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RESTRUCTURING AGREEMENT
by and among
UNITED PAN-EUROPE COMMUNICATIONS N.V.,
NEW UPC, INC.,
UNITEDGLOBALCOM, INC.,
UGC HOLDINGS, INC.,
UNITED EUROPE, INC.,
UNITED UPC BONDS, LLC
and
THE NOTEHOLDERS SET FORTH ON ANNEX A HERETO
DATED AS OF SEPTEMBER 30, 2002
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ARTICLE I DEFINITIONS; CROSS-REFERENCES; INTERPRETATION.......................4
Section 1.1 Definitions....................................................4
Section 1.2 Cross-references...............................................7
Section 1.3 Interpretation.................................................9
ARTICLE II RESTRUCTURING......................................................9
Section 2.1 General Structure..............................................9
Section 2.2 Treatment of UPC Notes........................................13
Section 2.3 Treatment of UPC Preference Shares A..........................14
Section 2.4 Treatment of Belmarken Notes..................................14
Section 2.5 Critical Vendors..............................................16
Section 2.6 Other Creditors...............................................16
Section 2.7 Administrative and Other Priority Claims......................17
Section 2.8 Treatment of Outstanding Rights, Options and Warrants.........17
Section 2.9 Management Incentive Plan.....................................18
Section 2.10 Extraordinary General Meeting................................18
ARTICLE III SHAREHOLDERS MEETING; DISCLOSURE STATEMENT; PLAN; AKKOORD........18
Section 3.1 Shareholders' Meeting.........................................18
Section 3.2 Prospectus....................................................19
Section 3.3 Disclosure Statement..........................................19
ARTICLE IV MINORITY RIGHTS; BOARD COMPOSITION................................21
Section 4.1 Pre-emptive Rights............................................21
Section 4.2 Board Composition.............................................21
Section 4.3 Affiliate Party Transactions..................................22
ARTICLE V VOTING PROVISIONS..................................................26
Section 5.1 Voting in the Shareholders Meeting............................26
Section 5.2 Voting Prior to the Effective Filing Date.....................26
Section 5.3 Voting After the Filing Date..................................27
Section 5.4 Direction of Trustees.........................................28
Section 5.5 Acknowledgement...............................................28
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ARTICLE VI EFFECTIVE DATE EQUITY INVESTMENT..................................28
Section 6.1 New UPC Equity Purchase Rights................................28
Section 6.2 UGC Subscription Commitment...................................29
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF UPC............................29
Section 7.1 Organization..................................................29
Section 7.2 Capitalization................................................29
Section 7.3 Authorization; Validity of Agreement; Corporate Action........30
Section 7.4 Consents and Approvals; No Violations.........................30
Section 7.5 SEC Reports and Financial Statements..........................31
Section 7.6 Brokers.......................................................31
Section 7.7 Voting Requirements...........................................31
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF UGC, UGC HOLDINGS,
NEW UPC AND UUB.................................................32
Section 8.1 Organization..................................................32
Section 8.2 Authorization; Validity of Agreement; Corporate Action........32
Section 8.3 Consents and Approvals; No Violations.........................33
Section 8.4 Ownership of Securities.......................................33
Section 8.5 Certain Securities Law Matters................................33
Section 8.6 Brokers.......................................................34
ARTICLE IX REPRESENTATIONS AND WARRANTIES OF PARTICIPATING NOTEHOLDERS.......34
Section 9.1 Organization..................................................34
Section 9.2 Authorization; Validity of Agreement; Noteholder Action.......34
Section 9.3 Consents and Approvals; No Violations.........................35
Section 9.4 Ownership of Securities.......................................35
Section 9.5 Certain Securities Law Matters................................35
Section 9.6 Brokers.......................................................36
ARTICLE X CERTAIN COVENANTS..................................................37
Section 10.1 Commercially Reasonable Efforts..............................37
Section 10.2 Notification of Certain Matters..............................37
Section 10.3 Tax Ruling...................................................38
Section 10.4 Forbearance..................................................38
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Section 10.5 Restrictions on Transfer.....................................38
Section 10.6 Further Acquisition of Claims or Interests...................39
Section 10.7 Impact of Appointment of Creditors' Committee................39
Section 10.8 Releases and Exculpation.....................................39
Section 10.9 Advisors.....................................................41
ARTICLE XI TERMINATION AND ABANDONMENT.......................................42
Section 11.1 Termination..................................................42
Section 11.2 Effect of Termination........................................44
ARTICLE XII MISCELLANEOUS....................................................44
Section 12.1 Nonsurvival of Representations and Warranties................44
Section 12.2 Notices......................................................44
Section 12.3 Entire Agreement.............................................46
Section 12.4 No Third-Party Beneficiaries.................................46
Section 12.5 Amendment....................................................46
Section 12.6 Assignment...................................................46
Section 12.7 Counterparts.................................................46
Section 12.8 Severability.................................................46
Section 12.9 Governing Law................................................46
Section 12.10 Submission to Jurisdiction..................................47
Section 12.11 Remedies....................................................47
Section 12.12 Waiver of Jury Trial........................................48
Section 12.13 Consideration...............................................48
Section 12.14 Acknowledgment of Risks.....................................48
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Annex A - Participating Noteholders A-1
Annex B - UPC Notes Owned by the UGC Group B-1
Annex C - UPC Notes Owned by UPC C-1
Annex D - Post-Restructuring Equity Capitalization of New UPC D-1
Annex E - Material Litigation Claims Against UPC E-1
Annex F - Outstanding Material Rights, Options and Warrants to
Acquire UPC Ordinary Shares A F-1
Annex G - Capitalization of UPC G-1
Annex H - UGC Group Claims and Interests H-1
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RESTRUCTURING AGREEMENT
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THIS RESTRUCTURING AGREEMENT (this "Agreement"), dated as of September 30,
2002, by and among United Pan-Europe Communications N.V., a corporation
organized under the laws of The Netherlands ("UPC"), New UPC, Inc., a
corporation organized under the laws of the state of Delaware ("New UPC"),
UnitedGlobalCom, Inc., a corporation organized under the laws of the State of
Delaware ("UGC" and, together with its Subsidiaries, other than New UPC and UPC
and its Subsidiaries, the "UGC Group"), UGC Holdings, Inc., a corporation
organized under the laws of the State of Delaware and a wholly owned Subsidiary
of UGC ("UGC Holdings"), United Europe, Inc., a corporation organized under the
laws of the State of Delaware and a wholly owned indirect Subsidiary of UGC
("United Europe"), United UPC Bonds, LLC, a limited liability company organized
under the laws of the State of Delaware and a wholly owned subsidiary of UGC
("UUB"), and the holders of UPC Notes (as defined below) set forth on Annex A
attached hereto (each such holder a "Participating Noteholder" and,
collectively, the "Participating Noteholders").
RECITALS:
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This Restructuring Agreement is based on the following:
A. Members of the UGC Group are the beneficial owners of (i) all of the
outstanding 6% Guaranteed Notes due 2007 (the "Belmarken Notes") of UPC and
Belmarken Holding B.V., a company with limited liability organized under the
laws of The Netherlands ("Belmarken"), as co-obligors and UPC Internet Holding
B.V. as guarantor, (ii) the UGC Owned Notes (as defined below), (iii) 2,500
shares of the Series 1 Convertible Preference Shares A ("UPC Preference Shares
A"), par value (euro)1.00 of UPC, (iv) 300 Priority Shares of UPC, par value
(euro)1.00 ("UPC Priority Shares"), and (v) 235,452,209 ordinary shares A of
UPC, par value (euro)1.00 ("UPC Ordinary Shares A"); and
B. The Participating Noteholders are the beneficial owners of that
aggregate principal amount of each outstanding series of UPC Notes as is set
forth on Schedule 1 to the Disclosure Schedule; and
C. The parties to this Agreement have determined that it is in the best
interests of UPC, UPC's Affiliates, and UPC's stakeholders to effect a
restructuring of the capital structure of UPC (the "Restructuring") and to
establish New UPC as a United States holding company for the UPC Group in order
to (i) facilitate the raising of additional capital, (ii) simplify the
governance structure of UPC, (iii) facilitate future rationalization of the
operations of New UPC and UPC, (iv) reduce the debt obligations of UPC and (v)
permit UPC to take advantage of the strategic opportunities available to it; and
D. If a restructuring of UPC is not implemented as contemplated in this
Agreement, the continuity of UPC would be in jeopardy; and
E. Certain of the Participating Noteholders have formed an informal
committee (the "Committee") of the holders of the UPC Notes and have engaged in
good faith negotiations with UGC and UPC with the objective of reaching an
agreement regarding the terms of the Restructuring; and
F. In conformity with the terms and conditions of this Agreement, New UPC
will issue shares of New UPC Common Stock, par value $0.01 per share ("New UPC
Common Stock"), in conformity with the applicable securities laws of The
Netherlands and the United States, for substantially all of the outstanding
claims of unsecured creditors of UPC, other than the claims of Critical Vendors
who are treated as "▇▇▇▇▇▇ suppliers" as set forth herein; and
G. In furtherance of the implementation of the Restructuring, UPC shall,
subject to the terms and conditions of this Agreement, (a) file (i) a voluntary
case (the "Chapter 11 Case") under Chapter 11 of title 11 of the United States
Code, 11 U.S.C. ▇▇.▇▇. 101-1330, as amended (the "US Bankruptcy Code") in a
United States Bankruptcy Court (the "US Bankruptcy Court") on or as soon as
reasonably practicable after the date of this Agreement, (ii) a plan of
reorganization (the "Plan") consistent in all material respects with this
Agreement (as in effect on the date hereof with such amendments and changes as
are agreed to in accordance with the terms thereof), on or as soon as reasonably
practicable after the date of the filing of the Chapter 11 Case, and (iii) an
accompanying disclosure statement (the "Disclosure Statement") consistent with
the terms set forth in this Agreement, the requirements of the US Bankruptcy
Code and the requirements of Dutch securities laws and (b) use its reasonable
best efforts to have such Disclosure Statement approved and such Plan confirmed
by the US Bankruptcy Court as expeditiously as practicable under the US
Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the "US
Bankruptcy Rules"); and
H. Following the filing of the Chapter 11 Case, or simultaneously
therewith, at a time to be determined by UPC, after consultation with the
parties hereto, in furtherance of the implementation of the Restructuring, UPC
shall, subject to the terms and conditions of this Agreement, (a) file (i) a
voluntary provisional moratorium petition (the "Moratorium Petition") under the
Dutch Bankruptcy Code (Faillissementswet) (together with all related rules and
regulations, the "Dutch Bankruptcy Code") in the Amsterdam Court (the "Dutch
Bankruptcy Court") and (ii) a plan of compulsory composition (the "Akkoord")
consistent in all material respects with this Agreement (as in effect on the
date hereof with such amendments and changes as are agreed to in accordance with
the terms thereof), on or as soon as reasonably practicable after the date of
the filing of the Moratorium Petition and (b) use its reasonable best efforts to
have such Akkoord voted upon by the creditors of UPC and ratified by the Dutch
Bankruptcy Court as expeditiously as practicable under the Dutch Bankruptcy
Code; and
I. In connection with the Restructuring, the parties hereto have agreed
that the Belmarken Notes, the UPC Notes, the UPC Ordinary Shares A, the UPC
Priority Shares and the UPC Preference Shares A are intended to be exchanged for
shares of New UPC Common Stock on the terms set forth in this Agreement; and
J. To facilitate the implementation of the Restructuring, including,
without limitation, the Plan, each Participating Noteholder is prepared, subject
to the terms and conditions of this Agreement, to vote its Restricted Claims in
favor of the Plan, as it may be modified in accordance with the terms of this
Agreement; and
K. To facilitate the implementation of the Restructuring, including,
without limitation, the Akkoord, each Participating Noteholder is prepared,
subject to the terms and conditions of this Agreement, to vote its Restricted
Claims in favor of the Akkoord as it may be modified in accordance with the
terms of this Agreement; and
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L. In furtherance of the transactions contemplated hereby, each of the
parties hereto has agreed to take certain other actions, all as more fully set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CROSS-REFERENCES; INTERPRETATION
---------------------------------------------
Section 1.1 Definitions. For purposes of this Agreement, each of the
following terms shall have the respective meaning ascribed thereto.
"Administrator" shall mean the administrator or administrators
(bewindvoerders) appointed by the Dutch Bankruptcy Court to oversee the affairs
of UPC during the period it is subject to a moratorium of payments pursuant to
the Dutch Bankruptcy Code.
"Affiliate" shall, with respect to any Person (the "First Person"), mean
(1) any other Person (the "Second Person") having beneficial ownership of 40% or
more of the Voting Securities of such First Person and (2) any other Person, 40%
or more of whose Voting Securities are owned, controlled or held with power to
vote, directly or indirectly, by that Second Person.
"Belmarken Loan Agreements" shall mean that certain Loan Agreement, dated
as of May 25, 2001, among Belmarken and UPC, as Obligors, UPC Internet Holding
B.V., as Guarantor, and Liberty-Belmarken, Inc., as Lender, together with all
other documentation entered into in connection with the issuance of the
Belmarken Notes, as the same may have been amended, supplemented or modified in
any respect.
"beneficial ownership" shall have 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.
"Business Day" shall mean any day, other than a Saturday, Sunday or a day
on which banks located in New York, New York or Amsterdam, The Netherlands shall
be authorized or required by law to close.
"Confirmation Date" shall mean the later to occur of (i) the date on which
the Plan is confirmed by the US Bankruptcy Court and (ii) the date on which the
Akkoord is adopted and subsequently ratified by the Dutch Bankruptcy Court.
"control" shall mean with respect to any Person (i) the power, directly or
indirectly by contract, proxy or otherwise, to vote or cause to be voted more
than 50% of the Voting Securities of such Person or (ii) the power (as general
partner, manager, or otherwise) to control the management and affairs of such
Person. The words "controlling" and "under common control with" shall have
correlative meanings.
"Disclosure Letter" means that certain disclosure letter to be executed and
delivered by the parties hereto simultaneously with the execution and delivery
of this Agreement.
"Disinterested Stockholder" shall mean, at any time of determination, with
respect to any proposed Related Party Transaction, a stockholder of New UPC that
neither (a) is an Affiliate of New UPC or (b) has a financial interest in the
proposed Related Party Transaction that is materially different from New UPC's
stockholders generally.
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"Effective Date" shall mean the Business Day that is no more than eleven
(11) Business Days following the date on which all conditions precedent to the
consummation of the Plan and the Akkoord have either been satisfied or, to the
extent permitted in the Plan and the Akkoord, duly waived and on which such day
the Plan and the Akkoord become effective and final.
"Euronext" shall mean Euronext Amsterdam N.V.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Filing Date" shall mean the date on which the Chapter 11 Case is commenced
under US Bankruptcy Law.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
"Governmental Entity" shall mean any national, state, provincial,
municipal, local or foreign government, any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority, commission or agency or any non-governmental, self-regulatory
authority, commission or agency.
"Judgment" shall mean any order, writ, injunction, award, judgment, ruling
or decree of any Governmental Entity.
"Law" shall mean any statute, law, code, ordinance, rule or regulation of
any Governmental Entity.
"Lien" shall mean any pledge, claim, equity, option, lien, charge,
mortgage, easement, right-of-way, call right, right of first refusal, "tag"- or
"drag"- along right, encumbrance, security interest or other similar restriction
of any kind or nature whatsoever, but excluding any of the foregoing created or
imposed by or pursuant to this Agreement.
"Majority-in-Interest of the Participating Noteholders" shall mean, with
respect to any date of determination, (a) if such date of determination is prior
to the Filing Date, Participating Noteholders holding a majority of the claims
arising under the UPC Notes held by all of the Participating Noteholders on such
date of determination (using for this purpose the prevailing exchange rates in
effect on such date of determination), or (b) if such date of determination is
on or after the Filing Date, Participating Noteholders holding a majority of the
claims arising under the UPC Notes held by all of the Participating Noteholders
on such date of determination (using for this purpose, the prevailing exchange
rate in effect on the Filing Date).
"Nasdaq" means the Nasdaq National Market.
"Other Creditors" shall mean, without duplication, each General Unsecured
Creditor and each holder of a Litigation Claim.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an incorporated organization and a government or any
department or agency thereof.
"Restricted Claims" shall mean, with respect to any Person, any Belmarken
Notes, UPC Notes, UPC Voting Securities or other claims against, or interests
in, UPC that such Person or its controlled Affiliates now owns or controls,
together with any Belmarken Notes, UPC Notes, UPC Voting Securities or other
claims against, or interests in, UPC which such Person or its
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controlled Affiliates may come to own or control between the date hereof and the
termination of this Agreement.
"Restriction" with respect to any capital stock, partnership interest,
membership interest in a limited liability company or other equity interest or
security, shall mean any voting or other trust or agreement, option, warrant,
preemptive right, right of first offer, right of first refusal, escrow
arrangement, proxy, buy-sell agreement, power of attorney or other contract (but
excluding the Belmarken Loan Agreements and this Agreement), any Law, license,
permit or Judgment that, conditionally or unconditionally, (i) grants to any
Person the right to purchase or otherwise acquire, or obligates any Person to
sell or otherwise dispose of or issue, or otherwise results or, whether upon the
occurrence of any event or with notice or lapse of time or both or otherwise,
may result in any Person acquiring, (x) any of such capital stock, partnership
interest, membership interest in a limited liability company or other equity
interest or security; (y) any of the proceeds of, or any distributions paid or
that are or may become payable with respect to, any of such capital stock,
partnership interest, membership interest in a limited liability company or
other equity interest or security; or (z) any interest in such capital stock,
partnership interest, membership interest in a limited liability company or
other equity interest or security or any such proceeds or distributions; (ii)
restricts or, whether upon the occurrence of any event or with notice or lapse
of time or both or otherwise, is reasonably likely to restrict the transfer or
voting of, or the exercise of any rights or the enjoyment of any benefits
arising by reason of ownership of, any such capital stock, partnership interest,
membership interest in a limited liability company or other equity interest or
security or any such proceeds or distributions; or (iii) creates or, whether
upon the occurrence of any event or with notice or lapse of time or both or
otherwise, is reasonably likely to create a Lien or purported Lien affecting
such capital stock, partnership interest, membership interest in a limited
liability company or other equity interest or security, proceeds or
distributions.
"SEC" shall mean the United States Securities and Exchange Commission, or
any successor agency.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shareholder Approval" shall mean approval by the shareholders of UPC of
all of the Proposals.
"Subsidiary" with respect to any Person shall mean (i) a corporation, a
majority in voting power of whose capital stock with voting power, under
ordinary circumstances, to elect directors is at the time, directly or
indirectly owned by such Person, by a Subsidiary of such Person, or by such
Person and one or more Subsidiaries of such Person, without regard to whether
the voting of such stock is subject to a voting agreement or similar
Restriction, controlled by or under common control with the respective Person,
(ii) a partnership or limited liability company in which such Person or a
Subsidiary of such Person is, at the date of determination, (x) in the case of a
partnership, a general partner of such partnership with the power affirmatively
to direct the policies and management of such partnership or (y) in the case of
a limited liability company, the managing member or, in the absence of a
managing member, a member with the power affirmatively to direct the policies
and management of such limited liability company, or (iii) any other Person
(other than a corporation) in which such Person, a Subsidiary of such Person or
such Person and one or more Subsidiaries of such Person, directly or indirectly,
at the date of deter-
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mination thereof, has (x) the power to elect or direct the election of a
majority of the members of the governing body of such Person (whether or not
such power is subject to a voting agreement or similar Restriction) or (y) in
the absence of such a governing body, a majority ownership interest.
"UGC Owned Notes" shall mean the UPC Notes set forth on Annex B to this
Agreement and any UPC Notes hereafter acquired by the UGC Group.
"UPC Distribution Credit Facility" shall mean the Senior Secured Credit
Facility, dated October 26, 2000, for UPC Distribution Holding B.V. and UPC
Financing Partnership, as borrowers, certain subsidiaries of UPC party thereto,
as guarantors, TD Bank Europe Limited, as Lead Arranger, Facility Agent, and
Security Agent, Toronto Dominion (Texas), Inc., as Facility Agent, Chase
Manhattan plc, ABN AMRO Bank N.V., Bank of America International Limited, BNP
Paribas, CIBC World Markets plc, Credit Lyonnais, Fortis Bank (Nederland) N.V.,
and The Royal Bank of Scotland plc, as lead arrangers, and certain banks and
financial institutions party thereto, as lenders, as the same may be amended
from time to time.
"UPC Dollar-Denominated Notes" shall mean the following series of
outstanding senior notes and senior discount notes of UPC: (i) the $200,000,000
10?% Senior Notes due 2007, (ii) the $800,000,000 10?% Senior Notes due 2009,
(iii) the $735,000,000 12 1/2% Senior Discount Notes due 2009, (iv) the
$252,000,000 11 1/4% Senior Notes due 2009, (v) the $478,000,000 13?% Senior
Discount Notes due 2009, (vi) the $600,000,000 11 1/4% Senior Notes due 2010,
(vii) the $300,000,000 11 1/2% Senior Notes due 2010, and (viii) the
$1,000,000,000 13 3/4% Senior Discount Notes due 2010.
"UPC Euro-Denominated Notes" shall mean the following series of outstanding
senior notes and senior discount notes of UPC: (i) the (euro)100,000,000 10?%
Senior Notes due 2007, (ii) the (euro)300,000,000 10?% Senior Notes due 2009,
(iii) the (euro)101,000,000 11 1/4% Senior Notes due 2009, (iv) the
(euro)191,000,000 13?% Senior Discount Notes due 2009, and (v) the
(euro)200,000,000 11 1/4% Senior Notes due 2010.
"UPC Notes" shall mean the UPC Dollar-Denominated Notes and the UPC
Euro-Denominated Notes, collectively.
"UPC Voting Securities" shall mean all equity securities of UPC, including,
without limitation, all UPC Ordinary Shares A, UPC Priority Shares and UPC
Preference Shares A, entitled to vote at a general meeting of the shareholders
of UPC.
"Voting Securities" shall mean, with respect to any Person, any equity
interest of such Person having general voting power under ordinary circumstances
to participate in the election of a majority of the governing body of such
Person (irrespective of whether at the time any other class of equity interest
of such Person shall have or might have voting power by reason of the happening
of any contingency).
Section 1.2 Cross-references. For purposes of this Agreement, each of the
following terms shall have the meaning ascribed thereto in the respective
Section of this Agreement indicated on the table below.
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Additional Shares................................2.1
Agreement...................................Preamble
A-FM.............................................3.2
Akkoord.....................................Recitals
Akkoord Option...................................2.1
Base Number of Shares............................2.1
Belmarken...................................Recitals
Belmarken Notes.............................Recitals
Belmarken Notes Consideration....................2.3
Capital Amendment Proposal......................2.12
Chapter 11 Case.............................Recitals
Common Shares UGC Fraction.......................4.4
Committee...................................Recitals
Critical Vendors.................................2.7
Designated Board Members.........................4.2
Disclosure Statement........................Recitals
Dutch Bankruptcy Code.......................Recitals
Dutch Bankruptcy Court......................Recitals
Dutch Exchange Offer Option......................2.1
Employee Options................................2.10
General Unsecured Creditors......................2.8
Implied Purchase Price...........................6.1
Litigation Claim.................................2.8
Maximum Subscription Amount..................... 6.1
Moratorium Petition.........................Recitals
New UPC.....................................Recitals
New UPC Common Stock........................Recitals
New UPC Dutch Exchange Offer.....................2.1
Notes Consideration..............................2.2
Ordinary Shares Consideration....................2.5
Participating Noteholder(s).................Preamble
Plan........................................Recitals
Plan Option 1....................................2.1
Plan Option 2....................................2.1
Preference Shares Consideration..................2.4
Priority Shares Consideration....................2.6
Proposals.......................................2.12
Prospectus.......................................3.2
Related Party Transaction........................4.3
Required UPC Consents............................7.4
Restructuring...............................Recitals
Shareholders Meeting............................2.12
Stockholders Agreement...........................4.4
Subscription Rights..............................4.1
Tag-Along Allotment..............................4.4
Tag-Along Notice.................................4.4
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Tag-Along Notice Date............................4.4
Tag-Along Sale...................................4.4
Tag-Along Sale Agreement.........................4.4
Tag-Along Sale Date..............................4.4
Tag-Along Sale Notice............................4.4
Tag-Along Stockholders...........................4.4
UGC.........................................Preamble
UGC Group...................................Preamble
UGC Holdings................................Preamble
United Europe...............................Preamble
UPC.........................................Preamble
UPC Ordinary Shares A.......................Recitals
UPC Preference Shares A.....................Recitals
UPC Priority Shares.........................Recitals
UPC SEC Documents................................7.5
US Bankruptcy Code..........................Recitals
US Bankruptcy Court.........................Recitals
US Bankruptcy Rules.........................Recitals
UUB.........................................Preamble
Section 1.3 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Capitalized terms used in this Agreement shall have
meanings equally applicable to both the singular and plural forms and masculine,
feminine and neuter genders. Whenever the words "include," "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation."
ARTICLE II
RESTRUCTURING
-------------
Section 2.1 General Structure. The Restructuring is intended to be
implemented in compliance with applicable laws, including the applicable laws of
The Netherlands, the United States of America and Luxembourg. In order to
achieve this objective, the Restructuring will consist of several different
elements, each of which is an integral aspect of the Restructuring and, as such,
are non-severable, and which will provide the holders of claims against, and
interests in, UPC with certain options in connection with the satisfaction of
their claims and interests. Specifically, the Restructuring shall provide as
follows:
(a) Treatment of Creditors. The following general structure will apply
to all creditors of UPC, except as otherwise provided herein:
(i) US Structure. UPC will commence the Chapter 11 Case in the US
Bankruptcy Court and shall file a Plan pursuant to which each holder of UPC
Notes and each holder of any other claim against UPC to the extent such
claim is in the same class as the UPC Notes will be offered
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two options, one of which will be to receive a specified number of shares
of New UPC Common Stock per $1000 of allowed claim from New UPC ("Plan
Option 1"), in exchange for transferring their claims against UPC to New
UPC, and the second of which will be to receive a number of shares of New
UPC Common Stock per $1000 of allowed claim from UPC ("Plan Option 2")
equal to seventy-five percent (75%) of the number of shares of New UPC
Common Stock per $1000 of allowed claim from New UPC offered pursuant to
Plan Option 1 in final discharge of their rights against UPC.
(ii) Dutch Structure. UPC will file the Moratorium Petition and
commence proceedings with respect thereto, in which it will propose an
Akkoord pursuant to which the creditors of UPC will receive a specified
number of shares of New UPC Common Stock per $1000 of allowed claim (the
"Akkoord Option") in final discharge of their claims against UPC. The
number of shares of New UPC Common Stock per $1000 of allowed claim that
creditors of UPC will receive pursuant to the Akkoord Option will be
identical to the number of shares of New UPC Common Stock that holders of
UPC Notes will receive in final discharge of their UPC Notes pursuant to
Plan Option 2.
(iii) New UPC Dutch Exchange Offer. All holders of UPC Notes that are
subject to the jurisdiction of the US Bankruptcy Court and each holder of
any other claim against UPC to the extent such claim is in the same class
as the UPC Notes that is subject to the jurisdiction of the US Bankruptcy
Court will receive shares of New UPC Common Stock in exchange for
transferring their claims against UPC to New UPC pursuant to Plan Option 1
as set forth in Section 2.1(a)(i). Solely for the purpose of carrying out
Plan Option 1 in a manner consistent with Dutch law, to the extent
necessary to qualify Plan Option 1 under applicable Dutch securities laws,
simultaneously with the proposal of the Akkoord, New UPC will, for purposes
of Dutch law and, to the extent permitted under applicable securities laws,
solely with respect to individuals and entities who are not U.S. Persons
(as defined in Rule 902(k) under the Securities Act), offer to exchange
(the "New UPC Dutch Exchange Offer") a specified number of shares of New
UPC Common Stock with the creditors of UPC (the "Dutch Exchange Offer
Option") in exchange for transferring their claims against UPC to New UPC,
as further set forth in this Article II. The number of shares of New UPC
Common Stock per $1000 of allowed claim that creditors of UPC will receive
pursuant to the New UPC Dutch Exchange Offer in exchange for claims against
UPC will be identical to the number of shares of New UPC Common Stock per
$1000 of allowed claim that creditors of UPC will receive in exchange for
their claims against UPC pursuant to Plan Option 1. The New UPC Dutch
Exchange Offer shall require, as a condition to the consummation of the New
UPC Dutch Exchange Offer, that all claims tendered in the New UPC Dutch
Exchange Offer be voted in favor of the Plan and the Akkoord and that the
holders of such claims shall deliver irrevocable proxies or
-10-
voting instructions and related powers of attorney (with powers of
substitution) in connection with their tender. Subject to Section 2.1(f),
the New UPC Dutch Exchange Offer shall also include such other terms and
conditions as UPC, UGC and the Committee shall agree. The New UPC Dutch
Exchange Offer will not close, nor will tenders be accepted, until the
Effective Date.
(iv) Treatment of UPC Owned Notes. All of the UPC Notes owned by UPC
as a result of the settlement and termination of (i) the swaps transactions
documented by the ISDA Master Agreement, dated as of April 29, 1998,
between The Toronto Dominion Bank, London Branch and UPC, and the related
schedules, annexes and confirmations, as the same shall have been amended
from time to time on the terms contemplated therein and (ii) the swaps
transactions documented by the ISDA Master Agreement, dated as of May 4,
2000, between The Chase Manhattan Bank and UPC, and the related schedules,
annexes and confirmations, as the same shall have been amended from time to
time on the terms contemplated therein, in each case, which are set forth
on Annex C, shall be deemed to be cancelled and not outstanding and UPC
shall not be entitled to receive any consideration on account thereof.
(b) Treatment of UPC Preference Shares A; UPC Ordinary Shares A and
UPC Priority Shares.
(i) US Structure. The Plan will provide that the holders of UPC
Preference Shares A, UPC Ordinary Shares A and UPC Priority Shares will
receive shares of New UPC Common Stock in an aggregate amount equal to up
to two percent of the Base Number of Shares of New UPC Common Stock. The
allocation of such percentage of New UPC's outstanding equity issuable to
the holders of the UPC Preference Shares A, UPC Ordinary Shares A and the
UPC Priority Shares will be determined by UPC, New UPC and UGC and shall be
set forth in the Plan; provided that the consideration allocated in respect
of each UPC Priority Share shall be identical to the consideration
allocated to one (1) UPC Ordinary Share A.
(ii) Dutch Structure. Interests in the UPC Preference Shares A, UPC
Ordinary Shares A and UPC Priority Shares will not be affected by the
Akkoord.
(c) Contribution of Belmarken Notes.
(i) US Structure. The Plan will provide that on the Effective Date,
and on the terms and conditions set forth herein and in the Plan and
subject to the Plan being confirmed substantially on the terms set forth in
this Agreement, the holder of the Belmarken Notes will contribute the
Belmarken Notes to New UPC in exchange for shares of New UPC Common Stock.
(ii) Dutch Structure. The contribution of the Belmarken Notes
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to New UPC will not be a part of the Akkoord process.
(d) Percentage of Base Number of Shares of New UPC Common Stock
Offered in Plan and Akkoord. The Plan and the Akkoord (to the extent applicable)
shall specify the number of shares of New UPC Common Stock that is to be
distributed on account of (i) the UPC Notes (assuming that Plan Option 1 applies
to all UPC Notes), (ii) the contribution of the Belmarken Notes, and (iii) the
UPC Preference Shares A, UPC Ordinary Shares A, and UPC Priority Shares and
holders of Litigation Claims subordinated under Section 510(b) of the US
Bankruptcy Code (the "Base Number of Shares"). Upon consummation of the Plan and
the Akkoord, the following percentages of the Base Number of Shares of New UPC
Common Stock shall be distributed to (i) the UGC Group in exchange for the
Belmarken Notes and the UPC Notes owned by the UGC Group on the date of this
Agreement, as set forth on Annex B, and not including any UPC Notes acquired by
the UGC Group after the date of this Agreement, (ii) to the holders of the UPC
Notes (other than the UPC Notes owned by the UGC Group on the date of this
Agreement) (assuming that Plan Option 1 applies to all UPC Notes), and (iii) to
the holders (including the UGC Group) of the UPC Preference Shares, the UPC
Ordinary Shares A and the UPC Priority Shares pursuant to Plan and the Akkoord:
--------------------------------------------------------------------------------
Percentage of Base Number of New
UPC Common Stock Offered
---------------------------------
Plan Option 1/
Dutch Exchange Offer Option
--------------------------------------------------------------------------------
Belmarken Notes and UPC Notes
owned by UGC Group on the date 65.5%
hereof
--------------------------------------------------------------------------------
UPC Notes (other than UPC Notes
owned by the UGC Group on the date 32.5%
hereof)
--------------------------------------------------------------------------------
Holders of UPC Preference Shares;
UPC Ordinary Shares A and UPC 2.0%
Priority Shares and holders of
Litigation Claims subordinated
under Section 510(b) of the US
Bankruptcy Code
--------------------------------------------------------------------------------
(e) Dilution. Any shares of New UPC Common Stock issuable to General
Unsecured Creditors or holders of Litigation Claims (to the extent not
subordinated pursuant to Section 510(b) of the US Bankruptcy Code) as set forth
in Section 2.8, shares of New UPC Common Stock issuable to certain members of
New UPC's management or other employees as set forth in Section 2.11, shares of
New UPC Common Stock issuable pursuant the New UPC Equity Purchase Rights as set
forth in Section 6.1 or issuable to UGC pursuant to the UGC subscription
commitment as set forth in Section 6.2 shall be in addition (the "Additional
Shares") to the Base Number of Shares of New UPC Common Stock. If Plan Option 2
applies to any UPC Notes, then
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the excess number of shares of New UPC Common Stock that would have been issued
and exchanged under Plan Option 1 for those UPC Notes shall not be issued or
exchanged; provided that nothing herein shall prevent New UPC from voluntarily
exchanging UPC Notes or other claims subject to Plan Option 2 for consideration
equal to the consideration offered to such claim pursuant to Plan Option 1 at
any time on or after the Effective Date. Neither the issuance and exchange of
the Additional Shares nor the reduction in the number of shares of New UPC
Common Stock issued and exchanged for UPC Notes resulting from the application
of Plan Option 2 to certain UPC Notes shall affect the number of shares of New
UPC Common Stock issued and exchanged for the Belmarken Note, the UPC Notes to
which Plan Option 1 applies, or the UPC Preference Shares, UPC Ordinary Shares
A, and UPC Priority Shares. For the avoidance of doubt, neither the issuance and
exchange of the Additional Shares nor the reduction in the number of shares of
New UPC Common Stock issued and exchanged for UPC Notes resulting from the
application of Plan Option 2 to certain UPC Notes shall reduce the percentage of
the Base Number of Shares to be offered to the holders of the UPC Notes pursuant
to Plan Option 1 and the Dutch Exchange Offer Option as described in Section
2.1(d).
(f) Alternate Structures. The parties hereto hereby agree that the
intention of the Restructuring is to effect the exchange of the Belmarken Notes,
the UPC Notes, certain other claims of creditors in UPC, the UPC Preference
Shares A, the UPC Ordinary Shares A and the UPC Priority Shares for shares of
New UPC Common Stock, such that the equity capitalization of New UPC immediately
after giving effect to the Restructuring, based upon the Base Number of Shares,
the issuance of the maximum amount of shares of New UPC Common Stock issuable to
certain members of New UPC's management or other employees as set forth in
Section 2.11, the issuance of the shares of New UPC Common Stock issuable
pursuant the New UPC Equity Purchase Rights or issuable to UGC pursuant to
Section 6.2, is as set forth on Annex D attached hereto, which equity
capitalization does not reflect the issuance of any Additional Shares to General
Unsecured Creditors or holders of Litigation Claims (to the extent not
subordinated pursuant to Section 510(b) of the US Bankruptcy Code). All parties
agree that in the event that UPC and UGC, after consultation with the Committee,
determine that it is necessary to effect changes to the transaction structure
described in this Agreement in order to more effectively achieve the economic
and other objectives contemplated by this Agreement or to comply with the
requests of any tax or regulatory authority, each party hereto will consent to
and take such actions as may be reasonably necessary to facilitate such changes;
provided that no such changes will be effected unless they result in
substantially the same proportional capitalization of New UPC immediately after
giving effect to the Restructuring and do not otherwise deviate from the terms
and conditions set forth in this Agreement in a manner that is adverse in any
material respect to such party; provided further, that no such changes will (i)
reduce the percentage of the Base Number of Shares of New UPC's outstanding
common stock set forth in Section 2.1(d) to be offered to the holders of the UPC
Notes other than the UGC Group, or (ii) alter the provisions of Article IV or
Article VI.
Section 2.2 Treatment of UPC Notes.
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(a) Treatment of UPC Notes. The Plan, the Akkoord and the New UPC
Dutch Exchange Offer shall provide that, on or as soon as practicable after the
Effective Date, and on the terms and conditions set forth herein and in the Plan
and the Akkoord and the New UPC Dutch Exchange Offer, New UPC or UPC, as the
case may be, shall exchange shares of New UPC Common Stock as provided in
Section 2.1(a) hereof and in accordance with Section 2.1(d) hereof for each of
the UPC Notes based upon the amount of the claim in respect of such UPC Notes on
the Filing Date (using for this purpose the prevailing exchange rates in effect
on the Filing Date, except as otherwise set forth in the Plan). The shares of
New UPC Common Stock offered in respect of the outstanding UPC Notes are
referred to as the "Notes Consideration" in respect of such series of UPC Notes.
(b) Full Satisfaction and Discharge. The receipt of the Notes
Consideration in accordance with the terms of this Agreement, the Plan and/or
the Akkoord by UPC's creditors shall constitute a full satisfaction, settlement,
release and discharge of the claims of each holder of UPC Notes pursuant to the
UPC Notes and the related indentures; provided that the Plan and the New UPC
Dutch Exchange Offer will provide that any UPC Notes acquired by New UPC through
the New UPC Dutch Exchange Offer and the operation of Plan Option 1, which UPC
Notes are not subsequently contributed to the capital of UPC will remain
outstanding and shall not be deemed to be satisfied, settled, released or
discharged.
Section 2.3 Treatment of Belmarken Notes; Contribution of Belmarken Notes.
(a) Treatment of UPC's Obligations Under Belmarken Notes; Contribution
of Belmarken Notes to New UPC. The Plan shall provide that on the Effective
Date, and on the terms and conditions set forth herein and in the Plan and
subject to the Plan being confirmed substantially on the terms set forth in this
Agreement, New UPC shall issue the number of shares of New UPC Common Stock
equal to the percentage of the Base Number of Shares of New UPC Common Stock set
forth in Section 2.1(d) for the Belmarken Notes (the "Belmarken Notes
Consideration") in exchange for the Belmarken Notes and the obligations of all
other parties under the Belmarken Notes and the related loan documentation. The
Plan shall also provide that simultaneously with, and conditional upon the
occurrence of, the Effective Date, and on the other terms and conditions set
forth herein and in the Plan, New UPC shall contribute the Belmarken Notes to
the capital of UPC in exchange for UPC ordinary shares C, par value (euro) 0.02
per share, and in satisfaction of UPC's obligations under the Belmarken Notes
and in exchange for the obligations of all other parties under the Belmarken
Notes and the related loan documentation.
(b) Full Satisfaction and Discharge. The receipt of the Belmarken
Notes Consideration by the UGC Group in accordance with the terms of this
Agreement and the Plan shall constitute a full satisfaction, settlement, release
and discharge of the claims of UGC pursuant to UPC's obligations under the
Belmarken Notes or the related loan documentation.
Section 2.4 Treatment of UPC Preference Shares A.
(a) Treatment of UPC Preference Shares A. The Plan shall provide that,
on or as soon as practicable after the Effective Date and after the contribution
of the
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Belmarken Notes to the capital of UPC by New UPC, and on the terms and
conditions set forth herein and in the Plan, New UPC shall exchange each of the
then existing and outstanding UPC Preference Shares A for shares of New UPC
Common Stock (the "Preference Shares Consideration") in an amount to be
determined by UPC, New UPC and UGC and set forth in the Plan, within the limits
provided in Sections 2.1(b) and 2.1(d). Pursuant to the Plan, the holders of the
UPC Preference Shares A shall deliver their Preference Shares A to New UPC in
exchange for the Preference Shares Consideration. After consummation of the
Restructuring, as soon as UPC becomes a wholly-owned Subsidiary of New UPC, New
UPC and UPC shall take such action as is necessary to cause the cancellation of
the UPC Preference Shares A.
(b) Full Satisfaction and Discharge. The receipt of the Preference
Shares Consideration by the holders of the UPC Preference Shares A in accordance
with the terms of this Agreement and the Plan shall constitute a full
satisfaction, settlement, release and discharge of the claims and interests of
each holder of UPC Preference Shares A in respect of the UPC Preference Shares
A; provided that the Plan will provide that any UPC Preference Shares A acquired
by New UPC through the Plan will remain outstanding and shall not be deemed to
be satisfied, settled, released or discharged.
Section 2.5 Treatment of UPC Ordinary Shares A.
(a) Treatment of UPC Ordinary Shares A. The Plan shall provide that,
on or as soon as practicable after the Effective Date and after the contribution
of the Belmarken Notes to the capital of UPC by New UPC, and on the terms and
conditions set forth herein and in the Plan, New UPC shall exchange each of the
then existing and outstanding UPC Ordinary Shares A for shares of New UPC Common
Stock (the "Ordinary Shares Consideration") in an amount to be determined by
UPC, New UPC and UGC and set forth in the Plan, within the limits provided in
Sections 2.1(b) and 2.1(d). Pursuant to the Plan, the holders of the UPC
Ordinary Shares A shall deliver their Ordinary Shares A to New UPC in exchange
for the Ordinary Shares Consideration.
(b) Full Satisfaction and Discharge. The receipt of the Ordinary
Shares Consideration by the holders of the UPC Ordinary Shares A in accordance
with the terms of this Agreement and the Plan shall constitute a full
satisfaction, settlement, release and discharge of the claims and interests of
each holder of UPC Ordinary Shares A in respect of the UPC Ordinary Shares A;
provided that the Plan will provide that any UPC Ordinary Shares A acquired by
New UPC through the Plan will remain outstanding and shall not be deemed to be
satisfied, settled, released or discharged.
Section 2.6 Treatment of UPC Priority Shares.
(a) Treatment of UPC Priority Shares. The Plan shall provide that, on
or as soon as practicable after the Effective Date and after the contribution of
the Belmarken Notes to the capital of UPC by New UPC, and on the terms and
conditions set forth herein and in the Plan, New UPC shall exchange each of the
then existing and outstanding UPC Priority Shares for shares of New UPC Common
Stock (the "Priority Shares Consideration") in a per share amount equal to the
Ordinary Shares Consideration. Pursuant to the Plan, the holders of the UPC
Priority Shares shall deliver their Priority Shares to New UPC in exchange for
the Priority Shares Consideration. After consummation of the Restructuring, as
soon as UPC becomes a wholly-owned Subsidiary
-15-
of New UPC, New UPC and UPC shall take such action as is necessary to cause the
cancellation of the UPC Priority Shares.
(b) Full Satisfaction and Discharge. The receipt of the Priority
Shares Consideration by the holders of the UPC Priority Shares in accordance
with the terms of this Agreement and the Plan shall constitute a full
satisfaction, settlement, release and discharge of the claims and interests of
each holder of UPC Priority Shares in respect of the UPC Priority Shares;
provided that the Plan will provide that any UPC Priority Shares acquired by New
UPC through the Plan will remain outstanding and shall not be deemed to be
satisfied, settled, released or discharged.
Section 2.7 Treatment of Critical Vendors. The parties hereto agree that
certain creditors of UPC to be identified by UPC (the "Critical Vendors") are
critical to the operation of the business of UPC as a going concern and are
likely to be regarded by the Administrator as so-called "▇▇▇▇▇▇-suppliers"
(dwangcrediteuren). As such, the parties hereto agree that UPC should use
commercially reasonable efforts to pay such Critical Vendors in full before the
Filing Date and, to the extent that any are not paid in full as of the Filing
Date, the parties hereto agree to support a motion in the US Bankruptcy Court to
permit the payment in full of such Critical Vendors on or as soon as is possible
after the Filing Date, subject to the consent of the Administrator. Furthermore,
the Plan will provide that the obligations of UPC to the Critical Vendors, to
the extent remaining unpaid on the Effective Date, will be left unimpaired,
assumed and reinstated under the Plan and, subject to the consent of the
Administrator, paid in full in cash on or as soon as practicable after the
Effective Date. UPC will use its reasonable best efforts to obtain the
permission of the Administrator to treat the Critical Vendors as
"▇▇▇▇▇▇-suppliers" and shall, subject to the approval of the US Bankruptcy
Court, pay the claims of such Critical Vendors in full in cash on or as soon as
practicable after the Filing Date. If UPC and/or the Administrator determine
after the Filing Date that there are additional "▇▇▇▇▇▇-suppliers," UPC shall
use its reasonable best efforts to obtain any necessary approvals of the US
Bankruptcy Court to treat such additional "▇▇▇▇▇▇-suppliers" as additional
Critical Vendors for all purposes. In accordance with the Dutch Bankruptcy Code,
Critical Vendors who are also "▇▇▇▇▇▇-suppliers," having been paid shall not be
treated as creditors of UPC and shall not be entitled to vote on the Akkoord and
shall not receive any additional compensation as a result of the Plan or the
Akkoord except having their claims paid in full in cash on or as soon as
practicable after the Filing Date. Critical Vendors who UPC is not permitted to
treat as "▇▇▇▇▇▇-suppliers" shall be treated as General Unsecured Creditors in
the Chapter 11 Case and the Moratorium, provided that the parties shall use
their commercially reasonable efforts to treat such Critical Vendors separately
from the UPC Notes, the Belmarken Notes and all other classes of creditors under
the Plan and under the Akkoord and in a manner which comports as closely as
possible with the treatment afforded by this Section 2.7, all to the extent
permitted under applicable law. To the knowledge of UPC, all of the principal
Critical Vendors as of the date of this Agreement are identified on Schedule 2
of the Disclosure Letter.
Section 2.8 Treatment of Other Creditors.
(a) Treatment of General Unsecured Creditors. "General Unsecured
Creditors" means all general unsecured creditors of UPC other than holders of
the UPC Notes or the Belmarken Notes and, to the extent applicable, any
Litigation Claims (as
-16-
defined below). All General Unsecured Creditors of UPC, other than "▇▇▇▇▇▇
suppliers" and Critical Vendors permitted to be treated separately from other
General Unsecured Creditors, at the date of the Moratorium that will be affected
by the Moratorium will be offered the same proportionate consideration pursuant
to Plan Option 1, Plan Option 2, the Akkoord Option and the Dutch Exchange Offer
Option as if they held UPC Notes in the amount of their debt in full redemption
of their claims once final adjudication by a competent court has been obtained;
provided that the number of shares of New UPC Common Stock to be issued to and
exchanged for the claims of General Unsecured Creditors shall be in addition to
the Base Number of Shares. To the knowledge of UPC, all of the principal General
Unsecured Creditors, as of the date of this Agreement, are identified on
Schedule 3 of the Disclosure Letter.
(b) Treatment of Litigation Claims. The Plan will provide for the
subordination under section 510(b) of the US Bankruptcy Code of all litigation
claims against the Company identified on Annex E attached hereto (the
"Litigation Claims") to the extent permitted by the US Bankruptcy Court. If the
US Bankruptcy Court determines that the Litigation Claims are subject to
subordination under section 510(b) or otherwise, then the holders of the
Litigation Claims will receive a portion of the number of shares of New UPC
Common Stock to be issued and exchanged for UPC Ordinary Shares A and UPC
Priority Shares as provided in Sections 2.1(b) and 2.1(d), pari passu on a pro
rata basis with the holders of UPC Ordinary Shares A and the UPC Priority Shares
based on an allowed interest in an amount to be determined by the US Bankruptcy
Court. If the US Bankruptcy Court determines that the Litigation Claims are not
subject to subordination under section 510(b) or otherwise, then the holders of
the Litigation Claims will receive the same proportionate consideration on
account of the Litigation Claims as if they held UPC Notes in the amount of
their Litigation Claims in lieu of any cash payment; provided that the number of
shares of New UPC Common Stock to be issued to and exchanged for the Litigation
Claims shall be in addition to the Base Number of Shares.
(c) Full Satisfaction and Discharge. The receipt of the consideration
contemplated by and in accordance with the terms of this Agreement, the Plan
and/or the Akkoord shall constitute a full satisfaction, settlement, release and
discharge of the claims of each Other Creditor.
Section 2.9 Administrative and Other Priority Claims. The Plan will provide
that on or as soon as practicable after the Effective Date, each holder of
allowed administrative or other priority claims under the US Bankruptcy Code
shall receive cash equal to the full amount of its allowed claim or will
otherwise be left unimpaired and reinstated or shall be accorded such other
treatment as UPC and such holder agree to in writing. UPC shall use its
reasonable best efforts to ensure that claims that are treated as administrative
claims in the Chapter 11 Case are treated by UPC and the Administrator as claims
of "estate creditors" (boedelschuldeisers) or "▇▇▇▇▇▇-suppliers"
(dwangcrediteuren) under the Dutch Bankruptcy Code in connection with moratorium
proceedings in respect of UPC under the Dutch Bankruptcy Code.
Section 2.10 Treatment of Outstanding Rights, Options and Warrants. The
Plan will provide that all rights, options and warrants to acquire UPC Ordinary
Shares A, including rights, options and warrants held by employees pursuant to
existing equity
-17-
incentive plans of UPC ("Employee Options"), outstanding immediately prior to
the Effective Date may remain outstanding, unless they can be cancelled in
connection with the Restructuring or unless, in the discretion of New UPC's
board of directors, any Employee Options are delivered to New UPC in connection
with issuance of equity pursuant to compensation arrangements described in
Section 2.11. All of the material rights, options and warrants to acquire UPC
Ordinary Shares A outstanding on the date of this Agreement are identified in
Annex F.
Section 2.11 Management Incentive Plan. The Plan will provide that, at the
discretion of New UPC's board of directors, options with respect to no more than
five (5) percent of New UPC's common equity outstanding immediately after the
Effective Date, on a fully-diluted basis, can be issued during the period
beginning on the Effective Date and continuing until the third anniversary of
the Effective Date to certain members of New UPC's and its Subsidiaries'
management and other employees pursuant to compensation arrangements adopted by
New UPC's board of directors; provided that, any options issuable under such
compensation arrangements on the Effective Date shall have an exercise price no
less than the share price implied by the Plan and as set forth in the Disclosure
Statement. Any shares reserved for issuance under the management incentive plan
shall be in addition to the Base Number of Shares.
Section 2.12 Extraordinary General Meeting. As promptly as practicable
after the Filing Date, UPC shall call an extraordinary general meeting of its
shareholders (the "Shareholders Meeting"), at which it shall propose (i) that
the authorized share capital of UPC be amended (the "Capital Amendment
Proposal") to 450,000,000 ordinary shares A, par value (euro)0.02 per share,
50,000,000,000 ordinary shares C, par value (euro)0.02 per share, 300 priority
shares, par value (euro)0.01 per share and 12,400 preference shares A, par value
(euro)0.01 per share, (ii) the approval of the Restructuring and (iii) such
other proposals (including, without limitation, such proposals to amend the
Articles of Association of UPC) as UPC deems necessary or appropriate to give
effect to the Restructuring and the other transactions contemplated hereby
(collectively, the "Proposals"). UPC shall provide the Committee and UGC with
copies of any materials provided to the holders of its Ordinary Shares A in
connection with the Shareholders Meeting.
Section 2.13 Condition Precedent to Confirmation of the Plan. It shall be a
condition precedent to consummation of the Plan that no UPC Preference Shares A
remain outstanding and enforceable, other than UPC Preference Shares A held by
New UPC after giving effect to the consummation of the Restructuring, following
the Effective Date of the Plan except that such condition shall be deemed
satisfied unless UGC or a Majority-in-Interest of the Participating Noteholders
serve written notice on the other that such condition has not been satisfied.
ARTICLE III
SHAREHOLDERS' MEETING; DISCLOSURE
STATEMENT; PLAN; AKKOORD
------------------------
Section 3.1 Shareholders' Meeting. As soon as reasonably practicable after
the Filing Date, UPC shall (i) duly call, give notice of, convene and hold the
Shareholders
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Meeting, including adjourning or recalling the same if necessary to obtain a
quorum, and (ii) use all commercially reasonable efforts to obtain approval of
all of the Proposals by the requisite vote of the shareholders of UPC.
Section 3.2 Prospectus.
(a) Preparation. As promptly as practicable after the date of this
Agreement, and to the extent required by applicable Dutch securities laws and
regulations of the Netherlands Authority for the Financial Markets (Autoriteit
Financiele Markten) (the "A-FM"), New UPC and UPC shall prepare and, subject to
the approval of UGC and after consultation with the Committee, file with the
A-FM a prospectus (together with all materials included therewith and any
amendments or supplements thereto, the "Prospectus") in respect of the shares of
New UPC Common Stock to be issued in respect of the Restructuring pursuant to
the Plan. The UGC Group, the Participating Noteholders, New UPC and UPC shall
cooperate with each other and provide each other with all information necessary
in order to prepare the Prospectus. The offer to exchange shares of New UPC
Common Stock for the Belmarken Notes, the UPC Notes, the claims of the Other
Creditors, the UPC Preference Shares A, the UPC Ordinary Shares A and the UPC
Priority Shares will be included in the Prospectus. Each of UPC, the UGC Group
and New UPC shall use its respective commercially reasonable efforts to (i) have
an external auditor certify that the Prospectus complies with all requirements
of Dutch securities regulations as promptly as practicable and, in any event,
prior to such filing, and (ii) to cause the Prospectus to be made generally
available and to be mailed to the holders of the Belmarken Notes, the UPC Notes,
the UPC Preference Shares A and the UPC Ordinary Shares A and to the Other
Creditors as promptly as practicable after the Prospectus is completed and
submitted to the A-FM and such other securities regulators as may be applicable.
(b) Listing Applications. New UPC shall use its commercially
reasonable efforts to cause the shares of New UPC Common Stock to be issued in
the Restructuring to be listed on the Nasdaq and, to the extent determined
advisable by New UPC and UGC, on the Official Segment of the stock market of
Euronext or another major European securities exchange. New UPC shall prepare
and file with Nasdaq and the SEC and, to the extent applicable, Euronext or such
other exchange, such listing applications, offering circulars and registration
statements in respect of the shares of New UPC Common Stock to be issued in
connection with the Restructuring as are required to be filed by the applicable
rules and regulations of the Nasdaq, the SEC and, to the extent applicable,
Euronext or such other exchange and shall use its commercially reasonable
efforts to have such applications and offering circulars approved and such
registration statements declared effective as are necessary for the listing of
such Shares of New UPC Common Stock on the Nasdaq and, to the extent applicable,
Euronext or such other exchange.
Section 3.3 Disclosure Statement and Plan; Akkoord.
(a) Disclosure Statement and Plan. As promptly as practicable, UPC and
New UPC shall prepare and, subject to the approval of UGC and after consultation
with the Committee, file with the US Bankruptcy Court promptly after the Filing
Date the Disclosure Statement and Plan, which shall be consistent with all of
the disclosures
-19-
contained in (or, to the extent it is determined that such documents need not be
prepared, would be required to be contained in) the Prospectus as well as such
other disclosures and information as may be required under the US Bankruptcy
Code or US Bankruptcy Rules or applicable Dutch or Luxembourg securities laws or
the inclusion of which is otherwise deemed advisable by UPC in connection with
the solicitation of votes in favor of the Plan. The UGC Group, New UPC, the
Participating Noteholders and UPC shall cooperate with each other and provide
each other with all information necessary in order to prepare the Disclosure
Statement and the Plan. The offer to exchange shares of New UPC Common Stock for
the Belmarken Notes, the UPC Notes, the claims of the General Unsecured
Creditors, the Litigation Claims, the UPC Preference Shares A, the UPC Ordinary
Shares A and the UPC Priority Shares will be described in the Disclosure
Statement and the Plan. Each of UPC, the UGC Group and New UPC shall use its
respective commercially reasonable efforts to (i) have the Disclosure Statement
and the Plan approved by the US Bankruptcy Court as promptly as practicable
after such filing, and (ii) to cause the Disclosure Statement, together with any
amendment or supplement thereto, to be mailed to the holders of the Belmarken
Notes, the UPC Notes, the UPC Preference Shares A and the UPC Ordinary Shares A,
as well as to the Other Creditors and to all other holders of claims against,
and interests in, UPC who are entitled to receive such Disclosure Statement and
the Plan, as promptly as practicable after the Disclosure Statement is approved
by the US Bankruptcy Court. The Participating Noteholders agree not to object to
the approval of the Disclosure Statement as long as it complies in all material
respects with the terms of this Agreement.
(b) Akkoord. As promptly as practicable, UPC shall prepare and,
subject to the approval of UGC and after consultation with the Committee, file
with the Dutch Bankruptcy Court promptly after the Filing Date the Akkoord,
which shall incorporate all of the disclosures contained in (or, to the extent
it is determined that such documents need not be prepared, would be required to
be contained in) the Prospectus and the Disclosure Statement, as well as such
other disclosures and information as may be required under the Dutch Bankruptcy
Code or the inclusion of which is otherwise deemed advisable by UPC in
connection with the solicitation of votes in favor of the Akkoord. The UGC
Group, New UPC, the Participating Noteholders and UPC shall cooperate with each
other and provide each other with all information necessary in order to prepare
the Akkoord. Each of UPC, the UGC Group and New UPC shall use its respective
commercially reasonable efforts to cause the Akkoord, together with any
amendment or supplement thereto, to be mailed to the holders of the Belmarken
Notes, the UPC Notes, as well as to the Other Creditors and to all other holders
of claims against, and interests in, UPC who are entitled to receive the
Akkoord.
(c) Opportunity to Comment. UPC and New UPC shall provide each of UGC,
New UPC and the Participating Noteholders with a reasonable opportunity to
review and comment on the Disclosure Statement, the Plan and the Akkoord, and
any amendment or supplement thereto, prior to filing same with the US Bankruptcy
Court or the Dutch Bankruptcy Court, as applicable, and shall provide each other
with a copy of all such filings made with the US Bankruptcy Court and the Dutch
Bankruptcy Court.
(d) Response to Comments. UPC and New UPC shall use their commercially
reasonable efforts to respond to and resolve any objections raised by
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parties in interest before the US Bankruptcy Court or the Dutch Bankruptcy Court
with respect to the Disclosure Statement, the Plan and the Akkoord as promptly
as practicable. UPC shall notify each of UGC, New UPC and the Participating
Noteholders promptly of the receipt of any such objections to the Disclosure
Statement, the Plan and the Akkoord and shall supply each of them with copies of
all material correspondence received with respect to the Disclosure Statement,
the Plan and the Akkoord.
ARTICLE IV
MINORITY RIGHTS; BOARD COMPOSITION
----------------------------------
Section 4.1 Pre-emptive Rights. On or prior to the Effective Date, New
UPC's certificate of incorporation will be amended to provide that the holders
of shares of New UPC Common Stock will have pre-emptive rights (the
"Subscription Rights") for the first (euro)1,538.46 million of equity or
equity-linked securities issued by New UPC after the Effective Date for cash or
in exchange for assets (or other consideration) acquired from an Affiliate. The
Subscription Rights will provide that, subject to any approvals required
pursuant to Section 4.3 hereof, if New UPC issues New UPC Common Stock in
exchange for assets (or other consideration) acquired from an Affiliate, the
holders of New UPC Common Stock will have the right to subscribe for additional
shares of New UPC Common Stock on a pro rata basis for cash at the same fair
market value as the assets (or other consideration) received for such shares of
New UPC Common Stock. The Subscription Rights will: (a) not be separable from
the New UPC Common Stock and (b) expire four years after the Effective Date.
Section 4.2 New UPC Board Composition.
(a) On or prior to the Effective Date, New UPC's By-Laws will be
amended to provide that, for a period beginning on the Effective Date and ending
three years after the Effective Date:
(i) the Board of Directors of New UPC shall be comprised of ten
members and that the number of members constituting the Board of Directors
of New UPC may not be changed without the consent of the Designated Board
Members (as defined below);
(ii) a Majority-in-Interest of the Participating Noteholders will have
the right to designate two individuals, each of whom must be acceptable to
UGC in its sole discretion, to serve as directors of New UPC (the
"Designated Board Members");
(iii) the Designated Board Members shall not be removed except for
cause or upon the written request of a Majority-in-Interest of the
Participating Noteholders; and
(iv) upon the removal, resignation or death of a Designated Board
Member, the Participating Noteholders shall have the right to designate an
additional individual, who must be acceptable to UGC in its sole
discretion, to serve as a Designated Board Member to fill the vacancy
created by such removal, resignation or death.
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(b) For a period beginning on the Effective Date and ending three
years after the Effective Date, New UPC's Board of Directors shall, to the
extent consistent with the rules of Nasdaq and Euronext or such other European
securities exchange, if any, on which New UPC and UGC shall have determined to
list the New UPC Common Stock, in each case to the extent applicable, be
comprised of ten Persons, eight of whom shall have been designated by UGC and
two of whom shall be the initial Designated Board Members. A
Majority-in-Interest of the Participating Noteholders shall designate the
initial Designated Board Members prior to the Effective Date.
Section 4.3 Related Party Transactions. On or prior to the Effective Date,
New UPC's by-laws will be amended to require that, during the period beginning
on the Effective Date and ending on the third anniversary after the Effective
Date, transactions by New UPC or UPC with Persons (other than Subsidiaries of
New UPC) that, at the time of determination, are Affiliates of New UPC with an
aggregate value of greater than $10 million per year (excluding (i) performance
of transactions in existence on the date of this Agreement that have been
disclosed in the UPC SEC Documents, (ii) completion of transactions described in
Schedule 4 of the Disclosure Letter, (iii) transactions, including, but not
limited to, renewals or replacements of existing transactions, that are
consistent with UPC's or its Subsidiaries' past practices, which past practices
were disclosed in the UPC SEC Documents, and (iv) to the extent such
transactions would otherwise constitute Related Party Transactions and are not
otherwise described in clause (i), (ii) or (iii), transactions with respect to
programming contracts, including, but not limited to, renewals or replacements
of existing transactions, with any of Liberty Media Corporation, its Affiliates
and/or its Subsidiaries, that (a) are entered into in the ordinary course of
business on commercially reasonable terms, and (b) are consistent with UPC's or
its Subsidiaries' past practices) (a "Related Party Transaction") shall not be
entered into if rejected by both of the Designated Board Members; provided that
in the event that a proposed Related Party Transaction is rejected by both of
the Designated Board Members, a majority of the Board of Directors may submit
the matter to a vote of the stockholders of New UPC and if such proposed Related
Party Transaction is approved by a majority of the Disinterested Stockholders
voting with respect to such matter, the proposed Related Party Transaction may
be entered into.
Section 4.4 Stockholders Agreement. On or prior to the Effective Date, UGC,
New UPC and the Participating Noteholders shall enter into a stockholders
agreement (the "Stockholders Agreement") which shall:
(a) implement the provisions of Sections 4.2 and 4.3;
(b) provide that, until the third anniversary of the Effective Date,
New UPC and UGC shall use their reasonable best efforts to cause the persons
designated by a Majority-in-Interest of the Participating Noteholders to serve
as Designated Board Members to be elected to serve as members of the Board of
Directors of New UPC, including, without limitation in the case of New UPC, by
causing such designees to be nominated for election as directors of New UPC by
the stockholders of New UPC on the slate of directors endorsed or supported by
the management of New UPC and by soliciting proxies, to the extent applicable,
in support of the election of such designees to the Board of Directors of New
UPC, and, in the case of UGC, voting, or causing to be voted, all shares of New
UPC Common Stock and all other Voting Securities of New UPC held by UGC or other
members of the UGC Group in favor of the election of such
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designees to the Board of Directors of New UPC and otherwise in a manner
consistent with Section 4.2;
(c) provide the Participating Noteholders with the following rights to
participate in sales of New UPC Common Stock by the UGC Group:
(i) If all previous transfers for value of shares of New UPC Common
Stock made by the UGC Group after the Effective Date, together with any
transfers for value of shares of New UPC Common Stock proposed to be made
by the UGC Group in a transfer, in each case other than (a) any sale or
other disposition of shares of New UPC Common Stock by and exclusively
among the UGC Group, Subsidiaries of UGC and Affiliates of UGC; provided
that such transferee agrees to be bound by the terms of the Stockholders
Agreement, or (b) pro rata distributions of shares of New UPC Common Stock
to the Stockholders of UGC, would result in the transfer, in the aggregate
for all such transactions by the UGC Group since the last Tag-Along Sale
(as hereinafter defined), if any, of at least five percent (5%) of the
outstanding shares of New UPC Common Stock (such sale or other disposition
for value being referred to as a "Tag-Along Sale"), then the UGC Group
shall afford each of the Participating Noteholders holding one half of one
percent (1/2%) or more of the outstanding shares of New UPC Common Stock
(each, individually, a "Tag-Along Stockholder" and, collectively, the
"Tag-Along Stockholders") the opportunity to participate proportionately in
such Tag-Along Sale in accordance with this Section 4.4(c). The number of
shares of New UPC Common Stock that each Tag-Along Stockholder will be
entitled to include in such Tag-Along Sale (the "Tag-Along Allotment")
shall be determined by multiplying (i) the number of shares of New UPC
Common Stock held by such Tag-Along Stockholder as of the close of business
on the day immediately prior to the Tag-Along Notice Date (as hereinafter
defined) by (ii) a fraction, the numerator of which shall equal the number
of shares of New UPC Common Stock proposed by the UGC Group to be sold or
otherwise disposed of pursuant to the Tag-Along Sale and the denominator of
which shall equal the total number of shares of New UPC Common Stock that
are beneficially owned by the UGC Group as of the close of business on the
day immediately prior to the Tag-Along Notice Date (the "Common Shares UGC
Fraction");
(ii) Notwithstanding any other provision of the Stockholders
Agreement, if any such Participating Noteholder fails to elect to
participate in a Tag-Along Sale within ten (10) days after the Tag-Along
Sale Notice (as defined below) is given, the UGC Group shall give notice of
such failure to the other Tag-Along Stockholders. Such notice shall be made
by telephone and confirmed in writing within two (2) days. The other
Tag-Along Stockholders shall have three (3) days following the date such
written notice was given to agree to sell their pro rata share of any
unsold portion. For purposes of this Section 4.4(c)(ii), a participating
Tag-Along Stockholder's pro rata share of any unsold portion of shares of
New
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UPC Common Stock shall be equal to the number of shares obtained by
multiplying (A) the Common Shares UGC Fraction times the total number of
shares of New UPC Common Stock that are held by such Participating
Noteholders that are not participating in the Tag-Along Sale, if any, by
(B) the number of shares of New UPC Common Stock held by such participating
Tag-Along Stockholder divided by the total number of shares of New UPC
Common Stock held by all Tag-Along Stockholders that are participating in
the Tag-Along Sale with respect to shares of New UPC Common Stock;
(iii) The UGC Group shall provide each Tag-Along Stockholder and New
UPC with written notice (the "Tag-Along Sale Notice") not more than sixty
(60) days nor less than fifteen (15) days prior to the proposed date of the
Tag-Along Sale (the "Tag-Along Sale Date"). Each Tag-Along Sale Notice
shall be accompanied by a copy of any written agreement relating to the
Tag-Along Sale and shall set forth: (i) the name and address of each
proposed transferee of shares of New UPC Common Stock in the Tag-Along
Sale; (ii) the number of shares of New UPC Common Stock proposed to be
transferred by the UGC Group; (iii) the proposed amount and form of
consideration (including any potential adjustments to the consideration
paid for such shares of New UPC Common Stock contained in the written
agreement relating to the Tag-Along Sale) to be paid for such shares of New
UPC Common Stock and the terms and conditions of payment offered by each
proposed transferee; (iv) the aggregate number of shares of New UPC Common
Stock held of record by the UGC Group as of the close of business on the
day immediately prior to the date of the Tag-Along Notice (the "Tag-Along
Notice Date"); (v) the Tag-Along Stockholder's Tag-Along Allotment assuming
the Tag-Along Stockholder elected to sell the maximum number of shares of
New UPC Common Stock; (vi) confirmation that the proposed transferee has
been informed of the "Tag-Along Rights" provided for herein and has agreed
to purchase shares of New UPC Common Stock from any Tag-Along Stockholder
in accordance with the terms hereof; and (vii) the Tag-Along Sale Date;
(iv) Any Tag-Along Stockholder wishing to participate in the Tag-Along
Sale shall provide written notice (the "Tag-Along Notice") to the UGC Group
no more than ten (10) days after the Tag-Along Sale Notice is given. The
Tag-Along Notice shall set forth the number of Shares that such Tag-Along
Stockholder elects to include in the Tag-Along Sale, which shall not exceed
such Tag-Along Stockholder's applicable Tag-Along Allotment. The Tag-Along
Notice given by any Tag-Along Stockholder shall constitute such Tag-Along
Stockholder's binding agreement to sell the shares of New UPC Common Stock
specified in the Tag-Along Notice on the terms and conditions applicable to
the Tag-Along Sale; provided, however, that in the event that there is any
material change in the terms and conditions of such Tag-Along Sale
applicable to the Tag-Along Stockholder (including, but not limited to, any
decrease in the purchase price that occurs other than pursuant to an
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adjustment mechanism set forth in the agreement relating to the Tag-Along
Sale) after such Tag-Along Stockholder gives its Tag-Along Notice, then,
notwithstanding anything herein to the contrary, the Tag-Along Stockholder
shall have the right to withdraw from participation in the Tag-Along Sale
with respect to all of its Shares affected thereby. If the proposed
transferee does not consummate the purchase of all of the shares of New UPC
Common Stock requested to be included in the Tag-Along Sale by any
Tag-Along Stockholder on the same terms and conditions applicable to the
UGC Group, then the UGC Group shall not consummate the Tag-Along Sale of
any of its Shares to such transferee, unless the shares of the UGC Group
and the Tag-Along Stockholders to be sold are reduced or limited pro rata
in proportion to the respective number of shares of New UPC Common Stock
actually sold in any such Tag-Along Sale and all other terms and conditions
of the Tag-Along Sale are the same for the UGC Group and the Tag-Along
Stockholders. Notwithstanding the foregoing, if the number of shares of New
UPC Common Stock proposed to be sold in any proposed Tag-Along Sale are
reduced or limited such that the proposed sale is no longer a Tag-Along
Sale in accordance with the terms of the Stockholders Agreement, then the
terms of the Stockholders Agreement shall be inapplicable to such proposed
sale and no Participating Noteholder or other stockholder shall have the
right hereunder to participate in such proposed transaction as a Tag-Along
Stockholder;
(v) If a Tag-Along Notice from any Tag-Along Stockholder is not
received by the UGC Group within the ten (10) day period specified in
Section 10.4(c)(iv), the UGC Group shall have the right to consummate the
Tag-Along Sale without the participation of such Tag-Along Stockholder, but
only on terms and conditions which are no more favorable in any material
respect to the UGC Group (and, in any event, at no greater a purchase
price) than as stated in the Tag-Along Sale Notice and only if such
Tag-Along Sale occurs on a date within ninety (90) days of the Tag-Along
Sale Date;
(vi) On the Tag-Along Sale Date, each Tag-Along Stockholder shall
deliver a certificate or certificates for the shares of New UPC Common
Stock to be sold by such Tag-Along Stockholder in connection with the
Tag-Along Sale, duly endorsed for transfer with signatures guaranteed, to
the transferee in the manner and at the address indicated in the Tag-Along
Notice against delivery of the purchase price for such shares of New UPC
Common Stock;
(vii) Any Participating Noteholder seeking to sell any shares of New
UPC Common Stock in connection with a Tag-Along Sale shall enter into an
agreement (the "Tag Along Sale Agreement") containing substantially similar
representations, warranties, indemnities and agreements as made by the UGC
Group in connection with such Tag-Along Sale, but in no case shall such
representations, warranties,
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indemnities and agreements be required to be made by the Participating
Noteholder on a joint (as opposed to several) basis or have the potential
of subjecting such Participating Noteholder to greater liability (on a
proportionate basis) than the UGC Group in connection with such Tag-Along
Sale.
ARTICLE V
VOTING PROVISIONS
Section 5.1 Voting in the Shareholders Meeting. Each party hereto,
including without limitation, UGC (on its own behalf and on behalf of the UGC
Group), UUB and each Participating Noteholder agrees that, for so long as this
Agreement remains in effect, such party shall cause all UPC Voting Securities
now beneficially owned or the beneficial ownership of which is hereafter
acquired by such party, to be voted at the Shareholders Meeting (or any
adjournment, postponement or continuation thereof) in favor of (a) the Proposals
and (b) any other proposals necessary or advisable to the Restructuring and
which are consistent with this Agreement and which are submitted for approval by
the shareholders of UPC at any annual or extraordinary general meeting of the
shareholders of UPC. Each party hereto, including without limitation, UGC (on
its own behalf and on behalf of the UGC Group), UUB and each Participating
Noteholder further agrees that, for so long as this Agreement remains in effect,
such party shall cause all UPC Voting Securities now beneficially owned or the
beneficial ownership of which is hereafter acquired by such party to be voted
against (i) any action or agreement that would result in a breach in any respect
of any covenant, representation or warranty or any other obligation or agreement
of UPC and/or such party, as the case may be, pursuant to this Agreement and
(ii) any action by UPC or any of its Subsidiaries and/or such party, as the case
may be, which is intended to or could reasonably be expected to impede,
interfere with, delay, postpone or materially adversely affect the Restructuring
and the other transactions contemplated by this Agreement. No party hereto shall
enter into any agreement or understanding with any Person the effect of which
would be to violate, circumvent or otherwise impede the effect of this Section
5.1 or any other provision of this Agreement.
Section 5.2 Certain Voting Matters. Each party hereto, including without
limitation, UGC (on its own behalf and on behalf of the UGC Group), UUB and each
of the Participating Noteholders, agrees that, for so long as this Agreement
remains in effect, such party shall cause all UPC Notes now beneficially owned
or the beneficial ownership of which is hereafter acquired by such party, to be
voted at all meetings, or consents obtained without meetings, of holders of UPC
Notes against the enforcement of any remedies under the relevant indentures and
shall take all such action as may be necessary to instruct the trustees under
the relevant indentures to act in a manner consistent with this Agreement,
including, without limitation, by voting to instruct such trustees to rescind
any action taken to accelerate the UPC Notes or to enforce remedies under the
relevant indentures.
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Section 5.3 Voting After the Filing Date.
(a) Agreement to Vote for Plan and Akkoord. Subject to Section 5.5
hereof, UGC, UUB and each Participating Noteholder irrevocably agrees, and UGC
hereby agrees to cause each other member of the UGC Group, during the period
commencing on the date of this Agreement and continuing until the termination of
this Agreement as provided in Article XI of this Agreement, (i) to vote, when
properly solicited to do so, timely all of its Restricted Claims in favor of (a)
the Plan, as the Plan may be modified in accordance with the terms of this
Agreement, and (b) the Akkoord, as the Akkoord may be modified in accordance
with the terms of this Agreement; provided, in each case, that such
modifications do not deviate from the terms and conditions set forth in this
Agreement in a manner that is adverse in any material respect to such party, by
timely executing ballots in favor of the Plan and timely executing ballots,
irrevocable voting instructions and appropriate irrevocable powers of attorney
in favor of the Administrator (with power of substitution) to file claims and
vote in favor of the Akkoord, and (ii) not attempt to revoke or withdraw such
vote or power of attorney in favor of the Plan and the Akkoord so long as the
Plan or the Akkoord, as the case may be, is not modified in a manner that is
adverse in any material respect to such party provided that no Participating
Noteholder shall be required to support a Plan or an Akkoord that (i) reduces
the percentage of the Base Number of Shares of New UPC's outstanding common
stock set forth in Section 2.1(d) to be offered to the holders of the UPC Notes
other than the UGC Group, or (ii) alters the provisions of Article IV or Article
VI; provided further, that the UGC Group shall not be required to support a Plan
or an Akkoord that (i) reduces the percentage of the Base Number of Shares of
New UPC's outstanding common stock set forth in Section 2.1(d) to be offered to
the UGC Group in exchange for the Belmarken Notes and the UPC Notes held by the
UGC Group on the date hereof this Agreement, or (ii) alters the provisions of
Article IV or Article VI. Each party agrees that its agreement hereunder may be
disclosed in solicitation materials prepared in connection with the Plan and the
Akkoord.
(b) Modifications. Notwithstanding any provision of this Agreement
(other than Section 2.1(f)), New UPC or UPC, as the case may be, may, after
consultation with the Committee, make such changes and modifications to the
Plan, the Akkoord, the New UPC Dutch Exchange Offer and/or the Disclosure
Statement as New UPC or UPC, as the case may be, in their respective discretions
deems necessary and appropriate, and to the extent permissible under the US
Bankruptcy Code and the Dutch Bankruptcy Code, in order to have the Disclosure
Statement approved the US Bankruptcy Court, the Plan confirmed by the US
Bankruptcy Court and the Akkoord ratified by the Dutch Bankruptcy Court;
provided that no party hereto shall be required to support a Plan or an Akkoord
that deviates from the terms and conditions of this Agreement in a manner that
is adverse in any material respect to such party; provided further, that no
Participating Noteholder shall be required to support a Plan or an Akkoord that
(i) reduces the percentage of the Base Number of Shares of New UPC's outstanding
common stock set forth in Section 2.1(d) to be offered to the holders of the UPC
Notes other than the UGC Group, or (ii) alters the provisions of Article IV or
Article VI; provided further, that the UGC Group shall not be required to
support a Plan or an Akkoord that (i) reduces the percentage of the Base Number
of Shares of New UPC's outstanding common stock set forth in Section 2.1(d) to
be offered to the UGC Group in exchange for the Belmarken
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Notes and the UPC Notes held by the UGC Group on the date hereof this Agreement,
or (ii) alters the provisions of Article IV or Article VI.
Section 5.4 Direction of Trustees. Each of the Participating Noteholders
and the UGC Group agrees that it shall use commercially reasonable efforts to
cause each of the trustees under the Indentures governing the UPC Notes to take
such action as is necessary or desirable and which is consistent with the Trust
Indenture Act of 1939, as amended to date, and any other applicable Law to
achieve the results contemplated in this Agreement, including, without
limitation, entering into voting arrangements acceptable to the Dutch Bankruptcy
Court which allow all beneficial holders of UPC Notes fully to vote their claims
as beneficial holders in a manner that is consistent with voting rights of such
holders under applicable US bankruptcy law.
Section 5.5 Acknowledgement. This Agreement is not, and shall not be deemed
to be, a solicitation of votes to accept the Plan or the Akkoord or an offering
of any securities to be issued under the Plan or the Akkoord. Neither UGC, New
UPC, UPC nor any of their respective controlled Affiliates shall solicit
acceptances of the Plan from, or offer such securities to, the Participating
Noteholders or any other creditor or holder of any other claim against, or
interest in, UPC until the Disclosure Statement has been approved by the US
Bankruptcy Court and the holders of the Belmarken Notes, the UPC Notes, the UPC
Preference Shares A and the UPC Ordinary Shares A, the General Unsecured
Creditors and the other creditors and holders of any other claims against, or
interests in, UPC have been provided with all applicable solicitation materials
and related ballots.
ARTICLE VI
EFFECTIVE DATE EQUITY INVESTMENT
Section 6.1 New UPC Equity Purchase Rights. The Plan will provide that, on
the Effective Date, New UPC will provide each holder of UPC Notes and the
Belmarken Notes the right (the "New UPC Equity Purchase Rights") to purchase a
pro rata share of up to (euro)100 million based upon the number of shares of New
UPC Common Stock distributed to (x) the UGC Group in exchange for the Belmarken
Notes and the UPC Notes owned by the UGC Group on the date of this Agreement and
(y) the holders of the UPC Notes (other than the UPC Notes owned by the UGC
Group on the date of this Agreement) in accordance with Section 2.1(d) (as
reduced pursuant to the last sentence of this Section 6.1, the "Maximum
Subscription Amount") of shares of New UPC Common Stock at the per share price
implied by the Plan (the "Implied Purchase Price"). The shares of New UPC Common
Stock issuable upon exercise of the New UPC Equity Purchase rights will be in
addition to the Base Number of Shares. The New UPC Equity Purchase Rights will
only be exercisable on the Effective Date. The Maximum Subscription Amount will
be reduced on a euro-for-euro basis by an amount equal to (1) the net proceeds
of any assets sold by UPC prior to the Effective Date, other than assets sold in
the ordinary course of UPC's business in a manner consistent with its past
practices, and (2) the net proceeds from any non-dilutive capital raised by UPC
(other than capital received by UPC from UGC or its Affiliates).
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Section 6.2 UGC Subscription Commitment. UGC commits, subject to
confirmation of the Plan substantially on the terms set forth in this Agreement,
to purchase, on the Effective Date and New UPC commits to sell to UGC on the
Effective Date, an amount of shares of New UPC Common Stock with an aggregate
value equal to the Maximum Subscription Amount, less the number of shares of New
UPC Common Stock purchased by holders of UPC Notes pursuant to the New UPC
Equity Purchase Rights, such shares of New UPC Common Stock to be purchased and
sold at the Implied Purchase Price. The shares of New UPC Common Stock issuable
pursuant to this Section 6.2 will be in addition to the Base Number of Shares.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to each of the other parties hereto that
the statements contained in this Article VII are true and correct.
Section 7.1 Organization. UPC is a corporation duly organized and validly
existing under the Laws of The Netherlands and has all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as now being conducted.
Section 7.2 Capitalization.
(a) The authorized share capital of UPC is(euro)1,653,000,000
consisting of (i) 1,000,000,000 UPC Ordinary Shares A; (ii) 300,000,000 ordinary
shares B, par value(euro)0.01 per share; (iii) 300 UPC Priority Shares; (iv)
49,999,700 UPC Preference Shares A; and (v) 600,000,000 preference shares B, par
value(euro)0.01 per share. After giving effect to the Capital Amendment
Proposal, immediately prior to the Effective Date the authorized share capital
of UPC will be 450,000,000 ordinary shares A, par value(euro)0.02 per share,
50,000,000,000 ordinary shares C, par value(euro)0.02 per share, 300 UPC
Priority Shares and 12,400 UPC Preference Shares A. As of the close of business
on the date hereof, UPC had outstanding (i) 443,417,525 UPC Ordinary Shares A;
(ii) no ordinary shares B have been issued; (iii) 300 UPC Priority Shares; (iv)
12,400 UPC Preference Shares A; (v) no preference shares B have been issued and
(vi) sufficient UPC Ordinary Shares A are reserved for issuance upon the
conversion, exchange or exercise of outstanding rights, options, warrants or
convertible or exchangeable securities issued by UPC and set forth on Annex F
and Annex G attached hereto. All of the outstanding share capital or other
equity interests, as the case may be, of UPC are duly authorized, validly
issued, fully paid and non-assessable, and are not subject to, nor were they
issued in violation of, any preemptive rights, purchase option, call option,
right of first refusal, subscription right or any similar right, and were issued
in compliance with applicable securities laws and regulations.
(b) Except as set forth above or on Annex F and Annex G attached
hereto, and except for the transactions contemplated by this Agreement, (i)
there is no capital share or other security (voting or nonvoting) of UPC that is
authorized, issued or outstanding, (ii) there are no outstanding or authorized
options, warrants, calls, preemptive rights, subscriptions or other rights,
convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, agreements, arrangements,
commitments or claims of any character, contingent or
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otherwise, relating to the issued or unissued share capital of UPC or obligating
UPC to issue, transfer or sell or cause to be issued, transferred or sold any
capital shares or other equity interests in UPC or securities convertible into
or exchangeable for such shares or equity interests, or obligating UPC to grant,
extend or enter into any such option, warrant, call, preemptive right,
subscription or other right, convertible or exchangeable security, agreement,
arrangement, commitment or claim, and (iii) there are no outstanding contractual
obligations of UPC to repurchase, redeem or otherwise acquire any capital shares
of UPC.
Section 7.3 Authorization; Validity of Agreement; Corporate Action.
UPC has full corporate power and authority to execute, deliver and, subject to
obtaining the Shareholder Approval and the approval of the US Bankruptcy Court
and the Administrator, perform this Agreement and each instrument required
hereby to be executed and delivered and performed by UPC pursuant to this
Agreement, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by UPC of this Agreement and each instrument required hereby to be
executed and delivered by UPC pursuant to this Agreement and the performance of
its obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by UPC's
management board and UPC's supervisory board, and, except for obtaining the
Shareholder Approval and the approval of the UPC Priority Shares, voting as a
separate class, no other corporate action on the part of UPC is necessary to
authorize the execution, delivery and performance by UPC of this Agreement and
the consummation of the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by UPC, and, assuming due and
valid authorization, execution and delivery hereof by each other party hereto,
is a valid and binding obligation of UPC enforceable against UPC in accordance
with its terms, subject to the approval of the US Bankruptcy Court and the
Administrator.
Section 7.4 Consents and Approvals; No Violations. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance by UPC with the provisions of this Agreement
will not:
(a) subject to obtaining the Shareholder Approval, violate or conflict
with or result in any breach of any provision of the Articles of Association or
By-laws or other organizational documents of UPC;
(b) require any filing, recordation, declaration or registration with,
or permit, order, authorization, consent, waiver or approval of, or action by or
in respect of, or the giving of notice to, any Governmental Entity to which UPC
is subject, except for (i) the filing with the SEC of such reports under the
Exchange Act as may be required in connection with this Agreement, the
Restructuring and the transactions contemplated hereby and thereby, (ii) the
filing with Euronext and/or the A-FM of the Prospectus and any applicable
listing circulars, applications or notices, (iii) the obtaining of an auditor's
statement in respect of the Prospectus and (iv) the commencement of the Chapter
11 Case, the filing of the Moratorium Petition and the receipt of the requisite
approvals of the US Bankruptcy Court and the Administrator (collectively, the
"Required UPC Consents");
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(c) subject to obtaining the Required UPC Consents and the Shareholder
Approval, violate any of the terms, conditions or provisions of any Law or
Judgment of any Governmental Entity to which UPC is subject or by which any of
the foregoing or any of UPC's assets are bound, except that no representation is
made with respect to any Law of any jurisdiction in which UPC is not engaged in
business; or
excluding from preceding clauses (b) and (c) such matters that have not resulted
in and would not reasonably be likely to result in, individually or in the
aggregate, a material adverse effect on the ability of UPC to perform its
respective material obligations under, and to consummate the transactions
contemplated by, this Agreement and the Restructuring.
Section 7.5 SEC Reports and Financial Statements. Except for such delays as
are the subject of Forms 12b-25 timely filed with the SEC, UPC has filed timely
with the SEC all forms, reports, schedules, statements and other documents
(including, in each case, exhibits, schedules, amendments or supplements
thereto, and any other information incorporated by reference therein) required
to be filed by it since January 1, 1999 under the Exchange Act or the Securities
Act (as such documents have been amended or supplemented between the time of
their respective filing and the date hereof, the "UPC SEC Documents"). Except to
the extent amended or superseded by a subsequent filing with the SEC made prior
to the date hereof, as of their respective dates (and if so amended or
superseded, then on the date of such filing prior to the date hereof), the UPC
SEC Documents (including, without limitation, any financial statements or
schedules included therein) (a) did not 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 therein, in light of the circumstances
under which they were made, not misleading and (b) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act, as the case may be, and the applicable rules and regulations of the SEC
thereunder. Each of the financial statements contained in the UPC SEC Documents
(including, in each case, any related notes and schedules) has been prepared
from, and is in accordance with, the books and records of UPC and its
consolidated Subsidiaries, complies in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, has been prepared in accordance with GAAP as in effect
during such periods (except as may be indicated in the notes thereto) and fairly
presents the consolidated financial position and the consolidated results of
operations and cash flows of UPC and its consolidated Subsidiaries at the dates
and for the periods covered thereby.
Section 7.6 Brokers. Except for the fees and expenses of ▇▇ ▇▇▇▇▇▇ & Co.
and Lazard Freres LLC (whose fees and expenses shall be paid by UPC in
accordance with UPC's agreements with such firms), no agent, broker, Person or
firm acting on behalf of UPC is or will be entitled to any advisory fee,
commission or broker's or finder's fee from any party hereto (or any of their
respective Affiliates) in connection with this Agreement, the Restructuring or
any of the transactions contemplated hereby or thereby.
Section 7.7 Voting Requirements. The affirmative vote of the holders of (i)
a majority of the holders of the UPC Priority Shares, voting as a separate
class, with each UPC Priority Share having one hundred (100) votes, and (ii) at
least a majority of the outstanding UPC Voting Securities (voting as one class,
with each UPC Voting Security having one hundred (100) votes), entitled to be
cast in adopting the Proposals is the only
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vote of the holders of any class or series of UPC's share capital or other
securities of UPC necessary under applicable Law or stock exchange (or similar
self-regulatory organization) regulations to adopt the Proposals and for
consummation by UPC of the transactions contemplated by this Agreement.
Section 7.8 Feasibility. Based on an analysis of its financial
circumstances and needs, UPC expects that, after giving effect to the equity
investment contemplated under Article VI of this Agreement, consummation of the
Restructuring on the terms set forth in this Agreement is not likely to be
followed by the liquidation or the need for further judicial financial
reorganization of UPC.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
OF UGC, UGC HOLDINGS, NEW UPC AND UUB
Each of UGC, UGC Holdings, New UPC and UUB hereby represents and warrants
to each of the other parties hereto (other than each other UGC party) that the
statements contained in this Article VIII are true and correct.
Section 8.1 Organization. Each of UGC, UGC Holdings and New UPC is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business as
now being conducted. UUB is a limited liability company duly organized, validly
existing and in good standing under the Laws of the State of Delaware and has
all requisite company power and authority to own, lease and operate its
properties and assets and to carry on its business as now being conducted.
Section 8.2 Authorization; Validity of Agreement; Corporate Action. Each of
UGC, UGC Holdings, New UPC and UUB has the full corporate or company power and
authority to execute and deliver this Agreement and each instrument required
hereby to be executed and delivered by it pursuant to this Agreement and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by each of UGC, UGC Holdings, New UPC and UUB of this Agreement and
each instrument required hereby to be executed and delivered by UGC, UGC
Holdings, New UPC or UUB, as the case may be, pursuant to this Agreement and the
performance of its obligations hereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by its Board of
Directors or Managers, as the case may be, and no other corporate action or
company action on the part of UGC, UGC Holdings, New UPC or UUB, as the case may
be, is necessary to authorize the execution, delivery and performance by UGC,
UGC Holdings, New UPC or UUB, as the case may be, of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of UGC, UGC Holdings, New UPC and UUB and,
assuming due and valid authorization, execution and delivery hereof by each
other party hereto, is a valid and binding obligation of UGC, UGC Holdings, New
UPC and UUB, as the case may be, enforceable against such Person in accordance
with its terms.
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Section 8.3 Consents and Approvals; No Violations. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance by each of UGC, UGC Holdings, New
UPC and UUB with the provisions of this Agreement will not:
(a) violate or conflict with or result in any breach of any provision
of the Certificate of Incorporation, By-laws, Certificate of Formation,
Limited Liability Company Agreement or other organizational documents of
any of UGC, UGC Holdings, New UPC or UUB, as the case may be;
(b) require any filing, recordation, declaration or registration with,
or permit, order, authorization, consent, waiver or approval of, or action
by or in respect of, or the giving of notice to, any Governmental Entity to
which any of UGC, UGC Holdings, New UPC or UUB or any of their Subsidiaries
is subject, except for (i) the filing with the SEC of such reports under
the Exchange Act, as may be required in connection with this Agreement and
the transactions contemplated hereby, (ii) the filing with Nasdaq of a
listing application in respect of the shares of New UPC Common Stock to be
issued in respect of the Restructuring and (iii) the receipt of any
requisite US Bankruptcy Court approvals and Administrator approvals;
(c) subject to obtaining the approvals specified in Section 8.3(b),
violate any of the terms, conditions or provisions of any Law or Judgment
of any Governmental Entity to which any of UGC, UGC Holdings or UUB or any
of their respective Subsidiaries is subject or by which any of the
foregoing or any of their respective assets are bound, except that no
representation is made with respect to any Law of any jurisdiction in which
none of UGC, UGC Holdings or UUB and its Subsidiaries are not engaged in
business;
excluding from preceding clauses (b) and (c) such matters that have not resulted
in and would not reasonably be likely to result in, individually or in the
aggregate, a material adverse effect on the ability of any of UGC, UGC Holdings,
UUB or any member of the UGC Group to perform its respective material
obligations under this Agreement, and to consummate the Restructuring and the
transactions contemplated thereby.
Section 8.4 Ownership of Securities. The members of the UGC Group are the
lawful owners, beneficially and of record, of the Belmarken Notes, UPC Notes,
UPC Preference Shares A, UPC Priority Shares and UPC Ordinary Shares A and other
claims against, or interests in, UPC set forth on Annex H, free and clear of all
Liens.
Section 8.5 Certain Securities Law Matters. Each of UGC, UGC Holdings and
UUB hereby further represents for itself that:
(a) Such Person is entering into this Agreement, the Restructuring and the
transactions contemplated hereby and thereby for such Person's own account and
it intends to acquire any shares of New UPC Common Stock or other securities of
New UPC issued in connection with the Restructuring for investment purposes only
and not with a view to, or the intention of, distributing any such shares of New
UPC Common Stock or other securities in violation of the Securities Act or any
other applicable securities laws of the United States, The Netherlands or any
political subdivision of either of the foregoing, and any such securities will
not be disposed of in contravention of the
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Securities Act or any other applicable securities laws of the United States, The
Netherlands or any political subdivision of either of the foregoing.
(b) Such Person is sophisticated in financial matters and is able to
evaluate the risks and benefits of an investment in New UPC and in shares of New
UPC Common Stock. In addition, by virtue of such Person's expertise, the advice
available to such Person, and its previous investment experience, such Person
has extensive knowledge and experience in financial and business matters,
investments, securities, and private placements and the capability to evaluate
the merits and risks of this Agreement, the Restructuring and the transactions
contemplated hereby and thereby.
(c) Such Person is able to bear the economic risk of an investment in
New UPC and New UPC Common Stock (including, without limitation, the complete
loss of such investment) for an indefinite period of time.
(d) Such Person has had an opportunity to ask questions and receive
answers concerning the business and affairs of UPC and New UPC, the terms and
conditions of the New UPC Common Stock and such other matters concerning its
current investment in UPC, New UPC, the Restructuring and the transactions
contemplated thereby and has had full access to such other information
concerning UPC, New UPC, the Restructuring and the transactions contemplated
thereby as such Person has requested.
(e) Such Person is a "qualified institutional buyer," as such term is
defined pursuant to Rule 144A(a) promulgated under the Securities Act or, if not
such a "qualified institutional buyer," is an "accredited investor" as such term
is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D, promulgated under
the Securities Act.
Section 8.6 Brokers. Except for the fees and expenses of Credit Suisse
First Boston Corporation and UBS Warburg LLC (whose fees and expenses shall be
paid by UPC, or New UPC, as the case may be, in accordance with UGC's agreement
with such firms and with UPC), no agent, broker, Person or firm acting on behalf
of any member of the UGC Group is or will be entitled to any advisory fee,
commission or broker's or finder's fee from any party hereto (or any of their
respective Affiliates) in connection with this Agreement, the Restructuring or
any of the transactions contemplated hereby or thereby.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF PARTICIPATING NOTEHOLDERS
Each Participating Noteholder, for itself and no other party, hereby
represents and warrants to each of the other parties hereto that the statements
contained in this Article IX are true and correct.
Section 9.1 Organization. Such Participating Noteholder is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization.
Section 9.2 Authorization; Validity of Agreement; Noteholder Action. Such
Participating Noteholder has the full institutional power and authority to
execute and deliver this Agreement and each instrument required hereby to be
executed and delivered by it pursuant to this Agreement and, to perform its
obligations hereunder and thereunder. The execution, delivery and performance by
such Participating Noteholder of this
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Agreement and each instrument required hereby to be executed and delivered by
such Participating Noteholder, pursuant to this Agreement and the performance of
such Participating Noteholder's obligations hereunder and thereunder and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized, to the extent such authorization is required, by its Board of
Directors or other governing body and no other institutional action on the part
of such Participating Noteholder is necessary to authorize the execution,
delivery and performance by such Participating Noteholder of this Agreement and
the consummation of the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by such Participating Noteholder
and, assuming due and valid authorization, execution and delivery hereof by each
other party hereto, is a valid and binding obligation of such Participating
Noteholder enforceable against such Participating Noteholder in accordance with
its terms.
Section 9.3 Consents and Approvals; No Violations. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance by such Participating Noteholder
with the provisions of this Agreement will not:
(a) violate or conflict with or result in any breach of any provision
of the Certificate of Incorporation, By-laws, other organizational documents of
such Participating Noteholder;
(b) require any filing, recordation, declaration or registration with,
or permit, order, authorization, consent, waiver or approval of, or action by or
in respect of, or the giving of notice to, any Governmental Entity to which such
Participating Noteholder or any of its Affiliates is subject, except for (i) the
filing with the SEC of such reports under the Exchange Act, as may be required
in connection with this Agreement, the Restructuring and the transactions
contemplated hereby and thereby and (ii) the receipt of requisite US Bankruptcy
Court approvals and Administrator approvals;
(c) subject to obtaining the approvals specified in clause (ii) above,
violate any of the terms, conditions or provisions of any Law or Judgment of any
Governmental Entity to which such Participating Noteholder is subject or by
which any of the foregoing or any of their respective assets are bound, except
that no representation is made with respect to any Law of any jurisdiction in
which such Participating Noteholder are not engaged in business;
excluding from preceding clauses (b) and (c) such matters that have not resulted
in and would not reasonably be likely to result in, individually or in the
aggregate, a material adverse effect on the ability of such Participating
Noteholder to perform its material obligations under this Agreement, and to
consummate the Restructuring and the transactions contemplated thereby.
Section 9.4 Ownership of Securities. Such Participating Noteholder is the
lawful beneficial owner of the UPC Notes and other claims against, or interests
in, UPC set forth on Schedule 1 of the Disclosure Letter, free and clear of all
Liens.
Section 9.5 Certain Securities Law Matters. (a) Such Participating
Noteholder is entering into this Agreement, the Restructuring and the
transactions contemplated hereby and thereby for such Participating Noteholder's
own account (or for the account of its clients' funds)
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and it intends to acquire any shares of New UPC Common Stock or other securities
of New UPC issued in connection with the Restructuring for investment purposes
only and not with a view to, or the intention of, distributing any such shares
of New UPC Common Stock or other securities in violation of the Securities Act
or any other applicable securities laws of the United States, The Netherlands or
any political subdivision of either of the foregoing, and any such securities
will not be disposed of in contravention of the Securities Act or any other
applicable securities laws of the United States, The Netherlands or any
political subdivision of either of the foregoing.
(b) Such Participating Noteholder is sophisticated in financial
matters and is able to evaluate the risks and benefits of an investment in New
UPC and in shares of New UPC Common Stock. In addition, by virtue of such
Participating Noteholder's expertise, the advice available to such Participating
Noteholder, and its previous investment experience, such Participating
Noteholder has extensive knowledge and experience in financial and business
matters, investments, securities, and private placements and the capability to
evaluate the merits and risks of this Agreement, the Restructuring and the
transactions contemplated hereby and thereby.
(c) Such Participating Noteholder is able to bear the economic risk of
an investment in New UPC and New UPC Common Stock (including, without
limitation, the complete loss of such investment) for an indefinite period of
time.
(d) Such Participating Noteholder has had an opportunity to ask
questions and receive answers concerning the business and affairs of UPC and New
UPC, the terms and conditions of the New UPC Common Stock and such other matters
concerning its current investment in UPC, New UPC, the Restructuring and the
transactions contemplated thereby and has had full access to such other
information concerning UPC, New UPC, the Restructuring and the transactions
contemplated thereby as such Participating Noteholder has requested.
(e) Such Participating Noteholder is a "qualified institutional
buyer," as such term is defined pursuant to Rule 144A(a) promulgated under the
Securities Act, or, if not such a "qualified institutional buyer," such
Participating Noteholder is an "accredited investor" as such term is defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D, promulgated under the
Securities Act.
Section 9.6 Brokers. Except for the fees and expenses of ▇▇▇▇▇▇▇▇▇ & Co.
LLP (whose fees and expenses shall be paid by UPC in accordance with UPC's
agreement with such firm and with the Participating Noteholders or, if the
Restructuring is consummated on terms consistent with the terms of this
Agreement and UPC does not pay such fees and expenses, by New UPC), no agent,
broker, Person or firm acting on behalf of the Participating Noteholders is or
will be entitled to any advisory fee, commission or broker's or finder's fee
from any party hereto (or any of their respective Affiliates) in connection with
this Agreement, the Restructuring or any of the transactions contemplated hereby
or thereby.
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ARTICLE X
CERTAIN COVENANTS
Section 10.1 Commercially Reasonable Efforts. Subject to the terms and
conditions provided herein, each of the parties hereto shall, and shall cause
each of its controlled Affiliates to, cooperate and use its commercially
reasonable efforts to take, or cause to be taken, all appropriate action, and
do, or cause to be done, and assist and cooperate with the other parties hereto
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Restructuring and the
other transactions contemplated hereby and thereby and to make, or cause to be
made, all filings necessary, proper or advisable under applicable Laws, to
consummate and make effective the Restructuring and the transactions
contemplated hereby and thereby. Without limiting the generality of the
foregoing, each of the parties hereto shall, and shall cause each of their
controlled Affiliates to, cooperate and use their commercially reasonable
efforts promptly to:
(a) make any and all filings, recordations, declarations or
registrations with, obtain any and all actions or non-actions, licenses,
permits, consents, approvals, waivers, authorizations, qualifications and orders
of, give any and all notices to, take reasonable steps to avoid an action or
proceeding by, any and all Governmental Entities and parties to contracts with
UPC, in each case prior to the Effective Date, as are necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Restructuring and the other transactions contemplated hereby
and thereby;
(b) defend any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of the
Restructuring or any of the other transactions contemplated hereby and thereby;
it being understood and agreed that each party hereto shall promptly notify the
other parties of any litigation (including any shareholder litigation), against
such party and/or its directors relating to the Restructuring or any of the
transactions contemplated hereby and thereby;
(c) execute and deliver any additional instruments necessary to
consummate the Restructuring and the transactions contemplated hereby and
thereby and to carry out fully the purposes of this Agreement; and
(d) cooperate in the taking of such actions under applicable Dutch
corporate laws as are consistent with the intent of this Agreement and necessary
or advisable for the consummation of the Restructuring.
Section 10.2 Notification of Certain Matters. Each party hereto shall give
prompt written notice to each other party, of (a) the occurrence or
non-occurrence of any event known to such party, the occurrence or
non-occurrence of which has resulted in, or is reasonably likely to result in,
any representation or warranty set forth in this Agreement made by such party to
be untrue or inaccurate in any material respect; (b) any material failure by
such party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; or (c) any action, suit, proceeding,
inquiry or investigation pending or, to the knowledge of such party, threatened,
that questions or challenges this Agreement or the consummation of the
Restructuring of any of the
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transactions contemplated hereby and thereby; provided that the delivery of any
notice pursuant to this Section 10.2 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice and that no such
notification shall modify the representations or warranties of any party or the
conditions to the obligations of any party hereunder.
Section 10.3 Tax Ruling. Each party hereto shall cooperate with UPC in
seeking a tax ruling from the Dutch tax inspector in respect of the
Restructuring, such ruling to be in form and substance satisfactory to UPC. UPC
shall consult with UGC and the Committee regarding preparations for and the
results of discussions with the Dutch tax inspector (and other tax authorities)
in respect of such a ruling.
Section 10.4 Forbearance. As long as this Agreement remains in effect, each
Person party hereto (other than UPC) acknowledges and agrees that it shall
forbear from (w) exercising the right to receive principal of, and interest or
dividends on, any security of UPC held by such Person, (x) the filing of a
notice of default, the taking of any action to accelerate or otherwise collect
on any such security, (y) pursuing any rights or remedies (including
acceleration of amounts due thereunder) available to such Person under any such
security and (z) the commencement of litigation or proceedings (including
arbitration) of any kind or nature against UPC or any of its Subsidiaries,
arising as the result of, or in connection with, any failure to pay the
principal of, or interest on, any such security or a default under any such
security or in respect of any other rights or remedies of such Person under any
such security or any indenture that governs any security of UPC held by such
Person or any agreement among UPC and any such Person or Persons. After UPC
becomes a debtor under the US Bankruptcy Code or subject to the moratorium under
the Dutch Bankruptcy Code, the Persons party hereto (other than UPC) shall be
entitled to exercise any rights or remedies they have in connection with the
Chapter 11 Case or the Moratorium, as the case may be, in all cases consistent
with the provisions and intent of this Agreement, subject to any stay or
modifications of such rights or remedies which may exist or be entered in
connection with such proceedings; provided that so long as this Agreement
remains in effect, such Persons agree to exercise such rights and remedies only
in a manner consistent with the provisions of this Agreement. Notwithstanding
anything in this Section 10.4 to the contrary, if the Plan is confirmed and is
not confirmed substantially on the terms set forth in this Agreement (after
giving effect to any modifications made pursuant to Section 2.1(f)) the
obligations under this Section 10.4 of each Person party hereto shall terminate.
Section 10.5 Restrictions on Transfer. Until the Effective Date, each
Person party hereto (other than UPC) agrees that it shall not (a) sell,
transfer, assign, pledge, gift or otherwise dispose of any of its claims
against, or interests in, UPC (including, without limitation, any Belmarken
Notes, UPC Notes, UPC Preference Shares A or UPC Ordinary Shares A), in whole or
in part, or any interest therein, unless the transferee thereof accepts such
claim against, or interest in, UPC subject to the terms of this Agreement, as
evidenced by an agreement executed by such transferee that provides, among other
things, that UPC is an express third-party beneficiary of such agreement or (b)
grant any proxies, deposit any of its claims against, or interests in, UPC
(including, without limitation, any Belmarken Notes, UPC Notes, UPC Preference
Shares A or UPC Ordinary Shares A) into a voting trust, or enter into a voting
or tendering agreement with
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respect to any claims against, or interests in, UPC, unless such arrangement
provides for compliance with this Agreement. In the event that a Person party to
this Agreement transfers any such claim against, or interest in, UPC prior to
the final vote on the Plan or the Akkoord, the transferee of such claim against,
or interest in, UPC shall comply with and be subject to all the terms of this
Agreement, including, but not limited to, the transferring party's obligations
to vote in favor of the Plan and the Akkoord and shall, as a condition precedent
to such transfer, execute an agreement on terms substantially identical in all
respects to the terms of this Agreement.
Section 10.6 Further Acquisition of Claims or Interests. This Agreement
shall in no way be construed to preclude any Person party hereto from acquiring
additional claims against, or interests in, UPC; provided that if any such
Person acquires any additional claims against, or interests in, UPC after the
date of this Agreement, such additional claims against, or interests in, UPC
shall immediately upon such acquisition without further action on the part of
UPC or the acquiring Person become subject to the terms of this Agreement.
Section 10.7 Impact of Appointment of Creditors' Committee. If an official
committee of unsecured creditors is appointed by the United States Trustee in
the Chapter 11 Case or by the Dutch Bankruptcy Court in the case of the
Moratorium Petition, UPC shall cooperate reasonably with the Participating
Noteholders in seeking to cause the United States Trustee or the Dutch
Bankruptcy Court, as the case may be, to appoint some or all of the
Participating Noteholders to be members of such official committee pursuant to
section 1102 of the Bankruptcy Code and the Dutch Bankruptcy Code. Nothing
contained in this Agreement shall limit the ability of any Participating
Noteholder appointed to such committee to take such acts as a committee member
that are required by or consistent with the fiduciary duties of a committee
member; provided that the freedom to act as a committee member (including the
freedom to vote in committee meetings and to instruct committee professionals to
act on behalf of such committee) shall not affect the obligations of the
Participating Noteholder to vote its Restricted Claims as provided herein and
shall not otherwise affect the continuing obligations of such Participating
Noteholder(s) under this Agreement or the validity or enforceability of this
Agreement. In the event that an official creditors' committee is so appointed,
where the context so permits, all references to the "Committee" set forth herein
shall thereafter be deemed to refer to such official creditors' committee until
such time as the official creditors' committee is dissolved or disbanded.
Section 10.8 Releases and Exculpation.
(a) Releases. The Plan and the New UPC Dutch Exchange Offer will
contain provisions addressing releases, in each case substantially as follows:
"Effective the Confirmation Date, but subject to the occurrence of the
Effective Date, UGC, UGC Holdings, UPC, New UPC, each Participating Noteholder,
each holder of UPC Notes, and each of the foregoing's respective current or
former officers, directors, Subsidiaries, Affiliates, members, managers,
shareholders, partners, representatives, employees, attorneys, financial
advisors and agents, or any of their respective successors and assigns, and
their respective property, shall be released from any and all claims,
obligations, rights, causes of action, choses in action, demands, suits,
-39-
proceedings and liabilities which UPC or any holder of a claim against, or
interest in, UPC may be entitled to assert, under the laws of the United States
or The Netherlands or any political subdivision of either of them, whether for
fraud, tort, contract, violations of applicable securities laws, or otherwise,
whether known or unknown, foreseen or unforeseen, existing or hereafter arising,
contingent or non-contingent, based in whole or in part upon any act, omission,
transaction, state of facts, circumstances or other occurrence or failure of an
event to occur, taking place before the Confirmation Date and in any way
relating to UPC, the issuance, purchase or sale of the Belmarken Notes, UPC
Notes, UPC Preference Shares A, UPC Priority Shares, UPC Ordinary Shares A, the
Restructuring, the Chapter 11 Case, the Moratorium Petition, the Plan, or the
Akkoord; provided, however, that nothing herein shall release any Person from
any claims, obligations, rights, causes of action, choses in action, demands,
suits, proceedings or liabilities based upon any act or omission arising out of
such Person's gross negligence or willful misconduct; provided further, that
nothing herein shall release UPC, New UPC, UGC or any Participating Noteholder
from any claims, obligations, rights, causes of action, choses in action,
demands, suits, proceedings or liabilities based upon such Person's failure to
comply with, or breach of such Person's obligations under, the Plan, the Akkoord
or this Agreement; provided further, that to the extent that, on the Effective
Date, New UPC is the holder of any Belmarken Notes, UPC Notes or other claims or
interests of General Unsecured Creditors, whether obtained through the New UPC
Dutch Exchange Offer and the application of Plan Option 1 or otherwise, the
claims represented by such Belmarken Notes, UPC Notes or other claims or
interests of General Unsecured Creditors held by New UPC will not be released,
but will instead remain outstanding as indebtedness of UPC to New UPC. Effective
as of the Confirmation Date, but subject to the occurrence of the Effective
Date, all holders of Belmarken Notes, UPC Notes, UPC Preference Shares A, UPC
Priority Shares, UPC Ordinary Shares A, shall be deemed to release, and shall be
permanently enjoined from bringing, maintaining, facilitating or assisting any
action, demand, suit or proceeding against, UPC and UPC's current or former
officers, directors, Subsidiaries, Affiliates, members, managers, shareholders,
partners, representatives, employees, attorneys, financial advisors and agents,
or any of their respective successors and assigns, and their respective
property, in respect of any claims, obligations, rights, causes of action,
demands, suits, proceedings and liabilities related to, or arising from, any and
all claims or interests arising under, in connection with, or related to the
Belmarken Notes, the UPC Notes, the UPC Preference Shares A, UPC Priority
Shares, UPC Ordinary Shares A, or the issuance, purchase, or sale thereof;
provided that such release and injunction shall not be binding on New UPC to the
extent of New UPC's claims solely against UPC on account of any Belmarken Notes,
UPC Notes or other claims or interests of General Unsecured Creditors held by
New UPC, whether obtained through the New UPC Dutch Exchange Offer and the
application of Plan Option 1 or otherwise."
(b) Exculpation. The Plan and the New UPC Dutch Exchange Offer will
contain provisions addressing exculpation and limitation of liability, in each
case substantially as follows:
"None of UGC, UGC Holdings, UPC, New UPC any Participating Noteholder, any
holder of UPC Notes, UPC Preference Shares A, UPC Priority Shares, UPC Ordinary
Shares A, or any of the foregoing's respective current or former officers,
directors,
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Subsidiaries, Affiliates, members, managers, shareholders, partners,
representatives, employees, attorneys, financial advisors and agents, or any of
their respective property, shall have or incur any liability to any holder of a
claim or an interest, or any other party in interest, or any of their respective
officers, directors, Subsidiaries, Affiliates, members, managers, shareholders,
partners, representatives, employees, attorneys, financial advisors and agents,
or any of their respective successors and assigns, and their respective
property, for any act or omission in connection with, relating to, or arising
out of, the Restructuring, the Moratorium Petition, the Chapter 11 Case, the
solicitation of acceptances of the Plan or the Akkoord, the pursuit of
confirmation of the Plan or the acceptance of the Akkoord, the consummation of
the Plan or the Akkoord, or the administration of the Plan or the Akkoord or the
property to be distributed under the Plan or the Akkoord, except for (i) their
gross negligence or willful misconduct and (ii) solely in the case of UPC, New
UPC, UGC or any Participating Noteholder, any liability for failure to comply
with, or breach of such Person's obligations under, the Plan, the Akkoord or
this Agreement, and in all respects shall be entitled to reasonably rely upon
the advice of counsel with respect to their duties and responsibilities under
the Plan, the Akkoord and this Agreement.
"Notwithstanding any other provision of the Plan or the Akkoord, no holder
of a claim or interest, no other party in interest, none of their respective
current or former officers, directors, subsidiaries, affiliates, members,
managers, shareholders, partners, representatives, employees, attorneys,
financial advisors and agents, or any of their respective successors and
assigns, and their respective property, shall have any right of action, demand,
suit or proceeding against UGC, UGC Holdings, UPC, New UPC, each Participating
Noteholder, each holder of UPC Notes, the Belmarken Notes, UPC Ordinary Shares
A, UPC Preference Shares A, UPC Priority Shares and each of the foregoing's
respective current or former officers, directors, Subsidiaries, Affiliates,
members, managers, shareholders, partners, representatives, employees,
attorneys, financial advisors and agents, or any of their respective successors
and assigns, and their respective property, for any act or omission in
connection with, relating to, or arising out of, the Restructuring, the
Moratorium Petition, the Chapter 11 Case, the solicitation of acceptances of the
Plan or the Akkoord, the pursuit of confirmation of the Plan or the acceptance
of the Akkoord, the consummation of the Plan or the Akkoord, or the
administration of the Plan or the Akkoord or the property to be distributed
under the Plan or the Akkoord, except for their gross negligence or willful
misconduct."
Section 10.9 Advisors.
(a) UPC shall pay the fees and expenses of UGC's and New UPC's
advisors and attorneys in connection with the preparation, negotiation,
execution and performance of (i) this Agreement, (ii) the Restructuring or (iii)
any of the transactions contemplated hereby or thereby, including the fees and
expenses of Credit Suisse First Boston Corporation and UBS Warburg, or, if the
Restructuring is consummated on terms consistent with the terms of this
Agreement and UPC does not pay such fees and expenses, such fees and expenses
shall be paid by New UPC.
(b) UPC shall pay the fees and expenses of the Participating
Noteholders' advisors and attorneys in connection with the preparation,
negotiation, execution and performance of (iii) this Agreement, (ii) the
Restructuring or (iii) any of
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the transactions contemplated hereby or thereby, including the fees and expenses
of ▇▇▇▇▇▇▇▇▇ & Co. LLP, or, if the Restructuring is consummated on terms
consistent with the terms of this Agreement and UPC does not pay such fees and
expenses, such fees and expenses shall be paid by New UPC.
Section 10.10 Post-Restructuring UPC Governance. The parties acknowledge
that it is their intention that, after consummation of the Restructuring, such
changes will be made to the corporate governance of UPC to ensure that the
decisions taken by the board of New UPC will be implemented by UPC and that the
approval requirements of Sections 4.2 and 4.3 will be applicable to actions
taken by UPC. The parties hereto further acknowledge that UPC will continue to
qualify as an international holding company in accordance with article 153
paragraph 3 and respectively article 263 paragraph 3 book 2 of the Dutch Civil
Code.
Section 10.11 Cancellation of priority shares and preference shares A. The
parties hereto acknowledge that it is their intention that, after consummation
of the Restructuring, as soon as UPC is a wholly-owned subsidiary of New UPC,
New UPC and UPC shall take such action as is necessary to cause the cancellation
of the priority shares and the preference shares A.
ARTICLE XI
TERMINATION AND ABANDONMENT
Section 11.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Date:
(i) by the mutual written consent of UPC, UGC, and a
Majority-in-Interest of the Participating Noteholders;
(ii) by UGC, UPC, New UPC or a Majority-in-Interest of the
Participating Noteholders if the Filing Date has not occurred on or prior
to December 31, 2002;
(iii) by UGC or a Majority-in-Interest of the Participating
Noteholders, if the Disclosure Statement contains information materially
different from information provided in writing to UGC or the Participating
Noteholders, as the case may be, by UPC in connection with the negotiation
and execution of this Agreement, which information adversely impacts the
value of the consideration being received by UGC or the Participating
Noteholders, as the case may be, pursuant to the Plan and the Akkoord, and
(i) within ten (10) days after receipt of the Disclosure Statement, UGC or
the Participating Noteholders have given written notice to UPC specifying
in reasonable detail the alleged differences, and (ii) within ten (10) days
after receipt of such notice UPC has not advised UGC or the Participating
Noteholders, as the case may be, that (A) it concurs with the claimed
difference in the Disclosure Statement and will take steps to conform the
disclosure to the previous disclosure (in which case UPC shall have thirty
(30) days to effect a cure) or (B) it disagrees
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with UGC's or the Participating Noteholders' notice, as the case may be,
and submits the issue to the US Bankruptcy Court for resolution (in which
case the parties shall be bound by the determination of the US Bankruptcy
Court);
(iv) by UPC, UGC or a Majority-in-Interest of the Participating
Noteholders, unless, on or prior to the deadline for voting to accept or
reject the Plan pursuant 11 USC ss. 1126, UPC has obtained a tax ruling
from the Dutch tax inspector in respect of the Restructuring the effect of
which is that there are no adverse effects upon the value of UPC as a
result of the Dutch tax consequences of consummating the Restructuring on
the terms set forth in this Agreement, after giving effect to any changes
in the transaction structure made in accordance with Section 2.1(f);
(v) by UPC, UGC or a Majority-in-Interest of the Participating
Noteholders if, prior to the Effective Date, the lenders under the UPC
Distribution Credit Facility accelerate any material indebtedness or other
material obligations under the UPC Distribution Credit Facility; or
(vi) by UPC, UGC or a Majority-in-Interest of the Participating
Noteholders if, prior to the Effective Date, the UPC Distribution Credit
Facility is amended in a manner materially adverse to UPC; provided that
all parties agree that an amendment to the UPC Distribution Credit Facility
substantially in the form provided to UGC and the Committee prior to the
date hereof shall not be deemed to be materially adverse to UPC.
(b) Any party to this Agreement may terminate its obligations under
this Agreement:
(i) at any time after the date which is nine (9) months after the
Filing Date;
(ii) upon the earliest to occur of (A) the conversion of the Chapter
11 Case to cases under Chapter 7 of the US Bankruptcy Code, (B) the
appointment of a Chapter 11 trustee, (C) the conversion of the moratorium
to a bankruptcy under the Dutch Bankruptcy Code, (D) the Akkoord's
rejection by the creditors' meeting of UPC without any legal remedy being
open to UPC to challenge the rejection, (E) the Plan is rejected by UPC's
creditors without any option being available to UPC to challenge such
rejection or amend the Plan, (F) the Akkoord is not approved by the Dutch
Bankruptcy Court on terms consistent with the terms set forth in this
Agreement, including after giving effect to any changes in the transaction
structure made in accordance with Section 2.1(f), or (G) the Plan is
confirmed by the US Bankruptcy Court on terms inconsistent with the terms
set forth in this Agreement, including after giving effect to any changes
in the transaction structure made in accordance with Section 2.1(f);
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(iii) if the representations or warranties of any other party to this
Agreement shall fail to be true in any material respect;
(iv) if any other party fails to perform in any material respect any
covenant or agreement of such other party pursuant to this Agreement;
provided that no party may terminate this Agreement pursuant to this
Section 11.1(b)(iv) if such party's conduct has contributed in any material
respect to the non-performance alleged as the basis for terminating this
Agreement or if such party is otherwise in material breach of its
obligations hereunder; or
(v) if UPC or UGC changes the transaction structure in a manner that
(a) reduces the percentage of the Base Number of Shares to be offered to
the holders of the UPC Notes (other than the UGC Group) as set forth in
Section 2.1(d), (b) alters the provisions of Article IV or Article VI, or
(c) is materially adverse to the Participating Noteholders.
Section 11.2 Effect of Termination. Except for any willful and material
breach of this Agreement by any party hereto (which breach and liability
therefor shall not be affected by the termination of this Agreement), if this
Agreement is terminated by any Party as provided in Section 11.1, this Agreement
shall become void and have no further effect, without any liability or
obligation on the part of any Party, other than the provisions of this Section
11.2 and Sections 10.9, 12.1, 12.2, 12.3, 12.4, 12.8 and 12.12.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Nonsurvival of Representations and Warranties. The respective
representations and warranties of the parties hereto contained in this Agreement
shall not be deemed waived or otherwise affected by any investigation made by
any other party. Each and every such representation and warranty shall expire
with, and be terminated and extinguished upon the occurrence of, the Effective
Date, and thereafter no party shall be under any liability whatsoever with
respect to any such representation and warranty.
Section 12.2 Notices. All notices, requests, claims and demands and other
communications hereunder shall be in writing and shall be deemed duly delivered
(i) four (4) Business Days after being sent by registered or certified mail,
return receipt requested, postage prepaid, or (ii) one (1) Business Day after
being sent for next business day delivery, fees prepaid, via a reputable
internationally recognized overnight courier service, in each case to the
intended recipient as set forth below:
(a) if to UPC, to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇-▇▇▇▇
Attention: Ton Tuijten
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with a copy to:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇;
(b) if to UGC, UGC Holdings, or UUB to:
UnitedGlobalCom, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
And a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(c) if to the Participating Noteholders, to the address and attention
of such parties set forth on Annex A,
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with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Any party hereto may give any notice or other communication hereunder using any
other means (including personal delivery, messenger service, facsimile or
ordinary mail), but no such notice or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any party may change the address to which notices and other
communications hereunder are to be delivered by giving the other parties to this
Agreement notice in the manner herein set forth.
Section 12.3 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes any prior understandings,
agreements or representations by or among the parties, or any of them, written
or oral, with respect to the subject matter hereof.
Section 12.4 No Third-Party Beneficiaries. This Agreement is not intended,
and shall not be deemed, to confer any rights or remedies upon any Person other
the parties hereto and their respective successors and permitted assigns, to
create any agreement of employment with any Person or to otherwise create any
third-party beneficiary hereto.
Section 12.5 Amendment. Subject to Section 12.15, this Agreement may not be
amended except by an instrument in writing signed by each of UPC, UGC and a
Majority-in-Interest of the Participating Noteholders.
Section 12.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other parties, and any such assignment
without such prior written consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 12.7 Counterparts. This Agreement may be executed in two (2) or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two (2) or more counterparts have been signed by
each of the parties hereto and delivered to the other parties.
Section 12.8 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a Governmental Entity of competent jurisdiction to
be invalid, void, unenforceable or against its regulatory policy, 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 12.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving
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effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of laws
of any jurisdiction other than those of the State of New York; provided that (i)
all matters with respect to the Chapter 11 Case shall be governed by the US
Bankruptcy Code and the US Bankruptcy Rules, (ii) all matters with respect to
the Moratorium Petition and related proceedings shall be governed by the Dutch
Bankruptcy Code and (iii) all matters with respect to the conduct of the
Shareholders Meeting, the issuance and/or reduction of share capital in UPC and
other matters relating to the internal governance of UPC shall be governed by
applicable Dutch company Laws.
Section 12.10 Submission to Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement, the Restructuring or the transactions
contemplated hereby and thereby shall be brought in any federal or state court
located in the County and State of New York or in the District Court sitting in
the Municipality of Amsterdam, The Netherlands, and each of the parties hereto
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. Process in
any such suit, action or proceeding may be served on any party hereto anywhere
in the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on
such party as provided in Section 12.2 as to giving notice hereunder shall be
deemed effective service of process on such party. Notwithstanding the foregoing
consent to jurisdiction, upon the commencement of the Chapter 11 Case and the
filing of the Moratorium Petition, each of the parties hereto agrees that the US
Bankruptcy Court and the Dutch Bankruptcy Court, or such other courts that may
have jurisdiction over the Chapter 11 Case and the Moratorium Petition, as the
case may be, shall have exclusive jurisdiction of all matters arising out of or
in connection with this Agreement, the Restructuring and the transactions
contemplated hereby and thereby.
Section 12.11 Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party shall be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party. No failure or delay on the part of any party hereto in the exercise
of any right hereunder shall impair such right or be construed to be a waiver
of, or acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. Each of the parties
hereto agrees that irreparable damage would occur to each other party hereto in
the event that any of the provisions of this Agreement were not performed by
such Person in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court as to which the
parties have agreed to submit to jurisdiction pursuant to Section 12.10 of this
Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity. Each party hereto further agrees to waive any requirement
for the securing or posting of any bond in connection
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with obtaining any such injunction or other equitable relief. All matters
relating solely to issues of Dutch bankruptcy law shall be governed by and be
construed in accordance with the Dutch Bankruptcy Code and all other relevant
Dutch Laws, except that the company Laws of The Netherlands shall apply to all
matters relating to issues of general corporate law.
Section 12.12 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY
OTHER PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT.
Section 12.13 Consideration. It is acknowledged by the parties hereto that
no consideration shall be due or paid to any Participating Noteholder for its
agreement to vote to accept the Plan and the Akkoord in accordance with the
terms and conditions of this Agreement, other than UPC's agreement to use its
reasonable best efforts to obtain approval of the Disclosure Statement,
acceptance of the Akkoord and confirmation of the Plan in accordance with the
terms and conditions of this Agreement.
Section 12.14 Acknowledgment of Risks. Each of the Participating
Noteholders has received and reviewed this Agreement and believes that it has
received "adequate information" with respect to its decision to vote in favor of
the Plan, as such term is defined in 11 U.S.C. ss. 1125(a), and the Akkoord,
subject however to approval by a US Bankruptcy Court of a disclosure statement
under Section 1125 that contains information not materially different from the
information provided to the Participating Noteholders. This Section 12.14 does
not waive whatever rights a Participating Noteholders may have under Sections
1125-26 of the US Bankruptcy Code.
Section 12.15 Action by Participating Noteholders. Whenever this Agreement
specifies that any action hereunder shall be taken or any consent or waiver be
given by the Participating Noteholders, unless otherwise specified, such action
shall be taken or such consent or waiver shall be given if approved by a
Majority-in-Interest of the Participating Noteholders; provided, however, that
no action may be taken or consent or waiver given without the consent of each
Participating Noteholder where such action, consent or waiver would increase the
obligations of any Participating Noteholder under this Agreement or reduce the
percentage of the Base Number of Shares to be offered to the holders of the UPC
Notes (other than the UGC Group) as set forth in Section 2.1(d).
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
UNITED PAN-EUROPE COMMUNICATIONS N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer and
Member of the Board of Management
By: /s/ ANTON A.M. TUIJTEN
-----------------------------------
Name: Anton A.M. Tuijten
Title: General Counsel and Member
of the Board of Management
NEW UPC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
UNITEDGLOBALCOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Operating
Officer
UGC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Operating
Officer
UNITED EUROPE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
UNITED UPC BONDS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
APOLLO INVESTMENT FUND IV, L.P.
By APOLLO MANAGEMENT IV, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
APOLLO OVERSEAS PARTNERS IV, L.P.
By APOLLO MANAGEMENT IV, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ARES LEVERAGED INVESTMENT FUND, L.P.
By ARES MANAGEMENT, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ARES LEVERAGED INVESTMENT FUND II, L.P.
By ARES MANAGEMENT II, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ARES III CLO LTD.
By ARES CLO MANAGEMENT LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ARES IV CLO LTD
By ARES CLO MANAGEMENT IV, L.P.
By ARES CLO ▇▇ ▇▇, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
MACKAY ▇▇▇▇▇▇▇ LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: Managing Director
SALOMON BROTHERS ASSET MANAGEMENT
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
EVEREST CAPITAL LIMITED
as General Partner/Investment Manager
for Certain Managed Accounts
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Operating Officer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Principal
CAPITAL RESEARCH AND MANAGEMENT
COMPANY on behalf of Fundamental
Investors, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Vice President
Annex A
-------
Participating Noteholders
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Research
II. Apollo Management, LP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
III. Capital Research & Management Co.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
▇▇. Everest Capital
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Managing Director
▇. ▇▇▇▇▇▇▇ Brothers Asset Management
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇.▇. 10013
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Managing Director
A-1
Annex B
-------
UPC Notes Owned by the UGC Group
---------------------------------------------------------------------------------------------------------------------------
Principal Amount
Principal Amount At Maturity
(Senior Notes) (Senior Discount Notes)
-------------- ----------------------
UPC Senior Notes:
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 $241,181,000
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 - Euro (euro) 69,870,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 $56,142,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 - Euro (euro) 31,315,000
▇▇▇ ▇▇ 1/4% Senior Notes due November 1, 2009 $125,305,000
▇▇▇ ▇▇ 1/4% Senior Notes due November 1, 2009 - Euro (euro) 31,734,000
▇▇▇ ▇▇ 1/2% Senior Notes due February 1, 2010 $83,649,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 $209,967,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 - Euro (euro) 63,528,000
UPC Senior Discount Notes:
▇▇▇ ▇▇ 1/2% Senior Discount Notes due August 1, 2009 $235,200,000
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 $149,795,000
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 - Euro (euro) 66,656,000
▇▇▇ ▇▇ 3/4% Senior Discount Notes due February 1, 2010 $334,094,000
-------------------------------------------------------------------------------------------------------------------------
B-1
Annex C
-------
UPC Notes Owned by UPC
-------------------------------------------------------------------------------------------------------------------------
Principal Amount
Principal Amount At Maturity
(Senior Notes) (Senior Discount Notes)
----------------- -----------------------
UPC Senior Notes:
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 $38,335,000
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 - Euro (euro)86,943,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 $30,091,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 - Euro (euro)30,834,000
▇▇▇ ▇▇ 1/4% Senior Notes due November 1, 2009 $12,510,000
▇▇▇ ▇▇ 1/4% Senior Notes due November 1, 2009 - Euro (euro)30,873,000
▇▇▇ ▇▇ 1/2% Senior Notes due February 1, 2010 $70,504,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 $31,550,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 - Euro (euro)53,480,000
UPC Senior Discount Notes:
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 $2,000,000
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 - Euro (euro)6,000,000
▇▇▇ ▇▇ 3/4% Senior Discount Notes due February 1, 2010 $16,300,000
-------------------------------------------------------------------------------------------------------------------------
C-1
Annex D
-------
Post-Restructuring Equity Capitalization of New UPC
Outstanding shares of New UPC
Common Stock ($.01 par value per share):
Base Number of Shares:
---------------------
Shares Issued in exchange for Belmarken Notes and
UPC Notes owned by UGC Group on date of Agreement 32,750,000(1)
Shares issued in exchange for UPC Notes (other than
UPC Notes owned by the UGC Group on the date
of Agreement) 16,250,000
Shares issued in exchange for UPC Priority Shares, UPC
Ordinary Shares A, UPC Preference Shares A 1,000,000
-----------
Total Base Number of Shares 50,000,000(2)
===========
Effective Date Equity Investment:
--------------------------------
(euro)100 million worth of shares of New UPC Common Stock issued
at the per share price implied by the Plan reduced on a euro for
euro
------------------------
(1) Assumes all UPC Notes are exchanged pursuant to Plan Option 1/Dutch Exchange
Offer Option. If Plan Option 2 applies to any UPC Notes, the excess number of
shares of New UPC Common Stock that would have been issued and exchanged under
Plan Option 1 for those UPC Notes shall not be issued or exchanged.
(2) For illustrative purposes only, the number of shares of New UPC Common Stock
to be issued as the "Base Number of Shares" has been assumed to be 50,000,000
shares for purposes of this Schedule D. Any changes to the number of shares of
New UPC Common Stock to be issued as the "Base Number of Shares" will not be
effected unless they result in the same proportional capitalization of New UPC
immediately after giving effect to the Restructuring.
D-1
basis based on (1) the net proceeds of any assets sold by UPC
prior to the Effective Date, other than assets sold in the
ordinary course of UPC's business in a manner consistent with its
past practices, or (2) the net proceeds from any non-dilutive
capital raised by UPC (other than capital received by UPC from
UGC.
Management Incentive Plan:
-------------------------
The Plan will provide that, at the discretion of New UPC's board
of directors, options with respect to no more than five (5)
percent of New UPC's common equity outstanding immediately after
the Effective Date, on a fully-diluted basis, can be issued
during the period beginning on the Effective Date and continuing
until the third anniversary of the Effective Date to certain
members of New UPC's and its Subsidiaries' management and other
employees pursuant to compensation arrangements adopted by New
UPC's board of directors (any options issuable under such
compensation arrangements on the Effective Date shall have an
exercise price no less than the share price implied by the Plan
and as set forth in the Disclosure Statement). Any shares
reserved for issuance under the management incentive plan shall
be in addition to the Base Number of Shares.
D-2
Annex E
-------
Material Litigation Claims Against ▇▇▇
▇. In Re. Initial Public Offering Securities Litigation, Master File ▇▇. ▇▇ ▇▇
▇▇ (▇▇▇) ▇▇▇▇▇▇ ▇▇▇▇▇▇ District Court for the Southern District of New
York. United States of America
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ et al. Versus
United Pan-Europe Communications NV, case number 1317/▇▇▇▇▇▇▇▇, Rechtbank
te Amsterdam, Tweede Enkelvoudige ▇▇▇▇▇ Rolnummr 2002/1083 (Referred to as
the Cignal Litigation).
3. InterComm Holdings L.L.C., InterComm France CVOHA, InterComm France II
CVOHA and Reflex Participations versus United Pan-Europe Communications NV,
Belmarken Holding BV and UPC France Holding BV, International Chamber of
Commerce, Court of Arbitration, Paris France.
E-1
Annex F
-------
Outstanding Material Rights
Options and Warrants to Acquire UPC Ordinary Shares A
UPC STOCK OPTION PLAN SUMMARY
FROM 1/1/1995 TO 9/9/2002
--------------------------------------------------------------------------------
S T O C K O P T I O N S H A R E S
--------------------------------------------------------------------------------
SHARES EURO
--------------------------------------------------------------------------------
GRANTS 43,852,497 (euro) 360,333,208
--------------------------------------------------------------------------------
EXERCISES -16,024,733 -(euro)28,980,337
--------------------------------------------------------------------------------
CANCELLATIONS -5,888,685 -(euro)82,905,875
--------------------------------------------------------------------------------
TOTAL OUTSTANDING 21,939,079 (euro) 248,446,996
--------------------------------------------------------------------------------
Prices range from(euro)1.0000 to(euro)75.0000, with an Average of(euro)11.3244
Expiration Dates range from 18/3/2003 to 15/2/2007
UPC PHANTOM STOCK OPTIONS PLAN SUMMARY
FROM 1/1/1995 TO 9/9/2002
--------------------------------------------------------------------------------
S T O C K O P T I O N S H A R E S
--------------------------------------------------------------------------------
SHARES EURO
--------------------------------------------------------------------------------
GRANTS 7,343,391 (euro) 25,695,745
--------------------------------------------------------------------------------
EXERCISES -1,568,469 -(euro)3,098,314
--------------------------------------------------------------------------------
CANCELLATIONS -2,734,766 -(euro)6,801,079
--------------------------------------------------------------------------------
TOTAL OUTSTANDING 3,040,156 (euro) 15,796,352
--------------------------------------------------------------------------------
Prices range from(euro)1.8151 to(euro)28.6700, with an Average of(euro)5.1959
Expiration Dates range from 3/18/2008 to 4/4/2010
$1,225,000,000 (principal amount at maturity) of Belmarken Notes
Option Agreement, dated as of November 5, 1998, between UPC and DIC
Communication and Technology Ltc. And PEC Israel Economic Corporation.
F-1
CHELLO PHANTOM STOCK OPTIONS PLAN SUMMARY
FROM 1/1/1995 TO 9/9/2002
--------------------------------------------------------------------------------
S T O C K O P T I O N S H A R E S
--------------------------------------------------------------------------------
SHARES EURO
--------------------------------------------------------------------------------
GRANTS 3,181,776 (euro) 37,448,553
--------------------------------------------------------------------------------
EXERCISES -1,016,866 -(euro)7,845,603
--------------------------------------------------------------------------------
CANCELLATIONS -1,120,762 -(euro)21,339,297
--------------------------------------------------------------------------------
TOTAL OUTSTANDING 1,044,148 (euro) 8,263,653
--------------------------------------------------------------------------------
Prices range from(euro)4.3100 to(euro)50.0000, with an Average of(euro)7.9143
Expiration Dates range from 6/15/2008 to 10/19/2010
CHELLO STOCK OPTION PLAN SUMMARY
FROM 1/1/1995 TO 9/9/2002
--------------------------------------------------------------------------------
S T O C K O P T I O N S H A R E S
--------------------------------------------------------------------------------
SHARES EURO
--------------------------------------------------------------------------------
GRANTS 550,000 (euro) 4,991,580
--------------------------------------------------------------------------------
EXERCISES -88,541 -(euro)803,563
--------------------------------------------------------------------------------
CANCELLATIONS 0 (euro) 0
--------------------------------------------------------------------------------
TOTAL OUTSTANDING 461,459 (euro) 4,188,017
--------------------------------------------------------------------------------
Prices range from(euro)9.0756 to(euro)9.0756, with an Average of(euro)9.0756
Expiration Dates range from 3/26/2004 to 3/26/2004
F-2
Annex G
-------
Capitalization of UPC
As of
June 30,
2002
-----------
Non-restricted cash and cash equivalents......................... 382,775
Short term debt
Germany...................................................... 80,089
Poland....................................................... 10,120
Priority Telecom ............................................ 653
----------
Total Short term debt......................................... 90,862
Current portion of long term debt and long term debt.............
July 1999 Notes.............................................. 1,561,479
October 1999 Notes........................................... 1,044,848
January 2000 Notes........................................... 1,655,372
UPC Distribution Bank Facility............................... 3,126,669
Exchangeable Loan............................................ 925,061
@Entertainment Notes......................................... 370,760
DIC Loan..................................................... 54,100
Other........................................................ 78,006
----------
Total current portion of long term debt and long term debt... 8,816,295
Minority interest in subsidiaries................................ 148,365
Convertible Preferred Stock...................................... 1,574,253
Shareholders' deficit............................................ (4,316,764)
----------
Total capitalization............................................. 6,695,786
==========
G-1
Annex H
-------
UGC Group Claims and Interests
235,452,209 UPC Ordinary Shares A
300 UPC Priority Shares
2,500 UPC Preference Shares A
Warrant to purchase 1,213,898 UPC Ordinary Shares A at (euro)42.546 per share.
$1,225,000,000 (principal amount at maturity) of Belmarken Notes
Amounts owing under that certain Management Services Agreement, made and entered
January, 1999, by and between UPC and UGC Holdings, Inc. (f/k/a United
International Holdings, Inc.), a Delaware corporation ("UGC Holdings")
($600,000.00 as of July 31, 2002).
Amounts owing under that certain Master Seconded Employee Services Agreement,
dated January, 1999, between UGC Holdings and UPC ($3,189,085.93 as of July 31,
2002).
UPC Notes
-------------------------------------------------------------------------------------------------------------------------
Principal Principal Amount
Amount At Maturity
(Senior Notes) (Senior Discount Notes)
-------------- ----------------------
UPC Senior Notes:
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 $241,181,000
▇▇▇ ▇▇ 7/8% Senior Notes due August 1, 2009 - Euro (euro) 69,870,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 $56,142,000
▇▇▇ ▇▇ 7/8% Senior Notes due November 1, 2007 - Euro (euro) 31,315,000
▇-▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ Maturity
(Senior Notes) (Senior Discount Notes)
-------------- ----------------------
UPC 11 1/4% Senior Notes due November 1, 2009 $125,305,000
▇▇▇ ▇▇ 1/4% Senior Notes due November 1, 2009 - Euro (euro) 31,734,000
▇▇▇ ▇▇ 1/2% Senior Notes due February 1, 2010 $83,649,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 $209,967,000
▇▇▇ ▇▇ 1/4% Senior Notes due February 1, 2010 - Euro (euro) 63,528,000
UPC Senior Discount Notes:
▇▇▇ ▇▇ 1/2% Senior Discount Notes due August 1, 2009 $235,200,000
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 $149,795,000
▇▇▇ ▇▇ 3/8% Senior Discount Notes due November 1, 2009 - Euro (euro) 66,656,000
▇▇▇ ▇▇ 3/4% Senior Discount Notes due February 1, 2010 $334,094,000
-------------------------------------------------------------------------------------------------------------------------
H-2