17 December 1997
TABLE OF CONTENTS
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Article Heading Page
------- ------- ----
1. Definitions 4
2. Purchase and Sale of Assets and Take-Over of Liabilities 6
3. Purchase Price and Payment 7
4. Arrangement of the Closing and Completion 8
5. Transfer of Contracts, Powers of Attorney and Licences 9
6. Accruals and Deferrals 10
7. Operation of the Cable Network until the Closing 12
8. Operation of the Cable Network after the Closing 14
9. Representations and Warranties 15
10. Indemnification 15
11. Environmental Matters 16
12. Employees 16
13. Tax Matters 17
14. Other Provisions 17
15. Applicable Law and Disputes 18
Appendices
----------
Appendix I Administrative Records
Appendix II Contracts
Appendix III Powers of Attorney and Licences
Appendix IV Immovable Property
Appendix V Moveable Property
Appendix VI Employees
Appendix VII Combivisie Representations and Warranties
Appendix VIII UPC Representations and Warranties
Appendix IX Investments
Appendix X 1996 Annual Accounts of Combivisie and Setelco
Appendix XI Municipalities
Appendix XII Claims and Procedures
Appendix XIII Agreements with the Municipalities
Appendix XIV Deed of Transfer of the Cable Network
Appendix XV Management Structure
SALES AGREEMENT CONCERNING THE ASSETS OF
----------------------------------------
STICHTING COMBIVISIE REGIO
--------------------------
THE UNDERSIGNED:
1. Stichting Combivisie Regio, a foundation having its registered office in
--------------------------
Helmond, the Netherlands, hereinafter to be called `SCR'; and
2. Setelco B.V., a private limited liability company having its registered
------------
office in Helmond, hereinafter to be called `Setelco';
hereinafter jointly to be called `Combivisie';
and
3. United Pan-Europe Communications N.V. (whose name was United and Philips
-------------------------------------
Communications B.V. until 11 December 1997), a public limited liability
company, having its registered office in Eindhoven, the Netherlands,
hereinafter to be called `UPC',
WHEREAS:
a. UPC on 24 May 1996 made an offer, subject to conditions, on the assets of
Combivisie, which offer Combivisie accepted by letter of 22 July 1996;
b. UPC and Combivisie recorded the agreements made in a Declaration of Intent
dated 20 December 1996;
c. UPC and Combivisie now wish to draw up a detailed agreement relating to the
sale by Combivisie to UPC of its assets, all of this subject to the
following conditions and stipulations.
HAVE AGREED AS FOLLOWS:
1. Definitions
------------------
1.1 In this Agreement the terms written with a capital letter have the
following meaning, unless the context indicates otherwise:
Connections: Single connections to the Cable Network
Assets: The assets referred to in Article 2.1
Administrative
Records: The (electronically) processable customers
file listing all of the subscribers, in any
event consisting of the address data and data
on payment behaviour and programme package,
all other administrative files and data
files, (working) drawings, building plans,
technical descriptions, books and records
relating to the Cable Network, as specified
in Appendix I to this Agreement.
Balance Sheet Date: 31 December 1996.
Completion: The date referred to in Article 4.1.
Closing: The closing referred to in Article 4.1.
Consumer Price
Index: The consumer price index figure, series for
all households, calculated by the Dutch
Central Statistics Office (CBS), for the
annual period preceding the calendar year in
which the index is applied.
Contracts: The contracts specified in Appendix II to
this Agreement.
Municipalities: The municipalities affiliated with Combivisie
and referred to in Appendix XI to this
Agreement.
Investments: The investments referred to in Article 7.2.
Annual Accounts: The annual accounts for the 1996 financial
year of SCR and Setelco, attached to this
Agreement as Appendix X.
Cable Network: The cable broadcasting installations
operated by Combivisie pursuant to the powers
of attorney under the Wet op de
telecommunicatievoorzieningen (Dutch
Telecommunications Act) in the
Municipalities, consisting of the following
property and rights:
(i) all cables, cable works,
amplification and other equipment,
other guiding devices and
connections, user connections and
other infrastructure connections,
all of this from the receiving
station up to and including the wall
socket at the subscriber and
including the `connecting networks'
and all conduits and cable ducts, if
any, through which the cables and
cable works referred to here have
been led;
(ii) maintenance and repair equipment,
parts and stocks, tools and means of
transport;
(iii) work in progress.
Purchase Price: The purchase price referred to in
Article 3.1.
Powers of Attorney: The powers of attorney to install, maintain
and operate the Cable Network pursuant to the
Dutch Telecommunications Act that have been
granted to SCR, all of this as specified in
more detail in Appendix III to this
Agreement.
Immovable Property: The immovable property that Combivisie uses
in the operation of the Cable Network,
including the immovable property specified in
Appendix IV.
Agreement: This sales agreement, including the relevant
Appendices and any other implementation deeds
or agreements.
Liabilities: The liabilities referred to in Article 2.3.
Parties: Combivisie and UPC, unless the context
indicates otherwise.
Programme Council: The programme council referred to in
Article 8.3.
Moveable Property: The moveable property that Combivisie uses in
the operation of the Cable Network, including
the immovable property specified in
Appendix V.
Postponed Payment: The payment referred to in Article 3.3, which
is part of the Purchase Price.
UPC Group Company: Any company affiliated with UPC in a group.
Licences: The regional infrastructure licences granted
to SCR pursuant to the Voorzieningenwet
Kabelgebonden Telecommunicatie Infrastructuur
(Cable Telecommunication Infrastructure
Facilities Act) and specified in
Appendix III.
Employees: The employees referred to in Article 12.
2. Purchase and Sale of Assets and Take-Over of Liabilities
--------------------------------------------------------
2.1 With due observance of the provisions and conditions of this Agreement,
Combivisie, as at the Closing, sells and, in so far as possible, delivers
to UPC, which hereby purchases from Combivisie and, in so far as
possible, accepts the ownership of the following assets (the `Assets'):
(i) the Cable Network, on the understanding that in so far as any
element or part of the Cable Network is by accession part of any
immovable property belonging to third parties, Combivisie hereby
sells to UPC all rights of use or other rights that Combivisie has
with regard to such elements or parts;
(ii) the Immovable Property;
(iii) the Moveable Property;
(iv) the Administrative Records;
(v) the Powers of Attorney, with due observance of the provisions of
Article 5.2;
(vi) the Licences, with due observance of the provisions of Article 5.2;
(vii) Combivisie's rights under the Contracts, in so far as such rights
relate to the period after the Closing, and with due observance of
the provisions of Article 5.1;
(viii) all other rights that Combivisie may have in connection with the
operation of the Cable Network.
2.2 UPC has the right as at the Closing to substitute a UPC Group Company for
itself under this Agreement, in which case UPC guarantees the fulfilment of
all obligations under this Agreement by such UPC Group Company.
2.3 With due observance of the provisions and conditions of this Agreement, UPC
hereby accepts and takes over from Combivisie the obligations under the
Contracts (jointly referred to as the `Liabilities') as from the Closing,
all of this in so far as the Contracts are transferred to UPC in accordance
with the provisions of Article 5.1. The parties agree that UPC will take
over only the Liabilities relating to the period after the Closing and is
not required under this Agreement to take over any other obligation or debt
of Combivisie or third parties. Combivisie indemnifies UPC against rights
and claims of third parties with regard to the Cable Network or its
operation, the other Assets and the Liabilities, in so far as such rights
and claims relate to the period up to and including the Closing, and
Combivisie will hold UPC harmless from all losses and reasonable costs that
UPC suffers or incurs as a result of such rights and claims.
3. Purchase Price and Payment
--------------------------
3.1 Purchase Price
--------------
The purchase price of the Assets that UPC owes Combivisie amounts to NLG
200,000,000 (two hundred million Dutch guilders), excluding VAT, to be
increased or decreased by the correction that will be made pursuant to the
provisions of Article 3.2, as well as the correction that will be made in
accordance with Article 7.3 (the `Purchase Price').
UPC and Combivisie assume that no VAT is due with regard to the provisions
of this Agreement. If it is nevertheless established at a later date that
VAT is due, the Purchase Price will be increased by the VAT due in that
case.
3.2 Correction of the Purchase Price
--------------------------------
The Purchase Price is based on the Parties' assumption that the Cable
Network as at the Closing will have 140,000 (one hundred and forty
thousand) Connections. In the event
that as at the Closing the Cable Network has more or fewer Connections, the
Purchase Price will be corrected in accordance with the following formula:
P = (Conn. / 140,000) x NLG 200,000,000
in which P = Purchase Price and
Conn = number of Connection as at the Closing.
The number of Connections as at the Closing must be evidenced by a
statement to be drawn up as at the Closing by an independent chartered
accountant (registeraccountant), which statement will be presented to UPC
by Combivisie.
3.3 Payment
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The Purchase Price will be paid by UPC on the date of Completion as
follows:
(a) Upon the Closing, UPC will pay Combivisie 95% (ninety-five percent)
of the Purchase Price into bank account ▇▇.▇▇.▇▇.▇▇▇ of Combivisie
with BNG in The Hague, the Netherlands, in such a way that this
amount will be at Combivisie's disposal as of the aforesaid date.
(b) Upon the Closing, UPC will pay the remaining 5% (five percent) of
the Purchase Price into a blocked bank account in the name of and to
the credit of Combivisie (the `Postponed Payment'). The Postponed
Payment will be interest-bearing as from the Closing at the deposit
interest rate then applicable and will be made available to
Combivisie by ▇▇▇ ▇▇ months after the Closing by deblocking of the
bank account and furthermore in the manner indicated above under
(a), on the understanding that the balance of any compensation made
in accordance with Article 10 of this Agreement will be deducted
from the Postponed Payment during this period. The bank account will
be deblocked by means of written approval from UPC and Combivisie
jointly.
4. Arrangement of the Closing and Completion
-----------------------------------------
4.1 Time and Place of the Closing and Completion
--------------------------------------------
The beneficial closing of the transactions to which this Agreement relates
will take place on 1 January 1998 (the `Closing'), which means that the
beneficial ownership of the Assets will be transferred to UPC by Combivisie
as of the Closing. The legal ownership of the Assets will be transferred at
the office of ▇▇▇▇▇▇▇▇▇ en ▇▇▇▇▇▇, civil-law notaries, in Helmond, the
Netherlands, on 5 January 1998 (`Completion'). If, as a result of
circumstances for which UPC is not to blame, the Closing does not take
place by 1 January 1998 at the latest, UPC will have the right to dissolve
this Agreement, without UPC owing any damages, or to reconsider its offer
on the Assets, in which case the parties will consult in good faith on an
amendment of the conditions of this Agreement.
4.2 Completion Procedure
--------------------
Upon Completion, all of the following actions will be performed:
(i) UPC will pay Combivisie the Purchase Price in the manner
described in Article 3.3 and UPC will prove to Combivisie's
satisfaction that the Purchase Price has been transferred to the
bank accounts referred to in Article 3.3 (a) or 3.3 (b), as the
case may be.
(ii) Combivisie and UPC will sign:
(a) a deed of transfer of the Cable Network in the form of
Appendix XIV to this Agreement;
(b) notarial deeds of purchase and sale of the Immovable
Property and registration of those deeds in the Land
Registry;
(c) a deed of assignment as referred to in Article 7.4 of this
Agreement;
(d) all other documents that are needed to effect the transfer
of Assets and Liabilities involved in this purchase and
sale.
(iii) Combivisie will provide UPC with or transfer to UPC:
(a) in so far as available, written proof of the approval of
the other parties whose Contracts will be transferred to
UPC with due observance of the provisions of Article 5.1;
(b) the signed accountant's statements referred to in
Article 3.2 and 7.3;
(c) written confirmation of the correctness of the
representations and warranties set out in Appendix VII to
this Agreement at the time of the Closing.
(iv) UPC will provide Combivisie with:
(a) written confirmation of the correctness of the
representations and warranties set out in Appendix VIII to
this Agreement at the time of the Closing.
4.3 Actions after Completion
------------------------
If and when UPC so requests after Completion, Combivisie will, in so far
as necessary, with the co-operation of UPC, perform or commission all
further actions that may reasonably be necessary to render this Agreement
fully effective, including but not limited to the signature of further
deeds and other documents.
5. Transfer of Contracts, Powers of Attorney and Licences
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5.1 Approval of Transfer of Contracts
---------------------------------
Prior to the Closing, Combivisie will make every reasonable effort to
obtain the written approval of the other parties to the Contracts for the
transfer to UPC of the rights and obligations under those Contracts. UPC
undertakes to provide every co-operation reasonably requested by
Combivisie, including the co-operation that is needed to release
Combivisie from its obligations under the Contracts.
5.2 Substitution of UPC as the Holder of Power of Attorney
------------------------------------------------------
Prior to the Closing, Combivisie will make every reasonable effort to
ensure that as at the Closing:
(i) the Powers of Attorney are withdrawn by the issuing institutes,
while at the same time new, equivalent powers of attorney are
granted to UPC; and
(ii) the Licences are transferred to UPC,
as a result of which UPC will as of the Closing have at its disposal the
Powers of Attorney and the Licences that relate to the operation of the
Cable Network.
UPC undertakes to provide every co-operation that Combivisie may
reasonably request.
5.3 Licences or Powers of Attorney Applied for by Combivisie
--------------------------------------------------------
Combivisie will furthermore make every reasonable effort to ensure that
all of the other powers of attorney or licences that are or have been
applied for by Combivisie prior to the Closing in connection with the
operation of the Cable Network will be acquired and transferred to UPC
prior to the Closing in accordance with the provisions of Article 5.2, or
will be issued directly to UPC by the issuing institutes.
5.4 No Approval Obtained
--------------------
If upon the Closing no approval has been obtained from an other Party to
any Contract or from the issuing institute with regard to any Power of
Attorney or Licence, if and in so far as such approval is required, or if
any other licence or power of attorney as referred to in the preceding
paragraph has not been granted to UPC by the Closing at the latest, the
Closing will nevertheless take place, but the Parties will continue their
efforts as referred to in Article 5 after the Closing as well until those
efforts cannot reasonably be expected of them any longer. As long as any
Power of Attorney or Licence has not yet been obtained by UPC pursuant to
this Article 5, Combivisie will fulfil the obligations pursuant to that
Power of Attorney or Licence at the instructions and for the account and
risk of UPC.
6. Accruals and Deferrals
----------------------
6.1 Income and Expenditure from Assets and Liabilities
--------------------------------------------------
The Parties agree that the income and expenditure that arise from the
Assets and/or Liabilities will be for the account of UPC as from the
Closing in the sense that:
(i) Combivisie will receive all proceeds and bear all costs that
arise from the Assets and/or Liabilities during the period up to
and including the Closing; and
(ii) UPC will receive all proceeds and bear all costs that arise from
the Assets and/or Liabilities after the Closing.
6.2 Amounts Received, Amounts Prepaid, Amounts to be Paid and Amounts to be
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Collected
---------
The following has been agreed with regard to the amounts that have been
paid or received by Combivisie and amounts that are to be paid or
collected by Combivisie prior to or upon the Closing and that relate to a
period that commences prior to the Closing and ends after the Closing:
(i) All amounts that Combivisie receives with regard to the Assets
and/or Liabilities prior to or upon the Closing, including
subscription fees paid by the users of the Cable Network and
contributions paid by programme providers, will, if and in so far
as they relate to the period after the Closing, be paid to UPC by
Combivisie.
(ii) All amounts that Combivisie pays with regard to the Assets and/or
Liabilities prior to or upon the Closing will, if and in so far
as they relate to the period after the Closing, be reimbursed to
Combivisie by UPC.
(iii) All amounts that are payable by Combivisie with regard to the
Assets and/or Liabilities upon the Closing and that are not
otherwise accepted pursuant to this Agreement will, if and in so
far as they relate to the period after the Closing, be reimbursed
to Combivisie by UPC.
(iv) All amounts that are payable to Combivisie with regard to the
Assets and/or Liabilities upon the Closing and that are not
otherwise transferred pursuant to this Agreement will, if and in
so far as they relate to the period after the Closing, be paid to
UPC by Combivisie.
6.3 Statement and Payment
---------------------
Combivisie (with such co-operation of UPC as Combivisie may reasonably
require) will as soon as possible and in any event not later than 120 days
after the Closing, draw up a statement of all amounts referred to in
Article 6.2 as at the Closing. Without prejudice to the provisions of
Article 6.4, Combivisie or UPC will pay the other Party an amount upon the
Closing or as soon as possible thereafter that is equal to the balance
specified
in that statement.
6.4 Disputes
--------
If UPC disputes the correctness of the statement drawn up by Combivisie in
accordance with Article 6.3, it shall immediately pay the amount that is
not disputed or Combivisie will pay that amount, as the case may be. If
UPC and Combivisie do not agree on the statement within 60 days after
receipt of the relevant statement, UPC may refer the case to an
independent office of chartered accountants that has been selected by
Combivisie and UPC in consultation or, if they do not agree, that has been
appointed by the president of the NIVRA (Royal Netherlands Institute of
Chartered Accountants) at the request of either Party. The accountants
thus appointed will settle the case by means of binding advice. The
accountants will be instructed to decide on the case as soon as possible
and in any event within 60 days after being so instructed. Combivisie or
UPC will pay the balance fixed within five days after it was fixed. The
costs of the binding advice referred to here will be borne by the parties
in the proportion determined by the accountants.
6.5 Amounts Received or Paid after the Closing
------------------------------------------
If after the Closing:
(i) Combivisie receives or makes payments with regard to the Assets
and/or Liabilities that relate (in part or in full) to a period
that commences upon or after the Closing; or
(ii) UPC receives or makes payments with regards to the Assets and/or
Liabilities that relate (in part or in full) to a period that ends
upon or prior to the Closing,
the provisions of this Article 6 will apply accordingly, on the
understanding that the Party that makes or receives the payment must inform
the other Party accordingly and that payment is in any event due within
seven (7) days after receipt or payment of the relevant amounts by
Combivisie or UPC.
7. Operation of the Cable Network until the Closing
------------------------------------------------
7.1 Continuation of Customary Management
------------------------------------
Until the Closing, Combivisie will continue the operation of the Cable
Network in the customary manner, in accordance with the management
conducted in the past and in accordance with the provisions of Appendix XV
to this Agreement relating to the management structure, and Combivisie will
not make any decisions or enter into any agreements that deviate therefrom,
unless UPC grants its written approval, all of this without prejudice to
the following provisions.
7.2 Investments; Expansion and Modification of the Cable Network
------------------------------------------------------------
Combivisie is currently replacing the main structure of the Cable
Network with glass fibre cables, replacing the terminal and group
amplifiers and making the Cable Network `interactively suitable'. The
investments referred to in this article (the `Investments') are
described in more detail in Appendix IX to this Agreement. The costs
involved in the Investments are borne by Combivisie with due observance
of the provisions of the following paragraph.
7.3 Implementation of the Investments
---------------------------------
UPC must approve the Investments that are made during the period until
the Closing before such Investments are made. Combivisie has set aside
an amount for the Investments of NLG 45,250,000 (forty-five million two
hundred and fifty thousand Dutch guilders). In so far as the aforesaid
reservation is not spent on the Investments prior to the Closing, the
remaining amount will be set off against the Purchase Price. UPC
declares that it will invest the same amount as the unspent amount
referred to in the preceding sentence for the benefit of the Cable
Network after the Closing, reduced, however, by the savings realised on
the Investments prior to the Closing, which savings are the result of
UPC's efforts. Those savings will be determined by Combivisie and UPC
jointly in close consultation prior to the Closing.
During the period until the Closing, Combivisie will not make any
essential investments other than the Investments referred to in this
Article or incur any expenses (other than in the context of the
customary management as referred to in Article 7.1) without UPC's prior
approval.
All Investments made by Combivisie until the Closing must be evidenced
by a statement to be drawn up as at the Closing by an independent
chartered accountant, which statement will be presented to UPC by
Combivisie.
The amount to be invested in the Cable Network by UPC after the Closing
in accordance with this paragraph must be evidenced by six-monthly
written reports to be presented to Combivisie by UPC, the first of
which will be provided by UPC six months after the Closing.
7.4 Agreements with the Municipalities
----------------------------------
Prior to the Closing, Combivisie will conclude an agreement with each
of the Municipalities in the form of Appendix XIII to this Agreement.
As at the Closing, Combivisie will assign the rights arising from those
agreements to UPC by means of a deed of assignment to be drawn up
between the Parties.
Combivisie declares that it is aware that the conclusion of the
aforesaid agreements by Combivisie with all, and not several, of the
Municipalities is an essential element for UPC in order to proceed with
the Closing under the conditions laid down in this Agreement.
All of the aforesaid agreements must be signed not later than six weeks
prior to the Closing by Combivisie and the Municipalities or, if that
proves to be impossible in
practice, the signature by the relevant Municipality and Combivisie
must be promised to UPC in writing, absent which signature or promise
UPC will have the right to renegotiate the conditions of the Sales
Agreement with Combivisie.
8. Operation of the Cable Network after the Closing
------------------------------------------------
8.1 Subscription Fee
----------------
The average subscription fee for the basic package will be NLG 18,73
(eighteen Dutch guilders and seventy-three cents), excluding VAT, per
month as at 1 January 1999. That price may be adjusted as of 1 January
1999 to the change in the Consumer Price Index. In so far as UPC owes
third parties a compensation as from 1 January 1999 for passing on
programmes that are part of the basic package (which includes
compensation for copyrights), UPC may then pass on this compensation in
the price of the subscription to the basic package.
8.2 Continuation of the Basic Package
---------------------------------
UPC will maintain the size of the basic packages consisting of uncoded
radio and television programmes that (as evidenced by the channels
card) apply at the moment of the offer by UPC, as referred to in the
recitals (i.e. 24 May 1996) after the Closing in any event until 1
January 2005, unless legal regulations provide otherwise. Any changes
in the programmes offered via the basic package will be presented for
advice to the Programme Council, except in so far as otherwise provided
by law.
8.3 Programme Council
-----------------
The parties will draw up a statute for the appointment of the members
of a programme council (the `Programme Council'). The object of this
statute is to secure the advice of the Programme Council with regard to
the content of the basic package. The statute will also provide for the
possibility of having the Programme Council merge in a regional context
with similar institutes, except in so far as otherwise provided by law.
8.4 Integration with UPC Group Company
----------------------------------
After the Closing (unless it is undesirable from a tax perspective) the
activities of SCL, Setelco and Kabeltelevisie Eindhoven N.V. (an UPC
Group company) will be concentrated into one legal entity, in which
respect the current activities of Setelco will be incorporated into the
marketing and sales division for the benefit of the entire integrated
company.
8.5 Name and Registered Office
--------------------------
1. Without prejudice to the provisions of Article 8.4, the
businesses of Combivisie and Kabeltelevisie Eindhoven N.V.
will as of the Closing be jointly conducted under one new
name.
2. UPC will register the new combined business in the Brandevoort
district, which district is located at roughly 6 kilometres'
distance from the centre of
Eindhoven and at roughly 4 kilometres' distance from Helmond.
If UPC invokes force majeure on the basis of which registration
in the aforesaid district is not possible, UPC will consult
with Combivisie.
9. Representations and Warranties
---------------------------------------
9.1 Combivisie Representations and Warranties
------------------------------------------
Combivisie represents and warrants vis-a-vis UPC the correctness of each
of the statements relating to SCR and Setelco as set out in Appendix VII
at the date of conclusion of this Agreement, as well as (except in so far
as expressly indicated otherwise) at the time of the Closing.
9.2 UPC Representations and Warranties
----------------------------------
UPC represents and warrants vis-a-vis Combivisie the correctness of each
of the statements set out in Appendix VIII at the date of conclusion of
this Agreement, as well as (except in so far as expressly indicated
otherwise) at the time of the Closing.
10. Indemnification
---------------
10.1 Combivisie will indemnify UPC against all claims and rights of third
parties and will compensate UPC for all damage and reasonable costs
related to:
a. the incorrectness of any statement set out in this Agreement,
including the representations and warranties set out in Appendix
VII;
b. the non-fulfilment by Combivisie of any obligation set out in
this Agreement.
Amounts that are payable to UPC by Combivisie pursuant to this
indemnification may be deducted by UPC from the Postponed Payment that
UPC owes Combivisie pursuant to Article 3.3 of this Agreement, without
prejudice to UPC's right to collect any deficit in excess of the amount
of the Postponed Payment from Combivisie, and provided that the
indebtedness of the aforesaid amounts has been established by agreement
or by a court order.
10.2 UPC will indemnify Combivisie against all claims and rights of third
parties and will compensate Combivisie for all damage and reasonable
costs related to:
a. the incorrectness of any statement set out in this Agreement,
including the representations and warranties set out in Appendix
VIII;
b. the non-fulfilment by UPC of any obligation set out in this
Agreement.
11. Environmental Matters
---------------------
11.1 Combivisie declares that it is not in violation of any law or regulation
with regard to the environment that applies to the business or the
Assets, including in particular the Immovable Property of Combivisie.
11.2 Combivisie will indemnify UPC against all claims and rights of third
parties and will compensate UPC for all damage and reasonable costs
related to the pollution of the ground or ground water belonging to the
Assets that took place prior to the Closing, in so far as the law on
which the claim or right is based entered into force prior to the Closing
and with the exception of claims and rights that relate to pollution of
ground or ground water with regard to Immovable Property of Combivisie
which, as evidenced by a written statement of the competent
(environmental) institutes, has been found to be suitable for use in
accordance with the provisions of the zoning plan that applies at the
time of the Closing.
12. Employees
---------
12.1 Transition of Employees
-----------------------
As from the Closing and under the conditions set out in this Agreement,
UPC will take over from Combivisie all rights and obligations under the
employment agreements of Combivisie's employees listed in Appendix VI (in
so far as such employees are still employed by Combivisie immediately
prior to the Closing), hereinafter to be called the `Employees'.
12.2 Maintaining of Jobs and Employment Conditions
---------------------------------------------
UPC guarantees that the jobs of the Employees will be maintained for a
period of five (5) years after the Closing, unless a shorter, limited
duration has been agreed in the individual employment agreements. UPC
guarantees that for a period of five (5) years after the Closing the
employment conditions of the Employees will be at least equivalent to the
employment conditions that apply at SCR or Setelco on the date of this
Agreement.
12.3 Pension and Early Retirement
----------------------------
UPC will maintain the scheme applicable to the Employees with regard to
early retirement and pension for a period of at least five (5) years
after the Closing.
If and in so far as they have not or not yet fulfilled their obligations
with regard to pensions and early retirement towards the pension insurer
and/or the Employees, Combivisie will transfer an amount to UPC equal to
the premiums yet to be paid or the other liabilities over the period
until the Closing. Combivisie will ensure that all Employees are insured
with the same pension insurer (Aegon) prior to the Closing.
If UPC so requests, Combivisie hereby undertakes that it will make every
effort to have the pension insurer referred to in the preceding sentence
co-operate in the transfer of the accrued pension rights and the relevant
cash value to UPC's pension insurer.
12.4 Expansion of the Workforce
--------------------------
During the period until the Closing the parties will decide in
consultation which management vacancies at Combivisie must be filled.
Combivisie will keep UPC informed of any other vacancies that arise
and/or are filled.
13. Tax Matters
-----------
Without prejudice to the provisions of Article 3.1 concerning VAT, all
taxes and other charges related to the performance of this Agreement and
the transactions provided for herein will be paid by the Party that is
designated by law as the payer of the relevant tax or charge.
14. Other Provisions
----------------
14.1 Entire Agreement
----------------
This Agreement is the entire agreement between the Parties with regard to
the transactions for which this Agreement provides. This Agreement
replaces all earlier written or oral agreements and arrangements between
the Parties.
14.2 Amendments
----------
Any amendments to this Agreement can be made only by valid procedure and
will enter into force only if they have been agreed in writing and have
been lawfully signed by all of the Parties.
14.3 Invalid Provisions
------------------
If a provision included in this Agreement is deemed to be invalid or
unenforceable, the remaining provisions will be interpreted as if such
invalid or unenforceable provision was not included in this Agreement,
and such an invalid or unenforceable provision will then be deemed to
have been replaced by a valid provision that is as close as possible to
the Parties' intention at the time of the inclusion of the original
provision.
14.4 Costs
-----
Unless this Agreement provides otherwise, each Party will bear its own
costs incurred in connection with the preparation of this Agreement and
the transactions for which it provides. The costs referred to in Article
4.2 will be shared by UPC and Combivisie on a 60 (UPC)/40 (Combivisie)
basis.
14.5 Notifications
-------------
All notifications or announcements related to this Agreement will be
given and made by registered post with acknowledgement of receipt (with a
copy by fax).
14.6 Assignability
-------------
Without prejudice to the provisions of Article 2.1, the Parties may
assign this Agreement and their respective rights and obligations under
this Agreement only with the written approval of the other Party, which
approval will not be refused on unreasonable grounds.
14.7 Announcements
-------------
The subscribers who are connected to the Cable Network will be informed
by UPC and Combivisie jointly, in time and correctly, about the
provisions of this Agreement, in so far as relevant to them. Any press
releases concerning the provisions of this Agreement will also be drawn
up by the parties in consultation.
15. Applicable Law and Disputes
---------------------------
15.1 Applicable Law
--------------
This Agreement is governed by Dutch law.
15.2 Disputes
--------
All disputes arising from or related to this Agreement and/or any
agreement arising from this Agreement will be submitted to the competent
court in Amsterdam, unless this Agreement provides otherwise.
Agreed and signed in two original copies in Helmond, the Netherlands /on
December 17, 1997.
Stichting Combivisie United Pan-Europe Setelco B.V.
Regio Communications N.V
/s/ J. ▇.▇. ▇▇▇▇▇▇ /s/ ▇.▇. ▇▇▇▇▇▇▇ /s/ W. Zaeyen
by: J. ▇.▇. ▇▇▇▇▇▇ by: ▇.▇. ▇▇▇▇▇▇▇ by: W. Zaeyen
position: Chairman position: Regional President UPC position: Director
Land purchase agreements yet to be completed:
1. a plot of land on the corner of Lod. Van Deyssellaan/P.C. Ballingslaan in
Bladel measuring 42 m2 (section number not yet known) for the
construction of a Local Centre;
2. a plot of land in ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇ (Section A,
number 1417) for the construction of a Local Centre;
3. a plot of land in Boekel for the tower located there (civil-law notaries'
office ▇▇▇▇▇ en Beks in Gemert). This subsoil and tower will be sold on
to Libertel immediately after they are purchased.
Appendix VII
Representations and Warranties of Combivisie
Appendix VII - Representations and Warranties of Combivisie
-----------------------------------------------------------
A Status of SCR and Setelco
-------------------------
A.1 SCR and Setelco have been validly incorporated and registered in the
Trade Register as a foundation and as a limited liability company,
respectively. No resolution has been adopted to dissolve or liquidate
SCR or Setelco. No application has been filed for a suspension of
payments and no petition has been filed in the bankruptcy of SCR or
Setelco, nor has any attachment been levied on their assets or on part
of their assets.
A.2 All approvals and resolutions required for the conclusion and
performance of this Agreement and the other agreements provided for in
this Agreement have been obtained and adopted, respectively. This
Agreement is therefore enforceable and the other aforesaid agreements
will therefore be enforceable vis-a-vis Combivisie after signature, in
accordance with the provisions set out therein.
A.3 The signature and observance of this Agreement by Combivisie is not in
conflict with the law, the provisions of any agreement to which
Combivisie is a party, or the provisions of any judgment of a judicial
body or administrative body to which Combivisie is subject.
B The Assets
----------
B.1 Except in so far as otherwise provided in this Agreement, Combivisie
has the full and unencumbered ownership of all of the Assets and is
entitled to transfer the Assets.
B.2 Combivisie has the exclusive and unlimited right to operate the Assets
and no agreements or arrangements with third parties apply in that
respect, except in so far as otherwise expressly provided in this
Agreement.
B.3 During the period until the Closing, the Investments will be made by
Combivisie in the manner provided for in Article 7 and Combivisie will
keep the Cable Network in good operational condition.
B.4 The Cable Network has at least 105,000 (one hundred and five thousand)
Connections as at the Closing, without prejudice to the provisions of
Article 3.2.
C The Contracts
-------------
C.1 Neither Combivisie nor any of its other parties is in default of
performance of any essential provisions included in the Contracts that
are transferred to UPC under this Agreement, or under any other written
or unwritten agreement, nor has Combivisie or any of the other parties
involved announced that it wishes to terminate the Contracts.
C.2 Combivisie has not concluded any agreements or undertaken any
commitment to conclude agreements that limit the operation of the Cable
Network or the conduct of Combivisie's business.
C.3 All loans granted to Combivisie by the Municipalities or other
institutions in connection with the installation or operation of the
Cable Network or otherwise have been fully redeemed as at the Closing,
if and in so far as the Assets have been provided in full or in part as
security therefor.
C.4 Combivisie has fulfilled all obligations under operation agreements
concluded with the Municipalities with regard to the Cable Network, or
other agreements relating to the acquisition or maintenance by
Combivisie of the Cable Network, and has no further obligations in this
respect towards the Municipalities or any third party.
D. The Powers of Attorney and the Licences
---------------------------------------
The Powers of Attorney and the Licences are in full effect until the
Closing. None of the issuing institutions involved in the Powers of
Attorney and the Licences has announced any amendment to the
conditions.
E. The Annual Accounts
-------------------
E.1 The Annual Accounts of SCR and Setelco fully and correctly represent
the size and composition of the capital and the results for 1996 and
have been drawn up in accordance with generally accepted accounting
principles in the Netherlands, consistent with the two financial years
preceding 1996.
E.2 Except in so far as indicated in the Annual Accounts:
a. there are no obligations or debts of SCR or Setelco, whether
or not due and payable, other than those undertaken in the
normal and day-to-day conduct of business;
b. no representations and warranties or security rights have been
provided by SCR or Setelco to any third party.
F. No Unfavourable Changes
-----------------------
Since the Balance Sheet Date, Combivisie's business has been exercised
in the usual manner and no essentially unfavourable changes have
occurred in the financial or economic status of the company.
G. Taxes
-----
G.1 Combivisie has always fulfilled all its obligations to pay taxes and
contributions, or has in any event made suitable provisions to that
effect, as evidenced by the Annual Accounts.
G.2 No events have occurred and no agreements have been concluded by
Combivisie that, to the best of Combivisie's knowledge, lead to a tax
imposition, tax assessment or fine other than taxes that are levied in
the context of normal business.
H. Entire Transaction
------------------
Except in so far as expressly otherwise provided in this Agreement, the
Assets comprise all the property presently used by Combivisie for the
operation of the Cable Network or otherwise for the distribution of
radio and television signals as well as the provision of
telecommunication services to residents of the Municipalities
(including companies and institutions).
I. Claims and Procedures
---------------------
Except as shown in the Annual Accounts of SCR and Setelco and Appendix
XII to this Agreement, SCR and Setelco are not involved as plaintiff or
defendant in any pending legal proceedings. No legal measures or
proceedings are expected against them, nor have any claims been filed
or are any claims expected to be filed against them that may result in
an essentially unfavourable change in the financial or economic status
of SCR or Setelco.
J. Employees
---------
J.1 As a result of the transaction set out in this Agreement, no
obligations will arise for UPC under Articles 7A:1639 et seq. of the
Dutch Civil Code otherwise than with regard to the Employees.
J.2 Appendix VI correctly represents for each of the Employees which
obligations will be taken over by UPC under this Agreement. No
essential commitments have been made and no employment conditions have
been agreed on with regard to the Employees other than those set out in
Appendix VI.
J.3 There are no pending or imminent employment conflicts or legal
proceedings with regard to the Employees.
J.4 Combivisie has always fulfilled all of its obligations concerning the
payment of wage tax and social security premiums with regard to the
Employees.
K. Observance of Statutory Provisions
----------------------------------
K.1 To the best of its knowledge, Combivisie has always in all respects
observed the essential statutory regulations and all judicial orders
that apply to it.
K.2 SCR has always observed all essential conditions related to the Powers
of Attorney and the Licences.
L. Full Openness of Affairs
------------------------
Combivisie has provided UPC with all information relating to the
condition of the Assets and the operation of the Cable Network with
which it is familiar and of which it knows or should know that such
information is of essential importance to a prospective purchaser of
the Assets. Combivisie declares to have performed the necessary
investigations in this respect, in a manner and with a thoroughness
that are customary for a transaction such as the present one.
Appendix VIII
Representations and Warranties of UPC
APPENDIX VIII
-------------
Representations and Warranties of UPC
-------------------------------------
A. Status of UPC
-------------
A.1 UPC is a private limited liability company organised under Dutch law,
authorised to perform the legal actions set out and provided for in
this Agreement.
A.2 All approvals and resolutions required for the conclusion and
performance of this Agreement and the other agreements provided for in
this Agreement have been obtained and adopted, respectively, as at the
Closing. This Agreement is therefore enforceable (and the other
aforesaid agreements will be enforceable after signature) vis-a-vis UPC
in accordance with the provisions set out therein.
A.3 The signature and performance of this Agreement by UPC is not in
conflict with the law, the provisions of any agreement to which UPC is
a party, or the provisions of any judgment of a judicial body or
administrative body to which UPC is subject.
