<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Event: December 11, 1997
UNITED INTERNATIONAL HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-21974 84-1116217
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification #)
incorporation)
4643 SOUTH ULSTER STREET, SUITE 1300, DENVER, CO. 80237
(Address of Principal Executive Office)
(303) 770-4001
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ------- ------------------------------------
On December 11, 1997, United International Holdings, Inc. (the
"Registrant" or "UIHI") acquired from affiliates of Philips Electronics NV
("Philips") Philips' entire interests in United and Philips Communications B.V.
(n/k/a United Pan-Europe Communications N.V. "UPC") (the "UPC Transaction").
Prior to the UPC Transaction, the Registrant and Philips each owned 50.0% of
UPC, except for shares held by a foundation benefiting UPC employees and
management pursuant to UPC's equity incentive plans. In addition to purchasing a
portion of Philips' interest in UPC, as part of the UPC Transaction, (i) UPC
purchased 3.17 million shares of Class A Common Stock of the Registrant held by
Philips, (ii) the Registrant purchased part of the accreted amount of UPC's
9.96% Series A and 10.03% Series B Convertible Pay-in-Kind Notes (the "PIK
Notes"), which UIHI redeemed for shares of UPC, (iii) UPC repaid to Philips the
remaining accreted amount of the PIK Notes, (iv) UPC repurchased a portion of
Philips' interest in UPC, and (v) the Registrant invested $7.5 million into UPC,
with UPC in turn making a payment of that amount to Philips in lieu of the
issuance of a stock appreciation right by UPC.
The final purchase price was $425.2 million, comprised of $168.7
million for the purchase by the Registrant and repayment by UPC of UPC's PIK
Notes, $33.2 million allocated to the purchase by UPC of 3.17 million shares of
the Registrant's Class A Common Stock, and $223.3 million allocated to the
purchase of Philips' interest in UPC. The UPC Transaction was funded by a long-
term revolving credit facility through UPC with a syndicate of banks arranged by
The Toronto-Dominion Bank (the "Tranche A Facility") ($151.5 million), a bridge
bank facility through a subsidiary of UPC arranged by The Toronto-Dominion Bank
and Toronto Dominion Capital (the "Tranche B Facility") ($111.2 million), and an
equity investment by the Registrant of $162.5 million. UPC borrowed an
additional amount on its Tranche A Facility to refinance existing debt and to
pay transaction costs.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ------- ---------------------------------
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
UNITED AND PHILIPS COMMUNICATIONS B.V.
<TABLE>
<CAPTION>
<S> <C>
Independent Auditor's Report................................................................... F-1
Independent Auditor's Report................................................................... F-2
Consolidated Balance Sheets as of December 31, 1995 and 1996, and June 30, 1997 (Unaudited).... F-3
Consolidated Statements of Income for the years ended December 31, 1995 and 1996, and for the
Six Months Ended June 30, 1996 and 1997(Unaudited)............................................ F-4
Consolidated Statements of Cash Flow for the years ended December 31, 1995 and 1996, and for
the Six Months Ended June 30, 1996 and 1997 (Unaudited)....................................... F-5
Notes to the Consolidated Financial Statements................................................. F-6
</TABLE>
(b) PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma consolidated condensed balance sheet
gives effect to the consummation of the UPC Transaction as if it had occurred on
August 31, 1997. The following unaudited pro forma consolidated condensed
statements of operations for the year ended February 28, 1997 and the six months
ended August 31, 1997 give effect to the UPC Transaction as if it had occurred
as of the beginning of fiscal 1997. The pro forma consolidated condensed
financial information and notes thereto do not purport to represent what the
Registrant's results of operations would actually have been if such transactions
had in fact occurred on such date.
The following unaudited pro forma consolidated condensed balance sheet
also gives effect to the sale of all of the Registrant's cable television assets
in Argentina. For further detailed information regarding this transaction and
the pro forma effects of the sale, see the Registrant's Form 8-K/A dated October
17, 1997 previously filed with the Securities and Exchange Commission.
2
<PAGE>
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management believes are reasonable under
current circumstances. The unaudited pro forma consolidated condensed financial
information and accompanying notes should be read in conjunction with the
consolidated financial statements and the related notes thereto, and other
financial information pertaining to the Registrant, previously filed with the
Securities and Exchange Commission.
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
--------------------------------------------------
THE ARGENTINA THE UPC
HISTORICAL TRANSACTION(1) TRANSACTION PRO FORMA
---------- -------------- ----------- ---------
(IN THOUSANDS, UNAUDITED)
CONSOLIDATED CONDENSED BALANCE SHEET
ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents and short-term investments..... $ 102,019 $ 78,894 $(117,694)(2) $ 63,219
Restricted and escrowed cash............................. 10,520 6,136 -- 16,656
Subscriber receivables, net.............................. 5,014 (3,007) 54,571 (3) 56,578
Costs to be reimbursed by affiliated companies........... 10,786 -- -- 10,786
Other current assets..................................... 29,484 -- 8,294 (3) 37,778
--------- --------- --------- ----------
Total current assets................................ 157,823 82,023 (54,829) 185,017
Property and equipment, net.............................. 214,345 (4,604) 240,339 (4) 450,080
Goodwill, net............................................ 118,650 (60,158) 196,064 (4) 254,556
License rights........................................... 9,101 -- 311,894 (4) 320,995
Investments in and advances to affiliated companies...... 301,858 (78,678) (9,469)(5) 213,711
Other non-current assets................................. 31,656 (1,659) 24,838 (3) 54,835
--------- --------- --------- ----------
Total assets........................................ $ 833,433 $ (63,076) $ 708,837 $1,479,194
========= ========= ========= ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Accounts payable, accrued liabilities and other.......... $ 50,644 $ (15,329) $140,570 (6) $ 175,885
Note payable............................................. 110,000 (110,000) -- --
Purchase money notes payable - current................... 24,021 (24,021) -- --
Current portion long-term debt........................... 4,705 -- 27,024 (7) 31,729
--------- --------- --------- ----------
Total current liabilities........................... 189,370 (149,350) 167,594 207,614
Purchase money notes payable............................. 11,806 (11,806) -- --
Deferred income taxes.................................... -- -- 4,325 (8) 4,325
Senior secured notes and other debt...................... 753,637 -- 567,227 (9) 1,320,864
--------- --------- --------- ----------
Total liabilities................................... 954,813 (161,156) 739,146 1,532,803
Minority interest........................................ 69 (103) 2,854 (3) 2,820
Preferred stock.......................................... 31,922 -- -- 31,922
Stockholders' (deficit) equity........................... (153,371) 98,183 (33,163)(10) (88,351)
--------- --------- --------- ----------
Total liabilities and stockholders' (deficit)
equity............................................. $ 833,433 $ (63,076) $ 708,837 $1,479,194
========= ========= ========= ==========
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28, 1997
-----------------------------------------------------
THE ARGENTINA THE UPC
HISTORICAL TRANSACTION(1) TRANSACTION PRO FORMA
----------- -------------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<S> <C> <C> <C> <C>
Service and other revenue........................... $ 30,244 $ (4,385) $145,076 (3) $ 170,935
Management fee income from related parties.......... 1,311 -- -- 1,311
Operating expense................................... (34,116) 2,031 (47,621)(3) (79,706)
Selling, general and administrative expense......... (46,155) 2,183 (46,641)(3) (90,613)
Depreciation and amortization....................... (38,961) 1,592 (69,613)(11) (106,982)
----------- -------- -------- -----------
Net operating loss........................... (87,677) 1,421 (18,799) (105,055)
Other income (expense):
Equity in losses of affiliated companies, net....... (47,575) -- 21,227 (13) (26,348)
Gain on sale of investment in affiliated company.... 65,249 -- -- 65,249
Interest expense, net............................... (66,330) 1,078 (35,266)(12) (100,518)
Provision for losses on investment related costs.... (5,859) -- -- (5,859)
Other............................................... 3,367 (22) (13,764)(3) (10,419)
----------- -------- -------- -----------
Net loss..................................... $ (138,825) $ 2,477 $(46,602) $ (182,950)
=========== ======== ======== ===========
Net loss per common share........................... $ (3.56) $ (5.10)
=========== ===========
Weighted average number of shares outstanding....... 39,035,776 35,866,625
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED AUGUST 31, 1997
------------------------------------------------------
THE ARGENTINA THE UPC
HISTORICAL TRANSACTION(1) TRANSACTION PRO FORMA
----------- -------------- ------------ -----------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
<S> <C> <C> <C> <C>
Service and other revenue........................... $ 44,359 $(13,043) $ 88,613 (3) $ 119,929
Management fee income from related parties.......... 738 -- -- 738
Operating expense................................... (27,896) 5,174 (36,328)(3) (59,050)
Selling, general and administrative expense......... (39,838) 4,395 (28,249)(3) (63,692)
Depreciation and amortization....................... (38,751) 2,683 (43,574)(11) (79,642)
----------- -------- -------- -----------
Net operating loss.......................... (61,388) (791) (19,538) (81,717)
Other income (expense):
Equity in losses of affiliated companies, net....... (37,542) 1,011 24,794 (13) (11,737)
Interest, expense net............................... (53,018) 4,826 (17,633)(12) (65,825)
Provision for losses on investment related costs.... (6,454) -- -- (6,454)
Other............................................... (1,710) 50 (17,193)(3) (18,853)
----------- -------- -------- -----------
Net loss................................... $ (160,112) $ 5,096 $(29,570) $ (184,586)
=========== ======== ======== ===========
Net loss per common share........................... $ (4.09) $ (5.12)
=========== ===========
Weighted average number of shares outstanding....... 39,191,640 36,022,489
=========== ===========
</TABLE>
(1) In October 1997, the Registrant's wholly-owned subsidiaries, UIH Latin
America, Inc., UIH Argentina, Inc., United International Holdings
Argentina, S.A., and CV American Holdings L.L.C. signed a definitive
agreement to sell all of the Company's cable television assets in
Argentina for $268,200 (the "Argentina Transaction"). For further
information regarding this transaction and the pro forma effects of the
sale, see the Registrant's Form 8-K/A dated October 17, 1997 previously
filed with the Securities and Exchange Commission.
4
<PAGE>
(2) Represents the net decrease in cash as a result of the UPC Transaction as
follows:
Historical cash balance of UPC at June 30, 1997......... $ 44,806
Reduction in cash at UIHI as a result of the acquisition
of UPC ordinary shares and UPC PIK Notes owned by
Philips................................................ (162,500)
----------
$ (117,694)
==========
(3) Represents the historical amounts included in UPC's consolidated balance
sheet as of June 30, 1997, and statements of operations for the year ended
December 31, 1996 and for the six month period ended June 30, 1997.
(4) Represents the net increase in property and equipment, net, goodwill, net
and license rights as a result of the UPC Transaction as follows:
<TABLE>
<CAPTION>
PROPERTY,
AND
EQUIPMENT, GOODWILL, LICENSE
NET NET RIGHTS
---------- --------- --------
<S> <C> <C> <C>
Historical UPC balances............................. $230,487 $ 78,574 $250,034
Step-up in basis as a result of the UPC Transaction. 9,852 117,490 61,860
-------- -------- --------
$240,339 $196,064 $311,894
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
(5) Represents the net decrease in investments in and advances to affiliated companies as a result of the UPC Transaction:
<S> <C>
Historical UPC balances.................................................................................... $ 31,963
UPC's acquisition of UIHI Class A Common Stock from Philips................................................ 33,163
Step-up in basis as a result of the UPC Transaction........................................................ 25,219
Additional investment by the Company in UPC................................................................ 162,500
Elimination of the Company's investment in UPC............................................................. (229,151)
Reclassification of UPC's investment in UIHI Class A Common Stock to treasury stock........................ (33,163)
---------
$ (9,469)
=========
(6) Represents the net increase in accounts payable, accrued liabilities, deferred revenue and other as follows:
Historical UPC balances.................................................................................... $ 148,888
Payment of accrued interest on convertible pay-in-kind notes............................................... (8,318)
---------
$ 140,570
=========
(7) Represents the net increase in current portion of long-term debt as a result of the UPC Transaction:
Historical UPC balances.................................................................................... $ 265,330
Refinancing of existing debt............................................................................... (238,306)
---------
$ 27,024
=========
(8) Represents the increase in deferred income taxes as a result of the UPC Transaction:
Historical UPC balance..................................................................................... $ 2,726
Step-up in basis as a result of the UPC Transaction........................................................ 1,599
---------
$ 4,325
=========
(9) Represents the net increase in senior secured notes and other debt as a result of the UPC Transaction:
Historical UPC balance of pay-in-kind convertible notes.................................................... $ 154,073
Historical UPC balance of other debt....................................................................... 62,330
Financing fee.............................................................................................. 10,200
Refinancing of UPC existing debt........................................................................... 238,306
UPC's acquisition of UPC ordinary shares and UIHI's Class A Common Stock owned by Philips,
and redemption of remaining pay-in-kind convertible notes *.............................................. 262,670
Payment of pay-in-kind convertible notes held by Philips *................................................. (160,352)
---------
$ 567,227
=========
(10) Represents the net decrease in UIH's consolidated equity as a result of the UPC Transaction:
Historical UPC balance.................................................................................... 87,366
Acquisition of ordinary shares held by Philips............................................................ $(223,337)
Reclassification of UPC's investment in UIHI Class A Common Stock to treasury stock....................... (33,163)
Elimination of historical investment in UPC............................................................... (66,651)
Step-up in basis as a result of the UPC Transaction....................................................... 202,622
----------
$ (33,163)
===========
</TABLE>
* An additional $6,279 was borrowed under the Tranche A Facility to pay for
accrued interest from July 1, 1997 through the purchase date on the pay-in-
kind convertible notes.
5
<PAGE>
(11) Represents additional depreciation and amortization related to the step-up
in basis and additional goodwill as follows:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 30, 1997
----------------- ----------------
<S> <C> <C>
Historical UPC depreciation and amortization ................................. $(57,001) $(37,268)
Additional depreciation and amortization related to step-up in basis.......... (12,612) (6,306)
-------- --------
$(69,613) $(43,574)
======== ========
</TABLE>
(12) Represents the net increase in interest expense as a result of the UPC
Transaction:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 30, 1997
----------------- ----------------
<S> <C> <C>
Historical UPC interest expense................................................... $(21,485) $(17,739)
Elimination of interest on the convertible pay-in-kind notes...................... 14,327 8,318
Elimination of interest on refinancing of UPC existing debt....................... 4,456 8,070
Additional interest on Tranche A Facility (assuming total borrowings of $400,000
at an interest rate of 5.5%)..................................................... (22,000) (11,000)
Additional interest on Tranche B Facility (assuming total borrowings of $111,200
at an interest rate of 9.5%)..................................................... (10,564) (5,282)
-------- --------
$(35,266) $(17,633)
======== ========
</TABLE>
(13) Represents the net decrease in equity in losses of affiliated companies,
net:
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 30, 1997
----------------- ----------------
<S> <C> <C>
Historical UPC equity in losses of affiliated companies, net...................... $ (3,438) $ (370)
Elimination of UIHI's equity in losses of UPC..................................... 24,665 25,164
-------- --------
$ 21,227 $ 24,794
======== ========
</TABLE>
(c) EXHIBITS
10.1 Amended and Restated Securities Purchase and Conversion Agreement dated as
of December 1, 1997, by and among Philips Media B.V., Philips Media
Networks B.V., UIHI, Joint Venture, Inc. and UPC.
10.2 Loan Agreement for NLG 1,100,000,000 multi-currency Revolving Credit
Facility dated as of October, 1997, between UPC and certain of its
subsidiaries and The Toronto-Dominion Bank as Agent for the financial
institutions identified therein, as amended by a Supplement Agreement dated
December 8, 1997.
10.3 Loan Agreement dated December 5, 1997, between Belmarken Holdings B.V.
("Belmarken") as the Borrower, Cable Network Netherlands Holding B.V.,
Binan Investments B.V. and Stipdon Investments B.V. as Guarantors, The
Toronto-Dominion Bank and Toronto Dominion Capital as Arrangers, the banks
and financial institutions listed therein, The Toronto-Dominion Bank as
Agent and The Toronto-Dominion Bank as Security Trustee, as amended by
Waiver and amendment letter dated December 11, 1997.
10.4 Registration Rights Agreement dated as of December 5, 1997, by and among
UIHI, Belmarken, and The Toronto-Dominion Bank as the Security Trustee.
23.1 Consent of Arthur Andersen & Co., Independent Public Accountants
23.2 Consent of KPMG Accountants N.V., Independent Public Accountants
6
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED INTERNATIONAL HOLDINGS, INC.
Date: December 24, 1997
------------------------------
By: /s/ J. Timothy Bryan
------------------------------
J. Timothy Bryan
Chief Financial Officer
(A Duly Authorized Officer and Principal Financial Officer)
7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Supervisory Directors and the Shareholders of
United and Philips Communications B.V.
We have audited the annual accounts for the year 1996 of United and Philips
Communications B.V. The annual accounts are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
annual accounts based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in The Netherlands, which are substantially the same as those
generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the annual accounts are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the annual accounts. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the annual accounts. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, these annual accounts give a true and fair view of the
financial position of the Company as of December 31, 1996 and of the result
for the year then ended in accordance with accounting principles generally
accepted in The Netherlands and comply with the financial reporting
requirements included in Part 9, Book 2 of The Netherlands Civil Code.
Generally accepted accounting principles in The Netherlands vary in certain
significant respects from generally accepted accounting principles in the
United States. Application of generally accepted accounting principles in the
United States would have affected total assets, results of operations and
shareholders' equity as at and for the year ended December 31, 1996 to the
extent summarized in Note 17 to the consolidated financial statements.
Arthur Andersen & Co.
Amstelveen, The Netherlands,
May 7, 1997
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and the Supervisory Directors of
United and Philips Communications B.V.
We have audited the consolidated balance sheet of UNITED AND PHILIPS
COMMUNICATIONS B.V. and subsidiaries as at December 31, 1995 and the related
consolidated statements of operations and cash flows for the year ended
December 31, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in The Netherlands, which are substantially the same as those
generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of United and Philips Communications
B.V. and subsidiaries as at December 31, 1995, and the results of their
operations and cash flows for the year ended December 31, 1995 in conformity
with generally accepted accounting principles in The Netherlands.
Generally accepted accounting principles in The Netherlands vary in certain
significant respects from generally accepted accounting principles in the
United States. Application of generally accepted accounting principles in the
United States would have affected results of operations and shareholders'
equity as at and for the year ended December 31, 1995 to the extent summarized
in Note 17 to the consolidated financial statements.
KPMG Accountants N.V. Arthur Andersen & Co.
Amsterdam, The Netherlands,
May 20, 1996
F-2
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
CONSOLIDATED BALANCE SHEETS OF THE UPC GROUP
(CURRENCY -- THOUSANDS OF NETHERLANDS GUILDERS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C>
FIXED ASSETS:
Intangible fixed assets............ 2 f 657,158 f 639,092 f 757,507
Tangible fixed assets.............. 3 299,760 434,736 466,258
Affiliated companies............... 4 62,250 112,916 110,934
Other non-current financial as-
sets.............................. 789 1,154 48,185
----------- ----------- -----------
Total fixed assets............... 1,019,957 1,187,898 1,382,884
----------- ----------- -----------
CURRENT ASSETS:
Inventories........................ 6,956 12,057 16,090
Receivables........................ 5 165,731 88,470 105,868
Cash and cash equivalents.......... 6 123,895 42,631 86,924
----------- ----------- -----------
Total current assets............. 296,582 143,158 208,882
----------- ----------- -----------
Total assets..................... f1,316,539 f1,331,056 f1,591,766
----------- ----------- -----------
SHAREHOLDERS' EQUITY AND LIABILITIES
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY................. 23 f 537,633 f 449,639 f 354,434
MINORITY INTEREST.................... 1,400 4,554 5,537
SUBORDINATED CONVERTIBLE LOAN........ 7 213,792 256,335 300,092
----------- ----------- -----------
752,825 710,528 660,063
----------- ----------- -----------
PROVISIONS........................... 8 5,391 14,895 64,613
LONG-TERM LIABILITIES................ 9 22,348 19,467 120,921
CURRENT LIABILITIES.................. 10 535,975 586,166 746,169
----------- ----------- -----------
Total shareholders' equity and
liabilities..................... f1,316,539 f1,331,056 f1,591,766
=========== =========== ===========
</TABLE>
The accompanying notes form an integral part of these Consolidated Financial
Statements
F-3
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
CONSOLIDATED STATEMENTS OF INCOME OF THE UPC GROUP
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
DECEMBER 31, DECEMBER 31, JUNE 30, JUNE 30,
1995 1996 1996 1997
<S> <C> <C> <C> <C> <C>
TOTAL REVENUE.............. 11 f100,179 f245,179 f110,730 f167,478
--------- --------- --------- ---------
Direct operating
expenses................ (32,806) (80,479) (13,660) (58,659)
Selling, general and
administrative expenses. (33,617) (78,823) (54,000) (53,391)
Depreciation and
amortisation............ (48,406) (105,072) (49,902) (74,806)
--------- --------- --------- ---------
Total operating
expenses............ 12 (114,829) (264,374) (117,562) (186,856)
--------- --------- --------- ---------
Operating loss........... (14,650) (19,195) (6,832) (19,378)
Financial income and
expenses................ 13 (13,372) (36,309) (12,029) (33,527)
Exchange rate loss on
convertible loans....... 13 (3,474) (20,544) (14,698) (31,363)
Other.................... -- -- -- (10,000)
--------- --------- --------- ---------
Loss before income
taxes................... (31,496) (76,048) (33,559) (94,268)
Income taxes............. 14 1,624 (3,697) (34) (157)
--------- --------- --------- ---------
Loss after taxes..... (29,872) (79,745) (33,593) (94,425)
--------- --------- --------- ---------
Equity in result of
affiliated
companies........... (16,179) (9,503) (4,520) (2,546)
--------- --------- --------- ---------
Group loss............... (46,051) (89,248) (38,113) (96,971)
Minority interests..... (191) (2,208) 337 (888)
--------- --------- --------- ---------
Net loss............. f(46,242) f(91,456) f(37,776) f(97,859)
========= ========= ========= =========
</TABLE>
The accompanying notes form an integral part of these Consolidated Financial
Statements
F-4
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
CONSOLIDATED STATEMENTS OF CASH FLOW OF THE UPC GROUP
(CURRENCY -- THOUSANDS OF NETHERLANDS GUILDERS)
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
DECEMBER 31, DECEMBER 31, ENDED JUNE ENDED JUNE
1995 1996 30, 1996 30, 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss.................... f(46,242) f(91,456) f(37,776) f(97,859)
Adjustments to reconcile net
loss to cash provided by
operating activities:
Depreciation and
amortisation............... 48,406 105,072 49,902 74,806
Share in results of affili-
ated companies............. 16,179 9,503 4,520 2,546
Minority interests.......... 191 2,208 (337) 888
Exchange differences in con-
vertible loan.............. 3,474 20,544 14,698 31,363
Other....................... 1,444 1,173 (653) 83
Changes in assets and
liabilities, net of
contributed amounts:
Increase in inventories..... (6,956) (2,091) (3,200) (2,956)
Increase in other non-cur-
rent financial assets...... (789) (309) (3,993) (47,024)
Decrease (increase) in re-
ceivables.................. (50,955) 82,201 101,417 (6,583)
(Decrease) increase in pro-
visions.................... (1,530) 3,932 5,209 11,502
Increase in other current
liabilities................ 75,271 25,541 76,006 80,142
--------- --------- --------- ---------
Net cash provided by
operating activities... 38,493 156,318 205,793 46,908
--------- --------- --------- ---------
Cash flows from investing
activities:
Capital expenditures........ (312,241) (106,647) (40,970) (63,306)
New acquisitions, net of
cash acquired.............. (187,865) (46,473) -- (85,667)
Loans to affiliated compa-
nies....................... -- -- -- (2,349)
Capital contributions affil-
iated companies............ -- (13,000) -- --
Capital repayment........... -- 44,950 44,950 --
Sale of affiliated compa-
nies....................... -- -- -- 11,068
--------- --------- --------- ---------
Net cash used by invest-
ing activities......... (500,106) (121,170) 3,980 (140,254)
--------- --------- --------- ---------
Cash flows from financing
activities:
Proceeds from borrowings
long term.................. -- 23,113 1,046 77,819
Proceeds from borrowings
short term................. 465,699 302,959 33,075 258,821
Repayments long and short
term borrowings............ -- (440,440) (350,683) (197,870)
Dividends paid to minority
shareholders............... (191) (2,388) -- --
--------- --------- --------- ---------
Net cash (used) provided
by financing activi-
ties................... 465,508 (116,756) (316,562) 138,770
--------- --------- --------- ---------
Net (decrease) increase in
cash and cash equivalents.. 3,895 (81,608) (106,789) 45,424
Cash and cash equivalent at
beginning of period........ -- 123,895 123,895 42,631
Cash contributed upon foun-
dation of UPC.............. 118,050 -- -- --
Exchange differences on cash
and cash equivalents....... 1,950 344 (116) (1,131)
--------- --------- --------- ---------
Cash and cash equivalent at
end of period.............. f123,895 f 42,631 f 16,990 f 86,924
========= ========= ========= =========
</TABLE>
The accompanying notes form an integral part of these Consolidated Financial
Statements
F-5
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
1. SIGNIFICANT ACCOUNTING POLICIES
General
United and Philips Communications B.V. ("UPC"), having its legal seat in
Eindhoven, The Netherlands, is a joint venture between Philips Electronics
N.V. Eindhoven, The Netherlands ("Philips") and United International Holdings
Inc. ("UIH") a Delaware, United States of America corporation.
Comparative figures
The figures for the year ended December 31, 1995 covered the period from the
inception of UPC on July 13, 1995 until December 31, 1995. The figures for the
year ended December 31, 1996 cover the full year 1996 and may not therefore be
comparable with 1995. In addition the 1996 results of UPC include the
consolidation of Norkabelgruppen AS with effect from October 1, 1996, and the
consolidation of various companies, which were in the development stage in
1995, including France, Portugal, Slovakia and Romania, with effect from
January 1, 1996. Furthermore the Company changed its presentation of the
excess values of cost over net assets acquired of affiliated companies and
includes these in "Affiliated companies'.
In addition the unaudited consolidated financial statements as of June 30,
1997 include the consolidation of Janco Kabel-TV AS as of January 1, 1997.
Interim Financial Statements
The interim financial statements as of June 30, 1997 and for the six months
ended June 30, 1996 and 1997 are unaudited. In management's opinion, the
unaudited financial statements as of June 30, 1997 and for the six months
ended June 30, 1996 and 1997 include all adjustments necessary for fair
presentation. Such adjustments were of a normal recurring nature.
Policies of Consolidation
These consolidated financial statements include the accounts of UPC and its
group companies (the "UPC Group"). Group companies are companies or other
legal entities in which UPC has an ownership interest of more than 50% of the
issued share capital or that UPC otherwise controls. The accounts of these
companies or other legal entities are included in full in the consolidated
financial statements; any minority interests are disclosed separately. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
F-6
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
The consolidated financial statements include the financial statements of
United and Philips Communications B.V. and the following subsidiaries,
directly or indirectly held by UPC:
<TABLE>
<CAPTION>
PERCENTAGE
NAME COUNTRY OWNERSHIP
<S> <C> <C>
Radio Public SA............................... Belgium 100
Telekabel Group............................... Austria 95
Kabeltelevisie Eindhoven NV................... The Netherlands 100
Kabel Net Holding AS.......................... Czech Republic 100
Kabe Net Brno AS.............................. Czech Republic 100
Slovatel SRO.................................. Slovak Republic 100
Trnavatel SRO................................. Slovak Republic 75
Multicanal Holdings SRL....................... Romania 90
Control Cable Ventures SRL.................... Romania 51
Mediareseaux SA............................... France 100
Mediareseaux Marne SA......................... France 100
Intercabo Televisao por Cabo SGPS Lda......... Portugal 100
Norkabelgruppen AS............................ Norway 100
Janco Kabel-TV AS (as of January 1, 1997)..... Norway 100
</TABLE>
POLICIES FOLLOWED IN VALUATION AND INCOME DETERMINATION
Foreign Currencies
The financial information of foreign companies and other legal entities is
prepared in local currencies. All foreign currency amounts in the balance
sheet have been translated into Netherlands guilders at the official exchange
rates on the respective balance sheet dates. Exchange differences due to
transactions in foreign currencies are reflected in the consolidated
statements of income. Exchange differences resulting from the translation of
the net investments in foreign subsidiaries into Netherlands guilders are
accounted for under Shareholders' equity.
In the consolidated statements of income the translation into Netherlands
guilders is based on the average rates of exchange for the periods involved.
The resulting difference between the application of these average rates and
the balance sheet exchange rates is accounted for directly in Shareholders'
equity.
Cash flows from the Company's operations in foreign countries are translated
based upon average exchange rates for the period while balance sheet amounts
are translated at period end exchange rates. As a result, amounts related to
assets and liabilities reported on the Consolidated Statements of Cash Flow
will not agree to the changes in the corresponding balances on the
Consolidated Balance Sheets. The effect of exchange rate changes on cash
balances held in foreign currencies is reported as a separate line below cash
flows from financing activities.
F-7
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
Exchange rates of major currencies in Netherlands guilders:
<TABLE>
<CAPTION>
BALANCE BALANCE
SHEET AVERAGE SHEET AVERAGE
RATE PER RATE RATE PER RAGE
DEC. 31, 1996 1996 DEC. 31, 1995 1995
<S> <C> <C> <C> <C>
Belgian Franc per 100........... 5.45 5.44 5.45 5.44
Austrian Schilling per 100...... 15.95 15.93 15.91 15.92
Czech Koruna per 100............ 6.37 6.26 6.03 6.06
US Dollar per unit.............. 1.74 1.69 1.60 1.61
Norwegian Crown per 100......... 27.11 26.45
Portuguese Escudo per 100....... 1.12 1.09
French Franc per 100............ 33.30 32.95
</TABLE>
BALANCE SHEET
(a) General
Assets and liabilities are stated at historical cost unless indicated
otherwise.
(b) Fixed assets
Intangible Fixed Assets
Intangible fixed assets include the value of licences and goodwill.
Licences in newly acquired companies are recognised at the fair market value
of those licences at the date of acquisition and include the development costs
incurred prior to or after the date a new licence was acquired. The licence
value is amortised on a straight line basis over the licence period, but with
a maximum of 20 years.
Goodwill represents the difference between acquisition price paid for a
participation and the fair value of the identifiable net assets, including the
value of any licences of such a participation. Amortisation is on a straight
line basis based on the useful lives over a maximum period of 15 years. When
assets are fully amortised, the costs and accumulated amortisation are removed
from the accounts.
Tangible fixed assets
Tangible fixed assets are presented at purchase price or cost to construct
less accumulated straight line depreciation. Assets constructed within the UPC
group incorporate overheads and interest charges incurred during the period of
construction; investment subsidies are deducted.
For newly acquired participations the cost of tangible fixed assets is
determined at fair value at the date such participations are acquired.
Depreciation is calculated using the straight line method over the economic
life of the asset, taking into account the residual value. The economic lives
are:
<TABLE>
<S> <C>
Land and buildings............................................ 20-33 years
Networks...................................................... 7-20 years
Machinery & Other............................................. 3-10 years
</TABLE>
F-8
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
Affiliated companies
Companies in which UPC exerts significant influence over the business and
financial policies are recorded using the equity method. Under this method the
investment, originally recorded at cost, is adjusted to recognize UPC's share
of net earnings or losses of the affiliates, including the amortisation of
basic differences related to the excess of cost over net tangible assets
acquired. When no significant influence is exercised the investment is stated
at cost or in case of permanent impairment, at the lower net realisable value.
Non-current financial assets
Valuation is at the lower of cost or net realisable value. In March 1995,
the Financial Accounting Standards Board ("FASB") issued a Statement of
Financial Accounting Standards No. 121, "Accounting for the impairment of
long-lived assets and for long-lived assets to be disposed of". This statement
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles and goodwill related to those assets to be
held and used, and for long-lived assets and certain identifiable assets to be
disposed of. The Company has adopted the principles of this statement in the
accompanying financial statements. The provisions of SFAS 121 did not have a
material effect on the Company's reported result of operations or financial
condition.
(c) Receivables
Receivables are stated at face value less an allowance for doubtful
accounts.
(d) Cash and cash equivalents
Cash and cash equivalents are stated at face value and include all cash and
bank balances.
(e) Provisions
Deferred tax liabilities arising from temporary differences between the
financial and tax bases of assets and liabilities are included in the
provisions. The principal difference arises in connection with valuation
differences of intangible and tangible fixed assets. In calculating the
provision, current tax rates are applied.
(f) Stock option plan
The FASB issued Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation". This statement defines a fair value
based method of accounting for employee stock options or similar equity
instruments. The Company has adopted the disclosure requirements of this
statement in the accompanying financial statements, as the Company complies
with the provisions of APB No. 25 in its primary financial statements.
(g) Income taxes
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" which
requires recognition of deferred tax assets and liabilities for the expected
future income tax consequences of transactions which have been included in the
financial statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based upon the difference between the financial
and tax bases of assets and liabilities and carryforwards using enacted
F-9
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
tax rates in effect for the year in which the differences are expected to
reverse. UPC has adopted the principles of this statement in its financial
statements.
(h) Fair value of financial instruments
SFAS Statement No. 107, "Disclosures about Fair Values of Financial
Instruments" requires the disclosure of estimated fair values for all
financial instruments, both on- and off-balance sheet, for which it is
practicable to estimate fair value.
For certain instruments, including cash and cash equivalents, receivables,
current liabilities and certain provisions, it was assumed that the carrying
amount approximated fair value due to the short maturity of those instruments.
For short and long term debt, the carrying value approximates the fair value
since all debt instruments carry a variable interest rate component except for
the convertible loans which carry a fixed interest rate. The fair value of the
subordinated convertible loans approximates its face value. For investments in
affiliated companies carried at cost, quoted market prices for the same or
similar financial instruments were used to estimate the fair values. UPC has
adopted the principles of this statement in its financial statements. UPC did
not have any material off-balance-sheet financial instruments as of December
31, 1996.
INCOME STATEMENT
Revenue is derived from the sale of cable television services to subscribers
and from the construction and management of cable television systems. The
cable television service revenues are recognized as revenue in the period in
which the related services are provided to the subscriber.
Initial installation fees ("first connection") are recognized as revenue in
the period in which the installation occurs, to the extent of direct selling
costs, with the remainder deferred. Deferred installation revenue is amortized
over the average subscriber period in the respective companies.
Initial subscriber installation expenditures are capitalized and depreciated
over a period no longer than the depreciation period used for cable television
plant and/or licence agreement.
All installation fees and related costs with respect to reconnections are
recognized in the period in which the reconnection occurs.
Expenses and other revenues are recorded in the period in which they
originate.
Income taxes are accounted for in the income statement in the same period as
the income and expenses to which they relate. Withholding taxes are taken into
consideration in situations where the income of subsidiaries is to be paid out
as dividends in the near future. Such withholding taxes are generally charged
to income in the year in which the income is generated.
F-10
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
2. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
DEFERRED
FINANCING
TOTAL LICENCES GOODWILL COSTS
<S> <C> <C> <C> <C>
Gross value......................... f676,365 f609,931 f 66,434 f --
Amortisation & provisions........... (19,207) (16,993) (2,214) --
--------- --------- --------- ------
BOOK VALUE AS OF JANUARY 1, 1996.... f657,158 f592,938 f 64,220 f --
CHANGES:
Investments....................... 6,605 6,605 -- --
Reallocation of goodwill to
investments in affiliated
companies........................ (54,463) -- (54,463) --
Valuation adjustment licenses..... -- (8,779) 8,779 --
Amortisation...................... (39,844) (38,411) (1,433) --
New consolidations................ 66,441 69,559 (3,118) --
Translation differences and sundry
movements........................ 3,195 3,195 -- --
--------- --------- --------- ------
BOOK VALUE AS OF DECEMBER 31, 1996.. f639,092 f625,107 f 13,985 f --
CHANGES (UNAUDITED):
Investments (unaudited)........... 43,220 4,450 37,800 970
Amortisation (unaudited).......... (28,093) (22,197) (5,892) (4)
Consolidation influences
(unaudited)...................... 104,614 -- 104,614 --
Translation differences and sundry
movements (unaudited)............ (1,326) (924) (373) (29)
--------- --------- --------- ------
BOOK VALUE AS OF JUNE 30, 1997
(UNAUDITED)........................ f757,507 f606,436 f150,134 f 937
========= ========= ========= ======
Gross value......................... 698,855 682,861 15,994 --
Amortisation & provisions........... (59,763) (57,754) (2,009) --
--------- --------- --------- ------
BOOK VALUE AS OF DECEMBER 31, 1996.. f639,092 f625,107 f 13,985 f --
========= ========= ========= ======
</TABLE>
During 1996 the Company reallocated part of goodwill paid on assets
contributed upon formation to its investments in UII ( f 12,754) based upon
its share in its net equity value. The Company has changed its presentation of
the excess value of cost over net assets acquired of affiliated companies. As
a result an amount of f 41,709 was transferred to Investments in Affiliated
companies during 1996. The value of the licences of KTE and Kabelnet Prague
was per the end of 1995 overstated with f 8,779, which amount was adjusted to
Goodwill during 1996.
<TABLE>
<CAPTION>
DEFERRED
FINANCING
TOTAL LICENCES GOODWILL COSTS
<S> <C> <C> <C> <C>
Gross value (unaudited)................... f845,234 f686,312 f 158,408 f 941
Amortisation & provisions
(unaudited).............................. (87,727) (79,876) (8,274) (4)
--------- --------- ---------- ------
BOOK VALUE AS OF JUNE 30, 1997
(UNAUDITED).............................. f757,507 f606,436 f 150,134 f 937
========= ========= ========== ======
</TABLE>
F-11
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
The amortisation of the licence values is based on the lifetime of the
licence with a maximum of 20 years. Goodwill is amortised over a period of 15
years in conformity with the average lifetime of the licences. This
amortisation period reflects the presently expected average lifetime of the
licences in the group and affiliated companies.
3. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
LAND AND MACHINERY
TOTAL BUILDINGS NETWORK AND OTHER
<S> <C> <C> <C> <C>
Cost................................. f328,959 f 1,135 f316,878 f10,946
Depreciation and write downs......... (29,199) (47) (27,670) (1,482)
--------- -------- --------- --------
BOOK VALUE AS OF JANUARY 1, 1996..... f299,760 f 1,088 f289,208 f 9,464
========= ======== ========= ========
CHANGES:
Additions.......................... 100,042 3,226 86,974 9,842
New consolidations................. 95,867 1,193 83,971 10,703
Depreciation....................... (65,228) (510) (59,392) (5,326)
Translation differences and sundry
movements......................... 4,295 485 4,679 (869)
--------- -------- --------- --------
BOOK VALUE AS OF DECEMBER 31, 1996... f434,736 f 5,482 f405,440 f23,814
========= ======== ========= ========
CHANGES (UNAUDITED):
Additions (unaudited).............. 57,886 1,434 50,529 5,923
Consolidation influences
(unaudited)....................... 22,022 60 18,636 3,326
Depreciation (unaudited)........... (46,713) (273) (39,097) (7,343)
Translation differences and sundry
movements (unaudited)............. (1,673) (194) (1,361) (118)
--------- -------- --------- --------
BOOK VALUE AS OF JUNE 30, 1997
(UNAUDITED)......................... f466,258 f 6,509 f434,147 f25,602
========= ======== ========= ========
Cost................................. 529,416 6,080 492,398 30,938
Depreciation and write downs......... (94,680) (598) (86,958) (7,124)
--------- -------- --------- --------
BOOK VALUE AS OF DECEMBER 31, 1996... f434,736 f 5,482 f405,440 f23,814
========= ======== ========= ========
Cost (unaudited)..................... 605,316 7,105 559,414 38,797
Depreciation and write downs
(unaudited)......................... (139,058) (596) (125,267) (13,195)
--------- -------- --------- --------
BOOK VALUE AS OF JUNE 30, 1997
(UNAUDITED)......................... f466,258 f 6,509 f434,147 f25,602
========= ======== ========= ========
</TABLE>
Depreciation is calculated on a straight line basis, taking into account the
expected working life of the asset and the residual value. The Company has no
reason to believe that the current value of tangible fixed assets differs
significantly from its stated value.
F-12
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
4. AFFILIATED COMPANIES
<TABLE>
<CAPTION>
TOTAL INVESTMENTS ADVANCES
<S> <C> <C> <C>
BALANCE AS OF JANUARY 1, 1996................. f 62,250 f 62,050 f 200
CHANGES:
New consolidations.......................... 325 325 --
To consolidated companies................... (3,090) (2,898) (192)
Reallocation of Goodwill to investment
affiliated companies....................... 54,463 54,463 --
Acquisitions/additions...................... 42,250 42,250 --
Capital contributions....................... 13,000 13,000 --
Capital repayment........................... (44,950) (44,950) --
Equity in result............................ (9,503) (9,503) --
Translation differences and sundry
movements.................................. (1,829) (1,909) 80
---------- ---------- ------
BALANCE AS OF DECEMBER 31, 1996............... f 112,916 f 112,828 f 88
</TABLE>
THE INVESTMENTS IN AFFILIATED COMPANIES AS OF DECEMBER 31, 1996 ARE:
<TABLE>
<CAPTION>
% VALUATION SHARE IN
OWNERSHIP TOTAL INVESTMENTS LOANS ALLOWANCE RESULT
<S> <C> <C> <C> <C> <C> <C>
A2000................... 50 f 1,325 f 1,325 f -- f -- f (7,965)
United Int.
Investments............ 50 61,528 61,528 -- -- (1,796)
Kabelkom................ 50 41,623 41,623 -- -- (262)
Spain................... -- 3,197 -- (3,197) 1,070
Germany................. 7,993 7,993 -- -- (585)
Other................... 447 359 1,077 (989) 35
---------- ---------- -------- --------- ---------
Total................. f 112,916 f 116,025 f 1,077 f (4,186) f (9,503)
========== ========== ======== ========= =========
</TABLE>
The excess values of cost over net assets acquired included in the amounts
stated above, are as follows:
<TABLE>
<CAPTION>
UII KABELKOM
<S> <C> <C>
gross............................................... f 42,069 f 33,353
amortisation........................................ (4,683) (556)
--------- ---------
Bookvalue as of December 31, 1996................. f 37,386 f 32,797
========= =========
</TABLE>
The amortisation charge (UII: f 2,805, Kabelkom: f 556) is included in Share
in result.
United International Investments ("UII") is a partnership through which UPC
holds a 20% interest in Princes Holdings (Ireland), a 23.3% interest in Tevel
(Israel) and a 42.5% interest in Melita (Malta).
For summary financial information about A2000 reference is made to note 18.
F-13
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
<TABLE>
<CAPTION>
TOTAL INVESTMENTS ADVANCES
<S> <C> <C> <C>
BALANCE AS OF DECEMBER 31, 1996...................... f 112,916 f 112,828 f 88
CHANGES (UNAUDITED):
Consolidation influences (unaudited)............... 3,412 (11,786) 15,198
Acquisitions/additions (unaudited)................. 2,349 -- 2,349
Sale of participations (unaudited)................. (11,068) (11,068) --
Equity in result (unaudited)....................... (2,546) (2,546) --
Translation differences and sundry
movements (unaudited)............................. 5,871 4,758 1,113
---------- ---------- ---------
BALANCE AS OF JUNE 30, 1997
(UNAUDITED)......................................... f 110,934 f 92,186 f 18,748
========== ========== =========
</TABLE>
The investments in affiliated companies as of June 30, 1997 are (unaudited):
<TABLE>
<CAPTION>
% VALUATION SHARE IN
OWNERSHIP TOTAL INVESTMENTS LOANS ALLOWANCE RESULT
<S> <C> <C> <C> <C> <C> <C>
A2000................... 50 f (3,825) f (3,825) f -- f -- f (5,149)
United Int.
Investments............ 50 64,964 64,964 -- -- 661
Kabelkom................ 50 46,133 43,513 2,620 -- 849
Spain................... -- -- 3,564 -- (3,564) --
Czech Republic.......... 50 3,465 (12,567) 16,032 -- (1,739)
Other................... 197 101 1,198 (1,102) 2,832
---------- --------- --------- --------- ---------
Total................... f 110,934 f 95,750 f 19,850 f (4,666) f (2,546)
========== ========= ========= ========= =========
</TABLE>
5. RECEIVABLES
Receivables as presented under current assets mature within one year.
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Trade accounts receivable.......................... f 7,764 f 9,581 f 11,470
Receivables from affiliated
companies......................................... 123,645 14,351 14,491
Prepaid expenses and accrued income................ 4,856 2,903 5,419
Other receivables.................................. 29,466 61,635 74,488
---------- --------- ----------
Total............................................ f 165,731 f 88,470 f 105,868
========== ========= ==========
</TABLE>
Receivables from affiliated companies represent amounts receivable due to
funding of local cash needs, and to expenses charged for UPC personnel.
Included in the Receivables per December 31, 1995 was f 114,776, which were
collected in connection with the funding of KTA by A2000. As of December 31,
1996 the amount receivable from affiliated companies is after deduction of a
provision of f 4,620 (1995: f 5,303). Major items under "Other receivables' as
of December 31, 1996 are current reclaimable VAT f 7,979 (1995: f 15,307) and
loans to personnel in connection with exercised stock options f 18,774 (1995:
nil). These loans are repayable upon sale of the shares concerned or five
years after the date of the grant, which ever date comes first.
F-14
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include all demand accounts and short term
investments held in a bank with a maturity of less than three months. Included
as of December 31, 1996 are short term deposits of f 18,959 (1995: f 112,191),
which deposits are renewed on a daily basis. The cash and cash equivalents are
freely available.
7. SUBORDINATED CONVERTIBLE LOAN
Included are the convertible loans notes, payable to Philips, who has the
right to convert these notes into common stock of UPC at USD 8.33 (1995:
USD2,250) per share before the repayment date (January 1, 2005). The
conversion price was adjusted due to the issuance of new shares. The notes are
subordinated to other financing instruments that UPC has or will have, and
bear an average rate of 10.00%. UIH was granted an option to acquire 50% of
the notes anytime prior to conversion.
8. PROVISIONS
Provisions relate mainly to deferred taxation.
9. LONG-TERM LIABILITIES
<TABLE>
<CAPTION>
AMOUNT AMOUNT AMOUNT
AVERAGE OUTSTANDING OUTSTANDING OUTSTANDING
RANGE OF RATE OF DECEMBER 31, DECEMBER 31, JUNE 30,
INTEREST INTEREST 1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Bank loans......... 3.61 - 6.60 3.9% f 10,300 f 8,950 f 72,950
Capital leases..... 2.80 - 25 9.7% 499 723 551
Other loans........ 7.50 - 7.625 7.5% 16,602 13,157 12,732
--------- --------- ---------
Total............ f 27,401 f 22,830 f 86,233
========= ========= =========
</TABLE>
In addition the long term liabilities as of June 30, 1997 include a
contingent payable of f 36,502 to the minority shareholder of Janco Kabel-TV
AS, Norway, which accretes interest of 5% per annum. The contingent payable
relates to the contemplated exercise price of the call c.q. put option for the
remaining 29.8% of Janco Kabel TV-AS. The amount, including accrued interest,
will be payable in 2001.
Long-term liabilities at December 31, 1996 will be payable as follows:
<TABLE>
<CAPTION>
BANK CAPITAL OTHER
LOANS LEASES LOANS TOTAL
<S> <C> <C> <C> <C>
1997................................. f 1,350 f 338 f 1,675 f 3,363
1998................................. 1,350 133 1,708 3,191
1999................................. 1,350 86 1,743 3,179
2000................................. 350 86 1,781 2,217
2001................................. 350 80 1,250 1,680
Thereafter........................... 4,200 -- 5,000 9,200
-------- ------ --------- ---------
Total.............................. f 8,950 f 723 f 13,157 f 22,830
======== ====== ========= =========
</TABLE>
Bank loans and other loans are guaranteed by the local Eindhoven
municipality. The capital leases are in the books of group companies in Prague
and Eindhoven.
F-15
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
10. CURRENT LIABILITIES
The current liabilities relate to short term debt and other liabilities
which are specified below.
a. Short term debt
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Long term debt repayable within one
year............................... f 5,053 f 3,363 f 1,814
Short term bank loans............... 345,575 424,449 512,926
Short term loans Philips............ 92,773 22,080 --
---------- ---------- ----------
Total............................. f 443,401 f 449,892 f 514,740
========== ========== ==========
</TABLE>
During 1996 UPC secured an USD 150 million revolving credit facility for
general working capital and also an USD 150 million syndicated acquisition
facility for acquisitions of new cable TV licenses or businesses. The
revolving credit facility and acquisition facility matured on July 11, 1997
and October 11, 1997 respectively. UPC must comply with certain covenant
restrictions in order to utilize the facilities. The facilities can be drawn
in US dollars or Netherlands guilders. As per June 30, 1997 an amount of
f 328,443 (1996: f 286,028) was drawn on the revolving credit facility and the
acquisition facility. The facilities were repaid after June 30, 1997 (see note
21.). The short term debt of Norkabel (1996: f 138,421) is being refinanced as
part of the contemplated Janco merger with Norkabel. Of the short term loans
from Philips per December 31, 1995 an amount of f87,656 was for the
acquisition of the cable network in Eindhoven which was fully repaid in 1996.
Per December 31, 1996 the debt represents short term financing in Brussels.
b. Other liabilities
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Accounts payable to trade creditors.. f 12,876 f 31,408 f 36,347
Accounts payable to affiliated
companies........................... 1,788 2,140 3,961
Deposits by customers................ 2,848 8,537 8,845
Other short term liabilities......... 55,829 46,149 51,307
Deferred income and accrued
expenses............................ 19,233 48,040 130,969
--------- ---------- ----------
Total.............................. f 92,574 f 136,274 f 231,429
========= ========== ==========
</TABLE>
Included under Other short term liabilities as of December 31, 1996 are
amounts payable to the parent companies of f 12,319 (1995: f 35,459), relating
to services supplied and to interest payable.
F-16
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
11. INFORMATION PER GEOGRAPHICAL AREA
<TABLE>
<CAPTION>
OPERATING
REVENUE INCOME (LOSS) TOTAL ASSETS
--------------- ---------------- -------------------
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Netherlands--corporate.. 4,433 1,242 (12,872) (6,631) 339,803 548,781
- --operating companies 21,633 4,297 4,828 282 120,626 120,094
Austria................. 156,964 72,802 16,430 7,117 528,409 510,903
Belgium................. 37,704 19,752 (4,287) (4,646) 100,762 96,951
Czech Republic.......... 7,746 2,086 (12,307) (10,772) 35,149 39,810
Norway (three months
period)................ 14,541 -- (767) -- 168,574 --
Other................... 2,158 -- (10,220) -- 37,733 --
------- ------- ------- ------- --------- ---------
Total................. 245,179 100,179 (19,195) (14,650) 1,331,056 1,316,539
======= ======= ======= ======= ========= =========
</TABLE>
The Total assets of Netherlands--corporate include UPC's share in the
licence of KTA and the investments, advances and current accounts with
Affiliated companies. The main reason for the reduction in Corporate assets
were the collection of f 114,776 in connection with the funding of KTA by
A2000, and the decrease in the Cash and Cash equivalents.
12. PERSONNEL
Labour cost is specified as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Salaries and wages...................................... f39,022 f13,565
Pension costs........................................... 1,050 1,311
Social securities....................................... 10,135 3,435
-------- --------
Total................................................. f50,207 f18,311
======== ========
</TABLE>
The information about employees by category is as follows:
<TABLE>
<CAPTION>
AS OF AS OF
DEC. 31 DEC. 31 AVERAGE AVERAGE
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Network..................................... 365 270 311 263
General & Administration.................... 339 137 266 117
--- --- --- ---
Total..................................... 704 407 577 380
=== === === ===
</TABLE>
13. FINANCIAL INCOME AND EXPENSES
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JANUARY - JANUARY -
1995 1996 JUNE 1996 JUNE 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income.............. f 6,403 f 2,757 f 2,757 f 4,517
Interest expense............. (19,873) (38,475) (8,349) (32,266)
Exchange loss and other...... (3,376) (21,135) (21,135) (37,141)
---------- ---------- ---------- ----------
Total...................... f (16,846) f (56,853) f (26,727) f (64,890)
========== ========== ========== ==========
</TABLE>
F-17
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
14. INCOME TAXES
The consolidated financial statements have been prepared assuming full tax
basis for licence fees capitalized relating to certain acquisitions and no
deferred taxes relating to these acquisitions have been provided for.
The difference between the income tax benefit and the actual income tax
benefit are as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
"Expected" income tax benefit....................... f (26,616) f (11,023)
Expenses and write downs not deductible............. 3,872 4,000
Differences in foreign tax rates.................... 1,105 797
Temporary differences for which no deferred tax
benefits has
been provided for.................................. 26,019 3,471
Other............................................... (683) 1,131
---------- ----------
Income tax loss (benefit)......................... f 3,697 f (1,624)
---------- ----------
</TABLE>
The net deferred tax liability of UPC consists of the following:
Deferred tax liabilities:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Intangible fixed assets................................... f31,688 f5,552
Tangible fixed assets..................................... 8,453 3,096
Other..................................................... (3,746) --
-------- -------
Total deferred tax liabilities.......................... 36,395 8,648
-------- -------
Deferred tax assets:
Tax loss carry forwards................................... 103,635 2,476
Other..................................................... -- 331
Tax loss carry forwards not recognized.................... (75,630) (1,913)
-------- -------
Net deferred tax assets................................. 28,005 894
-------- -------
Net deferred tax liabilities.......................... f 8,390 f7,754
======== =======
</TABLE>
Tax loss carry forwards arise primarily in Norway, The Netherlands, Belgium,
Czech Republic and Austria. The tax loss carry forwards of Norway, aggregating
to f 249,818, will expire during the years 1999--2006. The tax loss carry
forwards of The Netherlands, Belgium and Austria of f 77,855 (1995: f 7,922)
have no expiration date. The tax loss carry forwards of the Czech Republic of
f 15,688 (1995: f 14,489) will expire in the year 2003.
15. PARENT COMPANIES RELATED TRANSACTIONS
The Company is charged by the parent companies for services supplied and for
interest. In 1996 UIH charged an amount of f 9,004 for salaries and related
costs for employees seconded to UPC group and affiliated companies. The
charges from Philips in 1996 relate to interest on the convertible notes
(f 24,212) and reimbursement of expenses (f 620). These figures do not include
the purchase of equipment from Philips companies, which purchase is done at
normal commercial conditions.
F-18
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
16. COMMITMENTS AND GUARANTEES
The UPC Group has entered into various rent and lease agreements for office
space, cars etc. The terms of the agreements call for future minimum payments
as of December 31, 1996 as follows:
<TABLE>
<S> <C>
1997............................... f 10,643
1998............................... f 9,829
1999............................... f 7,652
2000............................... f 5,948
</TABLE>
The Company has guaranteed affiliated company debt in the amount of f 6,161
with respect to Princes Holdings Ltd. in Ireland (1995: f 7,040 with respect
to Melita Cable, Malta).
17. FOREIGN EXCHANGE RISK EXPOSURE
As of December 31, 1996 the Company did not enter into foreign forward
exchange contracts, or use other financial instruments, to hedge against
foreign exchange exposure. The currency risk is primarily applicable to the US
dollar, in total for approximately USD 185 million (1995: USD 145 million).
The main item of this exposure relates to the convertible loans. The risk
exposures for other foreign currencies are not material.
18. US GAAP RECONCILIATION
The accounting policies followed in the preparation for the consolidated
financial statements differ in some respects to those generally accepted in
the United States of America (US GAAP).
The differences which have a material effect on net loss and/or
shareholders' equity and/or total assets are as follows:
--The fair market value of licences, goodwill, land and buildings and
networks for US GAAP purposes is limited to a partial step-up of the fair
market value of the assets contributed by Philips. No step-up in asset
value is allowed for the difference between historical cost and the fair
market value of the assets contributed by UIH. Related amortisation and
depreciation has been adjusted accordingly.
--Deferred taxes have been established for the difference between book and
tax basis of contributed assets.
The calculation of net loss, shareholders' equity and total assets,
substantially in accordance with US GAAP, is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JANUARY- JANUARY-
1995 1996 JULY 1996 JUNE 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET LOSS AS PER
CONSOLIDATED STATEMENTS OF
INCOME.................... f (46,242) f (91,456) f (37,776) f (97,859)
Adjustments to reported
income (loss):
Amortisation of
licences................ 3,244 6,487 3,244 3,244
Amortisation of
goodwill................ 1,985 345 172 172
Depreciation of fixed
assets.................. 953 1,908 953 953
Amortisation goodwill
Affiliated Companies.... -- 3,692 1,846 1,846
Tax effect of US GAAP
adjustments............. (1,469) 3,188 3,274 (86)
---------- ---------- ---------- ----------
Approximate net loss in
accordance with US GAAP... f (41,529) f (75,836) f (28,287) f (91,730)
========== ========== ========== ==========
</TABLE>
F-19
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JANUARY -
1995 1996 JUNE 1997
(UNAUDITED)
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY AS PER
CONSOLIDATED
BALANCE SHEETS.................. f 537,633 f 449,639 f 354,434
Adjustments to reported equity:
Licences....................... (126,499) (120,012) (116,768)
Goodwill....................... (59,623) (3,411) (3,239)
Tangible fixed assets.......... (21,975) (20,067) (19,114)
Goodwill Affiliated Companies.. -- (50,771) (48,925)
Deferred taxes................. -- 3,188 3,102
------------ ------------ ------------
Approximate shareholders' equity
in accordance with US GAAP...... f 329,536 f 258,566 f 169,490
============ ============ ============
TOTAL ASSETS AS PER CONSOLIDATED
BALANCE SHEETS: f 1,316,539 f 1,331,056 f 1,591,766
Adjustments to reported assets:
Licences....................... (126,499) (120,012) (116,768)
Goodwill....................... (59,623) (3,411) (3,239)
Tangible fixed assets.......... (21,975) (20,067) (19,114)
Goodwill Affiliated Companies.. -- (50,771) (48,925)
------------ ------------ ------------
Approximate total assets in
accordance with US GAAP......... f 1,108,442 f 1,136,795 f 1,403,720
============ ============ ============
</TABLE>
19. SUMMARY FINANCIAL INFORMATION ABOUT A2000 HOLDING N.V., BASED ON DUTCH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
<TABLE>
<S> <C>
BALANCE SHEET PER DECEMBER 31, 1996
Intangible fixed assets..................................... f 132,018
Tangible fixed assets....................................... 230,304
Financial fixed assets...................................... 543
Liquid assets............................................... 33,389
Other current assets........................................ 24,997
---------
TOTAL ASSETS.................................................. f 421,251
---------
Provisions.................................................. 11,693
Long term debt.............................................. 366,000
Current liabilities......................................... 40,908
---------
TOTAL LIABILITIES............................................. f 418,601
=========
TOTAL SHAREHOLDERS' VALUE..................................... f 2,650
---------
STATEMENT OF INCOME 1996
Revenue..................................................... f 89,893
Costs....................................................... (49,064)
Depreciation and amortisation............................... (43,789)
Financial income/charges.................................... (12,969)
---------
NET LOSS...................................................... f (15,929)
=========
</TABLE>
F-20
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
20. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that effect amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period.
Actual results may differ from the estimates.
21. PROFORMA INFORMATION (UNAUDITED)
The acquisition of the additional 91.7% in Norkabelgruppen AS, and the
subsequent consolidation, has a material effect on the figures reported in the
statement of income. Based upon currently available information and upon
certain assumptions that management believes reasonable under current periods,
assuming the operations of Norkabelgruppen AS were included, is:
<TABLE>
<CAPTION>
1996
<S> <C>
Revenue.......................... f 287,962
Net Loss......................... f (108,856)
</TABLE>
22. SUBSEQUENT EVENTS
Acquisition of Philips Ownership
On December 11, 1997, UIH completed the purchase of Philips' 50% interest in
UPC. The final amount of the transaction was f856,600 ($425.2 million),
comprised of f339,800 ($168.7 million) for redemption of UPC's Subordinated
Convertible Loans due to Philips, f66,800 ($33.2 million) by UPC for the
repurchase 3.17 million UIHIA shares held by Philips, and f450,000 ($223.3
million) allocated to the purchase of Philips' 50% interest in UPC. The
transaction was funded by UPC's Senior Secured Reducing Revolving Credit
Facility (see below) f305,200 ($151.5 million), a non-recourse Senior Secured
Bridge Facility (see below) f224,000 ($111.2 million), and an equity investment
by UIH of f327,400 ($162.5 million).
Subsequent to this transaction, UIH now owns 100% of UPC. Following the
transaction UPC was renamed United Pan-Europe Communications N.V., but will
still use the "UPC" designation.
Janco Acquisition
On January 8, 1997, UPC acquired 70.2% of the shares of Janco, a Norwegian
Cable system for a price of f88,000. Financing was from the acquisition facility
for the full amount. Janco passes 225,000 homes and has 160,000 subscribers as
per December 31, 1996. During November 1997, Norkabelgruppen merged with Janco
Kabel-TV. Concurrent with the merger, Janco changed its name to Janco Multicom
AS. UPC ownership in the new merged company became 87.3% effective with the
merger.
Janco Kabel-TV AS is legally owned for 70.2%. Due to the fact that UPC has a
call option for the remaining 29.8% and the minority shareholder has a put
option, both for the same amount, Janco Kabel-TV is consolidated for 100%. The
relating liability is presented under long term liabilities (see note 9.).
Sale RKS Hamburg
In February 1997 UPC sold its 29% investment in both RKS Hamburg L.P. and
Kabel--Fernsehen Hamburg Service GmbH for f5,906. The transaction gain of
f2,611 was accounted for in 1997.
Sale AGFB
During March and April 1997 UPC sold its shares in AGFB (Germany). The
transaction gain of f204 was accounted for in 1997.
Refinancing UPC Borrowing Facilities
Subsequent to year end, UPC extended the USD 150 million revolving credit
facility and the USD 150 million acquisition facility until July 11, 1997 and
October 11, 1997 respectively.
On October 10, 1997, UPC secured a 1,100,000 Senior Secured Reducing
Revolving Credit Facility ("Credit Facility"). The Credit Facility matures on
September 30, 2006, and subjects the Company to certain drawdown tests and
financial convenants based upon earnings before interest, taxes, depreciation
and amortization ("EBITDA") of its Restricted Group of subsidiaries which
include the Telekabel Group, Radio Public, Norkabel and Janco. Approximately
330,000 of proceeds from the Credit Facility were used to refinance UPC's
Revolving Credit and Acquisition Facilities. Additional funds from the Credit
Facility were used to partially finance the purchase of Philips' interests in
UPC including the Subordinated Convertible Loans (f305,200), refinance Janco
Multicom (f150,000) reduce intercompany funding from the Telekabel Group
(f22,600), transaction costs (f15,000) and other working capital purposes
(f62,200).
On December 5, 1997, a newly formed wholly owned subsidiary of UPC, Belmarken
Holding B.V., secured a $125 million (f251,800) non-recourse Senior Secured
Bridge Facility ("Bridge Facility"). The Bridge Facility requires repayment on
December 5, 1998, but can be extended for an additional six month period if
certain conditions are met before March 31, 1998, and a substantial repayment is
made before December 5, 1998. Proceeds from the Bridge Facility were used to
satisfy the remaining financing requirements for the Philips' Transaction
($111.2 million). The remainder was used to fund an interest reserve account
($11 million) and cover transaction costs ($2.8 million). The Bridge Facility is
secured by UPC's non Restricted Group companies held in Belmarken Holding B.V.
which include all other UPC subsidiaries and the Company's investments in
affiliated companies.
Combivisie
On December 17, 1997 UPC signed an agreement to acquire certain assets,
including the cable systems, of Combivisie for an amount of 200,000. Combivisie
operates cablesystems in a number of municipalities near Eindhoven, The
Netherlands. The transaction is contemplated to close on January 5, 1998.
Nuon Merger
On November 13, 1997, UPC signed a Memorandum of Understanding ("MOU") with
Nuon, a Netherlands energy company, for the purpose of merging their Netherlands
cable assets into a new company, United TeleKabel Holding B.V. ("TeleKabel").
Under the terms of the MOU, UPC will contribute its 50% interest in A-2000 and
its wholly owned interests in Kabeltelevisie Eindhoven NV and future wholly
owned interests in Combivisie (totaling approximately 485,000 equity
subscribers) for a 51% ownership interest in TeleKabel. Nuon will contribute its
cable division (totaling approximately 580,000 equity subscribers) for a 49%
ownership interest in TeleKabel. Final negotiations are in progress with closing
expected during the first quarter of 1998.
Sale of Ownership Interests in Melita Cable TV Ltd
In July 1997, UPC through UII, sold 17.5% of its ownership interest in Melita
Cable TV Ltd. to an existing Maltese shareholder reducing UPC's ownership
interest to 25%. The sale increased the ownership held by Maltese citizens to
50% in accordance with the terms of the franchise.
Son en Breugel Acquisition
In July 1997, UPC acquired Son en Breugel, a cable system with approximately
5,000 subscribers for 5,875. Son en Breugel is located adjacent to the
Kabeltelevisie Endhoven NV and was acquired from the local municipality.
F-21
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
23. STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SHARE CAPITAL OTHER
CAPITAL RESERVES RESERVES
<S> <C> <C> <C>
BALANCE AS OF JANUARY 1, 1996........... f 200 f 582,180 f (44,747)
Issuance of new shares.................. 53,800 (53,800)
Net group loss.......................... -- -- (91,456)
Translation differences................. -- -- 3,462
--------- ---------- -----------
BALANCE AS OF DECEMBER 31, 1996......... f 54,000 f 528,380 f (132,741)
========= ========== ===========
Net group loss (unaudited).............. f -- f -- f (97,859)
Translation differences (unaudited)..... -- 2,654
--------- ---------- -----------
BALANCE AS OF JUNE 30, 1997
(UNAUDITED)............................ f 54,000 f 528,380 f (227,946)
========= ========== ===========
</TABLE>
On June 18, 1996, the general meeting of shareholders of UPC has decided to
issue 53,800,000 shares, which issuance of shares has been embodied in a
notarial deed dated July 26, 1996.
On June 18, 1996, UPC adopted a stock option plan for certain of its
employees and those of its subsidiaries. The shareholders have transferred 4
million ordinary shares of UPC into the "Stichting Administratiekantoor UPC"
(the "Foundation"), which administers the stock option plan. Until such time
as the shares of UPC have been listed at a stock exchange, the Foundation will
issue under certain circumstances certificates convertible into the shares of
UPC owned by the Foundation. The options are granted at fair market value to
be determined by the Supervisory Board. The maximum term that the options can
be exercised is five years from the date of the grant. During the 6 months
period ended December 31, 1996, no compensation expense was recognized in
connection with the plan.
Data concerning the stock option plan as of December 31, 1996 is as follows:
<TABLE>
<S> <C>
Outstanding at the beginning of the year...................
Granted during the year.................................... 2,660,000
Exercised during the year (vested portion 520,278)......... (1,120,000)
Cancelled during the year.................................. (6,389)
-----------
Outstanding at the end of the year (vested portion:
919,321).................................................. 1,533,611
-----------
Option price per share (in Dutch guilders)................. f 15.74
</TABLE>
Upon termination of an employee any unvested value associated with the
difference between exercise price and the fair market value of the
certificates must be repaid to the Foundation.
F-22
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
SUMMARY OF MAJOR GROUP AND AFFILIATED COMPANIES
<TABLE>
<S> <C>
AUSTRIA
Telekabel Wien GmbH................................................ 95%
Telekabel Graz GmbH................................................ 95%
Telekabel Klagenfurt GmbH.......................................... 95%
Telekabel--Fernsehnetz Region Baden Betriebsgesellschaft mbH....... 95%
Telekabel--Fernsehnetz Wr. Neustadt / Neunkirchen
Betriebsgesellschaft mbH.......................................... 95%
BELGIUM
Radio Public SA.................................................... 100%
CZECH REPUBLIC
Kabel Net Holding AS............................................... 100%
Kabel Net Brno AS.................................................. 100%
Ceska Programova Spolecnost SRO.................................... 50%
FRANCE
Mediareseaux S.A................................................... 100%
Mediareseaux Marne SA.............................................. 99.6%
Citecable SA....................................................... 30%
HUNGARY
Kabelkom Holding Company(1)........................................ 50%
IRELAND
Through UII partnership(2):
Princes Holdings Ltd............................................... 20%
ISRAEL
Through UII partnership(2):
Tevel Israel International Communications Ltd...................... 23.3%
MALTA
Through UII partnership(2):
Melita Cable TV Ltd................................................ 42.5%
NETHERLANDS
A2000 Holding NV (Amsterdam)....................................... 50%
Kabeltelevisie Eindhoven NV........................................ 100%
NORWAY
NorkabelGruppen AS................................................. 100%
Janco Kabel-TV AS(3)............................................... 100%
PORTUGAL
Intercabo Televisao por Cabo SGPS Lda.............................. 100%
</TABLE>
F-23
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
AT JUNE 30, 1997
(CURRENCY--THOUSANDS OF NETHERLANDS GUILDERS)
<TABLE>
<S> <C>
ROMANIA
Multicanal Holdings SRL............................................... 90%
Control Cable Ventures SRL............................................ 51%
SLOVAK REPUBLIC
Trnavatel SRO......................................................... 75%
Slovatel SRO.......................................................... 100%
SPAIN
Santander de Cable SA................................................. 25%
</TABLE>
- ---------------------
(1) UPC BV has a 50% legal ownership in Kabelkom Holding Company., which is
reduced by a preferential claim by Time Warner to an economic ownership of
47.2 %.
(2) UII (United International Investments) is a US general partnership between
UPC BV and TeleCommunications, Inc.With respect to the Israel system, UPC
BV's interest in UII is 50 % (corresponding with a 23.3 % beneficial
interest in Tevel Israel International Communications Ltd).With respect to
the Irish system, UPC BV's interest in UII is 44.4 % (corresponding with a
20 % beneficial interest of UPC BV in Princes Holding Ltd). With respect
to the Malta system, UPC BV's interest in UII is effectively 56.2 %
(corresponding with a 42.5 % beneficial interest of UPC BV in Melita Cable
TV Ltd). UPC BV provides the management services to UII Management, a US
general partnership between UPC BV (50 %) and TeleCommunications, Inc (50
%) which provides management and consulting services to UII's Israel
(Tevel) and Malta (Melita) cable television interests.
(3) UPC has a 70.2% legal ownership in Janco Kabel-TV AS together with a call
option on the remaning 29.8% for the same amount as the minority
shareholder has a put option. The call and put option expires in 2001. As
from an economic perspective UPC fully owns Janco Kabel-TV AS, 100% is
consolidated.
F-24
<PAGE>
EXHIBIT 10.1
EXECUTION COPY
================================================================================
AMENDED AND RESTATED
SECURITIES PURCHASE AND CONVERSION AGREEMENT
Dated as of December 1, 1997
By and Among
PHILIPS MEDIA B.V.,
PHILIPS MEDIA NETWORKS B.V.,
UNITED INTERNATIONAL HOLDINGS, INC.,
JOINT VENTURE, INC.
and
UNITED AND PHILIPS COMMUNICATIONS B.V.
================================================================================
<PAGE>
AMENDED AND RESTATED
SECURITIES PURCHASE AND CONVERSION AGREEMENT
--------------------------------------------
AMENDED AND RESTATED SECURITIES PURCHASE AND CONVERSION AGREEMENT
dated as of December 1, 1997 by and among PHILIPS MEDIA B.V., a private company
with limited liability (besloten venootschap) organized under the laws of The
Netherlands ("PHILIPS MEDIA"), PHILIPS MEDIA NETWORKS B.V., a private company
with limited liability (besloten venootschap) organized under the laws of The
Netherlands and a wholly-owned subsidiary of Philips Media ("PHILIPS NETWORKS",
and together with Philips Media, the "SELLERS"), UNITED INTERNATIONAL HOLDINGS,
INC., a corporation organized under the laws of the State of Delaware ("UIHI"),
JOINT VENTURE, INC., a corporation organized under the laws of the State of
Delaware and a wholly-owned subsidiary of UIHI ("JVI", and together with UIHI,
the "UIHI PARTIES"), and UNITED AND PHILIPS COMMUNICATIONS B.V., a private
company with limited liability (besloten venootschap) organized under the laws
of The Netherlands ("UPC").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Philips Networks owns 25,000,000 ordinary shares (the "UPC
SHARES") of the common stock, par value NLG 1 per share, of UPC ("UPC ORDINARY
SHARES") and JVI owns 25,000,000 UPC Ordinary Shares, which shares collectively
represent approximately 92.6% of the issued and outstanding capital shares of
UPC; and
WHEREAS, Philips Media owns $61,593,016.45 in aggregate principal
amount of 9.96% Series A Convertible Notes due 2005 of UPC, as of January 1,
1997, and $92,479,507.32 in aggregate principal amount of 10.03% Series B
Convertible Notes due 2005 of UPC, as of January 1, 1997, (collectively the "PIK
NOTES"); and
WHEREAS, Philips Networks owns 3,169,151 shares of the Class A Common
Stock, par value $.01 per share, of UIHI (the "UIHI SHARES" and collectively
with the UPC Shares and the PIK Notes, the "SECURITIES");
WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, UPC desires to purchase from the Sellers, and the Sellers desire
to sell or otherwise transfer to UPC, the PIK Notes and the UIHI Shares; and
WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, UPC and the Sellers desire to convert the UPC Shares into the
Initial Preference Shares and for UPC to pay to the Sellers, in partial
consideration therefor, the Conversion Fee and to issue to the Sellers the SAR
(as such terms are hereinafter defined).
<PAGE>
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
DEFINITIONS
-----------
(S)1.1 Definitions. When used in this Agreement, the following terms
-----------
shall have the respective meanings specified below:
"Additional Preference Shares" shall mean any Preference Shares issued
----------------------------
to Philips Media in settlement of the SAR.
"Affiliate" shall mean and include, with reference to any Person, any
---------
other Person Controlling, Controlled by or under common Control with such
Person.
"Agreement" and "this Agreement" shall mean this Securities Purchase
--------- --------------
and Conversion Agreement, together with each of the exhibits and schedules
attached hereto as amended, supplemented or modified from time to time.
"Alternate Consideration Event" shall have the meaning specified in
-----------------------------
Section 8.5 hereof.
"Appraisal Date" shall mean the date of the delivery of a notice of
--------------
redemption, in accordance with Section 8.6 hereof, of the UPC Ordinary Shares
issued upon the conversion of the Increasing Rate Preference Shares into UPC
Ordinary Shares.
"Austrian Subsidiaries" shall mean CNA, Telekabel Wien GmbH and
---------------------
Telekabel Fernsehnetz Wiener Neustadt/Neunkirchen Betriebsgesellschaft mbh.
"Business Day" shall mean any day, excluding Saturday, Sunday or any
------------
day which shall be a legal holiday in the States of New York or Colorado, in The
Netherlands or in England.
"Closing" shall mean the consummation of the transactions contemplated
-------
by this Agreement in accordance with the terms hereof and shall take place at
the offices of White & Case, 7-11 Moorgate, London, England, at 10:00 A.M. local
time on a Business Day occurring not more than five Business Days after the
satisfaction or waiver of all the conditions set forth in Article VII hereof or
such other place or time as the Parties hereto may agree (the date of the
Closing being referred to as the "Closing Date").
"Closing Exchange Rate" shall have the meaning specified in Section
----------------------
2A.3(b) hereof.
"CNA" shall have the meaning specified in Section 9.1 hereof.
---
"Control" shall mean the power to vote more than 50% of the Voting
-------
Securities of an Entity or otherwise control the management and affairs of such
Entity (including by way of
(2)
<PAGE>
the power to veto any material act or decision).
"Control Person" shall have the meaning specified in Section 8.4(a)
--------------
hereof.
"Conversion Date" shall have the meaning specified in Section 10.1(b)
---------------
hereof.
"Conversion Fee" shall mean an amount of Dutch Guilders equal to U.S.
--------------
$267.2 million minus (i) the aggregate principal amount of the PIK Notes on
-----
January 1, 1997 and (ii) an amount equal to the Fair Market Value of the UIHI
Shares on the Closing Date, all as converted to Dutch Guilders at the Exchange
Rate.
"Conversion Transaction" shall have the meaning specified in Section
----------------------
2.2(a) hereof.
"Converted Shares" shall have the meaning specified in Section
----------------
2.2(a).
"Damages" shall have the meaning specified in Section 8.4(a) hereof.
-------
"Designated Dollar Amount" shall mean an amount in U.S. Dollars equal
------------------------
to the difference between (i) if the transactions contemplated by this Agreement
are consummated on or prior to December 11, 1997, $156.0 million and (ii) the
sum of (x) the aggregate principal amount of the JVI Notes purchased pursuant to
Section 2A.2 hereof and (y) the aggregate principal amount of the Remaining PIK
Notes purchased pursuant to Section 2A.4 hereof.
"Designated Guilder Amount" shall mean an amount in Dutch Guilders
-------------------------
equal to the difference between (i) the difference between (x) U.S. $267.2
million and (y) an amount in U.S. Dollars equal to the UIHI Share Price, such
amount to be converted into Dutch Guilders at the Exchange Rate and (ii) the JV1
Share Price, such amount to be converted into Dutch Guilders at the Closing
Exchange Rate.
"DLJ" shall mean Donaldson, Lufkin & Jenrette Securities Corporation.
---
"Dollar Note" shall have the meaning specified in Section 2A.6(a)
-----------
hereof.
"Election Date" shall have the meaning specified in Section 12.5
-------------
hereof.
"Encumbrance" shall have the meaning specified in Section 3.1(a).
-----------
"Entity" shall mean any Person that is not a natural person.
------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
"Exchange Rate" shall mean the rate of NLG 1.9009 per U.S. $1.00.
-------------
"Fair Market Value" shall mean (x) with respect to the UIHI Shares,
-----------------
the amount determined by multiplying the number of shares of UIHI Class A Common
Stock comprising the UIHI Shares as of the date on which such fair market value
is being determined by the average of
(3)
<PAGE>
the closing prices for the Class A Common Stock of UIHI on the Nasdaq National
Market ("NASDAQ") for the thirty NASDAQ trading days immediately preceding the
determination date, and (y) with respect to the Preference Shares, the fair
market value of such Preference Shares on a fully-distributed basis as
determined by the investment advisors of UIHI and Philips Media and (z) with
respect to the UPC Ordinary Shares, the amount determined as of the Appraisal
Date pursuant to the Valuation Procedure set forth in Section 8.6 hereof.
"Finance Documents" shall have the meaning specified in Section 10.4
-----------------
hereof.
"Finance Party" shall mean any Person, other than UPC or its
-------------
Subsidiaries, which is a party to any Finance Document.
"Financing Period" shall mean the period beginning on the date hereof
----------------
and ending on September 15, 1997.
"Foundation" shall mean Stichting Administratiekantoor UPC.
----------
"Foundation Rights" shall have the meaning specified in Section 3.1(d)
-----------------
hereof.
"Goldman, Sachs" shall mean Goldman, Sachs & Co.
--------------
"Governmental Authority" shall mean any nation, state or supranational
----------------------
body or any political subdivision thereof or any body, agency, entity or other
Person thereof that exercises executive, legislative, judicial, regulatory or
administrative functions.
"Governmental Consents" shall have the meaning specified in Section
---------------------
6.1 hereof.
"Guilder Note" shall have the meaning specified in Section 2A.6(a)
------------
hereof.
"Increasing Rate Preference Shares" shall have the meaning specified
---------------------------------
in Section 8.5 hereof.
"Indemnified Party" shall have the meaning specified in Section 8.4(c)
-----------------
hereof.
"Indemnifying Party" shall have the meaning specified in Section
------------------
8.4(c) hereof.
"Independent Investment Banker" shall have the meaning specified in
-----------------------------
Section 8.6(d) hereof.
"Initial Preference Shares" shall have the meaning specified in
-------------------------
Section 2.2(a) hereof.
"Initial Purchasers" shall have the meaning specified in Section 8.2
------------------
hereof.
"JVI" shall have the meaning specified in the preliminary statement
---
hereof.
"JVI Notes" shall have the meaning specified in Section 2A.2 hereof.
---------
(4)
<PAGE>
"JVI Shares" shall have the meaning specified in Section 2A.3 hereof.
----------
"JVI Share Price" shall have the meaning specified in Section 2A.3
---------------
hereof.
"KTV" shall have the meaning specified in Section 9.1 hereof.
---
"Major Subsidiary" shall have the meaning specified in Section 10.4(g)
----------------
hereof.
"Material Adverse Effect" shall mean, with respect to any Entity, a
-----------------------
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of such Entity and its Subsidiaries, taken
as whole.
"Newco" shall have the meaning specified in Section 2A.6(a) hereof.
-----
"Newco Stock" shall have the meaning specified in Section 2A.6(b)
-----------
hereof.
"Option Agreement" shall mean the Option Agreement, dated as of July
----------------
13, 1995, by and between Philips Media and UIHI.
"Other Expenses" shall have the meaning specified in Section 8.3
--------------
hereof.
"Party" shall mean any party to this Agreement, and "Parties" shall
----- -------
mean all of the Parties to this Agreement, collectively.
"PENV" shall mean Philips Electronics N.V., a corporation organized
----
under the laws of The Netherlands.
"Permitted Liens" shall mean (i) encumbrances granted in connection
---------------
with any indebtedness incurred by the UIHI Parties or UPC for the purpose of
financing the transactions contemplated hereby or refinancing any such
indebtedness (including, but not limited to, encumbrances granted in connection
with the TD Facility), (ii) encumbrances in favor of UPC or its Subsidiaries,
(iii) encumbrances to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a similar nature
incurred in the ordinary course of business and (iv) liens for taxes,
assessments or governmental charges, claims or encumbrances otherwise created by
operation of law.
"Person" shall mean and include any individual, partnership,
------
association, joint stock company, joint venture, corporation, trust, limited
liability company, unincorporated organization, or a government, agency or
entity or any political subdivision thereof.
"Philips" shall mean PENV, Philips Media, Philips Networks and their
-------
respective Affiliates (other than UPC and its Controlled Affiliates).
"Philips Media" shall have the meaning specified in the preliminary
-------------
statement hereof.
"Philips Media Nominee" shall have the meaning specified in Section
---------------------
10.2(a)
(5)
<PAGE>
hereof.
"Philips Networks" shall have the meaning specified in the preliminary
----------------
statement hereof.
"Philips Person" shall mean Philips Networks and any Affiliate of
--------------
Philips Networks which may acquire any Initial Preference Shares prior to the
consummation of the Private Placement.
"Philips Required Consents" shall mean (x) the Governmental Consents
-------------------------
and Third Party Consents set forth on Schedule 3.3 attached hereto and (y) any
Governmental Consent required to be obtained by any Party hereto of which the
Parties hereto first become aware after the date hereof, which such Governmental
Consent, if not made, obtained or provided, will have a Material Adverse Effect
on Philips Media or UPC, as the case may be.
"PIK Notes" shall have the meaning specified in the recitals hereto.
---------
"Pre-Closing Period" shall have the meaning specified in Section 6.4
------------------
hereof.
"Preference Shares" shall have the meaning specified in Section 2.2(a)
-----------------
hereof.
"Private Placement" shall have the meaning specified in Section 8.2(a)
-----------------
hereof.
"Purchase Agreement" shall have the meaning specified in Section
------------------
7.1(g) hereof.
"Purchase Transaction" shall have the meaning specified in Section 2.1
--------------------
hereof.
"Redemption Price" shall have the meaning specified in Section 2A.5(b)
----------------
hereof.
"Remaining PIK Notes" shall have the meaning specified in Section
-------------------
2A.5(a) hereof.
"Required Consents" shall mean the Philips Required Consents, the UPC
-----------------
Required Consents and the UIHI Required Consents.
"Rule 144A Offering" shall have the meaning specified in Section
------------------
8.2(a).
"SAR" shall mean a stock appreciation right in the form of Exhibit A
--- ---------
attached hereto, which such right shall entitle Philips Networks, upon the
occurrence of certain events and the exercise or deemed exercise thereof, to
receive ten percent (10%) of the incremental equity value of UPC (as determined
pursuant to the terms of such right) in excess of (A) if UIHI elects, pursuant
to Section 12.5 of this Agreement, to comply with Article II hereof, U.S. $480.0
million or (B) if UIHI elects, pursuant to Section 12.5 of this Agreement, to
comply with Article IIA hereof, an amount equal to (x) U.S. $480.0 million,
minus (y) U.S. $162.5 million, plus (z) an amount in U.S. Dollars equal to the
aggregate principal amount of the JVI Notes purchased pursuant to Section 2A.2
hereof.
(6)
<PAGE>
"SAR Cash Payment Amount" shall mean an amount in U.S. Dollars equal
-----------------------
to (x) U.S. $7.5 million minus (y) an amount of U.S. Dollars equal to NLG
9,975,000 such Guilder amount to be converted into U.S Dollars at the Closing
Exchange Rate.
"Securities" shall have the meaning specified in the recitals hereto.
----------
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Security Documents" means any document pursuant to which any security
------------------
is granted in connection with or pursuant to the TD Facility.
"Sellers" shall have the meaning specified in the preliminary
-------
statement hereof.
"Selling Expenses" shall have the meaning specified in Section 8.3
----------------
hereof.
"Shareholders' Agreement" shall mean the Shareholders' Agreement,
-----------------------
dated as of July 13, 1995, by and among Philips Media, Philips Network, UIHI and
JVI.
"Strategic Plan" shall have the meaning specified in Section 8.6(a)
--------------
hereof.
"Subsidiary" shall mean, with respect to any Person, (a) any
----------
partnership of which such Person is a general partner or of which such Person's
Subsidiary is a general partner and (b) any other Entity which, at the time as
of which any determination is being made, is Controlled by such Person.
"Tax Matter" shall have the meaning specified in Section 6.4(b)
----------
hereof.
"Taxes" shall mean all taxes, public fees, public assessments and
-----
public charges, including, without limitation, all income taxes, trade taxes,
value added taxes, property taxes, withholding taxes, capital taxes, transfer
taxes, profit sharing taxes, stamp taxes, import duties, social security taxes
and all interest and penalties relating thereto.
"TD Facility" shall have the meaning specified in Section 8.9 hereof.
-----------
"TD Lenders" shall have the meaning specified in Section 8.6(d)
----------
hereof.
"Third Party Consents" shall have the meaning specified in Section 6.1
--------------------
hereof.
"Transaction" shall have the meaning specified in Section 2.2(a)
-----------
hereof.
"UIHI" shall have the meaning specified in the preliminary statement
----
hereof.
"UIHI Parties" shall have the meaning specified in the preliminary
------------
statement hereof.
"UIHI Required Consents" shall mean (x) the Governmental Consents and
----------------------
Third Party Consents set forth on Schedule 4.2 attached hereto and (y) any
Governmental Consent
(7)
<PAGE>
required to be obtained by any Party hereto of which the Parties hereto first
become aware after the date hereof, which such Governmental Consent, if not
made, obtained or provided, will have a Material Adverse Effect on UIHI or UPC,
as the case may be.
"UIHI Share Price" shall have the meaning specified in Article 2A.4(b)
----------------
hereof.
"UIHI Shares" shall mean have the meaning specified in the recitals
-----------
hereto.
"UPC" shall have the meaning specified in the preliminary statement
---
hereof.
"UPC Ordinary Shares" shall have the meaning specified in the recitals
-------------------
hereto.
"UPC Required Consents" shall mean (x) the Governmental Consents and
---------------------
Third Party Consents set forth on Schedule 5.2 attached hereto and (y) any
Governmental Consent required to be obtained by any Party hereto of which the
Parties hereto first become aware after the date hereof, which such Governmental
Consent, if not made, obtained or provided, will have a Material Adverse Effect
on UPC.
"UPC Shares" shall have the meaning specified in the recitals hereto.
----------
"Valuation Procedure" shall have the meaning specified in Section
-------------------
8.6(d) hereof.
"Vienna Agreements" shall have the meaning specified in Section 9.1
-----------------
hereof.
"Vienna Guaranty" shall have the meaning specified in Section 9.1
---------------
hereof.
"Voting Securities" shall mean, with respect to any Person, any shares
-----------------
of stock or other equity interest thereof having general voting power under
ordinary circumstances (irrespective of whether at the time any other class or
classes of equity interests of such Entity shall have or might have voting power
by reason of the happening of any contingency).
ARTICLE II
SALE, PURCHASE AND CONVERSION OF SECURITIES
-------------------------------------------
(S)2.1 Purchase of Securities. (a) Purchase and Sale. Subject to
---------------------- -----------------
the terms and conditions set forth herein, and assuming that UIHI has not
complied with Article IIA hereof, the Sellers agree to sell, assign and transfer
to UPC on the Closing Date, against the receipt of the consideration specified
in Section 2.1(b) hereof, and UPC agrees to purchase from the Sellers on the
Closing Date, the UIHI Shares and the PIK Notes (the "PURCHASE TRANSACTION").
(b) Purchase Price. In full consideration for the sale and transfer
--------------
by the Sellers of the UIHI Shares and the PIK Notes, UPC shall on the Closing
Date:
(i) deliver (x) to Philips Networks an amount of Dutch Guilders equal
to the Fair Market Value of the UIHI Shares as of the Closing Date and (y)
to Philips Media an amount of Dutch Guilders equal to the aggregate
principal amount of the outstanding PIK
(8)
<PAGE>
Notes on January 1, 1997, in each case converted into Dutch Guilders at the
Exchange Rate by wire transfer of immediately available funds to an account
specified by Philips Media at least two Business Days prior to the Closing
Date; and
(ii) deliver to Philips Media an amount in cash, payable in U.S.
Dollars, equal to the accrued and unpaid interest on the PIK Notes from and
including January 1, 1997 through the Closing Date, such amount to be paid
by wire transfer of immediately available funds to an account specified by
Philips Media at least two Business Days prior to the Closing Date.
(c) In connection with, and as an inducement to UIHI to approve the
Purchase Transaction and the other transactions completed hereby, Philips
Networks shall, on the Closing Date, transfer to JVI, without further
consideration, 21.75 million shares of the UPC Shares and shall execute all
notarial deeds and other documents necessary to give effect to such transfer.
(S)2.2 Conversion of Securities. (a) Upon the terms and subject to
------------------------
the conditions set forth herein and assuming that UIHI has not complied with
Article IIA hereof, upon the Closing Date Philips Networks and JVI shall cause
UPC to execute a notarial deed amending UPC's Articles of Association to effect
the conversion (such conversion being hereinafter referred to as the "CONVERSION
TRANSACTION" and the Conversion Transaction and the Purchase Transaction being
hereinafter referred to as the "TRANSACTION") of 3.25 million of the UPC Shares
(the "CONVERTED SHARES") into (i) 32.5 million preference shares of UPC with a
liquidation preference of $5.00 per share (the "INITIAL PREFERENCE SHARES"), par
value NLG 0.10 per share (the "PREFERENCE SHARES") (x) which shall be readily
marketable and for which a liquid market shall exist as of the Closing Date, (y)
which shall have a Fair Market Value on the Closing Date of U.S. $162.5 million
and (z) which shall have rights and be issued on terms reasonably acceptable to
each of Philips Media, UIHI and UPC or (ii) the Increasing Rate Preference
Shares in accordance with Section 8.5(a) hereof; provided that nothing in this
--------
Section 2.2(a) or elsewhere in this Article II shall relieve any Party of its
obligations under Article VIII hereof in respect of the Private Placement.
(b) Conversion Price. In consideration of Philips Networks'
----------------
converting the Converted Shares into the Initial Preference Shares or the
Increasing Rate Preference Shares, as the case may be on the Closing Date, UPC
shall:
(i) deliver to Philips Networks an amount of Dutch Guilders equal to
the Conversion Fee, such amount to be paid by wire transfer of immediately
available funds to an account specified by Philips Networks at least two
Business Days prior to the Closing Date; and
(ii) issue to Philips Networks the SAR.
(S)2.3 Actions at Closing. At the Closing, (a) the Sellers shall (i)
------------------
deliver to UPC the PIK Notes, for cancellation, (ii) deliver or cause to be
delivered to UPC certificates representing the UIHI Shares, together with stock
powers duly executed in blank, (iii) take all such actions as may be necessary
to effect the conversion of the Converted Shares into the Initial
(9)
<PAGE>
Preference Shares or the Increasing Rate Preference Shares, as the case may be,
(iv) deliver to JVI 21.75 million shares of the UPC Shares in accordance with,
and otherwise comply with the terms of, Section 2.1(c) hereof and (v) assign to
JVI the Foundation Rights and take such other actions as are required by Section
6.6(b) hereof, and (b) UPC will deliver or cause to be delivered to the Sellers
(i) the cash payments referred to in Section 2.1(b) and Section 2.2(b)(i) of
this Agreement, (ii) the Initial Preference Shares or the Increasing Rate
Preference Shares, as the case may be, and (iii) the SAR. On or after the
Closing Date, each Party shall execute and deliver such notarial deeds and other
instruments of conveyance, assignment and transfer and shall take, or cause to
be taken, such other actions as any other party may reasonably request to effect
the transactions contemplated hereby.
(S)2.4 Coordination with Article IIA. If UIHI elects, in accordance
-----------------------------
with Section 12.5 hereof, to comply with Article IIA hereof in lieu of complying
with this Article II, then the parties hereto shall have no further obligation
under this Article II or in respect of the Private Placement, it being
understood that all other obligations of the parties under this Agreement shall
remain unaffected; provided that the parties hereto shall comply with this
--------
Article II to the extent required as the result of the occurrence of an
Alternate Consideration Event as a result of the operation of Section 2A.1
hereof.
ARTICLE IIA
CASH ALTERNATIVE TRANSACTION;
-----------------------------
SALE AND PURCHASE OF SECURITIES
-------------------------------
(S)2A.1 Cash Alternative. Notwithstanding anything to the contrary
----------------
contained herein, UIHI may elect not to consummate the transactions contemplated
by Article II, in which case UIHI, JVI and UPC shall, and UIHI shall cause JVI
and UPC to, consummate the transactions contemplated in this Article IIA.
Notwithstanding an election by UIHI, in accordance with Section 12.5 hereof, to
proceed pursuant to this Article IIA, failure to consummate all of the
transactions contemplated by this Article IIA on or prior to December 11, 1997,
shall be deemed to constitute an Alternate Consideration Event pursuant to
Section 8.5 hereof.
(S)2A.2 Purchase, Sale and Conversion of JVI Notes. (a) Purchase
------------------------------------------ --------
and Sale. Subject to the terms and conditions set forth in this Agreement,
- --------
Philips Media agrees to sell, assign and transfer to JVI on the Closing Date,
against the receipt of the consideration specified in Section 2A.2(b) hereof,
and JVI agrees to purchase from Philips Media on the Closing Date, an aggregate
principal amount of PIK Notes which, together with the amount of accrued and
unpaid interest thereon from January 1, 1997, equals U.S. $84,291,973 (such PIK
Notes, the "JVI NOTES").
(b) Purchase Price. In full consideration for the sale, assignment
--------------
and transfer by Philips Media to JVI of the JVI Notes, JVI shall, on the Closing
Date, deliver to Philips Media cash in the amount of U.S. $84,291,973, such
amount to be paid by wire transfer of immediately available funds to an account
specified by Philips Media at least two Business Days prior to the Closing Date.
(10)
<PAGE>
(c) Conversion. On the Closing Date, JVI shall convert the JVI Notes
----------
into UPC Ordinary Shares at the conversion price set forth in the PIK Notes and
on the other terms specified in the PIK Notes.
(S)2A.3 Purchase and Sale of JVI Shares. (a) Purchase and Sale.
------------------------------- -----------------
Subject to the terms and conditions set forth in this Agreement, Philips
Networks agrees to sell, assign and transfer to JVI on the Closing Date, against
the receipt of the consideration specified in Section 2A.3(b) hereof, and JVI
agrees to purchase from Philips Networks on the Closing Date, 8,756,077 of the
UPC Ordinary Shares comprising the UPC Shares (the "JVI SHARES").
(b) JVI Share Price. In full consideration for the sale, assignment
---------------
and transfer by Philips Networks to JVI of the JVI Shares, JVI shall, on the
Closing Date, deliver to Philips Media cash in the amount of US$78,208,027 (the
"JVI SHARE PRICE") , such amount to be payable in Dutch Guilders, such amount to
be converted into Dutch Guilders at the exchange rate in effect on the Closing
Date (the "Closing Exchange Rate") and to be paid by wire transfer of
immediately available funds to an account specified by Philips Networks at least
two Business Days prior to the Closing Date.
(S)2A.4 Purchase of UIHI Shares. (a) Purchase and Sale. Subject to
----------------------- -----------------
the terms and conditions set forth in this Agreement, Philips Networks agrees to
sell, assign and transfer to UPC on the Closing Date, against receipt of the
consideration specified in Section 2A.4(b) hereof, and UPC agrees to purchase
from Philips Networks on the Closing Date, the UIHI Shares.
(b) Purchase Price. In full consideration of the sale, assignment and
--------------
transfer by Philips Networks to UPC of the UIHI Shares, UPC shall, on the
Closing Date, deliver to Philips Networks an amount (the "UIHI SHARE PRICE") in
Dutch Guilders equal to the Fair Market Value of the UIHI Shares (calculated in
U.S. Dollars) as of December 11, 1997, such amount to be converted into Dutch
Guilders at the Exchange Rate and to be paid by wire transfer of immediately
available funds to an account specified by Philips Networks at least two
Business Days prior to the Closing Date.
(S)2A.5 Redemption of Remaining PIK Notes. (a) Redemption. Subject
--------------------------------- ----------
to the terms and conditions set forth in this Agreement, UPC agrees to redeem on
the Closing Date, and Philips Media agrees to surrender for redemption on the
Closing, all outstanding PIK Notes (other than the JVI Notes) (such PIK Notes,
the "REMAINING PIK NOTES") held by Philips.
(b) Redemption Price. In full consideration for the surrender for
----------------
redemption of the Remaining PIK Notes by Philips Media, UPC shall pay to Philips
Media an amount payable in U.S. Dollars (the "REDEMPTION PRICE") equal to the
sum of (x) the aggregate principal amount of the Remaining PIK Notes and (y) an
amount equal to the total accrued and unpaid interest (calculated from January
1, 1997) on the Remaining PIK Notes, such amount to be paid by wire transfer of
immediately available funds to an account specified by Philips Media at least
two Business Days prior to the Closing Date.
(S)2A.6 UPC Shares. (a) Formation of Philips Subsidiary. Prior to
---------- -------------------------------
the Closing
(11)
<PAGE>
Date, Philips Networks shall sell, assign and transfer to a direct or indirect
subsidiary of PENV ("NEWCO") prior to the Closing Date, and Newco shall
purchase, the UPC Shares (other than the JVI Shares, which shall be purchased by
JVI pursuant to Section 2A.3 hereof) against delivery by Newco to Philips
Networks of (x) a demand promissory note denominated in U.S. Dollars (the
"DOLLAR NOTE") in a principal amount equal to the Designated Dollar Amount and
(y) a demand promissory note denominated in Dutch Guilders (the "GUILDER NOTE")
in a principal amount equal to the Designated Guilder Amount.
(b) Sale of Acquisition Sub.
-----------------------
(i) Purchase and Sale. Subject to the terms and conditions set forth
-----------------
in this Agreement, Philips Networks agrees to sell, assign and transfer to
UPC on the Closing Date, against the consideration specified in Section
2A.6(b)(ii) hereof, and UPC agrees to purchase from Philips Networks on the
Closing Date, all of the outstanding capital shares of Newco (the "NEWCO
STOCK").
(ii) Purchase Price. In full consideration for the sale, assignment
--------------
and transfer by Philips Networks to UPC of the Newco Stock, UPC shall, on
the Closing Date, pay to Philips Networks an amount in Dutch Guilders equal
to NLG 53,000.
(iii) Satisfaction of Indebtedness. Concurrently with the
----------------------------
consummation of the sale of the Newco Stock, UPC shall, on the Closing Date
pay and satisfy in full or cause Newco to pay and satisfy in full, the
Dollar Note and the Guilder Note.
(S)2A.7 Actions at Closing; Closing Date. At the Closing, (a)
--------------------------------
Sellers shall (i) deliver to JVI (x) the JVI Notes, together with bond powers
duly executed in blank and (y) the JVI Shares, and (ii) deliver to UPC (x) the
Remaining PIK Notes for cancellation, (y) the UIHI Shares, together with stock
powers duly executed in blank, and (z) the Newco Stock, and (iii) assign to JVI
the Foundation Rights and take such other actions as are required by Section
6.6(b) hereof, and (b) UPC will deliver or cause to be delivered to the Sellers
(i) the cash payments referred to in Sections 2A.2, 2A.3, 2A.4, 2A.5 and 2A.6
hereof and (ii) either (x) the SAR or (y) the SAR Cash Payment Amount, as the
case may be. At the Closing, JVI shall surrender to UPC the JVI Notes, together
with a notice of conversion in respect thereof, and UPC will deliver, or cause
to be delivered, to JVI a number of UPC Ordinary Shares equal to the number of
UPC Ordinary Shares deliverable upon the conversion of the JVI Notes, in
accordance with their terms. On or after the Closing Date, each party shall
execute and deliver such notarial deeds and other instruments of conveyance,
assignment and transfer and shall take, or cause to be taken, such actions as
any other party may reasonably request to effect the transactions contemplated
hereby. Promptly after the Closing, a notarial deed amending UPC's Articles of
Association to effect the conversion of UPC from private company with limited
liability (besloten venootschap) to a public limited liability company (naamloze
venootschap) under the laws of The Netherlands shall be executed.
(S)2A.8 SAR. As an additional inducement to Philip to enter into the
---
transaction contemplated hereby, UPC shall, in accordance with the election made
pursuant to Section 12.5(b) of this Agreement, either (x) issue to Philips
Networks the SAR or (y) pay to Philips
(12)
<PAGE>
Networks an amount in U.S. Dollars equal to SAR Cash Payment Amount.
(S)2A.9 Coordination with Article II. If UIHI elects, in accordance
----------------------------
with Section 12.5 hereof, to comply with Article II hereof in lieu of complying
with this Article IIA, then the parties hereto shall have no further obligation
under this Article IIA, it being understood that the parties' obligations under
any other Article of this Agreement shall remain unaffected. If each of UIHI,
JVI and UPC complies with each of its obligations under this Article IIA on or
prior to December 11, 1997, then no Alternate Consideration Event shall occur
and UPC shall have no further obligation to issue the Increasing Rate Preference
Shares.
ARTICLE III
REPRESENTATIONS OF THE SELLERS
------------------------------
(S)3. Representations of the Sellers. The Sellers hereby jointly and
------------------------------
severally represent and warrant to the UIHI Parties as follows:
(S)3.1 Ownership of Securities; Foundation Rights. (a) Philips
------------------------------------------
Networks is the record and beneficial owner of the UPC Shares, free and clear of
all liens, encumbrances, restrictions and claims of every kind ("Encumbrances"),
other than those imposed by the Shareholders' Agreement or by operation of law;
it being understood that, if UIHI elects pursuant to Section 12.5 hereof to
- -------------------
consummate the transactions contemplated by Article IIA hereof in lieu of those
contemplated by Article II hereof, Philips Networks will, prior to the Closing
Date, sell, assign and transfer the UPC Shares to Newco in accordance with
(S)2A.5 hereof, and after such sale, assignment and transfer, Newco will be the
record and beneficial owner of the UPC Shares, free and clear of all
Encumbrances, other than those imposed by the Shareholders' Agreement or by
operation of law.
(b) Philips Networks is the record and beneficial owner of the UIHI
Shares, free and clear of all Encumbrances, other than those imposed by
operation of law. The transfer to UPC of the UIHI Shares pursuant to the
provisions of this Agreement will transfer to UPC valid title thereto, free and
clear of any and all adverse claims, subject to the exception in the immediately
preceding sentence.
(c) Philips Media is the record and beneficial owner of the PIK
Notes, free and clear of all Encumbrances, other than those imposed by the
Option Agreement or by operation of law. The transfer to UPC and/or JVI, as the
case may be, of the PIK Notes pursuant to the provisions of this Agreement will
transfer to UPC and/or JVI, as the case may be, valid title thereto, free and
clear of any and all adverse claims, subject to the exception in the immediately
preceding sentence.
(d) Philips Networks has the right, title and interest (collectively
the "FOUNDATION RIGHTS") in and to (i) all the property and assets of the
Foundation to which it is entitled by virtue of the Articles of Association of
the Foundation dated July 26, 1996 (including, without limitation, its rights in
and to any surplus liquidation balance pursuant to Article 12.2 of such
Articles), and the Agreement dated June 13, 1996, between JVI, Philips Networks
and the
(13)
<PAGE>
Foundation and (ii) all of Philips Networks' other rights under such Agreement
and any other document, agreement or instrument related thereto, free and clear
of any and all adverse claims other than those imposed by such Articles, such
Agreement or by operation of law.
(e) In the event that the parties elect to consummate the
transactions contemplated by Article IIA hereof pursuant to Section 12.5 hereof,
Philips Networks will be, on the Closing Date, the record and beneficial owner
of the Newco Stock, free and clear of all Encumbrances, other than those imposed
by the Shareholders' Agreement or by operation of law. The transfer to UPC of
the Newco Stock pursuant to the provisions of Article IIA of this Agreement will
transfer to UPC valid title thereto, free and clear of any and all adverse
claims, subject to the exception in the immediately preceding sentence.
(S)3.2 Organization, Authorization and Validity of Agreement. Each
-----------------------------------------------------
of the Sellers is a limited liability company duly organized and validly
existing under the laws of The Netherlands. Each of the Sellers has full
corporate power and authority to enter into this Agreement and perform its
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized and approved by all required corporate
action of each of the Sellers. This Agreement has been duly executed and
delivered by each of the Sellers and, assuming the due execution and delivery of
this Agreement by each other Party hereto, is a valid and legally binding
obligation of each of the Sellers, enforceable against each of the Sellers in
accordance with its terms, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditor's rights generally and to
general equitable principles.
(S)3.3 No Violations; Consents and Approvals. Assuming that the
-------------------------------------
applications, registrations, declarations, filings, authorizations, orders,
consents and approvals set forth on Schedule 3.3 attached hereto are made or
------------
obtained, as the case may be, the execution and delivery of this Agreement by
each of the Sellers and the consummation of the transactions contemplated hereby
(a) will not violate any provision of the Articles of Association of either
Seller, (b) will not violate any statute, rule, regulation, order or decree of
any Governmental Authority by which either Seller or any of their respective
properties or assets is bound, (c) will not require any other filing with, or
permit, consent or approval of, or the giving of any notice to, any Governmental
Authority and (d) will not result in a violation or breach of, or constitute a
default under, any license, franchise, permit, indenture, agreement or other
instrument to which either Seller is a party, or by which either Seller or any
of their respective assets or properties is bound.
(S)3.4 Broker's or Finder's Fee. Except for Goldman, Sachs (whose
------------------------
fees and expenses will be paid by PENV), no agent, broker, Person or firm acting
on behalf of the Sellers is, or will be, entitled to any broker's, finder's or
other similar fee from any Party, or from any Person Controlling, Controlled by,
or under common Control with any Party, in connection with this Agreement or any
of the transactions contemplated hereby.
(S)3.5 Investment Company Act. Neither of the Sellers is an
----------------------
"investment company" or a company "controlled by" an investment company, as such
terms are defined in
(14)
<PAGE>
the U.S. Investment Company Act of 1940, as amended.
ARTICLE IV
REPRESENTATIONS OF THE UIHI PARTIES
-----------------------------------
(S)4. Representations of the UIHI Parties. The UIHI Parties hereby
-----------------------------------
jointly and severally represent and warrant to the Sellers as follows:
(S)4.1 Organization, Authorization and Validity of Agreement. Each
-----------------------------------------------------
of the UIHI Parties is a corporation duly organized and validly existing and is
in good standing under the laws of the State of Delaware. Each of the UIHI
Parties has full corporate power and authority to enter into this Agreement and
perform its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized and approved by
all required corporate action of each of the UIHI Parties. This Agreement has
been duly executed and delivered by each of the UIHI Parties and, assuming the
due execution and delivery of this Agreement by each other Party hereto, is a
valid and legally binding obligation of each of the UIHI Parties, enforceable
against each of the UIHI Parties in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditor's rights generally and to general equitable principles.
(S)4.2 No Violations; Consents and Approvals. Assuming that the
-------------------------------------
applications, registrations, declarations, filings, authorizations, orders,
consents and approvals set forth on Schedule 4.2 attached hereto are made or
------------
obtained, as the case may be, the execution and delivery of this Agreement by
each of the UIHI Parties and the consummation of the transactions contemplated
hereby (a) will not violate any provision of the Certificate of Incorporation or
the Bylaws of either UIHI Party, (b) will not violate any statute, rule,
regulation, order or decree of any Governmental Authority by which either UIHI
Party or any of their respective properties or assets is bound, (c) will not
require any other filing with, or permit, consent or approval of, or the giving
of any notice to, any Governmental Authority and (d) will not result in a
violation or breach of, or constitute a default or event of default under, any
license, franchise, permit, indenture, agreement or other instrument to which
either UIHI Party is a party, or by which either UIHI Party or any of their
respective assets or properties is bound.
(S)4.3 Broker's or Finder's Fee. Except for DLJ (whose fees and
------------------------
expenses will be paid by UIHI or, in the event the Transaction is consummated,
at UIHI's option, by UPC), no agent, broker, Person or firm acting on behalf of
either UIHI Party is, or will be, entitled to any broker's, finder's or other
similar fee from any Party, or from any Person Controlling, Controlled by, or
under common Control with any Party, in connection with this Agreement or any of
the transactions contemplated hereby.
(15)
<PAGE>
ARTICLE V
REPRESENTATIONS OF UPC
----------------------
(S)5. Representations of UPC. UPC hereby represents and warrants to
----------------------
the other Parties hereto as follows:
(S)5.1 Authority and Validity of Agreement. UPC is a limited
-----------------------------------
liability company duly organized and validly existing under the laws of The
Netherlands. UPC has full corporate power and authority to enter into this
Agreement and perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement and the transactions
contemplated hereby have been duly authorized and approved by all required
corporate action of UPC. This Agreement has been duly executed and delivered by
UPC and, assuming the due execution and delivery of this Agreement by each other
Party hereto, is a valid and legally binding obligation of UPC, enforceable
against UPC in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditor's rights generally and to general equitable principles.
(S)5.2 No Violations; Consents and Approvals. Assuming the
-------------------------------------
applications, registrations, declarations, filings, authorizations, orders,
consents and approvals set forth on Schedule 5.2 attached hereto are made or
------------
obtained, as the case may be, the execution and delivery of this Agreement by
UPC and the consummation of the transactions contemplated hereby (a) will not
violate any provision of the Articles of Association of UPC, (b) will not
violate any statute, rule, regulation, order or decree of any Governmental
Authority by which UPC or any of its properties or assets is bound, (c) will not
require any other filing with, or permit, consent or approval of, or the giving
of any notice to, any Governmental Authority and (d) will not result in a
violation or breach of, or constitute a default or event of default under, any
license, franchise, permit, indenture, agreement or other instrument to which
UPC is a party, or by which UPC or any of its assets or properties is bound.
(S)5.3 Capitalization. (a) On the Closing Date and after giving
--------------
effect to the consummation of the Transaction and assuming that (x) no Alternate
Consideration Event has occurred and (y) UIHI has not complied with Article IIA
hereof, UPC will have an authorized capitalization consisting of (i) 78.5
million UPC Ordinary Shares, par value NLG 1 per share and (ii) 134,375,000
preference shares, par value NLG 0.16 per share. If an Alternate Consideration
Event does occur, UPC will have an authorized capitalization on the Closing Date
of (i) 78.5 million UPC Ordinary Shares, par value NLG 1 per share and (ii)
134,375,000 Increasing Rate Preferred Shares, par value NLG 0.16 per share.
Assuming UIHI has compiled with Article IIA hereof, UPC shall have an authorized
capitalization consisting of 100.0 million UPC Ordinary Shares and no preference
share. On the Closing Date, after giving effect to the transactions
contemplated hereby, all outstanding UPC Ordinary Shares and preference shares
of UPC will be duly authorized and validly issued and will be fully paid and
nonassessable.
(b) Except for (i) the PIK Notes, (ii) rights contained in the
Shareholders' Agreement, (iii) the Option Agreement and (iv) options and rights
issued pursuant to that certain
(16)
<PAGE>
Stock Option Plan of UPC adopted on June 13, 1996, there will be no outstanding
options, warrants, rights, calls, commitments, conversion rights, rights of
exchange, plans or other agreements of any character providing for the purchase,
issuance or sale of any shares of the capital stock of UPC, other than as
contemplated by this Agreement.
(S)5.4 Securities. When and if issued, the Preference Shares or the
----------
shares of Increasing Rate Preference Shares, as the case may be, to be received
by Philips Networks in accordance with the terms of this Agreement and after
giving effect to the transactions contemplated hereby will be duly authorized,
validly issued, fully paid and nonassessable. The SAR to be received by Philips
Networks in accordance with the terms of this Agreement and after giving effect
to the transactions contemplated hereby will be duly authorized and issued and
will constitute a valid and legally binding obligation of UPC. The delivery by
UPC of the Preference Shares and the SAR to Philips Networks in accordance with
the terms of this Agreement and after giving effect to the transaction
contemplated hereby will transfer to Philips Networks valid title to such
securities, free and clear of any and all adverse claims other than those
imposed by operation of law. The conversion of the UPC Shares into the Initial
Preference Shares or the Increasing Rate Preference Shares, as the case may be,
and the terms of the Preference Shares or the Increasing Rate Preference Shares,
as the case may be, will not require UPC to accrue any amounts or establish any
reserves in respect thereof that will not be so accrued or established in
accordance with the laws of The Netherlands.
(S)5.5 No Registration. The conversion of the UPC Shares into the
---------------
Preference Shares or shares of Increasing Rate Preference Shares, as the case
may be, by UPC and the issuance and transfer of the SAR by UPC to the Sellers in
accordance with the terms hereof will not require registration of either the
Preference Shares or the SAR under the Securities Act, the securities laws,
rules and regulations of The Netherlands or of any other jurisdiction outside
the United States or any applicable United States State "blue sky" or other
securities laws.
(S)5.6 Investment Company Act. UPC is not an "investment company" or
----------------------
a company "controlled by" an investment company, as such terms are defined in
the U.S. Investment Company Act of 1940, as amended.
(S)5.7 Broker's or Finder's Fee. Except for DLJ (whose fees may, if
------------------------
the Transaction is consummated, be paid by UPC at UIHI's option) no agent,
broker, Person or firm acting on behalf of UPC is or will be, entitled to any
broker's, finder's or other similar fee from any Party, or from any Person
Controlling, Controlled by, or under common Control with any Party, in
connection with this Agreement or any of the transactions contemplated hereby.
ARTICLE VI
COVENANTS
---------
(S)6.1 Reasonable Best Efforts; Voting of UPC Ordinary Shares. (a)
------------------------------------------------------
Each Party agrees to use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with each other Party hereto in doing, all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement
(17)
<PAGE>
in the most expeditious manner possible and shall, in furtherance thereof (but
without limiting the generality of the foregoing), use its reasonable best
efforts to (i) obtain all waivers, consents, authorizations, licenses and
approvals from, make all filings with and provide all notifications to, all
Governmental Authorities (collectively "GOVERNMENTAL CONSENTS") that are
necessary or advisable to obtain, make or provide in order to consummate the
transactions (including, but not limited to, the Transaction) contemplated by
this Agreement and take all other steps that are necessary or advisable to
ensure that all Governmental Authorities approve (if necessary or advisable) the
consummation of the transactions (including, but not limited to, the
Transaction) contemplated by this Agreement or do not take any action that
obstructs or delays the consummation of such transactions, and (ii) obtain all
waivers, consents, authorizations, licenses and approvals from and provide all
notifications to, all third Parties other than Governmental Authorities
(collectively "THIRD PARTY CONSENTS") that are necessary or advisable to obtain,
make or provide in order to consummate the transactions (including, but not
limited to, the Transaction) contemplated by this Agreement and take all other
steps that are necessary or advisable to ensure that all such third Parties
approve (if necessary or advisable) the consummation of the transactions
(including, but not limited to, the Transaction) contemplated by this Agreement
or do not take any action that obstructs or delays the consummation of such
transactions; provided, however, that, except as otherwise specifically provided
for by this Agreement, no Party shall be required to make any cash payment or
incur any financial obligation to obtain such waiver, consent, authorization or
approval.
(b) Each Seller and each UIHI Party hereby agrees (i) to cause their
respective representatives on the Supervisory Board of UPC to take all such
actions as may be necessary (except that no such representative shall be
required to violate any fiduciary duty imposed by law in connection with any
such action), and (ii) if necessary, to vote all UPC Ordinary Shares held or
controlled by such Party to consummate the Transaction in the most expeditious
manner possible and to otherwise ensure compliance with Section 6.1 hereof.
(S)6.2 Notices of Certain Events. Each Party shall promptly notify
-------------------------
the other Parties of:
(a) any notice or other communication received by such Party from any
Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication received by such Party from any
Governmental Authority concerning or relating to the transactions
contemplated by this Agreement;
(c) any pending or threatened action, suit, claim, investigation or
proceeding that may have a material adverse effect upon the condition
(financial or otherwise), business, results of operations or prospects of
UPC or that relates to, involves or has or may have a material adverse
effect upon the transactions contemplated by this Agreement (including, but
not limited to, the Transaction);
(d) such Party's obtaining knowledge of the occurrence, or failure to
occur, of any
(18)
<PAGE>
event which occurrence or failure to occur will be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, or (ii) any material failure of any
Party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement;
(e) such party's obtaining knowledge of the occurrence, or failure to
occur, of any event or development or series of events or developments
(including, but not limited to, any development or series of developments
in respect of the proposed financing of the transactions contemplated
hereby) which, individually or in the aggregate, are likely to materially
affect the proposed timing of, or likelihood of the consummation of, the
transactions contemplated hereby; and
(f) the occurrence, or failure to occur, prior to the Closing Date,
of any event or series of events which would have a Material Adverse Effect
on UPC;
such notice to be given as promptly as practicable (i) following receipt of a
notice or communication referred to in clause (a) or (b) above, (ii) after
learning of any pending or threatened action, suit, claim, investigation or
proceeding referred to in clause (c) above and (iii) after learning of the
occurrence or failure to occur of any event referred to in clause (d), (e) or
(f) above. No such notification shall affect the representations, warranties
and obligations of the Parties hereunder or the conditions to any Party's
obligations hereunder.
(S)6.3 Amendment of UPC Governance Documents. The Parties expressly
-------------------------------------
acknowledge that certain amendments to the Articles of Association of UPC and
the Regulations of the Supervisory Board of UPC (including, without limitation,
amendments necessary to effect (x) the conversion of UPC from a private company
with limited liability (besloten venootschap) to a public limited liability
company (naamloze venootschap) under the laws of The Netherlands and (y) and,
assuming UIHI does not comply with Article IIA hereof, the conversion of the UPC
Shares into the Initial Preference Shares or the Increasing Rate Preferred
Shares, as the case may be) will be necessary to consummate the transactions
contemplated by this Agreement. The Parties agree to cooperate and use their
respective reasonable best efforts to effect all such amendments necessary or
advisable to consummate and make effective the transactions contemplated by this
Agreement (including, but not limited to, the Transaction).
(S)6.4 Post-Closing Access and Cooperation. (a) Cooperation. UPC
----------------------------------- -----------
shall provide the Sellers with such information relating to UPC and its business
or such other assistance as may be reasonably requested by the Sellers in
connection with the preparation by any of the Sellers of any Tax return, the
preparation by any of the Sellers for any audit, or the prosecution or defense
by any of the Sellers of any claim, suit, proceeding, or proposed adjustment
relating to any taxable year or other taxable period or any accounting period
ending on or prior to the Closing Date and, with respect to any taxable year or
other taxable period or any accounting period beginning before, and ending
after, the Closing Date, the portion of such taxable year or taxable or
accounting period ending on and including the Closing Date ("PRE-CLOSING
PERIODS"). UPC shall retain all Tax returns, schedules, work papers and all
records or other documents relating to Tax matters relating to UPC and its
business for the first taxable year or other taxable
(19)
<PAGE>
period ending after the Closing Date and for all taxable years or other taxable
periods ending prior to the Closing Date for at least six (6) years after the
Closing Date, and provide the Seller with such records or information (including
making employees available to the Sellers during normal business hours for
reasonable periods of time) which may be relevant to such Tax return, audit,
claim, suit, proceeding or adjustment. If UPC wishes to destroy such records
during the period commencing at the end of such six (6) year period and ending
on the date which is four (4) years after the end of such six (6) year period,
UPC will first give 90 days' prior written notice to the Sellers, and any of the
Sellers shall have the right, at its option and expense, upon prior written
notice to UPC within such 90-day period, to take possession of such records as
relate to it within 180 days after the date of its notice to UPC hereunder. Upon
the expiration of the ten (10) year period referred to in the previous sentence,
UPC may destroy such records without any notice to Sellers.
(b) Controversies. UPC shall promptly notify the Sellers in writing
-------------
upon receipt by UPC or any Affiliate of UPC of written notice of any inquiries,
claims, assessments, audits or similar events with respect to Taxes relating to
a Pre-Closing Period (any such inquiry, claim, assessment, audit or similar
event with respect to taxes for Pre-Closing Periods is herein referred to as a
"TAX MATTER"). UPC shall have the authority to represent any interests relating
to UPC and its Controlled Affiliates with respect to any Tax Matter before any
taxing authority, any other Governmental Authority or any court and shall have
the sole right to control the defense, compromise or other resolution of any Tax
Matter, including responding to inquiries, filing Tax returns, settling audits
and receiving refunds; provided, however, that neither UPC, nor any of its
affiliates shall enter into any settlement of or otherwise compromise any such
Tax Matter that adversely affects a Tax liability of Philips for any Pre-Closing
Period in any material respect without the prior written consent of the affected
Sellers, which consent shall not be unreasonably withheld. UPC shall keep the
Sellers informed with respect to the commencement, status and nature of any Tax
Matter.
(c) Sellers' Access to Records; Financial Reporting and Audit
---------------------------------------------------------
Cooperation. In addition to and not in limitation of any other rights of the
- -----------
Seller under this Agreement, after the Closing UPC shall afford any of the
Sellers and their respective attorneys, accountants, officers and other
representatives reasonable access, during normal business hours, to UPC's books
and records to the extent that such access is reasonably necessary or
appropriate to assist the Sellers in the preparation of any Tax return or
financial statements of the Sellers or responding to any audit, investigation or
other inquiry of any taxing authority relating to any Pre-Closing Period (and
shall permit such persons to examine and copy such books and records to the
extent reasonably requested by the affected Seller).
(d) UPC's Access to Information. After the Closing, Philips shall
---------------------------
provide to UPC such information relating to the business or affairs of any UPC
subsidiary which, prior to July 13, 1995, was an affiliate of Philips, as UPC
shall reasonably request in connection with the preparation of any Tax return or
responding to any audit, investigation or other inquiry of any taxing authority
relating to any period prior to July 13, 1995.
(S)6.5 Philips Name and Mark. (a) Philips Designations. The
--------------------- --------------------
Parties hereto
(20)
<PAGE>
acknowledge that the name "Philips" is a trademark of PENV, and that all rights
thereto (including, but not limited to all intellectual property rights thereto)
are the exclusive property of PENV. As soon as is practicable, but in no event
more than 30 days after the Closing Date, UPC, UIHI and JVI will cease to use,
and in the case of UIHI and JVI shall cause UPC to cease to use, the designation
"Philips" in connection with the operation of UIHI, JVI, UPC and their
respective Subsidiaries and will eliminate the use of any other designation
indicating affiliation after the Closing Date with Philips; it being understood
that the use of the initials "UPC" is permitted and the use of the designation
"Philips" and of any other designation indicating the affiliation before the
Closing Date with Philips is permitted in connection with any press release,
announcement or other disclosure which any party hereto reasonably determines to
be required under applicable law or the applicable rules and regulations of any
stock exchange, automated quotation system or self-regulatory organization on
which such party's securities are listed or of which such party is a member or
participant. Upon the request of Philips Media, UPC will provide, no later than
60 days after the Closing Date, Philips Media with a certificate signed by a
responsible office of UPC to the effect that the second sentence of this
paragraph has been complied with.
(b) Name Change. Promptly following the Closing Date, UPC shall
-----------
change, and each of Philips Media, Philips Networks, UIHI and JVI shall take all
such action as is necessary to cause UPC to change, its corporate name to remove
the word "Philips" therefrom.
(c) Certain Actions Not Required. Anything contained in this
----------------------------
Agreement to the contrary notwithstanding, neither UPC nor any Subsidiary
thereof shall be required to amend any contract, or financing statement or
similar document or instrument solely to evidence the change in corporate name
of UPC.
(S)6.6 Certain Resignations. (a) Resignations. On the Closing Date
-------------------- ------------
Philips shall cause (i) each Person who has been nominated to the Supervisory
Board of UPC pursuant to the provisions of the Shareholders' Agreement (other
than any such Person who is also designated by Philips Media to serve on the
Supervisory Board of UPC pursuant to Section 10.2(a) hereof) and (ii) each
Person who is an officer, director, employee, agent or representative of any of
the Sellers and who is serving as an officer or director of any Entity in which
UPC has an interest and by virtue of which interest or otherwise, UPC has
appointed any such Person as an officer or director of such Entity, to resign
from such position effective as of the Closing Date.
(b) Stichting Administratiekantoor UPC. On the Closing Date Philips
----------------------------------
shall cause each employee of Philips who is currently a trustee of, or who
otherwise serves in any position with, the Foundation to resign from such
position, effective as of the Closing Date, and shall take all such action as is
reasonably necessary to cooperate with UIHI and JVI in the appointment of
successors to all such Persons. To the extent necessary, in the reasonable
judgment of UIHI, to give effect to Section 2.3(a)(v) or Section 2A.6(a)(iii),
as the case may be, the Sellers and the UIHI Parties shall amend, or cause to be
amended, on the Closing Date and in such manner as UIHI shall reasonably
request: (i) the Articles of Association of the Foundation, (ii) the Agreement,
dated June 13, 1996 between JVI, Philips Networks and the Foundation, (iii) the
conditions under which the Foundation administers its property and assets, (iv)
the Agreement,
(21)
<PAGE>
dated June 13, 1996 between the Foundation and UPC and (v) any other document or
instrument related to any of the documents or matters referred to in the
immediately preceding clauses (i) through (v).
(S)6.7 Transfer of Preference Shares. Philips Networks hereby agrees
-----------------------------
that it will not offer, sell or otherwise transfer the Initial Preference Shares
or the Increasing Rate Preference Shares, as the case may be, except (a)
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements under the Securities Act or (b) pursuant to an
effective registration statement under the Securities Act.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE
SELLERS, UPC AND THE UIHI PARTIES
---------------------------------
(S)7.1 Conditions to the Obligations of the Sellers. The obligations
--------------------------------------------
of the Sellers to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, on or before the Closing Date, of the
following conditions precedent:
(a) Truth of Representations and Warranties. The representations and
---------------------------------------
warranties of UPC and the UIHI Parties contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been
made on such date, and UPC and each of the UIHI Parties shall have
delivered to the Sellers, with respect to such Party's representations and
warranties, a certificate dated the Closing Date to such effect.
(b) Fulfillment of Obligations. UPC and the UIHI Parties shall have
--------------------------
fulfilled all their respective material obligations under this Agreement
required to have been fulfilled at or before the Closing.
(c) No Injunction. No action, suit or proceeding shall be pending or
-------------
threatened before any court or other Governmental Authority or before any
arbitrator wherein an unfavorable judgment, injunction, order, decree,
ruling or charge would restrain or prohibit any Seller from completing the
transactions contemplated hereby.
(d) Approvals and Consents. All Philips Required Consents shall have
----------------------
been obtained or made, as the case may be.
(e) Registration Rights Agreement. Philips Media and UPC shall have
-----------------------------
entered into a Registration Rights Agreement substantially in the form of
Exhibit B hereto; provided that if UIHI (x) elects to comply with Article
---------
IIA hereof, in accordance with Section 12.5(a) hereof and actually delivers
the cash payments contemplated by such Article IIA and (y) UIHI makes
elects to deliver the SAR Cash payment Amount in lieu of the SAR and
actually delivers such SAR Cash Payment Amount, this condition shall not be
required to be satisfied.
(22)
<PAGE>
(f) Opinions of Counsel. The UIHI Parties shall have furnished the
-------------------
Sellers with an opinion of counsel, dated the Closing Date, in form and
substance reasonably satisfactory to Philips Media, and UPC shall have
furnished the Sellers with an opinion of counsel, dated the Closing Date,
in form and substance reasonably satisfactory to Philips Media.
(g) Purchase Agreement. At least three Business Days prior to the
------------------
Closing Date, Goldman, Sachs, DLJ and UPC shall have executed and delivered
to Philips Networks a Purchase Agreement in customary form for a
transaction involving an immediate resale of the Initial Preference Shares
pursuant to Rule 144A under the Securities Act (the "PURCHASE AGREEMENT")
in respect of the Initial Preference Shares, which Purchase Agreement will
provide for gross proceeds to Philips Networks (as adjusted pursuant to
confidential Exhibit C) upon the Closing Date of U.S. $162.5 million for
---------
the sale of the Initial Preference Shares; provided that if (x) the
Increasing Rate Preference Shares are issued in accordance with Section 8.5
hereof or (y) UIHI or UPC complies with Article IIA hereof, this condition
shall not be required to be satisfied.
(h) Articles of Association. The Articles of Association of UPC
-----------------------
shall have been amended and restated to convert UPC into a public limited
liability company (naamloze venootschap) under the laws of The Netherlands,
to authorize the Preference Shares or the Increasing Rate Preference
Shares, as the case may be (to the extent such authorization is required),
and to effect such other amendments as the Sellers shall reasonably request
and as are reasonably necessary to give effect to the provisions of this
Agreement and a ministerial declaration of non-objection shall have been
received with respect to such Articles of Association.
(i) Philips Coordination Center. Philips Media and each other
---------------------------
relevant Philips Entity and UPC shall have entered into a tax
indemnification agreement in relation to certain tax liabilities in respect
of (x) UPC's transactions with Philips Coordination Center Of Brussels,
Belgium, from and after the formation of UPC and (y) arising out of the
demerger ruling granted prior to the formation of UPC in respect of the
demerger ruling of Radio Public N.V./S.A., such agreement to contain
substantially the terms discussed between such parties as of the date
hereof and otherwise to contain terms mutually satisfactory to the parties
thereto.
(S)7.2 Conditions to the Obligations of UPC. The obligations of UPC
------------------------------------
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver, on or before the Closing Date, of the following
conditions precedent:
(a) Truth of Representations and Warranties. The representations and
---------------------------------------
warranties of the Sellers contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
such date, and the Sellers shall have delivered to UPC a certificate dated
the Closing Date to such effect.
(b) Fulfillment of Obligations. The Sellers shall have fulfilled all
--------------------------
of their
(23)
<PAGE>
material obligations under this Agreement required to have been fulfilled at or
before the Closing.
(c) No Injunction. No action, suit or proceeding shall be pending or
-------------
threatened before any court or other Governmental Authority or before any
arbitrator wherein an unfavorable judgment, injunction, order, decree,
ruling or charge would restrain or prohibit UPC from completing the
transactions contemplated hereby.
(d) Approvals and Consents. All UPC Required Consents shall have
----------------------
been obtained or made, as the case may be.
(e) Financing. UIHI and/or UPC shall have obtained financing which,
---------
together with any other cash available to UPC, shall enable UPC to fund its
obligations hereunder and related fees and expenses and provide UPC with
adequate working capital.
(f) Opinions of Counsel. The Sellers shall have furnished UPC with
-------------------
an opinion of counsel, dated the Closing Date, in form and substance
reasonably satisfactory to UPC.
(g) Philips Coordination Center. Philips Media and each other
---------------------------
relevant Philips Entity and UPC shall have entered into a tax
indemnification agreement in relation to certain tax liabilities in respect
of (x) UPC's transactions with Philips Coordination Center Of Brussels,
Belgium, from and after the formation of UPC and (y) arising out of the
demerger ruling granted prior to the formation of UPC in respect of the
demerger ruling of Radio Public N.V./S.A., such agreement to contain
substantially the terms discussed between such parties as of the date
hereof and otherwise to contain terms mutually satisfactory to the parties
thereto.
(S)7.3 Conditions to the Obligations of the UIHI Parties. The
-------------------------------------------------
obligations of the UIHI Parties to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver, on or before the
Closing Date, of the following conditions precedent:
(a) Truth of Representation and Warranties. The representations and
--------------------------------------
warranties of the Sellers contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
such date, and the Sellers shall have delivered to the UIHI Parties a
certificate dated the Closing Date to such effect.
(b) Fulfillment of Obligations. The Sellers shall have fulfilled all
--------------------------
their material obligations under this Agreement required to have been
fulfilled at or before the Closing.
(c) No Injunction. No action, suit or proceeding shall be pending or
-------------
threatened before any court or other Governmental Authority or before any
arbitrator wherein an unfavorable judgment, injunction, order, decree,
ruling or charge would restrain or prohibit any UIHI Party from completing
the transactions contemplated hereby.
(d) Approvals and Consents. All UIHI Required Consents shall have
----------------------
been
(24)
<PAGE>
obtained or made, as the case may be.
(e) Financing. UIHI and/or UPC shall have obtained financing which,
---------
together with any other cash available to UPC, shall enable UPC to fund its
obligations hereunder and related fees and expenses and provide UPC with
adequate working capital.
(f) Opinions of Counsel. The Sellers shall have furnished the UIHI
-------------------
Parties with an opinion of counsel, dated the Closing Date, in form and
substance reasonably satisfactory to UIHI.
(g) Articles of Association. The Articles of Association of UPC
-----------------------
shall have been amended and restated to convert UPC into a public limited
liability company (naamloze venootschap) under the laws of The Netherlands,
to authorize the Preference Shares or the Increasing Rate Preference
Shares, as the case may be (to the extent such authorization is required
hereby), and to effect such other amendments as the UIHI Parties shall
reasonably request and as are reasonably necessary to give effect to the
provisions of this Agreement and a ministerial declaration on non-objection
shall have been received with respect to such Articles of Association.
(h) Philips Coordination Center. Philips Media and each other
---------------------------
relevant Philips Entity and UPC shall have entered into a tax
indemnification agreement in relation to certain tax liabilities in respect
of (x) UPC's transactions with Philips Coordination Center Of Brussels,
Belgium, from and after the formation of UPC and (y) arising out of the
demerger ruling granted prior to the formation of UPC in respect of the
demerger ruling of Radio Public N.V./S.A., such agreement to contain
substantially the terms discussed between such parties as of the date
hereof and otherwise to contain terms mutually satisfactory to the parties
thereto.
ARTICLE VIII
DISPOSITION OF PREFERENCE SHARES; FINANCING
-------------------------------------------
(S)8.1 Disposition of Preference Shares. The Parties expressly
--------------------------------
acknowledge that it is their intention that the Initial Preference Shares, if
issued, will be disposed of in a transaction that will close on the Closing
Date. In furtherance of this objective and subject to UIHI's rights pursuant to
Section 8.2 of this Agreement, the Sellers, the UIHI Parties and UPC shall use
their reasonable best efforts to cause the Initial Preference Shares to be
offered and sold to third parties in connection with the financing of the
Transaction; provided, that such offer and sale shall be at a price and on other
terms acceptable to the Sellers in their sole discretion; provided, further,
that an offer that (i) results in gross proceeds to Philips Networks of $162.5
million, (ii) does not require Philips Networks to incur Other Expenses in an
amount in excess of the amount of such expenses customary in a transaction of
the type involved in such offer and sale, (iii) does not require Philips to (x)
make any representation or warranty in respect of the business or affairs of UPC
or (y) undertake any obligation not customarily undertaken by selling
shareholders in offerings of this type, and (iv) complies with all applicable
laws, rules and regulations, including, without limitation, the Securities Act,
the Securities Exchange Act of 1934, as amended, and the
(25)
<PAGE>
rules and regulations of the Securities and Exchange Commission thereunder,
shall be deemed to be acceptable to the Sellers; provided, further, that nothing
contained in the immediately preceding sentence, shall be construed to require
the Sellers to approve any offer using a preliminary Offering Memorandum, final
Offering Memorandum or other marketing materials which any Seller believes
contains an untrue statement of a material fact or omits to state a material
fact necessary to make a statement therein not misleading or which otherwise
unreasonably exposes the Sellers to any liability under any applicable
securities laws or otherwise. The parties hereby acknowledge that UPC may, at
its sole option, cause the offer in respect of the Initial Preference Shares
contemplated by this Section 8.1 and Section 8.2 of this Agreement to be in the
form of non-voting Dutch Depositary Receipts.
(S)8.2 Private Placement. (a) The Parties hereto will use their
-----------------
reasonable best efforts to cause UPC to (i) conduct a private placement in the
United States and such other jurisdictions as it shall deem appropriate of the
Initial Preference Shares (or of Dutch Depository Receipts representing such
shares) (the "PRIVATE PLACEMENT") and (ii) consummate the Private Placement as
soon as practicable after September 1, 1997 and in no event later than December
11, 1997. The Private Placement will be conducted in a manner that will enable
the initial purchasers to immediately resell the Initial Preference Shares
pursuant to Rule 144A (the "RULE 144A OFFERING") promulgated under the
Securities Act, will have accompanying registration rights and will be on terms
customary for offerings of its type.
(b) DLJ and Goldman, Sachs (the "INITIAL PURCHASERS") shall be co-
lead managers (and DLJ shall be the book-runner) of the Rule 144A Offering and,
together with such other persons as they shall designate, shall be the initial
purchasers of the Initial Preference Shares.
(c) The terms of the Initial Preference Shares will be such that the
Private Placement will result in gross proceeds of $162.5 million to Philips
Networks, as such sum may be adjusted pursuant to confidential Annex C, attached
-------
hereto.
(d) Immediately upon the execution hereof the Parties will, and the
UIHI Parties shall cause DLJ and Philips shall cause Goldman, Sachs to, commence
any and all actions necessary and appropriate to enable UPC to consummate the
Private Placement as soon as practicable after September 1, 1997. In
furtherance thereof, the Parties will cooperate with the Initial Purchasers to
prepare a preliminary Offering Memorandum, a final Offering Memorandum, a "road
show" presentation and such other marketing materials as Philips Networks and
the Initial Purchasers shall reasonably request, and shall take all such other
steps, including, but not limited to, participating in customary "road show"
presentations, as the Initial Purchasers shall reasonably request in order to
market the Initial Preference Shares. UPC will provide Philips Networks and the
Initial Purchasers with all information concerning the business and affairs of
UPC as Philips Networks and the Initial Purchasers reasonably deem necessary to
effect the disposition of the Initial Preference Shares.
(S)8.3 Private Placement Expenses. All expenses incident to UPC's
--------------------------
performance of or compliance with Section 8.2 hereof, including, without
limitation, all United States
(26)
<PAGE>
Securities and Exchange Commission and securities exchange or self-regulatory
organization registration and filing fees, fees and expenses of compliance with
securities laws of any jurisdiction (including reasonable fees and disbursements
of counsel in connection with the qualification of the Preference Shares),
rating agency fees, internal expenses (including, without limitation, all
salaries and expenses of UPC's officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing of the securities to be registered, if any, on each securities exchange
on which similar securities issued by UPC are then listed and reasonable fees
and disbursement of counsel for UPC and its independent certified public
accountants (including the expenses of any special audit or "cold comfort"
letters required by or incident to such performance), insurance for liabilities
under the Act (if UPC elects to obtain such insurance), the reasonable fees and
expenses of any special experts retained by UPC in connection with such
registration, and any "road show" expenses incurred by UPC or any UIHI Party
(all such expenses being herein called "SELLING EXPENSES") will be borne by UPC;
provided, that "Selling Expenses" shall not include, and UPC shall not be
responsible for, any (x) customary underwriting fees, discounts or commissions
(including selling commissions) attributable to the sale of the Initial
Preference Shares, (y) any printing expenses incurred in connection with the
Private Placement and (z) Philips Networks' own (1) legal fees and expenses, (2)
accountants' fees and expenses and (3) "road show" and other out-of-pocket
expenses (collectively the "OTHER EXPENSES"), all of which shall be paid by
Philips Networks; provided, further, that Philips Networks shall not be
responsible for any Other Expenses (other than the fees of its legal counsel),
and UPC shall pay all such Other Expenses, if the Private Placement is not
consummated prior to or on December 11, 1997.
(S)8.4 Indemnification by UPC. (a) UPC agrees to indemnify and hold
----------------------
harmless each Philips Person and the officers, directors, employees,
representatives, agents and advisors of each Philips Person (including, but not
limited to Goldman, Sachs, DLJ, any other placement agent or underwriter of any
Initial Preference Shares sold pursuant to the Purchase Agreement), each
Affiliate of a Philips Person and each person who controls any Philips Person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each such person, a "CONTROL PERSON") against any losses, claims,
damages, liabilities or expenses (including reasonable attorneys' fees and
expenses) (collectively, "DAMAGES") to which they may become subject, under the
laws (including, but not limited to, the securities laws) of the United States
or any other jurisdiction, insofar as such Damages (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any registration statement,
prospectus, offering memorandum, offering circular, listing particulars or
similar document (either in preliminary or final form) used in connection with
the disposition of any Initial Preference Shares by any Philips Person, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse each Philips Person and/or
the officers, directors, employees, representatives, agents, advisors
(including, but not limited to Goldman, Sachs, DLJ, any other placement agent or
underwriter of any Initial Preference Shares sold pursuant to the Purchase
Agreement, each Affiliate of any Philips Person and Control Persons of such
Philips Person for any other expenses reasonably incurred by them in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided that UPC shall not be liable in any such case to the
(27)
<PAGE>
extent that any such Damages arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission by any Philips
Person contained in any registration statement, prospectus, offering memorandum,
offering circular or similar document (either in preliminary or final form) used
in connection with the disposition of the Initial Preference Shares or any
amendment or supplement thereto in reliance upon and in conformity with
information furnished by such Philips Person to UPC expressly for use therein
which information was not corrected in a subsequent writing by such Philips
Person prior to or concurrently with the sale of the Registrable Securities to
the Person asserting the loss, claim, damage, liability or expense.
(b) Each Philips Person whose Initial Preference Shares are sold
pursuant to the Purchase Agreement, severally but not jointly, agrees to
indemnify and hold harmless UPC and the officers, directors, employees,
representatives, agents and advisors of UPC, each Affiliate of UPC and each
Control Person of UPC against any Damages to which they may become subject,
under the laws (including, but not limited to, the securities laws) of the
United States or any other jurisdiction, insofar as such Damages (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any registration statement,
prospectus, offering memorandum, offering circular, listing particulars or
similar document (either in preliminary or final form) used in connection with
the disposition of any Initial Preference Shares by any Philips Person, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse UPC and its officers,
directors, employees, representatives, agents, advisors, each Affiliate of UPC
and each Control Person of UPC for any other expenses reasonably incurred by
them in connection with investigating or defending such action or claim as such
expenses are incurred, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, prospectus, offering
memorandum, offering circular, listing particulars (either in preliminary or
final form) or any amendment or supplement thereto in reliance upon any written
information furnished in writing to UPC by Philips Person expressly for use
therein and which was not corrected in a subsequent such writing by such Philips
Person prior to or concurrently with the sale of the Initial Preference Shares
to the Person asserting such Damages. In no event shall the liability of any
Philips Person hereunder be an amount greater than the dollar amount of the
proceeds received by such Philips Person upon the sale of the Initial Preference
Shares giving rise to such indemnification obligation.
(c) Each Person entitled to indemnification pursuant to Section
8.4(a) or 8.4(b) hereof (each an "INDEMNIFIED PARTY") shall give prompt notice
to the party obligated to indemnify such Indemnified Party (each an
"INDEMNIFYING PARTY") of any action threatened or commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify any
Indemnifying Party shall not relieve such Indemnifying Party from any liability
which it may have otherwise than on account of the indemnity agreement provided
in Section 8.4(a) or 8.4(b) hereof, as the case may be. In case of any notice
under this indemnity agreement with respect to any loss, liability, claim,
damage or expense with respect to any claim made against an Indemnified Party,
the Indemnifying Party shall be entitled to participate at its own expense in
(28)
<PAGE>
the defense, or if it so elects within a reasonable time after receipt of such
notice, to assume the defense, of any such claim; but if it so elects to assume
the defense, such defense shall be conducted by counsel chosen by such
Indemnifying Party and approved by the Indemnified Party. If the Indemnifying
Party does not elect within a reasonable time after receipt of such notice to
assume the defense of any such claim, the Indemnified Party shall be entitled to
assume the control of such defense, in which case the fees and expenses incurred
by such Indemnified Party in the conduct of such defense, including the
reasonable fees and expenses of counsel, shall be reimbursed by the Indemnifying
Party as the same are incurred from time to time by such Indemnified Party. If
the Indemnifying Party elects to assume the defense and retain such counsel, the
Indemnified Party shall bear the fees and expenses of any additional counsel
thereafter retained by such Indemnified Party; provided, however, that such
Indemnified Party shall have the right to employ counsel to represent it or any
Person who controls it who may be subject to liability arising out of any action
in respect of which indemnity may be sought against the Indemnifying Party if,
in the reasonable judgment of the Indemnified Party's counsel, there may be a
conflict of interest between the Indemnifying Party and the Indemnified Party,
in which event the fees and expenses of appropriate separate counsel shall be
borne by such Indemnifying Party. The Indemnifying Party shall not, without the
written consent of each relevant Indemnified Party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not any such Indemnified Party
is an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of each such
Indemnified Party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of any Indemnified Party. No Indemnified Party
shall, without the written consent of each relevant Indemnifying Party (not to
be unreasonably withheld) effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any such action or claim.
(d) If the indemnification provided for in this Section 8.4 is
unavailable to or insufficient to hold harmless an Indemnified Party under
subsection (a) or (b) above in respect of any Damages (or actions in respect
thereof) referred to therein, then the Indemnifying Party shall contribute to
the amount paid or payable by such Indemnified Party as a result of such Damages
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of such Indemnifying Party on the one hand and the
Indemnified Party on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying Party on the
one hand or the Indemnified Party on the other and the Parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Indemnifying Party and the Indemnified Parties agree
that it would not be just and equitable if contributions pursuant to this
subsection (c) were determined by pro rata allocation (even if the Indemnified
Parties were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
(29)
<PAGE>
referred to above in this subsection (c). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (c) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (c), no Indemnified
Party shall be required to contribute any amount in excess of the amount by
which the total price at which the Initial Preference Shares sold by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Indemnified Party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(S)8.5 Alternate Transactions. (a) If UIHI or UPC has not, on or
----------------------
before December 11, 1997, either (i) both (x) consummated the Private Placement
and (y) consummated each of the other transactions contemplated by Article II
hereof or (ii) consummated each of the transactions contemplated by Article IIA
hereof (such failure, an "ALTERNATE CONSIDERATION EVENT"), then, provided that
each of the conditions set forth in Article VII hereof (other than the condition
set forth in Section 7.1(g)) has been satisfied or waived, on the next Business
Day thereafter, UPC shall otherwise consummate the transactions contemplated by
Article II hereof, including the delivery to Philips Networks of preference
shares of UPC with an aggregate liquidation preference equal to U.S. $162.5
million and containing the terms set forth on confidential Exhibit D hereto and
---------
such other terms as may be mutually acceptable to the Philips Networks and UIHI
(the "INCREASING RATE PREFERENCE SHARES").
(b) During the period from December 11, 1997, through September 1,
1998, UPC shall, and the UIHI Parties shall cause UPC to, use its reasonable
best efforts to refinance the Increasing Rate Preference Shares, such that the
Increasing Rate Preference Shares are redeemed or otherwise monetized in a
manner that provides Philips Networks with net cash proceeds in an amount equal
to the aggregate liquidation preference of the outstanding Increasing Rate
Preference Shares plus all accrued and unpaid dividends thereon; provided that,
----
the TD Facility may require that any additional equity interests newly issued
and sold in connection with such refinancing will contain terms and entitle the
holders thereof to rights no less favorable to UPC than the Increasing Rate
Preference Shares.
(c) All expenses, including, but not limited to, expenses of the sort
or type which would be considered to be Selling Expenses and Other Expenses if
incurred in connection with the Private Placement, which are incurred in
connection with the refinancing referred to in paragraph (b) of this Section 8.5
shall be for the sole account of UPC.
(S)8.6 Strategic Plan. (a) In the event of an Alternate
--------------
Consideration Event, each of Philips Media and UIHI will, on or before September
1, 1998, appoint a financial advisor (which such financial advisor will be an
internationally recognized investment banking firm) and such financial advisors
will meet to consider the potential strategic alternatives available to UPC and
develop a strategic plan for UPC (a "STRATEGIC PLAN") to be submitted to the
Supervisory Board
(30)
<PAGE>
of UPC, which Strategic Plan shall provide, among other things, that, upon the
consummation thereof, UPC shall redeem or otherwise monetize the Increasing Rate
Preference Shares and/or the UPC Ordinary Shares then held by Philips Networks,
as the case may be, such that Philips Networks receives net proceeds upon such
consummation equal to (x) if Philips Networks has not converted the Increasing
Rate Preference Shares into UPC Ordinary Shares, the aggregate liquidation
preference of the outstanding Increasing Rate Preference Shares plus all accrued
----
and unpaid dividends thereon, or (y) if Philips Networks has converted the
Increasing Rate Preference Shares into UPC Ordinary Shares, the Fair Market
Value of such UPC Ordinary Shares. In the event that Philips Media's and UIHI's
financial advisors cannot agree upon a Strategic Plan which meets the
requirements of Section 8.6(a) hereof prior to March 1, 1999, then, prior to
March 15, 1999, such financial advisors shall agree upon and appoint a third
financial advisor (which such financial advisor will be an internationally
recognized investment banking firm), which such third financial advisor shall,
within thirty (30) days of its appointment, propose a Strategic Plan to be
submitted to the Supervisory Board of UPC for its approval. Within ten (10) days
of the submission of a Strategic Plan to the Supervisory Board of UPC, the
Supervisory Board of UPC shall meet and the parties to this Agreement shall
cause their nominees to the Supervisory Board of UPC to vote in favor of
implementing such Strategic Plan, with such amendments or modifications as shall
be approved by a unanimous vote of the members of the Supervisory Board then
holding office; provided, that no such nominee will be required to violate any
fiduciary duty imposed by law in approving such Strategic Plan.
(b) Prior to the implementation of any Strategic Plan, Philips
Network shall either convert the Increasing Rate Preference Shares into UPC
Ordinary Shares or irrevocably waive the right to convert the Increasing Rate
Preference Shares into such ordinary shares.
(c) All expenses, including but not limited to all expenses of the
sort or type which would be considered to be Selling Expenses and Other Expenses
if incurred in connection with the Private Placement, which are incurred in
connection with any Strategic Plan or any other redemption or monetization of
the Increasing Rate Preference Shares and/or any UPC Ordinary Shares held by
Philips Networks, as the case may be, shall be for the sole account of UPC.
(d) The TD Facility may require that (x) any additional equity
interests newly issued and sold in connection with any Strategic Plan contain
terms and entitle the holders thereof to rights no less favorable to UPC than
the Increasing Rate Preference Shares and (y) the lenders under the TD Facility
(the "TD LENDERS") be entitled to require that the proceeds of any sales of the
assets of UPC or its Subsidiaries in connection with such Strategic Plan be used
to reduce the outstanding indebtedness under the TD Facility to zero prior to
the payment of any such proceeds to Philips or its Affiliates to refinance the
Increasing Rate Preference Shares.
(e) For purposes of this Section 8.6, the Fair Market Value of the
UPC Ordinary Shares shall be determined by the following procedure (the
"VALUATION PROCEDURE"):
(i) Each of Philips Networks and JVI shall , as promptly as possible
after the Appraisal Date, designate an independent investment banking firm
with experience valuing companies in the multi-channel subscription
television industry in the United
(31)
<PAGE>
States or Western Europe (each, an "INDEPENDENT INVESTMENT BANKER").
(ii) UPC shall afford each Independent Investment Banker and its
representatives full access during normal business hours to the properties,
books and records of UPC and its Subsidiaries and shall cause UPC's
officers and employees and the officers and employees of UPC's Subsidiaries
to furnish such additional financial and operating data and other
information as the Independent Investment Bankers and their representatives
shall from time to time reasonably request.
(iii) Each of JVI and Philips Networks shall cause the Independent
Investment Banker designated by it to submit its written determination of
the fair market value of one UPC Ordinary Share, to JVI and to Philips
Networks within 30 days after the date of its retention. If the higher of
the two such fair market values, as determined by the two Independent
Investment Bankers is not greater than 110% of the lower of such fair
market values, the Fair Market Value of one UPC Ordinary Share shall be the
average of such two determinations.
(iv) If the higher determination of such fair market value is greater
than 110% of the lower determination, then such two Independent Investment
Bankers shall jointly select, within ten days after the date on which they
are informed of such difference by UPC and Philips Networks, a third
Independent Investment Banker to be retained by UPC. Such third
Independent Investment Banker shall deliver its written determination
of the fair market value of one UPC Ordinary Share as of the Appraisal
Date, within 30 days after its retention, and the Fair Market Value of one
UPC Ordinary Share shall be the average of the two closest determinations
of such fair market value or, if there are not two closest determinations
of such fair market value, the average of all three determinations of such
fair market value.
(v) The Fair Market Value of the UPC Ordinary Shares shall be
expressed in U.S. Dollars and shall be determined without regard to any
minority discount or the illiquidity of the UPC Ordinary Shares. The fees
and expenses of such Independent Investment Bankers shall paid by UPC.
(S)8.7 Sale of UPC. Notwithstanding anything to the contrary
-----------
contained herein or in the Shareholders' Agreement, (x) in the event that UPC
fails to consummate the transactions necessary to complete a Strategic Plan by
September 1, 1999, or (y) the completion of such Strategic Plan does not result
in Philips Networks receiving the minimum net proceeds specified in Section
8.6(a), Philips Networks shall have the right to cause UIHI and JVI to vote,
and, to cause UIHI and JVI to cause their representatives on the Supervisory
Board of UPC to vote, to sell 100% of UPC, in whole or in part, by way of a
stock sale or an asset sale (the proceeds of which will be used, subject to the
claims of the TD Lenders, to redeem the Increasing Rate Preference Shares or any
UPC Ordinary Shares held by Philips, as the case may be) at a price and on such
other terms as are satisfactory to Philips Media in its sole discretion. To the
extent necessary to give full effect to this paragraph, this paragraph shall
serve as a waiver of UIHI and JVI's rights under the Shareholders' Agreement.
(32)
<PAGE>
(S)8.8 Restoration of Foundation Rights. As soon as practicable
--------------------------------
after Philips converts the Increasing Rate Preference Shares into UPC Ordinary
Shares, each of UIHI, JVI and UPC will take all such actions as may be necessary
to restore Philips to the position it held in respect of the Foundation prior to
February 23, 1997.
(S)8.9 Financing. UPC shall use its reasonable best efforts to, and
---------
the UIHI Parties shall use their reasonable best efforts to cause UPC to, on or
prior to the end of the Financing Period, enter into a binding commitment letter
or commitment letters in respect of a credit facility or credit facilities with
Toronto-Dominion Bank the terms of which reflect inter alia, the terms of this
Agreement (any such facilities, as from time to time amended, varied, extended,
restated, replaced, or refinanced by the same or other financial institutions in
accordance with the terms thereof, collectively, the "TD FACILITY"), which
credit facility or facilities will provide UPC with sufficient proceeds to fund
the transactions contemplated hereby; provided, however, that none of the UIHI
Parties shall be required to make any cash payment or incur any financial
obligation to obtain such financing for UPC.
ARTICLE IX
VIENNA GUARANTY
---------------
(S)9.1 Vienna Guaranty. Each of the UIHI Parties and UPC agree to
---------------
use their respective reasonable best efforts to obtain, on or prior to the
Closing Date or as promptly as practicable thereafter, the release of Philips
from all obligations which Philips may have to Kabel-TV Wien GmbH ("KTV") or the
municipality of Vienna under that certain Guaranty, dated June 28, 1995, by and
among PENV, UIHI, and KTV, the Syndikatsvereinbarung, dated June 28, 1995 (the
"VIENNA GUARANTY") among Osterreichische Philips Industrie GmbH, Cable Network
Austria Holdings B.V. ("CNA") and KTV and each other agreement relating to the
cable network indirectly operated by UPC in concert with KTV (collectively, the
"VIENNA AGREEMENTS"); provided, however, that except as otherwise specifically
provided for by this Agreement, none of the UIHI Parties shall be required to
make any cash payment or incur any financial obligation to obtain such release;
provided, further, that, prior to the Closing, neither UPC nor the UIHI Parties
-------
shall take any action which adversely affects the prospects of obtaining the
release of Philips contemplated hereby. The Parties agree to cooperate and
coordinate their efforts to obtain the release of Philips from all its
obligations under the Vienna Agreements. Philips Media agrees to take, and
agrees to use its reasonable best efforts to cause its Affiliates to take, all
such action as UPC or UIHI shall reasonably request in writing in order to
obtain the release of Philips from its obligations under the Vienna Agreements;
provided, that, notwithstanding the foregoing, the obligations of Philips Media
pursuant to this sentence shall not require the payment of money or the
incurrence of any other financial obligation by Philips. To the extent that UPC
and UIHI cannot obtain a full and complete release of Philips from its
obligations under the Vienna Agreements, UPC and UIHI shall use their reasonable
best efforts to obtain the agreement of any obligee under the Vienna Agreements
to proceed first against UPC and its Affiliates (other than Philips) when
seeking to satisfy such obligations; provided that, notwithstanding the
--------
foregoing, the obligations of UIHI to obtain such agreement shall not require
the payment of money or the incurrence of any financial obligation by UIHI.
(33)
<PAGE>
(S)9.2 Indemnification. (a) UPC Indemnification. To the extent
--------------- -------------------
that after the Closing Date, and for so long thereafter as Philips remains
obligated under the Vienna Agreements, Philips is required to make any payment
or perform any obligation on behalf of UPC thereunder, UPC shall indemnify and
hold harmless Philips for any Damages incurred by Philips relating to or arising
out of the payment of any amounts due or the performance of any obligation under
the Vienna Agreements.
(b) UIHI Indemnification. At such time as UIHI enters into
--------------------
negotiations to refinance any of its existing indebtedness that is governed by
documents which prohibit UIHI from indemnifying Philips for any Damages suffered
by Philips relating to or arising out of the Vienna Agreements, UIHI agrees to
use its reasonable best efforts to refinance such indebtedness on terms that
permit UIHI to enter into such indemnity arrangements, and, if successful, shall
enter into such indemnity arrangements, all to the extent that Philips remains
obligated under the Vienna Agreements.
(c) Indemnification Procedures. Philips shall give prompt notice to
--------------------------
UPC and to UIHI of any claim asserted, or action threatened or commenced against
it in respect of which indemnity may be sought under this Section 9.2, but
failure to so notify UIHI or UPC shall not relieve UPC or UIHI from any
liability which it may otherwise have on account of the indemnity agreements
provided in Sections 9.2(a) and 9.2(b) hereof. In the case of any notice under
this indemnity agreement with respect to any loss, liability, claim, damage or
expense with respect to any claim made against Philips, each of UPC and UIHI
shall be entitled to participate at its own expense in the defense of such
claim; provided that Philips shall control such defense, which shall be
conducted by counsel chosen by Philips in its reasonable discretion, after
consultation with UPC and UIHI. The fees and expenses incurred by Philips in
conducting such defense (including the reasonable fees and expenses of counsel)
shall be reimbursed by UPC (or UIHI, to the extent UIHI has entered into the
indemnity arrangements contemplated by Section 9.2(b) hereof) as the same are
incurred from time to time by Philips. Philips shall not, without the written
consent of UPC or UIHI, as the case may be, settle or compromise, or consent to
the entry of judgment with respect to, any claim or pending or threatened action
in respect of which indemnification may be sought hereunder; provided that such
consent may not be unreasonably withheld; provided, further, in the event that
UPC and UIHI shall be liable for any damages (including consequential damages)
to Philips resulting from UPC or UIHI's refusal to consent to any such
settlement or compromise.
(d) Certain Events. The Parties hereto agree that, to the extent
--------------
that after the Closing Date and for so long thereafter as Philips remains
obligated under the Vienna Agreements, UPC shall not, and the UIHI Parties shall
cause UPC not to, (i) sell, transfer or otherwise dispose of or (ii) allow UPC,
CNA or Telekabel Wien to issue or sell, transfer or otherwise dispose of, in
either case, to any Person any equity interest in CNA or Telekabel Wien (other
than pro rata issuances or sales to existing Shareholders of the Entity
effecting such issuance or sale) without the consent of Philips unless UPC or
the purchaser or other transferee of such equity interests first obtains the
release of Philips from all obligations which Philips may have to KTV or the
Municipality of Vienna under the Vienna Agreements; provided, that,
--------
notwithstanding the foregoing, in the event that the lenders under the TD
Facility seek to enforce
(34)
<PAGE>
their rights under the Security Documents in a manner that requires the sale of
any equity interest in CNA or Telekabel Wien, Philips will consent to the sale
of such equity interest if: (i) in Philips' reasonable judgment, the acquiring
party has sufficient financial resources and technical expertise to continue to
fulfill Telekabel Wien's obligations under the Vienna Agreements, (ii) the
purchase or such equity interest by such acquiror has been approved by the City
of Vienna and all other applicable third parties and regulatory authorities, and
(iii) such acquiror agrees to assume UPC's indemnity obligations pursuant to
this Article IX of this Agreement and grant Philips management rights identical
to those which Philips is afforded pursuant to Section 10.5 hereof.
(e) UPC Liability Primary. The Parties hereto agree that, to the
---------------------
extent that UPC or any of its Affiliates (other than Philips), on the one hand,
and Philips, on the other hand, are jointly liable for any amounts due or the
performance of any obligation under the Vienna Agreements, UPC shall, as between
UPC and its Affiliates (other than Philips) and Philips, be primarily liable for
the payment of any such amounts or the performance of any such obligation.
(f) Termination Upon Occurrence of Certain Events. Notwithstanding
---------------------------------------------
anything to the contrary contained in this Section 9.2, if (i) UPC issues the
Increasing Rate Preference Shares to Philips Networks and (ii) Philips Networks
elects to convert the Increasing Rate Preference Shares into UPC Ordinary
Shares, in accordance with the terms of Increasing Rate Preference Shares, then,
on the Conversion Date, UPC and UIHI shall be liable to Philips only for the
consequences of events which occur after the Closing Date and prior to such
Conversion Date but shall not have any liability under Sections 9.2(a) and
9.2(b) hereof, respectively for the consequences of any events which occur
thereafter.
(g) Subordination. (i) Philips hereby agrees, for the benefit of
-------------
the TD Lenders, that at any time at which (x) there are advances or loans
outstanding under the TD Facility and (y) UPC is unable to make cash
distributions in respect of its equity interests pursuant to the terms of TD
Facility, Philips will take no action, and will cause each of its Affiliates not
to take any action, to enforce or otherwise collect any claim or claims for
indemnity under this Section 9.2 until the date on which UPC is able to make
cash distributions in respect of the terms of its equity interests pursuant to
the terms of the TD Facility; provided, that, if such claim or claims exceed
--------
$5.0 million in the aggregate Philips may take action to enforce such claim or
claims on the 181st day following the date that the Agent under the TD Facility
is notified of such claims. This Agreement shall be solely for the benefit of
the TD Lenders and shall in no way affect the obligations of UPC to Philips or
its Affiliates under this Agreement.
(ii) UPC hereby agrees that, to the extent that is entitled to make
any cash distributions in respect of its equity interests pursuant to the terms
of the TD Facility, it shall, nonetheless not make any such cash distributions
until such time as all outstanding claims under this Section 9.2 have been paid
in full.
(35)
<PAGE>
ARTICLE X
GOVERNANCE OF UPC
-----------------
(S)10.1 Interim Governance of UPC. (a) From the date of this
-------------------------
Agreement through earliest to occur of, (i) the date upon which Philips Media
and UIHI reasonably determine in writing that the Transaction cannot be
consummated and (ii) December 11, 1997, the UIHI Parties shall have control of
the day-to-day management of UPC.
(b) Notwithstanding the immediately preceding paragraph (a), if an
Alternate Consideration Event occurs and UPC issues the Increasing Rate
Preference Shares to Philips Networks pursuant to Section 8.5 hereof, the UIHI
Parties shall have control of the day-to-day management of UPC until the date
(the "CONVERSION DATE") of the conversion of the Increasing Rate Preference
Shares into UPC Ordinary Shares pursuant to the terms thereof; provided, that,
during such period, Philips shall have all of the management rights to which it
is entitled pursuant to this Article X.
(c) Notwithstanding anything contained in the foregoing paragraphs
(a) and (b), none of the Sellers shall be deemed to have forfeited, waived or
agreed to forbear the enforcement of any of its rights under the Shareholders'
Agreement including, without limitation, any right to require that any "Major
Decision" (as such term is defined in the Shareholders' Agreement) be approved
by a unanimous vote of each Philips Nominee and each UIHI Nominee (as such terms
are defined in the Shareholders' Agreement); provided, that the Sellers shall,
and shall procure that each of the Philips Nominees shall, approve all matters
reasonably necessary to finance the Transaction; provided, further, that nothing
contained herein shall require any Philips Nominee to violate any fiduciary duty
or other requirement imposed by law in connection with such vote.
Notwithstanding anything to the contrary contained in this Agreement, at all
times prior to the later of the Closing Date or the Conversion Date, as the case
may be, UPC shall, and UIHI and JVI shall cause UPC to, provide to Philips
Networks and each Philips Nominee (as such term is defined in the Shareholders'
Agreement) information substantially similar in type, amount and scope of detail
to the information provided to Philips Networks and each Philips Nominee
immediately prior to February 24, 1997.
(S)10.2 Post-Closing Governance. (a) Supervisory Board
----------------------- -----------------
Representation. During the period beginning on the Closing Date and ending on
- --------------
the date of the last to occur of (i) the first date on which the disposition by
the Sellers and their Affiliates of Preference Shares (including, without
limitation, any Preference Shares issued to the Sellers or their Affiliates in
connection with the settlement of UPC's obligations under the SAR) or Increasing
Rate Preference Shares, as the case may be, results in the Sellers and their
Affiliates collectively owning Preference Shares or Increasing Rate Preference
Shares, as the case may be, with a Fair Market Value of less than U.S. $50.0
million, (ii) the full release of Philips from any and all obligations or
liabilities under the Vienna Agreements, and (iii) the date on which Philips is
fully reimbursed for all Damages incurred by Philips relating to or arising out
of the payment of any amounts due or the performance of any obligation under the
Vienna Agreements, Philips Media shall be entitled to nominate one member of the
Supervisory Board of UPC (the "PHILIPS MEDIA
(36)
<PAGE>
NOMINEE") who shall, subject to Section 10.2(d) hold office until the next
annual general meeting of the shareholders of UPC or until such person's
successor is duly appointed and qualified. Philips Networks and JVI shall take
all such action as may be necessary to amend the Articles of Association of UPC
to provide that Philips Media may directly appoint the Philips Media Nominee to
the Supervisory Board of UPC in conformity with Section 2:143 of the Dutch Civil
Code. Notwithstanding the preceding sentence, if for any reason Philips Media is
unable to directly appoint the Philips Media Nominee to the Supervisory Board of
UPC, during such period, UIHI and JVI shall vote, or cause to be voted, each of
the UPC Ordinary Shares directly or indirectly owned or controlled by either of
them in favor of the election of such Philips Media Nominee.
(b) Vacancy. During any period in which Philips Media is entitled to
-------
nominate a Philips Media Nominee to the Supervisory Board of UPC, whenever a
vacancy shall occur on the Supervisory Board of UPC as a result of the death,
resignation, removal (subject to paragraph (c) below) or other action or
inaction of the Philips Media Nominee, such vacancy shall be filled by a nominee
of Philips Media and the person so nominated and elected shall become the
Philips Media Nominee and shall hold office until the next annual general
meeting of the shareholders of UPC or until such Person's successor is duly
appointed and qualified. At any time and to the extent that Philips Media is
unable to directly appoint such Philips Media Nominee to the UPC Supervisory
Board in conformity with the Section 2:143 of the Dutch Civil Code, during such
period, UIHI and JVI shall vote, or cause to be voted, each of the UPC Ordinary
Shares directly or indirectly owned or controlled by either of them in favor of
the appointment of the Person so nominated.
(c) Removal. During any period in which Philips Media is entitled to
-------
nominate a member of the Supervisory Board of UPC, no Philips Media Nominee may
be removed as a member of the Supervisory Board of UPC without the express
written consent of Philips Media. UIHI and JVI agree that if Philips Media
notifies the UIHI Parties in writing of Philips Media's desire to remove the
Philips Media Nominee from the Supervisory Board of UPC, UIHI and JVI shall do
all things necessary pursuant to UPC's Articles of Association and the law of
The Netherlands to remove such Philips Media Nominee and UIHI and JVI shall
vote, or cause to be voted, each of the shares of UPC Ordinary Shares directly
or indirectly owned or controlled by either of them in favor of the removal of
such Philips Media Nominee. The term of any Philips Media Nominee so removed
shall forthwith terminate and there shall be a vacancy on the Supervisory Board
of UPC to be filled in accordance with Section 10.2(b) of this Agreement.
(d) Resignation. At such time as Philips Media ceases to be entitled
-----------
to nominate a member of the Supervisory Board of UPC, Philips Media shall, at
the request of UIHI or JVI, take all such action as is necessary to cause such
Philips Media Nominee to resign as a member of the Supervisory Board of UPC or
take all such action as may be necessary pursuant to UPC's Articles of
Association and the law of The Netherlands to remove such Philips Media Nominee.
(S)10.3 Meetings; Committees. (a) Notice; Access to Information.
-------------------- -----------------------------
UPC shall afford the Philips Media Nominee reasonable notice of all meetings of
the Supervisory Board of UPC, which notice shall be given at least as far in
advance of such meetings as such notice is
(37)
<PAGE>
afforded to the other members of the Supervisory Board of UPC and not fewer than
five Business Days in advance of the meeting with respect to which such notice
applies. The Philips Media Nominee shall be entitled to receive all information
provided to all other members of the Supervisory Board of UPC in such nominee's
capacity as a member of the Supervisory Board of UPC and shall have such access
to the management and books and records of UPC as is afforded to the other
members of the Supervisory Board of UPC or is necessary to protect the rights of
Philips under this Agreement.
(b) Quorum. A quorum for the transaction of business shall be
------
present at a meeting of the Supervisory Board of UPC if a majority of the
members then in office are present (unless such members are present solely to
object to such meeting). Each of UIHI and JVI shall do all things necessary,
including, but not limited to, voting, or causing to be voted, any UPC Ordinary
Shares directly or indirectly owned or controlled by either of them to amend the
Articles of Association of UPC, to give effect to the preceding sentence. If at
any meeting of the Supervisory Board of UPC there shall be less than a quorum
present, a majority of those present may adjourn the meeting from time to time
until a quorum shall have been obtained.
(c) Committees. The Supervisory Board of UPC may, in its discretion,
----------
designate from among its members one or more committees. Such committees shall
have and may exercise such powers as shall be conferred or authorized by the
resolution appointing them; provided that, during any period in which Philips
Media is entitled to nominate a member of the UPC Supervisory Board, (x) such
Philips Media Nominee shall be entitled to receive notice of and attend meetings
of any such committee and (y) no such committee shall be empowered to take any
of the actions requiring the consent of the Philips Media Nominee pursuant to
Sections 10.4 and 10.5 of this Agreement unless the Philips Media Nominee is a
member of such committee and votes in favor of taking such action. Each of UIHI
and JVI shall do all things necessary, including, but not limited to, voting, or
causing to be voted, any UPC Ordinary Shares directly or indirectly owned or
controlled by either of them to amend the Articles of Association of UPC, to
give effect to the preceding sentences.
(S)10.4 Approval of Certain Actions. During such period as the
---------------------------
Sellers and their Affiliates continue to hold Preference Shares or Increasing
Rate Preference Shares (including, without limitation, any Preference Shares
issued to UPC in settlement of the SAR), as the case may be, with an aggregate
Fair Market Value in excess of $50.0 million, the following actions shall
require the approval of the Philips Media Nominee to the Supervisory Board of
UPC, which approval shall not be unreasonably withheld:
(a) a merger or consolidation of UPC with or into (x) UIHI or (y) any
other entity which is not a direct or indirect wholly owned subsidiary of
UPC;
(b) the sale, transfer or other disposition or encumbrance (other than
Permitted Liens), in one transaction or a series of related transactions,
by UPC or any Subsidiary of UPC of assets aggregating more than 30% of the
consolidated assets or generating more than 30% of the consolidated revenue
from continuing operations of UPC to an entity that is not a direct or
indirect majority owned Subsidiary of UPC; provided that Philips Media
(38)
<PAGE>
shall cause the Philips Media Nominee to vote to approve any encumbrance
granted, or proposed to be granted, by UPC or any Subsidiary of UPC in
connection with any bona fide financing transaction entered into, or
proposed to be entered into, by UPC or any Subsidiary of UPC;
(c) the sale, transfer or other disposition or encumbrance (other than
Permitted Liens), in one transaction or a series of related transactions of
any assets of UPC or any of its Subsidiaries that have a fair market value
in excess of U.S. $5.0 million or for which the net proceeds received in
connection therewith exceeds U.S. $5.0 million, to any person or entity for
less than fair market value or otherwise on terms less favorable to UPC or
any such Subsidiary than those generally found in an arm's-length
transaction; provided that Philips Media shall cause the Philips Media
Nominee to vote to approve any encumbrance granted, or proposed to be
granted, by UPC or any Subsidiary of UPC in connection with any bona fide
financing transaction entered into, or proposed to be entered into, by UPC
or any Subsidiary of UPC;
(d) the acquisition by UPC or any Subsidiary of UPC of any asset at a
price in excess of fair market value or otherwise on terms less favorable
to UPC or any such Subsidiary than those generally found in an arm's length
transaction;
(e) except to the extent provided in Sections 10.4(b), (c) or (f),
hereof, the issuance, sale, transfer or other disposition or encumbrance
(other than Permitted Liens), in one transaction or a series of related
transactions, of any debt or equity interest in UPC or any Subsidiary of
UPC for less than fair market value;
(f) a proposal to declare any dividend or to redeem or otherwise make
any distribution in respect of the equity interests of UPC, other than
dividends or distributions which are (i) made in the ordinary course of
business consistent with past practice, (ii) payable in UPC Ordinary Shares
or (iii) contemplated by this Agreement;
(g) the discontinuance, winding up, dissolution or liquidation of the
affairs of UPC or of any Subsidiary of UPC with assets or earnings for the
previous fiscal year aggregating more than 20% of UPC's consolidated assets
or revenue from operations (a "MAJOR SUBSIDIARY") unless in connection
therewith, such affairs will be continued in any Subsidiary of UPC or in
UPC itself;
(h) the taking of any action which would subject UPC to the "large
company" (struktuur) regime under the law of The Netherlands;
(i) any amendment, change, modification, revision, rescission or
repeal of the Articles of Association or the Rules and Regulations of the
Supervisory Board of UPC which could have an adverse effect on the rights
or interests of Philips Media in respect of the governance of UPC or any
voluntary adoption by UPC of the struktuur regime under the law of The
Netherlands; and
(j) the making by UPC or any Major Subsidiary of a general assignment
for the
(39)
<PAGE>
benefit of the creditors of UPC or such Major Subsidiary, the appointment
of a trustee, receiver, assignee, liquidator or similar official for UPC or
any Major Subsidiary or for substantially all of the property of UPC or any
Major Subsidiary, the commencement by UPC or any Major Subsidiary of any
proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction relating to UPC or any Major Subsidiary, or the
determination to leave unstayed or otherwise forbear objection to any such
proceeding or action taken or commenced by any person other than UPC or any
UPC Major Subsidiary or the taking of any step preparatory to taking any of
the foregoing actions by UPC or any Major Subsidiary;
provided that, this Section 10.4 shall not apply to (i) any grant of any
security interest pursuant to any Security Document, (ii) any action taken by
UPC or any Subsidiary of UPC with the agreement of all of the relevant Finance
Parties after the occurrence of any material default under the TD Facility which
continues unremedied and unwaived for a period of 30 consecutive days, so long
as (x) such action does not require any Austrian Subsidiary to upstream any
funds which Philips has been required to advance to any Austrian Subsidiary
pursuant to its obligations under the Vienna Guaranty or the other Vienna
Agreements and (y) such action would not materially and adversely affect the
magnitude of the potential exposure of Philips under the Vienna Guaranty or the
other Vienna Agreements or would not result in a claim being made against
Philips pursuant to the Vienna Guaranty or the other Vienna Agreements, and
(iii) any action taken by any Finance Party under the TD Facility or any
Security Document entered into in connection with the TD Facility (collectively
the "FINANCE DOCUMENTS") in connection with the enforcement of any security
interest created by any Security Document, so long as such action is either (x)
required or permitted to be taken by a Finance Party under any Finance Document
or (y) required to be taken by UPC or any Subsidiary of UPC under any Finance
Document.
(S)10.5 Actions with Respect to the Vienna Agreements. During any
---------------------------------------------
period of time during which Philips retains any liability pursuant to or on
account of the Vienna Guaranty or the other Vienna Agreements the following
matters shall require the approval of the Philips Media Nominee, unless such
transaction results in the irrevocable elimination of any and all liability of
Philips relating to or arising out of the Vienna Guaranty and the other Vienna
Agreements:
(a) a merger or consolidation of UPC with or into (x) UIHI or (y) any
other entity which is not a direct or indirect wholly-owned subsidiary of
UPC;
(b) the issuance or sale, transfer or other disposition of any debt
or equity interest in any Austrian Subsidiary other than in compliance with
Section 8.6(d) or other than (i) loans or advances to any Austrian
Subsidiary made for contemporaneous value (x) by UPC or (y) by a TD Lender
pursuant to, and in accordance with the terms of, the TD Facility or (ii)
indebtedness of any Austrian Subsidiary (other than CNA) to trade creditors
incurred in the ordinary course of business for bona fide commercial
purposes;
(c) a proposal to declare any dividend or to redeem or otherwise make
any
(40)
<PAGE>
distribution in respect of the equity interests of Telekabel Wien if, after
giving effect to (x) such dividend, redemption or other distribution and
(y) any budgeted losses projected to occur at Telekabel Wien through the
end of the next succeeding full fiscal year, such dividend, redemption or
other distribution would cause the equity capital of such TeleKabel Wien to
fall below 337.3 million Austrian Schillings.
(d) the sale, transfer or other disposition or encumbrance (other
than Permitted Liens), in one transaction or a series of related
transactions, by CNA or any Subsidiary of CNA of assets aggregating more
than 30% of the consolidated assets or generating more than 30% of the
consolidated revenues from continuing operations of CNA to an entity that
is not a direct or indirect wholly-owned Subsidiary of CNA;
(e) the sale, transfer or other disposition or encumbrance (other
than Permitted Liens), in one transaction or a series of related
transactions of any assets of CNA or any of its Subsidiaries that have a
fair market value in excess of U.S. $5.0 million or for which the net
proceeds received in connection therewith exceeds U.S. $5.0 million, to any
person or entity for less than fair market value or otherwise on terms less
favorable to CNA or any such Subsidiary than those generally found in an
arm's-length transaction;
(f) the acquisition by CNA or any Subsidiary of CNA of any asset
which has a fair market value in excess of U.S. $5.0 million or of which
the aggregate purchase price (whether in cash, securities or other assets
and whether or not contingent) exceeds $ 5.0 million from any person or
entity at a price in excess of fair market value or otherwise on terms less
favorable to CNA or any such Subsidiary than those generally found in an
arm's length transaction;
(g) the making by CNA or any Subsidiary of CNA of a general
assignment for the benefit of the creditors of CNA or any such Subsidiary,
the appointment of a trustee, receiver, assignee, liquidator or similar
official for CNA or any Subsidiary of CNA or for substantially all of the
property of CNA or any Subsidiary of CNA, the commencement by CNA or any
Subsidiary of CNA of any proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to CNA or any
Subsidiary of CNA, or the determination to leave unstayed or otherwise
forbear objection to any such proceeding or action taken or commenced by
any person other than CNA or any Subsidiary of CNA or the taking of any
step preparatory to taking any of the foregoing actions by CNA or any
Subsidiary of CNA;
(h) any amendment, change, modification, revision, rescission or
repeal of any Vienna Agreement or the Articles of Association of any
Austrian Subsidiary that would increase Philips' exposure to Damages on
account of any obligation under any Vienna Agreement; and
(i) any other action including, but not limited to, (A) the
acquisition by Telekabel Wien of any debt or equity interest in any Person,
(B) the selection of management of Telekabel Wien which does not comply
with the requirements of Section II.1.d of the
(41)
<PAGE>
Vienna Guaranty, (C) any action which would cause the development of the
Vienna cable network to fall below normally applicable European standards
and (D) any action which results in the cash flow of Vienna being used
primarily for any other purpose other than the fulfillment of the
objectives of Section II of the Vienna Guaranty, which, in any such case,
would materially and adversely affect the magnitude of the potential
exposure of Philips under the Vienna Guaranty or the other Vienna
Agreements or would result in a claim being made against Philips pursuant
to the Vienna Guaranty or the other Vienna Agreements; provided, that
--------
unless such action would result in a claim being made against Philips
pursuant to the Vienna Agreements, this clause 10.5(i) shall not restrict
the ability of any Austrian Subsidiary to upstream funds to UPC;
provided that, this Section 10.5 shall not apply to (i) any grant of any
security interest pursuant to any Security Document, (ii) any action taken by
UPC or any Subsidiary of UPC with the agreement of all of the relevant Finance
Parties after the occurrence of any material default under the TD Facility which
continues unremedied and unwaived for a period of 30 consecutive days, so long
as (x) such action does not require any Austrian Subsidiary to upstream any
funds which Philips has been required to advance to any Austrian Subsidiary
pursuant to its obligations under the Vienna Guaranty or the other Vienna
Agreements and (y) such action would not materially and adversely affect the
magnitude of the potential exposure of Philips under the Vienna Guaranty or the
other Vienna Agreements or would not result in a claim being made against
Philips pursuant to the Vienna Guaranty or the other Vienna Agreements, or (iii)
any action taken by any Finance Party in connection with the enforcement of any
security interest created by any Security Document, so long as such action is
either (x) required or permitted to be taken by a Finance Party under any
Finance Document or (y) required to be taken by UPC or any Subsidiary of UPC
under any Finance Document.
(S)10.6 Effectiveness of Article X. Notwithstanding anything to the
--------------------------
contrary under this Article X, Sections 10.2 through 10.5 shall become effective
upon the Closing and shall have no force or effect otherwise.
ARTICLE XI
TERMINATION; EFFECT OF TERMINATION
----------------------------------
(S)11.1 Events of Termination. This Agreement may be terminated and
---------------------
the transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of the Parties;
(b) by Philips Media, if, upon the expiration of the Financing
Period, UPC has not entered into the TD Facility, or any other credit
facility meeting the requirements of Section 8.9(a) hereof, on terms which
provide UPC with sufficient funds to finance the transactions contemplated
hereby;
(c) by UIHI or Philips Media, if UIHI and Philips Media at any time
agree in writing that (i) the Required Consents cannot be obtained, (ii)
UIHI and/or UPC will be
(42)
<PAGE>
unable to obtain financing in an amount sufficient to consummate the
Transaction or (iii) the Transaction cannot otherwise be consummated;
(d) by UIHI or Philips Media, if the Closing Date shall not have
occurred on or prior to December 11, 1997, unless the failure of the
Closing Date to occur on or prior to December 11, 1997 is due to the
material breach of any representation or warranty, or material failure to
perform any of its covenants or agreements contained in this Agreement by
the Party seeking to so terminate; or
(e) by UIHI or Philips Media, if there shall be any law or regulation
of any Governmental Authority that makes consummation of the transactions
contemplated by this Agreement illegal or otherwise prohibited, or if any
judgment, injunction, order or decree of any competent authority
prohibiting such transaction is entered and such judgment, injunction,
order or decree shall have become final and nonappealable.
(S)11.2 Effect of Termination. In the event that this Agreement
---------------------
shall be terminated pursuant to Section 11.1 hereof all further obligations of
the Parties hereto under this Agreement (other than the obligations of UIHI and
JVI pursuant to Sections 11.3 and 12.3, which obligations will remain in full
force and effect) shall terminate without further liability or obligation of any
Party to the other hereunder; provided, however, that no Party shall be released
from liability hereunder if this Agreement is terminated and the transactions
abandoned by reason of (i) willful failure of such Party to have performed its
obligations hereunder or (ii) any knowing misrepresentation made by such Party
of any matter set forth herein.
(S)11.3 Actions upon Termination. Upon any termination of this
------------------------
Agreement (other than a termination of this Agreement by UIHI pursuant to
Section 11.1(d) which is occasioned by the material untruth or inaccuracy of any
representation or warranty made by any Seller in Article III of this Agreement
or the material breach by Philips Media of any of its covenants or agreements
contained herein), UIHI and JVI will, upon the request of Philips Media, cause
their representatives on the Supervisory Board of UPC to vote, and will, if
necessary, vote their respective shares in UPC, to cause UPC (i) to refinance
(and to redeem for cash) the PIK Notes on commercially reasonable terms and for
a price equal to the aggregate principal amount thereof plus all accrued and
----
unpaid interest thereon and (ii) to purchase for cash the UIHI Shares at a price
equal to the Fair Market Value of such securities determined as of the date on
which such purchase is made; provided that nothing contained herein shall
require any such representative to violate any fiduciary duty or other
requirement imposed by law in connection therewith. If applicable, UIHI and UPC
shall use their reasonable best efforts (including the arranging of interim
financing) to cause the transactions contemplated by the immediately preceding
sentence to be consummated on or prior to December 11, 1997.
ARTICLE XII
MISCELLANEOUS
-------------
(S)12.1 Survival of Representations and Warranties. Except for the
------------------------------------------
representations and warranties of the Sellers set forth in Sections 3.1 and 3.2
hereof, the representations and
(43)
<PAGE>
warranties of the UIHI Parties set forth in Section 4.1 hereof and the
representations and warranties of UPC set forth in Sections 5.1 and 5.4 hereof,
which shall survive indefinitely, the representations and warranties of the
Parties hereto contained in this Agreement shall not survive the Closing.
(S)12.2 Applicable Law; Submission to Jurisdiction. (a) This
------------------------------------------
Agreement and the legal relations between the Parties shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflict of laws rules thereof.
(b) Each of the Parties agrees that any legal action or proceeding
with respect to this Agreement may be brought in the Courts of the State of New
York or the United States District Court for the Southern District of New York
and, by execution and delivery of this Agreement, each Party hereby irrevocably
submits itself in respect of its property, generally and unconditionally to the
non-exclusive jurisdiction of the aforesaid courts in any legal action or
proceeding arising out of this Agreement. Each Party irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to in the preceding sentence. Each
Party consents to process being served in any such action or proceeding by the
mailing of a copy thereof to the address set forth opposite its name below and
agrees that such service upon receipt shall constitute good and sufficient
service of process or notice thereof. Nothing in this paragraph shall affect or
eliminate any right to serve process in any other matter permitted by law.
(S)12.3 Confidentiality. (a) Each Party will, and will cause its
---------------
Affiliates to, maintain the confidentiality of this Agreement and the
transaction contemplated hereby. No Party (nor any Affiliate thereof) shall
issue any press release or make any other statement intended for public
distribution or any announcement or other disclosure relating to, or connected
with this Agreement and the transaction contemplated hereby without obtaining
the prior approval of the other Parties; provided, that UIHI and UPC may
disclose such terms of the transactions contemplated hereby as they reasonably
consider necessary to obtain financing for such transactions or to obtain the
Necessary Consents.
(b) Notwithstanding the foregoing provisions, each of the Sellers,
the UIHI Parties and UPC may, upon written notice to and consultation with the
other Parties, issue or make a press release, announcement or other disclosure
regarding this Agreement and the transactions contemplated hereby which such
party reasonably determines to be required under applicable law or the
applicable rules and regulations of any stock exchange, automated quotation
system or self-regulatory organization on which such Party's securities are
listed or of which such Party is a member or participant.
(c) Each party will, and will cause its Affiliates and the Philips
Media Nominee to, maintain in confidence all information received from UPC
concerning the business, finances or methods of doing business used by UPC, any
of its Subsidiaries or any other Entity in which UPC or any of its Subsidiaries
directly or indirectly owns any interest or of their respective dealings,
transactions or affairs, and shall use such information only for the benefit of
UPC, such
(44)
<PAGE>
Subsidiary or other Entity as the case may be, and shall not disclose any such
information to a third party or make any unauthorized use thereof. Each Party
will, and will cause its Affiliates and the Philips Media Nominee to, treat all
such information with the same degree of care against disclosure or unauthorized
use that it affords to its own confidential information. Notwithstanding the
foregoing provisions, the obligation of confidentiality and non-use shall not
apply to any information that (a) was not previously treated as confidential by
UPC, such Subsidiary or other Entity, (b) is or becomes generally available to
the public through no fault of the receiving party, (c) is independently
developed by the receiving party, (d) is received in good faith from a third
party who discloses such information to the receiving party on a non-
confidential basis or (e) the receiving party reasonably determines is required
to be disclosed by it under applicable law or the applicable rules and
regulations of any stock exchange, automated quotation system or self-regulatory
organization on which such party's securities are listed or of which such party
is a member or participant. In addition, the obligation of confidentiality shall
not apply to the following information with respect to each of the multi-channel
television operating systems in which UPC has a direct or indirect interest:
homes in service area, homes passed, basic subscribers, premium subscribers,
basic penetration, revenues per subscriber, system capitalization per
subscriber, and EBITDA.
(S)12.4 Effect on Shareholder's Agreement. (a) Pre-Closing Effect.
--------------------------------- ------------------
Prior to the Closing Date, the Shareholders' Agreement shall remain in full
force and effect; provided, that the UIHI Parties shall have control of the day-
to-day management of UPC, as provided in Section 10.1 hereof, during the period
from the date hereof up to and including the Closing Date.
(b) Consummation of the Private Placement; Cash Alternative. If (x)
-------------------------------------------------------
the Private Placement is, or (y) the transactions contemplated by Article IIA
hereof are, consummated, the Shareholders' Agreement shall terminate upon the
consummation thereof and Philips' sole rights to participate in the management
of UPC shall be those rights afforded to it under Article X hereof or under
applicable law.
(c) Alternate Consideration Event. If there occurs an Alternate
-----------------------------
Consideration Event then, notwithstanding anything contained therein, the
Shareholders' Agreement shall remain in full force and effect until such time as
all of the equity interests (including, but not limited to, any ordinary or
preference shares) in UPC held by Philips are redeemed or repurchased by UPC;
provided, that the UIHI Parties shall have control of the day-to-day management
of UPC, as provided in Section 10.1 hereof, until the Conversion Date; provided,
further, that, after the Conversion Date, Philips shall be entitled to
participate fully in the day-to-day management of UPC, including, but not
limited to, participation in the selection of the management board of UPC and
the provisions of the immediately preceding proviso shall be of no further force
and effect.
(S)12.5 Election. (a) On or prior to the date (such date the
--------
"Election Date") which is the earlier to occur of (x) October 31, 1997, and (y)
the first Business Day immediately succeeding the date of the consummation of
the pending sale by a subsidiary of UIHI of certain Argentine cable interests as
previously publicly disclosed in UIHI's Form 8-K filed with the U.S. Securities
and Exchange Commission on September 10, 1997, UIHI shall, on its own behalf and
(45)
<PAGE>
on behalf of JVI and UPC, by written notice delivered to Philips Media,
irrevocably elect to comply with either Article II or Article IIA hereof. JVI
and UPC hereby agree that, notwithstanding anything to the contrary contained
herein or any notice to the contrary, the Sellers shall be entitled to rely
conclusively on such notice, and JVI and UPC shall be bound by such election.
(b) At UIHI's option, UIHI may on its own behalf, and on behalf of
JVI and UPC, on or prior to the Election Date, irrevocably elect, by written
notice delivered to Philips Media, to cause UPC to satisfy its obligation to
issue the SAR on the Closing Date by agreeing to pay Philips Media an amount in
U.S. Dollars equal to the SAR Cash Payment Amount at Closing in lieu of issuing
the SAR. Failure to make such elections in a timely fashion shall obligate UIHI
to issue the SAR. JVI and UPC hereby agree that, notwithstanding anything to
the contrary contained herein or any notice to the contrary, the Sellers shall
be entitled to rely conclusively on such notice, and JVI and UPC shall be bound
by such election.
(S)12.6 Headings. The descriptive headings of the several Articles
--------
and Sections of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(S)12.7 Binding Effect; Benefit; Assignment. This Agreement shall
-----------------------------------
inure to the benefit of and be binding upon the Parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the Parties without the prior written consent of the other Parties; provided
that any Seller under this Agreement may assign its rights hereunder in whole,
but not in part, to any wholly-owned Subsidiary of PENV. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the Parties or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
(S)12.8 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which taken together shall constitute one instrument.
(S)12.9 Entire Agreement. This Agreement and the other documents
----------------
referred to herein or delivered pursuant hereto, collectively contain the entire
understanding of the Parties with respect to the subject matter contained herein
and supersede all prior agreements and understandings, oral and written, with
respect thereto unless specifically set forth to the contrary herein.
(S)12.10 Waiver; Amendments. (a) General. At any time prior to the
------------------ -------
Closing, the Parties hereto may (i) extend the time for the performance of any
of the obligations or other acts of any Party hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions contained herein. Such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by all the Parties hereto. This Agreement may not be changed orally, but
only by an agreement in writing signed by all of the Parties. Each other
Philips Person shall be bound by any amendment or waiver authorized under
(46)
<PAGE>
this Section 12.10, whether or not it consents to such amendment or waiver.
(b) Certain Matters. The parties hereto acknowledge that
---------------
modifications to Articles II and IIA of this Agreement may become necessary
prior to the Closing in order to facilitate the closing of the TD Facility and
to meet local legal requirements. Each party hereto agrees to negotiate in good
faith in respect of any such modification requested by each other party, so long
as the substantive provisions (including without limitation the economic
benefits) of the Agreement relating to the consenting party's rights and
obligations are not adversely affected.
(S)12.11 Severability. If any term, provision, covenant or
------------
restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
(S)12.12 Fees and Expenses. Except for costs associated with hedging
-----------------
currency risks, which costs shall be borne by UPC and as otherwise expressly
agreed herein, all costs and expenses incurred in connection with this Agreement
and the consummation of the transactions contemplated hereby and thereby shall
be paid by the Party incurring such costs and expenses.
(S)12.13 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
by mail or overnight courier, postage prepaid, or sent by telex, telegram or
telecopier (confirmed by mail with postage prepaid), as follows:
(a) if to either Seller, to it at:
Philips Media B.V.
P.O. Box 218
5600 MD Eindhoven
The Netherlands
Attention: Corporate Legal Department
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Telephone: (212) 819-8200
Telecopier: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
(b) if to UPC, to it at:
(47)
<PAGE>
United and Philips Communications B.V.
Fred. Roeskestraat 123
1076 EE Amsterdam
Attention: Senior Managing Director
Telephone: (31-20) 578-9840
Telecopier: (31-20) 578-9871
(c) and if to either UIHI Party, to it at
United International Holdings, Inc.
4643 South Ulster Street
Suite 1300
Denver, Colorado 80237
Telephone: (303) 770-4001
Telecopier: (303) 770-4207
Attention: President and Legal Department
with a copy to:
Holme Roberts & Owen LLP
Suite 4100
1700 Lincoln
Denver, Colorado 80203
Telephone: (303) 861-7000
Telecopier: (303) 866-0200
Attention: W. Dean Salter, Esq.
or to such other Person or address as any Party shall specify by notice in
writing to each of the other Parties. Except for a notice of a change of
address, which shall be effective only upon receipt thereof, all such notices,
requests, demands, waivers and communications shall be deemed to have been
received on the date of delivery unless if mailed, in which case on the third
Business Day after the mailing thereof, and unless if by overnight courier, in
which case on the second Business Day after the dispatch thereof.
(S)12.14 Currency. All references in this Agreement to "U.S.
--------
Dollars" or "U.S. $" are references to the lawful currency of the United States.
All references to "NLG" or "Dutch Guilders" are references to the lawful
currency of The Netherlands.
[SIGNATURE PAGE FOLLOWS]
(48)
<PAGE>
IN WITNESS WHEREOF, the each of the Parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PHILIPS MEDIA B.V.
By /s/ M.F.L. SEVENANS
______________________________________
Name: M.F.L. Sevenans
Title: Managing Director
By /s/ R.J.A. de LANGE
______________________________________
Name: R.J.A. de Lange
Title: Managing Director
PHILIPS MEDIA NETWORKS B.V.
By /s/ M.F.L. SEVENANS
______________________________________
Name: M.F.L. Sevenans
Title: Managing Director
By /s/ R.J.A. de LANGE
______________________________________
Name: R.J.A. de Lange
Title: Managing Director
UNITED INTERNATIONAL HOLDINGS, INC.
By /s/ MARK L. SCHNEIDER
_____________________________________
Name: Mark L. Schneider
Title: Executive Vice President
JOINT VENTURE, INC.
By /s/ MARK L. SCHNEIDER
_____________________________________
Name: Mark L. Schneider
Title: Senior Vice President
(49)
<PAGE>
UNITED AND PHILIPS COMMUNICATIONS B.V.
By /s/ MARK L. SCHNEIDER
______________________________________
Name: Mark L. Schneider
Title: Senior Managing Director
By /s/ DONALD MILLER-JONES
_____________________________________
Name: Donald Miller-Jones
Title: Managing Director
(50)
<PAGE>
EXHIBIT 10.2
LOAN AGREEMENT
for a
NLG 1,100,000,000 Multi-currency Revolving Credit Facility
to
UNITED AND PHILIPS COMMUNICATIONS B.V.
AND CERTAIN OF ITS SUBSIDIARIES
Guaranteed by
CERTAIN SUBSIDIARIES OF
UNITED AND PHILIPS COMMUNICATIONS B.V.
Arranged by
THE TORONTO-DOMINION BANK
Agent
THE TORONTO-DOMINION BANK
Security Trustee
THE TORONTO-DOMINION BANK
as amended by a
Supplemental Agreement dated 8 December 1997
Norton Rose
London
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Clause Heading Page
<S> <C> <C>
1 Purpose and definitions.......................................................................1
1.1 Purpose..............................................................................1
1.2 Definitions..........................................................................1
1.3 Headings............................................................................17
1.4 Construction of certain terms.......................................................17
1.5 Majority Banks......................................................................18
1.6 Agent's opinion.....................................................................19
2 The Facility.................................................................................20
2.1 Amount..............................................................................20
2.2 Obligations several.................................................................20
2.3 Interests several...................................................................20
2.4 Telekabel Wien's interests several..................................................20
3 Conditions...................................................................................21
3.1 Documents and evidence..............................................................21
3.2 General conditions precedent........................................................21
3.3 Waiver of conditions precedent......................................................22
3.4 Notification........................................................................22
3.5 New Janco...........................................................................22
3.6 Conditions subsequent...............................................................22
4 Advances; Currencies.........................................................................24
4.1 Maximum Outstandings................................................................24
4.2 Drawdown............................................................................24
4.3 Amount and Term.....................................................................24
4.4 Selection of currencies.............................................................25
4.5 Limit on currencies; non-availability...............................................25
4.6 Currency Amounts....................................................................25
4.7 Notification to Banks...............................................................25
4.8 Application of proceeds.............................................................25
4.9 Initial Advances....................................................................25
4.10 Philips Advance.....................................................................26
4.11 Telekabel Bond......................................................................27
4.12 Subsidiary Drawings.................................................................27
4.13 Refinancing the Janco Loan Agreement................................................27
4.14 Telekabel Notes.....................................................................28
5 Interest; alternative interest rates.........................................................28
5.1 Normal interest rate................................................................28
5.2 Applicable Margin...................................................................28
5.3 Interest for late payment...........................................................29
5.4 Notification of interest rate.......................................................29
5.5 Reference Bank quotations...........................................................30
5.6 Market disruption; non-availability.................................................30
6 Repayment, prepayment and cancellation.......................................................31
6.1 Repayment...........................................................................31
6.2 Voluntary prepayment................................................................31
6.3 Additional voluntary prepayment.....................................................31
6.4 Amounts payable on prepayment.......................................................31
6.5 Mandatory prepayment, Excess Cash Flow recapture and cancellation...................31
</TABLE>
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<TABLE>
<S> <C> <C>
6.6 Notice of prepayment................................................................33
6.7 Cancellation of Commitments.........................................................33
6.8 Reduction of Total Commitments......................................................33
6.9 Termination of Commitments..........................................................34
7 Fees and expenses............................................................................35
7.1 Fees................................................................................35
7.2 Expenses............................................................................35
7.3 Value Added Tax.....................................................................35
7.4 Stamp and other duties..............................................................35
8 Payments and Taxes; accounts and calculations................................................37
8.1 No set-off or counterclaim; distribution to the Banks...............................37
8.2 Payments by the Banks...............................................................37
8.3 Non-Banking Days....................................................................37
8.4 Agent may assume receipt............................................................37
8.5 Grossing-up for Taxes...............................................................37
8.6 Qualifying Banks....................................................................38
8.7 Claw-back of Tax benefit............................................................38
8.8 Certification to secure a Tax benefit...............................................38
8.9 Bank accounts.......................................................................39
8.10 Partial payments....................................................................39
8.11 Calculations........................................................................40
8.12 Certificates conclusive.............................................................40
8.13 Effect of monetary union............................................................40
9 Guarantee....................................................................................41
9.1 Limits of Guarantee.................................................................41
9.2 Covenant to pay.....................................................................41
9.3 Guarantors as principal debtors; indemnity..........................................42
9.4 No security taken by Guarantors.....................................................42
9.5 Interest............................................................................42
9.6 Continuing security and other matters...............................................42
9.7 New accounts........................................................................43
9.8 Liability unconditional.............................................................43
9.9 Collateral Instruments..............................................................43
9.10 Waiver of Guarantors' rights........................................................43
9.11 Suspense accounts...................................................................44
9.12 Settlements conditional.............................................................44
9.13 Guarantors to deliver up certain property...........................................44
9.14 Retention of this guarantee.........................................................44
9.15 Changes in constitution or reorganisations of Banks.................................44
9.16 Other Guarantors....................................................................45
9.17 Acceding Guarantors and New Janco...................................................45
10 Representations and warranties...............................................................47
10.1 Repeated representations and warranties.............................................47
10.2 Further representations and warranties..............................................49
10.3 Repetition..........................................................................51
11 Undertakings.................................................................................52
11.1 Positive Covenants..................................................................52
11.2 Negative Covenants..................................................................61
12 Financial covenants..........................................................................66
12.1 Pre Philips Advance Covenants.......................................................66
12.2 Post Philips Advance Covenants......................................................66
12.3 Auditors certificate................................................................67
</TABLE>
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<TABLE>
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13 Events of Default............................................................................68
13.1 Events of default...................................................................68
13.2 Acceleration........................................................................73
13.3 Demand basis........................................................................73
14 Indemnities..................................................................................74
14.1 Miscellaneous indemnities...........................................................74
14.2 Currency of account; currency indemnity.............................................74
14.3 Environmental indemnity.............................................................74
15 Unlawfulness and increased costs; mitigation.................................................76
15.1 Unlawfulness........................................................................76
15.2 Increased costs.....................................................................76
15.3 Exceptions..........................................................................77
15.4 Mitigation..........................................................................77
16 Set-off and pro rata payments................................................................79
16.1 Set-off.............................................................................79
16.2 Pro rata payments...................................................................79
16.3 No release..........................................................................79
16.4 No charge...........................................................................80
17 Assignment, substitution and lending offices.................................................81
17.1 Benefit and burden..................................................................81
17.2 No assignment by Obligors...........................................................81
17.3 Substitution........................................................................81
17.4 Reliance on Substitution Certificate................................................81
17.5 Authorisation of Agent..............................................................82
17.6 Construction of certain references..................................................82
17.7 Lending offices.....................................................................82
17.8 Disclosure of information...........................................................82
18 Arranger, Agent, Security Trustee and Reference Banks........................................83
18.1 Appointment of Agent................................................................83
18.2 Agent's actions.....................................................................83
18.3 Agent's duties......................................................................83
18.4 Agent's rights......................................................................83
18.5 No liability of Arranger, Security Trustee and Agent................................84
18.6 Non-reliance on Arranger, Security Trustee or Agent.................................85
18.7 No Responsibility on Arranger, Security Trustee or Agent for any Obligor's
performance.........................................................................85
18.8 Reliance on documents and professional advice.......................................86
18.9 Other dealings......................................................................86
18.10 Rights of Agent as Bank; no partnership.............................................86
18.11 Amendments; waivers.................................................................86
18.12 Reimbursement and indemnity by Banks................................................87
18.13 Retirement of Agent.................................................................87
18.14 Change of Reference Banks...........................................................88
18.15 Prompt distribution of proceeds.....................................................88
19 Notices and other matters....................................................................89
19.1 Notices.............................................................................89
19.2 Notices through the Agent...........................................................89
19.3 No implied waivers, remedies cumulative.............................................90
19.4 English translations................................................................90
19.5 Counterparts........................................................................90
19.6 No breach of Austrian Agreements....................................................90
</TABLE>
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<TABLE>
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20 Governing law and jurisdiction...............................................................91
20.1 Law.................................................................................91
20.2 Submission to jurisdiction..........................................................91
20.3 Agent for service of process........................................................91
Schedules
1 Part A - The Banks and their Commitments.....................................................92
Part B - Restricted Subsidiaries and Original Guarantors.................................94
Part C - Borrowers.......................................................................95
2 Form of Drawdown Notice......................................................................96
3 Part A - documents and evidence required.....................................................98
Part B - Documents and evidence required................................................101
Part C - Documents and evidence required as conditions..................................102
Part D - Documents and evidence required as conditions..................................103
4 Calculation of Additional Cost..............................................................104
5 Form of Substitution Certificate............................................................106
6 Part A - Compliance Certificate.............................................................109
Part B - Compliance Certificate to be delivered by the auditors of......................111
7 Licences....................................................................................113
8 Form of Deed of Subordination...............................................................115
9 Principal Agreements........................................................................128
10 Part A - Deed of Guarantor Accession........................................................129
Part B - Documents and Evidence to be delivered by an Acceding Guarantor................131
11 Part A - Deed of Borrower Accession.........................................................133
Part B - Documents and Evidence to be delivered by New Janco............................134
12 [Intentionally left blank]..................................................................136
13 Part A - Norwegian Security Documents.......................................................137
Part B - Norwegian Security Documents (if at............................................143
14 Form of Telekabel Note......................................................................144
</TABLE>
<PAGE>
THIS AGREEMENT is dated 8th October 1997 and is amended pursuant to a
Supplemental Agreement dated 8 December 1997 and made BETWEEN:
(1) UNITED AND PHILIPS COMMUNICATIONS B.V. as Parent and a Borrower;
(2) THE ENTITIES listed in part C of schedule 1 as Borrowers;
(3) THE ENTITIES listed in part B of schedule 1 as Guarantors;
(4) THE TORONTO-DOMINION BANK as Arranger;
(5) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set out
in part A of schedule 1;
(6) THE TORONTO-DOMINION BANK as Agent; and
(7) THE TORONTO-DOMINION BANK as Security Trustee.
IT IS AGREED as follows:
1 Purpose and definitions
-----------------------
1.1 Purpose
-------
(a) This Agreement sets out the terms and conditions upon and subject to
which the Banks agree, according to their several obligations, to make
available to the Borrowers a revolving credit facility of up to NLG
1,100,000,000 or its equivalent in Optional Currencies to be used for
the purpose of (i) general corporate purposes of the Restricted Group,
(ii) refinancing and cancellation of the Existing UPC Facility (iii)
refinancing in part the ASLK Facility, (iv) refinancing and
cancellation of the Existing Norkabel Facility, (v) payments to be made
at the closing of the Philips Transaction in accordance with and as
contemplated by the Securities Purchase and Conversion Agreement in an
amount equal to (A) the principal and accrued but unpaid interest of
the UPC PIK Notes and (B) certain fees in connection with the Philips
Transaction, (vi) financing future investments and working capital
needs of the Restricted Group (subject to the provisions of this
Agreement), (vii) refinancing certain Indebtedness owed by members of
the Restricted Group to the Parent and (viii) financing expenses
incurred in connection with the Facility. For the avoidance of doubt
the Facility may not be used to make any payments of principal,
interest or other charges under the Bridge Facility. Furthermore, the
aggregate amount to be made available by the Banks to the Norwegian
Borrowers shall not exceed the Norwegian Loan Amount; and
(b) For the purposes of this Agreement the revolving credit facility shall
only be made available to Telekabel Wien by way of loans against the
issue by Telekabel Wien of Telekabel Notes within the overall limit of
the Facility and, without prejudice to the foregoing, Telekabel Wien
shall, subject to the approval of the managing board of Telekabel Wien
of the amount of such borrowing, be permitted to borrow by way of loans
against the issue of Telekabel Notes upon and subject to the terms of
this Agreement, a sum of up to Austrian Schillings 1,700,000,000 or
such greater amount as shall be agreed upon by the supervisory board of
Telekabel Wien from time to time. Except (i) in the possible case of
loans to CNA and (ii) loans to other members of the Restricted Group
incorporated in Austria in amounts not exceeding its Distributable
Profits at the time thereof, Telekabel Wien shall not use such
borrowings for the purpose of providing loans to any member of the
Restricted Group or any other person.: The possibility to grant loans
does not constitute an obligation to that extent and any loans may be
granted by Telekabel Wien in accordance with Austrian law.
1.2 Definitions
-----------
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In this Agreement, unless the context otherwise requires:
"1997 Budget" means the budget for the Restricted Group for the period
commencing on 1st January, 1997 and ending on 31st December, 1997
contained within the Management Base Case;
"Acceding Guarantors" means those entities which have become a party to
this Agreement as Guarantors pursuant to clause 9.17;
"Additional Cost" means in relation to any period a percentage
calculated for such period at an annual rate determined in accordance
with schedule 4;
"Advance" means (i) (in the case of each Borrower other than Telekabel
Wien) each borrowing of a portion of the Commitments by a Borrower by
way of advance or (as the context may require) the principal amount of
such borrowing for the time being and/or (ii)(in the case of Telekabel
Wien) each borrowing of a portion of the Commitments by Telekabel Wien
against the issue by Telekabel Wien of a Telekabel Note or (as the
context may require) the principal amount of such Telekabel Note for
the time being outstanding;
"Agent" means The Toronto-Dominion Bank of Triton Court, 14-18 Finsbury
Square, London EC2A 1DB or such other person as may be appointed agent
for the Banks pursuant to clause 18.13;
"Annual Budget" means a budget in respect of the Restricted Group for
each financial year containing information of a substantially similar
type and to a substantially similar level of detail as the 1997 Budget
or containing such other information or to such other level of detail
as has, at the relevant time, been approved in writing by the Agent
acting on the instructions of the Majority Banks;
"Arranger" means The Toronto-Dominion Bank of Triton Court, 14-18
Finsbury Square, London EC2A 1DB;
"ASLK Facility" means the secured overdraft facility made available to
Radio Public by ASLK Bank N.V. pursuant to an agreement between Radio
Public and ASLK Bank N.V. dated 13th February 1997;
"Associated Company" of a person means (i) any other person which is
directly or indirectly controlled by, under common control with or
controlling such person or (ii) any other person owning beneficially
and/or legally directly or indirectly 10 per cent. or more of the
equity interest in such person or 10 per cent. of whose equity interest
is owned beneficially and/or legally directly or indirectly by such
person. For the purposes of this definition the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person whether through
the ownership of interests or voting securities, by contract or
otherwise;
"Austrian Agreements" means the following documents and agreements
which have been entered into by the Telekabel Entities:
(a) Vereinbarung (agreement on mutual relations) dated 30th
November 1977 between Telekabel Wien and Kabel-TV-Wien GmbH;
(b) Entgeltvereinbarung (agreement on details of payment), dated
23rd November 1987 between Telekabel Wien and Stadt Wien;
(c) Programmnutzungsvereinbarung (agreement on use of television
and radio programmes) dated 10th December 1987 between
Telekabel Wien and Kabel-TV-Wien GmbH;
2
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(d) Treuhand-und Geschaftsbesorgungsvertrag (trust and agency
agreement) dated 29th November 1988 between Telekabel Wien,
Telekabel-Fernsehnetz Wiener Neustadt/Neunkirchen
Betriebsgesellschaft mbh and Philips Data Systems GmbH;
(e) Kostenvergutung (reimbursement of costs agreement) dated 27th
July 1994 by Telekabel Wien in favour of Kabel-TV Wiener
Neustadt/Neunkirchen GmbH;
(f) Syndikatsvereinbarung (shareholders agreement) dated 28th June
1995 between Osterreichische Philips Industrie GmbH, CNA and
Kabel-TV-Wien GmbH;
(g) Geschaftsordnung (internal organisational rules) Telekabel
Wien GmbH dated 28th June 1995 between Osterreichische Philips
Industrie GmbH, CNA and Kabel-TV-Wien GmbH;
(h) Entgeltvereinbarung (agreement on details of payment) dated
9th February 1988 between Telekabel Graz GmbH and Grazer
Kabel-TV GmbH;
(i) Grundsatzvereinbarung (basic agreement on mutual relations)
dated 30th November 1977 entered into between Osterreichische
Philips Industrie GmbH and Kabel-TV-Wien GmbH;
(j) Dividendengarantie (guarantee of dividends) dated 30th
November 1987 entered into by Osterreichische Philips
Industrie GmbH in favour of Kabel-TV-Wien GmbH;
(k) Grundsatzvereinbarung (basic agreement on mutual relations and
operations of project company (Telekabel Graz GmbH)) dated 5th
May 1983 entered into between Osterreichische Philips
Industrie GmbH and Grazer Kabel-TV GmbH;
(l) Dividendengarantie (guarantee of dividends) dated 14th
November 1988 entered into by Osterreichische Philips
Industrie GmbH in favour of Grazer Kabel-TV GmbH;
(m) Grundsatzvereinbarung (basic agreement on mutual relations and
operation of Telekabel Klagenfurt GmbH) dated 6th August 1979
entered into between Osterreichische Philips Industrie GmbH
and Landeshauptstadt Klagenfurt;
(n) Dividendengarantie (guarantee of dividends) dated 18th
December 1990 entered into by Osterreichische Philips
Industrie GmbH in favour of Landeshauptstadt Klagenfurt;
(o) Grundsatzvereinbarung (basic agreement on mutual relations and
operation of Telekabel-Fernsehnetz Region Buden
Betriebsgesellschaft mbH) dated 18th February 1980 entered
into between Osterreichische Philips Industrie GmbH and
Kabel-TV Sud GmbH;
(p) Grundsatzvereinbarung (basic agreement on mutual relations and
operation of Telekabel-Fernsehnetz Wiener Neustadt/Neunkirchen
Gesellschaft mbH) dated 23rd May 1979 entered into between
Osterreichische Philips Industrie GmbH and Kabel-TV Wiener
Neustadt GmbH; and
(q) Vereinbarung (agreement relating to remunerating Dr. Alfreda
Bergmann-Fiala) dated 30th November 1993 entered into between
Telekabel Wien and Kabel-TV-Wien GmbH;
"Austrian Licences" means those licences specified as Austrian Licences
in schedule 7;
"Austrian Security Document" means the pledge over receivables given to
the Security Trustee by Telekabel Wien in the agreed form;
3
<PAGE>
"Authorised Officer" means that officer or officers of the Parent
authorised to sign Compliance Certificates, Drawdown Notices and other
notices, requests, or confirmations referred to in this Agreement or
relating to the Facility;
"Availability Period" means the period from the date of this Agreement
and ending on whichever is the earlier of (i) the Termination Date or
(ii) the date on which (a) the Parent cancels the whole of the undrawn
Commitments under clause 6 or (b) the Total Commitments are reduced to
zero pursuant to clause 6, 13.2 or 15.1;
"Available Facility Amount" means at any time the amount by which the
Total Commitments exceed the aggregate Guilder Amount of all Advances
outstanding at such time;
"Banking Day" means a day (other than Saturday or Sunday) on which
dealings in deposits in Guilders or the relevant Optional Currency are
carried on in the London Interbank Market and (if any calculations in
respect of, or transfer of funds in, Guilders and/or an Optional
Currency is required to be made on such day) on which banks and foreign
exchange markets are open for business in the City of London and
Amsterdam or the principal financial centre in the jurisdiction of the
Optional Currency concerned;
"Banks" means the banks and financial institutions listed in part A of
schedule 1 and includes their successors in title and Substitutes;
"Belgian Francs" and "BEF" means the lawful currency for the time being
of Belgium;
"Belgian Licences" means those licences specified as Belgian Licences
in schedule 7;
"Borrowed Money" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks, (ii) any bond, note, loan stock,
debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than
on a non-recourse basis), (v) payments for assets acquired or services
supplied deferred for a period of over 90 days after the relevant
assets were or are to be acquired or the relevant services were or are
to be supplied, (vi) finance leases and hire purchase contracts, (vii)
any other transaction (including without limitation forward sale or
purchase agreements) having the commercial effect of a borrowing or
raising of money or of any of (ii) to (vi) above and (viii) guarantees
in respect of Indebtedness of any person falling within any of (i) to
(vii) above (for the avoidance of doubt without double counting
guarantees given by the member of the Restricted Group for the
Indebtedness of another member of the Restricted Group) provided that
Indebtedness which has been cash collateralised shall not be included
in any calculation of Borrowed Money to the extent so cash
collateralised;
"Borrowers" means the Parent and the other entities whose names are set
out in part C of schedule 1 together with, after its accession pursuant
to clause 3.5, New Janco and reference to a "Borrower" means any one of
them, as the context may require provided that Telekabel Wien shall not
be a Borrower for the purposes of this Agreement until the provisions
of clause 3.6(b) have been complied with and provided further that, for
the purposes of this Agreement, the term "Borrower", when used in
connection with Telekabel Wien, shall mean Telekable Wien as an issuer
of Telekabel Notes in accordance with the terms and conditions of this
Agreement;
"Bridge Agent" means The Toronto-Dominion Bank of Triton Court, 14/18
Finsbury Square, London EC2A 1BD or such successor bank or financial
institution as is appointed agent for the banks pursuant to the terms
of the Bridge Facility;
"Bridge Borrower" means Belmarken Holding B.V. a limited liability
company incorporated under the laws of The Netherlands with its
registered office at Amsterdam and its business office at (1076EE)
Amsterdam, Frederik Roeskestraat 123, The Netherlands;
"Bridge Facility" means the senior bridge facility made available to
the Bridge Borrower pursuant to the Bridge Facility Agreement the
proceeds of which (other than those to be used to
4
<PAGE>
fund the interest reserve) are to be used by the Bridge Borrower in
satisfaction of the consideration payable to the Parent for the
purchase of the interests in the Unrestricted Group pursuant to the
Restructuring such proceeds to be used by the Parent for the purpose of
making certain payments in connection with the Securities Purchase and
Conversion Agreement;
"Bridge Facility Agreement" means the agreement entered or to be
entered into between inter alios the Bridge Borrower and the Bridge
Agent in relation to the Bridge Facility provided that none of the
lenders under the Bridge Facility shall in any circumstances have
recourse to any member of the Restricted Group or any of their
respective assets unless such lenders have entered into inter-creditor
arrangements with the Banks, satisfactory to all the Banks;
"Bridge Termination Date" means the date upon which the Bridge Facility
has been repaid in full and the commitments of the banks thereunder
have been irrevocably cancelled in full, as notified by the Bridge
Agent to the Agent and the Parent;
"Cable Systems" means the telecommunications and/or television systems
constructed or to be constructed in the areas covered by the Licences
and includes any part of such system and all modifications,
substitutions, replacements, renewals and extensions made to such
systems;
"Cable TV Annualised Net Operating Cash Flow" means, for the Restricted
Group, twice the aggregate of the Cable TV Net Operating Cash Flow in
respect of the most recently ended Six Month Period for the Restricted
Group in respect of which Monthly Management Accounts have been
delivered to the Agent under this Agreement;
"Cable TV Net Operating Cash Flow" means in respect of each Six Month
Period or financial year of the Restricted Group, the aggregate of (i)
the aggregate of the Net Operating Cash Flow of each of the Restricted
Subsidiaries referable solely to their respective cable television
businesses and (ii) the unconsolidated Net Operating Cash Flow of the
Parent adjusted by adding back 50 per cent. of the overhead costs
incurred by the Parent, as determined in accordance with GAAP and as
shown in the financial statements for such Six Month Period or
financial year prepared and delivered to the Agent under this
Agreement;
"Call Option Agreement" means the call option agreement dated 8th
January 1997 and made between the Parent and HMC;
"CNA" means Cable Networks Austria Holding b.v., a limited liability
company incorporated under the laws of the Netherlands with its
registered office at Amsterdam and its business office at (1076EE)
Amsterdam, Fredrik Roeskestraat 123, The Netherlands;
"CNA Share Security" means the share pledge to be given to the Security
Trustee by the Parent in respect of its shareholding in CNA in the
agreed form;
"Collateral Instruments" means notes, bills of exchange, certificates
of deposit and other negotiable and non-negotiable instruments,
guarantees and any other documents or instruments which contain or
evidence an obligation (with or without security) to pay, discharge or
be responsible directly or indirectly for, any Indebtedness or
liabilities under this Agreement and includes Encumbrances;
"Commitment" means, in relation to a Bank, at any relevant time the
amount set opposite its name in part A of schedule 1 and/or, in the
case of a Substitute, the amount novated as specified in the relevant
Substitution Certificate, as reduced, in each case, by any relevant
term of this Agreement and so that, if at such time the Total
Commitments have been reduced to zero, references to a Bank's
Commitment shall be construed as a reference to that Bank's Commitment
immediately prior to such reduction to zero;
"Compliance Certificate" means either (i) a certificate substantially
in the form set out in schedule 6A in relation to the compliance (or
otherwise) with the undertakings in clause 12 issued by the Authorised
Officer of the Parent in relation to quarterly financial statements or
(ii)
5
<PAGE>
a certificate substantially in the form of schedule 6B in relation to
the compliance (or otherwise) with the undertakings in clause 12 issued
by the auditors of the Parent in relation to annual financial
statements;
"Contribution" means, in relation to a Bank, the principal amount of
the Advances owing to such Bank at any relevant time;
"Deed of Borrower Accession" means the deed to be executed and
delivered by each entity which is to accede to this Agreement as a
Borrower, each substantially in the form of schedule 11 part A, mutatis
mutandis (or such other document as the Banks may require which has the
same, or substantially the same, effect);
"Deed of Guarantor Accession" means a deed to be executed and delivered
by any Acceding Guarantor pursuant to clause 9.17 substantially in the
form of schedule 10 part A;
"Deed of Subordination" means a deed of subordination to be entered
into between the Security Trustee and any Relevant Person pursuant to
the terms of this Agreement substantially in the form of schedule 8
with such changes as are satisfactory to the Banks;
"Default" means any Event of Default or any event or circumstance which
would, upon the giving of a notice by the Agent and/or the expiry of
the relevant period and/or the fulfilment of any other condition (in
each case as specified in clause 13.1), constitute an Event of Default;
"Derivatives Contract" means a contract, agreement or transaction which
is:
(i) a rate swap, basis swap, commodity swap, forward rate transaction,
commodity option, equity (or equity or other index) swap or
option, bond option, interest rate option, foreign exchange
transaction, collar or floor, currency swap, currency option or
any other similar transaction; and/or
(ii) any combination of such transactions,
in each case, whether on-exchange or otherwise;
"Distributable Profits" means, in relation to any entity incorporated
in Austria, the distributable profits of such entity as calculated in
accordance with generally accepted accounting provisions prevailing in
Austria which may be disbursed as dividends and for which a
shareholder's resolution authorising such distribution has been passed
save that, in the case of any member of the Restricted Group
incorporated in Austria only, the Relevant Reserves may not be included
in the calculation of distributable profits of such entity apart from
by way of charges made to the profit and loss account of such entity in
respect of the amortisation of the good-will represented by such
Relevant Reserves and to extinguish existing negative balances on the
profit and loss account of such entity;
"Dollars" and "$" means the lawful currency for the time being of the
United States of America;
"Disclosure Letter" means the letter from the Parent to the Agent of
even date herewith, the form and content of which have previously been
approved by the Agent;
"Drawdown Date" means the date, being a Banking Day falling with the
Availability Period, on which an Advance is or is to be drawn down;
"Drawdown Notice" means a notice in the form or substantially in the
form of schedule 2, duly completed with particulars of the relevant
Advance;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust
arrangement for the purpose of providing security or other security
interest of any kind securing any obligation of any person or any other
6
<PAGE>
arrangement having the effect of conferring rights of retention or
other disposal rights over an asset (including without limitation title
transfer and/or retention arrangements having a similar effect or a
deposit of money with the primary intention of affording a right of
set-off) and includes any agreement to create any of the foregoing but
does not include liens arising in the ordinary course of trading by
operation of law and not by way of contract;
"Environmental Claim" means any claim, notice prosecution, demand,
action, official warning, abatement or other order (conditional or
otherwise) relating to Environmental Matters or any notification or
order requiring compliance with the terms of any Environmental Licence
or Environmental Law;
"Environmental Law" includes all or any law, statute, rule, regulation,
treaty, by-law, code of practice, order, notice, demand, decision of
the courts or of any governmental authority or agency or any other
regulatory or other body in any jurisdiction relating to Environmental
Matters;
"Environmental Licence" includes any permit, licence, authorisation,
consent or other approval required at any time by any Environmental
Law;
"Environmental Matters" includes (a) the generation, deposit, disposal,
keeping, treatment, transportation, transmission, handling,
importation, exportation, processing, collection, sorting, presence or
manufacture of any waste or any Relevant Substance; (b) nuisance,
noise, defective premises, health and safety at work or elsewhere; and
(c) the pollution, conservation or protection of the environment (both
natural and built) or of man or any living organisms supported by the
environment or any other matter whatsoever affecting the environment or
any part of it;
"Event of Default" means any of the events or circumstances described
in clause 13.1;
"Excess Cash Flow" means the aggregate of the Net Operating Cash Flow
of the Restricted Group calculated for the most recently ended
financial year (beginning with the financial year ending on 31st
December 2001), as shown in the relevant Compliance Certificate less
(i) any interest and other charges in respect of Borrowed Money of the
Restricted Group, (ii) repayments and/or prepayments of any Borrowed
Money of the Restricted Group and (iii) capital expenditure of the
Restricted Group, whether or not incurred, to the extent that the same
is included in the Annual Budget for such period as delivered to the
Agent under this Agreement, in the case of (i) and (ii) as were paid
during such Six Month Periods;
"Existing UPC Facility" means the US$150,000,000 revolving credit
facility dated 29th January 1996 and the US$150,000,000 syndicated
acquisition facility dated 15th April 1996, in each case made available
to the Parent by ABN-AMRO Bank N.V.;
"Existing Norkabel Facility" means the NOK 540,000,000 bridge facility
made available to Norkabel and its Subsidiaries by ING Bank N.V.
pursuant to an agreement dated 5th March 1997 between, inter alios, ING
Bank N.V. and Norkabel;
"Facility" means the revolving credit facility (including in the case
of Telekabel Wien, the facility permitting Telekabel Wien to borrow the
Commitments against the issue of Telekabel Notes) granted by the Banks
to the Borrowers under this Agreement;
"Finance Documents" means this Agreement and the Security Documents and
the Interest Rate Hedging Arrangements (as defined in the Security
Trust Deed);
"GAAP" means generally accepted accounting principles and practices in
the Netherlands;
"Guarantee" means the guarantee of the Guarantors contained in clause 9
and includes each separate or independent stipulation or agreement by
the Guarantors contained in clause 9;
7
<PAGE>
"Guaranteed Liabilities" means all moneys, obligations and liabilities
expressed to be guaranteed by the Guarantors in clause 9.2;
"Guarantors" means (i) the Original Guarantors and (ii) the Acceding
Guarantors Provided always that Radio Public shall not be a Guarantor
for the purposes of this Agreement until such time as it shall have
amended its Articles of Association to a form acceptable to the Agent
in accordance with clause 11.1(aa) which form permits Radio Public to
give the Guarantee (subject to the limits set out in clause 9.1);
"Guilder Amount" means (a) in relation to an Advance to be drawn down
in Guilders, the amount in Guilders so drawn down and (b) in relation
to an Advance to be drawn down in an Optional Currency, the amount in
Guilders which would be required to purchase the principal amount of
that Advance as determined in accordance with clause 4.6, in each case
as reduced by any repayment or prepayment under this Agreement;
"Guilders" and "NLG" mean the lawful currency for the time being of the
Netherlands and in respect of all payments to be made under this
Agreement in Guilders mean immediately available, freely transferable
cleared funds;
"HMC" means Helsinki Media Company Oy;
"Holding Company" in relation to a person, means an entity of which
that person is a Subsidiary;
"Incapacity" means, in relation to a person, the insolvency,
liquidation, dissolution, winding-up, administration, receivership or
other incapacity of that person whatsoever (and in the case of a
partnership, includes the termination or change in composition of the
partnership);
"Indebtedness" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"Information Memorandum" means the Information Memorandum dated 9th
September, 1997 and any subsequent update approved by the Parent
distributed by the Arranger at the request of the Parent in connection
with this Agreement;
"Intellectual Property Rights" means any patent, trademark, service
mark, registered design, trade name or copyright required to carry on
the business of any member of the Restricted Group;
"Janco" means Janco Kabel-TV A/S (now known as Janco Multicom A/S), a
corporation incorporated in Norway (organisation no. 919 394 056)
having its corporate seat at Ensjoveien 7, 0655 Oslo, Norway or,
following the Norwegian Merger, the successor entity of Janco Kabel-TV
A/S;
"Janco Loan Agreement" means the loan agreement dated 18th June 1997
made between the Parent and Janco in the amount of NOK 571,000,000;
"LIBOR" means, in relation to a particular period, the arithmetic mean
(rounded upwards, if necessary, to five decimal places) of the London
interbank offered rates for deposits of the currency in question for a
period equal to such period at or about 11 a.m. on the Quotation Date
for such period as displayed on the relevant page of the Reuter Monitor
Money Rates Service (or such other page as may replace such page on
such service for the purpose of displaying London interbank offered
rates of leading banks for deposits of that currency) or, if on such
date the offered rates for the relevant period of fewer than two
leading banks are so displayed, the arithmetic mean (rounded upwards,
if necessary, to five decimal places) of such rates quoted to the Agent
by each of the Reference Banks at the request of the Agent;
8
<PAGE>
"Licences" means the Belgian Licences, the Austrian Licences and the
Norwegian Licences and, if applicable, any other licences, franchises
and permits issued to any member of the Restricted Group under any
Telecommunications and Cable Laws;
"Loan" means the aggregate principal amount owing to the Banks under
this Agreement at any relevant time (including, for the avoidance of
doubt, the aggregate principal amount of all Telekabel Notes which are
then issued and outstanding);
"Majority Banks" means at any relevant time Banks (a) the aggregate of
whose Contributions exceeds 662/3 per cent of the Advances or (b) (if
no principal amounts are outstanding under this Agreement) the
aggregate of whose Commitments exceeds 662/3 per cent of the Total
Commitments;
"Management Base Case" means the management base case financial and
operational projections for the Restricted Group produced by the Parent
in the form approved by the Agent prior to the date of this Agreement;
"Margin" means the rate per annum calculated in accordance with clause
5;
"Material Adverse Effect" means a material adverse effect on the
ability of the members of the Restricted Group (taken as a whole) or
the Parent to perform all or any of their or its respective material
obligations under or otherwise comply with the terms of this Agreement
or any Security Document;
"month" or "months" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that (i) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it
shall end on the last Banking Day in such later calendar month and (ii)
if such numerically corresponding day is not a Banking Day, the period
shall end on the next following Banking Day in such later calendar
month but if there is no such Banking Day it shall end on the preceding
Banking Day and "monthly" shall be construed accordingly;
"Maturity Date" means, subject to clause 8.3, in relation to an
Advance, the last day of its Term;
"Monthly Management Accounts" means the monthly management accounts of
the Restricted Group to be delivered (or which may be delivered) to the
Agent pursuant to clause 11.1 in a form and to accounting policies
consistent with the Management Base Case and containing information of
a substantially similar type as is required by such form;
"Necessary Authorisations" means all approvals, authorisations and
licences (other than the Licences) from, all rights granted by and all
filings, registrations and agreements with any person including,
without limitation, any government or other regulatory authority
necessary in order to enable each member of the Restricted Group to
carry on such business as may be permitted by the terms of this
Agreement and which is carried on at the relevant time;
"Net Derivatives Liability" means, at any time, the net liability (if
any) at such time of the Parent and its Subsidiaries taken as a whole
in respect of Derivatives Contracts determined by reference to the
amounts (as determined by the Agent), which would be payable or
receivable by the Parent and its Subsidiaries if all Derivatives
Contracts to which the Parent and its Subsidiaries were party at such
time were terminated at such time and replaced by the obligation to
make a payment reflecting the economic burden or value to the Parent or
the relevant Subsidiary of the payment flows under those Derivatives
Contracts remaining at the time of termination;
"Net Income" means, in relation to any member of the Restricted Group
for any Six Month Period or any financial year, the net profit after
Taxes of such member of the Restricted Group
9
<PAGE>
arising out of the use and operation of its Cable System for such Six
Month Period or financial year, as determined in accordance with GAAP
and as shown in the financial statements for such Six Month Period or
financial year prepared and delivered to the Agent pursuant to clause
11.1;
"Net Operating Cash Flow" means in respect of each Six Month Period or
financial year of any member of the Restricted Group, the Net Income of
such member of the Restricted Group (plus any depreciation,
amortisation, other non-cash charges (such as deferred taxes) and
interest and other charges in respect of Borrowed Money) for such Six
Month Period adjusted as follows:
(a) minus extraordinary income of such member of the Restricted
Group for such Six Months Period;
(b) minus any interest income of such member of the Restricted
Group for such Six Months Period;
(c) minus all sums constituting management fees accrued but not
received in cash in respect of such Six Month Period to such
member of the Restricted Group by any member of the
Unrestricted Group or by any Relevant Person; and
(d) minus any profits or losses attributable to the interest of
such member of the Restricted Group in any member of the
Unrestricted Group
as determined in accordance with GAAP and as shown in the financial
statements for such Six Month Period or such financial year prepared
and delivered to the Agent pursuant to clause 11.1;
"New Janco" shall have the meaning ascribed to such term in clause
11.2(b);
"New Norkabel" shall have the meaning ascribed to such term in clause
11.2(b);
"Norkabel" means Norkabelgruppen A/S, a corporation incorporated in
Norway (organisation no. 947 029 150) and having its corporate seat at
Soerkedalsveien 6, N-0305 Oslo, Norway, whose rights and obligations
under this Agreement are to be assumed by New Janco after the Norwegian
Merger;
"Norwegian Borrowers" means Norkabel and New Janco;
"Norwegian Krone" and "NOK" means the lawful currency for the time
being of Norway;
"Norwegian I/C Indebtedness" means the indebtedness of Norkabel under
the unsecured promissory note in the principal amount of $70,780,401.40
issued by Norkabel on 26 October 1995 as amended pursuant to an
amendment agreement dated 5th March 1997;
"Norwegian Licences" means any licence required from Norwegian public
authorities in order for Norkabel, Janco or New Janco (or any of their
Subsidiaries) to operate their Cable Systems;
"Norwegian Loan Amount" means the maximum of NLG 350,000,000 or the
equivalent in Optional Currencies to be lent by the Banks to the
Norwegian Borrowers for the purpose of (i) refinancing and cancellation
of the Existing Norkabel Facility, (ii) refinancing the Janco Loan
Agreement in accordance with the terms of this Agreement and (iii)
general corporate purposes and working capital of the Norwegian
Borrowers;
"Norwegian Merger" means:
(a) the merger of Norkabelgruppen A/S, Norkabel A/S and Oslo
Kabelanlegg A/S to form New Norkabel; and
(b) the merger of New Norkabel with Janco Kabel-TV A/S to form New
Janco;
10
<PAGE>
"Norwegian Security Documents" means the documents listed in schedule
13;
"Norwegian Share Security" means the share pledge given to the Security
Trustee by the Parent in respect of its shareholding in Janco (and,
after the Norwegian Merger, New Janco) and, if any Advances are made to
any Norwegian Borrower or if the Philips Advance is made prior to the
Norwegian Merger, the share pledge given to the Security Trustee (i) by
Janco in respect of its shareholding in Norkabel and (ii) by Norkabel
in respect of its shareholding in Norkabel A/S, Kanal 2 A/S and Oslo
Kabelanlegg A/S in the agreed form;
"Obligor" means each Borrower and each Guarantor Provided that Radio
Public shall not be an Obligor for the purposes of this Agreement until
such time as it shall have amended its Articles of Association to a
form acceptable to the Agent in accordance with clause 11.1(aa) which
form permits Radio Public to give the Guarantee (subject to the limits
set out in clause 9.1) and Provided that Telekabel Wien shall not be an
Original Guarantor for the purposes of this Agreement until the
provisions of clause 3.6(b) have been complied with;
"Option Agreements" means the Put Option Agreement and the Call Option
Agreement;
"Option Date" means either (i) the date (falling on or prior to 29th
June, 2001) upon which the Parent exercises its rights to purchase all
of the shares in Janco that are owned by HMC pursuant to the Call
Option Agreement or (ii) the date (falling on or prior to 15th August,
2001) upon which HMC exercises its rights to sell all of its shares in
Janco to the Parent pursuant to the Put Option Agreement, whichever is
the earlier;
"Optional Currency" means any currency, other than Guilders, which is
freely transferable, freely convertible into Guilders and dealt in on
the London Interbank Market;
"Original Guarantors" means the Parent and those Subsidiaries of the
Parent whose names, country of incorporation and principal place of
business are set out in part B of schedule 1 Provided that Radio Public
shall not be an Original Guarantor for the purposes of this Agreement
until such time as it shall have amended its Articles of Association to
a form acceptable to the Agent in accordance with clause 11.1(aa) which
form permits Radio Public to give the Guarantee (subject to the limits
set out in clause 9.1) and Provided that Telekabel Wien shall not be an
Original Guarantor for the purposes of this Agreement until the
provisions of clause 3.6(b) have been complied with;
"Parent" means United and Philips Communications B.V. a limited
liability company incorporated under the laws of the Netherlands with
its registered office at Eindhoven and its business office at (1076EE)
Amsterdam, Fredrik Roeskestraat 123, The Netherlands;
"Permitted Borrowings" means:
(a) any Borrowed Money arising hereunder or under the Security
Documents;
(b) until the date of the first Advance hereunder, any Borrowed
Money under the Existing UPC Facility and until the date of
the first Advance to any Norwegian Borrower, any Borrowed
Money under the Existing Norkabel Facility;
(c) any Borrowed Money approved in writing by the Agent (acting on
the instructions of the Majority Banks);
(d) any Subordinated Debt;
(e) the unsecured loan of 100,000,000 Austrian Schillings made by
Bank Austria to Telekabel Wien;
(f) the letter of credit issued to ING Bank N.V. in relation to
the Option Agreements;
11
<PAGE>
(g) any Borrowed Money arising under deferred payment agreements
provided that such Borrowed Money is deferred for no longer
than 180 days and is in an aggregate amount of not more than
NLG 60,000,000;
(h) any Borrowed Money where the debtor and creditor are both
members of the Restricted Group provided that if the creditor
is the Parent, such arrangements as may be satisfactory to the
Agent are entered into so as to ensure that all of the
Parent's right, title, benefit and interest in respect of such
Borrowed Money is assigned to the Security Trustee;
(i) any Borrowed Money not exceeding NLG 500,000 in aggregate owed
to UIH in relation to the secondment of UIH employees to the
Parent;
(j) any deposits or prepayments constituting Borrowed Money
received by a member of the Restricted Group from a subscriber
for its services;
(k) any Borrowed Money of any Unrestricted Subsidiary which
becomes a Restricted Subsidiary which is existing on the date
that such Unrestricted Subsidiary becomes a Restricted
Subsidiary; and
(l) any Borrowed Money not falling within paragraphs (a) to (k)
above (apart from (e)) and not exceeding at any time more than
NLG 30,000,000 in aggregate (or its equivalent in other
currencies);
"Permitted Disposal" means the sale by any member of the Restricted
Group of any ownership interest in any member of the Unrestricted Group
on bona fide arms' length commercial terms and any other disposal made
by any member of the Restricted Group of interests that it has in, or
of Borrowed Money it is owed by members it is owed by of the
Unrestricted Group as part of the Restructuring;
"Permitted Encumbrances" means:
(a) any Encumbrance arising hereunder or under any Security
Document;
(b) until the date of the first Advance hereunder, any Encumbrance
securing the Existing UPC Facility and until the date of the
first Advance to any Norwegian Borrower any Encumbrance
securing the Existing Norkabel Facility;
(c) until the date of the first Advance hereunder any Encumbrance
agreed to be created by the Parent over its shares in CNA in
favour of ABN AMRO Bank N.V.;
(d) any liens arising in the ordinary course of trading by way of
contract which secure Borrowed Money falling within part (g)
of the definition of "Permitted Borrowings" above or which
secure any Indebtedness under any agreement for the supply of
goods or services in respect of which payment is not deferred
for more than 90 days;
(e) any Encumbrance over any asset acquired by any member of the
Restricted Group after the date hereof so long as the same is
discharged within six months of such acquisition;
(f) any Encumbrance imposed by any taxation or governmental
authority and which is being contested in good faith;
(g) any Encumbrance approved in writing by the Agent (acting on
the instructions of the Majority Banks); and
(h) any Encumbrance not falling within paragraphs (a) to (g) above
and securing Indebtedness in aggregate not exceeding NLG
10,000,000 or its equivalent in other currencies;
12
<PAGE>
"Permitted Payments" means, in so far as the same are applied by the
Parent in satisfaction of the obligations of the Bridge Borrower under
the Bridge Facility:
(a) the proceeds of any equity share capital that has been
subscribed for in the Parent for cash (other than pursuant to
a public offering) on terms that the same is not redeemable or
convertible into any other class of share or loan capital in
any member of the Restricted Group (in either case prior to
the date on which all amounts outstanding under this Agreement
have been irrevocably paid in full and no amounts are capable
of being so outstanding) and does not carry the right to any
dividend or other distribution (unless the same is not
prohibited by the application of clause 11.2(k)(i)), or on
such other terms as are satisfactory to the Majority Banks;
(b) dividends paid to members of the Restricted Group by members
of the Unrestricted Group;
(c) Subordinated Debt made available to the Parent; and
(d) any other payments agreed by all of the Banks;
"Philips Advance" means the Advance to be made to the Parent in
accordance with the terms of this Agreement to finance in part the
Philips Transaction;
"Philips Transaction" means the transactions to be undertaken in
accordance with and as contemplated by the terms of the Securities
Purchase and Conversion Agreement;
"Principal Agreements" means the documents and agreements listed in
schedule 9;
"Pro-forma Debt Service" means the aggregate of (i) the total forecast
amount of interest (calculated by reference to the rate of interest in
effect in relation to the relevant Borrowed Money of the Restricted
Group on the date on which the calculation falls to be made) and any
other charges payable in respect of Borrowed Money of the Restricted
Group in respect of the period of twelve months immediately following
the date on which any calculation under this Agreement falls to be
made, (ii) the principal amount of any Borrowed Money of the Restricted
Group due to be repaid in accordance with the terms of such Borrowed
Money during such period and (iii) the amount of dividends payable in
cash in respect of any preference shares issued by the Parent;
"Put Option Agreement" means the Put Option Agreement dated 8th January
1997 and made between the Parent and HMC;
"Qualifying Bank" means a person, being a bank or financial institution
(whether incorporated in the United Kingdom or elsewhere), which is
eligible to have payments made to it by any Borrower under this
Agreement without any deduction or withholding in respect of Taxes
either (i) by virtue of a double taxation treaty (assuming for this
purpose only that a direction or consent such as is referred to in
clause 8.8 has been given), or (ii) by virtue of the fact that no such
deduction or withholding is imposed in the jurisdiction to which the
relevant Borrower is subject;
"Quarterly Management Accounts" means the quarterly management accounts
of the Restricted Group to be delivered (or which may be delivered) to
the Agent pursuant to clause 11 in a form and to accounting policies
consistent with the Management Base Case and containing information of
a substantially similar type as is required by such form;
"Quarter Day" means 31st March, 30th June, 30th September and 31st
December in any year;
"Quarterly Period" means each period of approximately three months
commencing on the day after a Quarter Day and ending on the next
following Quarter Day;
13
<PAGE>
"Quotation Date" means, in relation to a Term or other period for which
LIBOR is to be determined, the date on which quotations would
customarily be provided by leading banks in the London Interbank Market
for deposits in the relevant currency for delivery on the first day of
that Term or other period;
"Radio Public" means Radio Public S.A., a company incorporated in
Belgium and having its registered office at 140, avenue Chazaal, 1030
Brussels, Belgium, registered in the register of commerce of Brussels
under no. 69,463 and in the register of commerce of Leuven under no.
44697;
"Radio Public Bond" means the registered loan bonds issued by Radio
Public on 17th July 1995 with an aggregate nominal amount of BEF
3,611,250,000;
"Reduction Date" means each Quarter Day during the Reduction Period
beginning with 31st December 2001;
"Reduction Period" means the period starting on 30th September, 2001
and ending on the Termination Date;
"Reference Banks" means the principal London offices of the Agent, CIBC
Wood Gundy Plc, HSBC Investment Bank plc and/or any other Bank
appointed as such pursuant to clause 18.14;
"Relevant Date" means the earliest date after the date of the Philips
Advance on which, in respect of each of the two most recent previous
consecutive Quarterly Periods, the ratio of Total Debt to Total
Annualised Net Operating Cash Flow (calculated on the last day of each
such Quarterly Period), each as demonstrated in the Compliance
Certificate for the Quarterly Period ending immediately prior to such
date, is less than 3:1;
"Relevant Janco Person" means, other than the members of the Restricted
Group, any shareholder of Janco or New Janco, any Subsidiary or
Associated Company of such shareholder or any Holding Company of such
shareholder or any Associated Company of such Holding Company;
"Relevant Jurisdiction" means each jurisdiction in which a member of
the Restricted Group is incorporated or formed or in which such member
of the Restricted Group has its principal place of business or owns any
material assets;
"Relevant Person" means any shareholder of the Parent (other than
Stichting Administratiekantoor UPC B.V. or any successor entity that is
set up to administer the Stock Option Plan), any Subsidiary or
Associated Company of such shareholder or any Holding Company of such
shareholder or any Associated Company of any such Holding Company;
"Relevant Reserves" means the non-restricted capital reserves of
members of the Restricted Group incorporated in Austria created in
mid-1995 in connection with the corporate reorganisation of those
entities which reserves will be reduced during any financial year of
such entity by the amount of any amortisation of goodwill, created at
such time as a result of such reorganisation during such financial
year;
"Relevant Substance" means any substance whatsoever (whether in a solid
or liquid form or in the form of a gas or vapour and whether alone or
in combination with any other substance) or waste which is capable of
causing harm to man or any other living organism supported by the
environment, or damaging the environment or public health or welfare;
"Relevant Telekabel Person" means, other than the members of the
Restricted Group, any shareholder of any Telekabel Entity, any
Subsidiary or Associated Company of such shareholder or any Holding
Company of such shareholder or any Associated Company of such Holding
Company;
14
<PAGE>
"Restricted Group" means the Parent and the Restricted Subsidiaries of
the Parent from time to time;
"Restricted Subsidiaries" means those Subsidiaries of the Parent whose
names, country of incorporation and principal place of business are set
out in part B of schedule 1 together with such Unrestricted
Subsidiaries that have become members of the Restricted Group pursuant
to clause 11.1(t);
"Restructuring" means the proposed transfer for cash consideration (to
be financed by the Bridge Facility or left outstanding on inter-company
account which amounts will not be repayable to the Parent or Radio
Public whilst any amounts are outstanding under the Bridge Facility
Agreement) of the interests of Radio Public and the Parent in, and of
the Borrowed Money owing to the Parent by, the Unrestricted Group to
the Bridge Borrower on terms and conditions satisfactory to all of the
Banks and, for the avoidance of doubt, if the Banks agree that the
consideration may be other than cash, provided that subordination
arrangements satisfactory to all the Banks and have been entered into
in relation to any Indebtedness owing from the Parent to the Bridge
Borrower as a result of all or part of the proceeds of the Bridge
Facility being on-lent to the Parent;
"RP Share Security" means the share pledge given to the Security
Trustee by the Parent in respect of its shareholding in Radio Public in
the agreed form;
"S.A.R." means the stock appreciation right to be issued to Philips
Media Networks B.V. by the Parent as part of the consideration for the
Philips Transaction in accordance with the terms of the Securities
Purchase and Conversion Agreement;
"Security Documents" means the Share Securities, the Austrian Security
Document, the Norwegian Security Documents and the Security Trust Deed
and all other mortgages, charges, pledges, guarantees, inter-creditor
agreements or deeds and other instruments from time to time entered
into in favour of the Agent and/or the Security Trustee and/or the
Banks by way of guarantee or other assurance and/or security for or (in
the case of inter-creditor agreements) otherwise in relation to amounts
owed to the Banks, the Arranger, the Agent or the Security Trustee in
respect of any Indebtedness of the Borrowers or the Guarantors under
this Agreement;
"Security Providers" means those persons (other than Obligors) that
have entered into any of the Security Documents from time to time;
"Securities Purchase and Conversion Agreement" means the securities
purchase and conversion agreement entered or to be entered into between
Philips Media B.V. (1), Philips Media Networks B.V. (2), UIH (3), Joint
Venture, Inc. (4) and the Parent (5), including all exhibits and
schedules thereto, in a form satisfactory to the Banks;
"Security Trustee" means the Agent in its capacity as security trustee
for the purposes of the Security Documents;
"Security Trust Deed" means the Security Trust Deed entered into or to
be entered into between the Banks, the Arrangers, the Agent, the
Security Trustee and each Obligor;
"Share Securities" means the RP Share Security, the CNA Share Security
and the Norwegian Share Security and such other pledges/charges over
shares in any of the Obligors as may be executed in favour of the
Security Trustee from time to time as security for the obligations of
the Obligors under this Agreement;
"Six Month Period" means each period of six months ending on the last
day of a calendar month;
15
<PAGE>
"Sterling" and "(Pounds)" mean the lawful currency for the time being
of the United Kingdom and in respect of all payments to be made under
this Agreement in Sterling mean immediately available, freely
transferable cleared funds;
"Stock Option Plan" means the stock option plan adopted by the Parent
on 13th June 1996 and administered by Stichting Administratiekantoor
UPC B.V. pursuant to an agreement between Stichting
Administratiekantoor UPC B.V. and the Parent dated 13th June, 1996;
"Subordinated Creditor" means any person who has, at any relevant time,
entered into a Deed of Subordination;
"Subordinated Debt" means at any relevant time, all Borrowed Money of
the Restricted Group owed to a Subordinated Creditor;
"Subsidiary" of a person means any company or entity directly or
indirectly controlled by such person, for which purpose "control" means
either ownership of more than 50 per cent of the voting share capital
(or equivalent right of ownership) of such company or entity or power
to direct its policies and management whether by contract or otherwise;
"Substitute" has the meaning given to it in clause 17.3;
"Substitution Certificate" means a certificate substantially in the
terms of schedule 5;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof and "Taxation" shall be construed
accordingly;
"Telecommunications and Cable Laws" means all laws, statutes,
regulations and judgments relating to telecommunications, cable
television and data services applicable to any member of the Restricted
Group and/or the business carried on by any member of the Restricted
Group in any Relevant Jurisdiction;
"Telekabel Bond" means the bearer bonds 1994-2003 issued by Telekabel
Wien in an aggregate nominal amount of BEF 3,863,750,000;
"Telekabel Entities" means each of:
(a) Telekabel Wien;
(b) Telekabel-Fernsehnetz Region Baden Betriebsgesellschaft m.b.H,
a company incorporated in Austria with its corporate seat at
A-2514 Traiskirchen, Hauptplatz 13, and with registration
number FN 111149f;
(c) Telekabel-Fernsehnetz Wiener Neustadt/Neunkirchen
Betriebsgesellschaft m.b.H, a company incorporated in Austria
with its corporate seat at A-2700 Wiener Neustadt,
Neunkirchner Strasse 24, and with registration number FN
114170y;
(d) Telekabel Graz Gesellschaft m.b.H, a company incorporated in
Austria with its corporate seat at A-8020 Graz, Lazarettgurtel
81, and with registration number FN 55555z;
(e) Telekabel Klagenfurt Gesellschaft m.b.H, a company
incorporated in Austria, with its corporate seat at A-9020
Klagenfurt, Villacher Strasse 161 and with registration number
FN 99365a; and
(f) CNA;
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<PAGE>
"Telekabel Notes" means the bearer bonds to be issued by Telekabel Wien
in respect of each Advance made to Telekabel Wien, in the form set out
in Schedule 14;
"Telekabel Wien" means Telekabel Wien Gesellschaft m.b.H. a company
incorporated in Austria with its corporate seat at A-1100 Wien,
Erlachgasse 116, and with registration number FN 84116 a;
"Term" means, in relation to an Advance, the period for which that
Advance is, or is to be, borrowed, as specified in the Drawdown Notice
for such Advance;
"Termination Date" means 30th September, 2006;
"Total Annualised Net Operating Cash Flow" means twice the consolidated
Net Operating Cash Flow for all of the members of the Restricted Group
in respect of the most recently ended Six Month Period for the
Restricted Group in respect of which Monthly Management Accounts have
been delivered to the Agent under this Agreement;
"Total Commitments" means at any relevant time the total of the
Commitments of all the Banks at such time;
"Total Debt" means the principal amount of all Borrowed Money of the
Restricted Group (other than Borrowed Money under the Bridge Facility);
"Total Debt Interest Charges" means, in relation to any period, the
total amount of all interest, fees and commissions accruing in respect
of Total Debt during such period (having taken into account the effect
of any relevant hedging arrangements);
"UIH" means United International Holdings, Inc. a corporation
incorporated in the State of Delaware, United States of America and
having its principal place of business at 4643 South Ulster, Suite
1300, Denver, Colorado 80237 U.S.A.;
"Unrestricted Group" means the Unrestricted Subsidiaries and the
Unrestricted Undertakings;
"Unrestricted Subsidiaries" means those Subsidiaries of the Parent
which are not Restricted Subsidiaries;
"Unrestricted Undertakings" means any person (other than the Restricted
Subsidiaries and Unrestricted Subsidiaries) in which UPC has the
beneficial ownership of 10 per cent. or more of the equity securities
of such person (either individually or as part of a group); and
"UPC PIK Notes" means all of the outstanding 9.96% Series A Convertible
Notes due 2005 and all of the 10.03% Series B Convertible Notes due
2005 issued by the Parent to Philips Media B.V.
1.3 Headings
--------
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
-----------------------------
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement
and references to this Agreement include its schedules;
17
<PAGE>
(b) references to (or to any specified provision of) this
Agreement or any other document shall be construed as
references to this Agreement, that provision or that document
as in force for the time being and as from time to time
amended in accordance with its terms, or, as the case may be,
with the agreement of the relevant parties and (where such
consent is, by the terms of this Agreement or the relevant
document, required to be obtained as a condition to such
amendment being permitted) the prior written consent of the
Agent, all of the Banks or the Majority Banks (as the case may
be);
(c) references to a "regulation" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any
self-regulatory or other national or supra-national authority;
(d) words importing the plural shall include the singular and vice
versa;
(e) references to a time of day are to London time;
(f) references to a "person" shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any of its
agencies;
(g) references to "assets" include all or part of any business,
undertaking, real property, personal property, uncalled
capital and any rights (whether actual or contingent, present
or future) to receive, or require delivery of, any of the
foregoing;
(h) references to a "guarantee" include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or services as a
consequence of a default by any other person to pay any
Indebtedness and "guaranteed" shall be construed accordingly;
(i) references to the "equivalent" of an amount specified in a
particular currency (the "specified currency amount") shall be
construed as a reference to the amount of the other relevant
currency which can be purchased with the specified currency
amount in the London foreign exchange market at or about 11
a.m. on the day on which the calculation falls to be made for
spot delivery as determined by the Agent;
(j) references to the "agreed form" means, in relation to any
document, the form of such document as shall have been agreed
between the Parent and the Agent (acting for and on behalf of
all of the Banks);
(k) references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or
extended; and
(l) references to this "Agreement" include all Telekabel Notes
issued under this Agreement and references to sums payable
under this Agreement include sums payable under all Telekabel
Notes.
1.5 Majority Banks
--------------
Where this Agreement provides for any matter to be determined by
reference to the opinion of the Majority Banks or to be subject to the
consent or request of the Majority Banks or for any action to be taken
on the instructions of the Majority Banks, such opinion, consent,
request or instructions shall (as between the Banks) only be regarded
as having been validly given or issued by the Majority Banks if all the
Banks shall have received prior notice of the matter on which such
opinion, consent, request or instructions are required to
18
<PAGE>
be obtained and the relevant majority of Banks shall have given or
issued such opinion, consent, request or instructions but so that (as
between the Borrowers and the Banks), once informed by the Agent that
such opinion, consent, request or instructions have been given, the
Borrowers shall be entitled (and bound) to assume that such notice
shall have been duly received by each Bank and that the relevant
majority shall have been obtained to constitute Majority Banks whether
or not this is in fact the case.
1.6 Agent's opinion
---------------
Where this Agreement provides for the Agent's opinion to determine
whether any matter would or is reasonably likely to have a Material
Adverse Effect and/or a material adverse effect, as the case may be,
the Agent shall act in accordance with the instructions of the Majority
Banks in making such determination.
19
<PAGE>
2 The Facility
------------
2.1 Amount
------
The Banks, relying upon each of the representations and warranties in
clause 10 agree to lend to the Borrowers upon and subject to the terms
of this Agreement the principal sum of up to NLG 1,100,000,000 or the
equivalent in Optional Currencies (of which, for the avoidance of
doubt, the Norwegian Borrowers may not borrow more than the Norwegian
Loan Amount and which shall include, for the avoidance of doubt, the
amounts borrowed by Telekabel Wien against the issue of Telekabel
Notes). The obligation of each Bank under this Agreement shall be to
contribute that proportion of each Advance which, as at the Drawdown
Date of such Advance, its Commitment bears to the Total Commitments.
2.2 Obligations several
-------------------
The obligations of each Bank under this Agreement are several; the
failure of any Bank to perform such obligations shall not relieve any
other Bank, the Arranger, the Security Trustee, the Agent or any
Obligor of any of their respective obligations or liabilities under
this Agreement nor shall the Agent, the Security Trustee or the
Arranger be responsible for the obligations of any Bank (except for its
own obligations, if any, as a Bank) nor shall any Bank be responsible
for the obligations of any other Bank under this Agreement.
2.3 Interests several
-----------------
Notwithstanding any other term of this Agreement (but without prejudice
to the provisions of this Agreement relating to or requiring action by
the Majority Banks) the interests of the Agent, the Security Trustee,
the Arranger and the Banks are several and the amount due to the Agent
(for its own account), to the Arranger, to the Security Trustee and to
each Bank is a separate and independent debt. The Agent, the Security
Trustee, the Arranger and each Bank shall have the right to protect and
enforce its rights arising out of this Agreement and it shall not be
necessary for the Agent, the Security Trustee, the Arranger or any Bank
(as the case may be) to be joined as an additional party in any
proceedings for this purpose.
2.4 Telekabel Wien's interests several
----------------------------------
For the avoidance of doubt, every obligation of Telekabel Wien under
this Agreement is several and it is acknowledged by all parties that
Telekabel Wien save for its obligations under the Guarantee, is not
liable for any obligations of any other Obligor under this Agreement.
20
<PAGE>
3 Conditions
----------
3.1 Documents and evidence
----------------------
(a) Subject to clause 3.1(b) and clause 3.1(c), the obligation of
each Bank to make its Commitment available shall be subject to
the condition that the Agent, or its duly authorised
representative, shall have received, not later than two
Banking Days before the day on which the first Advance is to
be made, the documents and evidence specified in part A of
schedule 3 in form and substance satisfactory to all of the
Banks.
(b) The obligation of each Bank to contribute to the Philips
Advance is subject to the further condition that the Agent, or
its duly authorised representative, shall have received, no
later than three Banking Days before the day on which the
Drawdown Notice in respect of the Philips Advance is given,
the documents and evidence specified in part B of schedule 3
in form and substance satisfactory to all of the Banks
together with either the documents and evidence set out in
schedule 3 part C or schedule 3 part D each in form and
substance satisfactory to all the Banks.
(c) The obligation of each Bank to contribute to the first Advance
to the Norwegian Borrowers shall be subject to the further
condition that the Agent, or its duly authorised
representative, shall have received, no later than three
Banking Days before the day on which the Drawdown Notice in
respect of such Advance is given, (i) (if the Norwegian Merger
has occurred by such date), the documents and evidence
specified in part C of schedule 3 or (ii) (if the Norwegian
Merger has not occurred by such date) the documents and
evidence set out in schedule 3 part D, in each case in form
and substance satisfactory to the Banks.
3.2 General conditions precedent
----------------------------
If, following the making of an Advance, the Loan will exceed the Loan
immediately prior to the making of such Advance (taking into account
any other Advances or part thereof scheduled to be made or repaid or
prepaid on the date of such Advance) the obligation of each Bank to
contribute to any Advance is subject to the further conditions that at
the date of each Drawdown Notice and on each Drawdown Date:
(a) the representations and warranties set out in clause 10.1 to
be repeated in accordance with clause 10.3 are true and
correct on and as of each such date as if each were made with
respect to the facts and circumstances existing at such date;
and
(b) no Default shall have occurred and be continuing or would
result from the making of such Advance.
However, in the case of the drawing of an Advance which would not, if
drawn, cause the aggregate Guilder Amount of Advances outstanding after
such drawing to exceed the aggregate Guilder Amount of Advances
outstanding prior to that drawing (after taking account of any
repayment made on the date of such drawing):
(i) clause 3.2(a) shall apply only if the incorrectness would be
reasonably likely to have a material adverse effect on the
ability of any Borrower to perform its obligations under this
Agreement or on the financial position of the Parent and its
Subsidiaries taken as a whole; and
(ii) clause 3.2(b) shall not apply if the Term of the relevant
Advance is one month.
Nothing in this clause 3.2 shall be construed as constituting a waiver
of any right of the Banks (including, without limitation, their rights
under clause 13.2) arising from any Event of Default
21
<PAGE>
which shall have occurred and be outstanding at the time of the drawing
of the relevant Advance.
3.3 Waiver of conditions precedent
------------------------------
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in
part and with or without conditions by the Agent acting on the
instructions of all of the Banks in respect of the first Advance, the
Philips Advance, and the first Advance to the Norwegian Borrowers and
on the instructions of the Majority Banks with respect to any other
Advances without prejudicing the right of the Agent acting on such
instructions to require fulfilment of such conditions in whole or in
part in respect of any other Advance.
3.4 Notification
------------
The Agent shall notify the Banks and the Parent promptly after receipt
by it of the documents and evidence referred to in clause 3.1 in form
and substance satisfactory to it.
3.5 New Janco
---------
(a) Contemporaneously with the completion of the Norwegian Merger,
the Parent shall procure that New Janco and/or the Parent
delivers to the Agent the documents and evidence listed in
part B of schedule 11 together with such other documents,
evidence and legal opinions as the Agent shall require so that
New Janco assumes all obligations then owed to the Agent, the
Arranger, the Security Trustee and the Banks by Norkabel
provided that such obligations shall not exceed the Norwegian
Loan Amount.
(b) On confirmation by the Agent to the Banks that it has received
all of the documents referred to in paragraph (a) above in
form and substance satisfactory to it, New Janco shall become
the sole Norwegian Borrower under this Agreement provided that
it shall not be permitted to borrow in excess of the Norwegian
Loan Amount and such of Norkabel and its Subsidiaries as were,
prior to the date of the Norwegian Merger, Borrowers and/or
Guarantors shall cease to be Borrowers and/or Guarantors under
this Agreement. Delivery of a Deed of Borrower Accession
executed by the Parent and New Janco constitutes confirmation
by New Janco and the Parent that the representations and
warranties set out in clause 10 and to be made by them on the
date of the Deed of Borrower Accession are correct, as if made
with reference to the facts and circumstances then existing.
Each Bank irrevocably authorises the Agent to execute any duly
executed Deed of Borrower Accession on its behalf and each
other Obligor irrevocably authorises the Parent to execute any
Deed of Borrower Accession on its behalf.
3.6 Conditions subsequent
---------------------
The Parent undertakes to procure that:
(a) prior to the earlier to occur of the date of the Philips
Advance or the date of the first Advance made to the Norwegian
Borrowers the constitutional documents of CNA shall be amended
to a form satisfactory to the Agent; and
(b) (i) resolutions of the supervisory board of Telekabel Wien
shall be provided to the Agent approving the terms and
conditions of this Agreement (as amended) and the
Austrian Security Document on or before 12th December
1997; and
(ii) on or before 12th December, 1997 there is delivered to
the Agent the Austrian Security Document and such other
documents as the Agent may require, each
22
<PAGE>
duly executed and delivered by Telekabel Wien, together
with such other documents, evidence and legal opinions
as the Agent shall require to ensure that Telekabel Wien
becomes a Borrower and a Guarantor under this Agreement.
Provided that if the Parent fails to comply with either of the above
undertakings, in whole or in part, without prejudice to any other
rights or remedies available to the Agent, the Security Trustee, the
Arranger, the Banks (or any of them) such failure shall constitute an
immediate Event of Default and the Agent shall be entitled to exercise
its rights under clause 13.2. Provided further that until such time as
the undertakings set out in clause 3.6 have been complied with, save
with the agreement of all of the Banks, none of the Banks shall be
under any obligation to make any Advance other than the Advance
referred to in clause 4.9(A).
23
<PAGE>
4 Advances; Currencies
--------------------
4.1 Maximum Outstandings
--------------------
(a) Prior to the date of the Philips Advance and subject to the
provisions of clause 4.10, the principal amount of Advances
outstanding under the Facility shall not exceed (i) if the
first Advance to a Norwegian Borrower shall not have been
made, NLG 360,000,000 or, (ii) if the first Advance to a
Norwegian Borrower shall have been made, NLG 550,000,000, or,
in each case, the equivalent in Optional Currencies. On each
Quarter Day and each Drawdown Date prior to the date on which
the Philips Advance is made, the amount of Total Debt shall
not exceed five times Total Annualised Net Operating Cash Flow
(as determined by reference to the most recently delivered
Monthly Management Accounts at such time) and no Advances
(other than the Philips Advance in accordance with the
provisions of clause 4.10) shall be made if, following the
making of such Advance, such limit would be exceeded.
(b) On and from the date of the Philips Advance, the principal
amount of Advances outstanding under the Facility shall not
exceed NLG 1,100,000,000 or the equivalent in Optional
Currencies. On each Quarter Day and each Drawdown Date falling
within the period set out in column (I) below, the amount of
Total Debt shall not exceed the multiple of Cable TV
Annualised Net Operating Cash Flow or Total Annualised Net
Operating Cash Flow, as the case may be, (each as determined
by reference to the most recently delivered Monthly Management
Accounts at such time) set out against such period in column
(II) and column (III) below, and no Advances shall be made if,
following the making of such Advance, such limit would be
exceeded:
<TABLE>
<CAPTION>
=======================================================================================================
(I) (II) (III)
Period Multiple of Cable TV Multiple of Total
Annualised Net Annualised Net
Operating Cash Flow Operating Cash Flow
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Prior to 31st December 1998 7 8.25
-------------------------------------------------------------------------------------------------------
1st January 1999 to 30th June 1999 n/a 6.75
-------------------------------------------------------------------------------------------------------
1st July 1999 to 31st December 1999 n/a 6.5
-------------------------------------------------------------------------------------------------------
1st January 2000 to 31st December 2000 n/a 5.5
-------------------------------------------------------------------------------------------------------
1st January 2001 to 31st December 2001 n/a 4
-------------------------------------------------------------------------------------------------------
1st January 2002 and thereafter n/a 3
=======================================================================================================
</TABLE>
4.2 Drawdown
--------
Subject to the terms and conditions of this Agreement, an Advance shall
be made available to a Borrower following receipt by the Agent from
such Borrower of a Drawdown Notice not later than 10 a.m. on the third
Banking Day before the proposed Drawdown Date. A Drawdown Notice shall
be effective on actual receipt by the Agent and, once given, shall,
subject as provided in clause 5.6(a), be irrevocable.
4.3 Amount and Term
---------------
Each Advance shall be:
(a) of a Guilder Amount which is a minimum of NLG 10,000,000 and,
in the case of Advances to be made in Guilders, an integral
multiple of NLG 5,000,000, or the balance of the Commitments;
24
<PAGE>
(b) denominated in one currency only; and
(c) borrowed for a Term of one, two, three or six months (or, with
the prior agreement of all of the Banks, such other period as
the Parent may select) ending on or before the Termination
Date.
4.4 Selection of currencies
-----------------------
Subject to the provisions of clause 4.5, if a Borrower so requests in
the Drawdown Notice for an Advance, such Advance may be drawn down in
an Optional Currency.
4.5 Limit on currencies; non-availability
-------------------------------------
An Advance may not be drawn down in an Optional Currency if (a) in
consequence thereof there would be Advances outstanding in more than 5
different currencies or (b) any Bank reasonably determines that
deposits of such Optional Currency are not readily available to such
Bank in an amount comparable with such Bank's portion of the relevant
Advance and so notifies the Agent not later than 3 p.m. on the third
Banking Day before the proposed Drawdown Date or (c) the Agent
determines after consultation with the Reference Banks (which
determination shall be conclusive) at any time prior to 10 a.m. (local
time in the place of payment) on the Drawdown Date that by reason of
any change in currency availability, currency exchange rates or
exchange controls it is or will be impracticable for the relevant
Advance to be drawn down in that Optional Currency. Accordingly, in any
such event, the relevant Advance shall be drawn down in Guilders.
4.6 Currency Amounts
----------------
If an Advance is to be drawn down in an Optional Currency, the Banks
shall, subject to clause 3.2, advance to the relevant Borrower on
drawdown of such Advance, the amount of such Optional Currency
requested. The Guilder Amount of such Advance shall be the amount of
Guilders (as determined by the Agent) which would be required to
purchase the amount of such Optional Currency at the average of the
spot rates of exchange quoted to the Agent by the Reference Banks to be
ruling in the London Foreign Exchange Market for the purchase of such
Optional Currency with Guilders on receipt of the relevant Drawdown
Notice. If an Advance is to be drawn down in Guilders, the Banks shall,
subject to clause 3.2, advance to the relevant Borrower on drawdown of
such Advance, the Guilder Amount of such Advance.
4.7 Notification to Banks
---------------------
As soon as practicable after receipt of a Drawdown Notice complying
with the terms of this Agreement the Agent shall notify each Bank and,
subject to clause 3, each of the Banks shall on the Drawdown Date make
available to the Agent its portion of the relevant Advance in
accordance with clause 8.2. If an Advance is to be drawn down in an
Optional Currency the amount to be advanced to the relevant Borrower
under this clause 4.7 shall be the amount of such Optional Currency
specified in the relevant Drawdown Notice. If an Advance is to be drawn
down in Guilders, the amount to be advanced to the relevant Borrower
under this clause 4.7 shall be the Guilder Amount of that Advance.
4.8 Application of proceeds
-----------------------
Without prejudice to the Borrowers' obligations under clause 11.1(c),
or clause 4.9 and 4.10, none of the Banks, the Arranger, the Security
Trustee or the Agent shall have any responsibility for the application
of the proceeds of any Advance by any Borrower.
4.9 Initial Advances
----------------
(A) Refinancing the Existing UPC Facility
-------------------------------------
25
<PAGE>
Subject to the provisions of clause 3.1(a), the Borrowers
undertake to comply with the terms of this clause 4 so as to
ensure that a Drawdown Notice is delivered for an Advance to
be made on or before 10th October 1997 (or such other date as
may be agreed by the Agent) by the Parent in an amount not
less than the aggregate of the amount certified to the Parent
by the Agent to be equal to the principal amount outstanding
under the Existing UPC Facility together with all unpaid
interest thereon and any other amounts payable in relation
thereto.
The Borrowers irrevocably authorise the Agent, and the Agent
agrees, to apply that part of such Advance as is equal to the
amount so certified in discharge of the Parent's obligations
in respect of the Existing UPC Facility and the Agent's
obligations under clause 8.2 in respect of such Advance shall
be to remit the balance following such discharge (if any) to
the Parent forthwith.
Unless and until the Existing UPC Facility has been repaid in
full and cancelled and all (if any) security granted in
connection therewith has been unconditionally discharged in
full to the satisfaction of the Agent or has been assigned or
transferred to the Security Trustee, no further Advances may
be made to the Borrowers hereunder.
(B) Refinancing the Existing Norkabel Facility
------------------------------------------
Subject to the provisions of clause 3.1(a) and clause 3.1(c),
the Borrowers undertake to comply with the terms of this
clause 4 so as to ensure that, on the earliest of (i) the date
of the Norwegian Merger, (ii) the date falling three Banking
Days prior to the date of the Philips Advance or (iii) 12th
December 1997 (or such other date as may be agreed by the
Agent) a Drawdown Notice is delivered to the Agent by (i) (if
the Norwegian Merger has not occurred) Norkabel or (ii) (if
the Norwegian Merger has occurred) New Janco in an amount not
less than the aggregate of the principal amount certified by
the Agent to the Parent and the relevant Norwegian Borrower to
be equal to the principal amount outstanding under the
Existing Norkabel Facility together with all unpaid interest
thereon and any other amounts payable in relation thereto.
The Borrowers irrevocably authorise the Agent, and the Agent
agrees, to apply that part of such Advance as is equal to the
amount so certified in discharge of Norkabel's obligations in
respect of the Existing Norkabel Facility, and the Agent's
obligations under clause 8.2 in respect of such Advance shall
be to remit the balance following such discharge (if any) to
the relevant Norwegian Borrower forthwith.
After the earliest of (i) the date of the Norwegian Merger,
(ii) the date falling three Banking Days prior to the date of
the Philips Advance or (iii) 12th December 1997 (or such other
date as may be agreed by the Agent), unless and until the
Existing Norkabel Facility has been repaid in full and
cancelled and all or any security granted in connection
therewith has been assigned or transferred to the Security
Trustee to the satisfaction of the Agent no further Advances
may be made if, following the making of such Advance, the Loan
would exceed the Loan immediately prior to such Advance.
4.10 Philips Advance
---------------
(a) Subject to the provisions of clause 3.1(b), the Borrowers
undertake to comply with the terms of this clause 4 so as to
ensure that the Philips Advance is made on or before the date
falling 90 days after the date of the first Advance (or such
other date as may be agreed by the Agent acting on the
instructions of all of the Banks) and to ensure that the
Philips Advance is in an amount not less than an amount which,
when aggregated with the amount of the Bridge Facility which
the Bridge Borrower has used in satisfaction of the
consideration payable to the Parent for the purchase of the
interests in the Unrestricted Group pursuant to the
Restructuring and any other funds available to the Parent (if
any), is certified by the Parent to the Agent to be sufficient
to consummate
26
<PAGE>
the Philips Transaction in accordance with the terms of the
Securities Purchase and Conversion Agreement.
The Borrowers irrevocably authorise the Agent to apply that
part of the Philips Advance so certified in discharge of the
Parent's obligations in respect of the Securities Purchase and
Conversion Agreement and the Agent's obligations under clause
8.2 in respect of the Philips Advance shall be to remit the
balance following such discharge (if any) to the Parent
forthwith. Unless and until the Philips Advance has been made
no further Advances may be made if, following the making of
such Advance, the Loan would exceed the amount set out in
clause 4.1(a).
(b) If the Philips Advance has not been made on or before the date
falling 90 days after the date of the first Advance made under
the Facility (or such other date as may be agreed by the Agent
acting on the instructions of all of the Banks), then the
Agent (acting on the instructions of all of the Banks) and the
Parent shall seek to renegotiate the terms and conditions of
the Facility in good faith. If the Philips Advance has not
been made on or before the date falling 180 days after the
date of the first Advance (or such other date as may be agreed
by the Agent acting on the instructions of all of the Banks)
then there shall be an Event of Default and the Agent shall be
entitled to exercise all of its rights under clause 13.2.
4.11 Telekabel Bond
--------------
Subject to the Agent receiving confirmation that the Telekabel Bond has
been delivered to the Parent, and subject to the provisions of clause
3.6, on the date that the Philips Advance is made (or as soon as
possible thereafter), the Borrowers undertake to comply with the terms
of this clause 4 so as to ensure that an Advance is made to Telekabel
Wien (the "Telekabel Advance") in an amount not less than the amount
equal to the principal amount outstanding under the Telekabel Bond
together with all unpaid interest thereon and any other amounts payable
in relation thereto.
The Borrowers irrevocably authorise the Agent, and the Agent agrees, to
apply that part of the Telekabel Advance as is equal to the amount
required to redeem the Telekabel Bond in full in discharge of Telekabel
Wien obligations in respect of the Telekabel Bond and the Agent's
obligations under clause 8.2 in respect of such Advance shall be to
remit the balance following such discharge (if any) to Telekabel Wien
forthwith. Following the date of the Philips Advance unless and until
the Telekabel Advance has been made, no further Advances (other than
the Advance referred to in clause 4.9(B)) may be made if, following the
making of such Advance, the Loan would exceed the Loan immediately
prior to the making of such Advance.
4.12 Subsidiary Drawings
-------------------
The Parent shall not be permitted to on-lend any funds drawn down by
the Parent under the Facility to Telekabel Wien or the Norwegian
Borrowers without the consent of the Majority Banks. Telekabel Wien and
the Norwegian Borrowers undertake that such funds as they may
respectively require for the purposes set out in clause 1.1 shall be
drawn by them direct from the Banks in accordance with the terms of
this Agreement (provided that, in the case of the Norwegian Borrowers,
the Norwegian Loan Amount shall not be exceeded).
4.13 Refinancing the Janco Loan Agreement
------------------------------------
Subject to the provisions of clause 3.1 and provided that the Agent
shall have received the documents and evidence specified in part B of
schedule 11, the Parent shall procure that on or prior to 30th June,
2000 New Janco shall refinance the principal amount of the Indebtedness
of New Janco under the Janco Loan Agreement as at the date of this
Agreement by Advances under this Agreement (the "New Janco Advances")
or, if this is not legally possible at such time, New Janco shall have
entered into such other arrangements as are acceptable to the Majority
Banks.
27
<PAGE>
The Borrowers irrevocably authorise the Agent, and the Agent agrees, to
apply the New Janco Advances in discharge of New Janco's obligations in
respect of the Janco Loan Agreement and the Agent's obligations under
clause 8.2 in respect of such Advance shall be to remit the balance
following such discharge (if any) to New Janco forthwith.
The first New Janco Advance shall not be made unless the Parent has
provided the Agent with a legal opinion of Norwegian counsel,
acceptable to the Banks stating that the making of such New Janco
Advance will not adversely affect the security position of the Banks or
the liability of the Norwegian Borrower (or any remaining Norwegian
Guarantors, as the case may be) under the Agreement and will not
contravene any provision of Norwegian law. If the Parent is unable to
provide such legal opinion, the Parent and New Janco shall enter into
such other arrangements as may be acceptable to the Majority Banks.
4.14 Telekabel Notes
---------------
Each borrowing of a portion of the Commitments to be made by Telekabel
Wien under this Agreement shall be made against the issue by Telekabel
Wien of a Telekabel Note to the Agent.
At the same time as and together with a Drawdown Notice in connection
with any such Advance to be made to Telekabel Wien, Telekabel Wien
shall deliver to the Agent an original Telekabel Note the details set
out in which shall correspond to the details of the Advance described
in such Drawdown Notice.
The Banks shall be under no obligation to make any funds available to
Telekabel Wien unless the Agent shall have received such Telekabel Note
in a form satisfactory to it.
Telekabel Wien hereby authorises the Agent to complete the provisions
in each Telekabel Note relating to the calculation of interest payable
in connection therewith.
On the condition that the relevant Telekabel Note has been duly
completed and executed and provided that the conditions set out in
clause 3 have been satisfied, the Banks shall contribute to the Advance
to be made to Telekabel Wien against the relevant Telekabel Note in
accordance with the provisions of clauses 4.2 to 4.8 (inclusive).
The Agent shall hold each Telekabel Note for and on behalf of the Banks
and shall not part with possession of such Telekabel Note without the
consent of the Banks. All payments received by the Agent under any
Telekabel Note shall be applied in accordance with the provisions of
clause 8. For the avoidance of doubt, for the purposes of the Security
Trust Deed, all indebtedness of Telekabel Wien under Telekabel Notes
shall constitute "Senior Indebtedness" (as defined in the Security
Trust Deed).
The Agent shall be entitled to place all Telekabel Notes deposited with
it in any safe deposit, safe or receptacle selected by the Agent and
the Agent shall not be responsible for any loss incurred in connection
with any such deposit.
5 Interest; alternative interest rates
------------------------------------
5.1 Normal interest rate
--------------------
The Borrowers shall pay interest on each Advance made to them on such
Advance's Maturity Date (or, in the case of an Advance having a Term of
more than six months, by instalments, every six months from the
Drawdown Date of such Advance and on the relevant Maturity Date) at the
rate per annum determined by the Agent to be the aggregate of (a) the
applicable Margin, (b) (in the case of Advances in Sterling) the
Additional Cost and (c) LIBOR.
5.2 Applicable Margin
-----------------
28
<PAGE>
The Margin in relation to any Advance and any unpaid sum due under this
Agreement under clause 5.3 shall (subject to the proviso below) be the
rate set out in column (I) below against the ratio of Total Debt to
Total Annualised Net Operating Cash Flow (as shown in the most recently
delivered Quarterly Management Accounts and Compliance Certificate
delivered to the Agent prior to, first day of the relevant Term or, in
relation to any unpaid sum due under this Agreement under clause 5.3,
the first day of the relevant period determined in accordance with
clause 5.3 set out in column (II) below as at the first day of the Term
of such Advance or period in respect of which interest is payable in
accordance with clause 5.3 (as the case may be):
<TABLE>
<CAPTION>
(I) (II)
Rate (per cent. Ratio of Total Debt to
--------------- ----------------------
per annum) Total Annualised
---------- ----------------
Net Operating Cash Flow
-----------------------
<S> <C>
2.00 8:1 or greater
1.75 at least 6.5:1 but less than 8:1
1.25 at least 5:1 but less than 6.5:1
1.00 at least 4:1 but less than 5:1
0.75 at least 3:1 but less than 4:1
0.50 less than 3:1
</TABLE>
provided that (i) if on the relevant date on which the Margin is to be
determined the Philips Advance has not been made then the Margin for
such Advance and/or such unpaid sum shall be 2.00 per cent. per annum,
and (ii) until such time as the Parent shall have delivered to the
Agent Quarterly Management Accounts (relating to any Quarter ending on
31st December 1997 or later) and a Compliance Certificate relating
thereto which indicate that a lower Margin is applicable, the Margin
for each Advance shall be 2.00 per cent. per annum.
5.3 Interest for late payment
-------------------------
If any Borrower fails to pay any sum (including, without limitation,
any sum payable pursuant to this clause 5.3 on its due date for payment
under this Agreement) the relevant Borrower shall pay interest on such
sum from the due date up to the date of actual payment (as well after
as before judgment) at a rate determined by the Agent pursuant to this
clause 5.3. The period beginning on such due date and ending on such
date of payment shall be divided into successive periods of not more
than three months as selected by the Agent (after consultation with the
Banks so far as reasonably practicable in the circumstances) each of
which (other than the first, which shall commence on such due date)
shall commence on the last day of the preceding such period. The rate
of interest applicable to each such period shall be the aggregate (as
determined by the Agent) of (a) one per cent per annum, (b) the
applicable Margin, (c) (in the case of amounts in Sterling) the
Additional Cost and (d) LIBOR, unless such unpaid sum is an amount of
principal which shall have become due and payable, by reason of a
declaration by the Agent under clause 13.2(b) or a prepayment pursuant
to clauses 6.3 or 15.1, prior to the Maturity Date relating thereto, in
which case the first such period selected by the Agent shall end on
such Maturity Date and interest shall be payable on such unpaid sum
during such period at a rate one per cent above the rate applicable
thereto immediately before it shall have become so due and payable.
Interest under this clause 5.3 shall be due and payable on the last day
of each period determined by the Agent pursuant to this clause 5.3 or,
if earlier, on the date on which the sum in respect of which such
interest is accruing shall actually be paid. If, for the reasons
specified in clause 5.6(a)(i) or 5.6(a)(ii), the Agent is unable to
determine a rate in accordance with the foregoing provisions of this
clause 5.3, each Bank shall promptly notify the Agent of the cost of
funds to such Bank and interest on any sum not paid on its due date for
payment shall be calculated for each Bank at a rate determined by the
Agent to be one per cent per annum above the aggregate of the Margin
and the cost of funds (including, in the case of amounts in Sterling,
Additional Cost) to such Bank.
5.4 Notification of interest rate
-----------------------------
29
<PAGE>
The Agent shall notify the Parent, the relevant Borrower and the Banks
promptly of each rate of interest determined by it under this clause 5.
5.5 Reference Bank quotations
-------------------------
If any Reference Bank is unable or otherwise fails to furnish a
quotation for the purpose of calculating LIBOR, the interest rate for
the relevant Term or other period shall be determined, subject to
clause 5.6, on the basis of the quotations furnished by the remaining
Reference Banks.
5.6 Market disruption; non-availability
-----------------------------------
(a) If and whenever, at any time prior to the making of an Advance
the London interbank offered rates for deposits of the
currency in question for the relevant period are not displayed
on the relevant page of the Reuter Monitor Money Rates Service
(or any replacement therefor) and:
(i) the Agent shall have determined, after consultation
with the Reference Banks (which determination shall,
in the absence of manifest error, be conclusive),
that adequate and fair means do not exist for
ascertaining LIBOR during such Term; or
(ii) none or only one of the Reference Banks supplies the
Agent with a quotation for the purpose of calculating
LIBOR; or
(iii) the Agent shall have received notification from Banks
with Contributions aggregating not less than
one-third of the total of the Advances (or, prior to
the first Drawdown Date, Commitments aggregating not
less than one-third of the Total Commitments) that
deposits in Guilders are not available to such Banks
in the London Interbank Market in the ordinary course
of business in sufficient amounts to fund their
Contributions to such Advance or that LIBOR does not
accurately reflect the cost to such Banks of
obtaining such deposits;
the Agent shall forthwith give notice (a "Determination
Notice") to the Parent and to each of the Banks and such
Advance shall not be made. A Determination Notice shall
contain particulars of the relevant circumstances giving rise
to its issue.
(b) After the giving of any Determination Notice the undrawn
amount of the Total Commitments shall not be borrowed until
the circumstances giving rise to the issue of the
Determination Notice have ceased.
(c) During the period of 10 days after any Determination Notice
has been given by the Agent under clause 5.6(a), each Bank
shall certify an alternative basis (the "Substitute Basis")
for making available or, as the case may be, maintaining its
contribution to the Advance. The Substitute Basis may (without
limitation) include alternative interest periods, alternative
currencies or alternative rates of interest but shall include
a margin above the cost of funds including Additional Cost, if
any, to such Bank equivalent to the Margin. Each Substitute
Basis so certified shall be binding upon the Borrowers and
shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as none
of the circumstances specified in clause 5.6 (a) continues to
exist whereupon the normal interest rate fixing provisions of
this Agreement shall apply.
30
<PAGE>
6 Repayment, prepayment and cancellation
--------------------------------------
6.1 Repayment
---------
The Borrowers shall repay each Advance on its Maturity Date in the
currency in which it is denominated. If an advance (the "new Advance")
is to be made on a day on which another Advance (the "maturing
Advance") denominated in the same currency as the new Advance is due to
be repaid by the same Borrower then, subject to the terms of this
Agreement and so long as the conditions referred to in clause 3.2 shall
have been satisfied in relation to the new Advance, (a) the maturing
Advance shall be deemed to have been repaid on its Maturity Date either
in whole (if the new Advance is equal to or greater than the maturing
Advance) or in part (if the new Advance is less than the maturing
Advance) and (b) to the extent that the maturing Advance is so deemed
to have been repaid, the principal amount of the new Advance to be made
on such date shall be deemed to have been credited to the account of
the relevant Borrower by the Agent on behalf of the Banks in accordance
with the terms of this Agreement and the Banks shall only be obliged to
make available to the relevant Borrower pursuant to clause 4.6 a
principal amount equal to the amount by which the new Advance exceeds
the maturing Advance. On the Termination Date, all outstanding Advances
and other sums (if any) then owing under this Agreement shall in any
event be repaid or paid in full.
6.2 Voluntary prepayment
--------------------
The Borrowers may, without premium or penalty, prepay any Advance (in
whole or in part provided that, in the case of part, the Guilder Amount
of such part is a minimum of NLG 10,000,000 and, in the case of
Advances made in Guilders, an integral multiple of NLG 10,000,000) at
any time subject to the provisions of this clause 6.
6.3 Additional voluntary prepayment
-------------------------------
Any Borrower may also prepay (in whole but not in part only), without
premium or penalty, but without prejudice to its obligations under
clauses 5.6, 8.5 and 15.2, the Contribution of any Bank to which such
Borrower shall have become obliged to pay additional amounts under
clause 5.6, 8.5 or 15.2. Upon any notice of such prepayment being
given, the Commitment of the relevant Bank shall be reduced to zero and
the amount of the Total Commitments shall be reduced accordingly.
6.4 Amounts payable on prepayment
-----------------------------
Any prepayment under this Agreement shall be made in the currency in
which the relevant Advance is then denominated together with: (a)
accrued interest to the date of prepayment; (b) any additional amount
payable under clause 5.6, 8.5 or 15.2; and (c) all other sums payable
by the relevant Borrower to the relevant Bank under this Agreement
including, without limitation, any accrued commitment commission
payable under clause 7.1(c) on any undrawn amount that is cancelled at
the same time as such prepayment and any amounts payable under clause
14.1.
6.5 Mandatory prepayment, Excess Cash Flow recapture and cancellation
-----------------------------------------------------------------
(A) Mandatory prepayment
--------------------
(a) Subject to the provisions of clause 6.5(D) below, the
Borrowers undertake to apply and to procure the application of
all of:
(i) the proceeds of all disposals made by any member of
the Restricted Group of assets comprising or
contributing 5 per cent. or more of the total assets,
turnover or Net Operating Cash Flow (in any financial
year) of the Restricted Group (taken as a whole);
31
<PAGE>
(ii) the proceeds of all equity share capital that has
been subscribed for in any member of the Restricted
Group for cash other than pursuant to the Norwegian
Merger or in connection with the conversion of the
Norwegian I/C Indebtedness in accordance with clause
11.1(ac); and
(iii) the proceeds of all Borrowed Money (other than
Permitted Borrowings) made available to members of
the Restricted Group,
in prepayment of the Loan (or, if less the amount of the
Loan).
(b) The Borrowers' obligations under paragraph (a) above shall not
apply at any time when, in respect of each of the two most
recent previous consecutive Quarterly Periods, the ratio of
Total Debt to Total Annualised Net Operating Cash Flow
(calculated on the last day of each such Quarterly Period and
each as demonstrated in the Compliance Certificate for the
Quarterly Period ending immediately prior to such date) is
less than (and remains below) 4:1.
(B) Excess Cash Flow recapture
--------------------------
During the Reduction Period, the Borrowers shall apply, or procure the
application of, 75 per cent. of Excess Cash Flow (if any) in respect of
the twelve month period of the Restricted Group ending on 31st December
in each year (commencing with the twelve month period ending on 31st
December, 2001 and calculated by reference to the Compliance
Certificate delivered by the auditors of the Parent in respect of the
most recent financial year ending on such date) in prepayment of the
Loan (or, if less, the amount of the Loan) Provided that:
(i) no such prepayment shall be required to be made if the ratio
of Total Debt to Total Annualised Net Operating Cash Flow
(calculated as at the last day of such twelve month period and
as shown in the most recent Compliance Certificate delivered
to the Agent in accordance with clause 11.1) is less than (and
remains below) 3.5:1; and
(ii) no such prepayment shall be required to be made if the amount
of Excess Cash Flow in respect of the most recently ended
twelve month period is less than NLG 10,000,000 (but without
prejudice to the operation of this clause 6.5(B) if the amount
of Excess Cash Flow is NLG 10,000,000 or more).
(C) Application of mandatory prepayments and Excess Cash Flow
---------------------------------------------------------
(a) Each prepayment to be made under paragraphs (A) and (B) above
(each referred to in this clause as a "Mandatory Payment")
shall be made immediately unless the relevant Borrower states
in writing at the time of its receipt of such Mandatory
Payment (or at the time that the auditors of the Parent
deliver the relevant Compliance Certificate, as the case may
be) that it shall be applied on Maturity Dates falling after
the date of receipt of such Mandatory Payment (or delivery of
such Compliance Certificate, as the case may be) in which case
the relevant Borrower shall deposit the amount of such
Mandatory Payment (or if less the amount of the Loan) with the
Agent or as the Agent may reasonably direct in an account (or
accounts) bearing interest at market rates on terms that the
principal amount so deposited may only be released to the
relevant Borrower by making the relevant prepayment, beginning
with the first such Maturity Date and continuing until the
prepayment obligation under paragraphs (A) and/or (B) above
has been satisfied but that any interest on such principal
amount is to be released to the relevant Borrower following
such prepayments; and
(b) if on any Maturity Date upon which an amount of a Mandatory
Payment is to be applied in prepayment of the Loan:
(A) such amount is less than the amount of Advances,
whose
32
<PAGE>
Maturity Date is such date, the relevant Borrower may
select against which Advance or Advances the
prepayment is to be made and the proportion of the
relevant amount to be prepaid on each Advance but
shall ensure that the full amount of such Mandatory
Payment required to be applied is so applied in
prepayment; or
(B) such amount is equal to or greater than the amount of
the Advances whose Maturity Date is such date, the
relevant Borrower shall prepay each such Advance on
such date.
(D) Exceptions to clause 6.5(A)
---------------------------
The following shall not constitute Mandatory Payments for the purposes
of clause 6.5(A):
(i) Permitted Payments;
(ii) Permitted Disposals made as part of the Restructuring;
(iii) 50% of the net proceeds received by the Parent from an initial
public offering of shares of the Parent;
(iv) the proceeds of any equity share capital subscribed for in
Janco which is permitted pursuant to clause 11.2(g)(iii); and
(v) the proceeds of any equity share capital subscribed for in the
Parent used to redeem or refinance any preference shares
issued pursuant to the Securities Purchase and Conversion
Agreement.
(E) Cancellation
------------
For the avoidance of doubt, and without prejudice to any other
provision of this Agreement, on the date upon which any Mandatory
Payment is to be applied in prepayment of the Loan pursuant to this
clause 6.5, the Total Commitments shall be automatically reduced by an
amount equal to the Guilder Amount of the Mandatory Payment to be so
applied.
6.6 Notice of prepayment
--------------------
No prepayment may be effected under this clause 6 unless the relevant
Borrower shall have given the Agent at least 3 Banking Days' notice of
its intention to make such prepayment. Every notice of prepayment shall
be effective only on actual receipt by the Agent, shall be irrevocable
and shall oblige the relevant Borrower to make such prepayment on the
date specified. Upon a prepayment being made during the Reduction
Period or in accordance with clause 6.5 the Total Commitments shall be
automatically reduced by an amount equal to the Guilder Amount of the
Advance (or part thereof) so prepaid. The Borrowers may not prepay the
Loan or any part thereof save as expressly provided in this Agreement.
6.7 Cancellation of Commitments
---------------------------
The Parent may at any time during the Availability Period by notice to
the Agent (effective only on actual receipt) cancel with effect from a
date not less than 3 Banking Days after the receipt by the Agent of
such notice the whole or any part (being NLG 10,000,000 or any larger
sum which is an integral multiple of NLG 10,000,000) of the Total
Commitments. Any such notice of cancellation, once given, shall be
irrevocable and upon such cancellation taking effect the Commitment of
each Bank shall be reduced proportionately.
6.8 Reduction of Total Commitments
------------------------------
33
<PAGE>
On each Reduction Date the Total Commitments shall be automatically
reduced by an amount equal to five per cent. of the amount of the Total
Commitments as at the beginning of the Reduction Period. The Commitment
of each Bank shall be reduced proportionately.
The Borrowers shall prepay or repay Advances in accordance with the
terms of this Agreement on each Reduction Date so that the aggregate of
the Loan does not exceed the aggregate of the Total Commitments as
reduced on such Reduction Date.
6.9 Termination of Commitments
--------------------------
Without prejudice to any other term of this Agreement, any part of the
Commitments which is undrawn and uncancelled on the Termination Date
shall thereupon be automatically reduced to zero and no Advance shall
be made to the Borrowers thereafter.
34
<PAGE>
7 Fees and expenses
-----------------
7.1 Fees
----
The Parent shall pay to the Agent whether or not any part of the
Commitments is ever advanced:
(a) on the earlier of (i) the date of the first Advance and (ii)
the date falling five Banking Days after the date of this
Agreement, for the account of the Arranger, an arrangement fee
of an amount agreed between the Parent and the Arranger in a
letter dated the date hereof;
(b) on the earlier of (i) the date of the first Advance and (ii)
the date falling five Banking Days after the date of this
Agreement and on each anniversary of the date of this
Agreement until all moneys owing under this Agreement have
been paid in full, for the account of the Agent, an agency fee
of an amount agreed between the Parent and the Agent in a
letter dated the date hereof; and
(c) in arrears on each Quarter Day after the date of this
Agreement and on the last day of the Availability Period, for
the account of each Bank, commitment commission computed from
the date of this Agreement or the relevant date from which
commitment commission is to accrue at the rate of 0.35 per
cent. per annum on the daily undrawn and uncancelled amount of
such Bank's Commitment. If an Advance is outstanding in an
Optional Currency, the amount of the Commitments treated as
drawn for the purpose of calculating commitment commission
shall be the Guilder Amount of such Advance.
7.2 Expenses
--------
The Parent shall pay to the Agent on demand:
(a) all expenses (including reasonable legal, printing and out-of-
pocket expenses) incurred by the Agent, the Security Trustee
and the Arranger in connection with the negotiation,
preparation and execution of this Agreement and the Security
Documents, the syndication of the Facility, the preparation
and distribution of the Information Memorandum and advertising
in connection with this Agreement and of any amendment or
extension of, or the granting of any waiver or consent under,
this Agreement or the Security Documents together with
interest at the rate referred to in clause 5.3 from the date
of demand for payment of such expenses to the date of payment
(as well after as before judgment); and
(b) all expenses (including legal and out-of-pocket expenses)
incurred by the Agent, the Security Trustee, the Arranger, the
Banks or any of them in contemplation of, or otherwise in
connection with, the enforcement or attempted enforcement of,
or preservation or attempted preservation of any rights under,
this Agreement and/or the Security Documents, including,
without limitation, after the occurrence of a Default or if
otherwise agreed with the Parent, the fees and expenses of
accountants or other experts incurred in relation to any
investigation into the affairs of the Parent or any member of
the Restricted Group, or otherwise in respect of the moneys
owing under this Agreement and/or the Security Documents,
together with interest at the rate referred to in clause 5.3
from the date on which such expenses were incurred to the date
of payment (as well after as before judgment).
7.3 Value Added Tax
---------------
All fees and expenses payable pursuant to this clause 7 shall be paid
together with an amount equal to any value added tax payable by the
Agent, the Arranger or any Bank in respect of such fees and expenses.
7.4 Stamp and other duties
----------------------
35
<PAGE>
The Parent shall pay all stamp, documentary, registration or other
similar duties or Taxes (including any such duties or Taxes payable by,
or assessed on, the Banks or the Agent or the Arranger) imposed on or
in connection with this Agreement and/or the Security Documents or the
Facility (other than those imposed by reason of any assignment or
novation by any Bank) and shall indemnify the Agent, the Arranger and
the Banks against any liability arising by reason of any delay or
omission by the Parent to pay such duties or Taxes.
36
<PAGE>
8 Payments and Taxes; accounts and calculations
---------------------------------------------
8.1 No set-off or counterclaim; distribution to the Banks
-----------------------------------------------------
All payments to be made by the Obligors under this Agreement and/or the
Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in clause 8.5, free
and clear of any deductions or withholdings, in Guilders or the
relevant Optional Currency (except for costs, charges or expenses which
shall be payable in the currency in which they are incurred) on the due
date to the account of the Agent at such bank as the Agent may from
time to time specify for this purpose. Save where this Agreement and/or
the Security Documents provide for a payment to be made for the account
of the Agent (for its own account), the Arranger, the Security Trustee
or a particular Bank (including, without limitation, clauses 6.3, 7,
8.5, 14.1, 14.2, 15.1 and 15.2), in which case the Agent shall
distribute the relevant payment to the Bank concerned, payments to be
made by any Obligor under this Agreement and/or the Security Documents
shall be for the account of all the Banks and the Agent shall forthwith
distribute such payments in like funds as are received by the Agent to
the Banks rateably in accordance with their Commitments or
Contributions, as the case may be.
8.2 Payments by the Banks
---------------------
All sums to be advanced by the Banks to the Borrowers under this
Agreement shall be remitted in Guilders or the relevant Optional
Currency on the relevant Drawdown Date to the account of the Agent at
such bank as the Agent may have notified to the Banks and shall be paid
by the Agent on such date in like funds as are received by the Agent to
the account of the relevant Borrower specified in the relevant Drawdown
Notice.
8.3 Non-Banking Days
----------------
When any payment under this Agreement would otherwise be due or any
reduction in the Total Commitments pursuant to clause 6.8 would
otherwise be effected on a day which is not a Banking Day, the due date
for payment or the date of such reduction shall be postponed to the
next following Banking Day unless such Banking Day falls in the next
calendar month in which case payment shall be made on the immediately
preceding Banking Day. If any date or day specifically referred to in
this Agreement is not a Banking Day all references thereto shall be
deemed to be to the immediately preceding Banking Day.
8.4 Agent may assume receipt
------------------------
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may assume that the payment will
be made when due and may (but shall not be obliged to) make such sum
available to the person so entitled. If it proves to be the case that
such payment was not made to the Agent, then the person to whom such
sum was so made available shall on request refund such sum to the Agent
together with interest thereon sufficient to compensate the Agent for
the cost of making available such sum up to the date of such repayment
and the person by whom such sum was payable shall indemnify the Agent
for any and all loss or reasonable expense which the Agent may sustain
or incur as a consequence of such sum not having been paid on its due
date.
8.5 Grossing-up for Taxes
---------------------
Subject to clause 8.6, at any time any Obligor is required to make any
deduction or withholding in respect of Taxes from any payment due under
this Agreement and/or the Security Documents for the account of any
Bank, the Arranger, the Security Trustee or the Agent (or if the Agent
is required to make any such deduction or withholding from a payment to
the Arranger, the Security Trustee or a Bank), the sum due from the
relevant Obligor in respect of such payment shall, subject to the
Banks' compliance with clause 8.8(b), be increased to the extent
necessary to ensure that, after the making of such deduction or
withholding, each Bank, the Arranger, the Security Trustee and the
Agent receives on the due date for such payment (and retains, free from
37
<PAGE>
any liability in respect of such deduction or withholding) a net sum
equal to the sum which it would have received had no such deduction or
withholding been required to be made and the relevant Obligor shall
indemnify each Bank, the Arranger, the Security Trustee and the Agent
against any losses or costs incurred by any of them by reason of any
failure of such Obligor to make any such deduction or withholding or by
reason of any increased payment not being made on the due date for such
payment. The relevant Obligor shall promptly deliver to the Agent any
receipts, certificates or other proof evidencing the amounts (if any)
paid or payable in respect of any such deduction or withholding.
8.6 Qualifying Banks
----------------
If any Bank is not or ceases to be a Qualifying Bank then it shall
promptly notify the relevant Obligor upon becoming aware of the same
and the relevant Obligor shall not be obliged to pay such Bank under
clause 8.5 any amount in excess of the amount it would have been
obliged to pay if such Bank was or had not ceased to be a Qualifying
Bank provided that this clause 8.6 shall not apply (and the relevant
Obligor shall be obliged to comply with its obligations under clause
8.5) if after today's date there shall have been any change in, or in
the interpretation or application of, any relevant law, directive,
treaty (including, without limitation, any applicable double tax
treaty) or regulation or practice of any applicable taxation authority
and as a result thereof the relevant Bank ceases to be a Qualifying
Bank or the relevant Obligor will be required to make deduction or
withholding on account of tax irrespective of whether the recipient of
the relevant payment is or is not a Qualifying Bank. Each Bank confirms
to each of the Obligors that it is a Qualifying Bank.
8.7 Claw-back of Tax benefit
------------------------
If following any such deduction or withholding as is referred to in
clause 8.5 the Agent, the Arranger, the Security Trustee or any Bank
shall receive or be granted a credit against or remission for any Taxes
payable by it, the Agent, the Arranger, the Security Trustee or such
Bank shall, subject to the relevant Obligor having made any increased
payment in accordance with clause 8.5 and to the extent that the Agent,
the Arranger, the Security Trustee or such Bank can do so without
prejudicing the retention of the amount of such credit or remission and
without prejudice to the right of the Agent, the Arranger, the Security
Trustee or such Bank to obtain any other relief or allowance which may
be available to it, reimburse the relevant Obligor with such amount as
the Agent, the Arranger or such Bank shall in its absolute discretion
certify to be the proportion of such credit or remission as will leave
the Agent, the Arranger, the Security Trustee or such Bank (after such
reimbursement) in no worse position than it would have been in had
there been no such deduction or withholding from the payment by the
relevant Obligor as aforesaid. Such reimbursement shall be made
forthwith upon the Agent, the Arranger, the Security Trustee or such
Bank certifying that the amount of such credit or remission has been
received by it. Nothing contained in this Agreement shall oblige the
Agent, the Arranger, the Security Trustee or any Bank to rearrange its
tax affairs or to disclose any information regarding its tax affairs
and computations. Without prejudice to the generality of the foregoing,
the Obligors shall not, by virtue of this clause 8.7, be entitled to
enquire about the Agent's, the Arranger's, the Security Trustee's or
any Bank's tax affairs.
8.8 Certification to secure a Tax benefit
-------------------------------------
If, in order to make any payment due under this Agreement to the Agent,
the Arranger, the Security Trustee or any Bank without deduction or
withholding for or on account of Tax or to secure the benefit of any
reduced rate of such deduction or withholding, any Borrower requires a
direction from or the consent of a government or taxing authority:
(a) the Borrowers agree to use their reasonable endeavours to
complete (accurately and in a manner reasonably satisfactory
to the Agent, the Security Trustee, the Arranger or such
Bank), execute, arrange for any required certification of, and
deliver to the Agent, the Security Trustee, the Arranger or
such Bank or such government or taxing authority as the Agent,
the Security Trustee, the Arranger or such Bank reasonably
directs, any form
38
<PAGE>
or document reasonably required of it, and to provide such
information that the Agent, the Security Trustee, the
Arranger, such Bank or such government or taxing authority may
reasonably require or request in order to assist or enable the
Agent, the Security Trustee, the Arranger or such Bank to
secure that such a direction or consent is given to the
relevant Borrower in respect of any payment. Each Borrower
shall perform its obligations under this sub-paragraph (a)
promptly upon the earlier of:
(i) being notified that the form, document or information
is required or requested; and
(ii) demand being made by the Agent, the Security Trustee,
the Arranger, such Bank or the relevant government or
taxing authority, as the case may be;
(b) the Agent, the Security Trustee, the Arranger and each such
Bank agrees to use its reasonable endeavours to complete
(accurately and in a manner reasonably satisfactory to the
Parent), execute, arrange for any required certification of,
and deliver to the relevant Borrower, or such government or
taxing authority as the Parent may reasonably direct, any form
or document reasonably required of it, and to provide such
information that the Parent or such government or taxing
authority may reasonably require or request in order to assist
or enable the Parent to secure that such a direction or
consent is given to the relevant Borrower in respect of any
payment. The obligations of the Agent, the Security Trustee,
the Arranger and such Bank under this sub-paragraph (b) shall
be performed within 30 days of reasonable demand by the
Parent.
8.9 Bank accounts
-------------
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. The Agent shall maintain
a control account showing each Advance and other sums owing by each
Borrower under this Agreement and all payments in respect thereof made
by the Obligors from time to time. The control account shall, in the
absence of manifest error, be conclusive as to the amount from time to
time owing by each Borrower under this Agreement.
8.10 Partial payments
----------------
If, on any date on which a payment is due to be made by any Obligor
under this Agreement and/or the Security Documents, the amount received
by the Agent from the relevant Obligor falls short of the total amount
of the payment due to be made by the relevant Obligor on such date
then, without prejudice to any rights or remedies available to the
Agent and the Banks under this Agreement and/or the Security Documents,
the Agent shall apply the amount actually received from the relevant
Obligor in or towards discharge of the obligations of the Borrowers
under this Agreement in the following order, notwithstanding any
appropriation made, or purported to be made, by the relevant Obligor:
(a) firstly, in or towards payment, on a pro rata basis, of any
unpaid fees, costs and expenses of the Agent under this
Agreement and/or the Security Documents;
(b) secondly, in or towards payment to the Arranger of any portion
of the arrangement fee payable under clause 7.1(a) which
remains unpaid and to the Agent of any portion of the agency
fee payable under clause 7.1(b) which remains unpaid;
(c) thirdly, in or towards payment to the Banks, on a pro rata
basis, of any accrued commitment commission payable under
clause 7.1(c) which shall have become due but remains unpaid;
(d) fourthly, in or towards payment to the Banks, on a pro rata
basis, of any accrued interest which shall have become due but
remains unpaid;
39
<PAGE>
(e) fifthly, in or towards payment to the Banks, on a pro rata
basis, of any principal which shall have become due but
remains unpaid; and
(f) sixthly, in or towards payment of any other sum which shall
have become due but remains unpaid (and, if more than one such
sum so remains unpaid, on a pro rata basis).
The order of application set out in this clause 8.10(b)-8.10(f) shall
be varied by the Agent if all Banks so direct, without any reference
to, or consent or approval from, any of the Borrowers.
8.11 Calculations
------------
All interest and other payments of an annual nature under this
Agreement shall accrue from day to day and be calculated on the basis
of actual days elapsed and (in the case of Gilders) a 360 day year or
(in the case of any optional currency) in accordance with standard
London interbank market practice in respect of calculating the numbers
of days comprising a year. In calculating the actual number of days
elapsed in a period which is one of a series of consecutive periods
with no interval between them or a period on the last day of which any
payment falls to be made in respect of such period, the first day of
such period shall be included but the last day excluded.
8.12 Certificates conclusive
-----------------------
Any certificate or determination of the Agent or any Bank as to any
rate of interest or any amount payable under this Agreement shall, in
the absence of manifest error, be conclusive and binding on the
Obligors and (in the case of a certificate or determination by the
Agent) on the Banks.
8.13 Effect of monetary union
------------------------
If the country of any national currency in which any amount is
expressed to be payable under this Agreement participates in Economic
and Monetary Union in accordance with Article 109j of the Treaty on
European Union, then:
(a) any amount expressed to be payable under this Agreement in
that national currency shall be made in that national currency
or in euro as the Agent may, by not less than three Banking
Days' notice to the Obligors and the Banks to that effect,
require;
(b) any amount so required to be paid in euro shall be converted
from that national currency at the rate stipulated pursuant to
Article 109l(4) of the Treaty on European Union and payment of
the amount in euro derived from such conversion shall
discharge the obligation of the relevant party to pay such
national currency amount in accordance with, and subject to,
the Regulation(s) made pursuant to Article 109l(4);
(c) after consultation with the Parent and the Banks and
notwithstanding clause 18.11 the Agent shall be entitled to
make such amendments to this Agreement as it may determine to
be necessary to take account of monetary union and any
consequent changes in market practices (whether as to the
settlement or rounding of obligations, the calculation of
interest or otherwise howsoever).
Any amendment so made to this Agreement by the Agent shall be promptly
notified to the Banks and the Obligors by the Agent and shall be
binding on all the Banks and the Obligors.
40
<PAGE>
9 Guarantee
---------
9.1 Limits of Guarantee
-------------------
Notwithstanding the provisions of clause 9.2 to 9.17 inclusive, the
following limitations shall apply to the relevant Guarantors:
(a) Austria
-------
Any payment under the Guarantee by any of the Guarantors
incorporated in Austria (the "Austrian Guarantors") for any
amounts not being direct liabilities of the respective
Austrian Guarantor shall only be up to the amount of
Distributable Profits for which CNA shall have given an
instruction in accordance with clause 11.1(af) to the relevant
Austrian Guarantor ("Anweisung auf Schuld") stating that its
interest in such Distributable Profits can be the subject of
the Guarantee. Provided that the Agent agrees that, without
prejudice to any of its other rights under this Agreement, it
shall not make a demand for payment from Telekabel Wien under
the Guarantee until 28 days after the date that the Agent has
notified Telekabel Wien that a Default has occurred unless at
such time (i) Telekabel Wien has repaid all amounts in respect
of the Telekabel Notes, (ii) Telekabel Wien has breached any
of its obligations under this Agreement or (iii) an Event of
Default has otherwise occurred in relation to Telekabel Wien,
in which case such 28 day grace period (or any unexpired part
thereof) shall not apply. Payments under the Guarantee for
direct liabilities of the relevant Austrian Guarantor are not
subject to any restriction.
(b) Belgium
-------
Radio Public shall not have any liability under the Guarantee
contained in this clause 9 unless and until such time as its
Articles of Association have been amended to a form
satisfactory to the Agent which form permits Radio Public to
give the Guarantee (to the extent described in this clause
9.1(b)). Once the Articles of Association of Radio Public have
been amended as set out above, the liability of Radio Public
under the Guarantee shall be limited to the amount that has
been on-lent to Radio Public from time to time from Advances
made to the Parent, together with the amount of any Advances
which have been applied by the Parent in satisfaction of
obligations of Radio Public.
(c) Norway
------
Each Guarantor which is incorporated in Norway (a "Norwegian
Guarantor") shall have no liability in excess of the aggregate
of (i) the amounts drawn down and utilised by the Norwegian
Borrowers under the Facility from time to time (up to but not
exceeding the Norwegian Loan Amount) and (ii) a portion of the
total loan amount drawn down and utilised by the Borrowers up
to but not exceeding the amount of distributable equity of
such Norwegian Guarantor for which adequate security has been
provided in accordance with the provisions of section 12-10 of
the Norwegian Companies Act of 1976.
9.2 Covenant to pay
---------------
In consideration of the Banks making or continuing to make Advances to
the Borrowers pursuant to this Agreement the Guarantors hereby
irrevocably and unconditionally but subject always to the provisions of
clause 9.1:
(a) jointly and severally guarantee to each Bank, the Arranger,
the Security Trustee and the Agent, the due performance by the
Borrowers of all of their respective obligations under or
pursuant to this Agreement; and
41
<PAGE>
(b) jointly and severally guarantee to each Bank, the Arranger,
the Security Trustee and the Agent the payment of all moneys
now or hereafter due, owing or incurred by the Borrowers under
or pursuant to this Agreement when the same become due whether
by acceleration or otherwise.
9.3 Guarantors as principal debtors; indemnity
------------------------------------------
As a separate and independent stipulation, but subject always to the
provisions of clause 9.1, the Guarantors jointly and severally agree
that if any purported obligation or liability of any Borrower which
would have been the subject of this Guarantee had it been valid and
enforceable is not or ceases to be valid or enforceable against such
Borrower on any ground whatsoever whether or not known to the Banks or
any of them or the Agent, the Security Trustee or the Arranger
(including, without limitation, any irregular exercise or absence of
any corporate power or lack of authority of, or breach of duty by, any
person purporting to act on behalf of such Borrower or any legal or
other limitation, or any disability or Incapacity or any change in the
constitution of any relevant Borrower) the Guarantors shall
nevertheless be jointly and severally liable in respect of that
purported obligation or liability as if the same were fully valid and
enforceable and such Guarantor was the principal debtor in respect
thereof. The Guarantors hereby irrevocably and unconditionally jointly
and severally agree to indemnify and keep indemnified the Agent, the
Arranger, the Security Trustee and the Banks against any loss or
liability arising from any failure of any Borrower to perform or
discharge any such purported obligation or liability or from any
invalidity or unenforceability of any of the same against any Borrower
(subject to the provisions of clause 9.1).
9.4 No security taken by Guarantors
-------------------------------
The Guarantors hereby jointly and severally warrant that they have not
taken or received, and undertake that until all the Guaranteed
Liabilities have been paid or discharged in full, they will not take or
receive, the benefit of any security from any Borrower or any other
person in respect of their obligations under this Guarantee save as may
be agreed by the Majority Banks.
9.5 Interest
--------
Each Guarantor agrees to pay interest on each amount demanded of it
under this Guarantee from the date of such demand until payment (as
well after as before judgment) at the rate specified in clause 5.3.
Such interest shall be compounded at the end of each period determined
for this purpose by the Agent in the event of it not being paid when
demanded but without prejudice to the Agent, the Arranger and each
Bank's right to require payment of such interest.
9.6 Continuing security and other matters
-------------------------------------
This Guarantee shall, subject to the provisions of clause 9.1:
(a) extend to the ultimate balance from time to time owing to the
Banks and/or the Agent and/or the Arranger and/or the Security
Trustee by the Borrowers and shall be a continuing guarantee,
notwithstanding any settlement of account or other matter
whatsoever;
(b) be in addition to any present or future Collateral Instrument,
right or remedy held by or available to the Banks or any of
them, the Arranger, the Security Trustee or the Agent; and
(c) not be in any way prejudiced or affected by the existence of
any such Collateral Instrument, rights or remedies or by the
same becoming wholly or in part void, voidable or
unenforceable on any ground whatsoever or by the Agent, the
Security Trustee or the Arranger or the Banks or any of them
dealing with, exchanging, varying or failing to perfect or
enforce any of the same or giving time for payment or
indulgence or compounding with any other person liable.
42
<PAGE>
9.7 New accounts
------------
If this Guarantee ceases to be continuing for any reason whatsoever
each Bank may nevertheless continue any account of any Borrower or open
one or more new accounts and the liability of each Guarantor under this
Guarantee shall not in any manner be reduced or affected by any
subsequent transactions or receipts or payments into or out of any such
account.
9.8 Liability unconditional
-----------------------
The liability of each Guarantor shall not be affected nor shall this
Guarantee be discharged or reduced by reason of:
(a) the Incapacity or any change in the name, style or
constitution of any Obligor or any other person liable; or
(b) the Agent, the Security Trustee or the Arranger or any of the
Banks granting any time, indulgence or concession to, or
compounding with, discharging, releasing or varying the
liability of any other Obligor or any other person liable or
renewing, determining, varying or increasing any
accommodation, facility or transaction or otherwise dealing
with the same in any manner whatsoever or concurring in,
accepting or varying any compromise, arrangement or settlement
or omitting to claim or enforce payment from any Obligor or
any other person liable; or
(c) any act or omission which would not have discharged or
affected the liability of such Guarantor had it been a
principal debtor instead of a guarantor or by anything done or
omitted which but for this provision might operate to
exonerate such Guarantor.
9.9 Collateral Instruments
----------------------
None of the Banks, the Arranger, the Security Trustee and the Agent
shall be obliged to make any claim or demand on any Borrower or to
resort to any Collateral Instrument or other means of payment now or
hereafter held by or available to them or it before enforcing this
Guarantee and no action taken or omitted by any of the Banks, the
Arranger, the Security Trustee or the Agent in connection with any such
Collateral Instrument or other means of payment shall discharge,
reduce, prejudice or affect the liability of any Guarantor under this
Guarantee nor shall any of the Banks, the Arranger, the Security
Trustee or the Agent be obliged to apply any money or other property
received or recovered in consequence of any enforcement or realisation
of any such Collateral Instrument or other means of payment in
reduction of the Guaranteed Liabilities.
9.10 Waiver of Guarantors' rights
----------------------------
Until all the Guaranteed Liabilities have been paid, discharged or
satisfied in full (and notwithstanding payment of a dividend in any
liquidation or under any compromise or arrangement) each Guarantor
agrees that, without the prior written consent of the Agent, it will
not:
(a) exercise its rights of subrogation, reimbursement and
indemnity against any other Obligor or any other person
liable; or
(b) demand or accept any security to be executed in respect of any
of its obligations under this Guarantee or any other
Indebtedness now or hereafter due to such Guarantor from any
other member of the Restricted Group or from any other person
liable; or
(c) take any step or enforce any right against any Obligor or any
other person liable in respect of any Guaranteed Liabilities;
or
43
<PAGE>
(d) exercise any right of set-off or counterclaim against any
other Obligor or any other person liable or claim or prove or
vote as a creditor in competition with the Agent, the
Arranger, the Security Trustee or any of the Banks in the
liquidation, administration or other insolvency proceeding of
any other Obligor or any other person liable or have the
benefit of, or share in, any payment from or composition with,
any other Obligor or any other person liable or any other
Collateral Instrument now or hereafter held by the Agent, the
Arranger, the Security Trustee or any of the Banks for any
Guaranteed Liabilities or for the obligations or liabilities
of any other person liable but so that, if so directed by the
Agent, it will prove for the whole or any part of its claim in
the liquidation of any other Obligor on terms that the benefit
of such proof and of all money received by it in respect
thereof shall be held on trust for the Banks, the Arranger,
the Security Trustee and the Agent and applied in or towards
discharge of the Guaranteed Liabilities in such manner as the
Agent shall deem appropriate.
9.11 Suspense accounts
-----------------
Any money received in connection with this Guarantee (whether before or
after any Incapacity of any Obligor) may be placed to the credit of a
suspense account with a view to preserving the rights of the Banks, the
Arranger, the Security Trustee and the Agent to prove for the whole of
their respective claims against any Obligor or any other person liable
or may be applied in or towards satisfaction of the Guaranteed
Liabilities as the Agent may from time to time conclusively determine
in its absolute discretion.
9.12 Settlements conditional
-----------------------
Any release, discharge or settlement between any Guarantor and the
Agent, the Arranger or any of the Banks shall be conditional upon no
security, disposition or payment to the Agent, the Arranger, the
Security Trustee or any of the Banks by any Obligor or any other person
liable being void, set aside or ordered to be refunded pursuant to any
enactment or law relating to bankruptcy, liquidation, administration or
insolvency or for any other reason whatsoever and if such condition
shall not be fulfilled the Banks, the Arranger, the Security Trustee
and the Agent shall be entitled to enforce this Guarantee subsequently
as if such release, discharge or settlement had not occurred and any
such payment had not been made.
9.13 Guarantors to deliver up certain property
-----------------------------------------
If, contrary to clauses 9.4 or 9.10, any Guarantor takes or receives
the benefit of any security or receives or recovers any money or other
property, such security, money or other property shall be held on trust
for the Agent, the Arranger, the Security Trustee and the Banks and
shall be delivered to the Agent on demand.
9.14 Retention of this guarantee
---------------------------
The Banks, the Arranger, the Security Trustee and the Agent shall be
entitled to retain this Guarantee after as well as before the payment
or discharge of all the Guaranteed Liabilities for such period as the
Agent may reasonably determine.
9.15 Changes in constitution or reorganisations of Banks
---------------------------------------------------
For the avoidance of doubt and without prejudice to the provisions of
clause 18, this Guarantee shall remain binding on each Guarantor
notwithstanding any change in the constitution of the Banks or any of
them or the Arranger, the Security Trustee or the Agent or their or its
absorption in, or amalgamation with, or the acquisition of all or part
of their or its undertaking or assets by, any other person, or any
reconstruction or reorganisation of any kind, to the intent that this
Guarantee shall remain valid and effective in all respects in favour of
any successor in title of the Banks, the Arranger, the Security Trustee
and the Agent, any Substitute and any successor Agent appointed
pursuant to clause 19.13 or any successor Security Trustee appointed
pursuant to the Security Trust Deed in the same manner as if such
successor in title, Substitute or successor
44
<PAGE>
Agent or successor Security Trustee had been named in this guarantee as
a party instead of, or in addition to, the relevant Bank or the
Arranger, the Security Trustee or the Agent, as the case may be.
9.16 Other Guarantors
----------------
Each Guarantor agrees to be bound by this Guarantee notwithstanding
that any other person intended to execute or to be bound by any other
guarantee or assurance under or pursuant to this Agreement may not do
so or may not be effectually bound and notwithstanding that such other
guarantee or assurance may be determined or be or become invalid or
unenforceable against any other person, whether or not the deficiency
is known to the Banks or any of them or the Agent, the Security Trustee
or the Arranger.
9.17 Acceding Guarantors and New Janco
---------------------------------
(a) To the extent legally possible, the Parent shall procure that
(i) as soon as reasonably practicable following the Bridge
Termination Date all Unrestricted Subsidiaries which are
wholly owned by the Parent and which are required to become
Acceding Guarantors by the Agent (acting on the instructions
of the Majority Banks acting reasonably) and (ii) all
Subsidiaries of any Restricted Subsidiary deemed by the Agent
(acting on the instructions of the Majority Banks acting
reasonably) to be of a material size, become Acceding
Guarantors by delivering to the Agent (as soon as is
reasonably practicable following receipt by the Parent of a
written notice from the Agent requiring such action) Deeds of
Guarantor Accession duly executed by such Subsidiaries and the
Parent.
(b) To the extent legally possible, the Parent shall procure that,
at the same time as a Deed of Guarantor Accession is delivered
to the Agent, there is delivered to the Agent all the
documents and evidence listed in schedule 10, part B in
respect of the relevant Subsidiary in each case in form and
substance satisfactory to the Agent acting reasonably.
(c) Delivery of a Deed of Guarantor Accession duly executed by an
Acceding Guarantor and the Parent constitutes confirmation by
the relevant Acceding Guarantor that the representations and
warranties set out in clause 10.1 to be made by it on the date
of the Deed of Guarantor Accession in accordance with clause
10.3 are correct as if made by it with reference to the facts
and circumstances then existing.
(d) To the extent legally possible in any Relevant Jurisdiction,
each Acceding Guarantor, before entering into such a Deed of
Guarantor Accession, shall comply with all relevant
legislation in its country of incorporation, to the
satisfaction of the Agent, to ensure that the proposed
guarantee to be given is in compliance with any relevant
provisions of such legislation and to ensure that the proposed
guarantee to be given is to be legal valid and binding on the
proposed Acceding Guarantor.
(e) The Arranger and each Bank irrevocably authorises the Agent to
countersign each Deed of Guarantor Accession on its behalf
without any further consent of, or consultation with, the
Arranger or any of the Banks.
(f) Each of the other Obligors irrevocably authorises the Parent
to countersign each Deed of Guarantor Accession on its behalf
without any further consent of, or consultation with, any of
the other Obligors.
(g) Contemporaneously with the completion of the Norwegian Merger,
the Parent shall procure that New Janco shall enter into such
documentation as the Agent shall require so as to succeed to
and assume all obligations then owed to the Agent, the
Arranger, the Security Trustee and the Banks by Janco,
Norkabel, Kanal 2 A/S, Norkabel A/S and
45
<PAGE>
Oslo Kabelanlegg A/S and shall provide to the Agent such
documents, evidence and legal opinions as the Agent may
require in connection therewith.
46
<PAGE>
10 Representations and warranties
------------------------------
10.1 Repeated representations and warranties
---------------------------------------
Each Obligor in respect of itself and its Subsidiaries which are
members of the Restricted Group represents and warrants to each of the
Banks, the Arranger, the Security Trustee and the Agent that:
(a) Due incorporation: all of the members of the Restricted Group
-----------------
are duly incorporated and validly existing under the laws of
the respective countries of their incorporation as limited
liability companies and have power to carry on their
respective businesses as they are now being conducted and to
own their respective property and other assets;
(b) Power to borrow etc.: each Obligor has power to execute,
--------------------
deliver and perform its obligations under this Agreement and
the Security Documents to which it is a party and, in the case
of the Borrowers, to borrow the Commitments; all necessary
corporate, shareholder and other action has been taken to
authorise the execution, delivery and performance of the same
and no limitation on the powers of any Borrower to borrow or
on the powers of any Guarantor to give guarantees will be
exceeded as a result of borrowings under this Agreement or as
a result of the giving of the Guarantee (in each case as
limited, where appropriate, by clause 9.1);
(c) Binding obligations: this Agreement constitutes and the
-------------------
Security Documents to which it is a party, when executed and
delivered by the relevant Obligor will constitute, valid and
legally binding obligations of such Obligor enforceable in
accordance with their respective terms subject to the
qualifications contained in the legal opinions referred to in
schedule 3 and mandatory provisions of law affecting creditors
rights generally;
(d) No conflict with other obligations: the execution and delivery
----------------------------------
of, the performance of its obligations under, and compliance
with the provisions of, this Agreement and the Security
Documents to which it is a party by the Obligors will not (i)
contravene any existing applicable law, statute, rule or
regulation or any judgment, decree or permit to which any
Obligor is subject, (ii) conflict with, or result in any
breach of any of the terms of, or constitute a default under,
any agreement or other instrument to which any Obligor is a
party or is subject or by which it or any of its property is
bound, (iii) contravene or conflict with any provision of any
Obligor's constitutive documents, (iv) breach in any material
respect any term of the Licences or Necessary Authorisations
or (v) save for the Encumbrances granted to the Security
Trustee pursuant to the Security Documents, result in the
creation or imposition of or oblige any member of the
Restricted Group to create any Encumbrance (other than a
Permitted Encumbrance) on any member of the Restricted Group's
undertakings, assets, rights or revenues;
(e) No filings required: save for the filings, registrations and
-------------------
notarisations referred to in the legal opinions referred to in
schedule 3, it is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of this
Agreement or the Security Documents that any of them or any
other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any
Relevant Jurisdiction or that any stamp, registration or
similar tax or charge be paid in any Relevant Jurisdiction on
or in relation to this Agreement or any of the Security
Documents and this Agreement and the Security Documents are in
proper form for their enforcement in the courts of any
Relevant Jurisdiction;
(f) No litigation: no litigation, arbitration or administrative
-------------
proceeding is taking place, pending or, to the knowledge of
the officers of any Obligor, threatened against any member of
the Restricted Group which, if adversely determined would or
is reasonably likely to have a Material Adverse Effect;
47
<PAGE>
(g) Financial statements correct and complete:
-----------------------------------------
(i) the audited consolidated financial statements of the
Parent and the audited financial statements of each
member of the Restricted Group (in the case of Kanal 2
A/S, Oslo Kabelanlegg A/S, Norkabel A/S, as
consolidated into the consolidated financial statements
of Norkabelgruppen A/S and in the case of CNA, as
consolidated into the consolidated financial statements
of the Parent) in respect of the financial year ended
on 31st December 1996 as delivered to the Agent have
been prepared in accordance with GAAP which principles
have been consistently applied and present fairly and
accurately the financial position of the Parent and the
financial position of each member of the Restricted
Group respectively as at such date and the results of
the operations of the operations of the Parent and the
results of the operations of each member of the
Restricted Group respectively for the financial year
ended on such date and, as at such date, neither the
Parent nor any member of the Restricted Group had any
significant liabilities (contingent or otherwise) or
any losses which are not disclosed by, or reserved
against or provided for in, such financial statements;
(ii) (A) the unaudited monthly management accounts for
each of the Parent, Radio Public, the Telekabel
Entities, Janco and its Subsidiaries and the
Restricted Group dated 30th June, 1997; and
(B) the unaudited quarterly management accounts for
each of the Parent, Radio Public, the Telekabel
Entities, Janco and its Subsidiaries and the
Restricted Group dated 30th June, 1997;
as delivered to the Agent have been prepared in
accordance with GAAP which principles have been
consistently applied and present fairly and accurately
the results of the operations of each of the Parent,
Radio Public, the Telekabel Entities, Janco and its
Subsidiaries and the Restricted Group dated 30th June,
1997 (as appropriate) for the relevant period; and
(iii) the combined financial projections for the Restricted
Group for the financial years ending 1997 to 2006
inclusive, the operating statistics projections for
such financial years and the Management Base Case have
been prepared based upon historical financial
information and upon the assumptions set forth therein,
which assumptions were reasonable when made and are
reasonable on the date hereof;
(h) No material adverse change: there has been no material adverse
--------------------------
change in the financial position of the Parent or the
consolidated financial position of the Restricted Group from
that set forth in the financial statements referred to in
clause 10.1(g)(i) and (ii);
(i) Choice of law: the choice by the Obligors of English law to
-------------
govern this Agreement and the submission by the Obligors to
the non-exclusive jurisdiction of the High Court of Justice in
England are valid and binding;
(j) Title to assets: each Obligor is the legal and beneficial
---------------
owner of and has good and marketable title to its assets free
and clear of any Encumbrance other than Permitted
Encumbrances;
(k) Intellectual Property Rights:
----------------------------
(i) the Intellectual Property Rights owned by or licensed
to each member of the Restricted Group are free from
any Encumbrance (save for those created or to be
created by or pursuant to the Security Documents and
Permitted Encumbrances) and any other rights or
interests in favour of third parties;
48
<PAGE>
(ii) the Intellectual Property Rights owned by or licensed
to each member of the Restricted Group are all the
Intellectual Property Rights required by them in order
to carry on, maintain and operate in all material
respects their respective businesses, properties and
assets and no member of the Restricted Group in
carrying on its business infringes any Intellectual
Property Rights of any third party where any action
taken by such third party in respect of any such
infringement would or is reasonably likely to have a
Material Adverse Effect; and
(iii) no Intellectual Property Rights owned by any member of
the Restricted Group are being infringed, nor is there
any threatened infringement of any such Intellectual
Property Rights which, in either case would or is
reasonably likely to have a Material Adverse Effect;
(l) Copyright matters: each member of the Restricted Group has
-----------------
obtained all consents and taken all other action required in
connection with the secondary transmission by it of any
broadcast television signals (other than where failure to do
so would or is reasonably likely to have a Material Adverse
Effect) and no member of the Restricted Group has any
knowledge, nor is it aware of any claim, that it is or may be
liable to any person for any copyright infringement of any
nature whatsoever as a result of the operation of its business
which liability would or is reasonably likely to have a
Material Adverse Effect;
(m) Shares: all shares issued by each member of the Restricted
------
Group have been validly allotted; and
(n) Works councils: no Obligor incorporated in the Netherlands has
--------------
instituted a works council or, if any such works council has
been instituted, all action has been taken by or in relation
to such works council necessary to authorise the performance
by the Obligors of their respective obligations under this
Agreement and the Security Documents.
10.2 Further representations and warranties
--------------------------------------
Each Obligor in respect of itself and its Subsidiaries which are
members of the Restricted Group further represents and warrants to each
of the Banks, the Arranger, the Security Trustee and the Agent that:
(a) Principal Agreements:
--------------------
(i) the Principal Agreements which have been entered into
on or prior to the date of this Agreement are in full
force and effect; and
(ii) to the best of its knowledge and belief after due
enquiry, (1) no party is in breach of any material term
thereof, (2) there is no material dispute subsisting
between the parties thereto and (3) no amendments have
been made thereto;
(b) Licences and Necessary Authorisations: the Licences are in
-------------------------------------
full force and effect and each member of the Restricted Group
is in compliance in all material respects with all provisions
thereof that are applicable to it. Each member of the
Restricted Group has secured all the Necessary Authorisations,
all such Necessary Authorisations are in full force and effect
and each member of the Restricted Group is in compliance in
all material respects with all provisions thereof. To the best
of its knowledge and belief after due enquiry, neither the
Licences nor any of the Necessary Authorisations are the
subject of any pending or threatened attack or revocation;
(c) Consents obtained: every consent, authorisation, licence or
-----------------
approval of, or registration with or declaration to,
governmental or public bodies or authorities of courts (other
than
49
<PAGE>
the Licences and the Necessary Authorisations) required by
each member of the Restricted Group to authorise, or required
by any member of the Restricted Group in connection with, the
execution, delivery, validity, enforceability or admissibility
in evidence of this Agreement and the Security Documents to
which it is a party or the performance by each member of the
Restricted Group of their respective obligations under this
Agreement and the Security Documents to which they are a party
has been obtained or made and is in full force and effect and
there has been no material default in the observance of the
conditions or restrictions (if any) imposed in, or in
connection with, any of the same;
(d) Contractual commitments: since the audited accounts of the
-----------------------
Parent for the year ended 31st December 1996, no dividends (in
cash or specie) of the Parent or any other rights or benefits
have been declared, made or paid by the Parent and no member
of the Restricted Group has entered into any contractual
commitments of a material nature (other than (i) the Principal
Agreements, (ii) for the purpose of carrying out the business
of constructing, installing and operating cable television and
telecommunications systems in the territories covered by the
Licences or such other business as is permitted by the terms
of this Agreement, (iii) contractual commitments constituting
Permitted Borrowings, Permitted Disposals or Permitted
Encumbrances or (iv) in relation to the Philips Transaction);
(e) No withholding Taxes: (assuming the correctness of the
--------------------
confirmation set out in clause 8.6) under the law and practice
at today's date no Taxes are imposed by withholding or
otherwise on any payment to be made to the Agent, the Security
Trustee, the Arranger or the Banks by any member of the
Restricted Group under this Agreement or any Security Document
or are imposed on or by virtue of the execution or delivery by
any member of the Restricted Group of this Agreement or any
Security Document to which it is a party or any document or
instrument to be executed or delivered under this Agreement or
any such Security Document;
(f) Telecommunications and Cable Laws: to the best of its
---------------------------------
knowledge and belief after due enquiry, each member of the
Restricted Group is in compliance in all material respects
with all Telecommunications and Cable Laws but excluding, for
these purposes only, breaches of Telecommunications and Cable
Laws which have been expressly waived by the relevant
regulatory authority;
(g) No Default: no member of the Restricted Group is in breach of
----------
or in default under any agreement relating to Indebtedness to
which it is a party or by which it may be bound; and
(h) Information Memorandum: to the best of the Parent's knowledge
----------------------
and belief after due enquiry, as at the date of the
Information Memorandum the factual information relating to the
Restricted Group contained in the Information Memorandum was
true and accurate in all material respects and not misleading
in any material respect and the Information Memorandum does
not omit any material facts; all reasonable enquiries have
been made by the Parent to verify the facts and statements
relating to the Restricted Group contained therein; all
opinions, projections and forecasts contained therein and the
assumptions on which such opinions, projections and forecasts
were based on and arrived at after due and careful
consideration and enquiry and represent the views of the
Parent as at the date of the Information Memorandum; there are
no material facts or circumstances which have not been
disclosed to the Arranger prior to the date hereof the
omission of which could make any factual information contained
in the Information Memorandum inaccurate or misleading in any
material respect either as at the date of the Information
Memorandum or as at the date of this Agreement or any of the
opinions, projections and forecasts contained in the
Information Memorandum (and the assumptions on which such
opinions, projections and forecasts were made) misleading in
any material respect either as at the date of the Information
Memorandum or as the date of this Agreement. Notwithstanding
the above, no warranty or
50
<PAGE>
representation is made in respect of (i) any information,
facts, statements, opinions, projections, forecasts,
demographic statistics or circumstances relating to the cable,
media, telecommunications and data services industry as a
whole, and (ii) any person other than any member of the
Restricted Group; and
(i) Environmental Matters
---------------------
(i) each member of the Restricted Group complies, in all
respects, with all requirements of Environmental Laws
where failure to do so has or is reasonably likely to
have a Material Adverse Effect; and
(ii) after due enquiry, no Environmental Claim is, to the
knowledge of any member of the Restricted Group,
pending, threatened or existing, as at the date of this
Agreement, which has or is reasonably likely to have a
Material Adverse Effect.
10.3 Repetition
----------
The representations and warranties in clause 10.1, (so that (i) the
representation and warranty in clause 10.1(g)(i) shall for this purpose
refer to the then latest consolidated financial statements of the
Restricted Group verified by the auditors to the Restricted Group and
delivered to the Agent under clause 11.1, (ii) the representation and
warranty in clause 10.1(g)(ii) shall for this purpose refer to the then
latest Monthly Management Accounts and Quarterly Management Accounts
delivered to the Agent under clause 11.1, (iii) the representation and
warranty contained in clause 10.1(g)(iii) shall for this purpose refer
to the then latest consolidated financial projections of the Restricted
Group and the then latest operating statistics projections for each
franchise and shall not include a representation or warranty as to the
Management Base Case, and (iv) the representation and warranty in
clause 10.1(h) shall for this purpose refer to the latest audited
financial statements of the Restricted Group delivered to the Agent
under clause 11.1) shall be deemed to be repeated by the Obligors on
and as of each Drawdown Date and each Maturity Date as if made with
reference to the facts and circumstances existing on each such day and,
in the case of an Obligor which becomes a party to this Agreement after
the date hereof, shall be deemed to be repeated by that Obligor on the
date that it executes a Deed of Borrower Accession or Deed of Guarantor
Accession.
51
<PAGE>
11 Undertakings
------------
11.1 Positive Covenants
------------------
Each Obligor in respect of itself and its Subsidiaries which are
members of the Restricted Group undertakes with each of the Banks, the
Security Trustee, the Arranger and the Agent that, from the date of
this Agreement and so long as any moneys are owing under this Agreement
or remain available for drawing by the Borrowers, it will:
(a) Notice of Default, etc.
----------------------
procure that the Agent is promptly informed of (i) any
occurrence of which it becomes aware which would or is
reasonably likely to have a Material Adverse Effect, (ii) any
Default and any potential breach of any of the undertakings
set out in clause 11 or 12 forthwith upon becoming aware
thereof and will from time to time, if so requested by the
Agent, confirm to the Agent in writing that, save as otherwise
stated in such confirmation, no Default has occurred and is
continuing, (iii) any lapse, suspension or termination of or
refusal by any person to renew or extend any Licence or
Necessary Authorisation or any breach of any Licence or
Necessary Authorisation or any breach of any Licence or
Necessary Authorisation where any such breach would or is
reasonably likely to have a Material Adverse Effect, (iv) (to
the extent known to any member of the Restricted Group) the
commencement of all proceedings and investigations by or
before any governmental body and all actions and proceedings
in any court or before any arbitrator where any such
proceedings, investigations or actions would, if adversely
determined, have a Material Adverse Effect (v) any application
of which it becomes aware for any other licence or franchise
agreement by means of cable television systems (including
satellite master antennae television systems and multi-point
microwave distributions systems) with respect to the territory
covered by the Licences where any such application, if
successful, would or is reasonably likely to have a Material
Adverse Effect and (vi) any breach of any Telecommunications
and Cable Laws by any member of the Restricted Group which
would or is reasonably likely to have a Material Adverse
Effect;
(b) Consents and licences
---------------------
without prejudice to clauses 3 and 10.1, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with the conditions and restrictions (if
any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public
bodies or authorities or courts and do, or cause to be done,
all other acts and things which may from time to time be
necessary or desirable under applicable law for the continued
due performance of all its obligations under this Agreement
and the Security Documents;
(c) Use of proceeds
---------------
use the proceeds of drawings under this Agreement exclusively
for the purposes specified in clause 1.1;
(d) Pari passu
----------
ensure that its obligations under this Agreement shall,
without prejudice to the provisions of clause 11.2 or to the
security intended to be created pursuant to the Security
Documents, at all times rank at least pari passu with all its
other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract;
(e) Business
--------
52
<PAGE>
engage in the business of acting as the holder of shares
and/or interests in other members of the Restricted Group
and/or the Unrestricted Group and/or engage in the business of
constructing, installing, operating and utilising cable
television, telecommunications and data service systems for
households and businesses in Europe and Israel and in no other
activities save for any directly related business reasonably
considered to be financially beneficial to such business; in
the case of the Parent engage in the business of acting as the
holding company of its Subsidiaries (which shall include the
raising of Permitted Borrowings and the on-lending of such
Borrowed Money to its Subsidiaries in accordance with the
provisions of this Agreement and the entry into of hedging
arrangements on behalf of its Subsidiaries) and in no other
activities;
(f) Financial statements
--------------------
(in the case of the Parent) prepare:
(i) annual audited:
(A) unconsolidated financial statements of the Parent,
(B) unconsolidated financial statements of Radio
Public,
(C) consolidated financial statements of the Telekabel
Entities,
(D) consolidated financial statements of Janco and its
Subsidiaries, and
(E) combined financial statements of the Restricted
Group each in accordance with GAAP (together with
a reconciliation statement to the generally
accepting accounting principles and practices in
the United States of America) and cause such
financial statements to be reported on by its
auditors and deliver to the Agent sufficient
copies of the same for distribution to all of the
Banks as soon as practicable but not later than
120 days (or 150 days if the Parent is in active
discussions with its auditors and if such
financial statements would have been subject to a
qualification (other than a qualification of a
technical nature and the remedy for the matter
giving rise to the qualification would have no
effect on the results of the relevant members of
the Restricted Group for the period to which such
financial statements relate or on the financial
position of the relevant member of the Restricted
Group as at the end of such period) if delivered
within 120 days) after the end of the financial
year to which they relate; and
(ii) semi-annual unaudited:
(A) unconsolidated financial statements of the Parent,
(B) unconsolidated financial statements of Radio
Public,
(C) consolidated financial statements of the Telekabel
Entities,
(D) consolidated financial statements of Janco and its
Subsidiaries, and
(E) combined financial statements of the Restricted
Group
(on the same basis as that used for the annual
financial statements referred to in (i) above) and
deliver to the Agent sufficient copies of the same for
53
<PAGE>
distribution to all of the Banks as soon as practicable
but not later than 45 days after the end of the Six
Month Period to which they relate.
Each set of consolidated financial information or financial
statements of all or any part of the Restricted Group
delivered pursuant to this clause 11.1(f) shall be accompanied
by a calculation in reasonable detail of Net Operating
Cashflow for each of (i) the Parent, (ii) Radio Public (iii)
the Telekabel Entities (iv) Janco and its Subsidiaries and (v)
the Restricted Group;
(g) Quarterly Management Accounts
-----------------------------
(in the case of the Parent) in respect of each Quarterly
Period commencing with the Quarterly Period ending 30th
September 1997, prepare unaudited Quarterly Management
Accounts for each of:
(i) the Parent (unconsolidated),
(ii) Radio Public (unconsolidated),
(iii) the Telekabel Entities (consolidated),
(iv) Janco and its Subsidiaries (consolidated), and
(v) the Restricted Group (combined)
in each case containing information of a substantially similar
type and to a substantially similar level of detail as in the
format used in the preparation of the Management Base Case
(including, without limitation, a profit and loss account,
balance sheet, cash flow statement and summary of operating
statistics in the form (or in a form substantially similar to
the form) used in the Management Base Case and, in the case of
the last Quarterly Period of each financial year, a profit and
loss account, and cash flow statement for that financial year
in the form (or in a form substantially similar to the form)
used in the Management Base Case) or omitting any such
information or detail or containing such other information or
to such other level of detail as may, from time to time, be
approved by the Agent (acting on the instructions of the
Majority Banks acting reasonably) in writing and deliver a
copy of the same to the Agent for distribution to all of the
Banks as soon as practicable but not later than 45 days after
the Quarterly Period to which they relate;
(h) Monthly Management Accounts
---------------------------
(in the case of the Parent) in respect of each calendar month
commencing with September 1997, prepare unaudited Monthly
Management Accounts each of:
(i) the Parent (unconsolidated),
(ii) Radio Public (unconsolidated),
(iii) the Telekabel Entities (consolidated),
(iv) Janco and its Subsidiaries (consolidated), and
(v) the Restricted Group (combined)
in each case containing information of a substantially similar
type and to a substantially similar level of detail as in the
format used in the preparation of the Management Base Case
(including, without limitation, a commentary, a profit and
loss account and cash flow statement and a summary of
operating statistics in the form (or in a form
54
<PAGE>
substantially similar to the form) used in the Management Base
Case) or omitting any such information or detail or containing
such other information or to such other level of detail as
may, from time to time, be approved by the Agent (acting on
the instructions of the Majority Banks acting reasonably) in
writing and deliver a copy of the same to the Agent for
distribution to all of the Banks as soon as practicable but
not later than 30 days after the calendar month to which they
relate;
(i) Change in basis of accounts
---------------------------
(in the case of the Parent) ensure that all financial
statements delivered under clause 10.1(f) are prepared in
accordance with GAAP and in accordance with the accounting
principles and practices used in the preparation of the
financial statements referred to in clause 9.1(g)(i) and the
1997 Budget (the "Original Basis") consistently applied in
respect of each financial year unless to do so would be
inconsistent with then current GAAP (the "New Basis"). If the
preparation of financial statements on the Original Basis is
contrary to the New Basis then the Parent shall promptly
notify the Agent in writing of the relevant change and (at the
option of the Parent) shall either (1) prepare and deliver to
the Agent audited financial statements on both the Original
Basis and the New Basis (or shall prepare and deliver
financial statements on the New Basis only but shall also
prepare and deliver an audited reconciliation statement (a
"Reconciliation Statement") showing those adjustments
necessary in order to reconcile the financial statements
produced on the New Basis to the Original Basis) or (2)
request the Agent to enter into good faith negotiations for
such amendments (if any) as are necessary to the covenants
contained in clause 12.1 and any other provisions of this
Agreement affected by such change, in which event the Agent
will enter into such negotiations for a period of not more
than 28 days. If agreement is reached between the Parent and
the Agent (acting on the instructions of the Majority Banks)
within such period as to the amendment of any such covenants
or provisions, then the parties hereto will enter into such
documentation and take such other steps as are required to put
such amendments into effect following which the Parent shall
then be obliged to produce financial statements on the New
Basis only. If no such agreement is reached then the Parent
shall be obliged to prepare and deliver financial statements
on both the Original Basis and the New Basis (or shall prepare
and deliver audited financial statements on the New Basis
accompanied by a Reconciliation Statement).
Where the Parent is under an obligation to deliver financial
statements under clause 11.1(f) on both the Original Basis and
the New Basis (or on the New Basis but accompanied by a
Reconciliation Statement), Monthly Management Accounts and
Quarterly Management Accounts shall also be delivered on both
bases or on the New Basis but accompanied by a Reconciliation
Statement.
All financial statements, Quarterly Management Accounts,
Monthly Management Accounts and Reconciliation Statements
delivered pursuant to this clause 11.1(i) shall be delivered
within the relevant time period set out in clause 11.1.
The provisions of this clause 11.1(i) shall also apply,
mutatis mutandis, to the preparation and delivery of the
Annual Budget under clause 11.1(j)(iii) and the revised
financial projections under clause 11.1(j)(iv).
(j) Delivery of reports
-------------------
deliver to the Agent, for distribution to the Banks (in the
case of a Compliance Certificate issued by the auditors of the
Restricted Group) sufficient copies for all of the Banks or
(in any other case) a copy of each of the following documents,
in each case at the time of issue thereof or (in the case of
the Compliance Certificates referred to in (ii) below)
together with the financial statements prepared in respect of
each financial year and Quarterly Management Accounts prepared
in respect of each Quarterly Period
55
<PAGE>
pursuant to clause 11.1(g) in respect of the financial period
to which such Compliance Certificate relates:
(i) every material document issued by the Parent to its
shareholders (in their capacity as a shareholder) or
issued by the Parent or any of its Subsidiaries to its
creditors generally;
(ii) (in the case of the Parent only) a Compliance
Certificate stating that the Restricted Group as at the
last day of the financial period to which such
financial statements or Quarterly Management Accounts
relate was in compliance with the relevant covenants
and undertakings in clause 12 (or if it was not in
compliance indicating the extent of the breach);
(iii) (in the case of the Parent only)(for each financial
year falling within the Availability Period) an Annual
Budget for each financial year for the Restricted Group
no later than the last day of the preceding financial
year; and
(iv) (in the case of the Parent only)(for each financial
year falling within the Availability Period commencing
in 1998) no later than 30th June in each year, revised
financial projections and revised projections for
operating statistics in relation to the Restricted
Group containing information of a substantially similar
type and to a substantially similar level of detail as
the base case financial projections and operating
statistics projections contained in the Management Base
Case, such projections to extend to at least the
Termination Date and to contain details of the
assumptions on the basis of which such projections have
been prepared and an explanation of any discrepancies
from the most recently delivered financial projections
and projections for operating statistics delivered
under this sub-paragraph (j)(iv) (or, in the case of
the first such financial projections, from the base
case financial projections or operating statistics
projections (as the case may be) contained in the
Management Base Case);
(k) Financial Year End
------------------
maintain a financial year end of 31 December for each member
of the Restricted Group save with the prior written consent of
the Majority Banks;
(l) Authorised Officers
-------------------
ensure that any new or replacement Authorised Officer has
provided the Agent with evidence satisfactory to it of such
new officer(s)' authority and a specimen of his or their
signature(s) prior to signing any Compliance Certificates,
Drawdown Notices, or any other notices, requests or
confirmations referred to in this Agreement or relating to the
Facility;
(m) Auditors
--------
ensure that Arthur Andersen is appointed as auditor of the
Parent and each Restricted Subsidiary and not change such
appointment without appointing a major accounting firm of
recognised international standing and repute;
(n) Provision of further information
--------------------------------
notify the Agent of any change to the business of any member
of the Restricted Group providing details of such change as
soon as practicable after making such change and provide the
Agent with a copy of (i) each Principal Agreement entered into
after the date of this Agreement and (ii) any material report,
notice or other communication relating to the Licences, the
Necessary Authorisations and such financial and other
56
<PAGE>
information concerning each member of the Restricted Group and
their respective affairs as the Agent or any Bank (acting
through the Agent) may from time to time reasonably require;
(o) Insurance
---------
maintain insurance cover of a type and level which a prudent
company in the same business as the relevant Obligor would
effect;
(p) Inspection
----------
if required by the Agent (acting on the instructions of the
Majority Banks), at any time whilst a Default is continuing,
permit, to the extent it is able to do so, representatives of
the Agent or any of the Banks upon reasonable prior written
notice to the Parent or its relevant Subsidiary, after having
made arrangements with the Parent so to do and after entering
into a confidentiality undertaking if reasonably required by
the Parent (a) visit and inspect the properties of any member
of the Restricted Group during normal business hours, (b)
inspect and make extracts from and copies of its books and
records other than records which the relevant member of the
Restricted Group is prohibited by law from disclosing to the
Agent and/or any relevant Bank and (c) discuss with its
principal officers and auditors its business, assets,
liabilities, financial position, results of operations and
business prospects provided that any such discussion with the
auditors shall only be on the basis of the audited accounts of
the Restricted Group and Compliance Certificates issued by the
auditors;
(q) Compliance with laws and regulations
------------------------------------
comply with the terms and conditions of all laws (including
Telecommunications and Cable Laws, the Licences and the
Necessary Authorisations), regulations, agreements, licences
and concessions including, without limitation, all
Environmental Laws and all Environmental Licences if the
failure to comply therewith, would or is reasonably likely, in
the opinion of the Agent, to have a Material Adverse Effect;
(r) Taxes
-----
file or cause to be filed all tax returns required to be filed
in all jurisdictions in which it is situated or carries on
business or is otherwise subject to Taxation and will pay all
Taxes shown to be due and payable on such returns or any
assessments made against it within the period stipulated for
such payment (other than those being contested in good faith
and where such payment may be lawfully withheld);
(s) Cost capitalisation policy
--------------------------
maintain a cost capitalisation policy consistent with the cost
capitalisation policy used in the preparation of the financial
statements referred to in clause 10.1(g)(i) or such other cost
capitalisation policy as may be approved by the auditors and
the Agent (acting on the instructions of the Majority Banks)
from time to time;
(t) Further members of the Restricted Group
---------------------------------------
after the Bridge Termination Date, and subject to the
provisions of clause 9.16, it will and will procure that any
Acceding Guarantor which is wholly owned by the Parent and
which the Majority Banks and the Parent agree may become a
member of the Restricted Group, delivers to the Agent such
documents and evidence as the Agent may require, in form and
substance satisfactory to the Agent (acting on the
instructions of the Majority Banks). The parties hereto agree
that upon the execution and delivery of all such documents and
evidence, and provided that the Agent has notified each of the
other parties of this Agreement that such documents and
evidence are in form and substance
57
<PAGE>
satisfactory to it, such Acceding Guarantor shall become a
member of the Restricted Group for the purposes of this
Agreement; and
(u) Agreed Hedging Programme
------------------------
as from the date falling three months after the date of this
Agreement, maintain interest rate protection arrangements with
a Bank, on a rolling forward three year basis in respect of at
least 50 per cent. of the then forecast amount of the Loan,
which interest rate protection arrangements have the effect of
fixing the maximum rate of interest payable (excluding the
Margin and any other associated costs) by the Borrowers within
200 basis points of three month LIBOR (as at the date that the
relevant arrangements come into effect) for the relevant
currency.
(v) Licences and Necessary Authorisations
-------------------------------------
obtain or cause to be obtained, every consent, authorisation,
licence or approval of, or registration with or declaration
to, governmental or public bodies or authorities or courts in
any Relevant Jurisdiction necessary for the construction,
installation or operation of the Cable Systems (including,
without limitation, the Licences and the Necessary
Authorisations) and (A) ensure that none of the same is
revoked, cancelled, suspended, withdrawn, terminated, expires
and is not renewed or otherwise ceases to be in full force and
effect without a new one having first been put in place with a
member of the Restricted Group on substantially identical
terms or on terms more beneficial to the Restricted Group and
(B) ensure that none of the same is modified in any respect
and that no member of the Restricted Group commits any default
in the observance of the conditions or restrictions (if any)
imposed in, or in connection with, any of the same which, in
the case of any of the events listed in this sub-paragraph
(B), in the reasonable opinion of the Majority Banks, would or
is reasonably likely to have a Material Adverse Effect; and
(w) Shareholdings in the Restricted Subsidiaries
--------------------------------------------
save, in each case, with the prior written consent of all of
the Banks:
(i) (in the case of the Parent) maintain (A) 100 per cent.
of the issued share capital of each of CNA and 100 per
cent. direct or indirect ownership of the issued share
capital of Radio Public and maintain at least the
percentage of direct shareholding in Radio Public that
it has at the date of this Agreement, (B) (prior to the
Norwegian Merger) not less than 70.2 per cent. of the
issued share capital of Janco, (c) (after the Norwegian
Merger but before the Option Date) not less than 87.3
per cent. of the issued share capital of New Janco and
(d) (after the Option Date and at all times after 29th
June, 2001) not less than 100 per cent. of the issued
share capital of New Janco and the Parent shall ensure
that at all times thereafter 100 per cent. of the
shares in New Janco are pledged to the Security Trustee
pursuant to the Norwegian Share Security;
(ii) (in the case of CNA) maintain not less than 95 per
cent. of the issued share capital of each of the
Telekabel Entities;
(iii) (in the case of Janco) prior to the Norwegian Merger,
maintain not less than 100 per cent. of the issued
share capital of Janco Multicom A/S, Satelvisjon A/S
and Norkabel;
(iv) (in the case of Norkabel) prior to the Norwegian
Merger, maintain not less than 100 per cent. of the
issued share capital of Kanal 2 A/S, Norkabel A/S and
Oslo Kabelanlegg A/S; and
58
<PAGE>
(v) as soon as practicable after the Norwegian Merger, the
Parent shall procure that New Janco shall liquidate
Kanal 2 A/S, Janco Multicom A/S (since renamed Janco
Telematikk A/S) and Satelvisjon A/S;
(x) Subordination of loans from Relevant Persons
--------------------------------------------
(in the case of the Parent) shall procure that prior to any
Relevant Person making any Borrowed Money available to any of
the members of the Restricted Group, such Relevant Person
shall enter into a Deed of Subordination on terms and
conditions satisfactory to the Agent and a Charging Entity's
Deed of Accession (as such term is defined in the Security
Trust Deed) and provides the Agent with such documents and
evidence as it may reasonably require as to the power and
authority of the Relevant Person to enter into such Deed of
Subordination and Charging Entity's Deed of Accession and that
the same constitute valid and legally binding obligations of
such Relevant Person enforceable in accordance with its terms
subject to substantially similar qualifications to those made
in the legal opinions referred to in part A of schedule 3. In
addition, it will procure that each Security Provider enters
into a Charging Entity's Deed of Accession and provides the
Agent with such documents and evidence as it may reasonably
require as to the power and authority of such Security
Provider to enter into such Charging Entity's Deed of
Accession and that the same constitutes valid and legally
binding obligations of such Security Provider enforceable in
accordance with its terms subject to substantially similar
qualifications to those made in the legal opinions referred to
in part A of schedule 3. For the avoidance of doubt, it is
agreed that Telekabel Wien shall not be required to enter into
a Deed of Subordination in respect of any loan provided by
Telekabel Wien to another member of the Restricted Group;
(y) Norwegian security
------------------
(in the case of each of the Obligors which is incorporated in
Norway) it shall and shall procure that it and each of its
Subsidiaries from time to time (the "Janco Group") shall,
immediately when requested to do so by the Agent, execute all
such documents and so all such acts and things (and shall
procure any other member of the Janco Group to execute all
such documents and do all such acts and things), as may
reasonably be required by the Agent (acting on the
instructions of the Majority Banks) and which may lawfully be
done for the purpose of ensuring that all assets of the Janco
Group are duly charged as security for the obligations of the
Norwegian Borrowers hereunder and procure to keep the Agent
informed about any new asset they acquire during the loan
period which could be provided as security for the Norwegian
Loan Amount;
(z) UPC debt to be reduced first
----------------------------
(in the case of the Parent) it shall ensure that during the
Reduction Period and in making any prepayment pursuant to
clause 6.5, and so long as such action does not result in any
adverse taxation, legal or other material consequences, the
aggregate of the Advances outstanding to the Parent shall be
reduced in accordance with the terms of this Agreement in
preference to the aggregate of the Advances outstanding to any
other Borrower by procuring, where appropriate, that the
Restricted Subsidiaries make intercompany loans directly or
indirectly to the Parent to enable the relevant Advances made
to the Parent under this Agreement to be repaid as required by
clause 6 provided that this clause shall not require Telekabel
Wien to make any loans to CNA or other members of the
Restricted Group incorporated in Austria except in accordance
with Austrian law and shall not require or permit Telekabel
Wien to make any loans to any other person other than CNA or
other members of the Restricted Group incorporated in Austria;
(aa) Radio Public Articles of Association
------------------------------------
59
<PAGE>
(in the case of the Parent) it shall procure that on or prior
to the date falling 150 days after the date of this Agreement,
the Articles of Association of Radio Public shall be amended
to a form acceptable to the Agent, which form will permit
Radio Public to give the Guarantee contained in clause 9
(subject always to the provisions of clause 9.1) and promptly
upon such amendment taking place provide a copy of such
amended Articles of Association to the Agent together with a
certified English translation thereof;
(ab) Radio Public Bond
-----------------
the Parent shall either (i) procure that on the date of the
Philips Advance or as soon as practicable thereafter, Radio
Public shall redeem and cancel the Radio Public Bond in full
or (ii) on the date of the Philips Advance or as soon as
practicable thereafter, enter into such arrangements as may be
satisfactory to the Banks so as to ensure that all of the
Parent's right, title, benefit and interest under the Radio
Public Bond is assigned to the Security Trustee and that,
provided that such action is at the time acceptable to the
Majority Banks, Radio Public makes a loan to the Parent in a
principal amount equal to the principal amount of the Radio
Public Bond, the interest in respect of which will be set off
against the interest payable under the Radio Public Bond;
(ac) Norwegian I/C Indebtedness
--------------------------
the Parent shall ensure that on the occurrence of the
Norwegian Merger the equivalent of NOK 600,000,000 of the
Norwegian I/C Indebtedness is converted into equity share
capital of New Janco, and that all such equity share capital
is pledged to the Security Trustee on the same terms and
conditions as the Norwegian Share Security. As a condition
precedent to the first Advance made to the Norwegian Borrowers
the Parent shall ensure that such arrangements as may be
satisfactory to the Banks are entered into so as to ensure
that all of the Parent's right, title, benefit and interest in
respect of the Norwegian I/C Indebtedness is assigned to the
Security Trustee; and
(ad) Janco Loan Agreement
--------------------
(in the case of the Parent) ensure that, as a condition
precedent to the first Advance made to the Norwegian
Borrowers, such arrangements as may be satisfactory to the
Banks are entered into so as to ensure that all of the
Parent's right, title benefit and interest in respect of the
Janco Loan Agreement is assigned to the Security Trustee.
(ae) ASLK Facility
-------------
(in the case of the Parent and/or Radio Public) (i) ensure
that Radio Public makes no drawing under the ASLK Facility
unless and until all security (including, but not limited to,
the subordination agreement relating to the Radio Public Bond
and any other pledges or charges granted to ASLK Bank N.V.)
granted in connection with the ASLK Facility has been released
and (ii) ensure that all such security granted in connection
with the ASLK Facility is so released within seven days of the
date of this Agreement.
(af) Instructions as to debt
-----------------------
(in the case of CNA) (i) ensure that at all times each other
Telekabel Entity has received a valid, irrevocable and
unconditional instruction to assume debt ("Anweisung auf
Schuld") stating that CNA's interest in any Distributable
Profits, to the extent that at any time it exceeds the
principal amount of intercompany loans made by that Telekabel
Entity to CNA pursuant to clause 11.1(z) which are outstanding
at that time, is to be owed by such Telekabel Entity to the
Agent pursuant to the Guarantee, and (ii) ensure that it calls
all relevant shareholders meetings of each Telekabel Entity to
vote upon the amount of Distributable Profits and votes its
shares in each Telekabel Entity so as to
60
<PAGE>
ensure that at all times the amount of Distributable Profits
of such Telekabel Entity is the maximum amount legally
possible for such Telekabel Entity.
11.2 Negative Covenants
------------------
Each Obligor in respect of itself and its Subsidiaries which are
members of the Restricted Group undertakes with each of the Banks, the
Security Trustee, the Arranger and the Agent that, from the date of
this Agreement and so long as any moneys are owing under this Agreement
or remain available for drawing by the Borrowers, without the prior
written consent of the Agent acting on the instructions of the Majority
Banks:
(a) Negative pledge
---------------
save for Encumbrances created by the Security Documents, it
will not permit any Encumbrance (other than the Permitted
Encumbrances) by any member of the Restricted Group to
subsist, arise or be created or extended over all or any part
of their respective present or future undertakings, assets,
rights or revenues to secure or prefer any present or future
Indebtedness of any member of the Restricted Group or any
other person;
(b) No merger
---------
it will not merge or consolidate with any other company or
person and it will procure that no member of the Restricted
Group merges or consolidates with any other company or person
save that subject to the compliance with the terms of clause
3.5(c) and 9.16(g):
(i) Norkabelgruppen A/S shall be permitted to merge with
Oslo Kabelanlegg A/S and Norkabel A/S (such merged
company being referred to in this Agreement as "New
Norkabel"); provided that promptly thereafter
(ii) New Norkabel shall be permitted to and shall merge
with Janco Kabel-TV A/S (such merged company being
referred to in this Agreement as "New Janco");
(c) Disposals
---------
it will not and will procure that no other member of the
Restricted Group will sell, transfer, lend or otherwise
dispose of or cease to exercise direct control over any part
of its present or future undertaking, assets, rights or
revenues whether by one or a series of transactions related or
not (other than (i) Permitted Disposals made as part of the
Restructuring, (ii) transfers, sales and disposals pursuant to
the Norwegian Merger, (iii) transfers, sales and disposals the
proceeds of which are applied in prepayment of the Loan
pursuant to clause 6.5 and (iv) transfers, sales and disposals
made to another member of the Restricted Group incorporated in
the same Relevant Jurisdiction provided that there is no
material adverse effect on the security position of the Banks
and there is no breach of any Licence) unless both (A) in
respect of each of the two most recent previous consecutive
Quarterly Periods, the ratio of Total Debt to Total Annualised
Net Operating Cash Flow (calculated on the last day of each
such Quarterly Period and as shown in the Compliance
Certificates for the two Quarterly Periods ending immediately
prior to such date) is less than and remains below 4:1 and (B)
such transfers, sales or disposals are conducted on arms'
length terms for full consideration in the ordinary course of
trading;
(d) Intra-Group accounts
--------------------
(without limiting the generality of clause 11.2(c) and other
than (i) the refinancing of the Telekabel Bond, (ii) as
envisaged by the terms of the Securities Purchase and
Conversion Agreement and (iii) the conversion of the Norwegian
I/C Indebtedness into
61
<PAGE>
equity securities in New Janco as part of the Norwegian
Merger) it will not subordinate, postpone, defer, assign or
otherwise dispose of or deal with, any Indebtedness owing to
it by any member of the Restricted Group and will procure that
no member of the Restricted Group will subordinate, postpone,
defer, assign or otherwise dispose of or deal with, any
Indebtedness owing to it by any other member of the Restricted
Group;
(e) Loans and guarantees
--------------------
it will not, and will procure that no member of the Restricted
Group will, make any loans, grant any credit (save for normal
trade credit in the ordinary course of day-to-day trading) or
give any guarantee to or for the benefit of any person other
than (i) to or for the benefit of members of the Unrestricted
Group in an aggregate amount (when aggregated with the amount
of all transactions falling within clause 11.2(h)(i), (ii) and
(iii)) not in excess of NLG 80,000,000 (or its equivalent in
other currencies) or (ii) to or for the benefit of another
member of the Restricted Group or (iii) as envisaged by the
terms of the Securities Purchase and Conversion Agreement or
(iv) if, in respect of each of the two most recent previous
consecutive Quarterly Periods, the ratio of Total Debt to
Total Annualised Net Operating Cash Flow (calculated on the
last day of each such Quarterly Period and as shown in the
Compliance Certificates for the two Quarterly Periods ending
immediately prior to such date) is less than and remains below
3:1;
(f) Borrowed Money
--------------
(i) it will not and will procure that the Restricted
Group (taken as a whole) and the Bridge Borrower
taken together will not incur Borrowed Money in
excess of NLG 1,300,000,000 to be outstanding at any
time; and
(ii) it will not and will procure that no member of the
Restricted Group will create, assume, incur or
otherwise permit to be outstanding any Borrowed Money
(other than Permitted Borrowings and other than as
envisaged by the terms of the Securities Purchase and
Conversion Agreement) Provided that, during the
Reduction Period, the Parent and/or any member of the
Restricted Group may create, assume, incur or
otherwise permit to be outstanding any such Borrowed
Money if the ratio of Total Debt (calculated as at
the relevant date and including the principal amount
of such Borrowed Money) to Total Annualised Net
Operating Cash Flow (as shown in the most recent
Compliance Certificate delivered to the Agent
pursuant to this Agreement) is less than and remains
below 3:1;
(g) Issue of shares
---------------
other than pursuant to the Norwegian Merger or as envisaged by
the terms of the Securities Purchase and Conversion Agreement,
it will not and will procure that no member of the Restricted
Group reduces its capital or purchases any class of its shares
and that no member of the Restricted Group issues any shares
of any class save that:
(i) any member of the Restricted Group may issue shares
to any other member of the Restricted Group so long
as such shares are charged or pledged in favour of
the Security Trustee pursuant to the terms of a
Security Document and there are delivered at the same
time to the Security Trustee the relevant share
certificates and blank stock transfer forms (or
equivalent documents) in respect thereof together
with such other documents and evidence and legal
opinions as the Agent may require;
(ii) the Parent shall be entitled to (a) issue ordinary
shares to UIH or any wholly owned Subsidiary of UIH,
(b) issue ordinary shares to Stichting
Administratiekantoor UPC B.V. in accordance with the
Stock Option Plan and
62
<PAGE>
(c) issue ordinary shares pursuant to an initial
public offering with the consent of all of the Banks;
(iii) Janco may, with the prior written consent of all of
the Banks, issue equity share capital to a recognised
telecommunications company or other person acceptable
to the Majority Banks provided that the proceeds of
such issue are used by Janco to fund the capital
expenditure requirements to provide
telecommunications services in the cable systems
operated by Janco; and
(iv) Telekabel Wien may reclassify into nominal share
capital such of the Relevant Reserves as may be
necessary to ensure that the nominal share capital of
Telekabel Wien is equal to 337,300,000 Austrian
Schillings.
(h) Investments
-----------
other than as envisaged by the terms of the Securities Purchase and
Conversion Agreement it will not and will procure that no member of the
Restricted Group:
(i) makes any loan or advance to, or enters into any
transaction having the effect of lending money with,
any person (other than another member of the
Restricted Group) or otherwise acquires for a
consideration any document evidencing Indebtedness,
capital stock or other securities of any person
(other than another member of the Restricted Group);
or
(ii) acquires all or any substantial part of the assets,
property or business of any other person (other than
another member of the Restricted Group) or any assets
that constitute a division or operating unit of the
business of any other person (other then another
member of the Restricted Group); or
(iii) creates or acquires any Subsidiary,
save that the members of the Restricted Group may undertake
transactions referred to in clause 11.2(h)(i)(ii)(iii) in relation to
the Unrestricted Group provided that the aggregate amount in respect of
such transactions (when aggregated with those transactions referred to
in clause 11.2(e)(i)) shall not be in excess of NLG 80,000,000 (or its
equivalent in other currencies) and Provided that:
(A) the Parent shall be permitted to subscribe for
capital stock in the Bridge Borrower for a
consideration of not more than NLG 60,000,000 in
aggregate so long as the Parent shall procure that
the proceeds of such subscription are used promptly
to fund the acquisition by Cable Network Brabant
Holding N.V. of Stichting Combivisie Regio and
Setelco B.V. and
(B) the Parent and/or any other member of the Restricted
Group may make such loans or acquisitions if, in
respect of each of the two most recent previous
consecutive Quarterly Periods, the ratio of Total
Debt to Total Annualised Net Operating Cash Flow
(calculated on the last day of each such Quarterly
Period and as shown in the Compliance Certificates
for the two Quarterly Periods ending immediately
prior to such date) is less than, and remains below
3:1;
(i) Capital expenditure
-------------------
it will not and will procure that no member of the Restricted Group
incurs any capital expenditure other than in relation to the business
of constructing, installing, operating and utilising cable television,
telecommunications and data service systems in the territories covered
by the Licences or any directly related business reasonably considered
to be financially beneficial thereto;
63
<PAGE>
(j) Swaps and hedging
-----------------
it will not and will procure that no member of the Restricted Group
enters into any interest rate or currency swaps or other hedging
arrangements other than non-speculative arrangements directly relating
to the risk management of any Borrowed Money permitted to subsist by
the terms of this Agreement and entered into in the ordinary course of
the business for the genuine hedging of the relevant underlying
transaction;
(k) Subordination of shareholder funding
------------------------------------
(i) (in the case of the Parent only) other than payments
to be made in consummation of the Philips Transaction
in accordance with the terms of the Securities
Purchase and Conversion Agreement, and other than
payments made to UIH in relation to the secondment of
UIH employees to the Parent described in paragraph
(j) of the definition of "Permitted Borrowings"
contained in clause 1.2, it will not make to any
Relevant Person (a) any direct or indirect
distribution, dividend or other payment (whether in
cash, securities, property or otherwise), including,
without limitation, any loan or any payment on
account of any class of its share capital or capital
stock or other securities, or any interest thereon,
(b) any transfer of assets or (c) any payment
(whether in cash, securities, property or otherwise)
of principal of, or interest on, any debt made
available to it by any Relevant Person unless (i) in
respect of each of the two most recent previous
consecutive Quarterly Periods, the ratio of Total
Debt to Total Annualised Net Operating Cash Flow
(calculated on the last day of each such Quarterly
Period), each as demonstrated in the Compliance
Certificates for the two Quarterly Periods ending
immediately prior to such date, is less than, and
remains below, 3:1, and (ii) no Default has occurred
or would occur or be reasonably likely to occur as a
result of such distribution, transfer or payment
Provided that (x) the Parent shall be permitted to
redeem the S.A.R. for cash in accordance with the
terms of the Securities Purchase and Conversion
Agreement with the prior written consent of the
Majority Banks or by using such part of the net
proceeds received by the Parent from an initial
public offering of shares in the Parent as are not
required to be used to prepay the Loan pursuant to
clause 6.5 and (y) the Parent shall be permitted to
use securities to redeem the S.A.R. or to redeem,
refinance or make any payment in connection with any
preference shares issued in accordance with the terms
of the Securities Purchase and Conversion Agreement,
in each case as envisaged by the Securities Purchase
and Conversion Agreement;
(ii) (in the case of Janco and/or New Janco only) it will
not make to any Relevant Janco Person (a) any direct
or indirect distribution, dividend or other payment
(whether in cash, securities, property or otherwise),
including, without limitation any loan or any payment
on account of its share capital or capital stock or
other securities or any interest thereon, (b) any
transfer of assets or (c) any payment (whether in
cash, securities, property or otherwise) of principal
of, or interest on, any debt made available to it by
any Relevant Janco Person, other than pursuant to the
Option Agreements (in their form as at the date of
this Agreement) unless (i) in respect of each of the
two most recent previous consecutive Quarterly
Periods, the ratio of Total Debt to Total Annualised
Net Operating Cash Flow (calculated on the last day
of each such Quarterly Period), each as demonstrated
in the Compliance Certificates for the two Quarterly
Periods ending immediately prior to such date, is
less than, and remains below, 3:1, and (ii) no
Default has occurred or would occur or would be
reasonably likely to occur as a result of such
distribution, transfer or payment.
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<PAGE>
(iii) (in the case of the Telekabel Entities only) they
will not make to any Relevant Telekabel Person (a)
any direct or indirect distribution, dividend or
other payment (whether in cash, securities, property
or otherwise), including, without limitation, any
loan or any payment on account of their share capital
or capital stock or other securities or any interest
thereon, (b) any transfer of assets or (c) any
payment (whether in cash, securities, property or
otherwise) of principal of, or interest on, any debt
made available to any of them by any Relevant
Telekabel Person, other than pursuant to the Austrian
Agreements (in their form as at the date of this
Agreement) unless (i) in respect of each of the two
most recent previous consecutive Quarterly Periods,
the ratio of Total Debt to Total Annualised Net
Operating Cash Flow (calculated on the last day of
each such Quarterly Period), each as demonstrated in
the Compliance Certificates for the two Quarterly
Periods ending immediately prior to such date, is
less than, and remains below, 3:1, and (ii) no
Default has occurred or would occur or would be
reasonably likely to occur as a result of such
distribution, transfer or payment Provided that if at
any time any Telekabel Entity makes any payment of
Distributable Profits to the Agent pursuant to any
instruction ("Anweisung auf Schuld") given to it by
CNA, the amount of Distributable Profits which are
not subject to such instruction may be paid by such
Telekabel Entity to the Relevant Telekabel Person
entitled thereto;
For the avoidance of doubt (A) this clause 11.2(k) shall not
prevent any payments, distributions or transfers from one
member of the Restricted Group to another member of the
Restricted Group and (B) this clause 11.2(k) shall not prevent
the performance of any contracts for the provision of goods
and services on bona fide arms length commercial terms between
the Telekabel Entities and any Relevant Telekabel Person;
(l) Change of business
------------------
it will not and will procure that the Restricted Group (taken
as a whole) does not change the nature of the business carried
on by it in any material respect from that carried on at the
date of this Agreement and that no member of the Restricted
Group ceases to carry on a business where any such cessation
would or is reasonably likely to have a Material Adverse
Effect;
(m) Constitutive documents
----------------------
save for (i) the amendment of the constitutive documents of
the Parent envisaged by the Securities Purchase and Conversion
Agreement, (ii) the amendments to constitutive documents
necessary to enable the Norwegian Merger to take place and
(iii) the amendments to the constitutive documents of Radio
Public referred to in clause 11.1(aa), it will not, and will
procure that none of members of the Restricted Group amends
its constitutive documents in any way which would or is
reasonably likely to adversely affect (in terms of value,
enforceability or otherwise) the charge or pledge granted to
the Security Trustee pursuant to the Share Securities;
(n) Securities Purchase and Conversion Agreement
--------------------------------------------
(in the case of the Parent) it will not permit any material
amendment to be made to the Securities Purchase and Conversion
Agreement (or any document, instrument or agreement entered
into in connection therewith) without the prior written
consent of the Agent (acting on the instructions of the
Majority Banks); and
(o) Indemnity payments
------------------
(in the case of the Parent) it will not make any payment to
Philips Electronics N.V. (or any Subsidiary or Associated
Company thereof) ("Philips") in respect of the indemnity
granted or to be granted by the Parent to Philips pursuant to
the Securities Purchase and
65
<PAGE>
Conversion Agreement in connection with the obligations of
Philips under the Vienna Agreements (as defined in the
Securities Purchase and Conversion Agreement) until, in
respect of each of the two most recent previous consecutive
Quarterly Periods, the ratio of Total Debt to Total Annualised
Net Operating Cash Flow (calculated on the last day of each
such Quarterly Period), each as demonstrated in the Compliance
Certificates for the two Quarterly Periods ending immediately
prior to such date, is less than, and remains below, 3:1.
12 Financial covenants
-------------------
12.1 Pre Philips Advance Covenants
-----------------------------
The Parent undertakes with each of the Banks, the Arranger, the
Security Trustee and the Agent to ensure that at all times the ratio of
Total Debt to Total Annualised Net Operating Cash Flow (calculated on
each Quarter Day by reference to the Six Month Period ending on such
day) shall not exceed 5:1 at all times prior to the date that the
Philips Advance is made (but, for the avoidance of doubt not on or
after such date).
12.2 Post Philips Advance Covenants
------------------------------
From the date that the Philips Advance is made the Parent undertakes
with each of the Banks, the Arranger, the Security Trustee and the
Agent:
(a) Total Debt/Total Annualised Net Operating Cash Flow
---------------------------------------------------
to ensure that at all times during the periods set out in
column (1) below the ratio of Total Debt to Total Annualised
Net Operating Cash Flow (calculated on each Quarter Day by
reference to the Six Month Period ending on such day) shall
not exceed the ratio set out against such period in column (2)
below:
<TABLE>
<CAPTION>
=================================================== =====================================
(1) (2)
Period Ratio
--------------------------------------------------- -------------------------------------
<S> <C>
up to (and including) 31st December, 1998 8.25:1
--------------------------------------------------- -------------------------------------
from 1st January, 1999 to 30th June, 1999 6.75:1
--------------------------------------------------- -------------------------------------
from 1st July, 1999 to 31st December, 1999 6.5:1
--------------------------------------------------- -------------------------------------
from 1st January, 2000 to 31st December, 2000 5.5:1
--------------------------------------------------- -------------------------------------
from 1st January, 2001 to 31st December, 2001 4:1
--------------------------------------------------- -------------------------------------
from 1st January, 2002 3:1
=================================================== =====================================
</TABLE>
(b) Total Debt/Cable TV Annualised Net Operating Cash Flow
------------------------------------------------------
to ensure that at all times up to and including 31st December,
1998 the ratio of Total Debt to Cable TV Annualised Net
Operating Cash Flow (calculated on each Quarter Day by
reference to the Six Month Period ending on such day) shall
not exceed 7:1;
(c) Senior Debt Interest Cover
--------------------------
to ensure that at all times during the periods set out in
column (1) below, the ratio of Total Annualised Net Operating
Cash Flow (calculated on each Quarter Day by reference to the
Six Month Period ending on such day) to the amount of Total
Debt Interest Charges incurred during such Six Month Period
multiplied by two shall be greater than the number set out
against such period in column (2) below:
66
<PAGE>
<TABLE>
<CAPTION>
=================================================== ===================================
(1) (2)
Period Ratio
--------------------------------------------------- -----------------------------------
<S> <C>
up to (and including) 31st December, 1998 1.5:1
--------------------------------------------------- -----------------------------------
from 1st January, 1999 to 31st December, 1999 1.75:1
--------------------------------------------------- -----------------------------------
from 1st January, 2000 to 30th June, 2000 2:1
--------------------------------------------------- -----------------------------------
from 1st July, 2000 to 31st December, 2000 3:1
--------------------------------------------------- -----------------------------------
from 1st January, 2001 4:1
=================================================== ===================================
</TABLE>
(d) Pro-forma Debt Service Cover
----------------------------
(i) to ensure that at all times from (and including) 31st
December, 2000, the ratio of Total Annualised Net
Operating Cash Flow (calculated on each Quarter Day
by reference to the Six Month Period ending on such
day) to Proforma Debt Service shall not be less than
1.2:1; and
(ii) to ensure that at all times from (and including) 31st
March, 2004, the ratio of Total Annualised Net
Operating Cash Flow (calculated in each Quarter Day
by reference to the Six Month Period ending on such
day) to Proforma Debt Service shall not be less than
1.5:1.
12.3 Auditors certificate
--------------------
If at any time the Majority Banks (acting reasonably and following
consultation with the Parent) do not consider that any figure set out
in any Compliance Certificate issued by any Authorised Officer is
correct, they shall be entitled within 30 days of the date of the
delivery of such Compliance Certificate to the Agent pursuant to clause
11.1 to call for a certificate from the Parent's auditors as to such
figure. For such purposes the Parent's auditors shall act as
independent experts and not as arbiters and every such certificate
shall be addressed to the Agent (on behalf of the Banks) and be at the
expense of the Parent (unless the certificate so provided by the
Parent's auditors shows that the relevant figures set out in the
Compliance Certificate are in fact correct in which case such
certificate shall be at the expense of the Banks). The Majority Banks
may only call for one such certificate in any calendar year unless the
relevant figures set out in the Compliance Certificate are in fact
incorrect in which case the Majority Banks may call for up to three
further such certificates in such financial year, provided that if, in
any of such certificates, the relevant figures set out in the
Compliance Certificate are certified as being in fact correct, then the
Majority Banks may not call for such further certificates in such
financial year. If the Majority Banks call for such a certificate all
calculations under this Agreement by reference to the relevant figure
shall (i) until the Parent's auditors deliver the relevant certificate
under this clause 12.3 be made by reference to the figure set out in
the relevant Compliance Certificate delivered to the Agent under this
Agreement and (ii) following the delivery by the Parent's auditors of a
certificate under this clause 12.3 be made by reference to such
certificate and the Parent undertakes forthwith to take all action
including, without limitation, the prepayment of all or part of the
Loan so as to procure that all action taken on the basis of the
relevant Compliance Certificate which on the basis of such auditors'
certificate would not have been permitted is reversed.
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13 Events of Default
-----------------
13.1 Events of default
-----------------
Each of the events and circumstances set out below is an Event of
Default (whether or not caused by any reason outside the control of an
Obligor):
(a) Non-payment: any Borrower fails to pay any principal sum due
-----------
from it under this Agreement in the currency, at the time and
in the manner stipulated in this Agreement, or any other sum
due from it under this Agreement within three Banking Days of
the due date in the currency and in the manner stipulated in
this Agreement; or
(b) Breach of certain obligations: any Obligor commits any breach
-----------------------------
of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under clauses 11.1(c), (d), (e),
(f), (g), (h), (j)(ii), (k) and (w), clause 11.2(a), (b), (c),
(e), (f),(g), (h), (i), (k) and (n) and clause 12; or
(c) Breach of other obligations: any Obligor commits any breach of
---------------------------
or omits to observe any of the obligations or undertakings
expressed to be assumed by it under this Agreement or the
Security Documents (other than failure to pay any sum when due
or any breach of the undertakings referred to in (b) above)
and, in respect of any such breach or omission which is
capable of remedy, such action as the Agent may require shall
not have been taken within 21 days of the Agent notifying the
relevant Obligor of such default and of such required action;
or
(d) Misrepresentation: any representation or warranty made or
-----------------
deemed to be made or repeated by or in respect of any Obligor
or any other member of the Restricted Group in or pursuant to
this Agreement or the Security Documents or in any notice,
certificate or statement referred to in or delivered under
this Agreement or the Security Documents is or proves to have
been incorrect or misleading in any material respect and, in
the event that the act or circumstance which led to such
representation or warranty being incorrect or misleading is
capable of remedy, such action as the Agent may require shall
not have been taken within 21 days of the Agent notifying the
relevant Obligor of such act or circumstance and such required
action; or
(e) Challenge to security: any Security Document is not or ceases
---------------------
to be effective (other than those Norwegian Security Documents
which are not required by the Agent to be assumed by or
transferred to New Janco at the time of the Norwegian Merger)
or any member of the Restricted Group shall in any way
challenge, or proceedings shall in any way be brought to
challenge, the prior status of the charges created by the
Security Documents or the validity or enforceability of the
Security Documents; or
(f) Cross-default: any Borrowed Money of any member of the
-------------
Restricted Group is not paid when due or any Borrowed Money of
any member of the Restricted Group becomes (whether by
declaration or automatically in accordance with the relevant
agreement or instrument constituting the same) due and payable
prior to the date when it would otherwise have become due or
any creditor of any member of the Restricted Group becomes
entitled to declare any Borrowed Money of any member of the
Restricted Group so due and payable or to require cash
collateralisation or security for any such Borrowed Money or
any facility or commitment available to any member of the
Restricted Group relating to Borrowed Money is withdrawn,
suspended or cancelled by reason of any default (however
described) of the company concerned and the amount, or
aggregate amount at any one time, of all Borrowed Money in
relation to which any of the foregoing events shall have
occurred and be continuing is equal to or greater than NLG
10,000,000 or its equivalent in the currency in which the same
is denominated and payable or if the Bridge Facility becomes
(whether by declaration or automatically in accordance with
the terms of the Bridge Facility Agreement) due and payable
prior to the date when it would otherwise have become due; or
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(g) Derivatives Contract default: any member of the Restricted
----------------------------
Group fails to make payment in relation to a Derivatives
Contract of any sum equal to or greater than NLG 10,000,000 in
aggregate at any one time (or its equivalent in the relevant
currency of payment) on its due date or the counterparty to a
Derivatives Contract becomes entitled to terminate that
Derivatives Contract early by reason of default on the part of
any member of the Restricted Group and the Net Derivatives
Liability of such member of the Restricted Group, in the
aggregate, under all its Derivatives Contracts at the relevant
time is not less than NLG 10,000,000 (or its equivalent in the
relevant currency); or
(h) Legal process: any judgment or order made against any member
-------------
of the Restricted Group is not stayed or complied with within
14 days or a creditor attaches or takes possession of, or a
distress, execution, sequestration or other process is levied
or enforced upon or sued out against, any material part of the
undertakings, assets, rights or revenues of any member of the
Restricted Group and is not discharged within seven days; or
(i) Insolvency:
----------
(i) any member of the Restricted Group which is domiciled
or which has a branch office in the Netherlands is
declared bankrupt (in staat van faillissement
verklaard) or enters into a preliminary or definitive
moratorium (in voorlopige of definitieve surseance
van betaling gaan) pursuant to the Dutch Bankruptcy
Act (Faillissementswet);
(ii) any "Reorganisationsverfahren", "Ausgleich" or
"Konkurs" under the applicable Austrian Laws is being
opened on the assets of any member of the Restricted
Group organised in Austria or any such member of the
Restricted Group enters into an agreement with its
creditors having the same effect;
(iii) any member of the Restricted Group incorporated in
Belgium is declared bankrupt under the Bankruptcy Act
of 18 April 1851 of Belgium or any replacement
enactment therefor which is entered into after the
date of this Agreement;
(iv) with respect to any member of the Restricted Group
incorporated in Norway, any order of a competent
court or an event analogous thereto shall be made or
any effective resolution passed with a view to the
bankruptcy, composition proceedings, debt
negotiations, liquidation, winding-up or similar
event pursuant to the Norwegian Bankruptcy Act of 8th
June 1984;
(j) Reduction or loss of capital: other than in connection with
----------------------------
the Norwegian Merger or as required in order to consummate the
Philips Transaction a meeting is convened by the Parent or any
of its Subsidiaries for the purpose of passing any resolution
to purchase, reduce or redeem any of its share capital; or
(k) Winding up: any petition is presented and is not discharged
----------
within 14 days or other step is taken for the purpose of
winding up any member of the Restricted Group (not being a
petition which the relevant member of the Restricted Group can
demonstrate to the satisfaction of the Agent, by providing an
opinion of leading counsel to that effect, is frivolous,
vexatious or an abuse of the process of the court or relates
to a claim to which the relevant member of the Restricted
Group has a good defence and which is being vigorously
contested by the relevant member of the Restricted Group) or
an order is made or resolution passed for the winding up of
any member of the Restricted Group or a notice is issued
convening a meeting for the purpose of passing any such
resolution; or
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(l) Administration: any petition is presented and is not withdrawn
--------------
within 14 days or other step is taken for the purpose of the
appointment of an administrator of any member of the
Restricted Group or the Agent believes that any such petition
or other step is imminent or an administration order is made
in relation to any member of the Restricted Group; or
(m) Appointment of receivers and managers: any administrative or
-------------------------------------
other receiver is appointed of any member of the Restricted
Group or any material part of their respective assets and/or
undertakings or any other steps are taken to enforce any
Encumbrance over all or any part of the assets of any member
of the Restricted Group; or
(n) Compositions: any steps are taken, or negotiations commenced,
------------
by any member of the Restricted Group or by any of their
respective creditors with a view to proposing any kind of
composition, compromise or arrangement involving such company
and any of its creditors; or
(o) Analogous proceedings: there occurs, in relation to any member
---------------------
of the Restricted Group, in any country or territory in which
any of them carries on business or to the jurisdiction of
whose courts any part of their respective assets is subject,
any event which corresponds with, or have an effect equivalent
or similar to, any of those mentioned in clauses 13.1(h) to
13.1(n) (inclusive) or any member of the Restricted Group
otherwise becomes subject, in any such country or territory,
to the operation of any law relating to insolvency, bankruptcy
or liquidation; or
(p) Cessation of business: other than in connection with the
---------------------
Norwegian Merger any member of the Restricted Group suspends
or ceases or threatens to suspend or cease to carry on their
respective businesses; or
(q) Seizure: all or a material part of the undertakings, assets,
-------
rights or revenues of, or shares or other ownership interests
in, any member of the Restricted Group are seized,
nationalised, expropriated or compulsorily acquired by or
under the authority of any government; or
(r) Change of Control:
-----------------
(i) after the date of the Philips Advance and prior to
the Relevant Date, UIH and/or any wholly owned
Subsidiary of UIH ceases (A) to own at least 51% of
the issued share capital of the Parent or (B) to own
at least 51% of the voting rights attributable to the
issued ordinary share capital of the Parent or (C) to
have the right to receive at least 51% of the
dividends or any other distributions by the Parent;
or
(ii) on or after the Relevant Date, (1) UIH and/or any
wholly owned Subsidiary of UIH ceases (A) to own at
least 30% of the issued share capital of the Parent
or (B) to own at least 30% of the voting rights
attributable to the issued share capital of the
Parent or (C) to have the right to receive at least
30% of the dividends or any other distribution by the
Parent or (2) any person or group of persons acting
in concert acquires a shareholding in the Parent
greater than that held by UIH and/or any wholly owned
Subsidiary of UIH;
Provided that if, pursuant to the Securities Purchase and
Conversion Agreement, Philips Media Networks B.V. acquires 50
per cent. of the issued share capital of the Parent and such
acquisition would constitute an Event of Default under this
clause 13.1(r) but for this proviso, then the Banks will
consult with UPC and its shareholders in good faith for a
period of up to 90 days during which period such acquisition
will not constitute an Event of Default. Immediately upon the
ending of such period, if, following such good faith
consultation, the Majority Banks determine that such
acquisition shall constitute
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an Event of Default, the Agent and the Banks shall be entitled
to exercise their rights under clause 13.2 in respect of such
Event of Default; or
(s) Principal Agreements:
--------------------
(i) save as is required by any term of this Agreement, any
Principal Agreement is terminated, suspended, revoked or
cancelled or otherwise ceases to be in full force and effect
unless services of a similar nature to those provided pursuant
to such Principal Agreement are at all times provided to the
Restricted Group on similar commercial terms or on terms no
less beneficial to the relevant member of the Restricted Group
save where any such services are provided on more onerous
terms to the relevant member of the Restricted Group due to
the mandatory requirements of any regulatory body and any such
termination, suspension, revocation, cancellation or cessation
would have a Material Adverse Effect; or
(ii) any alteration or variation is made to any term of any
Principal Agreement which would have a Material Adverse
Effect; or
(iii) any party breaches any term of or repudiates any of its
obligations under any of the Principal Agreements where such
breach or repudiation would have a Material Adverse Effect; or
(t) Unlawfulness: it becomes unlawful at any time for any Obligor or any
------------
Subordinated Creditor to perform any of their respective material
obligations under this Agreement or the Security Documents or any of
the material obligations of any Obligor or any Subordinated Creditor
under this Agreement or the Security Documents becomes unenforceable in
any way or there ceases to be security over the relevant property or
assets of the relevant Obligor as intended and created by the Security
Documents; or
(u) Environmental matters: as a result of any Environmental Law: (a) the
---------------------
Agent, the Arranger, the Security Trustee or any of the Banks becomes,
in the opinion of the Agent, subject to a material obligation (actual
or contingent, in the case of any contingent obligation, being one
which, at the relevant time, would be likely to arise) in relation to
any Relevant Substance on or from any property, owned, occupied or
leased by any member of the Restricted Group; or (b) the rights and
claims of the Agent, the Arranger, the Security Trustee, or any of the
Banks under this Agreement or any of the Security Documents become
subordinated to the claims and rights of any competent agency of any
Relevant Jurisdiction or the European Community; or
(v) Telecommunications and Cable Laws: any member of the Restricted Group
---------------------------------
fails to comply with any term or condition of any Telecommunications
and Cable Law where such non-compliance would or is reasonably likely
to have a Material Adverse Effect; or
(w) Repudiation: any member of the Restricted Group repudiates this
-----------
Agreement or any Security Document to which it is a party or does or
causes or permits to be done any act or thing evidencing an intention
to repudiate this Agreement or any such Security Document; or
(x) Subordinated Creditors:
----------------------
(i) any Subordinated Creditor commits any breach of or omits to
observe any of the obligations or undertakings expressed to be
assumed by it under a Deed of Subordination and in respect of
any such breach or omission which, in the opinion of the Agent
(acting on the instructions of the Majority Banks (acting
reasonably)) is capable of remedy, such action as the Agent
may require shall
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<PAGE>
not have been taken within 21 days of the Agent notifying such
Subordinated Creditor thereof and of such required action; or
(ii) any representation or warranty made or deemed to be made or
repeated by or in respect of any Subordinated Creditor in or
pursuant to any Deed of Subordination is or proves to have
been incorrect or misleading in any material respect on the
date on which it was made or deemed to be made or repeated
and, in the event that the act or circumstance which led to
such representation or warranty being incorrect or misleading
is capable of remedy, such action as the Agent may require
shall not have been taken within 21 days of the Agent
notifying the relevant Subordinated Creditor of such act or
circumstance and such required action; or
(iii) any Subordinated Creditor is not or ceases to be bound by a
Deed of Subordination; or
(iv) any payment due from a member of the Restricted Group to a
Subordinated Creditor is not or ceases to be subordinated to
the amounts owing under this Agreement; or
(v) any Subordinated Creditor or any liquidator, administrator or
administrative or other receiver (or similar officer) of any
Subordinated Creditor takes steps to contest the subordination
effected by a Deed of Subordination; or
(y) Security Documents:
------------------
(i) any Security Provider commits any breach of or omits to
observe any of its obligations or undertakings expressed to be
assumed by it under any Security Document and in respect of
any such breach or omission which is capable of remedy, such
action as the Agent may require shall not have been taken
within 21 days of the Agent and/or the Security Trustee
notifying such Security Provider thereof of such required
action; or
(ii) any representation or warranty made or deemed to be made or
repeated by or in respect of any Security Provider in or
pursuant to any Security Document is or proves to have been
incorrect or misleading in any material respect on the date on
which it was made or deemed to be made or repeated and, in the
event that the act or circumstance which led to such
representation or warranty being incorrect or misleading is
capable of remedy, such action as the Agent and/or the
Security Trustee may require shall not have been taken within
21 days of the Agent and/or the Security Trustee notifying the
relevant Security Provider of such act or circumstance and
such required action; or
(iii) any Security Provider is not or ceases to be bound by any
Security Document; or
(iv) any Security Document is not or ceases to constitute a valid
security interest over the relevant assets of the relevant
Security Provider in accordance with its terms; or
(v) any Security Provider or any liquidator, administrator or
administrative or other receiver (or similar officer) of any
Security Provider takes steps to contest any Security Document
and/or encumbrance effected by a Security Document; or
(z) Material events: any other event occurs or circumstances arise which in
----------------
the opinion of the Agent acting on the instructions of the Majority
Banks is likely to have a Material Adverse Effect; or
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(aa) Qualification of accounts: the auditors of any member of the
-------------------------
Restricted Group qualify their report on the audited financial
statements of the relevant member of the Restricted Group
and/or the audited consolidated financial statements of the
Restricted Group in any way whatsoever except where the
qualification is of a technical nature and the remedy for the
matter giving rise to the qualification would have no effect
on the results of the relevant member of the Restricted Group
for the period to which such accounts relate or on the
financial position of the relevant member of the Restricted
Group as at the end of such period; or
(ab) Failure to borrow the Philips Advance: the Parent fails to
-------------------------------------
draw down the Philips Advance in accordance with the terms of
this Agreement on or before the date falling 180 days after
the date of the first Advance (or such other date as may be
agreed by the Agent (acting on the instructions of all of the
Banks acting reasonably)) and there occurs an Event of Default
pursuant to clause 4.10(b).
13.2 Acceleration
------------
The Agent may and if so requested by the Majority Banks shall, without
prejudice to any other rights of the Banks, at any time after the
happening of an Event of Default so long as the same is continuing,
unremedied or unwaived by notice to the Parent declare that:
(a) the obligation of each Bank to make its Commitment available
shall be terminated, whereupon the Total Commitments shall be
reduced to zero forthwith; and/or
(b) all outstanding Advances and all interest and commitment
commission accrued and all other sums payable under this
Agreement have become immediately due and payable or have
become due and payable on demand, whereupon the same shall,
immediately or in accordance with the terms of such notice,
become so due and payable; and/or
(c) the Security Documents (or any of them) have become
enforceable whereupon the same shall be enforceable.
On or at any time after the making of any such declaration, the Agent
shall be entitled, to the exclusion of the Borrowers (and without
prejudice to clause 5.3), to select the duration of each period for the
calculation of interest in relation to any outstanding Advances or
other sums payable under this Agreement Provided that the Agent agrees
that, without prejudice to any of its other rights under this
Agreement, it shall not accelerate the due date of any sums payable by
Telekabel Wien until 28 days after the date that the Agent has given
notice to Telekabel Wien that a Default has occurred unless at such
time (i) Telekabel Wien has breached any of its obligations under this
Agreement or (ii) an Event of Default has otherwise occurred in
relation to Telekabel Wien, in which case such 28 day grace period (or
any unexpired part thereof) shall not apply.
13.3 Demand basis
------------
If, pursuant to clause 13.2(b), the Agent declares all outstanding
Advances to be due and payable on demand then the Agent may (and, if so
instructed by the Majority Banks, shall) at any time by written notice
to the Parent (a) call for repayment of the Advances on such date as
may be specified in such notice whereupon the Advances shall become due
and payable on the date so specified together with all interest and
commitment commission accrued and all other sums payable under this
Agreement or (b) withdraw such declaration with effect from the date
specified in such notice.
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<PAGE>
14 Indemnities
-----------
14.1 Miscellaneous indemnities
-------------------------
The Parent shall on demand indemnify each Bank, the Arranger and the
Agent, without prejudice to any of their other rights under this
Agreement and the Security Documents, against any loss (including loss
of Margin) or expense which such Bank, the Arranger or the Agent shall
certify as sustained or incurred by it as a consequence of:
(a) any default in payment by any Obligor of any sum under this
Agreement or any of the Security Documents when due;
(b) the occurrence of any other Event of Default;
(c) any prepayment of all or part of any Advance or being made
otherwise than on its Maturity Date; or
(d) any Advance not being made or issued for any reason (excluding
any default by the Agent, the Arranger or any Bank) after a
Drawdown Notice has been given;
including, in any such case, but not limited to, any loss or expense
sustained or incurred by such Bank in maintaining or funding all or any
part of its Contribution or in liquidating or re-employing deposits
from third parties acquired or contracted for to fund all or any part
of its Contribution or any other amount owing to such Bank.
14.2 Currency of account; currency indemnity
---------------------------------------
No payment by any Obligor under this Agreement which is made in a
currency other than the currency ("Contractual Currency") in which such
payment is required to be made pursuant to this Agreement shall
discharge the obligation in respect of which it is made except to the
extent of the net proceeds in the Contractual Currency received by the
Agent upon the sale of the currency so received, after taking into
account any premium and costs of exchange in connection with such sale.
For the avoidance of doubt the Agent, the Arranger, the Security
Trustee and the Banks shall not be obliged to accept any such payment
in a currency other than the Contractual Currency nor shall the Agent,
the Arranger, the Security Trustee or the Banks be liable to any
Obligor for any loss or alleged loss arising from fluctuations in
exchange rates between the date on which such payment is so received by
the Agent and the date on which the Agent effects such sale, as to
which the Agent shall (as against the relevant Obligor) have an
absolute discretion. If any sum due from any Obligor under this
Agreement or any order or judgment given or made in relation hereto is
required to be converted from the Contractual Currency or the currency
in which the same is payable under such order or judgment (the "first
currency") into another currency (the "second currency") for the
purpose of (a) making or filing a claim or proof against the relevant
Obligor, (b) obtaining an order or judgment in any court or other
tribunal or (c) enforcing any order or judgment given or made in
relation to this Agreement, the relevant Obligor shall indemnify and
hold harmless the Agent, the Arranger, the Security Trustee and each
Bank from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which the Agent, the Arranger,
the Security Trustee or such Bank may in the ordinary course of
business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of
any such order, judgment, claim or proof. Any amount due from any
Obligor under the indemnity contained in this clause 14.2 shall be due
as a separate debt and shall not be affected by judgment being obtained
for any other sums due under or in respect of this Agreement and the
term "rate of exchange" includes any premium and costs of exchange
payable in connection with the purchase of the first currency with the
second currency.
14.3 Environmental indemnity
-----------------------
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<PAGE>
The Parent agrees to indemnify on demand each Bank, the Arranger, the
Security Trustee and the Agent, and their respective officers,
employees, agents and delegates (together the "Indemnified Parties") in
respect of which each Bank, the Arranger, the Security Trustee and the
Agent holds this indemnity on trust, without prejudice to any of their
other rights under this Agreement, against any loss, liability, action,
claim, demand, cost, expense, fine or other outgoing whatsoever whether
in contract, tort, delict or otherwise and whether arising at common
law, in equity or by statute which the relevant Indemnified Party shall
certify as sustained or incurred by it at any time as a consequence of,
or relating to, or arising directly or indirectly out of, any
Environmental Claims made or asserted against such Indemnified Party
which would not have arisen if this Agreement had not been executed and
which was not caused by the negligence or wilful default of the
relevant Indemnified Party.
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<PAGE>
15 Unlawfulness and increased costs; mitigation
--------------------------------------------
15.1 Unlawfulness
------------
If it is or becomes contrary to any law or regulation for any Bank to
contribute to Advances or to maintain its Commitment or fund its
Contribution, such Bank shall promptly, through the Agent, notify the
Parent whereupon (a) such Bank's Commitment shall be reduced to zero
and (b) the Borrowers shall be obliged to prepay the Contribution of
such Bank either (i) forthwith or (ii) on a future specified date not
being earlier than the latest date permitted by the relevant law or
regulation. Any prepayment pursuant to this clause 15.1 shall be made
together with all amounts referred to in clause 6.4.
15.2 Increased costs
---------------
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law or any regulation, request or
requirement (whether or not having the force of law, but, if not having
the force of law, with which the relevant Bank or, as the case may be,
its holding company habitually complies), including (without
limitation) those relating to Taxation, capital adequacy, liquidity,
reserve assets, cash ratio deposits and special deposits, is to:
(a) subject any Bank to Taxes or change the basis of Taxation of
any Bank with respect to any payment under this Agreement
(other than Taxes or Taxation on the overall net income,
profits or gains of such Bank imposed in the jurisdiction in
which its principal or lending office under this Agreement is
located); and/or
(b) increase the cost to, or impose an additional cost on, any
Bank or its holding company in making or keeping available all
or part of such Bank's Commitment or maintaining or funding
all or part of such Bank's Contribution; and/or
(c) reduce the amount payable or the effective return to any Bank
under this Agreement; and/or
(d) reduce any Bank's or its holding company's rate of return on
its overall capital by reason of a change in the manner in
which it is required to allocate capital resources to such
Bank's obligations under this Agreement; and/or
(e) require any Bank or its holding company to make a payment or
forgo a return calculated by reference to or on any amount
received or receivable by such Bank under this Agreement;
and/or
(f) require any Bank or its holding company to incur or sustain a
loss (including a loss of future potential profits) by reason
of being obliged to deduct all or part of such Bank's
Commitment or Contribution from its capital for regulatory
purposes,
then and in each such case (but subject to clause 15.3):
(i) such Bank shall notify the Parent through the Agent in writing
of such event promptly upon its becoming aware of the same;
and
(ii) the Parent shall on demand, made at any time whether or not
such Bank's Contribution has been repaid, pay to the Agent for
the account of such Bank the amount which such Bank specifies
(in a certificate setting forth the basis of the computation
of such amount but not including any matters which such Bank
or its holding company regards as confidential) is required to
compensate such Bank and/or its holding company for such
liability to Taxes, increased or additional cost, reduction,
payment, forgone return or loss.
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For the purposes of this clause 15.2 and clause 15.4 "holding company"
means, in relation to a Bank, the company or entity (if any) within the
consolidated supervision of which such Bank is included.
15.3 Exceptions
----------
Nothing in clause 15.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, forgone return or loss to the
extent that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is the subject of an additional payment under clause 8.5; or
(c) arises as a consequence of (or of any law or regulation
implementing) (i) the proposals for international convergence
of capital measurement and capital standards published by the
Basle Committee on Banking Regulations and Supervisory
Practices in July 1988 and/or (ii) any applicable directive of
the European Union (in each case) unless it results from any
change in, or in the interpretation or application of, such
proposals or any such applicable directive (or any law or
regulation implementing the same) occurring after the date
hereof; or
(d) arises as a result of a breach by such Bank of any regulation,
request or requirement (which either (i) is in existence at
the date of this Agreement or (ii) which comes into effect
after the date of this Agreement and with which such Bank
would have complied if such regulation, request or requirement
was in effect on the date of this Agreement) of any applicable
central bank or other fiscal, monetary or other authority
(whether or not having the force of law).
For the purposes of clause 15.3(c) the term "applicable directive"
means (exclusively) each of the Own Funds Directive (89/299/EEC of 17th
April 1989) and the Solvency Ratio Directive (89/647/EEC of 18th
December 1989).
15.4 Mitigation
----------
If circumstances arise which would, or would upon the giving of notice,
result in:
(a) the application of clause 5.6 in relation to any Bank;
(b) any Obligor being required to make an increased payment to any
Bank pursuant to clause 8.5;
(c) the reduction of any Bank's Commitment to zero or the
Borrowers being required to prepay any Bank's Contribution
pursuant to clause 15.1; or
(d) the Parent being required to make a payment to any Bank to
compensate such Bank or its holding company for a liability to
Taxes, increased or additional cost, reduction, payment,
forgone return or loss pursuant to clause 15.2(ii);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Parent or the Borrowers under clause 8 and this
clause 15, such Bank shall, in consultation with the Agent, endeavour
to take such reasonable steps (and/or, in the case of clause 15.2(ii)
and where the increased or additional cost, reduction, payment, forgone
return or loss is that of its holding company, endeavour to procure
that its holding company takes such reasonable steps) as are open to it
(or, as the case may be, its holding company) to mitigate or remove
such circumstances (including (in the case of such Bank) the transfer
of its rights and obligations under this Agreement to another bank or
financial institution acceptable to the Parent) unless the taking of
such steps might (in the opinion of such Bank) be prejudicial to such
Bank (or, as the case may be, its holding company) or be in conflict
with such Bank's (or, as the case may be, its holding company's)
general banking policies or involve such Bank (or, as the
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case may be, its holding company) in any material expense or any
material increased administrative burden.
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16 Set-off and pro rata payments
-----------------------------
16.1 Set-off
-------
Each Obligor authorises each Bank to apply any credit balance to which
such Obligor is then entitled on any account of such Obligor with such
Bank at any of its branches in or towards satisfaction of any sum then
due and payable from such Obligor to such Bank under this Agreement. For
this purpose each Bank is authorised to purchase with the moneys standing
to the credit of such account such other currencies as may be necessary
to effect such application. No Bank shall be obliged to exercise any
right given to it by this clause 16.1. Each Bank shall notify the Agent
and the relevant Obligor (giving full details) forthwith upon the
exercise or purported exercise of any right of set-off and the Agent
shall inform the other Banks.
16.2 Pro rata payments
-----------------
(a) If at any time any Bank (the "Recovering Bank") receives or
recovers any amount owing to it by any Obligor under this Agreement
by direct payment, set-off or in any manner other than by payment
through the Agent pursuant to clause 8.1 or 8.10 (not being a
payment received from a Substitute in such Bank's Contribution or
any other payment of an amount due to the Recovering Bank for its
sole account pursuant to clauses 6.3, 7, 8.5, 14.1, 14.2, 15 or
15.2), the Recovering Bank shall, within two Banking Days of such
receipt or recovery (a "Relevant Receipt") notify the Agent of the
amount of the Relevant Receipt. If the Relevant Receipt exceeds the
amount which the Recovering Bank would have received if the
Relevant Receipt had been received by the Agent and distributed
pursuant to clause 8.1 or 8.10 (as the case may be) then:
(i) within two Banking Days of demand by the Agent, the
Recovering Bank shall pay to the Agent an amount equal (or
equivalent) to the excess;
(ii) the Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the relevant
Obligor and shall distribute the same to the Banks (other
than the Recovering Bank) in accordance with clause 8.10;
and
(iii) as between the relevant Obligor and the Recovering Bank the
excess amount so re-distributed shall be treated as not
having been paid but the obligations of the relevant Obligor
to the other Banks shall, to the extent of the amount so re-
distributed to them, be treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be wholly
or partly refunded by the Recovering Bank (whether to a liquidator
or otherwise) each Bank to which any part of such Relevant Receipt
was so re-distributed shall on request from the Recovering Bank
repay to the Recovering Bank such Bank's pro rata share of the
amount which has to be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Agent such information as
the Agent may from time to time request for the purpose of this
clause 16.2.
(d) Notwithstanding the foregoing provisions of this clause 16.2 no
Recovering Bank shall be obliged to share any Relevant Receipt
which it receives or recovers pursuant to legal proceedings taken
by it to recover any sums owing to it under this Agreement with any
other party which has a legal right to, but does not, either join
in such proceedings or commence and diligently pursue separate
proceedings to enforce its rights in the same or another court
(unless the proceedings instituted by the Recovering Bank are
instituted by it without prior notice having been given to such
party through the Agent).
16.3 No release
----------
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For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 16.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 16.2.
16.4 No charge
---------
The provisions of this clause 16 shall not, and shall not be construed so
as to, constitute a charge by a Bank over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause
16.2.
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17 Assignment, substitution and lending offices
--------------------------------------------
17.1 Benefit and burden
------------------
This Agreement shall be binding upon, and enure for the benefit of, the
Banks, the Arranger, the Agent, the Security Trustee and the Obligors and
their respective successors.
17.2 No assignment by Obligors
-------------------------
None of the Obligors may assign or otherwise transfer any of its rights
or obligations under this Agreement.
17.3 Substitution
------------
Each Bank (an "Existing Bank") may transfer, by way of novation (but not
by way of assignment or otherwise), all or any part (being at least NLG
15,000,000 and an integral multiple of NLG 5,000,000) of its rights,
benefits and/or obligations under this Agreement (including, for the
avoidance of doubt, any outstanding Telekabel Notes) to a Qualifying Bank
(a "Substitute") with the prior consent in writing of the Parent, such
consent not to be unreasonably withheld or delayed. Any such novation
shall be effected upon not less than 5 Banking Days' prior notice by
delivery to the Agent of a duly completed Substitution Certificate duly
executed by the Existing Bank and the Substitute. On the Effective Date
(as specified and defined in a Substitution Certificate so executed and
delivered), to the extent that the Commitment and Contribution of the
Existing Bank are expressed in a Substitution Certificate to be the
subject of the novation in favour of the Substitute effected pursuant to
this clause 17.3, by virtue of the counter-signature of the Substitution
Certificate by the Agent (for itself and the other parties to this
Agreement):
(a) the existing parties to this Agreement and the Security Trust Deed
and the Existing Bank shall be released from their respective
obligations towards one another under this Agreement and the
Security Trust Deed ("discharged obligations") and their respective
rights against one another under this Agreement and the Security
Trust Deed ("discharged rights") shall be cancelled;
(b) the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement and the Security Trust Deed
(other than such Existing Bank) shall assume obligations towards
each other which differ from the discharged obligations only
insofar as they are owed to or assumed by such Substitute instead
of to or by such Existing Bank; and
(c) the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement and the Security Trust Deed
(other than such Existing Bank) shall acquire rights against each
other which differ from the discharged rights only insofar as they
are exercisable by or against such Substitute instead of by or
against such Existing Bank;
and, on such Effective Date, the Substitute shall pay to the Agent for
its own account a fee of (Pounds)1,000. The Agent shall promptly notify
the Parent of the receipt by it of any Substitution Certificate and shall
promptly deliver a copy of such Substitution Certificate to the Parent.
17.4 Reliance on Substitution Certificate
------------------------------------
The Agent, the Banks, the Arranger, the Security Trustee and the Obligors
shall be fully entitled to rely on any Substitution Certificate delivered
to the Agent in accordance with the foregoing provisions of this clause
17 which is complete and regular on its face as regards its contents and
purportedly signed on behalf of the relevant Existing Bank and the
Substitute and none of the Agent, the Banks, the Arranger, the Security
Trustee or the Obligors shall have any liability or responsibility to any
party as a consequence of placing reliance on and acting in accordance
with
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any such Substitution Certificate if it proves to be the case that the
same was not authentic or duly authorised.
17.5 Authorisation of Agent
----------------------
Each party to this Agreement irrevocably authorises the Agent to counter-
sign each Substitution Certificate on its behalf for the purposes of
clause 17.3 without any further consent of, or consultation with, any
such party except, in the case of the Parent, the consent required
pursuant to clause 17.3.
17.6 Construction of certain references
----------------------------------
If any Bank novates all or any part of its rights, benefits and
obligations as provided in clause 17.3 all relevant references in this
Agreement and the Security Trust Deed to such Bank shall thereafter be
construed as a reference to such Bank and/or its Substitute to the extent
of their respective interests.
17.7 Lending offices
---------------
Each Bank shall lend through its office at the address specified in part
A of schedule 1 or, as the case may be, in any relevant Substitution
Certificate or through any other office of such Bank selected from time
to time by such Bank through which such Bank wishes to lend for the
purposes of this Agreement, Provided that no such change of lending
office may take place if it would involve any Obligor having to pay any
increased cost with respect to its obligations under this Agreement. If
the office through which a Bank is lending is changed pursuant to this
clause 17.7, such Bank shall notify the Agent promptly of such change.
17.8 Disclosure of information
-------------------------
Subject to such person first executing a confidentiality undertaking in a
form acceptable to the Parent, acting reasonably, any Bank may disclose
to a prospective transferee or to any other person who may propose
entering into contractual relations with such Bank in relation to this
Agreement such information about the Restricted Group as such Bank shall
consider appropriate.
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18 Arranger, Agent, Security Trustee and Reference Banks
-----------------------------------------------------
18.1 Appointment of Agent
--------------------
Each Bank irrevocably appoints the Agent as its agent for the purposes of
this Agreement and irrevocably authorises the Agent in such capacity:
(a) to execute all documents as may be approved by the Majority Banks
for execution by the Agent; and
(b) (whether or not by or through employees or agents) to take such
action on such Bank's behalf and to exercise such rights, remedies,
powers and discretions as are specifically delegated to the Agent
by this Agreement or, (as the case may be) the Security Documents,
together with such powers and discretions as are reasonably
incidental thereto (but subject to any restrictions or limitations
specified in this Agreement). None of the Agent, or the Arranger or
the Security Trustee shall, however, have any duties, obligations
or liabilities (whether fiduciary or otherwise) to the Banks beyond
those expressly stated in this Agreement and/or the Security
Documents.
Notwithstanding that the Agent and the Security Trustee may from time to
time be the same entity, the Agent and Security Trustee have entered into
this Agreement in their separate capacities as agent for the Banks under
and pursuant to this Agreement and as security trustee for the
Beneficiaries (as defined in the Security Trust Deed) to hold the
security created or to be created by the Security Documents on the terms
set out in the Security Trust Deed. However, where this Agreement
provides for the Agent to communicate with or provide instructions to the
Security Trustee, while the Agent and the Security Trustee are the same
entity, it will not be necessary for there to be any such formal
communications or instructions notwithstanding that this Agreement
provides in certain cases for the same to be in writing.
18.2 Agent's actions
---------------
Any action taken by the Agent under or in relation to this Agreement with
requisite authority, or on the basis of appropriate instructions,
received from the Majority Banks (or as otherwise duly authorised) shall
be binding on all the Banks.
18.3 Agent's duties
--------------
The Agent shall:
(a) promptly notify each Bank of the contents of each notice,
certificate or other document received by the Agent from the Parent
or any other Obligor under or pursuant to this Agreement;
(b) consult with the Banks as to whether and, if so, how a discretion
vested in the Agent is, either in any particular instance or
generally, to be exercised but so that this shall not prevent the
Agent in exceptional circumstances where time does not permit such
consultation and urgent action is required, from exercising its
rights and powers, or from instructing the Security Trustee to
exercise its rights and powers, to preserve the security
constituted by the Security Documents so long as the Agent promptly
notifies the Banks subsequently of such exercise; and
(c) (subject to the other provisions of this clause 18) take such
action or, as the case may be, refrain from taking such action with
respect to the exercise of any of its rights, remedies, powers and
discretions as agent or security agent, as the Majority Banks may
reasonably direct.
18.4 Agent's rights
--------------
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The Agent may:
(a) in the exercise of any right, remedy, power or discretion in
relation to any matter, or in any context, not expressly provided
for by this Agreement, act or, as the case may be, refrain from
acting in accordance with the instructions of the Majority Banks,
and shall be fully protected in so doing;
(b) unless and until it shall have received directions from the
Majority Banks, take such action, or refrain from taking such
action in respect of a Default of which the Agent has actual
knowledge as it shall deem advisable in the best interests of the
Banks (but shall not be obliged to do so);
(c) refrain from acting in accordance with any instructions of the
Majority Banks to institute, or to instruct the Security Trustee to
institute any legal proceedings arising out of or in connection
with this Agreement and/or the Security Documents until it and/or
the Security Trustee has been indemnified and/or secured to its
satisfaction against any and all costs, expenses or liabilities
(including legal fees) which it and/or the Security Trustee would
or might incur as a result;
(d) deem and treat (i) each Bank as the person entitled to the benefit
of the Contribution of such Bank for all purposes of this Agreement
and the Security Documents unless and until a Substitution
Certificate shall have been filed with the Agent and shall have
become effective, and (ii) the office set opposite the name of each
Bank in part A of schedule 1 or, as the case may be, in any
relevant Substitution Certificate as such Bank's lending office
unless and until a written notice of change of lending office shall
have been received by the Agent; and the Agent may act upon any
such notice unless and until the same is superseded by a further
such notice;
(e) rely as to matters of fact which might reasonably be expected to be
within the knowledge of any Obligor upon a certificate signed by
any director of the relevant Obligor on behalf of such Obligor; and
(f) refrain from doing anything which would, or might in its opinion,
be contrary to any law or regulation of any jurisdiction and may do
anything which is in its opinion necessary or desirable to comply
with any such law or regulation.
18.5 No liability of Arranger, Security Trustee and Agent
----------------------------------------------------
None of the Arranger, the Security Trustee, the Agent or any of their
respective employees and agents shall:
(a) be obliged to request any certificate or opinion under clause 11.1
or any provision of the Security Documents or to make any enquiry
as to the use of the proceeds of the Facility unless (in the case
of the Agent) so required in writing by any Bank, in which case the
Agent shall promptly make the appropriate request of the relevant
Obligor; or
(b) be obliged to make any enquiry as to any breach or default by any
Obligor in the performance or observance of any of the provisions
of this Agreement or as to the existence of a Default unless (in
the case of the Agent) the Agent has actual knowledge thereof or
has been notified in writing thereof by a Bank, in which case the
Agent shall promptly notify the Banks of the relevant event or
circumstance; or
(c) be obliged to enquire whether or not any representation or warranty
made by any Obligor pursuant to this Agreement or any of the
Security Documents is true; or
(d) be obliged to do anything (including, without limitation,
disclosing any document or information) which would, or might in
its opinion, be contrary to any law or regulation
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or be a breach of any duty of confidentiality or otherwise be
actionable or render it liable to any person; or
(e) be obliged to account to any Bank for any sum or the profit element
of any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of or in
connection with, or otherwise take steps to enforce, this Agreement
and/or the Security Documents other than on the instructions of the
Majority Banks; or
(g) be liable to any Bank for any action taken or omitted under or in
connection with this Agreement and/or the Security Documents or the
Loan unless caused by its gross negligence or wilful misconduct.
For the purposes of this clause 18 neither the Agent, nor the Security
Trustee shall be treated as having actual knowledge of any matter of
which the corporate finance or any other division outside the agency or
loan administration department of the person for the time being acting as
the Agent or the Security Trustee, as the case may be, may become aware
in the context of corporate finance, advisory or lending activities from
time to time undertaken by the Agent or the Security Trustee, as the case
may be, for the Parent or any of its Subsidiaries or Associated Companies
or any other person which may be a trade competitor of any of the
Obligors or may otherwise have commercial interests similar to those of
any of the Obligors.
18.6 Non-reliance on Arranger, Security Trustee or Agent
---------------------------------------------------
Each Bank acknowledges, by virtue of its execution of this Agreement or,
as the case may be, a Substitution Certificate, that it has not relied on
any statement, opinion, forecast or other representation made by the
Arranger, the Security Trustee or the Agent to induce it to enter into
this Agreement and that it has made and will continue to make, without
reliance on the Agent, the Security Trustee or the Arranger and based on
such documents as it considers appropriate, its own appraisal of the
creditworthiness of the Parent and its Subsidiaries and its own
independent investigation of the financial condition, prospects and
affairs of the Parent and its Subsidiaries in connection with the making
and continuation of the Loan under this Agreement. None of the Arranger,
the Security Trustee or the Agent shall have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any
credit or other information with respect to the Obligors whether coming
into its possession before the making of any Advance or at any time or
times thereafter, other than (in the case of the Agent) as provided in
clause 18.3(a).
18.7 No Responsibility on Arranger, Security Trustee or Agent for any
----------------------------------------------------------------
Obligor's performance
---------------------
None of the Arranger, the Security Trustee or the Agent shall have any
responsibility or liability to any Bank:
(a) on account of the failure of any Obligor to perform its obligations
under this Agreement or any Security Document; or
(b) for the financial condition of any Obligor; or
(c) for the completeness or accuracy of any statements, representations
or warranties in this Agreement, any Security Document or the
Information Memorandum or any document delivered under this
Agreement or any Security Document; or
(d) for the execution, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of this Agreement or
any of the Security Documents or of any certificate, report or
other document executed or delivered under this Agreement or any of
the Security Documents; or
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<PAGE>
(e) otherwise in connection with the Facility or its negotiation or for
acting (or, as the case may be, refraining from acting) in
accordance with the instructions of the Majority Banks.
18.8 Reliance on documents and professional advice
---------------------------------------------
The Arranger and the Agent shall be entitled to rely on any
communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person and shall be
entitled to rely as to legal or other professional matters on opinions
and statements of any legal or other professional advisers selected or
approved by it (including those in the Agent's employment).
18.9 Other dealings
--------------
The Arranger and the Agent may, without any liability to account to the
Banks, accept deposits from, lend money to, and generally engage in any
kind of banking or other business with, and provide advisory or other
services to, the Parent or any of its Subsidiaries or associated
companies or any of the Banks as if it were not the Arranger or the
Agent, as the case may be.
18.10 Rights of Agent as Bank; no partnership
---------------------------------------
With respect to its own Commitment and Contribution (if any) the Agent
shall have the same rights and powers under this Agreement and the
Security Documents as any other Bank and may exercise the same as though
it were not performing the duties and functions delegated to it under
this Agreement and/or the Security Documents and the term "Banks" shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity as a Bank. This Agreement shall not and shall not be
construed so as to constitute a partnership between the parties or any of
them.
18.11 Amendments; waivers
-------------------
(a) Subject to clause 18.11(b), the Agent may, with the consent of the
Majority Banks (or if and to the extent expressly authorised by the
other provisions of this Agreement) and, if so instructed by the
Majority Banks, shall (i) agree amendments or modifications to this
Agreement with the Obligors and/or (ii) vary or waive breaches of,
or defaults under, or otherwise excuse performance of, any
provision of this Agreement by any Obligor. Any such action so
authorised and effected by the Agent shall be documented in such
manner as the Agent shall (with the approval of the Majority Banks)
determine, shall be promptly notified to the Banks by the Agent and
(without prejudice to the generality of clause 18.2) shall be
binding on all the Banks.
(b) Except with the prior written consent of all the Banks, the Agent
shall not have authority on behalf of the Banks (A) to agree with
any Obligor any amendment or modification to this Agreement or to
grant waivers in respect of breaches or defaults or to vary or
excuse performance of or under this Agreement by any Obligor, if
the effect of such amendment, modification, waiver, variation or
excuse would be to (i) reduce the Margin, (ii) postpone the due
date or reduce the amount of any reduction in availability, any
payment of principal, interest, commitment commission or other
amount payable by any Obligor under this Agreement, (iii) change
the currency in which any amount is payable by any Obligor under
this Agreement, (iv) increase any Bank's Commitment, (v) extend the
Availability Period, (vi) change the definition of "Majority Banks"
in clause 1.2, (vii) change any provision of this Agreement which
expressly or impliedly requires the approval or consent of all the
Banks such that the relevant approval or consent may be given
otherwise than with the sanction of all the Banks, (viii) change
clause 4.1, (ix) change the order of distribution under clause
8.10, (x) change clause 16.2, (xi) change this clause 18.11 or (B)
release any member of the Restricted Group or any of their
respective assets from the security created by any of the Security
Documents unless such release is to permit the disposal or other
dealing
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with such asset in accordance with the terms of this Agreement and
any relevant Security Document or (C) release any Guarantor from
its obligations under any Guarantee to which it is a party.
(c) For the purposes of this clause 18.11 it is expressly agreed and
acknowledged that the execution of a Deed of Borrower Accession or
a Deed of Guarantor Accession or any deed or instrument pursuant to
a further assurance provision in the Security Documents shall not
constitute an amendment or modification to, or variation of, this
Agreement or any of the Security Documents.
18.12 Reimbursement and indemnity by Banks
------------------------------------
Each Bank shall reimburse the Arranger and the Agent (rateably in
accordance with such Bank's Commitment or Contribution), to the extent
that the Arranger or the Agent is not reimbursed by the Obligors, for the
costs, charges and expenses incurred by the Arranger and the Agent in
connection with the negotiation, preparation and execution of this
Agreement and the Security Documents and/or in contemplation of, or
otherwise in connection with, the enforcement or attempted enforcement
of, or the preservation or attempted preservation of any rights under, or
in carrying out its duties under, this Agreement and/or any of the
Security Documents including (in each case) the fees and expenses of
legal or other professional advisers. Each Bank shall on demand indemnify
the Agent (rateably in accordance with its Commitment or Contribution)
against all liabilities, damages, costs and claims whatsoever incurred by
the Agent in connection with this Agreement and the Security Documents or
the performance of its duties under this Agreement and the Security
Documents or any action taken or omitted by the Agent under this
Agreement and/or any of the Security Documents, unless such liabilities,
damages, costs or claims arise from the Agent's own gross negligence or
wilful misconduct.
18.13 Retirement of Agent
-------------------
(a) The Agent may retire from its appointment as Agent under this
Agreement having given to the Parent and each of the Banks not less
than 30 days' notice of its intention to do so, provided that no
such retirement shall take effect unless there has been appointed
by the Banks as a successor agent:
(i) a Bank nominated by the Majority Banks with the consent of
the Parent (not to be unreasonably withheld or delayed) or,
failing such a nomination,
(ii) any reputable and experienced bank or financial institution
with offices in London nominated by the Agent with the
consent of the Parent (not to be unreasonably withheld or
delayed).
Any corporation into which the Agent may be merged or converted or
any corporation with which the Agent may be consolidated or any
corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Agent shall be a
party shall, to the extent permitted by applicable law, be the
successor Agent under this Agreement without the execution or
filing of any document or any further act on the part of any of the
parties to this Agreement, save that notice of any such merger,
conversion, amalgamation, consolidation or other reorganisation
shall forthwith be given to the Parent and the Banks.
(b) Upon any such successor as aforesaid being appointed, the retiring
Agent shall be discharged from any further obligation under this
Agreement (but shall continue to have the benefit of this clause 18
in respect of any action it has taken or refrained from taking
prior to such discharge) and its successor and each of the other
parties to this Agreement shall have the same rights and
obligations among themselves as they would have had if such
successor had been a party to this Agreement in place of the
retiring Agent. The retiring Agent shall (at the expense of the
Parent) provide its successor
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with copies of such of its records as its successor reasonably
requires to carry out its functions under this Agreement.
18.14 Change of Reference Banks
-------------------------
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid, (b) the Commitment (if any) of any Reference Bank is reduced to
zero in accordance with clause 6.3 or 15.1, (c) a Reference Bank novates
the whole of its rights and obligations (if any) as a Bank under this
Agreement or (d) any Reference Bank ceases to provide quotations to the
Agent for the purposes of determining LIBOR, the Agent may, acting on the
instructions of the Majority Banks, terminate the appointment of such
Reference Bank and after consultation with the Parent appoint another
Bank to replace such Reference Bank.
18.15 Prompt distribution of proceeds
-------------------------------
Moneys received by the Security Trustee (whether from a Receiver or
otherwise) pursuant to the exercise of (or otherwise by virtue of the
existence of) any rights and powers under or pursuant to any of the
Security Documents shall be paid to the Agent for distribution in
accordance with the terms of the Security Trust Deed shall be distributed
by the Agent as soon as is practicable after the relevant moneys are
received by, or otherwise become available to, the Agent save that
(without prejudice to any other provision contained in any of the
Security Documents) the Agent (acting on the instructions of the Majority
Banks) may credit any moneys received by it to a suspense account for so
long and in such manner as the Agent may from time to time determine with
a view to preserving the rights of the Agent and/or the Arranger and/or
the Banks or any of them to prove for the whole of their respective
claims against any Obligor or any other person liable.
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19 Notices and other matters
-------------------------
19.1 Notices
-------
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter when delivered and, in the
case of a telefax, when a complete and legible copy is received by
the addressee (unless the date of despatch is not a business day in
the country of the addressee or the time of despatch of any telefax
is after the close of business in the country of the addressee in
which case it shall be deemed to have been received at the opening
of business on the next such business day); and
(c) be sent:
(i) to each Obligor at:
Fred. Roeskestraat 123
PO Box 74763,
1070 BT Amsterdam
Telefax: (31) 20578 9861
Attention: Chief Financial Officer
and,
in addition, the case of Telekabel Wien only, to:
Telekabel Wien G.m.b.H
Erlachgasse 116
1100, Wien, Austria
Telefax: 431 1701 211
Attention: Chief Financial Officer
(ii) to the Agent, the Arranger and the Security Trustee at:
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB
Telefax: (44) 171 638 2551
Attention: Manager, Loans Agency
and:
Telefax: (44) 171 638 0006
Attention: Director, Communications Finance
(iii) to each Bank
at its address or telefax number
specified in part A of schedule 1
or in any relevant Substitution Certificate
or to such other address or telefax number as is notified by the
relevant party to the other parties to this Agreement.
19.2 Notices through the Agent
-------------------------
89
<PAGE>
Every notice, request, demand or other communication under this Agreement
to be given by any Obligor to any other party shall be given to the Agent
for onward transmission as appropriate and to be given to the Obligors
(or any of them) shall (except as otherwise provided in this Agreement)
be given by the Agent.
19.3 No implied waivers, remedies cumulative
---------------------------------------
No failure or delay on the part of the Agent, the Arranger, the Banks or
any of them to exercise any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial
exercise by the Agent, the Arranger, the Banks or any of them of any
power, right or remedy preclude any other or further exercise thereof or
the exercise of any other power, right or remedy. The remedies provided
in this Agreement are cumulative and are not exclusive of any remedies
provided by law.
19.4 English translations
--------------------
All certificates, instruments and other documents to be delivered under
or supplied in connection with this Agreement shall be in the English
language or shall be accompanied by a certified English translation upon
which the Agent, the Arranger and the Banks shall be entitled to rely.
19.5 Counterparts
------------
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
19.6 No breach of Austrian Agreements
--------------------------------
The Banks (i) confirm that they have received copies of the Austrian
Agreements in their form at the date of the first supplemental agreement
to this Agreement, and (ii) further confirm, and authorise the Agent to
confirm, that if they, the Agent or the Security Trustee become majority
shareholders in CNA following enforcement of the CNA Share Security they
will not, and they will not instruct the Agent or the Security Trustee
to, require CNA to take any advice which would to their knowledge, after
taking advice, constitute a breach of the Austrian Agreements in their
form at the date of the first supplemental agreements to this Agreement
if such action would also constitute a breach of the Austrian Agreements
in their form at the date on which such action is taken. These
confirmations, however, do not constitute (a) a waiver of any rights the
Banks, the Agent or the Security Trustee may have under the Austrian
Agreements as such shareholders or (b) a guarantee of CNA's obligations
under the Austrian Agreements. The Banks do not have authority to bind
any third party who becomes a shareholder in CNA, whether following
enforcement of the CNA Share Security or otherwise, but the Banks agree
that if they, the Agent or the Security Trustee dispose of the shares in
CNA, upon enforcement of the CNA Share Security, or as shareholders in
CNA following enforcement of the CNA Share Security, otherwise than by
means of a public offer, public sale or public auction they will make
such disposal on terms that the acquirer gives a confirmation in the same
terms as this clause 19.6.
90
<PAGE>
20 Governing law and jurisdiction
------------------------------
20.1 Law
---
This Agreement shall be governed by English law.
20.2 Submission to jurisdiction
The parties to this Agreement agree for the benefit of the Agent, the
Arranger, the Security Trustee and the Banks that:
(a) if any party has any claim against any other arising out of or in
connection with this Agreement such claim shall (subject to clause
20.2(c) be referred to the High Court of Justice in England, to the
jurisdiction of which each of the parties irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any
such claim against the Agent, the Arranger, the Security Trustee or
any Bank shall be an exclusive jurisdiction and no courts outside
England shall have jurisdiction to hear or determine any such
claim; and
(c) nothing in this clause 20.2 shall limit the right of the Agent, the
Security Trustee, the Arranger or the Banks to refer any such claim
against any Obligor to any other court of competent jurisdiction
outside England, to the jurisdiction of which each Obligor hereby
irrevocably agrees to submit, nor shall the taking of proceedings
by the Agent, the Security Trustee, the Arranger or any Bank before
the courts in one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction whether concurrently or not.
20.3 Agent for service of process
----------------------------
Each Obligor irrevocably designates, appoints and empowers TG Registrars
Limited at present of 150 Aldersgate Street, London EC1A 4EJ to receive
for it and on its behalf service of process issued out of the High Court
of Justice in England in relation to any claim arising out of or in
connection with this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
91
<PAGE>
Schedule 1
Part A - The Banks and their Commitments
----------------------------------------
<TABLE>
<CAPTION>
Name Address and telefax number Commitment
NLG
- ---- -------------------------- ----------
<S> <C> <C>
The Toronto- Triton Court 254,000,000
Dominion Bank 14/18 Finsbury Square
London EC2A 1DB
Fax: 0171 638 0006
Attention: Loan Administration
Barclays Bank PLC 5th Floor 169,200,000
St. Swithins House
11/12 St. Swithins Lane
London EC4N 8AS
Fax: 0171 621 4583
Attention: Kevin Markham
CLAD UK
CIBC Wood Gundy Plc Cottons Centre 169,200,000
Cottons Lane
London SE1 2QL
Fax: 0171 234 6433
Attention: Supervisor Banking
Services
HSBC Investment Thames Exchange 169,200,000
Bank plc 2nd Floor
10 Queen Street Place
London EC4R 1BL
Facsimile: 0171 336 9302/9293
Attention: Specialised Financing
Support
NationsBank N.A. New Broad Street House 169,200,000
35 New Broad Street
London EC2M 1NH
Fax: 0171 282 6831
Attention: Tim Martin
Loan Administrator
The Royal Bank of 4th Floor 169,200,000
</TABLE>
92
<PAGE>
<TABLE>
<CAPTION>
Name Address and telefax number Commitment
NLG
- ---- -------------------------- ----------
<S> <C> <C>
Scotland plc 5-10 Great Tower Street
London EC3P 3HX
Fax: 0171 220 7370
Attention: Gina Thomas
Loans Administration
</TABLE>
93
<PAGE>
Part B - Restricted Subsidiaries and Original Guarantors
--------------------------------------------------------
<TABLE>
<CAPTION>
=========================================================================================================
Company Country of Incorporation Address
- ------- ------------------------ -------
=========================================================================================================
<S> <C> <C>
Cable Networks Austria Holding b.v. The Netherlands Fred. Roeskestraat 123
P.O. Box 74763
1070 BT
Amsterdam
=========================================================================================================
Telekabel Wien G.m.b.H. Austria Erlachgasse 116
1100, Wien, Austria
=========================================================================================================
Telekabel Klagenfurt G.m.b.H. Austria Villacherstrasse 161 9020,
Klagenfurt, Austria
=========================================================================================================
Telekabel Graz G.m.b.H. Austria Lazarettgurtel 81, 8020, Graz,
Austria
=========================================================================================================
Telekabel-Fernsehnetz Wiener Neustadt Austria Neunkirchnerstrasse 24, 2700,
Neunkirchen Betriebs-G.m.b.H. Wiener Neustadt, Austria
=========================================================================================================
Telekabel-Fernsehnetz Region Baden Austria Hauptplatz 13, 2514
Betriebs- G.m.b.H. Traiskirchen, Austria
=========================================================================================================
Radio Public S.A. Belgium Chazallaan 140, 1030 Brussels,
Belgium
=========================================================================================================
Janco Kabel-TV A/S Norway Ensjoveien 7, 0655 Oslo, Norway
(until Norwegian Merger)
=========================================================================================================
Norkabelgruppen A/S Norway Sorkendalsveien 6, P.O. Box
(until Norwegian Merger) 5425 Majorstuen, 0305 Oslo,
Norway
=========================================================================================================
Kanal 2 A/S (until Norwegian Merger) Norway Sorkendalsveien 6, P.O. Box
5425 Majorstuen, 0305 Oslo,
Norway
=========================================================================================================
Oslo Kabelanlegg A/S Norway Sorkendalsveien 6, P.O. Box
(until Norwegian Merger) 5425 Majorstuen, 0305 Oslo,
Norway
=========================================================================================================
Norkabel A/S Norway Sorkendalsveien 6, P.O. Box
(until Norwegian Merger) 5425 Majorstuen, 0305 Oslo,
Norway
=========================================================================================================
New Janco Norway (to be determined)
(after Norwegian Merger)
=========================================================================================================
</TABLE>
94
<PAGE>
Part C - Borrowers
------------------
<TABLE>
<CAPTION>
=========================================================================================================
Company Country of Incorporation Address
- ------- ------------------------ -------
=========================================================================================================
<S> <C> <C>
United and Philips Communications B.V. The Netherlands Fred. Roeskestraat 123
P.O. Box 74763
1076 EE Amsterdam
=========================================================================================================
Telekabel Wien G.m.b.H. Austria Erlachgasse 116, 1100 Wien,
Austria
=========================================================================================================
Norkabelgruppen A/S Norway Sorkedalsveien 6, P.O. Box
(before Norwegian Merger) 5425 Majerstuen, 0305 Oslo,
Norway
=========================================================================================================
New Janco Norway (to be determined)
(after Norwegian Merger)
=========================================================================================================
</TABLE>
95
<PAGE>
Schedule 2
----------
Form of Drawdown Notice
-----------------------
To: The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB.
Attention: Manager, Loans Agency '19'
NLG 1,100,000,000 Multi-currency Revolving Credit
-------------------------------------------------
Facility Agreement dated ' 19' (as from time to time amended,
-------------------------------------------------------------
varied, extended, restated, refinanced or replaced, the "Agreement")
--------------------------------------------------------------------
We refer to the Agreement and hereby give you notice that we wish to
draw down an Advance of ' on '19' for a Term of ' months [we wish to issue a
Telekabel Note in the nominal amount of . on . 19. for a Term of . months]. The
funds should be credited to [name and number of account] with [details of bank
in [principal financial centre for relevant Optional Currency]].
We confirm that:
(i) so far as we are aware, no event or circumstance has occurred and
is continuing which constitutes a Default; [and]
(ii) the representations and warranties contained in clause 10.1 of
the Agreement to be repeated in accordance with clause 10.3 of
the Agreement:
(A) [if the aggregate Guilder Amount of Advances
outstanding after such drawing would exceed the
aggregate Guilder Amount of Advances outstanding
prior to that drawing (after taking into account any
repayment made on the date of such drawing)] are true
and correct; or
(B) [in all other circumstances] are not incorrect or
misleading in any way which would be reasonably
likely to have a material adverse effect on the
ability of any Borrower to perform its obligations
under this Agreement or on the financial position of
the Parent and its Subsidiaries taken as a whole,
as at the date of this notice as if made with respect to the
facts and circumstances existing at the date of this notice;
[and]
[(iii) the amount of the Advance, when aggregated with other
Advances outstanding to the Norwegian Borrowers, is
less than the Norwegian Loan Amount]*.
[We enclose a Telekabel Note in respect of the drawdown requested by
this notice which has been duly completed save for the provision of
such Telekabel Note dealing with the calculation of interest. We hereby
authorize you to complete on our behalf the provisions of such
Telekabel Note dealing with the calculation of interest.]**
We confirm that Total Annualized Net Operating Cash Flow in the most
recently delivered Monthly Management Accounts was [ ].
- --------------------------------------------------------------------------------
* Norwegian Borrowers only
** Austrian Borrowers only
96
<PAGE>
[We confirm that Cable TV Annualized Net Operating Cash Flow in the
most recently delivered Monthly Management Accounts was [ ]].
We confirm that the ratio of Total Debt (including for these purposes,
the amount of the Advance the subject of this notice) to Total
Annualized Net Operating Cash Flow as calculated from the most recently
delivered Monthly Management Accounts delivered to the Agent under the
Agreement was [ ].
[We confirm that the ratio of Total Debt (including for these purposes,
the amount of the Advance the subject of this notice) to Cable TV
Annualized Net Operating Cash Flow as calculated from the most recently
delivered Monthly Management Accounts delivered to the Agent under the
Agreement was [ ]].
Words and expressions defined in the Agreement shall have the same
meanings where used in this notice.
For and on behalf of
[Name of relevant Borrower] [and]
United and Philips Communications B.V.
.....................
97
<PAGE>
Schedule 3
----------
Part A - documents and evidence required
----------------------------------------
as conditions precedent to first Advance
----------------------------------------
(a) A copy, certified as a true, complete and up-to-date copy by an
Authorized Officer of the Parent, of the constitutive documents of the
Parent and each member of the Restricted Group amended as agreed
between the Parent and the Agent.
(b) A copy, certified as a true copy by an Authorized Officer of the
Parent, of resolutions of the Supervisory Board of Directors of the
Parent evidencing approval of this Agreement, the Security Documents to
which it is a party and authorizing its appropriate officers to execute
and deliver this Agreement, such Security Documents and to give all
notices and take all other action required by the Parent under this
Agreement and each such Security Document.
(c) A copy, certified as a true copy by an Authorized Officer of the Parent
of resolutions of the Board of Directors of each of the members of the
Restricted Group (except for the Austrian members of the Restricted
Group) evidencing approval of this Agreement and the Security Documents
to which they are a party and authorizing their respective appropriate
officers to execute and deliver such Security Documents and to give all
notices and take all other action required by such member of the
Restricted Group thereunder.
(d) Specimen signatures, authenticated by an Authorized Officer of the
Parent, of the persons authorized in the resolutions referred to in
paragraphs (b) and (c) above, together with originals of the powers of
attorney granted by the Parent and any member of the Restricted Group
in connection with the Finance Documents.
(e) A copy, certified as a true copy by an Authorized Officer of the
Parent, of all consents, authorizations, licenses and approvals
required by the members of the Restricted Group to authorize, or
required by the members of the Restricted Group in connection with, the
execution, delivery, validity, enforceability and admissibility in
evidence of this Agreement and the Security Documents and the
performance by the members of the Restricted Group of their respective
obligations under this Agreement and the Security Documents.
(f) An opinion of Norton Rose, dated not more than five Banking Days prior
to the first Drawdown Date, in a form acceptable to the Agent.
(g) A copy, certified as a true copy by an Authorized Officer of the Parent
of a letter from each Obligor's agent for receipt of service of process
referred to this Agreement and in the Security Trust Deed accepting its
appointment.
(h) The Share Securities and the Security Trust Deed duly executed by the
Parent and/or by the other members of the Restricted Group party
thereto together with all documents, deeds, notices and certificates
required to be delivered pursuant to the terms thereof.
(i) The Disclosure Letter.
(j) The audited financial statements for the financial year ended on 31
December 1996 referred to in clause 10.1(g)(i) and the monthly
management accounts and quarterly management accounts referred to in
clause 10.1(g)(ii).
(k) A copy of the Management Base Case.
(l) A copy of the accountants letter relating to the Management Base Case.
(m) Copies, certified by the Authorized Officer of the Parent to be true,
complete and up to date copies of:
(i) the Licenses;
98
<PAGE>
(ii) the Principal Agreements; and
(iii) the Necessary Authorizations.
Documents and evidence required as conditions precedent in Austria
- ------------------------------------------------------------------
1 List of receivables pledged by the Austrian Security Document to be
provided on or before 12 December, 1997 under clause 3.6(b).
2 Written confirmation from the secretary of Telekabel Wien that the
pledge pursuant to the Austrian Security Document has been noted in the
computerized company books of Telekabel Wien to be provided on or
before 12 December, 1997 under clause 3.6(b).
3 Originals of the notice and acknowledgement of the pledge of bank
account duly signed by Telekabel Wien and acknowledged by the relevant
bank, as set out in the schedule to the Austrian Security Document to
be provided on or before 12 December, 1997 under clause 3.6(b).
4 A resolution of CNA, as 95 per cent. shareholder in each other
Telekabel Entity (other than Telekabel Wien), inter alia, approving the
entry into by such Telekabel Entity of the Guarantee, in a form
acceptable to the Agent.
5 An opinion of Ortner, Poch, Foramitti Rechtsanwalte, special legal
advisers to the Banks in Austria, dated not more than five Banking Days
prior to the first Drawdown Date, in a form acceptable to the Agent.
Documents and evidence required as conditions precedent in Belgium
- ------------------------------------------------------------------
1 Entry in the share register of Radio Public of the pledge of shares in
Radio Public given by the Parent, signed by the Parent.
2 Regulatory approvals of Radio Public for Etterbeek, Schaarbeek,
Koekelberg, Jette, Ganshoren, Berghem-Sainte-Agathe, Forest, Leuven,
Heverlee and Kessel-Lo and two letters of the Belgian Institute for
Post and Telecommunication authorizing Radio Public to operate an
Internet Service and a telecommunications service from 7th May 1997.
3 An opinion of Coppens, Van Ommeslaghe & Faures, special legal advisers
to the Banks in Belgium, dated not more than five Banking Days prior to
the first Drawdown Date, in a form acceptable to the Agent.
Documents and evidence required as conditions precedent in the Netherlands
- --------------------------------------------------------------------------
1 An extract from the trade register of the Chamber of Commerce of the
Parent and each member of the Restricted Group incorporated in The
Netherlands.
2 A copy, certified as a true, complete and up-to-date copy by an
Authorized Officer of the Parent, of the shareholders' register of (i)
the Parent and (ii) each member of the Restricted Group incorporated in
The Netherlands.
3 Resolution of the Board of Supervisory directors of the Parent
evidencing approval of this Agreement and the Security Documents to
which the Parent is a party and authorizing the appropriate officers of
the Parent to execute and deliver the Agreement and the Security
Documents and to give all notices and other action required thereunder.
99
<PAGE>
4 A confirmation satisfactory to the Agent from ABN Amro Bank N.V. of all
amounts outstanding under the Existing UPC Facility to be repaid for
value 10th October 1997 and confirming that all and any security
granted in connection with such facility will be released and that such
facility shall be irrevocably cancelled on receipt of such amount.
5 An opinion of (i) Trenite Van Doorne and (ii) Horlings, Bronwer &
Horlings, special legal advisers to the Banks in the Netherlands, dated
not more than five Banking Days prior to the first Drawdown Date, in a
form acceptable to the Agent.
Documents and evidence required as conditions precedent in Norway
- -----------------------------------------------------------------
1 A shareholders' resolution of the shareholders of Janco evidencing
approval of the shareholders of Janco to the terms of this Agreement
and the obligations of Janco thereunder.
2 A letter from the Norwegian Bankruptcy Register confirming that as of
the first Drawdown Date, none of the members of the Restricted Group
incorporated in Norway have been reported from the local probate courts
to the said register bankrupt.
3 Copies, certified as true copies by an Authorized Officer of the
Parent, of shareholders' registers ("aksjonaerprotokoll") of Janco.
4 An opinion of Wiersholm, Mellbye & Bech, special legal advisers to the
Banks in Norway, dated not more than five Banking Days prior to the
first Drawdown Date, in a form acceptable to the Agent.
5 Originals of the notice of assignment of dividends and acknowledgement
of notice duly signed by the Parent and acknowledged by Janco, as set
out in exhibits 1 and 2 to the Norwegian Share Security.
100
<PAGE>
Schedule 3
----------
Part B - Documents and evidence required
----------------------------------------
as conditions precedent to Philips Advance
------------------------------------------
(a) A copy certified to be a true copy by an Authorized Officer of the
Parent of the Securities Purchase and Conversion Agreement and the
Bridge Facility Agreement.
(b) Evidence satisfactory to the Agent that:
(i) all conditions to the Securities Purchase and Conversion
Agreement have been satisfied other than those dependant upon
the drawdown of the Philips Advance and, if the Parent is
required to issue any Initial Preference Shares (as defined in
the Securities Purchase and Conversion Agreement) pursuant to
the terms of the Securities Purchase and Conversion Agreement
such shares are consistent with the outline terms and
conditions contained in the Securities Purchase and Conversion
Agreement;
(ii) all conditions precedent set out in the Bridge Facility
Agreement have been satisfied and a drawdown notice in respect
of the full amount of the Bridge Facility has been given in
accordance with the terms thereof;
(iii) the Parent has sufficient funds at its disposal, in the
opinion of the Agent, which when aggregated with the Philips
Advance will enable the Parent to consummate the Philips
Transaction in accordance with the terms of the Securities
Purchase and Conversion Agreement.
(c) Such other documents and evidence as the Agent shall reasonably require.
101
<PAGE>
Schedule 3
----------
Part C - Documents and evidence required as conditions
------------------------------------------------------
precedent to the first Advance made to the Norwegian Borrowers
--------------------------------------------------------------
if at that time the Norwegian Merger has occurred
-------------------------------------------------
(a) An opinion of Wiersholm, Mellbye & Bech, special legal advisers to the
Banks in Norway dated not more than five Banking Days prior to the date
of the first Advance to be made to the Norwegian Borrowers, in a form
acceptable to the Agent.
(b) Each of the Norwegian Security Documents listed in part B of schedule
13 duly executed by the members of the Restricted Group party thereto
together with all documents, deeds, notices and certificates required
to be delivered pursuant to the terms thereof.
(c) A confirmation from ING Bank N.V. specifying the total of all amounts
outstanding under the Existing Norkabel Facility as at the proposed
date of the first Advance to be made to the Norwegian Borrowers and
that such of the Norwegian Security Documents that are to be assigned
or transferred to the Security Trustee by ING Bank N.V. have been
deposited with the law firm Thommessen, Krefting, Greve, Lund in Oslo,
who have been irrevocably instructed to release the said documents to
the law firm Wiersholm, Mellbye & Bech in Oslo on behalf of the
Security Trustee upon confirmation from ING Bank N.V. that the said
amounts have been received and that upon the said amounts being
received all other security granted to ING Bank N.V. in connection with
the Norkabel Facility shall be released, cancelled or discharged (as
the case may be).
(d) each of the documents and evidence specified in part B of schedule 11.
(e) A shareholders resolution of the shareholders of Janco evidencing
approval of the shareholders of Janco to the terms of the Norwegian
Security Documents and the obligations of Janco under those documents.
(f) A copy, certified as a true copy by an Authorized Officer of the Parent
of the Shareholders' registers ("aksjonaerprotokoll") of Janco.
(g) A letter from the Norwegian Bankruptcy Register confirming that as of
the date of the first drawdown to be made to the Norwegian Borrowers,
that Janco has not been reported from the local probate court to the
said local register bankrupt.
(h) Consent in writing to record the mortgages over leased real estates
with appurtenances forming part of the Norwegian Security Documents,
from the landlords who have not given such consent earlier on.
(i) Evidence of the discharge of all Encumbrances granted by Janco prior to
the date of the Norwegian Merger.
(j) An assignment given by the Parent of all of its rights title benefit
and interest in and under the Janco Loan Agreement, in form and
substance satisfactory to the Majority Banks together with such Board
Resolutions, legal opinions and such other documents and evidence to
show that the obligations of the Parent thereunder are legal, valid and
binding, as the Agent, acting on the instructions of the Majority
Banks, may reasonable require.
(k) A copy, certified as a true, complete and up-to-date copy by an
Authorized Officer of each relevant company, of the constitutive
documents as at the date of foundation of such company of each member
of the Restricted Group incorporated in Norway.
102
<PAGE>
Schedule 3
----------
Part D - Documents and evidence required as conditions
------------------------------------------------------
precedent to the first Advance made to the Norwegian Borrowers
--------------------------------------------------------------
if at that time the Norwegian Merger has not occurred
-----------------------------------------------------
(a) An opinion of Wiersholm, Mellbye & Bech, special legal advisers to the
Banks in Norway dated not more than five Banking Days prior to the date
of the first Advance to be made to the Norwegian Borrowers, in a form
acceptable to the Agent.
(b) Each of the Norwegian Security Documents listed in part A of schedule
13 duly executed by the members of the Restricted Group party thereto
together with all documents, deeds, notices and certificates required
to be delivered pursuant to the terms thereof.
(c) A confirmation from ING Bank N.V. specifying the total of all amounts
outstanding under the Existing Norkabel Facility as at the proposed
date of the first Advance to be made to the Norwegian Borrowers and
that such of the Norwegian Security Documents that are to be assigned
or transferred to the Security Trustee by ING Bank N.V. have been
deposited with the law firm Thommessen, Krefting, Greve, Lund in Oslo,
who have been irrevocably instructed to release the said documents to
the law firm Wiersholm, Mellbye & Bech in Oslo on behalf of the
Security Trustee upon confirmation from ING Bank N.V. that the said
amounts have been received and that upon the said amounts being
received all other security granted to ING Bank N.V. in connection with
the Norkabel Facility shall be released, cancelled or discharged (as
the case may be).
(d) A shareholders resolution of the shareholders of Janco evidencing
approval of the shareholders of Janco to the terms of the Norwegian
Security Documents and the obligations of Janco under those documents.
(e) A copy, certified as a true copy by an Authorized Officer of the Parent
of the Shareholders' registers ("aksjonaerprotokoll") of each member of
the Restricted Group incorporated in Norway.
(f) A letter from the Norwegian Bankruptcy Register confirming that as of
the date of the first drawdown to be made to the Norwegian Borrowers,
no member of the Restricted Group incorporated in Norway has been
reported from the local probate court to the said local register
bankrupt.
(g) Consent in writing to record the mortgages over leased real estates
with appurtenances forming part of the Norwegian Security Documents,
from the landlords who have not given such consent earlier on.
(h) Evidence of the discharge of all Encumbrances granted by Janco prior to
the date of the first Advance to be made to the Norwegian Borrowers.
(i) An assignment given by the Parent of all of its rights title benefit
and interest in and under the Janco Loan Agreement, in form and
substance satisfactory to the Majority Banks together with such Board
Resolutions, legal opinions and such other documents and evidence to
show that the obligations of the Parent thereunder are legal, valid and
binding, as the Agent, acting on the instructions of the Majority
Banks, may reasonable require.
(j) A copy, certified as a true, complete and up-to-date copy by an
Authorized Officer of each relevant company, of the constitutive
documents as at the date of the foundation of such company of each
member of the Restricted Group incorporated in Norway.
103
<PAGE>
Schedule 4
----------
Calculation of Additional Cost
------------------------------
1 The Additional Cost for any period shall (subject to paragraph 5 below)
be calculated in accordance with the following formula:
BY + L(Y-X) + S(Y-Z)
-------------------- per cent per annum
100 - (B+S)
where on the day of application of the formula:
B is the percentage of the Agent's eligible liabilities which
the Bank of England then requires the Agent to hold on a
non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the
Agent to leading banks in the London Interbank Market at or
about 11 a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result
of the requirements of the Bank of England) the Agent
maintains as secured money with members of the London Discount
Market Association or in certain marketable or callable
securities approved by the Bank of England, which percentage
shall (in the absence of evidence that any other figure is
appropriate) be conclusively presumed to be 5 per cent;
X is the rate at which secured Sterling investments may be
placed by the Agent with members of the London Discount Market
Association at or about 11 a.m. on that day for the relevant
period or, if greater, the rate at which Sterling bills of
exchange (of a tenor equal to the duration of the relevant
period) eligible for rediscounting at the Bank of England can
be discounted in the London Discount Market at or about 11
a.m. on that day;
S is the percentage of the Agent's eligible liabilities which
the Bank of England requires the Agent to place as a special
deposit; and
Z is the interest rate expressed as a percentage per annum
allowed by the Bank of England on special deposits.
2 For the purposes of this schedule 4:
(a) "eligible liabilities" and "special deposits" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(b) "relevant period" in relation to each period for which
Additional Cost falls to be calculated means:
(i) if it is 3 months or less, that period; or
(ii) if it is more than 3 months, 3 months.
3 In the application of the formula, B, Y, L, X, S and Z are included in
the formula as figures and not as percentages, e.g. if B = 0.5 per cent
and Y = 15 per cent BY is calculated as 0.5 x 15.
4 The formula shall be applied on the first day of each relevant period.
Each amount shall be rounded up to the nearest four decimal places.
5 If the Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Agent (after consultation
with the Banks) shall notify the Parent of the manner
104
<PAGE>
in which the Additional Cost will subsequently be calculated. The
manner of calculation so notified by the Agent shall, in the absence of
manifest error, be binding on all the parties.
105
<PAGE>
Schedule 5
----------
Form of Substitution Certificate
--------------------------------
Banks are advised not to employ Substitution Certificates without first ensuring
- --------------------------------------------------------------------------------
that the transaction complies with all applicable laws and regulations,
- -----------------------------------------------------------------------
including the Financial Services Act 1986 and regulations made thereunder.
- --------------------------------------------------------------------------
To: The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB.
Attention: Manager, Loans Agency ' 19'
Substitution Certificate
------------------------
This Substitution Certificate relates to an Agreement (as from time to
time amended, varied, extended, restated, refinanced or replaced, the
"Agreement") dated ' 1997 between United and Philips Communications b.v. as
Parent and a Borrower (1), the entities listed in part C of schedule 1 thereto
as Borrowers (2), the entities listed in part B of schedule 1 thereto as
Guarantors (3), The Toronto-Dominion Bank as Arranger (4), the banks and
financial institutions whose respective names and addresses are set out in part
A of schedule 1 thereto as Banks (5), The Toronto-Dominion Bank as Agent (6) and
The Toronto-Dominion Bank as Security Trustee (7). Terms defined in the
Agreement shall have the same meaning in this Substitution Certificate.
1 [Name of Existing Bank] (the "Existing Bank") (a) confirms the accuracy
of the summary of its Commitment and Contribution set out in the
schedule to this Substitution Certificate; and (b) requests [Substitute
Bank] (the "Substitute") to accept by way of novation the portion of
its Commitment and Contribution specified in the schedule to this
Substitution Certificate by counter-signing and delivering this
Substitution Certificate to the Agent at its address for the service of
notices specified in the Agreement.
2 The Substitute requests the Agent (on behalf of itself, the Arranger,
the Security Trustee, the Interest Rate Beneficiaries (as defined in
the Security Trust Deed), the Obligors and the Banks) to accept this
Substitution Certificate as being delivered to the Agent pursuant to
and for the purposes of clause Error! Reference source not found. of
the Agreement, so as to take effect in accordance with its terms on
[date of transfer], [being not earlier than 5 Banking Days after date
of delivery of the Certificate to the Agent] (the "Effective Date").
3 The Agent (on behalf of itself and the other parties to the Agreement)
confirms the novation effected by this Substitution Certificate
pursuant to and for the purposes of clause 17.3 of the Agreement.
4 The Substitute confirms:
(a) that it has received a copy of the Agreement, the Security
Trust Deed and all other Security Documents and other
documentation and information required by it in connection
with the transactions contemplated by this Substitution
Certificate;
(b) that it has made its own assessment of the execution,
effectiveness, adequacy, genuineness, validity, enforceability
and admissibility in evidence of the Agreement, the Security
Documents and this Substitution Certificate and has not relied
and will not rely on the Existing Bank or any statements made
by the Existing Bank in that respect;
(c) that it has made and will continue to make its own appraisal
of the creditworthiness of the Parent and its Subsidiaries and
its own independent investigation of the financial
106
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condition, prospects and affairs of the Parent and its
Subsidiaries and has not relied and will not rely on the
Existing Bank, the Agent, the Arranger, the Security Trustee
or any other Bank or any statement, opinion, forecast or other
representation made by the Existing Bank, the Agent, the
Arranger, the Security Trustee or any other Bank in that
respect;
(d) accordingly, none of the Existing Bank, the Agent, the
Arranger, the Security Trustee or any other Bank shall have no
liability or responsibility to the Substitute in respect of
any of the foregoing matters[; and]
(e) it is a Qualifying Bank.
5 Execution of this Substitution Certificate by the Substitute
constitutes its representation to the Existing Bank and all other
parties to the Agreement and the Security Trust Deed that it has power
to become party to the Agreement and the Security Trust Deed as a Bank
on the terms herein and therein set out and has taken all necessary
steps to authorize execution and delivery of this Substitution
Certificate.
6 The Substitute acknowledges that the Existing Bank has no obligation to
repurchase or reacquire any of the rights and obligations novated by
virtue of this Substitution Certificate or to support, indemnify or
compensate the Substitute for any losses suffered by the Substitute as
a consequence of the novation effected by virtue of this Substitution
Certificate.
7 The Substitute hereby undertakes to the Existing Bank, the Obligors,
the Arranger, the Security Trustee, the Interest Rate Beneficiaries and
the Agent that it will perform in accordance with their terms all those
obligations which by the respective terms of the Agreement and the
Security Trust Deed will be assumed by it after acceptance of this
Substitution Certificate by the Agent.
8 This Substitution Certificate is governed by English law.
Note: This Substitution Certificate is not a security, bond, note, debenture,
- ---- investment or similar instrument.
AS WITNESS the hands of the authorized signatories of the parties hereto on the
date appearing below.
The Schedule
------------
Amount Advance Maturity Date Portion novated
- -------------- ------------- ---------------
Guilder Portion novated
------- ---------------
Amount of NLG
--------- ---
Commitment
----------
NLG
---
Administrative Details of Substitute
------------------------------------
Lending office:
Account for payments:
Telephone:
107
<PAGE>
Telefax:
Attention:
[Existing Bank] [Substitute]
By: By:
Date: Date:
The Agent
By:
on its own behalf
and on behalf of the Parent and the other parties to the Agreement and the
Security Trust Deed
Date:
108
<PAGE>
Schedule 6
----------
Part A - Compliance Certificate
-------------------------------
to be delivered by an Authorised Officer of the Parent
------------------------------------------------------
The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square
London
EC2A 1DB
Attention: Manager, Loans Agency [Date]
Dear Sirs,
United and Philips Communications B.V.
--------------------------------------
NLG 1,100,000,000,000 Multi-Currency Revolving
----------------------------------------------
Credit Facility, Loan Agreement dated [ ], 1997 (as from
--------------------------------------------------------
time to time amended, varied, extended, restated, refinanced
------------------------------------------------------------
or replaced the "Loan Agreement")
---------------------------------
We refer to the Loan Agreement and deliver this Certificate in respect
of the Six Months Period ended [Quarter Day] pursuant to clause 11.1(j)(ii)
thereof. Terms defined in the Loan Agreement shall have the same meaning when
used in this Certificate.
We confirm that:
1 Net Operating Cash Flow for the Restricted Group in respect of the Six
Month Period ending on [Quarter Day] was [ ] [insert calculation
details].
2 Cable TV Net Operating Cash Flow for the Restricted Group in respect of
the Six Month Period ending on [Quarter Day] was [ ] [insert
calculation details]/1/
3 As at the end of [Quarter Day] Total Debt was [ ] [insert
calculation details].
4 Total Debt Interest Charges for the Six Month Period ending on [Quarter
Day] was [ ] [insert calculation details].
5 On the basis of the current rate of interest payable in relation
thereto, the total forecast amount of interest and any other charges
payable in respect of [Borrowed Money of the Restricted Group] during
the twelve months immediately following [Quarter Day] will be [ ]. The
principal amount of [Borrowed Money of the Restricted Group] to be
repaid in accordance with the terms of [such Borrowed Money] during
such twelve months will be [ ] [insert calculation details]./2/
Based on the above, we confirm that on [Quarter Day]:
1 The ratio of Total Debt to Total Annualised Net Operating Cash Flow was
[ ] [insert calculation details].
2 The ratio of Total Debt to Cable TV Annualised Net Operating Cash Flow
was [ ] [insert calculation details]./1/
3 The ratio of Total Annualised Net Operating Cash Flow to Total Debt
Interest charges was [ ] [insert calculation details].
109
<PAGE>
4 The ratio of Total Annualised Net Operating Cash Flow to Proforma Debt
Service was [ ] [insert calculation details]./2/
Accordingly, we confirm that [save as disclosed in this certificate] on
[Quarter Day] the Parent was in compliance with those covenants contained in
clause 12.2(a) to (d) inclusive of the Loan Agreement which were applicable as
at [Quarter Day].
We confirm that the representations and warranties contained in clause
10.1 of the Loan Agreement to be repeated in accordance with clause 10.3 of the
Loan Agreement, are true and correct as at the date hereof as if made with
respect to the facts and circumstances existing at such date.
For and on behalf of
United and Philips Communications B.V.
..................
Authorised Officer
/1/ Up to and including 31st December 1998 only.
/2/ From and including 31st December 2000 only.
110
<PAGE>
Schedule 6
----------
Part B - Compliance Certificate to be delivered by the auditors of
- ------------------------------------------------------------------
the Restricted Group
--------------------
The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square
London
EC2A 1DB
Attention: Manager, Loans Agency [Date]
Dear Sirs,
United and Philips Communications B.V.
--------------------------------------
NLG 1,100,000,000,000 Revolving
-------------------------------
Credit Facility, Loan Agreement dated [ ], 1997 (as from
--------------------------------------------------------
time to time amended, varied, extended, restated,
-------------------------------------------------
refinanced or replaced the "Loan Agreement")
--------------------------------------------
We refer to the Loan Agreement and deliver this Certificate in respect
of the financial year ended [year end] pursuant to clause 11.1(j)(ii) thereof.
Terms defined in the Loan Agreement shall have the same meaning when used in
this Certificate.
We confirm that in our opinion:
1 Net Operating Cash Flow for the Restricted Group in respect of the
financial year ending on [year end] was [ ] [insert calculation
details].
2 Cable TV Net Operating Cash Flow for the Restricted Group in respect of
the financial year ending on [year end] was [ ] [insert calculation
details]./1/
3 As at the end of [year end] Total Debt was [ ] [insert calculation
details].
4 Total Debt Interest Charges for the financial year ending on [year end]
was [ ] [insert calculation details].
5 On the basis of the current rate of interest payable in relation
thereto, interest and any other specific rate charges payable in
respect of [Borrowed Money of the Restricted Group] during the twelve
months immediately following [year end] will be [ ]. The principal
amount of [Borrowed Money of the Restricted Group] to be repaid in
accordance with the terms of such Borrowed Money during such twelve
months will be [ ] [insert calculation details]./2/
Based on the above, we confirm that on [year end]:
1 The ratio of Total Debt to Total Annualised Net Operating Cash Flow was
[ ] [insert calculation details].
2 The ratio of Total Debt to Cable TV Annualised Net Operating Cash Flow
was [ ] [insert calculation details].
3 The ratio of Total Annualised Net Operating Cash Flow to Total Debt
Interest Charges was [ ] [insert calculation details].
4 The ratio of Total Annualised Net Operating Cash Flow to Pro-forma Debt
Service was [ ] [insert calculation details].
111
<PAGE>
Accordingly, we confirm that in our opinion [and save as disclosed in
this Certificate] as at [year end] the Parent was in compliance with those
covenants contained in clause 12.2 (a) to (d) (inclusive) of the Loan Agreement
which were applicable as at [year end].
For and on behalf of
..............................
Auditors
/1/ Up to and including 31st December 1998 only.
/2/ From and including 31st December 2000 only.
112
<PAGE>
Schedule 7
----------
Licences
--------
A: Austrian Licences
-----------------
"Austrian Licences" means the following documents and agreements:
(a) Telekabel Wien
--------------
(i) Gewerbeschein dated 5th November 1981 and
(ii) Gewerbeschein dated 30th October 1979
(iii) Konzessionsdekret dated 8th October 1981
(iv) Fernmeldebewilligung dated 13th September 1993
(v) Wegerechte: Bescheld der Germeinde Wien dated 1st
March 1978
(b) Telekabel Graz GmbH
-------------------
(i) Gewerbeschein dated 22nd April 1980
(ii) Gewerbeschein dated 7th May 1984
(iii) Fernmeldebewilligung dated 24th October 1995
(c) Telekabel Klagenfurt GmbH
-------------------------
(i) Gewerbeschein dated 10th November 1980
(ii) Gewerbeschein dated 16th December 1982
(iii) Fernmeldebewilligung dated 17th January 1995
(d) Telekabel-Fernsehnetz Baden Betriebsgesellschaft mbh
----------------------------------------------------
(i) Gewerbeschein dated 4th December 1981
(ii) Fernmeldebewillignung dated 26th July 1990 held by
Kabel - TV - Sud GmbH (minority shareholder)
(e) Telekabel-Fernsehnetz Wiener Neustadt/Neunkirchen
-------------------------------------------------
Betriebsgesellschaft mbh
------------------------
(i) Gewerbeschein dated 26th June 1984
(ii) Fernmeldebewilligung dated 25th July
1990 held by Kabel-TV-Wiener Neustadt GmbH (minority
shareholder).
B: Belgian Licences
----------------
"Belgian Licences" means the following documents and agreements:
1 Brussels area:
(a) Municipality of Etterbeek:
--------------------------
113
<PAGE>
Licence given by settlement agreement dated 26 May 1997 and
authorisation dated 19 May 1969.
(b) Municipality of Schaerbeek
--------------------------
Licence given by agreement dated 17 July 1968 and authorisation dated
21 October 1969.
(c) Municipality of Koekelberg
--------------------------
Licence given by agreement dated 19 April 1968 and authorisation dated
21 October 1969.
(d) Municipality of Jette
---------------------
Licence given by agreement dated 7 May 1968 and authorisation dated 6
February 1970.
(e) Municipality of Ganshoren
-------------------------
Licence given by agreements dated 19 March 1969 and 18 November 1988
and authorisation dated 6 February 1970.
(f) Municipality of Berghem-St-Agathe
---------------------------------
Licence given by agreement dated 29th December 1969 and agreement dated
20 July 1988, and authorisation dated 22 December 1970.
(g) Municipality of Forest
----------------------
Licence given by agreement dated 31 March 1969 and authorisation dated
21 December 1970.
2 Leuven area:
------------
(a) Municipality of Heverlee
------------------------
Licence given by agreement dated 22 November 1968 and authorisation
dated 1971.
(b) Municipality of Kessel-Lo
-------------------------
Licence given by agreement dated 5 December 1968, and authorisation
dated 1971.
(c) Municipality of Leuven
----------------------
Licence given by agreement dated 30 August 1968, and authorisation
dated 1971.
3 Telecommunications services
---------------------------
(a) Letter of the IBPT authorising Radio Public to provide Internet access
through the company's public telecommunications structure;
(b) Letter of the IBPT authorising Radio Public to operate a public
telecommunications system service as of 7 May 1997, in the territories
of Etterbeek, Shaerbeek, Koekelberg, Jette, Ganshoren,
Berghem-St.-Agathe, Forest and Leuven.
114
<PAGE>
Schedule 8
----------
Form of Deed of Subordination
-----------------------------
DATED '
-------
[SUBORDINATED CREDITOR] (1)
and
THE TORONTO-DOMINION BANK (2)
(as Security Trustee)
------------------------------
DEED OF SUBORDINATION
------------------------------
Norton Rose
London
115
<PAGE>
THIS DEED OF SUBORDINATION is dated ' and made BETWEEN:
(1) [name of Subordinated Creditor] (No. [ ]) whose [registered
office/principal place of business] is at [ ] (the
"Subordinated Creditor"); and
(2) THE TORONTO-DOMINION BANK of Triton Court, 14/18 Finsbury Square,
London EC2A 1DB as Security Trustee.
WHEREAS
(A) By an agreement dated [ ], 1997 (as from time to time
amended, varied, extended, restated, refinanced or replaced, the
"Facility Agreement") made between (1) United and Philips
Communications b.v., as Parent and a Borrower, (2) the entities listed
in part C of schedule 1 thereto as Borrowers, (3) the entities listed
in part B of schedule 1 thereto as Original Guarantors, (4) the
Arranger, (5) the banks whose names and addresses are set out in part A
of schedule 1 thereto as Banks and (6) the Agent and (7) the Security
Trustee, the Banks agreed, upon and subject to the terms and conditions
of the Facility Agreement, to make available to the Borrowers a
reducing revolving credit facility of up to NLG 1,100,000,000.
(B) The Subordinated Creditor has or will make certain Borrowed Money
available to the Borrowers and/or other members of the Restricted Group
pursuant to the Subordinated Agreements.
(C) The Parent has agreed to procure that the Subordinated Creditor enter
into this Deed pursuant to clause 11.1(x) of the Facility Agreement.
WITNESSES as follows:
1 Definitions and interpretation
------------------------------
1.1 Definitions
In this Deed:
"Distribution" means any payment by or distribution of assets whether
in cash, property, securities or otherwise;
"Group Liabilities" means all Liabilities of the Subordinated Creditor
to any member of the Restricted Group;
"Insolvency Event" means, any of the events set out in clauses 13.1(i),
(k), (l) or (o) of the Facility Agreement;
"Liabilities" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"Subordinated Agreements" means the agreements described in the
schedule together with any other agreement relating to Subordinated
Borrowed Money;
"Subordinated Borrowed Money" means all Liabilities of members of the
Restricted Group to the Subordinated Creditor in respect of Borrowed
Money howsoever arising, including, without limitation, any such
Liabilities arising by virtue of any right of subrogation,
reimbursement or indemnity; and
"Subordinated Liabilities" means all Subordinated Borrowed Money
including, without limitation, all Liabilities of any member of the
Restricted Group under the Subordinated Agreements, including interest
thereon or which may arise as a result of the Subordinated
116
<PAGE>
Creditor entering into or performing all or any of its obligations
under any Subordinated Agreement.
1.2 Facility Agreement definitions
------------------------------
Unless the context otherwise requires, or unless otherwise defined in
this Deed (i) words and expressions defined in the Facility Agreement
shall have the same meaning when used in this Deed (including its
recitals) and (ii) words and expressions defined in the Security Trust
Deed shall, unless otherwise defined in the Facility Agreement, shall
have the same meaning when used in this Deed (including its recitals).
1.3 Interpretation
--------------
The interpretative provisions in clauses 1.3, 1.4, 1.5 and 1.6 of the
Facility Agreement shall apply, mutatis mutandis, in this Deed.
1.4 Effect as a Deed
----------------
This Deed is intended to take effect as a deed notwithstanding that the
Security Trustee and/or the Subordinated Creditor may have executed it
under hand only.
1.5 Successors and assigns
----------------------
The expressions "Borrower", "Obligor", "Subordinated Creditor",
"Beneficiary", "Security Trustee", "Agent", "Parent" and "Member of the
Restricted Group" include, where the context admits, their respective
successors.
2 Deferral undertakings
---------------------
2.1 Subordinated Creditor undertakings
----------------------------------
The Subordinated Creditor hereby undertakes with the Security Trustee
that, notwithstanding any provision of any of the Subordinated
Agreements, for so long as any Secured Obligations remain outstanding,
it will, and will procure that its Subsidiaries will, unless with the
prior written consent of the Security Trustee, directly or indirectly:
(a) not demand or accept payment or repayment of, in whole or
part, from any member of the Restricted Group or any other
person liable, any of the Subordinated Liabilities or any
distribution of assets (whether in cash, property, securities
or otherwise) in respect of the same;
(b) not take, accept, receive or permit to exist any Encumbrance
to secure the payment and/or repayment of any of the
Subordinated Liabilities;
(c) not assign, transfer, create any Encumbrance over or otherwise
dispose of, any of the Subordinated Liabilities;
(d) not take, accept or receive any Distribution; or
(e) (save only to the extent it may be required to do so under any
applicable law) not set-off any Subordinated Liabilities
against any Group Liabilities;
(f) not commence any proceedings against any member of the
Restricted Group or take any action for or in respect of the
recovery of any of the Subordinated Liabilities, or any part
thereof (including, without limitation, any action or step
with a view to winding up any member of the Restricted Group);
117
<PAGE>
(g) not enter into any transaction, whether by way of borrowing or
otherwise, constituting, or otherwise suffer to arise any
Group Liabilities;
(h) not agree to any variation of the terms of any Subordinated
Agreement; or (i) procure that each of its Subsidiaries (which
is not a member of the Restricted Group) enters into a Deed of
Subordination prior to any moneys in respect of any loans made
by such Subsidiary to any member of the Restricted Group and
provides the Agent with such evidence as it may reasonably
request as to the power and authority of the relevant
Subsidiary to enter into such Deed of Subordination and that
such Deed of Subordination constitutes valid and legally
binding obligations of the relevant Subsidiary enforceable in
accordance with its terms.
[2.2 Permitted payments
------------------
If (A) no Default has occurred and is continuing or would result from
the making of any payment under this clause 2.2 and (B) in respect of
each of the two most recent previous consecutive Quarterly Periods the
ratio of Total Debt to Total Annualised Net Operating Cash Flow
(calculated on the last day of each such Quarterly Period by reference
to the Six Month Period ended on such date) each as demonstrated in the
Compliance Certificate for the relevant Quarterly Period that has been
delivered to the Agent under the Facility Agreement for the Quarterly
Period ending immediately prior to such date is less than and remains
below 3:1, then this clause shall not prevent the payment of any
interest on any Subordinated Agreement.]
2.3 Notification of Subordinated Liabilities
----------------------------------------
The Subordinated Creditor hereby agrees to notify the Security Trustee
of the amounts from time to time of the Subordinated Liabilities and
the Group Liabilities which may be scheduled to be made by any member
of the Restricted Group to the Subordinated Creditor.
3 Subordination
-------------
3.1 Insolvency Events
-----------------
Upon an Insolvency Event occurring in respect of any member of the
Restricted Group:
(a) the claims of the Subordinated Creditor in respect of the
Subordinated Liabilities shall be postponed in all respects to
the Secured Obligations;
(b) the Subordinated Creditor shall not, unless otherwise directed
by the Security Trustee, prove for the Subordinated
Liabilities until the Secured Obligations have first been paid
or discharged in full (and for all purposes any Distribution
received by the Security Trustee shall only be taken to
discharge the Secured Obligations to the extent of the actual
amount received);
(c) if the Subordinated Creditor is directed by the Security
Trustee to prove for the Subordinated Liabilities then it
shall act in accordance with such directions and shall procure
that any resultant Distributions shall be made by the
liquidator of the relevant member of the Restricted Group, or
any other person making the Distribution, to the Security
Trustee to the extent necessary to repay all the Secured
Obligations in full; and
(d) the Subordinated Creditor hereby irrevocably authorises and
directs the Security Trustee to submit any proof and/or to
instruct the relevant liquidator or other person to make
Distributions in accordance with the foregoing.
3.2 Payments contrary to this Deed
------------------------------
In the event of:
118
<PAGE>
(a) any payment or other Distribution being made to, or a right of
set-off of the Group Liabilities against the Subordinated
Liabilities being exercised by, the Subordinated Creditor or
any member of the Restricted Group contrary to the provisions
of this Deed;
(b) any Distribution being made by a liquidator or other person to
the Subordinated Creditor, rather than to the Security
Trustee, as required by clause 3.1; or
(c) the Subordinated Creditor or any member of the Restricted
Group being required to exercise rights of set-off of the
Group Liabilities against the Subordinated Liabilities under
applicable law (as contemplated in clause 2.1(e)).
the Subordinated Creditor shall forthwith pay to the Security Trustee
an amount equal to the Distributions which shall have been so received
by it up to an aggregate amount equal to the Secured Obligations or, as
the case may be, in the case of set-off, an amount equal to the sum
set-off up to an aggregate amount equal to the Secured Obligations and,
until such payment to the Security Trustee, the Subordinated Creditor
will hold such sums on trust for the Security Trustee and any such sums
so paid to the Security Trustee shall be applied in accordance with the
terms of the Security Trust Deed in or toward discharge of the Secured
Obligations.
3.3 Subordinated Agreements
-----------------------
Notwithstanding clauses 2 and 3, nothing contained in this Deed is
intended to or shall impair, as between the members of the Restricted
Group and the Subordinated Creditor, the obligations of the members of
the Restricted Group under the Subordinated Agreements, including the
obligation to pay to the Subordinated Creditor all of the Subordinated
Liabilities. Until all of the Subordinated Liabilities are paid in full
by the relevant members of the Restricted Group in funds which may, at
the time when the same are received, be fully retained by the
Subordinated Creditor after giving effect to this Deed, the members of
the Restricted Group shall remain fully liable under the Subordinated
Agreements and any payment made to the Subordinated Creditor in
contravention of the terms of this Deed or by the Subordinated Creditor
to the Agent pursuant to this Deed shall not be deemed for these
purposes to have in any way extinguished the obligations of the members
of the Restricted Group to the Subordinated Creditor in relation to the
Subordinated Liabilities pursuant to the Subordinated Agreements.
3.4 Subrogation
-----------
If the Secured Obligations are partially paid out of any proceeds
received in respect of or on account of any Subordinated Liabilities,
the Creditor will not be subrogated to the Secured Obligations so paid
(or any Collateral Instrument) until the Secured Obligations have been
irrevocably paid in full.
4 Continuing obligations
----------------------
4.1 Continuing obligations
----------------------
The obligations of the Subordinated Creditor hereunder shall be
continuing obligations and shall be and remain fully effective until
this Deed is formally released following the discharge in full of the
Secured Obligations notwithstanding any intermediate reduction or
settlement of the Secured Obligations or any part thereof and
notwithstanding any increase in or variation of the Secured Obligations
or any amendment, variation, extension, restatement, refinancing or
replacement of the Facility Agreement any Interest Rate Hedging
Arrangements or Security Document.
4.2 Statements of account
---------------------
Any statement of account of the Parent, signed as correct by an officer
of the Agent, showing the amount of the Secured Obligations shall be
prima facie evidence of the amount of the Secured obligations.
119
<PAGE>
4.3 Continuing security and other matters
-------------------------------------
This Deed shall:
(a) secure the ultimate balance from time to time of the Secured
Obligations and shall be a continuing security,
notwithstanding any settlement of account or other matter
whatsoever;
(b) be in addition to any present or future Collateral Instrument,
right or remedy held by or available to the Beneficiaries or
any of them; and
(c) not be in any way prejudiced or affected by the existence of
any Collateral Instrument or other right or remedy or by the
same becoming wholly or in part void, voidable or
unenforceable on any ground whatsoever or by the Beneficiaries
or any of them dealing with, exchanging, varying or failing to
perfect or enforce any of the same or giving time for payment
or indulgence or compounding with any other person liable.
4.4 Liability unconditional
-----------------------
The liability of the Subordinated Creditor shall not be affected,
discharged or reduced by reason of:
(a) the Incapacity or any change in the name, style or
constitution of any Obligor or any other person;
(b) the Beneficiaries (or any of them) granting any time,
indulgence or concession to, or compounding with, discharging,
releasing or varying the liability of, any Obligor or any
other person or renewing, determining, varying or increasing
any accommodation, facility or transaction or otherwise
dealing with the same in any manner whatsoever or concurring
in, accepting or varying any compromise, arrangement or
settlement or omitting to claim or enforce payment from any
Obligor or any other person; or
(c) any act or omission which but for this provision might operate
to exonerate the Subordinated Creditor.
4.5 Collateral Instruments
----------------------
None of the Beneficiaries shall be obliged to make any claim or demand
on the Obligors or to resort to any Collateral Instrument or other
means of payment now or hereafter held by or available to them or it
before enforcing this Deed and no action taken or omitted by the
Beneficiaries in connection with any such Collateral Instrument or
other means of payment shall discharge, reduce, prejudice or affect the
liability of the Subordinated Creditor under this Deed nor (until
sufficient money has been received by the Beneficiaries (whether or not
credited to a suspense account), to discharge irrevocably the Secured
Obligations in full and no Beneficiary is under any commitment to
permit any Secured Obligations to become outstanding) shall any of the
Beneficiaries be obliged to account for any money or other property
received or recovered in consequence of any enforcement or realisation
of any such Collateral Instrument or other means of payment.
4.6 Suspense accounts
-----------------
Any money received in connection with this Deed (whether before or
after any Incapacity of any Obligor, any other person or the
Subordinated Creditor) may be placed to the credit of an interest
bearing suspense account (until sufficient money has been credited to
such suspense account to irrevocably discharge the Secured Obligations
in full and no Beneficiary is under any commitment to permit any
Secured Obligations to become outstanding) with a view to preserving
the rights of the Beneficiaries to prove for the whole of their
respective claims against the Obligors or any other person liable or
may be applied in or towards satisfaction of such of the Secured
Obligations in accordance with the terms of the Security Trust Deed.
Interest shall
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<PAGE>
accrue on monies from time to time standing to the credit of any
suspense account at the rate agreed between the Security Trustee and
the Subordinated Creditor at the relevant time or, failing such
agreement, the Security Trustee's overnight deposit rate from time to
time and shall be credited to such suspense account or may be applied
in or towards satisfaction of the Secured Obligations in accordance
with the terms of the Security Trust Deed.
4.7 Settlements conditional
-----------------------
Any release, discharge or settlement between the Subordinated Creditor
and the Beneficiaries (or any of them) shall be conditional upon no
security, disposition or payment to the Beneficiaries (or any of them)
by any Obligor or any other person liable being void, set aside or
ordered to be refunded pursuant to any enactment or law relating to
bankruptcy, liquidation, administration or insolvency or for any other
reason whatsoever and if such condition shall not be fulfilled the
Security Trustee shall be entitled to enforce this Deed subsequently as
if such release, discharge or settlement had not occurred and any such
payment had not been made.
4.8 Retention of this Deed
----------------------
Notwithstanding any other provision of this Deed, this Deed shall not
be released, the Security Trustee shall be entitled to retain this Deed
and all the provisions of this Deed shall remain in full force and
effect until the irrevocable payment or discharge in full of all the
Secured Obligations.
5 Representations and warranties
------------------------------
5.1 Representations and warranties
------------------------------
The Subordinated Creditor represents and warrants in respect of itself
and its Subsidiaries to the Security Trustee that:
(a) Due incorporation
-----------------
the Subordinated Creditor is duly [incorporated] under the
laws of' as a [limited liability company] and has the
[corporate] power to carry on its business as it is now being
conducted and to own its property and other assets;
(b) Corporate power
---------------
the Subordinated Creditor has the [corporate] power to
execute, deliver and perform its obligations under this Deed;
all necessary [corporate, shareholder] and other action has
been taken to authorise the execution, delivery and
performance of the same;
(c) Binding obligations
-------------------
this Deed constitutes valid and legally binding obligations of
the Subordinated Creditor enforceable in accordance with its
terms;
(d) No conflict with other obligations
----------------------------------
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this
Deed by the Subordinated Creditor will not (i) contravene any
existing applicable law, statute, rule or regulation or any
judgment, decree or licence to which the Subordinated Creditor
is subject, (ii) conflict with, or result in any breach of any
of the terms of, or constitute a default under, any agreement,
permit or other instrument to which the Subordinated Creditor
is a party or is subject or by which it or any of its property
is bound, (iii) contravene or conflict with any provision of
the Subordinated Creditor's [Memorandum and Articles of
Association] or (iv)result in the creation or imposition of or
oblige the Subordinated Creditor or any of its Subsidiaries
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to create any Encumbrance on any of the Subordinated
Creditor's or any of its Subsidiaries' undertakings, assets,
rights or revenues;
(e) Consents obtained
-----------------
every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public
bodies or authorities (in each case, solely in their capacity
as such a body or authority and not in any other capacity) or
courts required by the Subordinated Creditor to authorise, or
required by the Subordinated Creditor in connection with, the
execution, delivery, validity, enforceability or admissibility
in evidence of this Deed or the performance by the
Subordinated Creditor of its obligations under this Deed has
been obtained or made and is in full force and effect and
there has been no material default which is continuing in the
observance of the conditions or restrictions (if any) imposed
in, or in connection with, any of the same;
(f) No filings required
-------------------
it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Deed that
it or any other instrument be notarised, filed, recorded,
registered or enrolled in any court, public office in any
relevant jurisdiction or that any stamp, registration or
similar tax or charge be paid in any relevant jurisdiction on
or in relation to this Deed and this Deed is in proper form
for its enforcement in the courts of any relevant
jurisdiction;
(g) No litigation
-------------
no litigation, arbitration or administrative proceeding is
taking place, or, to the knowledge of the officers of the
Subordinated Creditor pending or threatened against the
Subordinated Creditor or any of its Subsidiaries or Associated
Companies which would or is reasonably likely to have a
material adverse effect on the ability of the Subordinated
Creditor to fulfil its obligations under this Deed; and
(h) Choice of law
-------------
the choice by the Subordinated Creditor of English law to
govern this Deed and the submission by the Subordinated
Creditor to the jurisdiction of the English courts is valid
and binding.
5.2 Repetition
----------
The representations and warranties in clause 5.1 shall be deemed to be
repeated by the Subordinated Creditor in respect of itself and its
Subsidiaries on and as of each date on which any of the representations
and warranties contained in clause 10.1 of the Facility Agreement are
repeated or deemed to be repeated with reference to the facts and
circumstances existing on such day.
5.3 Covenant
--------
The Subordinated Creditor undertakes with the Security Trustee that it
will, without prejudice to clause 5.1, (i) obtain or cause to be
obtained, maintain in full force and effect and comply in all material
respects with the conditions and restrictions (if any) imposed in, or
in connection with, every consent, authorisation, licence or approval
of governmental or public bodies or authorities (in each case, solely
in their capacity as such a body or authority and not in any other
capacity) or courts (and do, or cause to be done, all other acts and
things) which may from time to time be necessary or reasonably
desirable under applicable law of any relevant jurisdiction for the
continued due performance of all its obligations under this Deed, and
(A) ensure that none of the same is revoked, cancelled, suspended,
withdrawn, terminated, expires and is not renewed or
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<PAGE>
otherwise ceases to be in full force and effect without a new one
having first been put in place with the Subordinated Creditor on
substantially identical terms or on terms more beneficial to the
Subordinated Creditor, and (B) ensure that none of the same is modified
in any material respect and that the Subordinated Creditor does not
commit any default in the observance of the conditions or restrictions
(if any) imposed in, or in connection with, any of the same which, in
the case of any of the events referred to in (B) above, in the
reasonable opinion of the Majority Banks, would or is reasonably likely
to have a material adverse effect on the ability of the Subordinated
Creditor to perform all or any of its obligations under or otherwise to
comply with the terms of this Deed, and (ii) ensure that this Deed is
notarised, filed, recorded, registered or enrolled in any court or
public office in any relevant jurisdiction necessary to ensure the
legality, validity, enforceability or admissibility in evidence thereof
and that any stamp, registration or similar tax or charge is paid in
any relevant jurisdiction on or in relation to this Deed.
6 Benefit of this Deed
--------------------
6.1 Benefit and burden
------------------
This Deed shall be binding upon the Subordinated Creditor and its
successors in title and shall enure for the benefit of the Security
Trustee (and any successor Security Trustee appointed pursuant to the
terms of the Security Trust Deed) and their respective successors for
the benefit of the Beneficiaries in accordance with the provisions of
the Security Trust Deed.
6.2 No assignment
-------------
The Subordinated Creditor may not assign or transfer any of its rights
or obligations under this Deed.
6.3 The Security Trust Deed
-----------------------
The Subordinated Creditor and the Security Trustee hereby acknowledge
that the covenants of the Creditor contained in this Deed and the
rights constituted by this Deed and all moneys, property and assets
paid to, or held, received or recovered by the Security Trustee
pursuant to or in connection with this Deed are held by the Security
Trustee subject to and on the terms of the trusts declared in the
Security Trust Deed.
6.4 Changes in constitution or reorganisation of Beneficiaries
----------------------------------------------------------
For the avoidance of doubt and without prejudice to the provisions of
clause 6.1, this Deed shall remain binding on the Subordinated Creditor
notwithstanding any change in the constitution of any of the
Beneficiaries or their or its absorption in, or amalgamation with, or
the acquisition of all or part of their or its undertaking or assets
by, any other person, or any reconstruction or reorganisation of any
kind, to the intent that this Deed shall remain valid and effective in
all respects in favour of the Security Trustee (and any successor
Security Trustee appointed pursuant to the provisions of the Security
Trust Deed and their respective successors in title) as trustee for the
Beneficiaries and any assignee, transferee or other successor in title
of a Beneficiary.
7 Notices and other matters
-------------------------
7.1 Notices
-------
Every notice, request, demand or other communication under this Deed
shall be made in accordance with the provisions, mutatis mutandis, of
clause 19 of the Facility Agreement and shall be sent to the
Subordinated Creditor at its address set out above (facsimile number:
[!]) or to the Security Trustee at its address set out in clause 19 of
the Facility Agreement or to such other address or facsimile number as
is notified by one party to this Deed to the other.
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<PAGE>
7.2 No implied waivers, remedies cumulative
---------------------------------------
No failure or delay on the part of the Security Trustee to exercise any
power, right or remedy under this Deed shall operate as a waiver
thereof, nor shall any single or partial exercise by the Security
Trustee of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy.
The remedies provided in this Deed are cumulative and are not exclusive
of any remedies provided by law.
7.3 Other Collateral Instruments
----------------------------
The Subordinated Creditor agrees to be bound by this Deed
notwithstanding that any other person intended to execute or to be
bound by any Collateral Instrument may not do so or may not be
effectually bound and notwithstanding that such other Collateral
Instrument may be determined or be or become invalid or unenforceable
against any other person, whether or not the deficiency is known to the
Security Trustee or any of the other Beneficiaries.
7.4 Severability
------------
Each of the provisions of this Deed is severable and distinct from one
another and if at any time one or more of such provisions is or becomes
illegal, invalid or unenforceable under any applicable law the validity
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
7.5 Counterparts
------------
This Deed may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
8 Law and jurisdiction
--------------------
8.1 Governing law
-------------
This Deed is governed by and shall be construed in accordance with
English law.
8.2 Submission to jurisdiction
--------------------------
The Subordinated Creditor agrees for the benefit of the Security
Trustees that:
(a) if any party has any claim against any other arising out of or
in connection with this Agreement such claim shall (subject to
clause 8.2(c)) be referred to the High Court of Justice in
England, to the jurisdiction of which each of the parties
irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over
any such claim against the Security Trustee shall be an
exclusive jurisdiction and no courts outside England shall
have jurisdiction to hear or determine any such claim; and
(c) nothing in this clause 8.2 shall limit the right of the
Security Trustee to refer any such claim against the
Subordinated Creditor to any other court of competent
jurisdiction outside England, to the jurisdiction of which the
Subordinated Creditor hereby irrevocably agrees to submit, nor
shall the taking of proceedings by the Security Trustee before
the courts in one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction whether concurrently or
not.
8.3 Agent for service of process
----------------------------
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<PAGE>
The Subordinated Creditor irrevocably designates, appoints and
empowers' Limited at present of' to receive for it and on its behalf
service of process issued out of the High Court of Justice in England
in relation to any claim arising out of or in connection with this
Agreement.
IN WITNESS whereof this Deed has been executed by each party hereto the day and
year first above written.
125
<PAGE>
Schedule
--------
Subordinated Agreements
-----------------------
1 The agreements, the details of which are set out below:
<TABLE>
<CAPTION>
Date Document Parties
<S> <C> <C>
' ' '
</TABLE>
2 Each and every Encumbrance issued or entered into by the Parent or any
member of the Restricted Group in favour of the Subordinated Creditor
in respect of the Subordinated Borrowed Money.
126
<PAGE>
Subordinated Creditor
- ---------------------
EXECUTED as a DEED )
by [SUBORDINATED CREDITOR] )
Security Trustee
- ----------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: )
127
<PAGE>
Schedule 9
----------
Principal Agreements
--------------------
1 The General Services Agreements between the Parent and each of:
(i) Radio Public, effective from 1st January 1995;
(ii) Norkabel, effective from 1st January, 1997; and
(iii) the Telekabel Entities (other than CNA), effective from 1st
January, 1995.
2 The Radio Public Bond.
3 The Telekabel Bond.
4 The Austrian Agreements.
5 The Option Agreements.
6 The Stock Option Plan.
7 The Securities Purchase and Conversion Agreement.
8 The Janco Loan Agreement.
9 The documents constituting the Norwegian I/C Indebtedness.
128
<PAGE>
Schedule 10
-----------
Part A - Deed of Guarantor Accession
------------------------------------
To: THE TORONTO-DOMINION BANK as Security Trustee
From: [PROPOSED GUARANTOR] and [UNITED AND PHILIPS
COMMUNICATIONS B.V.]
Date: [ ]
UNITED AND PHILIPS COMMUNICATIONS B.V. NLG 1,100,000,000 Senior Reducing
Revolving Credit Agreement dated , 1997 (as from time to time
amended, varied, extended, restated, refinanced or replaced the "Facility
Agreement")
We refer to clause 9.17 of the Facility Agreement. Words and expressions defined
in the Facility Agreement have the same meanings when used in this Deed.
We, [name of company] of [address] agree to become an Acceding Guarantor and to
be bound by the terms of the Facility Agreement as an Acceding Guarantor in
accordance with clause 9.16 of the Facility Agreement and the Security Trust
Deed as a Guarantor in accordance with clause 10.16 of the Security Trust Deed.
[Local law limitations on amounts guaranteed by Acceding Guarantor (if any)]
Our address for notices for the purposes of clause 19.1 of the Facility
Agreement is:
[
]
This Deed is intended to be executed as a deed and is governed by English law.
[PROPOSED GUARANTOR] [UNITED AND PHILIPS COMMUNICATIONS
B.V.]
[Appropriate execution clause] [Appropriate execution clause]
By: By:
129
<PAGE>
By:
THE TORONTO-DOMINION BANK
[Appropriate execution clause]
By
130
<PAGE>
Schedule 10
-----------
Part B - Documents and Evidence to be delivered by an Acceding Guarantor
- ------------------------------------------------------------------------
(a) Deed of Guarantor Accession, duly executed under seal by the
Acceding Guarantor and the Parent;
(b) a Share Security over the shares of the Acceding
Guarantor, duly executed as a deed by the parties to it (the
"Relevant Shareholders") and such other Security Documents as
the Agent may reasonably require;
(c) a copy of the constitutional documents of each of the Acceding
Guarantor and the Relevant Shareholders;
(d) a copy of a resolution of the board of directors of each
of the Acceding Guarantor and Relevant Shareholders approving
the terms of, and the transactions contemplated by, the Deed
of Guarantor Accession, the relevant Security Documents or the
relevant Share Security (as appropriate) and authorising its
appropriate officers to execute and deliver the Deed of
Guarantor Accession, the relevant Security Documents or the
Share Security (as appropriate) and give all notices and take
all other action required by it under the Finance Documents;
(e) a certificate of a director of the Acceding Guarantor
certifying that the amounts to be guaranteed by the Acceding
Guarantor would not cause any guaranteeing limit binding on it
to be exceeded;
(f) a copy of any other authorisation or other document,
opinion or assurance which is necessary for the execution,
delivery and validity and enforceability of the Deed of
Guarantor Accession, the relevant Security Documents or the
Share Security;
(g) a specimen of the signature of each person authorised by a
resolution referred to in paragraph (d) above;
(h) if available, a copy of the latest audited accounts of the
Acceding Guarantor;
(i) a legal opinion of English legal advisers, acceptable to
the Agent, addressed to the Security Trustee on behalf of the
Beneficiaries (as defined in the Security Trust Deed)
(j) if the Acceding Guarantor and/or a Relevant Shareholder is
incorporated in a jurisdiction outside England, a legal
opinion of legal advisers, acceptable to the Agent, in the
jurisdiction of incorporation of the Acceding Guarantor and/or
Relevant Shareholder (as appropriate), addressed to the
Security Trustee on behalf of the Beneficiaries (as defined in
the Security Trust Deed);
(k) a certificate of an authorised signatory of the Acceding
Guarantor and each Relevant Shareholder certifying that each
copy document specified in part B of this schedule 10 and
relating to it is correct, complete and in full force and
effect as at a date no earlier than the date of the Deed of
Guarantor Accession, relevant Security Documents or the Share
Security (as appropriate);
(l) a certificate of an authorised signatory of the Parent
confirming that its constitutional documents have not been
amended (or, if they have, enclosing a copy of the amended
constitutional documents) and that all authorisations and
resolutions authorising its appropriate officers to execute
and deliver the Deed of Guarantor Accession remain in full
force and effect;
(m) if applicable, share certificates and stock transfer forms
executed in blank and all other documents required to be
delivered to the Security Trustee in connection with the
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<PAGE>
relevant Share Security and such other documents as may be
required pursuant to the relevant Security Documents; and
(n) such other documents as the Agent may reasonably require
after taking the advice of the legal advisers referred to in
paragraphs (i)and (j) above.
132
<PAGE>
Schedule 11
-----------
Part A - Deed of Borrower Accession
-----------------------------------
To: THE TORONTO-DOMINION BANK as Agent
From: [NEW JANCO] [TELEKABEL WIEN] and [UNITED AND PHILIPS
COMMUNICATIONS B.V.]
Date: [ ]
UNITED AND PHILIPS COMMUNICATIONS B.V. NLG 1,100,000,000 Senior Reducing
Revolving Credit Agreement dated , 1997 (as from time to time
amended, varied, extended, restated, refinanced or replaced the "Facility
Agreement")
We refer to [clause 3.5] [clause 3.6] of the Facility Agreement. Words and
expressions defined in the Facility Agreement have the same meanings when used
in this Deed.
[Name of New Janco] [Telekabel Wien] of [address] (the "Proposed Borrower")
agrees to become a Borrower and to be bound by the terms of the Facility
Agreement as a Borrower in accordance with [clause 3.5] [clause 3.6] of the
Facility Agreement and the Security Trust Deed as a Borrower in accordance with
clause 10.16 of the Security Trust Deed.
The address for notices of [New Janco] [Telekabel Wien] for the purposes of
clause 19.1 of the Facility Agreement is:
[
]
This Deed is intended to be executed as a deed and is governed by English law.
[NEW JANCO] [TELEKABEL WIEN] [UNITED AND PHILIPS COMMUNICATIONS
B.V.]
Authorised Signatory Authorised Signatory
[Appropriate execution clause] [Appropriate execution clause]
By: By:
By:
THE TORONTO-DOMINION BANK
[Appropriate execution clause]
By
133
<PAGE>
Schedule 11
-----------
Part B - Documents and Evidence to be delivered by New Janco
------------------------------------------------------------
(a) a Deed of Borrower Accession, duly executed by New Janco and
the Parent;
(b) a copy of the articles of association, certificate of
registration and other constitutional documents of New Janco
(as updated following the Norwegian Merger);
(c) a copy of a resolution of the board of directors of New
Janco approving the terms of, and the transactions
contemplated by, the Deed of Borrower Accession and
authorising its appropriate officers to execute and deliver
the Deed of Borrower Accession and to give all notices
(including, where applicable, Drawdown Notices) and take all
other action required by it under the Finance Documents;
(d) a certificate of a director of New Janco confirming that
utilisation of the Facility up to the Norwegian Loan Amount
would not cause any borrowing limit binding on it to be
exceeded;
(e) a copy of any other authorisation or other document,
opinion or assurance which is necessary for the execution,
delivery, validity and enforceability of the Deed of Borrower
Accession or any other Finance Document insofar as it is
necessitated by the execution of the Deed of Borrower
Accession;
(f) a specimen of the signature of each person authorised by the
resolution referred to in paragraph (c) above;
(g) if available, the latest audited accounts of New Janco;
(h) a legal opinion of English legal advisers, acceptable to the
Agent, addressed to the Banks;
(i) a legal opinion of legal advisers, acceptable to the Agent, in
Norway, addressed to the Banks;
(j) a certificate of an authorised signatory of New Janco
certifying that each copy document specified in part B of this
schedule 11 is correct, complete and in full force and effect
as at a date no earlier than the date of the Deed of Borrower
Accession;
(k) a certificate of an authorised signatory of the Parent
confirming that its constitutional documents have not been
amended (or, if they have, enclosing a copy of the amended
constitutional documents) and that all authorisations and
resolutions authorising its appropriate officers to execute
and deliver the Deed of Borrower Accession in full force and
effect;
(l) Copy of minutes from general meeting in Norkabelgruppen AS,
evidencing the decision to merge Norkabelgruppen AS and Janco
Kabel-TV AS, including copies of summons to such general
meeting (with annexes);
(m) Copy of minutes from general meeting in Janco Kabel-TV AS,
evidencing the decision to merge Norkabelgruppen AS and Janco
Kabel-TV AS, including copies of summons to such general
meeting (with annexes);
(n) Copy of merger agreement between Norkabelgruppen AS and Janco
Kabel-TV AS (with annexes);
(o) Copies of minutes from board meeting in Norkabelgruppen AS,
evidencing the board's approval of the merger agreement with
Janco Kabel-TV AS;
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<PAGE>
(p) Copies of minutes from board meeting in Janco-Kabel-TV AS,
evidencing the board's approval of the merger agreement with
Norkabelgruppen AS;
(q) Copy of minutes from board meeting in Norkabelgruppen AS,
evidencing the decision to merge Norkabelgruppen AS, Norkabel
AS and Oslo Kabelanlegg AS;
(r) Copy of filing to the Norwegian Companies Register from
Norkabel AS, regarding the decision to merge Norkabel AS with
Norkabelgruppen AS;
(s) Copy of filing to the Norwegian Companies Register from Oslo
Kabelanlegg AS, regarding the decision to merge Oslo
Kabelanlegg AS with Norkabelgruppen AS;
(t) Copy of filing to the Norwegian Companies Register from
Norkabelgruppen AS, regarding the decision to merge
Norkabelgruppen AS with Janco Kabel-TV AS;
(u) Copy of existing company certificates of Norkabel AS, Oslo
Kabelanlegg AS, Norkabelgruppen AS and Janco Kabel-TV AS (not
more than one month old) prior to the mergers;
(v) Copy of new company certificate of Janco Kabel-TV AS after
registration of the merger with Norkabelgruppen AS;
(w) Such other documents as the Agent may reasonably require to
ensure that all security granted to the Security Trustee prior
to the Norwegian Merger remains in place.
135
<PAGE>
Schedule 12
-----------
[Intentionally left blank]
136
<PAGE>
Schedule 13
-----------
Part A - Norwegian Security Documents
-------------------------------------
(if at the relevant time the Norwegian Merger
---------------------------------------------
has not occurred)
-----------------
A Security provided by Norkabel, Kanal 2 A/S ("Kanal"), Norkabel A/S
("NAS") and Oslo Kabelanlegg A/S ("OK")
1 Norkabel Pledge(s) of Shares by United Communications International,
the Parent and/or Janco dated 5th March 1997, which has been either
assigned for the benefit of the Security Trustee by ING Bank N.V. or
re-executed in favour of the Security Trustee in the same form mutatis
mutandis;
2 Kanal Pledge of Shares by Norkabel, dated 5th March 1997, which has
been either assigned for the benefit of the Security Trustee by ING
Bank N.V. or re-executed in favour of the Security Trustee in the same
form mutatis mutandis;
3 NAS Pledge of Shares by Norkabel, dated 5th March 1997, which has been
either assigned for the benefit of the Security Trustee by ING Bank
N.V. or re-executed in favour of the Security Trustee in the same form
mutatis mutandis;
4 OK Pledge of Shares by Norkabel, dated 5th March 1997, which has been
either assigned for the benefit of the Security Trustee by ING Bank
N.V. or re-executed in favour of the Security Trustee in the same form
mutatis mutandis;
5 Assignment of Receivables by Norkabel, dated 5th March 1997, which has
been either assigned for the benefit of the Security Trustee by ING
Bank N.V. or re-executed in favour of the Security Trustee in the same
form mutatis mutandis;
6 Assignment of Receivables by NAS, dated 5th March 1997, which has been
either assigned for the benefit of the Security Trustee by ING Bank
N.V. or re-executed in favour of the Security Trustee in the same form
mutatis mutandis;
7 Assignment of Receivables by OK, dated 5th March 1997, which has been
either assigned for the benefit of the Security Trustee by ING Bank
N.V. or re-executed in favour of the Security Trustee in the same form
mutatis mutandis;
8 Assignment of Receivables by Kanal, dated 5th March 1997, which has
been either assigned for the benefit of the Security Trustee by ING
Bank N.V. or re-executed in favour of the Security Trustee in the same
form mutatis mutandis;
9 Pledge of Bank Accounts by Norkabel, NAS, OK and Kanal, dated 5th March
1997, which has been either assigned for the benefit of the Security
Trustee by ING Bank N.V. or re-executed in favour of the Security
Trustee in the same form mutatis mutandis;
10 Declarations of Norkabel concerning Mortgages over Stock of Goods and
Motor Vehicles together with Factoring Agreement and Transcript of
Register, in substantially the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility;
11 Declarations of NAS concerning Mortgages over Stock of Goods and Motor
Vehicles together with Factoring Agreement and Transcript of Register,
in substantially the form given to ING Bank N.V. in connection with the
Existing Norkabel Facility;
12 Declarations of OK concerning Mortgages over Stock of Goods and Motor
Vehicles together with Factoring Agreement and Transcript of Register,
in substantially the form given to ING Bank N.V. in connection with the
Existing Norkabel Facility;
137
<PAGE>
13 Declarations of Kanal concerning Mortgages over Stock of Goods and
Motor Vehicles together with Factoring Agreement and Transcript of
Register, in substantially the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility;
14 Declaration relating to transfer of existing mortgages by Norkabel and
NAS, in the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
15 Declaration relating to mortgages over new property by Norkabel and
NAS, in the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
16 Assignment and Notice of Programme Supply Agreements by Norkabel and
NAS, in the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
17 Assignment of General Services Agreement by Norkabel, in the form given
to ING Bank N.V. in connection with the Existing Norkabel Facility,
mutatis mutandis;
18 Assignment of Insurance Proceeds by Norkabel, NAS, OK and Kanal, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
19 [Intentionally left blank];
20 A Mortgage Deed for NOK 720,000,000 dated 16 November 1989, under the
name of Askim Antenneservice, registered over the Mortgagors' Leased
Real Estate and Appurtenances (leierett med driftsilbehor) in
Eidsbergvn. 5, gnr. 52, bnr. 47 in the municipality of Askim, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
21 A Mortgage Deed for NOK 720,000,000 registered 17 November 1989 under
the name of Drammen Kabel-TV, registered over the Mortgagors' Leased
Real Estate and Appurtenances (leierett med drifstilbehor) in hans
Kjaersgt. 2, gnr. 111, bnr. 248 in the municipality of Drammen, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
22 A Mortgage Deed for NOK 724,000,000 registered 10 March 1992 under the
name of AS KA-TEL, registered over the Mortgagors' Leased Real Estate
and Appurtenances (leierett med drifstilbehor) in gnr. 7613, bnr. 9 in
the municipality of Kongsberg, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
23 A Mortgage Deed for NOK 720,000,000 registered 9 February 1990 under
the name of Moss Kabel TV, registered over the Mortgagors' Leased Real
Estate and Appurtenances (leierett med drifstilbehor) in Vaerftsgaten
10, gnr. 1, bnr. 2750 in the municipality of Moss, in the form given to
ING Bank N.V. in connection with the Existing Norkabel Facility,
mutatis mutandis;
24 A Mortgage Deed for NOK 720,000,000 registered 31 January 1990 under
the name of Ostfold Kabelnett A/S, registered over the Mortgagors'
Leased Real Estate and Appurtenances (leierett med drifstilbehor) in
Violgt. 8, gnr. 62, bnr. 111 in the municipality of Halden, in the form
given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
25 A Mortgage Deed for NOK 720,000,000 registered 17 November 1989 under
the name of Teletransmisjon A/S, registered over the Mortgagors' Leased
Real Estate and Appurtenances (leierett med drifstilbehor) in
Lensmannslia 30, gnr. 50, bnr. 23 parcel A in the municipality of
Asker, in the form given to ING Bank N.V. in connection with the
Existing Norkabel Facility, mutatis mutandis;
26 A Mortgage Deed for NOK 720,000,000 registered 13 March 1990 under the
name of West Satellite A/S, registered over the Mortgagors' Leased Real
Estate and Appurtenances (leierett med drifstilbehor) in Arken Senter
Asane 39, gnr. 88, bnr. 387, 388, 389, 390 and 391 in the municipality
of Bergen, in the form given to ING Bank N.V. in connection with the
Existing Norkabel Facility, mutatis mutandis;
138
<PAGE>
27 A Mortgage Deed for NOK 720,000,000 registered 12 September 1990 under
the name of West Satellite A/S, registered over the Mortgagors' Real
Estate and Appurtenances (fast eiendom med drifstilbehor) in
Tjensvolltorget 27, gnr. 25, bnr. 161 in the municipality of Stavanger,
in the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
28 A Mortgage Deed for NOK 725,000,000 dated 10 June 1993, under the name
of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 2076 bnr. 169 in
the municipality of Sarpsborg, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
29 A Mortgage Deed for NOK 725,000,000 dated 10 June 1993, under the name
of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 15, bnr. 661 in the
municipality of Karmoy, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
30 A Mortgage Deed for NOK 725,000,000 dated 10 June 1993, under the name
of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 188, bnr. 202 in
the municipality of Bergen, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
31 A Mortgage Deed for NOK 725,000,000 dated 5 November 1993, under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 86, bnr. 33 in the
municipality of Frogn, in the form given to ING Bank N.V. in connection
with the Existing Norkabel Facility, mutatis mutandis;
32 A Mortgage Deed for NOK 725,000,000 registered 10 March 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 148, bnr. 834 and
306 in the municipality of Karmoy, in the form given to ING Bank N.V.
in connection with the Existing Norkabel Facility, mutatis mutandis;
33 A Mortgage Deed for NOK 725,000,000 registered 23 March 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 16, bnr. 109 in the
municipality of Stavanger, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
34 A Mortgage Deed for NOK 725,000,000 registered 23 March 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 150 bnr. 1141 in
the municipality of Kristiansand, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
35 A Mortgage Deed for NOK 725,000,000 registered 15 June 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 38, bnr. 158 in the
municipality of Oslo, in the form given to ING Bank N.V. in connection
with the Existing Norkabel Facility, mutatis mutandis;
36 A Mortgage Deed for NOK 725,000,000 registered 15 June 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 24 bnr. 4 in the
municipality of Nedre Eiker, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
37 A Mortgage Deed for NOK 725,000,000 registered 20 June 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 39, bnr. 137 in the
municipality of Ringerike, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
38 A Mortgage Deed for NOK 725,000,000 registered 23 June 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor)
139
<PAGE>
in gnr. 30 bnr. 230 in the municipality of Skedsmo, in the form given
to ING Bank N.V. in connection with the Existing Norkabel Facility,
mutatis mutandis;
39 A Mortgage Deed for NOK 2,080,000 registered 17 October 1995 under the
name of Norkabel, registered over the Mortgagors' Leased Real Estate
and Appurtenances (leierett med driftstilbehor) in gnr. 32, bnr. 279
and 771 in the municipality of Oslo, in the form given to ING Bank N.V.
in connection with the Existing Norkabel Facility, mutatis mutandis;
40 A Mortgage Deed for NOK 725,000,000 registered 28 August 1995 under the
name of NAS, registered over the Mortgagors' Leased Real Estate and
Appurtenances (leierett med driftstilbehor) in gnr. 34, bnr. 14 in the
municipality of Royken, in the form given to ING Bank N.V. in
connection with the Existing Norkabel Facility, mutatis mutandis;
41 [Intentionally left blank];
42 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
driftstilbehor) in gnr. 152 bnr. 1756 in the municipality of
Kristiansand, in the form given to ING Bank N.V. in connection with the
Existing Norkabel Facility, mutatis mutandis;
43 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 34 bnr. 14 in the municipality of Royken, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
44 A Mortgage Deed for NOK 900,000,000 registered over the Mortgagors'
Leased Real Estate and Appurtenances (leierett med drifstilbehor) in
gnr. 12 bnr. 751 in the municipality of Kristiansand, in the form given
to ING Bank N.V. in connection with the Existing Norkabel Facility,
mutatis mutandis;
45 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 188 bnr. 202 in the municipality of Bergen, in
the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
46 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 38 bnr. 158 in the municipality of Oslo, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
47 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 134 bnr. 8 in the municipality of Drammen, in
the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
48 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 132 bnr. 214 in the municipality of Drammen, in
the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
49 A Mortgage Deed for NOK 900,000,000 registered over the Mortgagors'
Leased Real Estate and Appurtenances (leierett med drifstilbehor) in
gnr. 117 bnr. 517 in the municipality of Drammen, in the form given to
ING Bank N.V. in connection with the Existing Norkabel Facility,
mutatis mutandis;
50 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 17 bnr. 3 in the municipality of Drammen, in
140
<PAGE>
the form given to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis;
51 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 142 bnr. 6 in the municipality of Lier, in the
form given to ING Bank N.V. in connection with the Existing Norkabel
Facility, mutatis mutandis;
52 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
driftstilbehor) gnr. 8651 bnr. 1, 114, 115, 116, 117, 118, 119 and 120
in the municipality of Kongsberg, in the form given to ING Bank N.V.,
in connection with the Existing Norkabel Facility, mutatis mutandis;
53 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
drifstilbehor) in gnr. 12 bnr. 26 in the municipality of Askim, in the
form given to ING Bank N.V., in connection with the Existing Norkabel
Facility, mutatis mutandis;
54 A Mortgage Deed for NOK 900,000,000 to be registered over the
Mortgagors' Leased Real Estate and Appurtenances (leierett med
driftstilbehor) in gnr. 33 bnr. 500 in the municipality of Haugesund,
in the form given to ING Bank N.V., in connection with the Existing
Norkabel Facility, mutatis mutandis;
B Security provided by Janco Kabel-TV A/S
141
<PAGE>
1 Assignment of Receivables by Janco, in a form satisfactory to the
Banks.
2 Declaration of Janco concerning mortgages over Stock of Goods and Motor
Vehicles together with Factoring Agreement, in a form satisfactory to
the Banks.
3 Pledge of Bank Accounts by Janco, in a form satisfactory to the Banks.
4 Assignment of Insurance Proceeds by Janco, in a form satisfactory to
the Banks.
5 Assignment and Notice of Programme Supply Agreement by Janco, in a form
satisfactory to the Banks.
6 Mortgage Deed for NOK 900,000,000 to be registered over the Mortgagor's
easement rights to antennas and appurtenances (leierett med
driftstilbehor) in gnr. 75 bnr. 1 in the municipality of Oslo with Oslo
Municipality as the servient tenant, in a form satisfactory to the
Banks.
7 Mortgage Deed for NOK 900,000,000 to be registered over the Mortgagors'
easement rights to antennas and appurtenances (leierett med
driftstilbehor) in gnr. 98 bnr. 7 in the municipality of Oslo with
Asbj0rn Lie Kristoffersen as the servient tenant, in a form
satisfactory to the Banks.
8 Mortgage Deed for NOK 900,000,000 to be registered over the Mortgagors
Leased Real Estate and Appurtenances (leierett med driftstilbehor) at
Ensj0veien 7, Oslo leased pursuant to a Lease Agreement dated 24th June
1997, in a form satisfactory to the Banks.
9 A Declaration of Pledge and Deposit of a new promissory note to be
issued by Janco in the principal amount of NLG75,440,850 which, upon
full repayment of ING Bank B.V., shall replace, supersede and be in
substitution of the unsecured promissory note dated October 26th, 1995
in the principal amount of USD$70,780,401.40 pledged to ING Bank N.V.
in connection with the Existing Nakabel Facility.
142
<PAGE>
Schedule 13
-----------
Part B - Norwegian Security Documents (if at
--------------------------------------------
the relevant time the Norwegian Merger has occurred)
----------------------------------------------------
The documents listed in part A of schedule 13 with the following numbers:-
B1 to B5 and B8 and B9 (inclusive); and
A15 to A54 exclusive A17 (inclusive)
each in the form granted to ING Bank N.V. in connection with the Existing
Norkabel Facility, mutatis mutandis, or in a form acceptable to the Banks
together with a declaration by Janco concerning the security documents provided
by Norkabel, Norkabel A/S, Kanal 2 A/S and Oslo Kableanlegg A/S, in favour of
The Toronto-Dominion Bank as Security Trustee, in a form satisfactory to the
Banks: the declaration will be numbered A9.
143
<PAGE>
Schedule 14
-----------
Form of Telekabel Note
----------------------
Telekabel Wien Gesellschaft m.b.H
[currency][amount]
Bearer Bond (the "Note")
issued subject to the terms and conditions set out below
Vienna [date]
Terms and Conditions
- --------------------
1 Form and denomination
---------------------
This Note is issued in bearer form. The holder of this Note shall be
entitled to exercise any rights hereunder. The nominal amount of this
Note is [currency][amount].
2 Interest
--------
Interest on this Note shall accrue at [rate] per cent. per annum (being
the aggregate of (a) the applicable Margin (which, unless otherwise
agreed by the issuer shall not exceed 2 per cent. per annum), (b) the
Additional Cost (if the nominal amount is denominated in Sterling and
(c) LIBOR).
Interest shall be payable on this Note on [[interim interest payment
date] and on] [date of maturity].
3 Term and final maturity
-----------------------
Subject to clause 4 below, this Note shall be redeemed in full on [date
of maturity].
4 Term and Conditions
-------------------
This Note has been issued on terms and conditions agreed between, inter
alia, United and Philips Communications B.V., Telekabel Wien
Gesellschaft m.b.H., The Toronto-Dominion Bank as Arranger, The
Toronto-Dominion Bank as Agent on behalf of certain Banks and The
Toronto-Dominion Bank as Security Trustee. Unless the context otherwise
requires, the words and expressions defined in such terms and
conditions shall have the same meanings when used in this Note
Signed,
Telekabel Wien Gesellschaft m.b.H.
[Completed under instructions from Telekabel Wien Gesellschaft m.b.H. by the
Agent]
144
<PAGE>
The Parent (as a Borrower and a Guarantor)
- ----------
SIGNED for and on behalf of )
UNITED AND PHILIPS COMMUNICATIONS B.V. ) /s/ STEVE BUTLER
by: )
The Other Borrower
- ------------------
SIGNED for and on behalf of )
NORKABELGRUPPEN A/S ) /s/ STEVE BUTLER
by: )
The Guarantors
- --------------
SIGNED for and on behalf of )
CABLE NETWORKS AUSTRIA HOLDING B.V. ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
TELEKABEL KLAGENFURT G.M.B.H. ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
TELEKABEL-FERNSEHNETZ WIENER ) /s/ STEVE BUTLER
NEUSTADT/NEUNKIRCHEN )
BETRIEBS-G.M.B.H. by: )
SIGNED for and on behalf of )
TELEKABEL GRAZ G.M.B.H. ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
TELEKABEL-FERNSEHNETZ REGION ) /s/ STEVE BUTLER
BADEN BETRIEBS-G.M.B.H. by: )
SIGNED for and on behalf of )
RADIO PUBLIC S.A. ) /s/ STEVE BUTLER
145
<PAGE>
by: )
SIGNED for and on behalf of )
JANCO KABEL-TV A/S ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
NORKABELGRUPPEN A/S ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
KANAL 2 A/S ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
OSLO KABELANLEGG A/S ) /s/ STEVE BUTLER
by: )
SIGNED for and on behalf of )
NORKABEL A/S ) /s/ STEVE BUTLER
by: )
The Arranger
- ------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK ) /s/ DAVID FRENCH
by: )
The Banks
- ---------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK ) /s/ DAVID FRENCH
by: )
SIGNED for and on behalf of )
BARCLAYS BANK PLC ) /s/ NEIL McKENZIE
by: )
146
<PAGE>
SIGNED for and on behalf of )
CIBC WOOD GUNDY PLC ) /s/ LOUISE MOAT
by: )
SIGNED for and on behalf of )
HSBC INVESTMENT BANK PLC ) /s/ JAMES FALLON
by: )
SIGNED for and on behalf of )
NATIONSBANK N.A. ) /s/ KEVIN HARBER
by: )
SIGNED for and on behalf of )
THE ROYAL BANK OF SCOTLAND PLC ) /s/ KEN BARCLAY
by: )
The Agent
- ---------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK ) /s/ DAVID FRENCH
by:
The Security Trustee
- --------------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK ) /s/ DAVID FRENCH
by: )
147
<PAGE>
- --------
* Norwegian Borrowers only
** Austrian Borrowers only
148
<PAGE>
SUPPLEMENTAL AGREEMENT
relating to a
NLG 1,100,000,000 Multi-currency
Revolving Credit Facility
to
UNITED AND PHILIPS COMMUNICATIONS B.V.
AND CERTAIN OF ITS SUBSIDIARIES
guaranteed by
UNITED AND PHILIPS COMMUNICATIONS B.V.
AND CERTAIN OF ITS SUBSIDIARIES
arranged by
THE TORONTO-DOMINION BANK
Agent
THE TORONTO-DOMINION BANK
Security Trustee
THE TORONTO-DOMINION BANK
Norton Rose
London
<PAGE>
CONTENTS
--------
<TABLE>
<CAPTION>
Clause Heading Page
<S> <C> <C>
1 Interpretation................................... 1
2 Amendments to the Principal Agreement............ 2
3 Accession by Telekabel Wien...................... 11
4 Waiver........................................... 12
5 Representations and warranties................... 13
6 Fees and Expenses................................ 15
7 Effective Date................................... 15
8 Miscellaneous.................................... 17
9 Governing Law.................................... 17
Schedule
1 Borrowers........................................ 18
2 Guarantors....................................... 19
</TABLE>
<PAGE>
THIS SUPPLEMENTAL AGREEMENT is dated December, 1997 and made BETWEEN:
(1) UNITED AND PHILIPS COMMUNICATIONS B.V. as Parent;
(2) THE ENTITIES listed in schedule 1 as Borrowers;
(3) THE ENTITIES listed in schedule 2 as Guarantors;
(4) THE TORONTO-DOMINION BANK as Arranger;
(5) THE BANKS under the Principal Agreement referred to below;
(6) THE TORONTO-DOMINION BANK as Agent; and
(7) THE TORONTO-DOMINION BANK as Security Trustee.
WHEREAS:
(A) This Supplemental Agreement is supplemental to an agreement (the "Principal
Agreement") dated 8th October 1997 and made between the same parties (other
than Telekabel Wien and save that certain Obligors incorporated in Norway
have merged into Janco since the date of the Principal Agreement pursuant
to the Norwegian Merger and that Janco has changed its name to Janco
Multicom A/S), whereby the Banks agreed to make available to the Borrowers
a revolving credit facility of up to NLG 1,100,000,000 upon the terms and
subject to the conditions therein contained.
(B) The Parent has requested the Banks to amend the Principal Agreement to the
extent set out in this Supplemental Agreement.
NOW IT IS AGREED as follows:
1 Interpretation
--------------
1.1 Definitions in Principal Agreement
----------------------------------
Unless the context otherwise requires and save as mentioned below, words
and expressions defined in the Principal Agreement shall have the same
meanings when used in this Supplemental Agreement. In this Supplemental
Agreement the expression the "Supplemental Agreement" shall mean this
Supplemental Agreement, the expression the "Effective Date" shall have the
meaning given to it in clause 7.1, the expression "Obligors" shall mean
each of the Borrowers listed in schedule 1 and each of the Guarantors
listed in schedule 2 and the expression "Principal Agreement" shall have
the meaning given to it in Recital (A), save that in clause 3 it shall mean
the agreement referred to in Recital (A) as amended by this Supplemental
Agreement.
<PAGE>
1.2 Interpretation of Principal Agreement
-------------------------------------
References in the Principal Agreement to "this Agreement" shall, with
effect from the Effective Date and unless the context otherwise requires,
be references to the Principal Agreement as amended by this Supplemental
Agreement and words such as "herein", "hereof", "hereunder", "hereafter",
"hereby" and "hereto", where they appear in the Principal Agreement, shall
be construed accordingly.
1.3 Incorporation of certain references
-----------------------------------
Clauses 1.3, 1.4, 1.5 and 1.6 of the Principal Agreement shall be deemed to
be incorporated in this Supplemental Agreement in full, mutatis mutandis.
2 Amendments to the Principal Agreement
-------------------------------------
2.1 The following clauses of the Principal Agreement shall, with effect from
the Effective Date, be amended as follows:
(a) clause 1.1: by making this clause a new sub-clause (a);
(b) clause 1.1: by adding at the end of sub-clause (a), a new sub-clause
(b) as follows:
"For the purposes of this Agreement the revolving credit facility
shall only be made available to Telekabel Wien by way of loans against
the issue by Telekabel Wien of Telekabel Notes within the overall
limit of the Facility and, without prejudice to the foregoing,
Telekabel Wien shall, subject to the approval of the managing board of
Telekabel Wien of the amount of such borrowing, be permitted to borrow
by way of loans against the issue of Telekabel Notes upon and subject
to the terms of this Agreement, a sum of up to Austrian Schillings
1,700,000,000 or such greater amount as shall be agreed upon by the
supervisory board of Telekabel Wien from time to time. Except (i) in
the possible case of loans to CNA and (ii) loans to other members of
the Restricted Group incorporated in Austria in amounts not exceeding
its Distributable Profits at the time thereof, Telekabel Wien shall
not use such borrowings for the purpose of providing loans to any
member of the Restricted Group or any other person. The possibility
to grant loans does not constitute an obligation to that extent and
any loans may only be granted by Telekabel Wien in accordance with
Austrian law.";
(c) clause 1.2, definition of "Advance": by deleting the existing
definition and replacing it with:
""Advance" means (i)(in the case of each Borrower other than Telekabel
Wien) each borrowing of a portion of the Commitments by a Borrower by
way of advance or (as the context may require) the principal amount of
such borrowing for the time being and/or (ii)(in the case of Telekabel
Wien) each borrowing of a portion of the Commitments by Telekabel
<PAGE>
Wien against the issue by Telekabel Wien of a Telekabel Note or (as
the context may require) the principal amount of such Telekabel Note
for the time being outstanding;";
(d) clause 1.2, definition of "Borrowers": by adding, at the end of such
definition, the words: "and provided further that, for the purposes of
this Agreement, the term "Borrower", when used in connection with
Telekabel Wien, shall mean Telekabel Wien as an issuer of Telekabel
Notes in accordance with the terms and conditions of this Agreement.";
(e) clause 1.2, definition of "Bridge Borrower": by deleting the words:
"Cable Network Brabant Zuid-Oost" in the first line thereof, and
replacing them with the word: "Belmarken";
(f) clause 1.2, definition of "Deed of Borrower Accession": by deleting
the existing definition and replacing it with: "means the deed to be
executed and delivered by each entity which is to accede to this
Agreement as a Borrower, each substantially in the form of schedule 11
part A, mutatis mutandis (or such other document as the Banks may
require which has the same, or substantially the same, effect)";
(g) clause 1.2, by inserting a new definition of "Distributable Profits"
as follows:
""Distributable Profits" means, in relation to any entity incorporated
in Austria, the distributable profits of such entity as calculated in
accordance with generally accepted accounting provisions prevailing in
Austria which may be disbursed as dividends and for which a
shareholder's resolution authorising such distribution has been passed
save that, in the case of any member of the Restricted Group
incorporated in Austria only, the Relevant Reserves may not be
included in the calculation of distributable profits of such entity
apart from by way of charges made to the profit and loss account of
such entity in respect of the amortisation of the good-will
represented by such Relevant Reserves and to extinguish existing
negative balances on the profit and loss account of such entity;";
(h) clause 1.2, definition of "Facility": by adding, after the words
"revolving credit facility" in the first line thereof, the words:
"(including, in the case of Telekabel Wien, the facility permitting
Telekabel Wien to borrow the Commitments against the issue of
Telekabel Notes)";
(i) clause 1.2, definition of "Permitted Payments" by deleting the
existing sub-clause (a) and replacing it with the following:
"(a) the proceeds of any equity share capital that has been
subscribed for in the Parent for cash (other than pursuant to a
public offering) on terms that the same is not redeemable or
convertible into any other class of share or loan capital in any
member of the
<PAGE>
Restricted Group (in either case prior to the date on which all
amounts outstanding under this Agreement have been irrevocably
paid in full and no amounts are capable of being so outstanding)
and does not carry the right to any dividend or other
distribution (unless the same is not prohibited by the
application of clause 11.2(k)(i)), or on such other terms as are
satisfactory to the Majority Banks";
(j) clause 1.2, by adding a new definition of "Relevant Reserves" as
follows:
""Relevant Reserves" means the non-restricted capital reserves of
members of the Restricted Group incorporated in Austria created in
mid-1995 in connection with the corporate reorganisation of those
entities which reserves will be reduced during any financial year of
such entity by the amount of any amortisation of goodwill, created at
such time as a result of such reorganisation during such financial
year;";
(k) clause 1.2, definition of "Janco": by adding the words "(now known as
Janco Multicom A/S)" after the words "Janco Kabel-TV A/S" where such
words appear in the first and fourth lines of such definition;
(l) clause 1.2, definition of "Loan": by inserting at the end of such
definition the words: "(including, for the avoidance of doubt, the
aggregate principal amount of all Telekabel Notes which are then
issued and outstanding)";
(m) clause 1.2, definition of "Permitted Disposal": by inserting after the
words "of interests it has in" the words ", or of Borrowed Money it is
owed by,";
(n) clause 1.2, definition of "Restructuring": by inserting after the
words "and the Parent in" the words ", and of the Borrowed Money owing
to the Parent by,";
(o) clause 1.2, definition of "Telekabel Notes", by deleting the words
"bearer notes", in the first line thereof and replacing them with the
words "bearer bonds";
(p) clause 1.4(l): by adding, at the end of such clause the words: "and
references to sums payable under this Agreement include sums payable
under all Telekabel Notes";
(q) clause 2.4: by adding a new clause 2.4 as follows:
"Telekabel Wien's interests several
----------------------------------
For the avoidance of doubt, every obligation of Telekabel Wien under
this Agreement is several and it is acknowledged by all parties that
<PAGE>
Telekabel Wien, save for its obligations under the Guarantee, is not
liable for any obligations of any other Obligor under this Agreement."
(r) clause 3.6(a): by deleting the words "which form shall permit the
Security Trustee to exercise voting rights in respect of CNA pursuant
to the CNA Pledge after the occurrence of an Event of Default" in the
fourth to sixth lines thereof;
(s) clause 2.1: by adding the words: "and which shall include, for the
avoidance of doubt, the amounts borrowed by Telekabel Wien against the
issue of Telekabel Notes" after the words "Norwegian Loan Amount" in
the fifth line thereof;
(t) clause 3.6(b)(i): by adding the words "(as amended)" after the word
"Agreement", where it appears in the third line thereof and by
replacing the words "24th October, 1997" with the words "12th
December, 1997" where they appear in the fourth line thereof;
(u) clause 3.6(b)(ii): by deleting the existing clause 3.6(b)(ii) and
replacing it with:
"on or before 12th December, 1997 there is delivered to the Agent the
Austrian Security Document and such other documents as the Agent may
require, each duly executed and delivered by Telekabel Wien, together
with such other documents, evidence and legal opinions as the Agent
shall require to ensure that Telekabel Wien becomes a Borrower and a
Guarantor under this Agreement.";
(v) clause 4.9(B): by deleting the references to "30 November 1997" in
fifth line of the first paragraph and third line of the third
paragraph, and inserting "12 December 1997" where deleted;
(w) clause 4.14: by deleting the existing clause 4.14 and replacing it
with:
"4.14 Telekabel Notes
---------------
Each borrowing of a portion of the Commitments to be made by
Telekabel Wien under this Agreement shall be made against the
issue by Telekabel Wien of a Telekabel Note to the Agent.
At the same time as and together with a Drawdown Notice in
connection with any such Advance to be made to Telekabel Wien,
Telekabel Wien shall deliver to the Agent an original Telekabel
Note the details set out in which shall correspond to the
details of the Advance described in such Drawdown Notice.
The Banks shall be under no obligation to make any funds
available to Telekabel Wien unless the Agent shall have
received such Telekabel Note in a form satisfactory to it.
<PAGE>
Telekabel Wien hereby authorises the Agent to complete the
provisions in each Telekabel Note relating to the calculation
of interest payable in connection therewith.
On the condition that the relevant Telekabel Note has been duly
completed and executed and provided that the conditions set out
in clause 3 have been satisfied, the Banks shall contribute to
the Advance to be made to Telekabel Wien against the relevant
Telekabel Note in accordance with the provisions of clauses 4.2
to 4.8 (inclusive).
The Agent shall hold each Telekabel Note for and on behalf of
the Banks and shall not part with possession of such Telekabel
Note without the consent of all the Banks. All payments
received by the Agent under any Telekabel Note shall be applied
in accordance with the provisions of clause 8. For the
avoidance of doubt, for the purposes of the Security Trust
Deed, all indebtedness of Telekabel Wien under Telekabel Notes
shall constitute "Senior Indebtedness" (as defined in the
Security Trust Deed).
The Agent shall be entitled to place all Telekabel Notes
deposited with it in any safe deposit, safe or receptacle
selected by the Agent and the Agent shall not be responsible
for any loss incurred in connection with any such deposit.";
(x) clause 6.5(B)(ii) - by amending the word "of" in the penultimate line
to "if";
(y) clause 8.11: by deleting the words "(in the case of Sterling) a 365
day year and (in the case of currencies other than Sterling) a 360 day
year" and replacing them with the words "(in the case of Guilders) a
360 day year or (in the case of any Optional Currency) in accordance
with standard London interbank market practice in respect of
calculating the number of days comprising a year";
(z) clause 9.1(a): by deleting the words: "distributable profits from time
to time of the respective Austrian Guarantor" where they appear in the
fourth and fifth lines thereof and by replacing them with the words:
"Distributable Profits for which CNA shall have given an instruction
in accordance with clause 11.1(af) to the relevant Austrian Guarantor
("Anweisung auf Schuld") stating that its interest in such
Distributable Profits can be the subject of the Guarantee Provided
that the Agent agrees that, without prejudice to any of its other
rights under this Agreement, it shall not make a demand for payment
from Telekabel Wien under the Guarantee until 28 days after the date
that the Agent has notified Telekabel Wien that a Default has occurred
unless at such time (i) Telekabel Wien has repaid all amounts in
respect of the Telekabel Notes, (ii) Telekabel Wien has breached any
of its obligations under this
<PAGE>
Agreement or (iii) an Event of Default has otherwise occurred in
relation to Telekabel Wien, in which case such 28 day grace period (or
any unexpired part thereof) shall not apply";
(aa) clause 9.3: by amending the word "of" which appears after the word
"Incapacity" in line 10 to "or" and inserting the word "any" after the
word "constitution of" in the same line;
(bb) clause 10.1: by deleting the words: "jointly and severally" where they
appear in the first line thereof and replacing them with the words:
"in respect of itself and its Subsidiaries which are members of the
Restricted Group";
(cc) clause 10.2: by deleting the words: "jointly and severally" where they
appear in the first line thereof and replacing them with the words "in
respect of itself and its Subsidiaries which are members of the
Restricted Group";
(dd) clause 11.1: by deleting the words: "jointly and severally" where they
appear in the first line thereof and replacing them with the words:
"in respect of itself and its Subsidiaries which are members of the
Restricted Group";
(ee) clause 11.1(w)(v): by adding the words: "(since renamed Janco
Telematikk A/S)" after the words "Janco Multicom A/S" in the
second/third lines thereof;
(ff) clause 11.1(x): by adding the words at the end of the clause: "For the
avoidance of doubt, it is agreed that Telekabel Wien shall not be
required to enter into a Deed of Subordination in respect of any loan
provided by Telekabel Wien to another member of the Restricted
Group;";
(gg) clause 11.1(z):
(i) by adding the words "directly or indirectly" after the words
"intercompany loans"; and
(ii) by adding the words at the end of the clause: "provided that this
clause shall not require or permit Telekabel Wien to make any
loans to CNA or other members of the Restricted Group
incorporated in Austria except in accordance with Austrian law
and shall not require or permit Telekabel Wien to make any loans
to any person other than CNA or other members of the Restricted
Group incorporated in Austria;";
<PAGE>
(hh) clause 11.1: by adding a new clause 11.1(af) as follows:
"(af) Instructions as to debt
-----------------------
(in the case of CNA) (i) ensure that at all times each other
Telekabel Entity has received a valid, irrevocable and
unconditional instruction to assume debt ("Anweisung auf
Schuld") stating that CNA's interest in any Distributable
Profits, to the extent that at any time it exceeds the principal
amount of intercompany loans made by that Telekabel Entity to
CNA pursuant to clause 11.1(z) which are outstanding at that
time, is to be owed by such Telekabel Entity pursuant to the
Guarantee, and (ii) ensure that it calls all relevant
shareholders meetings of each Telekabel Entity to vote upon the
amount of Distributable Profits and votes its shares in each
Telekabel Entity so as to ensure that at all times the amount of
Distributable Profits of such Telekabel Entity is the maximum
amount legally possible for such Telekabel Entity."
(ii) clause 11.2: by deleting the words: "jointly and severally" where they
appear in the first line thereof and replacing them with the words "in
respect of itself and its Subsidiaries which are members of the
Restricted Group";
(jj) clause 11.2(g): by inserting the word "and" at the end of clause
11.2(g)(iii) and adding a new clause 11.2(g)(iv) as follows:
"(iv) Telekabel Wien may reclassify into nominal share capital such
of the Relevant Reserves as may be necessary to ensure that the
nominal capital of Telekabel Wien is equal to 337,300,000 Austrian
Schillings.";
(kk) clause 11.2(k)(iii): by adding, at the end of such clause, the words:
"Provided that if at any time any Telekabel Entity makes any payment
of Distributable Profits to the Agent pursuant to any instruction
("Anweisung auf Schuld") given to it by CNA, the amount of
Distributable Profits which are not subject to such instruction may be
paid by such Telekabel Entity to the Relevant Telekabel Person
entitled thereto.";
(ll) proviso to clause 11.2(k): by adding "(A)" after the words "for the
avoidance of doubt" in the first line and at the end of such proviso
the words: "(B) this clause 11.2(k) shall not prevent the performance
of any contracts for the provision of goods and services on bona fide
arms length commercial terms between the Telekabel Entities and any
Relevant Telekabel Person;";
(mm) clause 13.2: by adding at the end of such clause the words:
<PAGE>
"Provided that the Agent agrees that, without prejudice to any of its
other rights under this Agreement, it shall not accelerate the due
date of any sums payable by Telekabel Wien until 28 days after the
date that the Agent has given notice to Telekabel Wien that a Default
has occurred unless at such time (i) Telekabel Wien has breached any
of its obligations under this Agreement or (ii) an Event of Default
has otherwise occurred in relation to Telekabel Wien, in which case
such 28 day grace period (or any unexpired part thereof) shall not
apply.";
(nn) clause 19.1(c)(i): by adding at the end of such clause the words:
"and,
in addition, the case of Telekabel Wien only, to:
Telekabel Wien G.m.b.H
Erlachgasse 116
1100, Wien, Austria
Telefax: 431 1701 211
Attention: Chief Financial Officer";
(oo) by inserting a new clause 19.6 as follows:
"19.6 No breach of Austrian Agreements
--------------------------------
The Banks (i) confirm that they have received copies of the
Austrian Agreements in their form at the date of the first
supplemental agreement to this Agreement, and (ii) further
confirm, and authorise the Agent to confirm, that if they, the
Agent or the Security Trustee become majority shareholders in
CNA following enforcement of the CNA Share Security they will
not, and they will not instruct the Agent or the Security
Trustee to, require CNA to take any action which would to their
knowledge, after taking advice, constitute a breach of the
Austrian Agreements in their form at the date of the first
supplemental agreement to this Agreement if such action would
also constitute a breach of the Austrian Agreements in their
form at the date on which such action is taken. These
confirmations, however, do not constitute (a) a waiver of any
rights the Banks, the Agent or the Security Trustee may have
under the Austrian Agreements as such shareholders or (b) a
guarantee of CNA's obligations under the Austrian Agreements.
The Banks do not have authority to bind any third party who
becomes a shareholder in CNA, whether following enforcement of
the CNA Share Security or otherwise, but the Banks agree that
if they, the Agent or the Security Trustee dispose of the
shares in CNA upon enforcement of the CNA Share Security, or as
shareholders in CNA following enforcement of the CNA Share
Security, otherwise than by means of a public offer, public
sale or public
<PAGE>
auction they will make such disposal on terms that the acquirer
gives a confirmation in the same terms as this clause 19.6.";
(pp) schedule 2: by deleting the words "[such Advance to be made by way of
issue of a Telekabel Note]", where they appear in the introductory
paragraph to such Schedule and replacing them with the words "[we wish
to issue a Telekabel Note in the nominal amount of . on . 19. for a
Term of . months]";
(qq) schedule 8, clause 8.2(c) : by deleting the word "nay" and replacing
it with "any" in the second line;
(rr) schedule 3, Part A, Documents listed as conditions precedent in
Austria, items 1, 2 and 3, the square brackets to be deleted and the
date changed from "24th October 1997" to "12th December 1997";
(ss) schedule 13 part A, subheading A: by making the following amendments:
(i) in item 16, by adding the words "Norkabel and" before the word
"NAS" in the first line thereof, (ii) by deleting item 19 and
inserting the words: "[intentionally left blank]" (iii) in item 26, by
replacing the number "490" with the number "390" in the fourth line
thereof, (iv) in item 40, by deleting the words "and 771" in the third
line thereof, (v) by deleting item 41 and inserting the words:
"[intentionally left blank]", (vi) in item 42, by adding the words "to
be" before the word "registered" in the first line thereof, (vii) in
item 44, by deleting the words "to be" where they appear before the
word "registered" in the first line thereof and (viii) in item 49, by
deleting the words "to be" where they appear before the word
"registered" in the first line thereof;
(tt) schedule 13 part A, subheading B: by making the following amendment by
inserting a new item 9:
"9 A Declaration of Pledge and Deposit by the Parent of a new
promissory note to be issued by Janco in the principal amount of
NLG 75,440,850 which, upon the full repayment of the Existing
Norkabel Facility, shall replace, supersede and be in
substitution of the unsecured promissory note dated October 26th,
1995 in the principal amount of $70,780,401.40 pledged to ING
Bank N.V. in connection with the Existing Norkabel Facility".
(uu) schedule 13 part B: (i) by deleting the figure "B8" where it appears
in the second line thereof and replacing it with the figure "B5" and
(ii) by the end of the second line adding "and B8 and B9" and (iii) by
deleting the "A14" where it appears in the third line thereof and
replacing it with the figure "A15" and (iv) by adding at the end of
the third line "exclusive A17" and (v) by adding at the end of such
schedule the words: "together with a declaration by Janco concerning
the security documents provided by Norkabel, Norkabel A/S, Kanal 2 A/S
and Oslo Kableanlegg A/S, in
<PAGE>
favour of The Toronto-Dominion Bank as Security Trustee, in a form
satisfactory to the Banks: the declaration will be numbered A9";
(vv) schedule 14 - form of Telekabel Note: (i) by deleting the words
"Bearer Note" where they appear in the third line of the heading
thereof and replacing them with the words "Bearer Bond" and (ii) by
deleting paragraph 4 thereof and replacing it with:
"4 Terms and Conditions
--------------------
This Note has been issued on terms and conditions agreed between,
inter alia, United and Philips Communications B.V., Telekabel
Wien Gesellschaft m.b.H., The Toronto-Dominion Bank as Arranger,
The Toronto-Dominion Bank as Agent on behalf of certain Banks and
The Toronto-Dominion Bank as Security Trustee. Unless the
context otherwise requires, the words and expressions defined in
such terms and conditions shall have the same meanings when used
in this Note."
and (iii), by adding the following words after "per cent. per annum"
in paragraph 2:
"(being the aggregate of (a) the applicable Margin (which, unless
otherwise agreed by the issuer shall not exceed 2 per cent. per annum,
(b) the Additional Cost (if the nominal amount is denominated in
Sterling and (c) LIBOR)"; and
(ww) by changing the following cross-references:
(i) clause 1.2, definition of "Deed of Guarantor Accession": the
reference to clause 9.16 to clause 9.17;
(ii) clause 1.2, definition of "Guaranteed Liabilities": the
reference to clause 9.1 to clause 9.2;
(iii) proviso to clause 11.2(k): the reference to clause 11.2(i) to
clause 11.2(k); and
(iv) schedule 10, part A: references to clause 9.16 to clause 9.17.
3 Accession by Telekabel Wien
---------------------------
3.1 Accession as Borrower
---------------------
Telekabel Wien agrees to become a Borrower (as such definition is to be
amended pursuant to this Supplemental Agreement) under the Principal
Agreement and to be bound by the terms of the Principal Agreement as a
Borrower (as such definition is to be amended pursuant to this Supplemental
Agreement) in accordance with clause 3.6 of the Principal Agreement and to
be bound by the terms of the Security Trust Deed as a Borrower (as such
term is to
<PAGE>
be amended pursuant to this Supplemental Agreement) in accordance with
clause 10.6 of the Security Trust Deed. Telekabel Wien shall only have
liabilities as a Borrower to the extent that it has liabilities under the
Telekabel Notes.
3.2 Accession as Guarantor
----------------------
Telekabel Wien agrees to become an Acceding Guarantor under the Principal
Agreement (subject always to the provisions of clause 9.1(a) of the
Principal Agreement) and to be bound by the terms of the Principal
Agreement as an Acceding Guarantor in accordance with clause 9.17 of the
Principal Agreement and to be bound by the terms of the Security Trust Deed
as a Guarantor in accordance with clause 10.16 of the Security Trust Deed.
3.3 Address for notices
-------------------
The address for notices of Telekabel Wien for the purposes of clause 19.1
of the Principal Agreement is:
Telekabel Wien G.m.b.H.
Eilachgasse 116
1100, Wien, Austria
Telefax: 431 1701 211
Attention: Chief Financial Officer
3.4 Telekabel Notes
---------------
The parties to this Supplemental Agreement hereby agree and confirm that
the "terms and conditions" of the Telekabel Notes, as referred to in
paragraph 4 of the pro forma Telekabel Note set out in schedule 14 to the
Principal Agreement, shall be the terms and conditions of the Principal
Agreement as from time to time amended, varied, extended, restated,
refinanced or replaced, mutatis mutandis, and that such terms and
conditions shall be deemed to be incorporated in each Telekabel Note as if
set out explicitly therein. The parties further confirm that, for the
purposes of the Principal Agreement, the amount outstanding under each
Telekabel Note shall be treated as an Advance made under the Principal
Agreement in an amount equal to the nominal amount of such Telekabel Note,
for a Term equal to the term of such Telekabel Note.
4 Waiver
------
4.1 Norway
------
The Banks hereby agree to waive any breach of the Principal Agreement,
including, but not limited to, breaches of clause 4.9(B), clause 11.1(ac)
and clause 11.1(ad) of the Principal Agreement, that may have occurred as a
consequence of the fact that the Norwegian Merger has taken place prior to
the date of this Supplemental Agreement and prior to the date of the
accession of Telekabel Wien, provided that on or before the Effective Date
there shall be delivered the documents and evidence referred to in schedule
3 part C and
<PAGE>
schedule 11 part B of the Principal Agreement and provided that on the
Effective Date the Norwegian Borrower shall borrow the Advance referred to
in clause 4.9(B) of the Principal Agreement.
5 Representations and warranties
------------------------------
5.1 Each of the Obligors (in the case of Telekabel Wien, in respect of itself
only) represents and warrants to each of the Banks, the Arranger, the
Security Trustee and the Agent that:
(a) Representations and warranties in Principal Agreement
-----------------------------------------------------
the representations and warranties set out in clause 10.1 of the
Principal Agreement which are to be repeated in accordance with clause
10.3 of the Principal Agreement are true and correct as if made at the
date of this Supplemental Agreement with reference to the facts and
circumstances existing at such date;
(b) Corporate power
---------------
each of the Obligors has power to execute, deliver and perform its
obligations under this Supplemental Agreement (and, in the case of
Telekabel Wien the Austrian Security Document); all necessary
corporate, shareholder and other action has been taken to authorise
the execution, delivery and performance of this Supplemental Agreement
(and, in the case of Telekabel Wien, the Austrian Security Document)
and, in the case of Telekabel Wien, no limitation on the powers of
Telekabel Wien to borrow or to give guarantees will be exceeded as a
result of the borrowings by Telekabel Wien under the Principal
Agreement or the giving of the Guarantee by Telekabel Wien (as limited
by clause 9.1(a));
(c) Binding obligations
-------------------
this Supplemental Agreement (and, in the case of Telekabel Wien, the
Austrian Security Document) constitutes valid and legally binding
obligations of each of the Obligors enforceable in accordance with its
terms, subject to the qualifications contained in the legal opinions
referred to in schedule 3 part A of the Principal Agreement and in
clause 7.1(j) and mandatory provisions of law affecting creditors
rights generally;
(d) No conflict with other obligations
----------------------------------
the execution and delivery of, the performance of its obligations
under, and compliance with the provisions of, this Supplemental
Agreement (and, in the case of Telekabel Wien, the Austrian Security
Document) by the Obligors will not (i) contravene any existing
applicable law, statute, rule or regulation or any judgment, decree or
permit to which any of the Obligors is subject, (ii) conflict with, or
result in any breach of any of the
<PAGE>
terms of, or constitute a default under, any agreement or other
instrument to which any of the Obligors is a party or is subject or by
which it or any of its property is bound, (iii) contravene or conflict
with any provision of any Obligor's constitutive documents (iv) breach
in any material respect any term of the Licences or Necessary
Authorisations or (v) save for the Encumbrances granted to the
Security Trustee pursuant to the Security Documents, result in the
creation or imposition of or oblige any Obligor to create any
Encumbrance (other than a Permitted Encumbrance) on any member of the
Restricted Group's undertakings, assets, rights or revenues;
(e) Consents obtained
-----------------
every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities
or courts (other than the Licences and the Necessary Authorisations)
required by each of the Obligors to authorise, or required by the
Obligors in connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this Supplemental
Agreement (and, in the case of Telekabel Wien, the Austrian Security
Document) or the performance by each of the Obligors of their
respective obligations under this Supplemental Agreement (and, in the
case of Telekabel Wien, the Austrian Security Document) has been
obtained or made and is in full force and effect and there has been no
material default in the observance of the conditions or restrictions
(if any) imposed in, or in connection with, any of the same;
(f) No filings required
-------------------
save for the filings, registrations and notarisations referred to in
the legal opinions referred to in clause 7.1(j), it is not necessary
to ensure the legality, validity, enforceability or admissibility in
evidence of this Supplemental Agreement (and, in the case of Telekabel
Wien, the Austrian Security Document) that it or any other instrument
be notarised, filed, recorded, registered or enrolled in any court,
public office or elsewhere in any Relevant Jurisdiction or that any
stamp, registration or similar tax or charge be paid in any Relevant
Jurisdiction on or in relation to this Supplemental Agreement or the
Austrian Security Document and this Supplemental Agreement and the
Austrian Security Document are each in proper form for their
respective enforcement in the courts of each Relevant Jurisdiction.
5.2 Repetition
----------
The representations and warranties in clause 5.1 (other than (a) and (e))
shall be deemed to be repeated by each of the Obligors on and as of each
Drawdown Date and each Maturity Date as if made with reference to the facts
and circumstances existing on each such day.
<PAGE>
6 Fees and Expenses
-----------------
6.1 Expenses
--------
The Parent shall pay to the Agent on demand all expenses (including legal
fees) incurred by the Agent, the Security Trustee and the Arranger in
connection with the negotiation, preparation and execution of this
Supplemental Agreement.
6.2 Stamp and other duties (general)
--------------------------------
The Parent shall pay all stamp, documentary, registration or other duties
or Taxes (including any duties or Taxes payable by, or assessed on, the
Banks, the Agent, the Security Trustee or the Arranger) imposed on or in
connection with this Supplemental Agreement or the Facility and shall
indemnify the Agent, the Arranger, the Security Trustee and the Banks
against any liability arising by reason of any delay or omission by the
Parent to pay such duties or Taxes.
6.3 Stamp and other duties (Austrian Security Document)
---------------------------------------------------
The Parent shall pay all stamp, documentary, registration or other duties
or Taxes payable by, or assessed on, Telekabel Wien in connection with the
Austrian Security Document and shall indemnify Telekabel Wien against any
liability arising by reason of any delay or omission by the Parent to pay
such duties or Taxes.
7 Effective Date
--------------
7.1 Conditions precedent documentation
----------------------------------
The amendments to be made to the Principal Agreement by this Supplemental
Agreement shall take effect on and from the date (the "Effective Date") on
which the Agent notifies the Parent and the Banks that the Agent has
received the following documents in form and substance satisfactory to it:
(a) the Austrian Security Document duly executed by Telekabel Wien;
(b) a list of the receivables pledged to the Banks pursuant to the
Austrian Security Document;
(c) written confirmation from the secretary of Telekabel Wien that the
pledge pursuant to the Austrian Security Document has been noted in
the computerised company books of Telekabel Wien;
(d) originals of the notice and acknowledgement of the pledge of bank
account duly signed by Telekabel Wien and acknowledged by the relevant
bank, each in the form set out in the schedule to the Austrian
Security Document;
(e) a copy, certified as a true copy by an Authorised Officer of the
Parent, of resolutions of the Supervisory Boards and/or Boards of
Directors of each
<PAGE>
Obligor evidencing approval of this Supplemental Agreement (and, in
the case of Telekabel Wien, the Austrian Security Document and the
Principal Agreement as amended by this Supplemental Agreement) and
authorising its appropriate officers to execute and deliver this
Supplemental Agreement and, in the case of Telekabel Wien, the
Austrian Security Document and to give all notices and take all other
action required by the relevant Obligor thereunder;
(f) specimen signatures of the persons authorised in the resolutions of
the Boards of Directors referred to in clause 7.1(e);
(g) a copy, certified to be a true copy by an Authorised Officer of the
Parent, of the constitutional documents of Telekabel Wien in the
version which has been approved by the shareholders meeting of 3rd
December 1997, together with confirmation that the constitutional
documents of each other Obligor have not changed from those already
delivered to the Agent under the Principal Agreement;
(h) a copy, certified as a true copy by an Authorised Officer of the
Parent, of all consents, authorisations, licences and approvals
required by each of the Obligors to authorise, or required by each of
the Obligors in connection with, the execution, delivery, validity,
enforceability and admissibility in evidence of this Supplemental
Agreement and, in the case of Telekabel Wien, the Austrian Security
Document, and the performance by each of the Obligors of their
respective obligations under this Supplemental Agreement and, in the
case of Telekabel Wien, the Austrian Security Document;
(i) a letter from Telekabel Wien's agents for the receipt of service of
process accepting its appointment;
(j) an opinion of Ortner Poch & Foramitti Rechtsanwalte, special legal
advisers to the Banks in Austria, an opinion of Norton Rose special
legal advisers to the Banks in England and opinions of special legal
advisers to the Banks in the Netherlands, Belgium, Norway each in a
form approved by the Agent acting on the instructions of the Majority
Banks; and
(k) a copy, certified by the Parent to be a true, complete and up to date
copy of an unconditional and irrevocable instruction from CNA to
Telekabel Wien ("Anweisung auf Schuld") that all Distributable Profits
of Telekabel Wien which are payable to CNA, to the extent that at any
time they exceed the principal amount of intercompany loans made by
Telekabel Wien to CNA pursuant to clause 11.1(z) of the Principal
Agreement which are outstanding at that time, are to be made the
subject of the Guarantee pursuant to clause 9.1(a) of the Principal
Agreement in a form satisfactory to the Agent.
<PAGE>
7.2 Further Conditions Precedent
----------------------------
The Agent shall not give notice of the occurrence of the Effective Date
under clause 7.1 (unless expressly instructed in writing by the Majority
Banks to do so) if, on the date on which it would otherwise have done so,
the Agent has received actual knowledge that an Event of Default has
occurred and is continuing or that any of the representations and
warranties in clause 5.1 are untrue or incorrect in any material respect as
at such date as if made on such date with respect to the facts and
circumstances existing at such date.
8 Miscellaneous
-------------
8.1 Continuation of Principal Agreement and the Security Documents
--------------------------------------------------------------
Save as amended by this Supplemental Agreement, the provisions of the
Principal Agreement and the Security Documents shall continue in full force
and effect and the Principal Agreement and this Supplemental Agreement and
each Security Document and this Supplemental Agreement shall be read and
construed as one instrument.
8.2 Counterparts
------------
This Supplemental Agreement may be executed in any number of counterparts
and by the different parties on separate counterparts, each of which when
so executed and delivered shall be an original but all counterparts shall
together constitute one and the same instrument.
9 Governing Law
-------------
This Supplemental Agreement shall be governed by English law.
IN WITNESS whereof the parties hereto have caused this Supplemental Agreement to
be duly executed the day and year first above written.
<PAGE>
Schedule 1
----------
Borrowers
---------
<TABLE>
<CAPTION>
Company Country of Incorporation Address
- ------- ------------------------ -------
<S> <C> <C>
United and Philips The Netherlands Fred. Roeskestraat 123
Communications B.V. P.O. Box 74763
1076 EE Amsterdam
Telekabel Wien G.m.b.H. Austria Erlachgasse 116, 1100
Wien, Austria
Janco Multicom A/S Norway Ensjoveien 7,
(formerly known as Janco 0655, Oslo
Kabel-TV A/S)
(as legal successor to
Norkabelgruppen A/S)
</TABLE>
<PAGE>
Schedule 2
----------
Guarantors
----------
<TABLE>
<CAPTION>
Company Country of Incorporation Address
- ------- ------------------------ -------
<S> <C> <C>
United and Philips The Netherlands Fred Roeskestraat 123
Communications B.V. P O Box 74763
1070 BT
Amsterdam
Cable Networks Austria The Netherlands Fred Roeskestraat 123
Holding b.v. P O Box 74763
1070 BT
Amsterdam
Telekabel Wien G.m.b.H. Austria Erlachgasse 116
1100, Wien, Austria
Telekabel Klagenfurt Austria Villacherstrasse 161
G.m.b.H. 9020, Klagenfurt,
Austria
Telekabel Graz G.m.b.H. Austria Lazarettgurtel 81,
8020, Graz, Austria
Telekabel-Ferneshnetz Austria Neunkirchnerstrasse
Wiener Neustadt 24, 2700, Wiener
Neunkirchen Betriebs- Neustadt, Austria
G.m.b.H.
Telekabel-Fernsehnetz Austria Hauptplatz 13, 2514
Region Baden Betriebs- Traiskirchen, Austria
G.m.b.H.
Radio Public S.A. Belgium Chazallaan 140, 1030
Brussels, Belgium
Janco Multicom A/S Norway Ensjoveien 7, 0655
(formerly known as Janco Oslo, Norway
Kabel-TV A/S)
</TABLE>
<PAGE>
The Parent (in its capacity as a Borrower
- -----------------------------------------
and a Guarantor)
- ----------------
SIGNED for and on behalf of )
UNITED AND PHILIPS COMMUNICATIONS B.V. )
by: /s/ STEVE BUTLER )
The other Borrowers
- -------------------
SIGNED for and on behalf of )
JANCO MULTICOM A/S )
(formerly known as Janco Kabel-TV A/S) )
by: /s/ STEVE BUTLER )
SIGNED for and on behalf of )
TELEKABEL WIEN G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN )
The other Guarantors
- --------------------
SIGNED for and on behalf of )
CABLE NETWORKS AUSTRIA HOLDING B.V. )
by: /s/ STEVE BUTLER )
SIGNED for and on behalf of )
TELEKABEL WIEN G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN )
SIGNED for and on behalf of )
TELEKABEL KLAGENFURT G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN )
SIGNED for and on behalf of )
TELEKABEL-FERNSEHNETZ WIENER )
NEUSTADT/NEUNKIRCHEN )
BETRIEBS-G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN
SIGNED for and on behalf of )
TELEKABEL GRAZ G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN )
<PAGE>
SIGNED for and on behalf of )
TELEKABEL-FERNSEHNETZ REGION )
BADEN BETRIEBS-G.M.B.H. )
by: /s/ ANTON VAN VOSKUIJLEN )
SIGNED for and on behalf of )
RADIO PUBLIC S.A. )
by: /s/ STEVE BUTLER )
SIGNED for and on behalf of )
JANCO MULTICOM A/S )
(formerly known as Janco Kabel-TV A/S) )
by: )
The Arranger
- ------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: )
The Banks
- ---------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: /s/ DAVID FRENCH )
SIGNED for and on behalf of )
BARCLAYS BANK PLC )
by: )
SIGNED for and on behalf of )
CIBC WOOD GUNDY PLC )
by: )
SIGNED for and on behalf of )
HSBC INVESTMENT BANK PLC )
by: )
SIGNED for and on behalf of )
NATIONSBANK N.A. )
by: )
<PAGE>
SIGNED for and on behalf of )
THE ROYAL BANK OF SCOTLAND PLC )
by: )
The Agent
- ---------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: /s/ DAVID FRENCH )
The Security Trustee
- --------------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: /s/ DAVID FRENCH )
<PAGE>
EXHIBIT 10.3
LOAN AGREEMENT
for a
U.S.$125,000,000 Extendable Senior Secured Bridge Loan Facility
to
BELMARKEN HOLDING B.V.
Guaranteed by
CABLE NETWORK NETHERLANDS HOLDING B.V.
BINAN INVESTMENTS B.V.
and
STIPDON INVESTMENTS B.V.
Arranged by
THE TORONTO-DOMINION BANK
and
TORONTO DOMINION CAPITAL
Agent
THE TORONTO-DOMINION BANK
Security Trustee
THE TORONTO-DOMINION BANK
Norton Rose
London
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
--------
Clause Heading Page
<C> <S> <C>
1 Purpose and definitions.......................................................................1
1.1 Purpose..............................................................................1
1.2 Definitions..........................................................................1
1.3 Headings............................................................................21
1.4 Construction of certain terms.......................................................21
1.5 Majority Banks......................................................................23
1.6 Agent's opinion.....................................................................23
2 The Facility.................................................................................24
2.1 Amount..............................................................................24
2.2 Obligations several.................................................................24
2.3 Interests several...................................................................24
3 Conditions...................................................................................25
3.1 Documents and evidence..............................................................25
3.2 General conditions precedent........................................................25
3.3 Waiver of conditions precedent......................................................25
3.4 Notification........................................................................25
3.5 Conditions subsequent...............................................................25
4 The Loan.....................................................................................28
4.1 Drawdown............................................................................28
4.2 Amount and application..............................................................28
4.3 Notification to Banks...............................................................28
4.4 Termination of Commitments..........................................................28
5 Interest and Interest Periods; alternative interest rates....................................29
5.1 Interest on the Loan................................................................29
5.2 Interest Periods....................................................................29
5.3 Applicable Margin...................................................................30
5.4 Interest for late payment...........................................................30
5.5 Notification of interest rate.......................................................31
5.6 Reference Bank quotations...........................................................31
5.7 Market disruption; non-availability.................................................31
6 Repayment, prepayment and cancellation.......................................................33
6.1 Repayment...........................................................................33
6.2 Voluntary prepayment................................................................33
6.3 Additional voluntary prepayment.....................................................33
6.4 Amounts payable on prepayment.......................................................33
6.5 Mandatory prepayment................................................................33
6.6 Prepayments generally...............................................................35
7 Fees and expenses............................................................................36
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
7.1 Fees................................................................................36
7.2 Expenses............................................................................36
7.3 Value Added Tax.....................................................................37
7.4 Stamp and other duties..............................................................37
8 Payments and Taxes; accounts and calculations................................................38
8.1 No set-off or counterclaim; distribution to the Banks...............................38
8.2 Payments by the Banks...............................................................38
8.3 Non-Banking Days....................................................................38
8.4 Agent may assume receipt............................................................38
8.5 Grossing-up for Taxes...............................................................39
8.6 Qualifying Banks....................................................................39
8.7 Claw-back of Tax benefit............................................................39
8.8 Certification to secure a Tax benefit...............................................40
8.9 Bank accounts.......................................................................41
8.10 Partial payments....................................................................41
8.11 Calculations........................................................................42
8.12 Certificates conclusive.............................................................42
9 Guarantee....................................................................................43
9.1 Covenant to pay.....................................................................43
9.2 Guarantors as principal debtors; indemnity..........................................43
9.3 Limitation..........................................................................43
9.4 No security taken by Guarantors.....................................................44
9.5 Interest............................................................................44
9.6 Continuing security and other matters...............................................44
9.7 New accounts........................................................................45
9.8 Liability unconditional.............................................................45
9.9 Collateral Instruments..............................................................45
9.10 Waiver of Guarantors' rights........................................................45
9.11 Suspense accounts...................................................................46
9.12 Settlements conditional.............................................................46
9.13 Guarantors to deliver up certain property...........................................47
9.14 Retention of this guarantee.........................................................47
9.15 Changes in constitution or reorganizations of Banks.................................47
9.16 Other guarantors....................................................................47
9.17 Covenant by the Guarantors..........................................................48
10 Representations and warranties...............................................................49
10.1 Repeated representations and warranties.............................................49
10.2 Further representations and warranties..............................................52
10.3 Repetition..........................................................................56
11 Undertakings.................................................................................57
11.1 Positive Covenants..................................................................57
11.2 Negative Covenants..................................................................63
11.3 Assistance with syndication arrangements............................................67
12 Financial covenants..........................................................................68
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
13 Events of Default............................................................................69
13.1 Events of Default...................................................................69
13.2 Remedies............................................................................76
13.3 Demand basis........................................................................77
14 Indemnities..................................................................................78
14.1 Miscellaneous indemnities...........................................................78
14.2 Currency of account; currency indemnity............................................78
14.3 Environmental indemnity.............................................................79
15 Unlawfulness and increased costs; mitigation.................................................80
15.1 Unlawfulness........................................................................80
15.2 Increased costs.....................................................................80
15.3 Exceptions..........................................................................81
15.4 Mitigation..........................................................................82
16 Set-off and pro rata payments................................................................83
16.1 Set-off.............................................................................83
16.2 Pro rata payments...................................................................83
16.3 No release..........................................................................84
16.4 No charge...........................................................................84
17 Assignment, substitution and lending offices.................................................85
17.1 Benefit and burden..................................................................85
17.2 No assignment by the Obligors.......................................................85
17.3 Substitution........................................................................85
17.4 Reliance on Substitution Certificate................................................86
17.5 Authorization of Agent..............................................................86
17.6 Construction of certain references..................................................86
17.7 Lending offices.....................................................................86
17.8 Disclosure of information...........................................................86
18 Arrangers, Agent, Security Trustee and Reference Banks.......................................88
18.1 Appointment of Agent and Security Trustee...........................................88
18.2 Agent's actions.....................................................................88
18.3 Agent's duties......................................................................88
18.4 Agent's rights......................................................................89
18.5 No liability of Arrangers, Security Trustee and Agent...............................90
18.6 Non-reliance on Arrangers, Security Trustee or Agent................................91
18.7 No Responsibility on Arrangers, Security Trustee or Agent for any Obligor's
performance.........................................................................91
18.8 Reliance on documents and professional advice.......................................92
18.9 Other dealings......................................................................92
18.10 Rights of Agent and Security Trustee as Bank; no partnership........................92
18.11 Amendments; waivers.................................................................92
18.12 Reimbursement and indemnity by Banks................................................93
18.13 Retirement of Agent.................................................................94
18.14 Change of Reference Banks...........................................................95
18.15 Prompt distribution of proceeds.....................................................95
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
19 Notices and other matters....................................................................96
19.1 Notices.............................................................................96
19.2 Notices through the Agent...........................................................97
19.3 No implied waivers, remedies cumulative.............................................97
19.4 English translations................................................................97
19.5 Counterparts........................................................................97
19.6 Change of governing law.............................................................97
20 Governing law and jurisdiction...............................................................99
20.1 Law.................................................................................99
20.2 Submission to jurisdiction..........................................................99
20.3 Agent for service of process........................................................99
<CAPTION>
Schedules
<C> <S> <C>
1 Part A - The Banks and their Commitments....................................................100
Part B - Corporate Group members............................................................101
Part C - Partnership Group Members..........................................................106
2 Part A - Form of Drawdown Notice............................................................107
Part B - Form of Rollover Notice............................................................108
Part C - Form of Extension Notice...........................................................110
3 Documents and evidence required as conditions precedent to the Loan.........................112
4 Form of Substitution Certificate............................................................117
5 Compliance Certificate......................................................................121
6 Licenses....................................................................................123
7 Permitted Borrowings........................................................................134
8 Permitted Encumbrances......................................................................137
9 Additional information and documents included within the Information Package................142
10 Joint Venture Agreements....................................................................144
11 Key Group Members...........................................................................149
</TABLE>
<PAGE>
THIS AGREEMENT is dated 5th December, 1997 and made BETWEEN:
(1) BELMARKEN HOLDING B.V. as the Borrower;
(2) CABLE NETWORK NETHERLANDS HOLDING B.V., BINAN INVESTMENTS B.V. and STIPDON
INVESTMENTS B.V. as Guarantors;
(3) THE TORONTO-DOMINION BANK and TORONTO DOMINION CAPITAL as Arrangers;
(4) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set out
in part A of schedule 1;
(5) THE TORONTO-DOMINION BANK as Agent; and
(6) THE TORONTO-DOMINION BANK as Security Trustee.
IT IS AGREED as follows:
1 Purpose and definitions
-----------------------
1.1 Purpose
-------
This Agreement sets out the terms and conditions upon and subject to which
the Banks agree, according to their several obligations, to make available
to the Borrower an extendable senior secured bridge loan facility of up to
U.S.$125,000,000 to be used for the purpose of (i) part financing the
purchase price payable by the Borrower to the Parent for the Unrestricted
Assets, (ii) funding the initial balance on the Interest Reserve Account,
and (iii) financing expenses incurred in connection with the negotiation of
the Facility.
1.2 Definitions
-----------
In this Agreement, unless the context otherwise requires:
"A2000" means A2000 Holding N.V., a limited liability company incorporated
under the laws of the Netherlands with its registered office at Eindhoven
and its business office at Willem de Zwijgerland 350, 1055 RD Amsterdam,
The Netherlands;
"A2000 Joint Venture Agreement" means the joint venture agreement between
the Parent and US West International B.V. dated 13 February 1996, as
amended by a consent agreement between the Parent, US West International
B.V., Philips Media B.V., UIH and JVI dated 27th September 1997;
"Acceptable Consideration" means, in relation to any Permitted Disposal,
(i) immediately payable or same day cash payable to the member of the Group
which is the seller or (ii) a combination of immediately payable or same
day cash payable to the member of the Group which is the seller, deferred
cash payment obligations payable to the member of the Group which is the
seller
1
<PAGE>
and/or immediately payable or same day cash payable to the credit of the
relevant Escrow Account (if any) Provided that (a) the aggregate of such
deferred cash payment obligations and the amount paid to the credit of such
Escrow Account does not exceed 30 per cent. of the sale price and (b) the
terms of such deferred cash payment obligations and on which amounts are
released from such Escrow Account are acceptable to the Agent (acting on
the instructions of the Majority Banks);
"Account Charge" means the charge over the Charged Accounts and the amounts
from time to time standing to the credit thereof entered into, or to be
entered into, by the Borrower in favour of the Security Trustee;
"Affiliate" of a person means any company, partnership or other entity
which is directly or indirectly related to such person, for which purpose a
company, partnership or other entity is "related" to a person if 15 per
cent. or more of the Ownership Interests in such company, partnership or
other entity are owned or controlled by such person or by its Subsidiary or
its Affiliate, and "Affiliated" shall be construed accordingly;
"Agent" means The Toronto-Dominion Bank of Triton Court, 14-18 Finsbury
Square, London EC2A 1DB or such other person as may be appointed agent for
the Banks pursuant to clause 18.13;
"Anticipated Interest Amount" means, on any day:
(i) for any period equal to or greater than six months, the applicable
Margin (calculated in accordance with the applicable table in clause
5.1) and six month LIBOR calculated on such day multiplied by the
amount of the Loan outstanding (taking into account (without double-
counting) any repayments required to be made during such period under
clause 6.1, and any prepayments anticipated (following receipt by the
Agent of a prepayment notice) or required to be made during such
period under clauses 6.2 or 6.5, but only to the extent that the funds
which will be used to make such prepayments are standing to the credit
of the Charged Accounts), all calculated in accordance with clause
8.11; or
(ii) for any period less than six months, the applicable Margin (calculated
in accordance with the applicable table in clause 5.1) and LIBOR for
the period most closely approximating to such period calculated on
such day multiplied by the amount of the Loan outstanding (taking into
account (without double-counting) any repayments required to be made
during such period under clause 6.1, and any prepayments anticipated
(following receipt by the Agent of a prepayment notice) or required to
be made during such period under clauses 6.2 or 6.5, but only to the
extent that the funds which will be used to make such prepayments are
standing to the credit of the Charged Accounts), all calculated in
accordance with clause 8.11;
2
<PAGE>
"Arrangers" means The Toronto-Dominion Bank of Triton Court, 14-18 Finsbury
Square, London EC2A 1DB and Toronto Dominion Capital of 31 West 52nd
Street, New York, N.Y. 10019-6101;
"Associated Company" means a Subsidiary or a Holding Company of a person
and any other Subsidiary of that Holding Company;
"Authorised Officer" means, in relation to any person, that officer or
officers of such person authorised to sign notices, requests, confirmations
or other documents referred to in this Agreement or relating to the
Facility;
"Availability Period" means the period from the date of this Agreement and
ending on whichever is the earlier of (i) the Termination Date or (ii) the
date on which the Total Commitments are reduced to zero pursuant to clause
13.2 or 15.1;
"Banking Day" means a day (other than Saturday or Sunday) on which dealings
in deposits in Dollars are carried on in the London Interbank Market and
(if any calculation in respect of, or transfer of funds in, Dollars is
required to be made on such day) on which banks and foreign exchange
markets are open for business in the City of London and in New York City;
"Banks" means the banks and financial institutions listed in part A of
schedule 1 and includes their successors in title and Substitutes;
"Beneficiaries" has the meaning given to that term in the Security Trust
Deed;
"Borrowed Money" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks, (ii) any bond, note, loan stock,
debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than on a
non-recourse basis), (v) payments for assets acquired or services supplied
deferred for a period of over 90 days after the relevant assets were or are
to be acquired or the relevant services were or are to be supplied, (vi)
finance leases and hire purchase contracts, (vii) any other transaction
(including without limitation forward sale or purchase agreements) having
the commercial effect of a borrowing or raising of money or of any of (ii)
to (vi) above and (viii) guarantees in respect of Indebtedness of any
person falling within any of (i) to (vii) above;
"Borrower" means Belmarken Holding B.V., a limited liability company
incorporated under the laws of the Netherlands with its registered office
at Amsterdam and its business office at Frederik Roeskestraat 123, 1076EE
Amsterdam, The Netherlands;
"Cable Systems" means the telecommunications and/or television systems
constructed or to be constructed in the areas covered by the Licences and
includes any part of such system and all modifications, substitutions,
replacements, renewals and extensions made to such systems;
3
<PAGE>
"Ceska Programova" means Ceska Programova Spolecnost s.r.o., a Czech
limited liability company, of Praha 4, Pod Visnovkou 21 PSC 14000;
"Charged Accounts" means the Interest Reserve Account and the Disposal
Proceeds Account;
"CNBH" means Cable Network Brabant Holding B.V., a limited liability
company incorporated under the laws of the Netherlands with its registered
office at Eindhoven and its business office at Frederik Roeskestraat 123,
1076EE Amsterdam, The Netherlands;
"Collateral Instruments" means notes, bills of exchange, certificates of
deposit and other negotiable and non-negotiable instruments, guarantees and
any other documents or instruments which contain or evidence an obligation
(with or without security) to pay, discharge or be responsible directly or
indirectly for any Indebtedness or liabilities under this Agreement and
includes Encumbrances;
"Combivisie" means Stichting Combivisie Regio, the assets of which are
proposed to be acquired by CNBH;
"Commitment" means, in relation to a Bank, at any relevant time the amount
set opposite its name in part A of schedule 1 and/or, in the case of a
Substitute, the amount novated as specified in the relevant Substitution
Certificate, as reduced, in each case, by any relevant term of this
Agreement and so that, if at such time the Total Commitments have been
reduced to zero, references to a Bank's Commitment shall be construed as a
reference to that Bank's Commitment immediately prior to such reduction to
zero;
"Completion Date" means the date of this Agreement;
"Compliance Certificate" means a certificate substantially in the form set
out in schedule 5 in relation to the compliance (or otherwise) with the
undertakings in clause 11 issued by the Authorised Officer;
"Contribution" means, in relation to a Bank, the principal amount of the
Loan owing to such Bank at any relevant time;
"Corporate Group Member" means the Obligors, those companies and
corporations listed in part B of schedule 1 and any other company or
corporation which becomes a Subsidiary or Affiliate of the Borrower after
the date of this Agreement;
"Deed of Pledge" means a deed of pledge to be entered into between the
Security Trustee and any Relevant Person pursuant to the terms of this
Agreement in a form satisfactory to the Agent (acting on the instructions
of all the Banks);
"Default" means any Event of Default or any event or circumstance which
would, upon the giving of a notice by the Agent and/or the expiry of the
relevant
4
<PAGE>
period and/or the fulfilment of any other condition (in each case as
specified in clause 13.1), constitute an Event of Default;
"Derivatives Contract" means a contract, agreement or transaction which is:
(i) a rate swap, basis swap, commodity swap, forward rate transaction,
commodity option, equity (or equity or other index) swap or option,
bond option, interest rate option, foreign exchange transaction,
collar or floor, currency swap, currency option or any other similar
transaction; and/or
(ii) any combination of such transactions,
in each case, whether on-exchange or otherwise;
"Disclosure Letter" means the letter from the Borrower to the Agent dated
on or about the date hereof, the form and content of which have previously
been approved by the Agent;
"Disposal Proceeds Account" means the Dollar-denominated account (the
account number of which will be advised by the Security Trustee on or
before the Drawdown Date, but which may be redesignated from time to time)
established by the Borrower with the Security Trustee (or as it may direct)
and into which the proceeds of disposals are to be paid pursuant to clause
6.5;
"Disposals Plan" means the plan referred to in paragraph (u) of schedule 3;
"Dollars" and "U.S.$" mean the lawful currency for the time being of the
United States of America and in respect of all payments to be made under
this Agreement in Dollars means funds which are for the same day settlement
in the New York Clearing House Interbank Payments System (or such other
Dollar funds as may at the relevant time be customary for the settlement of
international banking transactions denominated in Dollars);
"Drawdown Date" means the date, being a Banking Day falling within the
Availability Period, on which the Loan is, or is to be, drawn down;
"Drawdown Notice" means a notice in the form, or substantially in the form,
of part A of schedule 2, duly completed with particulars of each Tranche;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust
arrangement for the purpose of providing security or other security
interest of any kind securing any obligation of any person or any other
arrangement having the effect of conferring rights of retention or other
disposal rights over an asset (including without limitation title transfer
and/or retention arrangements having a similar effect or a deposit of money
with the primary intention of affording a right of set-off) and includes
any agreement to create any of the foregoing but does not include liens
arising in the ordinary course of trading by operation of law and not by
way of contract;
5
<PAGE>
"Environmental Claim" means any claim, notice prosecution, demand, action,
official warning, abatement or other order (conditional or otherwise)
relating to Environmental Matters or any notification or order requiring
compliance with the terms of any Environmental Licence or Environmental
Law;
"Environmental Law" includes all or any law, statute, rule, regulation,
treaty, by-law, code of practice, order, notice, demand, decision of the
courts or of any governmental authority or agency or any other regulatory
or other body in any jurisdiction relating to Environmental Matters;
"Environmental Licence" includes any permit, licence, authorisation,
consent or other approval required at any time by any Environmental Law;
"Environmental Matters" includes (a) the generation, deposit, disposal,
keeping, treatment, transportation, transmission, handling, importation,
exportation, processing, collection, sorting, presence or manufacture of
any waste or any Relevant Substance; (b) nuisance, noise, defective
premises, health and safety at work or elsewhere; and (c) the pollution,
conservation or protection of the environment (both natural and built) or
of man or any living organisms supported by the environment or any other
matter whatsoever affecting the environment or any part of it;
"Escrow Account" means, in relation to any Permitted Disposal, an escrow
account established in respect of such Permitted Disposal for the sole
purpose of holding cash forming part of the proceeds of such Permitted
Disposal on terms that, subject to no relevant claim (as defined in
paragraph (a)(i) of the definition of "Permitted Disposal") in respect of
such Permitted Disposal being successfully made against the member of the
Group which is the seller within a period approved by the Agent (acting on
the instructions of the Majority Banks), such cash shall be paid away in
accordance with clause 6.5;
"Event of Default" means any of the events or circumstances described in
clause 13.1;
"Extension Conditions" means all of the following:
(a) all of the Letters of Consent are received by the Agent on or before
31st March, 1998; and
(b) either:
(i) mandatory prepayments of the Loan totalling at least
U.S.$62,500,000 have been made under clause 6.5(a), (b), (c), (f)
and/or (g); or
(ii) mandatory prepayments of the Loan totalling at least
U.S.$40,000,000 have been made under clause 6.5(d), following the
subscription for cash for new Ownership Interests in the Borrower
which cash has been ultimately provided by UIH; and
6
<PAGE>
(c) the ratio of Total Valuation Amount: Net Loan is not less than 4:1;
and
(d) the credit balance on the Interest Reserve Account exceeds the greater
of:
(i) the Anticipated Interest Amount accruing on the Loan over each
period commencing on a day between the date of receipt by the
Agent of the Extension Notice and the Initial Repayment Date
(both dates inclusive) and ending on the Final Repayment Date;
and
(ii) U.S.$5,000,000; and
(e) no Default shall occur or be continuing during the period commencing
on the date of receipt by the Agent of the Extension Notice and ending
on the Initial Repayment Date (both dates inclusive);
"Extension Notice" means a notice in the form, or substantially in the
form, of part C of schedule 2, duly completed;
"Facility" means the term loan facility granted by the Banks to the
Borrower under this Agreement;
"Fair Market Value" means, in relation to the UIH Shares, the amount
determined by multiplying the number of UIH Class A Common Stock comprising
the UIH Shares as of the date on which the Fair Market Value is being
determined by the average of the closing prices for UIH Class A Common
Stock on NASDAQ for the five NASDAQ trading days immediately preceding the
determination date;
"Final Repayment Date" means the date falling 18 months after the
Completion Date;
"GAAP" means, in relation to any Key Group Member, generally accepted
accounting principles and practices in the country of incorporation or
establishment of such Key Group Member;
"Group" means all the Corporate Group Members and Partnership Group Members
from time to time;
"Guarantee" means the guarantee of the Guarantors contained in clause 9 and
includes each separate or independent stipulation or agreement by the
Guarantors contained in clause 9;
"Guaranteed Liabilities" means all the moneys, obligations and liabilities
expressed to be guaranteed by the Guarantors in clause 9.1;
"Guarantors" mean KTE Newco, UII Newco and Kabelkom Newco;
7
<PAGE>
"Guilders" and "NLG" mean the lawful currency for the time being of the
Netherlands and in respect of all payments to be made under this Agreement
in Guilders mean immediately available, freely transferable, cleared funds;
"Holding Company" in relation to a person, means an entity of which that
person is a Subsidiary;
"Incapacity" means, in relation to a person, the insolvency, liquidation,
dissolution, winding-up, administration, receivership or other incapacity
of that person whatsoever (and in the case of a partnership, includes the
termination or change in composition of the partnership);
"Indebtedness" means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent;
"Independent Financial Adviser" means an accounting, appraisal or
investment banking firm of internationally recognised standing which, in
the opinion of the Security Trustee, is independent and qualified to
perform the task for which it is to be engaged;
"Information Memorandum" means the Information Memorandum dated November
1997 and any subsequent update approved by the Borrower distributed by the
Arrangers at the request of the Borrower and the Parent in connection with
this Agreement;
"Information Package" means the Information Memorandum and the other
information and documents listed in schedule 9;
"Initial Repayment Date" means the date falling 12 months after the
Completion Date;
"Intellectual Property Rights" means any patent, trademark, service mark,
registered design, trade name or copyright required to carry on the
business of any member of the Group;
"Intercompany Loan Agreement" means the loan agreements setting out the
terms of the Subsidiary Loans, the Reorganisation Loans and the
intercompany loans referred to in paragraph (w) of schedule 3 and the loan
agreements setting out the terms of any other Pledged Debt, provided that
the Security Trustee is a party thereto and that such terms (i) (except in
the case of the Subsidiary Loans) include terms that, except with the
consent of the Agent (acting on the instructions of the Majority Banks),
interest and principal on such Pledged Debt are not payable or repayable
(in each case) until all amounts from time to time expressed to be owing
under this Agreement and the Security Documents have been paid in full, and
(ii) are otherwise acceptable to the Agent (acting on the instructions of
the Majority Banks);
"Interest Payment Date" means the last day of an Interest Period;
8
<PAGE>
"Interest Period" means each period for the calculation of interest in
respect of the Loan ascertained in accordance with clause 5.2;
"Interest Reserve Account" means the Dollar-denominated account (the
account number of which will be advised by the Security Trustee on or
before the Drawdown Date, but which may be designated from time to time)
established by the Borrower with the Security Trustee (or as it may direct)
and into which U.S.$11,000,000 from the proceeds of drawing of the Loan
will be credited in accordance with clause 4.2(b);
"Ireland Interests" has the meaning given to it in the UII Partnership
Agreement, but includes, directly or indirectly, Princes;
"Israel Interests" has the meaning given to it in the UII Partnership
Agreement, but includes, directly or indirectly, Tevel;
"Joint Venturer" means each party to a Joint Venture Agreement;
"Joint Venture Agreement" means each agreement listed in schedule 10 and
any other agreement between a Key Group Member and any other shareholder in
a Corporate Group Member or any other partner in a Partnership Group Member
in relation to or regulating the holding of Ownership Interests in the
relevant Corporate Group Member or Partnership Group Member which is
entered into after the Completion Date with the consent of the Agent
(acting on the instructions of the Majority Banks);
"JVI" means Joint Venture, Inc., a corporation incorporated in the State of
Delaware, United States of America, and having its chief executive office
at 4643 South Ulster, Suite 1300, Denver, Colorado 80237, U.S.A.;
"Kabelkom" means Kabelkom Holding Co., a general partnership established
under the laws of Delaware, with an office at 4643 South Ulster Street,
Suite 1300, Denver, Colorado 80237 and its business office at Budatoki
u.59, 1111 Budapest, Hungary;
"Kabelkom Newco" means Stipdon Investments B.V., a limited liability
company incorporated under the laws of the Netherlands with its registered
office at Amsterdam and its business office at Frederik Roeskestraat 123,
1076EE Amsterdam, The Netherlands;
"Kabel Net Holding" means Kabel Net Holding A.S., a Czech joint stock
company, of Patia 4, Pod Visnovkou 21, PSC 14600 Prague, Czech Republic;
"Kabel Net Brno" means Kabel Net Brno A.S., a Czech joint stock company, of
Brno, Hybesova 38, Okres Brno-mesto BRNO, Czech Republic;
"Kabel Net Loans" means the loans referred to in paragraphs 16 and 17 of
schedule 7;
"Key Group Member" means each member of the Group listed in schedule 11;
9
<PAGE>
"Key Group Core Member" means each member of the Group referred to as such
in schedule 11, provided that, in the context of financial information and
the Management Base Case, a reference to a Key Group Core Member means such
Key Group Core Member and all its Subsidiaries and Affiliates together;
"KTA" means Kabeltelevisie Amsterdam B.V., a limited liability company
incorporated under the laws of the Netherlands with its registered office
at Amsterdam and its business office at Willem de Zwijgerlaan 350, 1055 RD
Amsterdam, The Netherlands;
"KTE" means Kabeltelevisie Eindhoven N.V. a limited liability company
incorporated under the laws of the Netherlands with its registered office
at Eindhoven and its business office at Prof. Dr. Dorgelolaan 28, 5613 AM
Eindhoven, The Netherlands;
"KTE Loans" means the loans referred to in paragraphs 18 and 19 of schedule
7;
"KTE Newco" means Cable Network Netherlands Holding B.V., a limited
liability company incorporated under the laws of the Netherlands with its
registered office at Amsterdam and its business office at Frederik
Roeskestraat 123, 1076EE Amsterdam, The Netherlands;
"Letters of Consent" mean the letters of consent duly executed by the
persons listed below in form acceptable to the Agent, in respect of the
Joint Venture Agreements, shareholder covenants or facility agreements
noted against their names:
(i) Time Warner Entertainment Company LP (in respect of the Joint
Venture Agreements relating to Kabelkom and Kabelkom Management
Co.);
(ii) UA-UII Inc. (in respect of the UII Partnership Agreement);
(iii) US West International B.V. and US West International Holdings, Inc.
(in respect of the A2000 Joint Venture Agreement and a shareholder
covenant relating to A2000);
(iv) Philips Media B.V. (in respect of a shareholder covenant relating to
A2000);
(v) The Municipality of Amsterdam (in respect of the Joint Venture
Agreement relating to KTA);
(vi) ABN-Amro Bank N.V. (in respect of a shareholder covenant relating to
A2000 dated 15th February 1996); and
(vii) Riordan Communications Ltd (in respect of the Joint Venture
Agreement relating to UII-Ireland, Ltd.);
10
<PAGE>
"LIBOR" means, in relation to a particular period, the arithmetic mean
(rounded upwards, if necessary, to five decimal places) of the London
interbank offered rates for deposits of the currency in question for a
period equal to such period at or about 11 a.m. on the Quotation Date for
such period as displayed on the relevant page of the Reuter Monitor Money
Rates Service (or such other page as may replace such page on such service
for the purpose of displaying London interbank offered rates of leading
banks for deposits of that currency) or, if on such date the offered rates
for the relevant period of fewer than two leading banks are so displayed,
the arithmetic mean (rounded upwards, if necessary, to five decimal places)
of such rates quoted to the Agent by each of the Reference Banks at the
request of the Agent;
"Licences" means any licences, franchises and permits issued to any member
of the Group under any Telecommunications and Cable Laws including, without
limitation and, in relation to the Key Group Members, those specified in
schedule 6;
"Loan" means the aggregate principal amount owing to the Banks under this
Agreement at any relevant time;
"Majority Banks" means at any relevant time Banks (a) the aggregate of
whose Contributions exceeds 662/3 per cent of the Loan or (b) (if no
principal amounts are outstanding under this Agreement) the aggregate of
whose Commitments exceeds 662/3 per cent of the Total Commitments;
"Malta Interests" has the meaning given to it in the UII Partnership
Agreement, but includes, directly or indirectly, Melita;
"Management Base Case" means the base case financial and operational
projections for the Key Group Core Members (other than the Obligors)
produced by the Borrower in the form approved by the Agent prior to the
date of this Agreement;
"Margin" means the rate per annum calculated in accordance with clause 5.3;
"Material Adverse Effect" means a material adverse effect or material
adverse change in (a) the ability of any Obligor, any Pledged Creditor or
any Security Provider to perform all or any of its respective material
obligations under or otherwise comply with the terms of this Agreement or
any Security Document; (b) the value of any Key Group Core Member or (c)
the ability of any Key Group Member to liquidate, or realise disposal
proceeds in respect of, any other Key Group Member;
"Media Reseaux" means Media Reseaux S.A., a French societe anonyme, of 12
Rue Albert Einstein, 77420 Champs sur Marne, France;
"Melita" means Melita Cable TV P.L.C., a Maltese limited liability company,
of Highrise; Triq I-imradd, Ta'Xbiex, Malta MSD 12;
11
<PAGE>
"month" or "months" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that (i) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day, it
shall end on the last Banking Day in such later calendar month and (ii) if
such numerically corresponding day is not a Banking Day, the period shall
end on the next following Banking Day in such later calendar month but if
there is no such Banking Day it shall end on the preceding Banking Day and
"monthly" shall be construed accordingly;
"NASDAQ" means the Nasdaq National Market;
"Necessary Authorisations" means all approvals, authorisations and licences
(other than the Licences) from, all rights granted by and all filings,
registrations and agreements with any person including, without limitation,
any government or other regulatory authority necessary in order to enable
each member of the Group to carry on such business as may be permitted by
the terms of this Agreement and which is carried on at the relevant time;
"Net Derivatives Liability" means, at any time, the net liability (if any)
at such time of any member of the Group in respect of Derivatives Contracts
determined by reference to the amounts (as determined by the Agent), which
would be payable or receivable by such member if all Derivatives Contracts
to which such member was a party at such time were terminated at such time
and replaced by the obligation to make a payment reflecting the economic
burden or value to such member of the payment flows under those Derivatives
Contracts remaining at the time of termination;
"Net Disposal Proceeds" means, in respect of a disposal, the gross proceeds
of that disposal minus:
(i) reasonable transaction expenses; and
(ii) where the asset which is the subject of the disposal is being replaced
in accordance with clause 11.2(c)(ii), the cost of the replacement
fixed asset to the extent that it is acquired for cash
Provided that (a) if the Net Disposal Proceeds would be a negative number
it will be taken to be zero and (b) any proceeds of disposal which are
credited to an Escrow Account shall only become Net Disposal Proceeds on
being released from such Escrow Account;
"Net Loan" means, at any time, the Loan at such time less the aggregate
balances on the Charged Accounts at such time;
"Obligor" means any of the Borrower and each Guarantor;
"Ownership Interest" means any interest in shares, securities, partnership
rights or other ownership rights of any nature, or options or warrants to
acquire the same, provided that for the purposes of paragraph (e) of the
definition of
12
<PAGE>
"Permitted Disposal" the (direct or indirect) Ownership
Interest of the Borrower in each asset listed in column (I) of that
definition shall (in each case) be deemed to include the principal amount
of the Subsidiary Loan owing by such asset (if any);
"Ownership Rights Securities" means (i) Encumbrances over the Ownership
Interests of the Borrower or any Security Provider listed in section 1 of
Part B of schedule 1, KTE Newco and the UIH Shares and (ii) such other
Encumbrances over shares or partnership or other ownership interests in any
of the members of the Group as may be executed in favour of the Security
Trustee from time to time as security for the obligations of the Borrower
under this Agreement;
"Parent" means United and Philips Communications B.V., a limited liability
company incorporated under the laws of the Netherlands with its registered
office at Eindhoven and its business office at Frederik Roeskestraat 123,
1076EE Amsterdam, The Netherlands;
"Partnership Group Member" means those partnerships listed in part C of
schedule 1 and any other partnership which becomes an Affiliate of the
Borrower after the date of this Agreement;
"Permitted Borrowings" means:
(a) any Borrowed Money arising hereunder or under the Security Documents;
(b) any Borrowed Money approved in writing by the Agent (acting on the
instructions of the Majority Banks);
(c) any Pledged Debt the terms of which are set out in an Intercompany
Loan Agreement;
(d) any Borrowed Money of any Group member disclosed in schedule 8 (but
not any increase in the principal amount thereof (or the
capitalisation of any interest accruing thereon or other sums payable
in connection therewith) in excess of the principal amount made
available to the relevant Group member by the documents under which
such Borrowed Money is so made available in their form at the date
hereof, which amount is set out opposite such Borrowed Money in
schedule 7);
(e) any Borrowed Money owing by any member of the Group other than any
Obligor arising under deferred payment agreements provided that such
Borrowed Money is deferred for no longer than 180 days and is in an
aggregate amount of not more than NLG 70,000,000 (or its equivalent);
(f) any deposits or prepayments constituting Borrowed Money received by
any member of the Group other than any Obligor from a customer or
subscriber for its services;
13
<PAGE>
(g) any Borrowed Money owing by any member of the Group other than any
Obligor arising under finance leases or hire purchase contracts
entered into by the relevant member of the Group in the ordinary
course of trading, provided that, in relation to each such lease
or contract, the aggregate payments do not exceed NLG 100,000 (or
its equivalent);
(h) (without prejudice to the generality of (b) above) Borrowed Money:
(i) incurred by CNBH to finance the acquisition of Combivisie;
(ii) incurred by Media Reseaux Marne S.A. to finance the
construction and/or installation of its cable television and
telephony system; and
(iii) incurred by Kabel Net Holding and/or Kabel Net Brno to
finance the construction and/or installation of its cable
television system,
(in each case) in amounts and on terms approved in writing by the
Agent (acting on the instructions of the Majority Banks); and
(i) any Borrowed Money owing by any member of the Group other than any
Obligor to other members of the Group which are Affiliates of the
borrower, or to which it is Affiliated, (but which are not
Obligors) in the ordinary course of day-to-day trading
consistently with its practice prior to the Completion Date;
"Permitted Disposal" means, in relation to any Unrestricted Asset, the
sale of such Unrestricted Asset to a person which is not a member of
the Group for Acceptable Consideration on bona fide arms' length
commercial terms, provided that (unless the Agent, acting on the
instructions of the Majority Banks, otherwise agrees before a member
of the Group enters into a binding commitment with respect to such
sale):
(a) (i) the only members of the Group incurring any actual or
contingent, present or future, liability in respect of
warranty or indemnity claims or other claims of a similar
nature ("relevant claims") in connection with such sale are
the seller and any Holding Companies of the seller;
(ii) the sole recourse to any member of the Group of every
person making a relevant claim in respect of such sale is
to (x) the deferred cash payment obligations (if any) owed
in respect of such sale to the member of the Group which is
the seller and/or (y) the cash standing to the credit of
the Escrow Account established in respect of such sale (if
any); and
(iii) if any person which is not a member of the Group incurs any
liability as referred to in (i) above in respect of such
sale, before a member of the Group enters into a binding
commitment with
14
<PAGE>
respect to such sale such person waives, to the
satisfaction of the Agent (acting on the instructions of
the Majority Banks), its rights of subrogation,
contribution and indemnity and other rights of a similar
nature against the members of the Group arising out of its
making, or being liable to make, payments in respect of
relevant claims;
(b) such sale is not on terms whereby the asset sold may be leased to, or
re-acquired or acquired by, any member of the Group;
(c) an Ownership Interest in any asset listed in column (I) below, and an
Ownership Interest in any asset the value of which is principally
represented by any such asset, may only be sold if the entire
Ownership Interests of the Group in respect of such asset are sold in
such sale;
(d) an Ownership Interest in a Key Group Member which is a Subsidiary or
Affiliate of an asset listed in column (I) below may only be sold if
such sale forms part of a sale of the Ownership Interests in the
relevant asset or any asset the value of which is principally
represented by the relevant asset; and
(e) if the immediately payable or same day cash proceeds payable to the
member of the Group which is the seller (net of reasonable transaction
expenses) which are attributable to the Borrower's (direct or
indirect) Ownership Interest in any asset listed in column (I) below
will be less than the amount listed against the relevant asset in
column (II) below the Borrower has, before a member of the Group
enters into a binding commitment with respect to such sale, notified
the Agent and, if the Agent (acting on the instructions of the
Majority Banks) so requests, obtained and delivered to the Security
Trustee a favourable opinion addressed to the Security Trustee as to
the fairness of such transaction to the relevant Group member, from a
financial point of view, from an Independent Financial Adviser.
<TABLE>
<CAPTION>
(I) (II)
Ownership Interests in (U.S.$ 000,000)
- ---------------------- ---------------
<S> <C>
Tevel 54.7
A2000 109.4
KTE/CNBH/1/ 25.25
Princes 13.45
Melita 8.4
Kabelkom 37.85
</TABLE>
15
<PAGE>
<TABLE>
<S> <C>
Media Reseaux 21.05
Kabel Net Holding ) 8.4
Kabel Net Brno )
UIH Shares 85 per cent. of the Fair Market
Value
</TABLE>
/1/ U.S.$50,500,000 when CNBH completes the acquisition of the assets of
Combivisie;
"Permitted Encumbrances" means:
(a) any Encumbrance arising hereunder or under any Security Document;
(b) any liens on any assets of any member of the Group other than any
Obligor arising in the ordinary course of trading by way of contract
which secure Borrowed Money falling within part (e) of the definition
of "Permitted Borrowings" or which secure any Indebtedness of any
member of the Group other than any Obligor under any agreement for the
supply of goods or services in respect of which payment is not
deferred for more than 90 days;
(c) any Encumbrance fully and fairly disclosed in schedule 8;
(d) any Encumbrance over any asset acquired by any member of the Group
(other than any Obligor) after the Completion Date so long as (in the
case of the Key Group Members only) the same is discharged within six
months of such acquisition;
(e) any Encumbrance securing Borrowed Money falling within part (g) of the
definition of "Permitted Borrowings", provided that such Encumbrance
is only over the asset the acquisition of which is being financed by
such Borrowed Money;
(f) any Encumbrance securing Borrowed Money falling within part (h) of the
definition of "Permitted Borrowings", provided that such Encumbrance
is only over the assets of the borrower of such Borrowed Money;
(g) any Encumbrance over any asset of any member of the Group imposed by
any taxation or governmental authority securing a claim which is being
contested in good faith, provided that, in the case of any Obligor,
such claim is for less than NLG 1,000,000 (or its equivalent); and
(h) any Encumbrance approved in writing by the Agent (acting on the
instructions of the Majority Banks);
"Permitted Fees" means (i) management fees payable by members of the Group
other than the Obligors to Relevant Persons under the terms of contractual
16
<PAGE>
arrangements in existence at the Completion Date (but not, unless the Agent
(acting on the instructions of the Majority Banks) otherwise agrees, under
any revision to such arrangements after the Completion Date or under any
other arrangements) and (ii) secondment fees payable by members of the
Group other than the Obligors to Relevant Persons from time to time in
respect of the secondment of staff to the relevant Group members, provided
that the amount of such secondment fees does not exceed the salaries and
benefits of the staff so seconded;
"Pledged Creditor" means any person (other than the Security Trustee) who
has, at any relevant time, entered into a Deed of Pledge;
"Pledged Debt" means, at any relevant time, all Borrowed Money of the
Borrower or (to the extent only of the Subsidiary Loans) the relevant other
members of the Group or (to the extent only of the Reorganisation Loans)
the other Obligors which is (in each case) subject to a Deed of Pledge;
"Princes" means Princes Holding Ltd., an Irish limited liability company,
of Corporate House, Mungret Street, Limerick, Ireland;
"Princes Loan" means the loan referred to in paragraph 24 of schedule 7;
"Principal Agreements" means the Sale and Purchase Agreements, the
Intercompany Loan Agreements and the Joint Venture Agreements;
"Qualifying Bank" means a person, being a bank or financial institution
(whether incorporated in the United Kingdom or elsewhere), which is
eligible to have payments made to it by the Borrower under this Agreement
without any deduction or withholding in respect of Taxes either (i) by
virtue of a double taxation treaty (assuming for this purpose only that a
direction or consent such as is referred to in clause 8.8 has been given),
or (ii) by virtue of the fact that no such deduction or withholding is
imposed in the jurisdiction to which the Borrower is subject;
"Quarterly Management Accounts" means the quarterly management accounts in
respect of each Key Group Member to be delivered (or which may be
delivered) to the Agent pursuant to clause 11 in the form of the pro forma
return delivered, or to be delivered, pursuant to paragraph (p) of schedule
3 and to accounting policies consistent with the Management Base Case;
"Quarter Day" means 31st March, 30th June, 30th September and 31st December
in any year;
"Quarterly Period" means each period of approximately three months
commencing on the day after a Quarter Day and ending on the next following
Quarter Day;
"Quotation Date" means, in relation to an Interest Period or other period
for which LIBOR is to be determined, the date on which quotations would
customarily be provided by leading banks in the London Interbank Market for
17
<PAGE>
deposits in the relevant currency for delivery on the first day of that
Interest Period or other period;
"Radio Public" means Radio Public S.A., a company incorporated in Belgium
and having its registered office at 140, Avenue Chazal, 1030 Brussels,
Belgium, registered in the register of commerce of Brussels under no.
69,463 and in the register of commerce of Leuven under no. 44697;
"Reference Banks" means the principal London offices of the Agent and/or
any other Bank appointed as such pursuant to clause 18.14;
"Registration Rights Agreement" means the agreement dated on or around the
date of this Agreement between the Security Trustee and UIH, whereby UIH
agrees that it will, on demand by the Security Trustee in accordance with
the terms thereof, register the UIH Shares under the Securities Act of 1933
of the United States of America so that they may be freely traded on NASDAQ
or any other relevant securities market;
"Relevant Jurisdiction" means each jurisdiction in which a member of the
Group is incorporated or formed or in which such member of the Group has
its principal place of business or owns any material assets;
"Relevant Person" means (in the case of the Reorganisation Loans and the
Subsidiary Loans) the Borrower and (otherwise) any shareholder of the
Borrower, any Subsidiary or Associated Company of such shareholder or any
Holding Company of such shareholder or any Associated Company of any such
Holding Company;
"Relevant Substance" means any substance whatsoever (whether in a solid or
liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) or waste which is capable of causing
harm to man or any other living organism supported by the environment, or
damaging the environment or public health or welfare;
"Reorganisation" means the transfer for cash consideration (to be financed
by the Loan or left outstanding on inter-company account on terms
acceptable to all of the Banks) of the interests of Radio Public and the
Parent in, and of the Borrowed Money owing to the Parent by, the Group
(other than the Obligors) to the Obligors on terms and conditions
satisfactory to all of the Banks;
"Reorganisation Loans" means the loans owing by the Guarantors to the
Borrower as a result of the Reorganisation, which loans must be in amounts
and on terms acceptable to all the Banks;
"Repayment Dates" means, subject to clause 8.3, each of the dates on which
repayment instalments in respect of the Loan are due under clause 6.1;
"Rollover Notice" means a notice in the form, or substantially in the form,
of part B of schedule 2, duly completed with particulars of the relevant
Tranches of the Loan;
18
<PAGE>
"Sale and Purchase Agreements" means the sale and purchase agreements
between (inter alia) the Parent, Radio Public and the Obligors entered
into, or to be entered into, on or about the Completion Date regarding the
transactions referred to in clause 1.1(i), including all exhibits and
schedules thereto, in forms satisfactory to the Agent;
"Security Documents" means the Deeds of Pledge, the Ownership Rights
Securities, the Registration Rights Agreement, the Account Charge, the
Security Trust Deed and all other mortgages, charges, pledges, guarantees,
inter-creditor agreements or deeds and other instruments from time to time
entered into in favour of the Agent and/or the Security Trustee and/or the
Banks by way of guarantee or other assurance and/or security for or (in the
case of inter-creditor agreements or deeds) otherwise in relation to
amounts owed to the Banks, the Arrangers, the Agent or the Security Trustee
in respect of any Indebtedness of the Obligors under this Agreement;
"Security Provider" means each person (other than the Obligors and the
Security Trustee) that has entered into any of the Security Documents from
time to time;
"Security Trustee" means the Agent in its capacity as security trustee for
the purposes of the Security Documents;
"Security Trust Deed" means the security trust deed entered into or to be
entered into between the Banks, the Arrangers, the Agent, the Security
Trustee, the Parent and each Obligor;
"Senior Facility Agreement" means the agreement referred to in paragraph
(q) of schedule 3;
"Subsidiary" of a person means any company or entity directly or indirectly
controlled by such person, for which purpose "control" means either
ownership of more than 50 per cent. of the voting share capital (or
equivalent right of ownership) of such company or entity or power to direct
its policies and management whether by contract or otherwise, provided that
for the purposes of the definitions of "Permitted Disposal" and "Total
Valuation Amount" CNBH shall be deemed to be a Subsidiary of KTE;
"Subsidiary Loans" means the loans referred to in paragraphs 15 and 20 to
22 (inclusive) of schedule 7 and, upon execution of the Deeds of Pledge
referred to in clause 3.5(c)(iii) and (g), the Kabel Net Loans and the KTE
Loans;
"Substitute" has the meaning given to it in clause 17.3;
"Substitution Certificate" means a certificate substantially in the terms
of schedule 4;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof and "Taxation" shall be construed accordingly;
19
<PAGE>
"Telecommunications and Cable Laws" means all laws, statutes, regulations
and judgments relating to telecommunications, cable television and data
services applicable to any member of the Group and/or the business carried
on by any member of the Group in any Relevant Jurisdiction;
"Termination Date" means the date falling 1 week after Completion Date;
"Tevel" means Tevel Israel International Communications Ltd., an Israeli
corporation, of 8 Haharutz Street, 67060 Tel Aviv, Israel;
"Total Commitments" means at any relevant time the total of the Commitments
of all the Banks at such time;
"Total Valuation Amount" means the valuation of all the assets listed in
column (I) below as set out in column (II) below, provided that such assets
are at the time of calculation beneficially owned by the Group:
<TABLE>
<CAPTION>
(I) (II)
Ownership Interests in Valuation (U.S.$ 000,000)
---------------------- -------------------------
<S> <C>
Tevel 64.35
A2000 128.7
KTE/CNBH/1/ 29.7
Princes 15.85
Melita 9.9
Kabelkom 44.55
Media Reseaux 24.75
Kabel Net Holding ) 9.9
Kabel Net Brno )
Other assets/2/
UIH Shares Fair Market Value
</TABLE>
/1/ U.S.$59,000,000 when CNBH completes the acquisition of the assets of
Combivisie.
/2/ Other assets will be included subject to the Borrower submitting to the
Agent a formal letter of intent from a purchaser approved by the Agent
(such approval not to be unreasonably withheld) to purchase such asset
(with their valuation being that stated in the applicable letter of
intent), or with the consent of the Majority Banks;
"Tranche" means each tranche into which the Loan is from time to time
divided pursuant to clause 5.2(a)(ii) and includes, if only one Tranche is
outstanding, the Loan;
20
<PAGE>
"UIH" means United International Holdings, Inc., a corporation incorporated
in the State of Delaware, United States of America, and having its chief
executive office at 4643 South Ulster, Suite 1300, Denver, Colorado 80237,
U.S.A.;
"UIH Class A Common Stock" means class "A" common stock of U.S.$0.01 par
value per share of UIH;
"UIH Shares" means the 3,169,159 shares of UIH Class A Common Stock to be
sold by the Parent to the Borrower pursuant to the Sale and Purchase
Agreement;
"UII" means United International Investments, a general partnership
established under the laws of Colorado, with its chief executive office at
4643 South Ulster, Suite 1300, Denver, Colorado 80237, U.S.A.;
"UII Newco" means Binan Investments B.V., a limited liability company
incorporated under the laws of the Netherlands with its registered office
at Amsterdam and its business office at Frederik Roeskestraat 123, 1076EE
Amsterdam, The Netherlands;
"UII Partnership Agreement" means the third amended and restated
partnership agreement between the Parent and UA-UII Inc. dated 18th June
1992, as amended prior to the date of this Agreement; and
"Unrestricted Assets" means the UIH Shares, the Subsidiary Loans and the
Ownership Interests of the members of the Group in the other members of the
Group.
1.3 Headings
--------
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
-----------------------------
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as references
to the clauses of, and schedules to, this Agreement and references to
this Agreement include its schedules;
(b) references to (or to any specified provision of) this Agreement or any
other document shall be construed as references to this Agreement,
that provision or that document as in force for the time being and as
from time to time amended in accordance with its terms, or, as the
case may be, with the agreement of the relevant parties and (where
such consent is, by the terms of this Agreement or the relevant
document, required to be obtained as a condition to such amendment
being permitted) the prior written consent of the Agent, all of the
Banks or the Majority Banks (as the case may be);
21
<PAGE>
(c) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency, authority, central bank or
government department or any self-regulatory or other national or
supra-national authority;
(d) words importing the plural shall include the singular and vice versa;
(e) references to a time of day are to London time;
(f) references to a "person" shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any State or any of its agencies;
(g) references to "assets" include all or part of any business,
undertaking, real property, personal property, uncalled capital and
any rights (whether actual or contingent, present or future) to
receive, or require delivery of, any of the foregoing;
(h) references to a "guarantee" include references to an indemnity or
other assurance against financial loss including, without limitation,
an obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and "guaranteed"
shall be construed accordingly;
(i) references to the "equivalent" of an amount specified in a particular
currency (the "specified currency amount") shall be construed as a
reference to the amount of the other relevant currency which can be
purchased with the specified currency amount in the London foreign
exchange market at or about 11 a.m. on the day on which the
calculation falls to be made for spot delivery as determined by the
Agent;
(j) references to the "agreed form" means, in relation to any document,
the form of such document as shall have been agreed between the
Borrower and the Agent (acting for and on behalf of all of the Banks);
(k) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended;
(l) references to a "disposal" means a disposal as defined in the Security
Trust Deed, and "dispose" shall be construed accordingly; and
(m) references to an Obligor "procuring" that another member of the Group
takes, or does not take, any action shall be construed, where the
relevant other member is not a Subsidiary of the relevant Obligor, as
references to the relevant Obligor procuring so far as it is able so
to do.
22
<PAGE>
1.5 Majority Banks
--------------
Where this Agreement provides for any matter to be determined by reference
to the opinion of the Majority Banks or to be subject to the consent or
request of the Majority Banks or for any action to be taken on the
instructions of the Majority Banks, such opinion, consent, request or
instructions shall (as between the Banks) only be regarded as having been
validly given or issued by the Majority Banks if all the Banks shall have
received prior notice of the matter on which such opinion, consent, request
or instructions are required to be obtained and the relevant majority of
Banks shall have given or issued such opinion, consent, request or
instructions but so that (as between each Obligor and the Banks), once
informed by the Agent that such opinion, consent, request or instructions
have been given, each Obligor shall be entitled (and bound) to assume that
such notice shall have been duly received by each Bank and that the
relevant majority shall have been obtained to constitute Majority Banks
whether or not this is in fact the case.
1.6 Agent's opinion
---------------
Where this Agreement provides for the Agent's opinion to determine whether
any matter would or is reasonably likely to have a Material Adverse Effect
the Agent shall act in accordance with the instructions of the Majority
Banks in making such determination.
23
<PAGE>
2 The Facility
------------
2.1 Amount
------
The Banks, relying upon each of the representations and warranties in
clause 10, agree to lend to the Borrower upon and subject to the terms of
this Agreement the principal sum of up to U.S.$125,000,000. The obligation
of each Bank under this Agreement shall be to contribute that proportion of
each Tranche which, as at the Drawdown Date, its Commitment bears to the
Total Commitments.
2.2 Obligations several
-------------------
The obligations of each Bank under this Agreement are several; the failure
of any Bank to perform such obligations shall not relieve any other Bank,
the Arrangers, the Security Trustee, the Agent or any Obligor of any of
their respective obligations or liabilities under this Agreement nor shall
the Security Trustee, the Agent or the Arrangers be responsible for the
obligations of any Bank (except for its own obligations, if any, as a Bank)
nor shall any Bank be responsible for the obligations of any other Bank
under this Agreement.
2.3 Interests several
-----------------
Notwithstanding any other term of this Agreement (but without prejudice to
the provisions of this Agreement relating to or requiring action by the
Majority Banks) the interests of the Agent, the Security Trustee, the
Arrangers and the Banks are several and the amount due to the Agent (for
its own account), to the Arrangers, to the Security Trustee and to each
Bank is a separate and independent debt. The Agent, the Security Trustee,
the Arrangers and each Bank shall have the right to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for the
Agent, the Security Trustee, the Arrangers or any Bank (as the case may be)
to be joined as an additional party in any proceedings for this purpose.
24
<PAGE>
3 Conditions
----------
3.1 Documents and evidence
----------------------
The obligation of each Bank to make its Commitment available shall be
subject to the condition that the Agent, or its duly authorised
representative, shall have received, not later than three Banking Days
before the day on which the Drawdown Notice is given, the documents and
evidence specified in schedule 3 in form and substance satisfactory to all
of the Banks.
3.2 General conditions precedent
----------------------------
The obligation of each Bank to contribute to the Loan is subject to the
further conditions that at the date of the Drawdown Notice and on the
Drawdown Date:
(a) the representations and warranties set out in clause 10 are true and
correct on and as of each such date as if each were made with respect
to the facts and circumstances existing at such date; and
(b) no Default shall have occurred and be continuing or would result from
the making of the Loan.
3.3 Waiver of conditions precedent
------------------------------
The conditions specified in clause 3.2 are inserted solely for the benefit
of the Banks and may be waived on their behalf in whole or in part and with
or without conditions by the Agent acting on the instructions of all of the
Banks.
3.4 Notification
------------
The Agent shall notify the Banks and the Borrower promptly after receipt by
it of the documents and evidence referred to in clause 3.1 in form and
substance satisfactory to it.
3.5 Conditions subsequent
---------------------
(a) On or before 19th December 1997 the Borrower shall give formal notice
to US WEST International B.V. under the A2000 Joint Venture Agreement
of the Borrower's intention to sell its Ownership Interest in A2000
and shall, at the time of giving such formal notice, send a copy
thereof by fax to the Agent .
(b) On or before:
(i) 31st March 1998, in the case of the Israel Interests;
(ii) 1st July 1998, in the case of the Ireland Interests; and
(iii) 1st January 1999, in the case of the Malta Interests
25
<PAGE>
UII Newco shall propose to the other partner in UII, under article XII
of the UII Partnership Agreement, that UII should sell the Israel
Interests, the Ireland Interests and the Malta Interests to such other
partner in accordance with such article XII. A copy of each such
proposal shall be sent to the Agent at the time it is made to the
other partner in UII. After each such proposal each of the Obligors
shall, and shall procure that each other member of the Group shall,
expeditiously exercise such sale or liquidity rights as it has under
any applicable Joint Venture Agreements in respect of the Israel
Interests, the Ireland Interests or, as the case may be, the Malta
Interests.
(c) If the Parent (or, in the case of Trnavatel s.r.o., Radio Public), as
the legal and beneficial owner of all of the Ownership Interests in
Kabel Net Holding, Kabel Net Brno, Santander de Cable S.A., Burgos
S.A., UIH Spain, Inc. and Trnavatel s.r.o., has not entered into a
binding commitment with respect to the sale of all such Ownership
Interests before 31st March, 1998 on terms acceptable to the Agent
(acting on the instructions of the Majority Banks) and including,
without limitation, the transfer of the consideration for such sale
(and, in the case of Kabel Net Holding and Kabel Net Brno, the
transfer proceeds or (as the case may be) proceeds of repayment of the
Kabel Net Loans) to the Borrower, such Ownership Interests (and, in
the case of Kabel Net Holding and Kabel Net Brno, the Kabel Net Loans)
shall be transferred forthwith to the Borrower so that the Borrower
becomes the legal and beneficial owner of all of Kabel Net Holding,
Kabel Net Brno, Santander de Cable S.A., Burgos S.A., UIH Spain, Inc.
and Trnavatel s.r.o. (and, in the case of Kabel Net Holding and Kabel
Net Brno, the Kabel Net Loans) and, on the same date as such transfer,
the Borrower shall execute (i) an assignment and assumption agreement
on similar terms as are set out in the Ownership Rights Security over
Kabel Net Holding and Kabel Net Brno, (ii) a Security Document the
terms of which are acceptable to the Agent (acting on the instructions
of the Majority Banks) over all the Ownership Interests in Santander
de Cable S.A., Burgos S.A., UIH Spain, Inc. and Trnavatel s.r.o. and
(iii) a Deed of Pledge over the Kabel Net Loans. Clause 11.1(r)(ii)
applies to this clause mutatis mutandis.
(d) Within one month of the Completion Date each Obligor shall have
adopted new articles the terms of which are acceptable to the Agent
(acting on the instructions of the Majority Banks) and in particular
so that (i) each Obligor is not empowered to have any Indebtedness or
create any Encumbrances not permitted by this Agreement and (ii) the
Security Trustee receives a special share providing it with certain
rights (but no rights to income or capital, save for the return of the
nominal amount of the special share upon a dissolution of the relevant
Obligor).
(e) If UIH Programming, Inc. or the Parent, as the legal and beneficial
owner of all of the Ownership Interests in Ceska Programova, has not
entered into a binding commitment with respect to the sale of all such
Ownership
26
<PAGE>
Interests before 31st March, 1998 on terms acceptable to the Agent
(acting on the instructions of the Majority Banks) and including,
without limitation, the transfer of the consideration for such sale to
the Borrower, such Ownership Interests shall be transferred forthwith
to the Borrower so that the Borrower becomes the legal and beneficial
owner of all of Ceska Programova and the Borrower shall by such date
have provided to the Security Trustee an assignment as security of all
the Ownership Interests in Ceska Programova. Clause 11.1(r)(ii)
applies to this clause mutatis mutandis.
(f) The Borrower shall ensure that on or before 10th December, 1997:
(i) Media Reseaux modifies its articles of association by replacing
article 11 with a standard clause d'agrement; and
(ii) the Borrower has transferred seven of the shares in Media
Reseaux to seven other persons (who may or may not be directors
of Media Reseaux) and the holders of such shares have pledged
such shares to the Security Trustee on the same terms and in
substantially the same form as the Borrower has pledged its
shares in Media Reseaux.
(g) If the KTE Loans have not been converted into Ownership Interests in
the respective borrowers before 31st March, 1998 the Borrower shall
execute a Deed of Pledge over the KTE Loans. Clause 11.1(r)(ii)
applies to this clause mutatis mutandis.
<PAGE>
4 The Loan
--------
4.1 Drawdown
--------
Subject to the terms and conditions of this Agreement, the Loan shall be
made available to the Borrower following receipt by the Agent from the
Borrower of a Drawdown Notice not later than 10 a.m. on the third Banking
Day before the proposed Drawdown Date. A Drawdown Notice shall be
effective on actual receipt by the Agent and, once given, shall, subject as
provided in clause 5.7(a), be irrevocable.
4.2 Amount and application
----------------------
Subject to the other terms of this Agreement, the Loan shall be
U.S.$125,000,000 and shall be advanced in Dollars. The Borrower
irrevocably authorises and instructs the Agent to remit the proceeds of
drawing of the Loan as follows:
(a) as to U.S.$114,000,000, on behalf of the Borrower:
(i) to or to the order of the Parent (whose receipt shall be a good
discharge to the Agent) in satisfaction of the Borrower's present
payment obligations under the Sale and Purchase Agreement; and
(ii) to or to the order of the Agent in or towards satisfaction of the
Borrower's present payment obligations under clause 7; and
(b) as to U.S.$11,000,000, on behalf of the Borrower to the Interest
Reserve Account.
4.3 Notification to Banks
---------------------
As soon as practicable after receipt of a Drawdown Notice complying with
the terms of this Agreement the Agent shall notify each Bank and, subject
to clause 3, each of the Banks shall on the Drawdown Date make available to
the Agent its portion of each Tranche in accordance with clause 8.2.
4.4 Termination of Commitments
--------------------------
Without prejudice to any other term of this Agreement, any part of the
Commitments which is undrawn on the Termination Date or, if earlier, the
Drawdown Date shall thereupon be automatically reduced to zero and no (or,
if the Loan has been drawn, no further) advance shall be made to the
Borrower under this Agreement thereafter.
28
<PAGE>
5 Interest and Interest Periods; alternative interest rates
---------------------------------------------------------
5.1 Interest on the Loan
--------------------
The Borrower shall pay interest on each Tranche in Dollars in respect of
each Interest Period relating thereto on each relevant Interest Payment
Date (or, in the case of Interest Periods of more than three months, by
instalments, the first three months from the commencement of the relevant
Interest Period and the subsequent instalments at intervals of three months
or, if shorter, the period from the date of the preceding instalment until
the Interest Payment Date relative to such Interest Period) at the rate per
annum determined by the Agent to be the aggregate of (i) the applicable
Margin and (ii) LIBOR.
5.2 Interest Periods
----------------
(a) The Borrower may by a Rollover Notice received by the Agent not later
than 10 a.m. on the third Banking Day before the beginning of an
Interest Period relating to a Tranche:
(i) specify whether such Interest Period shall have a duration of
one, two or three months or such other duration (not exceeding 6
months) as the Agent (acting on the instructions of the Majority
Banks) may agree Provided that every Interest Period commencing
on the Drawdown Date shall have a duration of one month; or
(ii) specify that such Tranche shall be split into two or more
Tranches or, if the next Interest Period for any Tranche would
begin on the same day as the next Interest Period in respect of
any other Tranche, specify that such Tranches be consolidated
into one Tranche, in each case with effect from the beginning of
the next Interest Period, provided that:
(x) not more than three Tranches may be outstanding at any one
time; and
(y) each Tranche shall be of a minimum principal amount of
U.S.$2,500,000 or a principal amount equal to the balance of
the Loan.
(b) Every Interest Period shall be of the duration specified pursuant to
clause 5.2(a) but so that:
(i) the initial Interest Period in respect of each Tranche will
commence on the Drawdown Date and each subsequent Interest Period
in respect of such Tranche will commence forthwith upon the
expiry of the previous Interest Period in respect of such
Tranche;
29
<PAGE>
(ii) if any Interest Period would otherwise overrun the Initial
Repayment Date, then such Interest Period shall end on the
Initial Repayment Date;
(iii) (if the maturity of the Loan is extended pursuant to clause
6.1(b)) if any Interest Period would otherwise overrun the Final
Repayment Date then such Interest Period shall end on the Final
Repayment Date; and
(iv) if the Borrower fails to specify the duration of an Interest
Period in accordance with the provisions of clause 5.2(a) and
this clause 5.2(b) such Interest Period shall have a duration of
three months or such other period as shall comply with this
clause 5.2(b).
5.3 Applicable Margin
-----------------
The Margin in relation to each Tranche and any unpaid sum due under this
Agreement under clause 5.4 shall be the rate set out in column (I) below
applicable from the date set out in column (II) below (irrespective of
whether such date is an Interest Payment Date):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
(I) (II)
- ---------------------------------------------------------------------------------------
Rate (per cent. per annum) The date falling:
------------------------- -----------------
- ---------------------------------------------------------------------------------------
<C> <S>
4.50 on the Completion Date
- ---------------------------------------------------------------------------------------
5.00 9 months after the Completion Date
- ---------------------------------------------------------------------------------------
5.50 12 months after the Completion Date
- ---------------------------------------------------------------------------------------
6.00 15 months after the Completion Date
- ---------------------------------------------------------------------------------------
</TABLE>
5.4 Interest for late payment
-------------------------
If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this clause 5.4 on its due date for payment under
this Agreement the Borrower shall pay interest on such sum from the due
date up to the date of actual payment (as well after as before judgment) at
a rate determined by the Agent pursuant to this clause 5.4. The period
beginning on such due date and ending on such date of payment shall be
divided into successive periods of not more than three months as selected
by the Agent (after consultation with the Banks so far as reasonably
practicable in the circumstances) each of which (other than the first,
which shall commence on such due date) shall commence on the last day of
the preceding such period. The rate of interest applicable to each such
period shall be the aggregate (as determined by the Agent) of (a) one per
30
<PAGE>
cent. per annum, (b) the applicable Margin and (c) LIBOR, unless such
unpaid sum is an amount of principal which shall have become due and
payable, by reason of a declaration by the Agent under clause 13.2(b) or a
prepayment pursuant to clauses 6.3 or 15.1, other than on an Interest
Payment Date relating thereto, in which case the first such period selected
by the Agent shall end on such Interest Payment Date and interest shall be
payable on such unpaid sum during such period at a rate one per cent above
the rate applicable thereto immediately before it shall have become so due
and payable. Interest under this clause 5.4 shall be due and payable on
the last day of each period determined by the Agent pursuant to this clause
5.4 or, if earlier, on the date on which the sum in respect of which such
interest is accruing shall actually be paid. If, for the reasons specified
in clause 5.7(a)(i) or 5.7(a)(ii), the Agent is unable to determine a rate
in accordance with the foregoing provisions of this clause 5.4, each Bank
shall promptly notify the Agent of the cost of funds to such Bank and
interest on any sum not paid on its due date for payment shall be
calculated for each Bank at a rate determined by the Agent to be one per
cent per annum above the aggregate of the applicable Margin and the cost of
funds to such Bank.
5.5 Notification of interest rate
-----------------------------
The Agent shall notify the Borrower and the Banks promptly of each rate of
interest determined by it under this clause 5.
5.6 Reference Bank quotations
-------------------------
If any Reference Bank is unable or otherwise fails to furnish a quotation
for the purpose of calculating LIBOR, the interest rate for the relevant
Interest Period or other period shall be determined, subject to clause 5.7,
on the basis of the quotations furnished by the remaining Reference Banks.
5.7 Market disruption; non-availability
-----------------------------------
(a) If on the Quotation Date in respect of the proposed Drawdown Date or
any Interest Period the London interbank offered rates for deposits of
Dollars for the relevant Interest Period are not displayed on the
relevant page of the Reuter Monitor Money Rates Service (or any
replacement therefor) and:
(i) the Agent shall have determined, after consultation with the
Reference Banks (which determination shall, in the absence of
manifest error, be conclusive), that adequate and fair means do
not exist for ascertaining LIBOR during such Interest Period; or
(ii) none or only one of the Reference Banks supplies the Agent with
a quotation for the purpose of calculating LIBOR; or
(iii) the Agent shall have received notification from Banks with
Contributions to any Tranche aggregating not less than one-third
of the relevant Tranche (or, prior to the Drawdown Date,
31
<PAGE>
Commitments aggregating not less than one-third of the Total
Commitments) that deposits in Dollars are not available to such
Banks in the London Interbank Market in the ordinary course of
business in sufficient amounts to fund their Contributions to
the relevant Tranche or that LIBOR does not accurately reflect
the cost to such Banks of obtaining such deposits;
the Agent shall forthwith give notice (a "Determination Notice") to
the Borrower and to each of the Banks and the Loan (if not already
outstanding) shall not be made. A Determination Notice shall contain
particulars of the relevant circumstances giving rise to its issue.
(b) After the giving of any Determination Notice the Total Commitments
shall not be borrowed until the circumstances giving rise to the issue
of the Determination Notice have ceased.
(c) During the period of 10 days after any Determination Notice has been
given by the Agent under clause 5.7(a), each Bank shall certify an
alternative basis (the "Substitute Basis") for making available or, as
the case may be, maintaining its Contribution to the relevant Tranche.
The Substitute Basis may (without limitation) include alternative
interest periods, alternative currencies or alternative rates of
interest but shall include a margin above the cost of funds to such
Bank equivalent to the Margin. Each Substitute Basis so certified
shall be binding upon the Borrower and shall take effect in accordance
with its terms from the date specified in the Determination Notice
until such time as none of the circumstances specified in clause
5.7(a) continues to exist, whereupon the normal interest rate fixing
provisions of this Agreement shall apply.
32
<PAGE>
6 Repayment, prepayment and cancellation
--------------------------------------
6.1 Repayment
---------
The Borrower shall repay the Loan either:
(a) in full on the Initial Repayment Date; or
(b) in the event that:
(i) the Agent receives an Extension Notice from the Borrower (which
notice shall be effective only on actual receipt by the Agent
and, once given, shall be irrevocable) not later than the
thirtieth day before the Initial Repayment Date evidencing
satisfaction of the Extension Conditions as at the date of
delivery of the Extension Notice; and
(ii) the Extension Conditions are satisfied on each day during the
period commencing on the date of receipt by the Agent of the
Extension Notice and ending on the Initial Repayment Date (both
dates inclusive)
in full on the Final Repayment Date.
6.2 Voluntary prepayment
--------------------
The Borrower may, without premium or penalty, prepay the Loan (in whole or
in part provided that, in the case of part, the amount of such part is a
minimum of U.S.$2,500,000 and an integral multiple of U.S.$2,500,000) at
any time subject to the provisions of this clause 6.
6.3 Additional voluntary prepayment
-------------------------------
The Borrower may also prepay (in whole but not in part only), without
premium or penalty, but without prejudice to its obligations under clauses
5.7, 8.5 and 15.2, the Contribution of any Bank to which the Borrower shall
have become obliged to pay additional amounts under clause 5.7, 8.5 or
15.2.
6.4 Amounts payable on prepayment
-----------------------------
Any prepayment under this Agreement shall be made in Dollars together with:
(a) accrued interest to the date of prepayment; (b) any additional amount
payable under clause 5.7, 8.5 or 15.2; and (c) all other sums payable by
the Borrower to the relevant Bank under this Agreement including, without
limitation, any amounts payable under clause 14.1.
6.5 Mandatory prepayment
--------------------
The Borrower undertakes to apply amounts equal to all of (or, in the case
of a disposal of an Ownership Interest in a member of the Group which is
neither a
33
<PAGE>
Subsidiary of the Borrower nor a Key Group Member, to procure that amounts
equal to the proportion referred to in (a) below are applied):
(a) the proportion of the Net Disposal Proceeds of Ownership Interests in
other members of the Group which is attributable to the Borrower's
(direct or indirect) Ownership Interests in such other members;
(b) the Net Disposal Proceeds of any of the UIH Shares;
(c) the proportion of the Net Disposal Proceeds of other assets of members
of the Group, other than assets disposed of pursuant to clause
11.2(c)(iii), which is attributable to the Borrower's (direct or
indirect) Ownership Interests in such members;
(d) (except for the proceeds of subscriptions made by the Parent in order
to prevent the occurrence of an Event of Default under clause
13.1(s)(iii)) the proceeds of subscriptions for new Ownership
Interests in the Borrower or any other member of the Group by persons
which are not members of the Group;
(e) (except for the proceeds of Borrowed Money made available by the
Parent in order to prevent the occurrence of an Event of Default under
clause 13.1(s)(iii)) the proceeds of all Borrowed Money (including
Pledged Debt (other than the Reorganisation Loans and the Subsidiary
Loans), but excluding other Permitted Borrowings) made available to
members of the Group by persons which are not members of the Group;
(f) the proceeds of repayment of, and of all interest payments in respect
of, the Subsidiary Loans and the KTE Loans; and
(g) the proportion of the proceeds of repayment of, and of all interest
payments in respect of, the Princes Loan which is attributable to the
Borrower's interest in the Princes Loan by means of its indirect
Ownership Interest in UII-Ireland Ltd.
in prepayment of the Loan in the following manner:
(i) all amounts equal to or greater than U.S.$2,500,000 (or its
equivalent) shall, subject to clause 12(a) and if the Borrower is so
instructed by the Agent (acting on the instructions of the Majority
Banks), be immediately converted into Dollars (if not already
denominated in Dollars) and shall be applied in or towards prepayment
of the Loan forthwith upon receipt by a member of the Group; and
(ii) (if the Borrower is not instructed as referred to in (i) above) all
amounts shall, subject to clause 12(a), be immediately converted into
Dollars (if not already denominated in Dollars) and shall be paid
directly into the Disposal Proceeds Account forthwith upon receipt by
a member of the Group. The balance on the Disposal Proceeds Account
shall, subject to clause 12(a), be applied in or towards prepayment of
the Loan on the
34
<PAGE>
earlier of (x) the date falling 35 days after the date on which such
balance was last equal to zero and (y) the next following Interest
Payment Date.
6.6 Prepayments generally
---------------------
No prepayment may be effected under this clause 6 unless the Borrower shall
have given the Agent at least 5 Banking Days' notice of its intention to
make such prepayment (which the Borrower undertakes to give in the case of
a prepayment required to be made by clause 6.5). Every notice of
prepayment shall be effective only on actual receipt by the Agent, shall be
irrevocable and shall oblige the Borrower to make such prepayment on the
date specified. The Borrower may not prepay the Loan or any part thereof
save as expressly provided in this Agreement.
35
<PAGE>
7 Fees and expenses
-----------------
7.1 Fees
----
The Borrower shall pay to the Agent (in the case of (a), (b) and (c) below,
whether or not any part of the Commitments is ever advanced):
(a) a signing fee of an amount agreed between the Borrower and the Agent
in a letter of even date, payable in accordance with the terms of such
letter for the account of the Arrangers;
(b) on the date of this Agreement and on each anniversary thereof until
all moneys owing under this Agreement have been paid in full, for the
account of the Agent, an agency fee of an amount agreed between the
Borrower and the Agent in a letter of even date;
(c) on the Drawdown Date (or, if the Loan is not drawn, the Termination
Date), for the account of each Bank, commitment commission computed
from the date of this Agreement at the rate of 0.5 per cent. per annum
on the daily undrawn and uncancelled amount of such Bank's Commitment;
and
(d) additional fees of 0.5 per cent. of the amount of the Loan, for the
account of each Bank pro rata, payable on the date falling nine months
after the Completion Date and on each of the dates falling at three
monthly intervals thereafter until all moneys owing under this
Agreement have been paid in full.
7.2 Expenses
--------
The Borrower shall pay to the Agent on demand:
(a) all expenses (including reasonable legal, printing and out-of-pocket
expenses) incurred by the Agent, the Security Trustee and the
Arrangers in connection with the negotiation, preparation and
execution of this Agreement and the Security Documents, the
syndication of the Facility, the preparation and distribution of the
Information Memorandum and advertising in connection with this
Agreement and of any amendment or extension of, or the granting of any
waiver or consent under, this Agreement or the Security Documents
together with interest at the rate referred to in clause 5.4 from the
date of demand for payment of such expenses to the date of payment (as
well after as before judgment); and
(b) all expenses (including legal and out-of-pocket expenses) incurred by
the Agent, the Security Trustee, the Arrangers, the Banks or any of
them in contemplation of, or otherwise in connection with, the
enforcement or attempted enforcement of, or preservation or attempted
preservation of any rights under, this Agreement and/or the Security
Documents, including, without limitation, after the occurrence of a
Default or if otherwise agreed with the Borrower, the fees and
expenses of
36
<PAGE>
accountants or other experts incurred in relation to any investigation
into the affairs of the Borrower or any other member of the Group, or
otherwise in respect of the moneys owing under this Agreement and/or
the Security Documents, together with interest at the rate referred to
in clause 5.4 from the date on which such expenses were incurred to
the date of payment (as well after as before judgment).
7.3 Value Added Tax
---------------
All fees and expenses payable pursuant to this clause 7 shall be paid
together with an amount equal to any value added tax payable by the Agent,
the Security Trustee, the Arrangers or any Bank in respect of such fees and
expenses.
7.4 Stamp and other duties
----------------------
The Borrower shall pay all stamp, documentary, registration or other
similar duties or Taxes (including any such duties or Taxes payable by, or
assessed on, the Banks or the Agent or the Security Trustee or the
Arrangers) imposed on or in connection with this Agreement and/or the
Security Documents or the Facility (other than those imposed by reason of
any assignment or novation by any Bank) and shall indemnify the Agent, the
Security Trustee, the Arrangers and the Banks against any liability arising
by reason of any delay or omission by the Borrower to pay such duties or
Taxes.
37
<PAGE>
8 Payments and Taxes; accounts and calculations
---------------------------------------------
8.1 No set-off or counterclaim; distribution to the Banks
-----------------------------------------------------
All payments to be made by the Obligors under this Agreement and/or the
Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in clause 8.5, free and
clear of any deductions or withholdings, in Dollars (except for costs,
charges or expenses which shall be payable in the currency in which they
are incurred) on the due date to the account of the Agent at such bank as
the Agent may from time to time specify for this purpose. Save where this
Agreement and/or the Security Documents provide for a payment to be made
for the account of the Agent (for its own account), the Arrangers, the
Security Trustee or a particular Bank (including, without limitation,
clauses 6.3, 7, 8.5, 14.1, 14.3, 15.1 and 15.2), in which case the Agent
shall distribute the relevant payment to the person concerned, payments to
be made by any Obligor under this Agreement and/or the Security Documents
shall be for the account of all the Banks and the Agent shall forthwith
distribute such payments in like funds as are received by the Agent to the
Banks rateably in accordance with their Commitments or Contributions, as
the case may be.
8.2 Payments by the Banks
---------------------
All sums to be advanced by the Banks to the Borrower under this Agreement
shall be remitted in Dollars on the Drawdown Date to the account of the
Agent at such bank as the Agent may have notified to the Banks and shall be
paid by the Agent on such date in like funds as are received by the Agent
in accordance with the Borrower's irrevocable authorisation and instruction
contained in clause 4.2.
8.3 Non-Banking Days
----------------
When any payment under this Agreement would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be postponed to the
next following Banking Day unless such Banking Day falls in the next
calendar month in which case payment shall be made on the immediately
preceding Banking Day. If any date or day specifically referred to in this
Agreement is not a Banking Day all references thereto shall be deemed to be
to the immediately preceding Banking Day.
8.4 Agent may assume receipt
------------------------
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may assume that the payment will be
made when due and may (but shall not be obliged to) make such sum available
to the person so entitled. If it proves to be the case that such payment
was not made to the Agent, then the person to whom such sum was so made
available shall on request refund such sum to the Agent together with
interest thereon sufficient to compensate the Agent for the cost of making
available such sum up to the date
38
<PAGE>
of such repayment and the person by whom such sum was payable shall
indemnify the Agent for any and all loss or reasonable expense which the
Agent may sustain or incur as a consequence of such sum not having been
paid on its due date.
8.5 Grossing-up for Taxes
---------------------
Subject to clause 8.6, if at any time any Obligor is required to make any
deduction or withholding in respect of Taxes from any payment due under
this Agreement and/or the Security Documents for the account of any Bank,
the Arrangers, the Security Trustee or the Agent (or if the Agent is
required to make any such deduction or withholding from a payment to the
Arrangers, the Security Trustee or a Bank), the sum due from the relevant
Obligor in respect of such payment shall, subject to the Banks' compliance
with clause 8.8(b), be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, each Bank, the
Arrangers, the Security Trustee and the Agent receives on the due date for
such payment (and retains, free from any liability in respect of such
deduction or withholding) a net sum equal to the sum which it would have
received had no such deduction or withholding been required to be made and
the relevant Obligor shall indemnify each Bank, the Arrangers, the Security
Trustee and the Agent against any losses or costs incurred by any of them
by reason of any failure of such Obligor to make any such deduction or
withholding or by reason of any increased payment not being made on the due
date for such payment. The relevant Obligor shall promptly deliver to the
Agent any receipts, certificates or other proof evidencing the amounts (if
any) paid or payable in respect of any such deduction or withholding.
8.6 Qualifying Banks
----------------
If any Bank is not or ceases to be a Qualifying Bank then it shall promptly
notify the relevant Obligor upon becoming aware of the same and the
relevant Obligor shall not be obliged to pay such Bank under clause 8.5 any
amount in excess of the amount it would have been obliged to pay if such
Bank was or had not ceased to be a Qualifying Bank provided that this
clause 8.6 shall not apply (and the relevant Obligor shall be obliged to
comply with its obligations under clause 8.5) if after today's date there
shall have been any change in, or in the interpretation or application of,
any relevant law, directive, treaty (including, without limitation, any
applicable double tax treaty) or regulation or practice of any applicable
taxation authority and as a result thereof the relevant Bank ceases to be a
Qualifying Bank or the relevant Obligor will be required to make deduction
or withholding on account of tax irrespective of whether the recipient of
the relevant payment is or is not a Qualifying Bank. Each Bank confirms to
each of the Obligors that it is a Qualifying Bank.
8.7 Claw-back of Tax benefit
------------------------
If following any such deduction or withholding as is referred to in clause
8.5 the Agent, the Arrangers, the Security Trustee or any Bank shall
receive or be
39
<PAGE>
granted a credit against or remission for any Taxes payable by it, the
Agent, the Arrangers, the Security Trustee or such Bank shall, subject to
the relevant Obligor having made any increased payment in accordance with
clause 8.5 and to the extent that the Agent, the Arrangers, the Security
Trustee or such Bank can do so without prejudicing the retention of the
amount of such credit or remission and without prejudice to the right of
the Agent, the Arrangers, the Security Trustee or such Bank to obtain any
other relief or allowance which may be available to it, reimburse the
relevant Obligor with such amount as the Agent, the Arrangers, the Security
Trustee or such Bank shall in its absolute discretion certify to be the
proportion of such credit or remission as will leave the Agent, the
Arrangers, the Security Trustee or such Bank (after such reimbursement) in
no worse position than it would have been in had there been no such
deduction or withholding from the payment by the relevant Obligor as
aforesaid. Such reimbursement shall be made forthwith upon the Agent, the
Arrangers, the Security Trustee or such Bank certifying that the amount of
such credit or remission has been received by it. Nothing contained in this
Agreement shall oblige the Agent, the Arrangers, the Security Trustee or
any Bank to rearrange its tax affairs or to disclose any information
regarding its tax affairs and computations. Without prejudice to the
generality of the foregoing, the Obligors shall not, by virtue of this
clause 8.7, be entitled to enquire about the Agent's, the Arrangers, the
Security Trustee's or any Bank's tax affairs.
8.8 Certification to secure a Tax benefit
-------------------------------------
If, in order to make any payment due under this Agreement to the Agent, the
Arrangers, the Security Trustee or any Bank without deduction or
withholding for or on account of Taxes or to secure the benefit of any
reduced rate of such deduction or withholding, the Borrower requires a
direction from or the consent of a government or taxing authority:
(a) the Borrower agrees to use its reasonable endeavours to complete
(accurately and in a manner reasonably satisfactory to the Agent, the
Security Trustee, the Arrangers or such Bank), execute, arrange for
any required certification of, and deliver to the Agent, the Security
Trustee, the Arrangers or such Bank, or such government or taxing
authority as the Agent, the Security Trustee, the Arrangers or such
Bank directs, any form or document reasonably required of it, and to
provide such information that the Agent, the Security Trustee, the
Arrangers, such Bank or such government or taxing authority may
reasonably require or request in order to assist or enable the Agent,
the Security Trustee, the Arrangers or such Bank to secure that such a
direction or consent is given to the Borrower in respect of any
payment. The Borrower shall perform its obligations under this sub-
paragraph (a) promptly upon the earlier of:
(i) being notified that the form, document or information is required
or requested; and
40
<PAGE>
(ii) demand being made by the Agent, the Security Trustee, the
Arrangers, such Bank or the relevant government or taxing
authority,
as the case may be; and
(b) the Agent, the Security Trustee, the Arrangers and each such Bank
agrees to use its reasonable endeavours to complete (accurately and in
a manner reasonably satisfactory to the Borrower), execute, arrange
for any required certification of, and deliver to the Borrower, or
such government or taxing authority as the Borrower directs, any form
or document reasonably required of it, and to provide such information
that the Borrower or such government or taxing authority may
reasonably require or request in order to assist or enable the
Borrower to secure that such a direction or consent is given to the
Borrower in respect of any payment. The obligations of the Agent, the
Security Trustee, the Arrangers and such Bank under this sub-clause
(b) shall be performed within 30 days of reasonable demand by the
Borrower.
8.9 Bank accounts
-------------
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by, owing
to and paid to it under this Agreement. The Agent shall maintain a control
account showing the sums owing by the Borrower under this Agreement and all
payments in respect thereof made by the Obligors from time to time. The
control account shall, in the absence of manifest error, be conclusive as
to the amount from time to time owing by the Borrower under this Agreement.
8.10 Partial payments
----------------
If, on any date on which a payment is due to be made by any Obligor under
this Agreement and/or the Security Documents, the amount received by the
Agent from the relevant Obligor falls short of the total amount of the
payment due to be made by the relevant Obligor on such date then, without
prejudice to any rights or remedies available to the Agent and the Banks
under this Agreement and/or the Security Documents, the Agent shall apply
the amount actually received from the relevant Obligor in or towards
discharge of the obligations of the Borrower under this Agreement and the
Security Documents in the following order, notwithstanding any
appropriation made, or purported to be made, by the relevant Obligor:
(a) firstly, in or towards payment of any unpaid fees, costs and expenses
of the Agent under this Agreement and/or the Security Documents;
(b) secondly, in or towards payment in accordance with the terms of the
letter referred to in clause 7.1(a) of any portion of the signing fee
payable under clause 7.1(a) which remains unpaid;
41
<PAGE>
(c) thirdly, in or towards payment to the Banks, on a pro rata basis, of
any portion of the additional fee payable under clause 7.1(d) or the
commitment commission payable under clause 7.1(c) which remains
unpaid;
(d) fourthly, in or towards payment to the Banks, on a pro rata basis, of
any accrued interest which shall have become due but remains unpaid;
(e) fifthly, in or towards payment to the Banks, on a pro rata basis, of
any principal which shall have become due but remains unpaid; and
(f) sixthly, in or towards payment of any other sum which shall have
become due but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro rata basis).
The order of application set out in this clause 8.10(c) - 8.10(f) shall be
varied by the Agent if all Banks so direct, without any reference to, or
consent or approval from, the Borrower.
8.11 Calculations
------------
All interest and other payments of an annual nature under this Agreement
shall accrue from day to day and be calculated on the basis of actual days
elapsed and a 360 day year. In calculating the actual number of days
elapsed in a period which is one of a series of consecutive periods with no
interval between them or a period on the last day of which any payment
falls to be made in respect of such period, the first day of such period
shall be included but the last day excluded.
8.12 Certificates conclusive
-----------------------
Any certificate or determination of the Agent or any Bank as to any rate of
interest or any amount payable under this Agreement shall, in the absence
of manifest error, be conclusive and binding on the Obligors and (in the
case of a certificate or determination by the Agent) on the Banks.
42
<PAGE>
9 Guarantee
---------
9.1 Covenant to pay
---------------
In consideration of the Banks making the Loan to the Borrower pursuant to
this Agreement the Guarantors hereby irrevocably and unconditionally:
(a) jointly and severally guarantee to each Bank, the Arrangers, the
Security Trustee and the Agent the due performance by the Borrower of
all of its obligations under or pursuant to this Agreement; and
(b) jointly and severally guarantee to each Bank, the Arrangers, the
Security Trustee and the Agent the payment of all moneys now or
hereafter due, owing or incurred by the Borrower under or pursuant to
this Agreement when the same become due whether by acceleration or
otherwise.
9.2 Guarantors as principal debtors; indemnity
------------------------------------------
As a separate and independent stipulation, but subject always to the
provisions of clause 9.1, the Guarantors jointly and severally agree that
if any purported obligation or liability of the Borrower which would have
been the subject of this Guarantee had it been valid and enforceable is not
or ceases to be valid or enforceable against the Borrower on any ground
whatsoever whether or not known to the Banks or any of them or the Agent,
the Security Trustee or the Arrangers (including, without limitation, any
irregular exercise or absence of any corporate power or lack of authority
of, or breach of duty by, any person purporting to act on behalf of the
Borrower or any legal or other limitation, or any disability or Incapacity
or any change in the constitution of the Borrower) the Guarantors shall
nevertheless be jointly and severally liable in respect of that purported
obligation or liability as if the same were fully valid and enforceable and
each Guarantor was the principal debtor in respect thereof. The Guarantors
hereby irrevocably and unconditionally jointly and severally agree to
indemnify and keep indemnified the Agent, the Arrangers, the Security
Trustee and the Banks against any loss or liability arising from any
failure of the Borrower to perform or discharge any such purported
obligation or liability or from any invalidity or unenforceability of any
of the same against the Borrower.
9.3 Limitation
----------
Notwithstanding the other provisions of this clause 9, the liability of
each Guarantor under this Guarantee is limited to the greater of:
(a) the amount by which such Guarantor's assets on the Completion Date
(being (i) in the case of KTE Newco, its Ownership Interests in KTE
and CNBH, (ii) in the case of UII Newco, its Ownership Interests in
UII, and (iii) in the case of Kabelkom Newco, its Ownership Interests
in Kabelkom) exceed the principal amount of the Reorganisation Loan
owing by such Guarantor on such date; and
43
<PAGE>
(b) the distributable reserves of such Guarantor at each date on which
demand is made under this Guarantee, for which purpose "distributable
reserves" means the shareholders' equity of the relevant Guarantor as
far as it exceeds the sum of the amount of the paid and called up part
of the capital and the reserves which must be maintained under the law
or the articles.
For the avoidance of doubt, the making of a demand under this Guarantee
shall not preclude the making of a further or subsequent demand.
9.4 No security taken by Guarantors
-------------------------------
The Guarantors hereby jointly and severally warrant that they have not
taken or received, and undertake that until all the Guaranteed Liabilities
have been paid or discharged in full, they will not take or receive, the
benefit of any security from the Borrower or any other person in respect of
their obligations under this Guarantee save as may be agreed by the
Majority Banks.
9.5 Interest
--------
Each Guarantor agrees to pay interest on each amount demanded of it under
this Guarantee from the date of such demand until payment (as well after as
before judgment) at the rate specified in clause 5.4. Such interest shall
be compounded at the end of each period determined for this purpose by the
Agent in the event of it not being paid when demanded but without prejudice
to the Agents, each Arranger's, the Security Trustee's and each Bank's
right to require payment of such interest.
9.6 Continuing security and other matters
-------------------------------------
This Guarantee shall, subject to the provisions of clause 9.1:
(a) extend to the ultimate balance from time to time owing to the Banks
and/or the Agent and/or the Arrangers and/or the Security Trustee by
the Borrower and shall be a continuing guarantee, notwithstanding any
settlement of account or other matter whatsoever;
(b) be in addition to any present or future Collateral Instrument, right
or remedy held by or available to the Banks or any of them, the
Arrangers or either of them, the Security Trustee or the Agent; and
(c) not be in any way prejudiced or affected by the existence of any such
Collateral Instrument, rights or remedies or by the same becoming
wholly or in part void, voidable or unenforceable on any ground
whatsoever or by the Agent, the Security Trustee, the Arrangers or
either of them or the Banks or any of them dealing with, exchanging,
varying or failing to perfect or enforce any of the same or giving
time for payment or indulgence or compounding with any other person
liable.
44
<PAGE>
9.7 New accounts
------------
If this Guarantee ceases to be continuing for any reason whatsoever each
Bank may nevertheless continue any account of the Borrower or open one or
more new accounts and the liability of each Guarantor under this Guarantee
shall not in any manner be reduced or affected by any subsequent
transactions or receipts or payments into or out of any such account.
9.8 Liability unconditional
-----------------------
The liability of each Guarantor shall not be affected nor shall this
Guarantee be discharged or reduced by reason of:
(a) the Incapacity or any change in the name, style or constitution of any
Obligor or any other person liable; or
(b) the Agent, the Security Trustee, either of the Arrangers or any of the
Banks granting any time, indulgence or concession to, or compounding
with, discharging, releasing or varying the liability of any other
Obligor or any other person liable or renewing, determining, varying
or increasing any accommodation, facility or transaction or otherwise
dealing with the same in any manner whatsoever or concurring in,
accepting or varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from any Obligor or any other
person liable; or
(c) any act or omission which would not have discharged or affected the
liability of such Guarantor had it been a principal debtor instead of
a guarantor or by anything done or omitted which but for this
provision might operate to exonerate such Guarantor.
9.9 Collateral Instruments
----------------------
None of the Banks, the Arrangers, the Security Trustee and the Agent shall
be obliged to make any claim or demand on the Borrower or to resort to any
Collateral Instrument or other means of payment now or hereafter held by or
available to them or it before enforcing this Guarantee and no action taken
or omitted by any of the Banks, either of the Arrangers, the Security
Trustee or the Agent in connection with any such Collateral Instrument or
other means of payment shall discharge, reduce, prejudice or affect the
liability of any Guarantor under this Guarantee nor shall any of the Banks,
either of the Arrangers, the Security Trustee or the Agent be obliged to
apply any money or other property received or recovered in consequence of
any enforcement or realisation of any such Collateral Instrument or other
means of payment in reduction of the Guaranteed Liabilities.
9.10 Waiver of Guarantors' rights
----------------------------
Until all the Guaranteed Liabilities have been paid, discharged or
satisfied in full (and notwithstanding payment of a dividend in any
liquidation or under any
45
<PAGE>
compromise or arrangement) each Guarantor agrees that, without the prior
written consent of the Agent, it will not:
(a) exercise its rights of subrogation, reimbursement and indemnity
against any other Obligor or any other person liable; or
(b) demand or accept any security to be executed in respect of any of its
obligations under this Guarantee or any other Indebtedness now or
hereafter due to such Guarantor from any other member of the Group or
from any other person liable; or
(c) take any step or enforce any right against any other Obligor or any
other person liable in respect of any Guaranteed Liabilities; or
(d) exercise any right of set-off or counterclaim against any other
Obligor or any other person liable or claim or prove or vote as a
creditor in competition with the Agent, either of the Arrangers, the
Security Trustee or any of the Banks in the liquidation,
administration or other insolvency proceeding of any other Obligor or
any other person liable or have the benefit of, or share in, any
payment from, or composition with, any other Obligor or any other
person liable or any other Collateral Instrument now or hereafter held
by the Agent, either of the Arrangers, the Security Trustee or any of
the Banks for any Guaranteed Liabilities or for the obligations or
liabilities of any other person liable but so that, if so directed by
the Agent, it will prove for the whole or any part of its claim in the
liquidation of any other Obligor on terms that the benefit of such
proof and of all money received by it in respect thereof shall be held
on trust for the Banks, the Arrangers, the Security Trustee and the
Agent and applied in or towards discharge of the Guaranteed
Liabilities in such manner as the Agent shall deem appropriate.
9.11 Suspense accounts
-----------------
Any money received in connection with this Guarantee (whether before or
after any Incapacity of any Obligor) may be placed to the credit of a
suspense account with a view to preserving the rights of the Banks, the
Arrangers, the Security Trustee and the Agent to prove for the whole of
their respective claims against any Obligor or any other person liable or
may be applied in or towards satisfaction of the Guaranteed Liabilities as
the Agent may from time to time conclusively determine in its absolute
discretion.
9.12 Settlements conditional
-----------------------
Any release, discharge or settlement between any Guarantor and the Agent,
the Security Trustee, either of the Arrangers or any of the Banks shall be
conditional upon no security, disposition or payment to the Agent, either
of the Arrangers, the Security Trustee or any of the Banks by any Obligor
or any other person liable being void, set aside or ordered to be refunded
pursuant to any enactment or law relating to bankruptcy, liquidation,
administration or insolvency or for
46
<PAGE>
any other reason whatsoever and if such condition shall not be fulfilled
the Banks, the Arrangers, the Security Trustee and the Agent shall be
entitled to enforce this Guarantee subsequently as if such release,
discharge or settlement had not occurred and any such payment had not been
made.
9.13 Guarantors to deliver up certain property
-----------------------------------------
If, contrary to clauses 9.4 or 9.10, any Guarantor takes or receives the
benefit of any security or receives or recovers any money or other
property, such security, money or other property shall be held on trust for
the Agent, the Arrangers, the Security Trustee and the Banks and shall be
delivered to the Agent on demand.
9.14 Retention of this guarantee
---------------------------
The Banks, the Arrangers, the Security Trustee and the Agent shall be
entitled to retain this Guarantee after as well as before the payment or
discharge of all the Guaranteed Liabilities for such period as the Agent
may reasonably determine.
9.15 Changes in constitution or reorganisations of Banks
---------------------------------------------------
For the avoidance of doubt and without prejudice to the provisions of
clause 18, this Guarantee shall remain binding on each Guarantor
notwithstanding any change in the constitution of the Banks or any of them
or the Arrangers or either of them, the Security Trustee or the Agent or
their or its absorption in, or amalgamation with, or the acquisition of all
or part of their or its undertaking or assets by, any other person, or any
reconstruction or reorganisation of any kind, to the intent that this
Guarantee shall remain valid and effective in all respects in favour of any
successor in title of the Banks, the Arrangers, the Security Trustee and
the Agent, any Substitute, any successor Agent appointed pursuant to clause
18.13 and any successor Security Trustee appointed pursuant to the Security
Trust Deed in the same manner as if such successor in title, Substitute,
successor Agent or successor Security Trustee had been named in this
Guarantee as a party instead of, or in addition to, the relevant Bank, the
relevant Arranger, the Security Trustee or the Agent, as the case may be.
9.16 Other guarantors
----------------
Each Guarantor agrees to be bound by this Guarantee notwithstanding that
any other person intended to execute or to be bound by any other guarantee
or assurance under or pursuant to this Agreement may not do so or may not
be effectually bound and notwithstanding that such other guarantee or
assurance may be determined or be or become invalid or unenforceable
against any other person, whether or not the deficiency is known to the
Banks or any of them, the Agent, the Security Trustee or the Arrangers or
either of them.
47
<PAGE>
9.17 Covenant by the Guarantors
--------------------------
Each Guarantor agrees that it will not agree to the admission of a new
partner (other than in substitution for an existing partner) to any Joint
Venture Agreement to which such Guarantor is from time to time a party.
48
<PAGE>
10 Representations and warranties
------------------------------
10.1 Repeated representations and warranties
---------------------------------------
Each Obligor jointly and severally represents and warrants to each of the
Banks, the Arrangers, the Security Trustee and the Agent that:
(a) Due incorporation of Corporate Group Members: all of the Corporate
--------------------------------------------
Group Members are duly incorporated and validly existing under the
laws of the respective jurisdictions of their incorporation and have
power to carry on their respective businesses as they are now being
conducted and to own their respective property and other assets;
(b) Due formation of Partnership Group Members: all of the Partnership
------------------------------------------
Group Members are partnerships duly formed, and validly existing under
the laws of the respective jurisdictions of their formation and have
the power and authority to carry on their respective businesses as
they are now being conducted and to own their respective property and
other assets. Each Partnership Group Member is duly qualified, in good
standing and authorised to do business in each jurisdiction in which
the character of its properties or the nature of its business requires
such qualification or authorisation;
(c) Power to borrow etc.: each Obligor has power to execute, deliver and
--------------------
perform its obligations under this Agreement and the Security
Documents to which it is a party and to borrow the Commitments; all
necessary corporate, shareholder and other action has been taken to
authorise the execution, delivery and performance of the same and no
limitation on the powers of the Borrower to borrow or on the powers of
any Guarantor to give guarantees will be exceeded as a result of
borrowings under this Agreement or as a result of the giving of the
Guarantee;
(d) Binding obligations: this Agreement constitutes, and the Security
-------------------
Documents to which it is a party, when executed and delivered by the
relevant Obligor, will constitute, valid and legally binding
obligations of such Obligor enforceable in accordance with their
respective terms subject to the qualifications contained in the legal
opinions referred to in schedule 3 and mandatory provisions of law
affecting creditors' rights generally;
(e) No conflict with other obligations: the execution and delivery of, the
----------------------------------
performance of its obligations under, and compliance with the
provisions of, this Agreement and the Security Documents to which it
is a party by the Obligors will not (i) contravene any existing
applicable law, statute, rule or regulation or any judgment, decree or
permit to which any Obligor is subject, (ii) conflict with, or result
in any breach of any of the terms of, or constitute a default under,
any agreement or other instrument to which any Obligor is a party or
is subject or by which it or any of its
49
<PAGE>
property is bound, (iii) contravene or conflict with any provision of
any Obligor's constitutive documents, (iv) breach in any material
respect any term of the Joint Venture Agreements or Licences or
Necessary Authorisations or (v) save for the Encumbrances granted to
the Security Trustee pursuant to the Security Documents, result in the
creation or imposition of or oblige any member of the Group to create
any Encumbrance (other than a Permitted Encumbrance) on any member of
the Group's undertakings, assets, rights or revenues;
(f) No filings required: save for the filings, registrations and
-------------------
notarisations referred to in the legal opinions referred to in
schedule 3, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or the
Security Documents that any of them or any other instrument be
notarised, filed, recorded, registered or enrolled in any court,
public office or elsewhere in any Relevant Jurisdiction or that any
stamp, registration or similar tax or charge be paid in any Relevant
Jurisdiction on or in relation to this Agreement or any of the
Security Documents and this Agreement and the Security Documents are
in proper form for their enforcement in the courts of any Relevant
Jurisdiction;
(g) No litigation: no litigation, arbitration or administrative proceeding
-------------
is taking place, pending or, to the knowledge of the officers of any
Obligor, threatened against any member of the Group which, if
adversely determined, would or is reasonably likely to have a Material
Adverse Effect;
(h) Financial statements correct and complete:
-----------------------------------------
(i) the financial statements of each Key Group Member (other than the
Obligors) in respect of the financial year ended on 31st December
1996 as delivered to the Agent have been prepared in accordance
with GAAP which principles have been consistently applied and
present fairly and accurately the financial position of such Key
Group Member as at such date and the results of the operations of
the operations of such Key Group Member for the financial year
ended on such date and, as at such date, no Key Group Member had
any significant liabilities (contingent or otherwise) or any
losses which are not disclosed by, or reserved against or
provided for in, such financial statements;
(ii) the unaudited quarterly management accounts for each Key Group
Core Member delivered to the Agent pursuant to clause 3.1 and
paragraph (n) of schedule 3 have been prepared in accordance with
GAAP which principles have been consistently applied and present
fairly and accurately the results of the operations of such Key
Group Core Member for the relevant period; and
50
<PAGE>
(iii) the Management Base Case has been prepared based upon historical
financial information and upon the assumptions set forth
therein, which assumptions were reasonable when made and are
reasonable on the date hereof;
(i) No material adverse change: there has been no material adverse change
--------------------------
in the financial position of any Key Group Member from that set forth
in the financial statements referred to in clause 10.1(h)(i) and (ii);
(j) Choice of law: the choice by the Obligors of English law to govern
-------------
this Agreement and the submission by the Obligors to the non-exclusive
jurisdiction of the High Court of Justice in England are valid and
binding;
(k) Title to assets: each Obligor is the legal and beneficial owner of and
---------------
has good and marketable title to its assets free and clear of any
Encumbrance other than Permitted Encumbrances;
(l) Intellectual Property Rights:
----------------------------
(i) the Intellectual Property Rights owned by or licensed to each
member of the Group are free from any Encumbrance (save for
Permitted Encumbrances) and any other rights or interests in
favour of third parties;
(ii) the Intellectual Property Rights owned by or licensed to each
member of the Group are all the Intellectual Property Rights
required by them in order to carry on, maintain and operate in
all material respects their respective businesses, properties
and assets and no member of the Group in carrying on its
business infringes any Intellectual Property Rights of any third
party where any action taken by such third party in respect of
any such infringement would or is reasonably likely to have a
Material Adverse Effect; and
(iii) no Intellectual Property Rights owned by any member of the Group
are being infringed, nor is there any threatened infringement of
any such Intellectual Property Rights which, in either case,
would or is reasonably likely to have a Material Adverse Effect;
(m) Copyright matters: each member of the Group has obtained all consents
-----------------
and taken all other action required in connection with the secondary
transmission by it of any broadcast television signals (other than
where failure to do so would not, or is not reasonably likely to, have
a Material Adverse Effect) and no member of the Group has any
knowledge, nor is it aware of any claim, that it is or may be liable
to any person for any copyright infringement of any nature whatsoever
as a result of the
51
<PAGE>
operation of its business which liability would or is reasonably
likely to have a Material Adverse Effect;
(n) Ownership Interests: all shares issued by each Corporate Group Member
-------------------
to a member of the Group have been validly allotted and all Ownership
Interests in each Partnership Group Member granted to a member of the
Group have been validly granted;
(o) Works councils: no member of the Group incorporated in the Netherlands
--------------
has instituted a works council or, if any such works council has been
instituted, all action has been taken by or in relation to such works
council necessary to authorise the performance by the Obligors of
their respective obligations under this Agreement and the Security
Documents;
(p) Borrower control: the by-laws of the Unrestricted Assets and/or the
----------------
Joint Venture Agreements for the Unrestricted Assets provide (i) the
protection against the incurrence of incremental Borrowed Money by
such entities without the approval of the Borrower and (ii) the
Borrower with the ability to approve operating decisions, annual
budgets and similar matters (in each case) as described in the
Disclosure Letter;
(q) No other joint venture agreements: the Joint Venture Agreements are
---------------------------------
the only agreements between the Key Group Members and any other
shareholder in any Corporate Group Member or (as the case may be) any
other partner in any Partnership Group Member in relation to or
regulating the holding of Ownership Interests in the relevant
Corporate Group Member or (as the case may be) Partnership Group
Member; and
(r) Dormant companies: Ballinasloe Electronic Services (Audio Vision)
-----------------
Ltd., T.V. Sparts Ltd., Culross Investments Ltd., Kenniv Securities,
UIH Portugal, Inc., UIH Bulgaria, Inc., UIH Slovakia, Inc., UIH
Turkey, Inc. and Multi Televisoa Porcabo Lda are all dormant companies
and have no material assets.
10.2 Further representations and warranties
--------------------------------------
Each Obligor jointly and severally further represents and warrants to each
of the Banks, the Arrangers, the Security Trustee and the Agent that:
(a) Licences and Necessary Authorisations:
-------------------------------------
(i) the Licences are in full force and effect and each member of the
Group is in compliance in all material respects with all
provisions thereof. Each member of the Group has secured all the
Necessary Authorisations, all such Necessary Authorisations are
in full force and effect and each member of the Group is in
compliance in all material respects with all provisions thereof.
In respect of members of the Group which are not Key Group
Members, this
52
<PAGE>
representation and warranty is made to the best of
the knowledge and belief of the Obligors after due enquiry;
(ii) to the best of its knowledge and belief after due enquiry,
neither the Licences nor any of the Necessary Authorisations are
the subject of any pending or threatened attack or revocation;
(b) Consents obtained: every consent, authorisation, licence or approval
-----------------
of, or registration with or declaration to, Joint Venturers or
governmental or public bodies or authorities or courts (other than the
Licences and the Necessary Authorisations) required:
(i) by any Obligor to authorise, or required by any Obligor in
connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this Agreement
and/or the Security Documents to which it is a party or the
performance by such Obligor of its obligations under this
Agreement and/or the Security Documents to which it is a party;
or
(ii) from Joint Venturers to authorise the execution, granting of
Encumbrances under and enforcement of the Security Documents to
which any Obligor is a party
has been obtained or made and is in full force and effect and there
has been no material default in the observance of the conditions or
restrictions (if any) imposed in, or in connection with, any of the
same;
(c) Contractual commitments: since the financial statements of the members
-----------------------
of the Group in respect of the financial year ended on 31st December
1996 (and, without prejudice to any other term of this Agreement, save
as disclosed by such financial statements), no dividends (in cash or
specie) or any other rights or benefits have been declared, made or
paid by the members of the Group and no member of the Group has
entered into any contractual commitments of a material nature (other
than (i) for the purpose of carrying out the business of constructing,
installing and operating cable television and telecommunications
systems in the territories covered by the Licences or such other
business as is permitted by the terms of this Agreement or (ii)
contractual commitments constituting Permitted Borrowings, Permitted
Disposals or Permitted Encumbrances). In respect of members of the
Group which are not Key Group Members, this representation and
warranty is made to the best of the knowledge and belief of the
Obligors after due enquiry;
(d) No withholding Taxes: (assuming the correctness of the confirmation
--------------------
set out in clause 8.6) under the law and practice at the Completion
Date no Taxes are imposed by withholding or otherwise on any payment
to be made to the Agent, the Security Trustee, the Arrangers or the
Banks by any Obligor under this Agreement or any Security Document or
are imposed on or by virtue of the execution or delivery by any
Obligor of
53
<PAGE>
this Agreement or any Security Document to which it is a party or any
document or instrument to be executed or delivered under this
Agreement or any such Security Document;
(e) Telecommunications and Cable Laws: to the best of its knowledge and
---------------------------------
belief after due enquiry, each member of the Group is in compliance in
all material respects with all Telecommunications and Cable Laws but
excluding, for these purposes only, breaches of Telecommunications and
Cable Laws which have been expressly waived by the relevant regulatory
authority;
(f) No Default:
----------
(i) no Key Group Member and no other member of the Group which is a
wholly owned (direct or indirect) subsidiary of the Borrower is
in breach of or in default under any agreement relating to
Borrowed Money to which it is a party or by which it may be
bound; and
(ii) no other member of the Group is in material breach of or in
material default under any agreement relating to Borrowed Money
to which it is a party or by which it may be bound, for which
purpose a "material breach" and a "material default" includes,
without limitation, any default in making payment on the due date
(ignoring any applicable grace period);
(g) Information Package: to the best of its knowledge and belief (in the
-------------------
case of the Borrower only) after due enquiry, as at the respective
dates of the documents comprising the Information Package the factual
information contained in the Information Package was true and accurate
in all material respects and not misleading in any material respect
and the Information Package does not omit any material facts; all
reasonable enquiries have been made by the Borrower to verify the
facts and statements contained therein; all opinions, projections,
valuations and forecasts contained therein, and the assumptions on
which such opinions, projections, valuations and forecasts were based,
were arrived at after due and careful consideration and enquiry and
represented the views of the Borrower as at the respective dates of
the documents comprising the Information Package; there are no
material facts or circumstances which have not been disclosed to the
Arrangers prior to the date hereof the omission of which could make
any factual information contained in the Information Package
inaccurate or misleading in any material respect either as at the
respective dates of the documents comprising the Information Package
or as at the date of this Agreement or any of the opinions,
projections, valuations and forecasts contained in the Information
Package (and the assumptions on which such opinions, projections,
valuations and forecasts were made) misleading in any material respect
either as at the respective dates of the documents comprising the
Information Package or as the date of this Agreement.
54
<PAGE>
No warranty or representation is made in respect of (i) any
information, facts, statements, opinions, projections, valuations,
forecasts, demographic statistics or circumstances relating to the
cable and telecommunications industry as a whole, or (ii) any person
other than the members of the Group;
(h) Environmental matters:
---------------------
(i) each member of the Group complies, in all respects, with all
requirements of Environmental Laws where failure to do so has or
is reasonably likely to have a Material Adverse Effect; and
(ii) after due enquiry, no Environmental Claim is, to the knowledge of
any member of the Group, pending, threatened or existing, as at
the date of this Agreement, which has or is reasonably likely to
have a Material Adverse Effect;
(i) Copies of documents to be true and accurate: the copies of the Joint
-------------------------------------------
Venture Agreements delivered to the Agent in accordance with schedule
3 and clause 3 are true, complete and accurate in all respects and
have not been amended, varied or supplemented in any way and no other
agreements, arrangements or understandings exist between all or any of
the parties to those agreements and instruments which would materially
and adversely affect the transactions or arrangements contemplated by
the Joint Venture Agreements and/or the forecasts, projections,
valuations and/or estimates contained or referred to in the
Information Memorandum;
(j) Ownership Interests in Group members: the legal owners of the
------------------------------------
Ownership Interests in each member of the Group are those persons
listed against such member in parts B and C of schedule 1. Such parts
of such schedule are true and accurate in all material respects and
complete. Those Ownership Interests listed as being held by members of
the Group are beneficially owned by the relevant members of the Group
free of Encumbrances (other than Permitted Encumbrances), who have
good and marketable title to them. The members of the Group have no
Ownership Interests in any person (other than, in the case of the
Borrower, the other Obligors and the UIH Shares, in respect of which
it is the legal and beneficial owner free of Encumbrances (other than
Permitted Encumbrances) and has good and marketable title) save for
those listed in parts B and C of schedule 1; and
(k) Clean company: prior to the date of this Agreement none of the
-------------
Obligors has undertaken any trading or incurred any material
liabilities of any nature whatsoever whether actual or contingent,
except for liabilities for professional fees and any liability which
would arise if the relevant company were wound up.
55
<PAGE>
10.3 Repetition
----------
The representations and warranties in clause 10.1, (so that (i) the
representation and warranty in clause 10.1(h)(i) shall for this purpose
refer to the then latest financial statements of the respective Key Group
members delivered to the Agent under clause 11.1, (ii) the representation
and warranty in clause 10.1(h)(ii) shall for this purpose refer to the
then latest Quarterly Management Accounts of the respective Key Group Core
Members delivered to the Agent under clause 11.1, and (iii) the
representation and warranty in clause 10.1(i) shall for this purpose refer
to the then latest financial statements of the respective Key Group
Members delivered to the Agent under clause 11.1) shall be deemed to be
repeated by the Obligors on and as of the Drawdown Date and each Interest
Payment Date as if made with reference to the facts and circumstances
existing on each such day.
56
<PAGE>
11 Undertakings
------------
11.1 Positive Covenants
------------------
Each Obligor jointly and severally undertakes with each of the Banks, the
Arrangers, the Security Trustee and the Agent that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower, it will and (save where
otherwise indicated) will procure that each other member of the Group
will:
(a) Notice of Default, etc.
-----------------------
procure that the Agent is promptly informed of (i) any occurrence of
which it becomes aware which would or is reasonably likely to have a
Material Adverse Effect, (ii) any Default and any potential breach of
any of the undertakings set out in clause 11 or 12 forthwith upon
becoming aware thereof and will from time to time, if so requested by
the Agent, confirm to the Agent in writing that, save as otherwise
stated in such confirmation, no Default has occurred and is
continuing, (iii) any lapse, suspension or termination of or refusal
by any person to renew or extend any Licence or Necessary
Authorisation or any breach of any Licence or Necessary Authorisation
or any breach of any Licence or Necessary Authorisation where any
such breach would or is reasonably likely to have a Material Adverse
Effect, (iv) (to the extent known to any member of the Group) the
commencement of all proceedings and investigations by or before any
governmental body and all actions and proceedings in any court or
before any arbitrator where any such proceedings, investigations or
actions would, if adversely determined, have a Material Adverse
Effect, (v) any application of which it becomes aware for any other
licence or franchise agreement by means of cable television systems
(including satellite master antennae television systems and multi-
point microwave distributions systems) with respect to the territory
covered by the Licences where any such application, if successful,
would or is reasonably likely to have a Material Adverse Effect, (vi)
any dispute under any Joint Venture Agreement and (vii) any breach of
any Telecommunications and Cable Laws by any member of the Group
which would or is reasonably likely to have a Material Adverse
Effect;
(b) Consents and licences
---------------------
(in the case of each Obligor only) without prejudice to clause 3
obtain or cause to be obtained, maintain in full force and effect and
comply in all material respects with the conditions and restrictions
(if any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public bodies
or authorities or courts and do, or cause to be done, all other acts
and things which may from time to time be necessary or desirable
under applicable law for the continued due
57
<PAGE>
performance of all its obligations under this Agreement and the
Security Documents;
(c) Use of proceeds
---------------
(in the case of the Borrower only) use the proceeds of drawing of the
Loan exclusively for the purposes specified in clause 1.1;
(d) Pari passu
----------
(in the case of each Obligor only) ensure that its obligations under
this Agreement shall, without prejudice to the provisions of clause
11.2 or to the security intended to be created pursuant to the
Security Documents, at all times rank at least pari passu with all
its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are
mandatorily preferred by law and not by contract;
(e) Business
--------
(in the case of each Obligor only) engage in the business of holding
and disposing of Ownership Interests in other members of the Group
and performing its obligations under this Agreement and the Security
Documents and in no other activities (and, without prejudice to the
generality of the foregoing, shall not have outstanding any
Indebtedness other than Permitted Borrowings or any Encumbrances
other than Permitted Encumbrances);
(f) Financial statements
--------------------
prepare annual financial statements of each Key Group Member as
referred to in schedule 11 in accordance with GAAP and cause such
financial statements to be reported on by its auditors and deliver to
the Agent sufficient copies of the same for distribution to all of
the Banks as soon as practicable but not later than 120 days after
the end of the financial year to which they relate;
(g) Quarterly Management Accounts
-----------------------------
in respect of each Quarterly Period commencing with the Quarterly
Period ending 31st December, 1997 prepare unaudited Quarterly
Management Accounts for each Key Group Core Member other than UII as
referred to in schedule 11 in each case containing information of a
substantially similar type and to a substantially similar level of
detail as in the format used in the preparation of the Management
Base Case (including, without limitation, a profit and loss account,
balance sheet, cash flow statement and summary of operating
statistics in the form (or in a form substantially similar to the
form) used in the Management Base Case and, in the case of the last
Quarterly Period of each financial year, a profit and loss account,
balance sheet and cash flow statement for that financial year in the
form (or in a form substantially similar to the form)
58
<PAGE>
used in the Management Base Case) or omitting any such information or
detail or containing such other information or to such other level of
detail as may, from time to time, be approved by the Agent (acting on
the instructions of the Majority Banks acting reasonably) in writing
and deliver a copy of the same to the Agent for distribution to all
of the Banks as soon as practicable but not later than 45 days after
the Quarterly Period to which they relate;
(h) Monthly information
-------------------
(in the case of the Borrower only) in respect of each calendar month
commencing with December 1997, by not later than 30 days after each
month end provide a statement of all disposals made and a report on
the progress which has been made in (i) the implementation of the
Disposals Plan (including, without limitation, a reconciliation of
any divergences from the timetable set out therein), and (ii)
identifying alternative sources of repayment (including, without
limitation, the raising of additional share capital or Borrowed
Money) of the Loan that are being pursued;
(i) Delivery of reports
-------------------
(in the case of the Borrower only) deliver to the Agent, for
distribution to the Banks, sufficient copies for all of the Banks of
each of the following documents, (in the case of (i) below) at the
time of issue thereof or (in the case of (ii) below) within seven
days of each Quarter Day:
(i) every material document issued by any member of the Group to
its creditors, shareholders or partners generally; and
(ii) a Compliance Certificate stating that as at the last Quarter
Day, the Borrower was in compliance with its undertakings in
clause 12 and, to the best of the knowledge and belief of the
Borrower, the Obligors and Security Providers, were in
compliance with their respective obligations (or, in the case
of the Borrower, other obligations) under this Agreement and
the Security Documents (or, if the Borrower, any other Obligor
or any Security Provider it was not in compliance, indicating
the extent of the breach);
(j) Financial year end
------------------
(in the case of each Obligor only) maintain a financial year end of
31st December save with the prior written consent of the Majority
Banks;
(k) Authorised Officers
-------------------
(in the case of each Obligor only) ensure that any new or replacement
Authorised Officer has provided the Agent with evidence satisfactory
to it of such new officer(s)' authority and a specimen of his or
their signature(s) prior to signing any Compliance Certificates or
any other
59
<PAGE>
notices, requests or confirmations referred to in this Agreement or
relating to the Facility;
(l) Auditors
--------
(in the case of each Obligor only) ensure that Arthur Andersen is
appointed as its auditor and not change such appointment without
appointing a major accounting firm of recognised international
standing and repute;
(m) Provision of further information
--------------------------------
notify the Agent of any material change to the business of any member
of the Group providing details of such change as soon as practicable
after making such change and provide the Agent with a copy of any
material report, notice or other communication relating to the Joint
Venture Agreements, the Licences, the Necessary Authorisations and
such financial and other information concerning each member of the
Group and their respective affairs as the Agent or any Bank (acting
through the Agent) may from time to time reasonably require;
(n) Insurance
---------
maintain insurance cover of a type and level which a prudent company
in the same business as the relevant Group member would effect;
(o) Inspection
----------
if required by the Agent (acting on the instructions of the Majority
Banks), at any time whilst a Default is continuing, permit, to the
extent it is able to do so, representatives of the Agent or any of
the Banks upon reasonable prior written notice to the Borrower or the
relevant Group member, after having made arrangements with the
Borrower so to do and after entering into a confidentiality
undertaking if reasonably required by the Borrower to (a) visit and
inspect the properties of any member of the Group during normal
business hours, (b) inspect and make extracts from and copies of its
books and records other than records which the relevant member of the
Group is prohibited by law from disclosing to the Agent and/or any
relevant Bank and (c) discuss with its principal officers and
auditors its business, assets, liabilities, financial position,
results of operations and business prospects provided that any such
discussion with the auditors shall only be on the basis of the
audited accounts of the Group and Compliance Certificates issued by
the auditors;
(p) Compliance with laws and regulations
------------------------------------
comply with the terms and conditions of all laws (including
Telecommunications and Cable Laws, the Licences and the Necessary
Authorisations), regulations, agreements (including Joint Venture
Agreements), licences and concessions including, without limitation,
all
60
<PAGE>
Environmental Laws and all Environmental Licences if the failure to
comply therewith would or is reasonably likely, in the opinion of the
Agent, to have a Material Adverse Effect;
(q) Taxes
-----
file or cause to be filed all tax returns required to be filed in all
jurisdictions in which it is situated or carries on business or is
otherwise subject to Taxation and will pay all Taxes shown to be due
and payable on such returns or any assessments made against it within
the period stipulated for such payment (other than those being
contested in good faith and where such payment may be lawfully
withheld);
(r) Pledges of Ownership Interests
------------------------------
(in the case of the Borrower, UII Newco and Kabelkom Newco only)
after the last relevant Letter of Consent is obtained, provide (i) an
Encumbrance over the Ownership Interest which is the subject of such
Letter of Consent in favour of the Security Trustee, on terms
acceptable to the Agent, within 30 days of the date of such Letter of
Consent and (at the same time) (ii) such documents and evidence as
the Agent may reasonably require as to the power and authority of the
relevant Obligor to enter into such Encumbrance and that such
Encumbrance constitutes valid and legally binding obligations of such
Obligor enforceable in accordance with its terms subject to
substantially similar qualifications to those made in the legal
opinions referred to in schedule 3;
(s) Licences and Necessary Authorisations
-------------------------------------
obtain, or cause to be obtained, every consent, authorisation,
licence or approval of, or registration with or declaration to,
governmental or public bodies or authorities or courts in any
Relevant Jurisdiction necessary for the construction, installation or
operation of the Cable Systems (including, without limitation, the
Licences and the Necessary Authorisations) and (A) ensure that none
of the same is revoked, cancelled, suspended, withdrawn, terminated,
expires and is not renewed or otherwise ceases to be in full force
and effect without a new one having first been put in place with the
same member of the Group on substantially identical terms or on terms
more beneficial to such member and (B) ensure that none of the same
is modified in any respect and that no member of the Group commits
any default in the observance of the conditions or restrictions (if
any) imposed in, or in connection with, any of the same which, in the
reasonable opinion of the Majority Banks, would or is reasonably
likely to have a Material Adverse Effect;
(t) Ownership Interests in Group members
------------------------------------
(i) (in the case of the Borrower only) not dispose of or cease to
exercise direct control over any Ownership Interest in any of
the
61
<PAGE>
other Obligors except with the prior written consent of all of
the Banks; and
(ii) (without prejudice to (i) above and save for Permitted
Disposals the Net Disposal Proceeds of which are applied in
prepayment of the Loan pursuant to clause 6.5) not reduce its
Ownership Interest in any other Group member except with the
prior written consent of all of the Banks (and so that, for
the avoidance of doubt, no such Ownership Interest may be
disposed of from one Group member to another);
(u) Pledge of loans from Relevant Persons
-------------------------------------
prior to any Relevant Person making any Borrowed Money available to
any of the members of the Group, procure that such Relevant Person
shall enter into an Intercompany Loan Agreement, a Deed of Pledge and
a Charging Entity's Deed of Accession (as such term is defined in the
Security Trust Deed) and provides the Agent with such documents and
evidence as it may reasonably require as to the power and authority
of the Relevant Person to enter into such Intercompany Loan
Agreement, Deed of Pledge and Charging Entity's Deed of Accession and
that the same constitute valid and legally binding obligations of
such Relevant Person enforceable in accordance with their respective
terms subject to substantially similar qualifications to those made
in the legal opinions referred to in schedule 3. In addition, it will
procure that each Security Provider enters into a Charging Entity's
Deed of Accession and provides the Agent with such documents and
evidence as it may reasonably require as to the power and authority
of such Security Provider to enter into such Charging Entity's Deed
of Accession and that the same constitutes valid and legally binding
obligations of such Security Provider enforceable in accordance with
its terms subject to substantially similar qualifications to those
made in the legal opinions referred to in schedule 3;
(v) Interest Reserve Account
------------------------
(in the case of the Borrower only) pay into the Interest Reserve
Account:
(i) on the Drawdown Date, U.S.$11,000,000; and
(ii) directly upon receipt, all dividends and distributions received
by the Borrower from any other member of the Group or in respect
of the UIH Shares,
and no amount, including capitalised interest on amounts held in the
Interest Reserve Account, may be withdrawn from the Interest Reserve
Account save for the purpose of assisting the Borrower in making (x)
any interest payment due pursuant to clause 5.1, (y) the principal
repayment due on the Final Repayment Date or (z) (to the extent only
that the
62
<PAGE>
balance on the Interest Reserve Account exceeds 100 per cent. of the
Anticipated Interest Amount) a voluntary prepayment pursuant to
clause 6.2; and
(w) Letters of Consent
------------------
(in the case of the Borrower only) use its reasonable endeavours to
obtain all the Letters of Consent duly executed by the relevant
persons as soon as possible.
11.2 Negative Covenants
------------------
Each Obligor jointly and severally undertakes with each of the Banks, the
Arrangers, the Security Trustee and the Agent that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower, without the prior written
consent of the Agent acting on the instructions of the Majority Banks:
(a) Negative pledge
---------------
it will not permit, and it will procure that no other member of the
Group permits, any Encumbrance (other than the Permitted
Encumbrances) by any member of the Group to subsist, arise or be
created or extended over all or any part of their respective present
or future undertakings, assets, rights or revenues to secure or
prefer any present or future Indebtedness of any member of the Group
or any other person;
(b) No merger
---------
it will not merge or consolidate with any other company or person and
it will procure that no other member of the Group merges or
consolidates with any other company or person;
(c) Disposals
---------
it will not and will procure that no other member of the Group will
dispose of or cease to exercise direct control over any part of its
present or future undertaking, assets, rights or revenues whether by
one or a series of transactions related or not, other than:
(i) Permitted Disposals the Net Disposal Proceeds of which are
applied in prepayment of the Loan pursuant to clause 6.5;
(ii) a disposal of any fixed asset (not being an Ownership
Interest, a Reorganisation Loan, a Subsidiary Loan or all, or
substantially all, of the assets of a Group member) in the
ordinary course of trading at the time of, or within one month
following, the acquisition of a replacement fixed asset of the
same or a similar type and of comparable or superior value and
quality;
63
<PAGE>
(iii) disposals of assets (but not being an Ownership Interest, a
Reorganisation Loan, a Subsidiary Loan or all, or
substantially all, of the assets of a Group member) with an
aggregate market value (in respect of all disposals made by
all Group members pursuant to this clause 11.2(c)(iii)) of
less than NLG 2,000,000 (or its equivalent); and
(iv) Permitted Encumbrances;
(d) Intra-Group accounts
--------------------
(without limiting the generality of clause 11.2(c) and save for the
Deeds of Pledge referred to in paragraphs (x) and (dd) of schedule 3)
it will not subordinate, postpone, defer, assign or otherwise dispose
of or deal with, any Indebtedness owing to it by any other member of
the Group and will procure that no other member of the Group will
subordinate, postpone, defer, assign or otherwise dispose of or deal
with, any Indebtedness owing to it by any other member of the Group;
(e) Loans and guarantees
--------------------
it will not, and will procure that no other member of the Group will,
make any loans, grant any credit or give any guarantee to or for the
benefit of any person, save for:
(i) in the case of any member of the Group which is not an
Obligor, (x) normal trade credit in the ordinary course of
day-to-day trading and (y) loans made to other members of the
Group which are Affiliates of the lender, or to which it is
Affiliated, (but which are not Obligors) in the ordinary
course of day-to-day trading consistently with its practice
prior to the Completion Date;
(ii) the Guarantee;
(iii) the Reorganisation Loans; and
(iv) the Subsidiary Loans;
(f) Borrowed Money
--------------
it will not and will procure that no other member of the Group will
create, assume, incur or otherwise permit to be outstanding any
Borrowed Money (other than Permitted Borrowings);
(g) Issue of shares and other interests
-----------------------------------
it will not and will procure that no other member of the Group will
reduce its capital or purchase or redeem any class of its shares or
any partnership or other ownership interest in it and that no member
of the Group issues any shares of any class or otherwise acquires any
additional
64
<PAGE>
capital (or rights to the same), save that any member of the Group
which is not a Guarantor may issue shares to or otherwise acquire
additional capital (or rights to the same) from another member of the
Group which immediately prior to such issuance or acquisition already
held shares or partnership or other ownership interests in the first
member so long as if the shares or partnership or other ownership
interests already held are charged or pledged in favour of the
Security Trustee pursuant to the terms of a Security Document, the
additional shares or partnership or other ownership interests are so
charged or pledged and there are delivered at the same time to the
Security Trustee the relevant share certificates and blank stock
transfer forms (or equivalent documents) in respect thereof together
with such other documents and evidence and legal opinions as the
Agent may require;
(h) Investments
-----------
it will not and will procure that no other member of the Group will:
(i) make any loan or advance to, or enter into any transaction
having the effect of lending money with, any person (including
another member of the Group) or otherwise acquire for a
consideration any document evidencing Indebtedness, capital
stock or other securities of any person (other than in
compliance with clauses 11.2(e) and (g)); or
(ii) (other than the acquisition of the assets of Combivisie by
CNBH on terms acceptable to the Majority Banks) acquire all or
any substantial part of the assets, property or business of
any other person (including another member of the Group) or
any assets that constitute a division or operating unit of the
business of any other person (including another member of the
Group); or
(iii) create or acquire any Subsidiary or Affiliate (or reactivate
any dormant Subsidiary or Affiliate) or otherwise enter into
any joint venture arrangement or partnership or other similar
undertaking with another person;
(i) Capital expenditure
-------------------
it will procure that no other member of the Group will incur any
capital expenditure other than in relation to the business of
constructing, installing, operating and utilising cable television,
telecommunications and data service systems in the territories
covered by the Licences or any directly related business reasonably
considered to be financially beneficial thereto;
65
<PAGE>
(j) Swaps and hedging
-----------------
it will not and will procure that no other member of the Group will
enter into any interest rate or currency swaps or other hedging
arrangement other than non speculative arrangements directly relating
to the risk management of any Borrowed Money permitted to subsist by
the terms of this Agreement and entered into in the ordinary course
of the business for the genuine hedging of the relevant underlying
transaction;
(k) Subordination of shareholder funding
------------------------------------
other than:
(A) the initial payment to be made to the Parent under the Sale and
Purchase Agreement;
(B) Permitted Fees;
(C) the making of the Reorganisation Loans; and
(D) the Subsidiary Loans,
it will not and will procure that no other member of the Group will
make to any Relevant Person (i) any direct or indirect distribution,
dividend or other payment (whether in cash, securities, property or
otherwise), including, without limitation, any loan or any payment on
account of any class of its share capital or capital stock or other
securities, or any interest thereon, (ii) any transfer of assets or
(iii) any payment (whether in cash, securities, property or
otherwise) of principal of, or interest on, any debt made available
to it by any Relevant Person. For the avoidance of doubt this clause
11.2(k) shall not prevent the declaration and payment of dividends
and distributions by one member of the Group to another member of the
Group which is a shareholder or partner in it;
(l) Change of business
------------------
it will procure that no member of the Group changes the nature of the
business carried on by it in any material respect from that carried
on at the date of this Agreement and that no member of the Group
ceases to carry on a business where any such cessation would or is
reasonably likely to have a Material Adverse Effect;
(m) Constitutive documents and Joint Venture Agreements
---------------------------------------------------
it will not, and will procure that no other member of the Group will,
amend its constitutive documents or any Joint Venture Agreement in
any way which would or is reasonably likely to (A) adversely affect
(i) (in terms of value, enforceability or otherwise) the charge,
pledge or security interest granted to the Security Trustee pursuant
to the Ownership Rights Securities or (ii) the ability of the
Security Trustee to obtain a charge,
66
<PAGE>
pledge or security interest in or over the Ownership Interest in the
relevant member of the Group following the issuance of a Letter of
Consent (or the value or enforceability of such charge, pledge or
security interest) or (iii) the ability of any member of the Group to
liquidate, or realise disposal proceeds in respect of, any other
member of the Group (or the value obtained by so doing) or (B) enable
any Obligor to incur or have outstanding Indebtedness, or create or
have outstanding Encumbrances, not permitted by this Agreement;
(n) Sale and Purchase Agreements; Intercompany Loan Agreements
----------------------------------------------------------
(in the case of each Obligor) it will not permit any material
amendment to be made to any Sale and Purchase Agreement (or any
document, instrument or agreement entered into in connection
therewith) or any amendment to be made to any Intercompany Loan
Agreement; and
(o) Arms length transactions
------------------------
it will not, and procure that no other member of the Group will,
enter into any arrangement or contract with any other member of the
Group or UIH or any Affiliate of UIH unless such arrangement or
contract is entered into on a bona fide arms length basis.
11.3 Assistance with syndication arrangements
----------------------------------------
The Borrower undertakes with the Arrangers to give to the Arrangers all
such assistance as the Arrangers shall reasonably require for the purpose
of the syndication of the Facility and agrees (upon reasonable notice and
for a reasonable period) to make appropriate senior management available
to discuss the business and affairs of the Group.
67
<PAGE>
12 Financial covenants
-------------------
From the Drawdown Date the Borrower undertakes with each of the Banks, the
Arrangers, the Security Trustee and the Agent to ensure that:
(a) Interest cover
--------------
the credit balance on the Interest Reserve Account at all times after
the date falling three months after the Completion Date exceeds the
Anticipated Interest Amount accruing on the Loan over:
(i) the next twelve months; or (if shorter)
(ii) the period commencing on any day and ending on the Final
Repayment Date
Provided that no Event of Default shall occur under this clause 12(a)
if (x) the credit balance on the Interest Reserve Account is at least
85 per cent. of the Anticipated Interest Amount for the relevant
period and (y) the balance on the Interest Reserve Account is
increased to 100 per cent. of such Anticipated Interest Amount within
30 days of such balance falling below 100 per cent. of such
Anticipated Interest Amount, using any amount otherwise required to
be applied in or towards prepayment of the Loan or to be credited to
the Disposal Proceeds Account pursuant to clause 6.5, and/or the
balance on the Disposal Proceeds Account (if any), to fund the
Interest Reserve Account to the extent necessary; and
(b) Asset cover
-----------
the ratio of Total Valuation Amount: Net Loan is not less than:
(i) 3:1 at any time prior to the Initial Repayment Date; or
(ii) 4:1 at any time during the period commencing on the Initial
Repayment Date and ending on the Final Repayment Date (both
dates inclusive).
68
<PAGE>
13 Events of Default
-----------------
13.1 Events of Default
-----------------
Each of the events and circumstances set out below is an Event of Default
(whether or not caused by any reason outside the control of an Obligor):
(a) Non-payment: the Borrower fails to pay any principal sum due from it
-----------
under this Agreement in the currency, at the time and in the manner
stipulated in this Agreement, or any other sum due from it under this
Agreement within three Banking Days of the due date in the currency
and in the manner stipulated in this Agreement; or
(b) Breach of certain obligations: any Obligor commits any breach of or
-----------------------------
omits to observe any of the obligations or undertakings expressed to
be assumed by it under clauses 3.5, 6.5 (and, in relation thereto,
clauses 6.4 and 6.6), 9.17, 11.1(c), (d), (e), (f), (g), (h),
(i)(ii), (j), (r), (t), (u) and (v), 11.2(a), (b), (c), (e), (f),
(g), (h), (i), (k), (m) and (n) and 12; or
(c) Breach of other obligations: any Obligor commits any breach of or
---------------------------
omits to observe any of the obligations or undertakings expressed to
be assumed by it under this Agreement or the Security Documents
(other than failure to pay any sum when due or any breach of the
undertakings referred to in (b) above) and, in respect of any such
breach or omission which is capable of remedy, such action as the
Agent may require shall not have been taken within 21 days of the
Agent notifying the relevant Obligor of such default and of such
required action; or
(d) Misrepresentation: any representation or warranty made or deemed to
-----------------
be made or repeated by or in respect of any Obligor or any other
member of the Group in or pursuant to this Agreement or the Security
Documents or in any notice, certificate or statement referred to in
or delivered under this Agreement or the Security Documents is or
proves to have been incorrect or misleading in any material respect
and, in the event that the act or circumstance which led to such
representation or warranty being incorrect or misleading is capable
of remedy, such action as the Agent may require shall not have been
taken within 21 days of the Agent notifying the relevant Obligor of
such act or circumstance and such required action; or
(e) Challenge to security: any Security Document is not or ceases to be
---------------------
effective or any member of the Group shall in any way challenge, or
proceedings shall in any way be brought to challenge, the prior
status of the Encumbrances created by the Security Documents or the
validity or enforceability of the Security Documents; or
(f) Cross-default: any Borrowed Money of any member of the Group is not
-------------
paid when due or becomes (whether by declaration or automatically in
accordance with the relevant agreement or instrument constituting the
69
<PAGE>
same) due and payable prior to the date when it would otherwise have
become due or any facility or commitment available to any member of
the Group relating to Borrowed Money is withdrawn, suspended or
cancelled by reason of any default (however described) of the member
of the Group concerned or any creditor of any Key Group Member
becomes entitled to declare any Borrowed Money of any Key Group
Member so due and payable or to require cash collateralisation or
security for any such Borrowed Money and the amount, or aggregate
amount at any one time, of all Borrowed Money in relation to which
any of the foregoing events shall have occurred and be continuing is
equal to or greater than NLG 1,000,000 (or its equivalent in the
currency in which the same is denominated and payable); or
(g) Derivatives Contract default: any member of the Group fails to make
----------------------------
payment in relation to a Derivatives Contract of any sum equal to or
greater than NLG 1,000,000 in aggregate at any one time (or its
equivalent in the relevant currency of payment) on its due date or
the counterparty to a Derivatives Contract becomes entitled to
terminate that Derivatives Contract early by reason of default on the
part of any member of the Group and the Net Derivatives Liability of
such member of the Group, in the aggregate, under all its Derivatives
Contracts at the relevant time is not less than NLG 1,000,000 (or its
equivalent in the relevant currency); or
(h) Legal process: any judgment or order made against any Key Group
-------------
Member is not stayed or complied with within 14 days or a creditor
attaches or takes possession of, or a distress, execution,
sequestration or other process is levied or enforced upon or sued out
against, any material part of the undertakings, assets, rights or
revenues of any Key Group Member and is not discharged within seven
days; or
(i) Insolvency:
----------
(i) The Netherlands: any member of the Group which is domiciled or
---------------
which has a branch office in the Netherlands: (y) is declared
bankrupt (in staat van faillissement verklaard), or (z) enters
into a preliminary or definitive moratorium (in voorlopige of
definitieve surseance van betaling gaan) pursuant to the Dutch
Bankruptcy Act (Faillissementswet);
(ii) United States of America: any member of the Group which is a
------------------------
partner of any partnership formed under the laws of the states
of Colorado or Delaware, United States of America: (u) shall
become insolvent, have made a transfer in fraud of creditors
or an assignment for the benefit of creditors, or have
admitted in writing its inability to pay its debts as they
become due; (v) is generally not paying its debts as such
debts become due; (w) shall have had appointed a receiver, or
custodian for, or taken possession of, all or substantially
all of its assets, in a proceeding
70
<PAGE>
brought by or against such Group member, and such appointment
shall not have been discharged or such possession shall not
have been terminated within thirty days after the effective
date thereof or such Group member shall have consented to or
acquiesced in such appointment or possession; (x) shall have
filed a petition for relief under the insolvency, bankruptcy
or similar laws of the United States of America or any state
thereof, or an involuntary petition for such relief shall have
been filed against any such Group member under such laws and
shall not have been dismissed or terminated within thirty days
after such involuntary petition is filed; (y) shall have
failed to pay or obtained a stay of any proceeding to enforce
any money judgment against it at least ten days prior to the
date on which all or substantially all of the assets of such
Group member may be sold to satisfy such judgment; or (z)
shall have failed to have discharged or obtained a stay of any
proceeding to enforce, within a period of ten days after the
commencement thereof, any attachment, sequestration or similar
proceeding asserted against all or substantially all of the
assets of such Group member;
(iii) Czech Republic: any member of the Group which is incorporated
--------------
in or which has a branch office in the Czech Republic is
subject in the Czech Republic to: (v) bankruptcy proceedings
under Act No. 328/1991 Coll., as amended, on Bankruptcy and
Composition (the "Bankruptcy Act"); (w) involuntary
composition proceedings under the Bankruptcy Act; (x)
voluntary composition proceedings under the Bankruptcy Act;
(y) voluntary winding up with liquidation under Act No.
513/1991 Coll., as amended (the "Commercial Code"); or (z)
involuntary winding up with liquidation under the Commercial
Code;
(iv) France: any member of the Group which is domiciled in or
------
which has a branch office in France: (r) admits in writing its
inability to pay its debts generally as they become due; (s)
declares to the court such inability (declaration de cessation
des paiements); (t) applies for or takes any corporate action
approving any voluntary liquidation (liquidation volontaire);
(u) applies for the appointment of a conciliator
(conciliateur), within the meaning of French law No. 84-148 of
1st March, 1984); (v) enters into an amicable settlement
(accord amiable) with its creditors; (w) enters into an
amicable settlement (accord amiable) with its creditors; (x)
ceases its payments (cessation des paiements) for the purposes
of Article 3 of the French bankruptcy law No. 85-98 of 25th
January, 1985; (y) has a judgment issued in respect of its
judicial reorganisation (redressment judiciaire) and the
administrateur judiciaire named in connection with such
proceedings does not (or is deemed not to) opt to continue
performance of this Agreement; or (z) has a judgment issued in
respect of its judicial
71
<PAGE>
liquidation (liquidation judiciaire) pursuant to French law
No. 85-98 of 25th January, 1985, or pursuant to such law, for
the transfer of the whole or part of its business (cessation
totale ou partielle de l'entreprise);
(j) Reduction or loss of capital: a meeting is convened by any Key Group
----------------------------
Member for the purpose of passing any resolution or agreeing to, or any
Key Group Member does, purchase, reduce or redeem any of its share
capital or any partnership or other ownership interest in it; or
(k) Winding up: any petition is presented and is not discharged within 14
----------
days or other step is taken for the purpose of winding up any Key Group
Member (not being a petition which the relevant member of the Group can
demonstrate to the satisfaction of the Agent, by providing an opinion of
leading counsel to that effect, is frivolous, vexatious or an abuse of
the process of the court or relates to a claim to which the relevant
member of the Group has a good defence and which is being vigorously
contested by the relevant member of the Group) or an order is made or
resolution passed for the winding up of any member of the Group or a
notice is issued convening a meeting for the purpose of passing any such
resolution; or
(l) Administration: any petition is presented and is not withdrawn within 14
--------------
days or other step is taken for the purpose of the appointment of an
administrator of any member of the Group or the Agent believes that any
such petition or other step is imminent or an administration order is
made in relation to any member of the Group; or
(m) Appointment of receivers and managers: any administrative or other
-------------------------------------
receiver is appointed of any member of the Group or any material part of
their respective assets and/or undertakings or any other steps are taken
to enforce any Encumbrance over all or any part of the assets of any
member of the Group; or
(n) Compositions: any steps are taken, or negotiations commenced, by any
------------
member of the Group or by any of their respective creditors with a view
to proposing any kind of composition, compromise or arrangement involving
such company and any of its creditors; or
(o) Analogous proceedings: there occurs, in relation to any member of the
---------------------
Group, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their
respective assets is subject, any event which corresponds with, or has
an effect equivalent or similar to, any of those mentioned in clauses
13.1(i) to 13.1(n) (inclusive) or any member of the Group otherwise
becomes subject, in any such country or territory, to the operation of
any law relating to insolvency, bankruptcy or liquidation; or
72
<PAGE>
(p) Cessation of business: any Key Group Member suspends or ceases or
---------------------
threatens to suspend or cease to carry on its business; or
(q) Seizure: all or a material part of the undertakings, assets, rights or
-------
revenues of, or shares or other ownership interests in, any member of
the Group are seized, nationalised, expropriated or compulsorily
acquired by or under the authority of any government; or
(r) Change of Control:
-----------------
(i) the Parent is not or ceases to be the direct unencumbered legal
and beneficial owner of 100 per cent. of the issued share capital
and voting rights in the Borrower; or
(ii) UIH is not or ceases to be the direct or indirect unencumbered
legal and beneficial owner of 100 per cent. of the issued share
capital and voting rights in the Parent (excluding employee stock
options); or
(s) Principal Agreements:
--------------------
(i) save as is required by any term of this Agreement, any of the
Principal Agreements is terminated, suspended, revoked or
cancelled; or
(ii) any party breaches any term of or repudiates any of its
obligations under any Principal Agreement where such breach or
repudiation would have a Material Adverse Effect; or
(iii) any amounts which any member of the Group is obliged to expend or
contribute under any Joint Venture Agreement in order to comply
with its obligations thereunder are not provided by the Parent as
contemplated by clause 6.5(d) and (e); or
(t) Unlawfulness: it becomes unlawful at any time for any Obligor or any
------------
Security Provider to perform any of their respective material
obligations under this Agreement or the Security Documents or any of the
material obligations of any Obligor or any Security Provider under this
Agreement and the Security Documents becomes unenforceable in any way or
there ceases to be security over the relevant property or assets of the
relevant Obligor or Security Provider as intended and created by the
Security Documents; or
(u) Environmental matters: as a result of any Environmental Law: (a) the
---------------------
Agent, the Arrangers, the Security Trustee or any of the Banks becomes,
in the opinion of the Agent, subject to a material obligation (actual or
contingent, in the case of any contingent obligation, being one which,
at the relevant time, would be likely to arise) in relation to any
Relevant Substance on or from any property, owned, occupied or leased by
any member of the Group; or (b) the rights and claims of the Agent, the
73
<PAGE>
Arrangers, the Security Trustee, or any of the Banks under this
Agreement or any of the Security Documents become subordinated to the
claims and rights of any competent agency of any Relevant Jurisdiction
or the European Community; or
(v) Telecommunications and Cable Laws: any member of the Group fails to
---------------------------------
comply with any term or condition of any Telecommunications and Cable
Law where such non-compliance would or is reasonably likely to have a
Material Adverse Effect; or
(w) Repudiation: any member of the Group repudiates this Agreement or any
-----------
Security Document to which it is a party or does or causes or permits to
be done any act or thing evidencing an intention to repudiate this
Agreement or any such Security Document; or
(x) Pledged Creditors:
------------------
(i) any Pledged Creditor commits any breach of or omits to observe any
of the obligations or undertakings expressed to be assumed by it
under a Deed of Pledge and, in respect of any such breach or
omission which, in the opinion of the Agent (acting on the
instructions of the Majority Banks (acting reasonably)) is capable
of remedy, such action as the Agent may require shall not have
been taken within 21 days of the Agent notifying such Pledged
Creditor thereof and of such required action; or
(ii) any representation or warranty made or deemed to be made or
repeated by or in respect of any Pledged Creditor in or pursuant
to any Deed of Pledge is or proves to have been incorrect or
misleading in any material respect on the date on which it was
made or deemed to be made or repeated and, in the event that the
act or circumstance which led to such representation or warranty
being incorrect or misleading is capable of remedy, such action as
the Agent may require shall not have been taken within 21 days of
the Agent notifying the relevant Pledged Creditor of such act or
circumstance and such required action; or
(iii) any Pledged Creditor is not or ceases to be bound by a Deed of
Pledge; or
(iv) any Deed of Pledge is not or ceases to constitute a valid security
interest over the relevant Pledged Debt in accordance with its
terms; or
(v) any Pledged Creditor or any liquidator, administrator or
administrative or other receiver (or similar officer) of any
Pledged Creditor takes steps to contest the pledge effected by a
Deed of Pledge; or
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(y) Security Documents:
------------------
(i) any Security Provider commits any breach of or omits to observe
any of its obligations or undertakings expressed to be assumed by
it under any Security Document and in respect of any such breach
or omission which is capable of remedy, such action as the Agent
may require shall not have been taken within 21 days of the Agent
and/or the Security Trustee notifying such Security Provider
thereof of such required action; or
(ii) any representation or warranty made or deemed to be made or
repeated by or in respect of any Security Provider in or pursuant
to any Security Document is or proves to have been incorrect or
misleading in any material respect on the date on which it was
made or deemed to be made or repeated and, in the event that the
act or circumstance which led to such representation or warranty
being incorrect or misleading is capable of remedy, such action as
the Agent and/or the Security Trustee may require shall not have
been taken within 21 days of the Agent and/or the Security Trustee
notifying the Borrower of such act or circumstance and such
required action; or
(iii) any Security Provider is not or ceases to be bound by any Security
Document; or
(iv) any Security Document is not or ceases to constitute a valid
security interest over the relevant assets of any Security
Provider in accordance with its terms; or
(v) any Security Provider or any liquidator, administrator or
administrative or other receiver (or similar officer) of such
Security Provider takes steps to contest any Security Document
and/or encumbrance effected by a Security Document; or
(z) No offering circular: the Parent has not:
---------------------
(i) prepared an offering circular in respect of an issue of securities
representing equity in or Borrowed Money of the Parent, the net
proceeds of which issue (the "Issue Proceeds") would (x) equal or
exceed the Loan and all interest thereon and other amounts payable
under this Agreement and (y) be applied (directly or indirectly)
in repayment or payment of the amounts referred to in (x) above,
within 9 months of the Completion Date; or
(ii) distributed the offering circular referred to in (i) above in
sufficient time so that it will receive the Issue Proceeds before
the Initial Repayment Date or (if the maturity of the Loan is
extended pursuant to clause 6.1(b)) the Final Repayment Date; or
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(aa) No downstreaming: the Parent or JVI either:
----------------
(i) receives the proceeds of subscriptions for new Ownership
Interests in it or the proceeds of Borrowed Money ("Relevant
Amounts") in circumstances where it is obliged to make a
prepayment under the Senior Facility Agreement, or it is a
default under the Senior Facility Agreement if such prepayment
is not made (the banks under the Senior Facility Agreement not
having waived the right to receive such prepayment); or
(ii) does not use all Relevant Amounts to subscribe in cash for new
Ownership Interests in the Borrower or to make loans to the
Borrower in accordance with this Agreement; or
(bb) Material events: any other event occurs or circumstances arise which
---------------
in the opinion of the Agent acting on the instructions of the Majority
Banks is likely to have a Material Adverse Effect; or
(cc) Qualification of accounts: the auditors of any member of the Group
-------------------------
qualify their report on the audited financial statements of the
relevant member of the Group in any way whatsoever except where the
qualification is of a technical nature and the remedy for the matter
giving rise to the qualification would have no effect on the results
of the relevant member of the Group for the period to which such
accounts relate or on the financial position of the relevant member of
the Group as at the end of such period.
13.2 Remedies
--------
The Agent may and if so requested by the Majority Banks shall, without
prejudice to any other rights of the Banks, at any time after the happening
of an Event of Default so long as the same is continuing, unremedied or
unwaived by notice to the Borrower:
(a) declare that the obligation of each Bank to make its Commitment
available shall be terminated, whereupon the Total Commitments shall
be reduced to zero forthwith; and/or
(b) declare that the Loan and all interest and fees accrued and all other
sums payable under this Agreement have become immediately due and
payable or have become due and payable on demand, whereupon the same
shall, immediately or in accordance with the terms of such notice,
become so due and payable; and/or
(c) declare that the Security Documents (or any of them) have become
enforceable whereupon the same shall be enforceable; and/or
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(d) (without prejudice to clause 3.5) require the Borrower to procure that
the relevant member of the Group forthwith exercises any sale or
liquidity rights which it has in respect of any Unrestricted Asset.
On or at any time after the making of any such declaration, the Agent shall
be entitled, to the exclusion of the Borrower (and without prejudice to
clause 5.4), to select the duration of each period for the calculation of
interest in relation to the Loan or other sums payable under this
Agreement.
13.3 Demand basis
------------
If, pursuant to clause 13.2(b), the Agent declares the Loan to be due and
payable on demand then the Agent may (and, if so instructed by the Majority
Banks, shall) at any time by written notice to the Borrower (a) call for
repayment of the Loan on such date as may be specified in such notice
whereupon the Loan shall become due and payable on the date so specified
together with all interest and fees accrued and all other sums payable
under this Agreement or (b) withdraw such declaration with effect from the
date specified in such notice.
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14 Indemnities
-----------
14.1 Miscellaneous indemnities
-------------------------
The Borrower shall on demand indemnify each Bank, the Arrangers, the
Security Trustee and the Agent, without prejudice to any of their other
rights under this Agreement and the Security Documents, against any loss
(including loss of Margin) or expense which such Bank, the Arrangers, the
Security Trustee or the Agent shall certify as sustained or incurred by it
as a consequence of:
(a) any default in payment by any Obligor of any sum under this Agreement
or any of the Security Documents when due;
(b) the occurrence of any other Event of Default;
(c) (save for any prepayment required to be made under clause 6.5(i)) any
prepayment of all or part of any Tranche being made otherwise than on
an Interest Payment Date relating thereto; or
(d) the Loan not being made for any reason (excluding any default by the
Agent, the Arrangers, the Security Trustee or any Bank) after a
Drawdown Notice has been given;
including, in any such case, but not limited to, any loss or expense
sustained or incurred by such Bank in maintaining or funding all or any
part of its Contribution or in liquidating or re-employing deposits from
third parties acquired or contracted for to fund all or any part of its
Contribution or any other amount owing to such Bank.
14.2 Currency of account; currency indemnity
---------------------------------------
No payment by any Obligor under this Agreement which is made in a currency
other than the currency ("Contractual Currency") in which such payment is
required to be made pursuant to this Agreement shall discharge the
obligation in respect of which it is made except to the extent of the net
proceeds in the Contractual Currency received by the Agent upon the sale
of the currency so received, after taking into account any premium and
costs of exchange in connection with such sale. For the avoidance of doubt
the Agent, the Arrangers, the Security Trustee and the Banks shall not be
obliged to accept any such payment in a currency other than the
Contractual Currency nor shall the Agent, the Arrangers, the Security
Trustee or the Banks be liable to any Obligor for any loss or alleged loss
arising from fluctuations in exchange rates between the date on which such
payment is so received by the Agent and the date on which the Agent
effects such sale, as to which the Agent shall (as against the relevant
Obligor) have an absolute discretion. If any sum due from any Obligor
under this Agreement or any order or judgment given or made in relation
hereto is required to be converted from the Contractual Currency or the
currency in which the same is payable under such order or judgment (the
"first currency") into another currency (the "second currency") for the
purpose of (a) making or filing
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a claim or proof against the relevant Obligor, (b) obtaining an order or
judgment in any court or other tribunal or (c) enforcing any order or
judgment given or made in relation to this Agreement, the relevant Obligor
shall indemnify and hold harmless the Agent, the Arrangers, the Security
Trustee and each Bank from and against any loss suffered as a result of
any difference between (i) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (ii) the rate or rates of exchange at which the Agent, the
Arrangers, the Security Trustee or such Bank may in the ordinary course of
business purchase the first currency with the second currency upon receipt
of a sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. Any amount due from any Obligor under the
indemnity contained in this clause 14.2 shall be due as a separate debt
and shall not be affected by judgment being obtained for any other sums
due under or in respect of this Agreement and the term "rate of exchange"
includes any premium and costs of exchange payable in connection with the
purchase of the first currency with the second currency.
14.3 Environmental indemnity
-----------------------
The Borrower agrees to indemnify on demand each Bank, the Arrangers, the
Security Trustee and the Agent, and their respective officers, employees,
agents and delegates (together the "Indemnified Parties"), in respect of
which each Bank, the Arrangers, the Security Trustee and the Agent holds
this indemnity on trust, without prejudice to any of their other rights
under this Agreement, against any loss, liability, action, claim, demand,
cost, expense, fine or other outgoing whatsoever whether in contract,
tort, delict or otherwise and whether arising at common law, in equity or
by statute which the relevant Indemnified Party shall certify as sustained
or incurred by it at any time as a consequence of, or relating to, or
arising directly or indirectly out of, any Environmental Claims made or
asserted against such Indemnified Party which would not have arisen if
this Agreement had not been executed and which was not caused by the
negligence or wilful default of the relevant Indemnified Party.
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15 Unlawfulness and increased costs; mitigation
--------------------------------------------
15.1 Unlawfulness
------------
If it is or becomes contrary to any law or regulation for any Bank to
contribute to any Tranche or to maintain its Commitment or fund its
Contribution, such Bank shall promptly, through the Agent, notify the
Borrower whereupon (a) such Bank's Commitment shall be reduced to zero and
(b) the Borrower shall be obliged to prepay the Contribution of such Bank
either (i) forthwith or (ii) on a future specified date not being earlier
than the latest date permitted by the relevant law or regulation. Any
prepayment pursuant to this clause 15.1 shall be made together with all
amounts referred to in clause 6.4.
15.2 Increased costs
---------------
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law (including, without limitation, the
proposed Bank of England Act following the publication of the Bank of
England Bill 1997) or any regulation, request or requirement (whether or
not having the force of law, but, if not having the force of law, with
which the relevant Bank or, as the case may be, its holding company
habitually complies), including (without limitation) those relating to
Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits
and special deposits, is to:
(a) subject any Bank to Taxes or change the basis of Taxation of any Bank
with respect to any payment under this Agreement (other than Taxes or
Taxation on the overall net income, profits or gains of such Bank
imposed in the jurisdiction in which its principal or lending office
under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, any Bank or
its holding company in making or keeping available all or part of
such Bank's Commitment or maintaining or funding all or part of such
Bank's Contribution; and/or
(c) reduce the amount payable or the effective return to any Bank under
this Agreement; and/or
(d) reduce any Bank's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Bank's obligations
under this Agreement; and/or
(e) require any Bank or its holding company to make a payment or forgo a
return calculated by reference to or on any amount received or
receivable by such Bank under this Agreement; and/or
(f) require any Bank or its holding company to incur or sustain a loss
(including a loss of future potential profits) by reason of being
obliged to
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deduct all or part of such Bank's Commitment or Contribution from its
capital for regulatory purposes,
then and in each such case (but subject to clause 15.3):
(i) such Bank shall notify the Borrower through the Agent in writing of
such event promptly upon its becoming aware of the same; and
(ii) the Borrower shall on demand, made at any time whether or not such
Bank's Contribution has been repaid, pay to the Agent for the account
of such Bank the amount which such Bank specifies (in a certificate
setting forth the basis of the computation of such amount but not
including any matters which such Bank or its holding company regards
as confidential) is required to compensate such Bank and/or its
holding company for such liability to Taxes, increased or additional
cost, reduction, payment, forgone return or loss.
For the purposes of this clause 15.2 and clause 15.4 "holding company"
means, in relation to a Bank, the company or entity (if any) within the
consolidated supervision of which such Bank is included.
15.3 Exceptions
----------
Nothing in clause 15.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, forgone return or loss to the extent
that the same:
(a) is the subject of an additional payment under clause 8.5; or
(b) arises as a consequence of (or of any law or regulation implementing)
(i) the proposals for international convergence of capital
measurement and capital standards published by the Basle Committee on
Banking Regulations and Supervisory Practices in July 1988 and/or
(ii) any applicable directive of the European Union (in each case)
unless it results from any change in, or in the interpretation or
application of, such proposals or any such applicable directive (or
any law or regulation implementing the same) occurring after the date
hereof; or
(c) arises as a result of a breach by such Bank of any regulation,
request or requirement (which either (i) is in existence at the date
of this Agreement or (ii) which comes into effect after the date of
this Agreement and with which such Bank would have complied if such
regulation, request or requirement was in effect on the date of this
Agreement) of any applicable central bank or other fiscal, monetary
or other authority (whether or not having the force of law).
For the purposes of this clause 15.3 the term "applicable directive" means
(exclusively) each of the Own Funds Directive (89/299/EEC of 17th April
1989) and the Solvency Ratio Directive (89/647/EEC of 18th December 1989).
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15.4 Mitigation
----------
If circumstances arise which would, or would upon the giving of notice,
result in:
(a) the application of clause 5.7 in relation to any Bank;
(b) any Obligor being required to make an increased payment to any Bank
pursuant to clause 8.5;
(c) the reduction of any Bank's Commitment to zero or the Borrower being
required to prepay any Bank's Contribution pursuant to clause 15.1;
or
(d) the Borrower being required to make a payment to any Bank to
compensate such Bank or its holding company for a liability to Taxes,
increased or additional cost, reduction, payment, forgone return or
loss pursuant to clause 15.2(ii);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under clause 8 and this clause 15, such Bank
shall, in consultation with the Agent, endeavour to take such reasonable
steps (and/or, in the case of clause 15.2(ii) and where the increased or
additional cost, reduction, payment, forgone return or loss is that of its
holding company, endeavour to procure that its holding company takes such
reasonable steps) as are open to it (or, as the case may be, its holding
company) to mitigate or remove such circumstances (including (in the case
of such Bank) the transfer of its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Borrower) unless the taking of such steps might (in the opinion of such
Bank) be prejudicial to such Bank (or, as the case may be, its holding
company) or be in conflict with such Bank's (or, as the case may be, its
holding company's) general banking policies or involve such Bank (or, as
the case may be, its holding company) in any material expense or any
material increased administrative burden.
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16 Set-off and pro rata payments
-----------------------------
16.1 Set-off
-------
Each Obligor authorises each Bank to apply any credit balance to which
such Obligor is then entitled on any account of such Obligor with such
Bank at any of its branches in or towards satisfaction of any sum then due
and payable from such Obligor to such Bank under this Agreement. For this
purpose each Bank is authorised to purchase with the moneys standing to
the credit of such account such other currencies as may be necessary to
effect such application. No Bank shall be obliged to exercise any right
given to it by this clause 16.1. Each Bank shall notify the Agent and the
relevant Obligor (giving full details) forthwith upon the exercise or
purported exercise of any right of set-off and the Agent shall inform the
other Banks.
16.2 Pro rata payments
-----------------
(a) If at any time any Bank (the "Recovering Bank") receives or recovers
any amount owing to it by any Obligor under this Agreement by direct
payment, set-off or in any manner other than by payment through the
Agent pursuant to clauses 8.1 or 8.10 (not being a payment received
from a Substitute in such Bank's Contribution or any other payment of
an amount due to the Recovering Bank for its sole account pursuant to
clauses 6.3, 7, 8.5, 14.1, 14.3, 15.1 or 15.2), the Recovering Bank
shall, within two Banking Days of such receipt or recovery (a
"Relevant Receipt") notify the Agent of the amount of the Relevant
Receipt. If the Relevant Receipt exceeds the amount which the
Recovering Bank would have received if the Relevant Receipt had been
received by the Agent and distributed pursuant to clauses 8.1 or 8.10
(as the case may be) then:
(i) within two Banking Days of demand by the Agent, the Recovering
Bank shall pay to the Agent an amount equal (or equivalent) to
the excess;
(ii) the Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the relevant
Obligor and shall distribute the same to the Banks (other than
the Recovering Bank) in accordance with clause 8.10; and
(iii) as between the relevant Obligor and the Recovering Bank the
excess amount so re-distributed shall be treated as not having
been paid but the obligations of the relevant Obligor to the
other Banks shall, to the extent of the amount so re-
distributed to them, be treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was
so re-distributed shall on request from the Recovering Bank repay to
the
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Recovering Bank such Bank's pro rata share of the amount which has to
be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Agent such information as
the Agent may from time to time request for the purpose of this
clause 16.2.
(d) Notwithstanding the foregoing provisions of this clause 16.2 no
Recovering Bank shall be obliged to share any Relevant Receipt which
it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other
party which has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Bank are instituted by it
without prior notice having been given to such party through the
Agent).
16.3 No release
----------
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 16.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 16.2.
16.4 No charge
---------
The provisions of this clause 16 shall not, and shall not be construed so
as to, constitute a charge by a Bank over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause 16.2.
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17 Assignment, substitution and lending offices
--------------------------------------------
17.1 Benefit and burden
------------------
This Agreement shall be binding upon, and ensure for the benefit of, the
Banks, the Arrangers, the Agent, the Security Trustee and the Obligors and
their respective successors.
17.2 No assignment by the Obligors
-----------------------------
None of the Obligors may assign or otherwise transfer any of its rights or
obligations under this Agreement.
17.3 Substitution
------------
Each Bank (an "Existing Bank") may transfer, by way of novation (but not
by way of assignment or otherwise), all or any part (being at least
U.S.$2,500,000 and an integral multiple of U.S.$2,500,000) of its rights,
benefits and/or obligations under this Agreement to a Qualifying Bank (a
"Substitute") with the prior consent in writing of the Borrower, such
consent not to be unreasonably withheld or delayed Provided that any such
transfer must be of an equal proportion of the Existing Bank's rights,
benefits and obligations in respect of each Tranche. Any such novation
shall be effected upon not less than 5 Banking Days' prior notice by
delivery to the Agent of a duly completed Substitution Certificate duly
executed by the Existing Bank and the Substitute. On the Effective Date
(as specified and defined in a Substitution Certificate so executed and
delivered), to the extent that the Commitment or Contribution of the
Existing Bank are expressed in a Substitution Certificate to be the
subject of the novation in favour of the Substitute effected pursuant to
this clause 17.3, by virtue of the counter-signature of the Substitution
Certificate by the Agent (for itself and the other parties to this
Agreement):
(a) the existing parties to this Agreement and the Security Trust Deed
and the Existing Bank shall be released from their respective
obligations towards one another under this Agreement and the Security
Trust Deed ("discharged obligations") and their respective rights
against one another under this Agreement and the Security Trust Deed
("discharged rights") shall be cancelled;
(b) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than such Existing Bank) shall assume obligations towards each other
which differ from the discharged obligations only insofar as they are
owed to or assumed by such Substitute instead of to or by such
Existing Bank; and
(c) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than such Existing Bank) shall acquire rights against each other
which
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differ from the discharged rights only insofar as they are
exercisable by or against such Substitute instead of by or against
such Existing Bank;
and, on such Effective Date, the Substitute shall pay to the Agent for its
own account a fee of (Pounds)1,000. The Agent shall promptly notify the
Borrower of the receipt by it of any Substitution Certificate and shall
promptly deliver a copy of such Substitution Certificate to the Borrower.
17.4 Reliance on Substitution Certificate
------------------------------------
The Agent, the Banks, the Arrangers, the Security Trustee and the Obligors
shall be fully entitled to rely on any Substitution Certificate delivered
to the Agent in accordance with the foregoing provisions of this clause 17
which is complete and regular on its face as regards its contents and
purportedly signed on behalf of the relevant Existing Bank and the
Substitute and none of the Agent, the Banks, the Arrangers, the Security
Trustee or the Obligors shall have any liability or responsibility to any
party as a consequence of placing reliance on and acting in accordance
with any such Substitution Certificate if it proves to be the case that
the same was not authentic or duly authorised.
17.5 Authorisation of Agent
----------------------
Each party to this Agreement irrevocably authorises the Agent to counter-
sign each Substitution Certificate on its behalf for the purposes of
clause 17.3.
17.6 Construction of certain references
----------------------------------
If any Bank novates all or any part of its rights, benefits and
obligations as provided in clause 17.3 all relevant references in this
Agreement and the Security Trust Deed to such Bank shall thereafter be
construed as a reference to such Bank and/or its Substitute to the extent
of their respective interests.
17.7 Lending offices
---------------
Each Bank shall lend through its office at the address specified in part A
of schedule 1 or, as the case may be, in any relevant Substitution
Certificate or through any other office of such Bank selected from time to
time by such Bank through which such Bank wishes to lend for the purposes
of this Agreement, Provided that no such change of lending office may take
place if it would involve any Obligor having to pay any increased cost
with respect to its obligations under this Agreement. If the office
through which a Bank is lending is changed pursuant to this clause 17.7,
such Bank shall notify the Agent promptly of such change.
17.8 Disclosure of information
-------------------------
Subject to such person first executing a confidentiality undertaking in a
form acceptable to the Borrower, acting reasonably, any Bank may disclose
to a prospective transferee or to any other person who may propose
entering into
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contractual relations with such Bank in relation to this Agreement such
information about the Group as such Bank shall consider appropriate.
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18 Arrangers, Agent, Security Trustee and Reference Banks
------------------------------------------------------
18.1 Appointment of Agent and Security Trustee
-----------------------------------------
Each Bank irrevocably appoints the Agent as its agent for the purposes of
this Agreement and the Security Trustee as Security Trustee for the
purposes of the Security Documents and irrevocably authorises the Agent
and/or the Security Trustee in such capacities:
(a) to execute each of the Security Documents and all such further
documents as may be approved by the Majority Banks for execution by
the Security Trustee; and
(b) (whether or not by or through employees or agents) to take such
action on such Bank's behalf and to exercise such rights, remedies,
powers and discretions as are specifically delegated to the Agent or
(as the case may be) the Security Trustee by this Agreement or, (as
the case may be) the Security Documents, together with such powers
and discretions as are reasonably incidental thereto (but subject to
any restrictions or limitations specified in this Agreement). None of
the Agent, the Arrangers or the Security Trustee shall, however, have
any duties, obligations or liabilities (whether fiduciary or
otherwise) to the Banks beyond those expressly stated in this
Agreement and/or the Security Documents.
Notwithstanding that the Agent and the Security Trustee may from time to
time be the same entity, the Agent and Security Trustee have entered into
this Agreement in their separate capacities as agent for the Banks under
and pursuant to this Agreement and as security trustee for the
Beneficiaries (as defined in the Security Trust Deed) to hold the security
created or to be created by the Security Documents on the terms set out in
the Security Documents and/or in this Agreement. However, where this
Agreement provides for the Agent to communicate with or provide
instructions to the Security Trustee, while the Agent and the Security
Trustee are the same entity, it will not be necessary for there to be any
such formal communications or instructions notwithstanding that this
Agreement provides in certain cases for the same to be in writing.
18.2 Agent's actions
---------------
Any action taken by the Agent under or in relation to this Agreement with
requisite authority, or on the basis of appropriate instructions, received
from the Majority Banks (or as otherwise duly authorised) shall be binding
on all the Banks.
18.3 Agent's duties
--------------
The Agent shall:
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(a) promptly notify each Bank of the contents of each notice, certificate
or other document received by the Agent from the Borrower or any
other Obligor under or pursuant to this Agreement;
(b) consult with the Banks as to whether and, if so, how a discretion
vested in the Agent is, either in any particular instance or
generally, to be exercised but so that this shall not prevent the
Agent, in exceptional circumstances where time does not permit such
consultation and urgent action is required, from exercising its
rights and powers, or from instructing the Security Trustee to
exercise its rights and powers to preserve the security constituted
by the Security Documents so long as the Agent promptly notifies the
Banks subsequently of such exercise; and
(c) (subject to the other provisions of this clause 18) take such action
or, as the case may be, refrain from taking such action with respect
to the exercise of any of its rights, remedies, powers and
discretions as agent or security agent, as the Majority Banks may
reasonably direct.
18.4 Agent's rights
--------------
The Agent may:
(a) in the exercise of any right, remedy, power or discretion in relation
to any matter, or in any context, not expressly provided for by this
Agreement, act or, as the case may be, refrain from acting in
accordance with the instructions of the Majority Banks, and shall be
fully protected in so doing;
(b) unless and until it shall have received directions from the Majority
Banks, take such action, or refrain from taking such action in
respect of a Default of which the Agent has actual knowledge as it
shall deem advisable in the best interests of the Banks (but shall
not be obliged to do so);
(c) refrain from acting in accordance with any instructions of the
Majority Banks to institute, or to instruct the Security Trustee to
institute any legal proceedings arising out of or in connection with
this Agreement and/or the Security Documents until it and/or the
Security Trustee has been indemnified and/or secured to its
satisfaction against any and all costs, expenses or liabilities
(including legal fees) which it and/or the Security Trustee would or
might incur as a result;
(d) deem and treat (i) each Bank as the person entitled to the benefit of
the Contribution of such Bank for all purposes of this Agreement and
the Security Documents unless and until a Substitution Certificate
shall have been filed with the Agent and shall have become effective,
and (ii) the office set opposite the name of each Bank in part A of
schedule 1 or, as the case may be, in any relevant Substitution
Certificate as such Bank's lending office unless and until a written
notice of change of lending
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<PAGE>
office shall have been received by the Agent; and the Agent may act
upon any such notice unless and until the same is superseded by a
further such notice;
(e) rely as to matters of fact which might reasonably be expected to be
within the knowledge of any Obligor upon a certificate signed by any
director of the relevant Obligor on behalf of such Obligor; and
(f) refrain from doing anything which would, or might in its opinion, be
contrary to any law or regulation of any jurisdiction and may do
anything which is in its opinion necessary or desirable to comply
with any such law or regulation.
18.5 No liability of Arrangers, Security Trustee and Agent
-----------------------------------------------------
None of the Arrangers, the Security Trustee, the Agent or any of their
respective employees and agents shall:
(a) be obliged to request any certificate or opinion under clause 10.1 or
any provision of the Security Documents or to make any enquiry as to
the use of the proceeds of the Facility unless (in the case of the
Agent) so required in writing by any Bank, in which case the Agent
shall promptly make the appropriate request of the relevant Obligor;
or
(b) be obliged to make any enquiry as to any breach or default by any
Obligor in the performance or observance of any of the provisions of
this Agreement or as to the existence of a Default unless (in the
case of the Agent) the Agent has actual knowledge thereof or has been
notified in writing thereof by a Bank, in which case the Agent shall
promptly notify the Banks of the relevant event or circumstance; or
(c) be obliged to enquire whether or not any representation or warranty
made by any Obligor pursuant to this Agreement or any of the Security
Documents is true; or
(d) be obliged to do anything (including, without limitation, disclosing
any document or information) which would, or might in its opinion, be
contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to any
person; or
(e) be obliged to account to any Bank for any sum or the profit element
of any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of or in
connection with, or otherwise take steps to enforce, this Agreement
and/or the Security Documents other than on the instructions of the
Majority Banks; or
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<PAGE>
(g) be liable to any Bank for any action taken or omitted under or in
connection with this Agreement and/or the Security Documents or the
Loan unless caused by its gross negligence or wilful misconduct.
For the purposes of this clause 18 neither the Agent nor the Security
Trustee shall be treated as having actual knowledge of any matter of which
the corporate finance or any other division outside the agency or loan
administration department of the person for the time being acting as the
Agent or the Security Trustee, as the case may be may become aware in the
context of corporate finance, advisory or lending activities from time to
time undertaken by the Agent or the Security Trustee, as the case may be
for the Borrower or any other members of the Group or any associated
companies of the Borrower (including, without limitation, the Parent and
its Subsidiaries) or any other person which may be a trade competitor of
any of the Obligors or may otherwise have commercial interests similar to
those of any of the Obligors.
18.6 Non-reliance on Arrangers, Security Trustee or Agent
----------------------------------------------------
Each Bank acknowledges, by virtue of its execution of this Agreement or,
as the case may be, a Substitution Certificate, that it has not relied on
any statement, opinion, forecast or other representation made by the
Arrangers, the Security Trustee or the Agent to induce it to enter into
this Agreement and that it has made and will continue to make, without
reliance on the Agent, the Security Trustee or the Arrangers and based on
such documents as it considers appropriate, its own appraisal of the
creditworthiness of the Borrower and the other members of the Group and
its own independent investigation of the financial condition, prospects
and affairs of the Borrower and the other members of the Group in
connection with the making and continuation of the Loan under this
Agreement. None of the Arrangers, the Security Trustee or the Agent shall
have any duty or responsibility, either initially or on a continuing
basis, to provide any Bank with any credit or other information with
respect to the Obligors whether coming into its possession before the
making of the Loan or at any time or times thereafter, other than (in the
case of the Agent) as provided in clause 18.3(a).
18.7 No Responsibility on Arrangers, Security Trustee or Agent for any
-----------------------------------------------------------------
Obligor's performance
---------------------
Neither the Arrangers, the Security Trustee nor the Agent shall have any
responsibility or liability to any Bank:
(a) on account of the failure of any Obligor to perform its obligations
under this Agreement or any Security Document; or
(b) for the financial condition of any Obligor; or
(c) for the completeness or accuracy of any statements, representations
or warranties in this Agreement, any Security Document or the
Information
91
<PAGE>
Memorandum or any document delivered under this Agreement or any
Security Document; or
(d) for the execution, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of this Agreement or any
of the Security Documents or of any certificate, report or other
document executed or delivered under this Agreement or any of the
Security Documents; or
(e) otherwise in connection with the Facility or its negotiation or for
acting (or, as the case may be, refraining from acting) in
accordance with the instructions of the Majority Banks.
18.8 Reliance on documents and professional advice
---------------------------------------------
The Arrangers, the Security Trustee and the Agent shall be entitled to
rely on any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person
and shall be entitled to rely as to legal or other professional matters
on opinions and statements of any legal or other professional advisers
selected or approved by it (including those in the Agent's employment).
18.9 Other dealings
--------------
The Arrangers, the Security Trustee and the Agent may, without any
liability to account to the Banks, accept deposits from, lend money to,
and generally engage in any kind of banking or other business with, and
provide advisory or other services to, the Borrower or any other member
of the Group or any associated company of the Borrower (including,
without limitation, UIH and any of its Affiliates) or any of the Banks as
if it were not the Arrangers, the Security Trustee or the Agent, as the
case may be.
18.10 Rights of Agent and Security Trustee as Bank; no partnership
------------------------------------------------------------
With respect to its own Commitment and Contribution (if any) the Agent
and the Security Trustee shall have the same rights and powers under this
Agreement and the Security Documents as any other Bank and may exercise
the same as though they were not performing the duties and functions
delegated to them under this Agreement and/or the Security Documents and
the term "Banks" shall, unless the context clearly otherwise indicates,
include the Agent and the Security Trustee in their individual capacities
as Banks. This Agreement shall not and shall not be construed so as to
constitute a partnership between the parties or any of them.
18.11 Amendments; waivers
-------------------
(a) Subject to clause 18.11(b), the Agent may, with the consent of the
Majority Banks (or if and to the extent expressly authorised by the
other provisions of this Agreement) and, if so instructed by the
Majority Banks, shall (i) agree amendments or modifications to this
Agreement
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<PAGE>
with the Obligors and/or (ii) vary or waive breaches of, or defaults
under, or otherwise excuse performance of, any provision of this
Agreement or the Security Documents by any Obligor. Any such action
so authorised and effected by the Agent shall be documented in such
manner as the Agent shall (with the approval of the Majority Banks)
determine, shall be promptly notified to the Banks by the Agent and
(without prejudice to the generality of clause 18.2) shall be
binding on all the Banks.
(b) Except with the prior written consent of all the Banks, the Agent
shall not have authority on behalf of the Banks (A) to agree with
any Obligor any amendment or modification to this Agreement or to
grant waivers in respect of breaches or defaults or to vary or
excuse performance of or under this Agreement by any Obligor, if the
effect of such amendment, modification, waiver, variation or excuse
would be to (i) reduce the Margin, (ii) postpone the due date or
reduce the amount of any payment of principal, interest, commitment
commission or other amount payable by any Obligor under this
Agreement or any of the Security Documents, (iii) change the
currency in which any amount is payable by any Obligor under this
Agreement, (iv) increase any Bank's Commitment, (v) extend the
Availability Period, (vi) change the definition of "Majority Banks"
in clause 1.2, (vii) change any provision of this Agreement which
expressly or impliedly requires the approval or consent of all the
Banks such that the relevant approval or consent may be given
otherwise than with the sanction of all the Banks, (viii) change
clause 6.1, (ix) change the order of distribution under clause 8.10,
(x) change clause 16.2, (xi) change this clause 18.11 or (B) release
any member of the Group or any of their respective assets from the
security created by any of the Security Documents unless such
release is to permit the disposal or other dealing with such asset
in accordance with the terms of this Agreement and any relevant
Security Document or (C) release any Guarantor from its obligations
under any Guarantee to which it is a party.
(c) For the purposes of this clause 18.11 it is expressly agreed and
acknowledged that the execution of any deed or instrument pursuant
to a further assurance provision in the Security Documents shall not
constitute an amendment or modification to, or variation of, this
Agreement or any of the Security Documents.
18.12 Reimbursement and indemnity by Banks
------------------------------------
Each Bank shall reimburse the Arrangers and the Agent (rateably in
accordance with such Bank's Commitment or Contribution), to the extent
that the Arrangers or the Agent is not reimbursed by the Obligors, for
the costs, charges and expenses incurred by the Arrangers and the Agent
in connection with the negotiation, preparation and execution of this
Agreement and the Security Documents and/or in contemplation of, or
otherwise in connection with, the enforcement or attempted enforcement
of, or the preservation or attempted preservation of any rights under, or
in carrying out its duties under, this Agreement and/or any of the
Security Documents including (in each case) the
93
<PAGE>
fees and expenses of legal or other professional advisers. Each Bank
shall on demand indemnify the Agent (rateably in accordance with its
Commitment or Contribution) against all liabilities, damages, costs and
claims whatsoever incurred by the Agent in connection with this Agreement
and the Security Documents or the performance of its duties under this
Agreement and the Security Documents or any action taken or omitted by
the Agent under this Agreement and/or any of the Security Documents,
unless such liabilities, damages, costs or claims arise from the Agent's
own gross negligence or wilful misconduct.
18.13 Retirement of Agent
-------------------
(a) The Agent may retire from its appointment as Agent under this
Agreement having given to the Borrower and each of the Banks not
less than 30 days' notice of its intention to do so, provided that
no such retirement shall take effect unless there has been appointed
by the Banks as a successor agent:
(i) a Bank nominated by the Majority Banks with the consent of the
Borrower (not to be unreasonably withheld or delayed) or,
failing such a nomination,
(ii) any reputable and experienced bank or financial institution
with offices in London nominated by the Agent with the consent
of the Borrower (not to be unreasonably withheld or delayed).
Any corporation into which the Agent may be merged or converted or
any corporation with which the Agent may be consolidated or any
corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Agent shall be a
party shall, to the extent permitted by applicable law, be the
successor Agent under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties
to this Agreement, save that notice of any such merger, conversion,
amalgamation, consolidation or other reorganisation shall forthwith
be given to the Borrower and the Banks.
(b) Upon any such successor as aforesaid being appointed, the retiring
Agent shall be discharged from any further obligation under this
Agreement (but shall continue to have the benefit of this clause 18
in respect of any action it has taken or refrained from taking prior
to such discharge) and its successor and each of the other parties
to this Agreement shall have the same rights and obligations among
themselves as they would have had if such successor had been a party
to this Agreement in place of the retiring Agent. The retiring Agent
shall (at the expense of the Borrower) provide its successor with
copies of such of its records as its successor reasonably requires
to carry out its functions under this Agreement.
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<PAGE>
18.14 Change of Reference Banks
-------------------------
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid, (b) the Commitment (if any) of any Reference Bank is reduced to
zero in accordance with clause 6.3 or 15.1, (c) a Reference Bank novates
the whole of its rights and obligations (if any) as a Bank under this
Agreement or (d) any Reference Bank ceases to provide quotations to the
Agent for the purposes of determining LIBOR, the Agent may, acting on the
instructions of the Majority Banks, terminate the appointment of such
Reference Bank and after consultation with the Borrower appoint another
Bank to replace such Reference Bank.
18.15 Prompt distribution of proceeds
-------------------------------
Moneys received by the Security Trustee (whether from a receiver or
otherwise) pursuant to the exercise of (or otherwise by virtue of the
existence of) any rights and powers under or pursuant to any of the
Security Documents shall be paid to the Agent for distribution in
accordance with the terms of the Security Trust Deed and shall be
distributed by the Agent as soon as is practicable after the relevant
moneys are received by, or otherwise become available to, the Agent save
that (without prejudice to any other provision contained in any of the
Security Documents) the Agent (acting on the instructions of the Majority
Banks) may credit any moneys received by it to a suspense account for so
long and in such manner as the Agent may from time to time determine with
a view to preserving the rights of the Agent and/or the Arrangers and/or
the Banks or any of them to prove for the whole of their respective
claims against any Obligor or any other person liable.
95
<PAGE>
19 Notices and other matters
-------------------------
19.1 Notices
-------
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter when delivered and, in the
case of a telefax, when a complete and legible copy is received by
the addressee (unless the date of despatch is not a business day in
the country of the addressee or the time of despatch of any telefax
is after the close of business in the country of the addressee in
which case it shall be deemed to have been received at the opening of
business on the next such business day); and
(c) be sent:
(i) to each Obligor at:
Fred. Roeskestraat 123
PO Box 74763,
1070 BT Amsterdam
Telefax: (31) 20578 9861
Attention: Chief Financial Officer
(ii) to the Agent, the Arrangers and the Security Trustee at:
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB
Telefax: (44) 171 638 2551
Attention: Manager, Loans Agency
and:
Telefax: (44) 171 638 0006
Attention: Director, Communications Finance
and in the case of Toronto
Dominion Capital at:
31 West 52nd Street
New York
N.Y. 10019-6101
Telefax: 212 974 8429
Attention: Steve Reinstadtler
(iii) to each Bank
at its address or telefax number
specified in part A of schedule 1 or
in any relevant Substitution Certificate
96
<PAGE>
or to such other address or telefax number as is notified by the relevant
party to the other parties to this Agreement.
19.2 Notices through the Agent
-------------------------
Every notice, request, demand or other communication under this Agreement
to be given by any Obligor to any other party shall be given to the Agent
for onward transmission as appropriate and to be given to the Obligors
shall (except as otherwise provided in this Agreement) be given by the
Agent.
19.3 No implied waivers, remedies cumulative
---------------------------------------
No failure or delay on the part of the Agent, the Arrangers, the Security
Trustee, the Banks or any of them to exercise any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise by the Agent, the Arrangers, the Security
Trustee, the Banks or any of them of any power, right or remedy preclude
any other or further exercise thereof or the exercise of any other power,
right or remedy. The remedies provided in this Agreement are cumulative
and are not exclusive of any remedies provided by law.
19.4 English translations
--------------------
All certificates, instruments and other documents to be delivered under or
supplied in connection with this Agreement shall be in the English
language or shall be accompanied by a certified English translation upon
which the Agent, the Security Trustee, the Arrangers and the Banks shall
be entitled to rely.
19.5 Counterparts
------------
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed
and delivered shall be an original, but all counterparts shall together
constitute one and the same instrument.
19.6 Change of governing law
-----------------------
(a) The Arrangers may at any time give notice (a "Change of Law Notice")
to the Borrower under this clause 19.6.
(b) After the giving of a Change of Law Notice the Agent (acting on the
instructions of the Majority Banks) and the Borrower (acting on
behalf of the Obligors) shall negotiate in good faith with a view to
replacing this Agreement with a new agreement (the "Replacement
Agreement"), the terms of which shall substantially reflect the terms
of this Agreement, but shall also be consistent with market practice
in New York. The Replacement Agreement shall be governed by New York
law.
97
<PAGE>
(c) Each party shall bear its own costs incurred in connection with the
negotiation, preparation and execution of the Replacement Agreement
and all documents executed as conditions precedent to the
availability of the facility made available thereby.
98
<PAGE>
20 Governing law and jurisdiction
------------------------------
20.1 Law
---
This Agreement shall be governed by English law.
20.2 Submission to jurisdiction
--------------------------
The parties to this Agreement agree for the benefit of the Agent, the
Arrangers, the Security Trustee and the Banks that:
(a) if any party has any claim against any other arising out of or in
connection with this Agreement such claim shall (subject to clause
20.2(c)) be referred to the High Court of Justice in England, to the
jurisdiction of which each of the parties irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any
such claim against the Agent, the Arrangers, the Security Trustee or
any Bank shall be an exclusive jurisdiction and no courts outside
England shall have jurisdiction to hear or determine any such claim;
and
(c) nothing in this clause 20.2 shall limit the right of the Agent, the
Arrangers, the Security Trustee or the Banks to refer any such claim
against any Obligor to any other court of competent jurisdiction
outside England, to the jurisdiction of which each Obligor hereby
irrevocably agrees to submit, nor shall the taking of proceedings by
the Agent, the Arrangers, the Security Trustee or any Bank before the
courts in one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction whether concurrently or not.
20.3 Agent for service of process
----------------------------
Each Obligor irrevocably designates, appoints and empowers TG Registrars
Limited at present of 150 Aldersgate Street, London EC1A 4EJ to receive
for it and on its behalf service of process issued out of the High Court
of Justice in England in relation to any claim arising out of or in
connection with this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
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<PAGE>
Schedule 1
----------
Part A - The Banks and their Commitments
----------------------------------------
<TABLE>
<CAPTION>
Name Address and telefax number Commitment
(U.S.$)
<S> <C> <C>
Toronto Dominion 909 Fannin, STE. 1700 125,000,000
Investments, Inc. Houston, TX
USA 77010
Fax: (713) 652 2647
Attention: Martha Gariepy
</TABLE>
100
<PAGE>
Part B - Corporate Group members
--------------------------------
(other than the Obligors)
Section 1
---------
<TABLE>
<CAPTION>
Company Owner(s)
<S> <C>
1 Cable Network Brabant Holding B.V. KTE Newco - 100%
2 Cable Network Zuid-Oost Brabant Holding B.V. Borrower - 100%
3 Cable Network Holding B.V. Borrower - 100%
4 Kabeltel SRO Borrower - 100%
5 Slovatel SRO Borrower - 100%
6 Kabel Net Holding A.S. Parent - 100%
7 Kabel Net Brno A.S. Parent - 100%
8 UIH Romania, Inc. Borrower - 100%
9 UIH Romania Ventures, Inc. Borrower - 100%
10 MediaReseaux S.A. Borrower - 99.99%
six director nominees -one
share each
11 Intercabo Televisao por Cabo SGPS LDA Borrower - 100%
("Intercabo SGPS")
12 Ceska Programova Spolecnost s.r.o. UIH Programming, Inc. -
100%
13 UIH Spain, Inc. Parent - 100%
Section 2
---------
1 A2000 Holding N.V. Borrower - 50%
US West International
B.V. - 50%
2 Kabeltelevisie Amsterdam B.V. A2000 - 100%
Municipality of Amsterdam
- 1 priority share
3 A2000 Hilversum B.V. A2000 - 100%
</TABLE>
101
<PAGE>
<TABLE>
<CAPTION>
Company Owner(s)
<S> <C>
4 Kabeltelevisie Eindhoven N.V. KTE Newco - 100%
5 Media Groep West B.V. A2000 - 25%
NV Holdingmij. De
Telegraaf - 75%
6 Kabeltelevisie Son en Breugel B.V. Cable Network Brabant
Holding B.V. - 100%
7 Intercabo Centro S.A. Intercabo SGPS - 100%
8 Intercabo Atlantico S.A. Intercabo SGPS - 100%
9 Intercabo Norte S.A. Intercabo SGPS - 100%
10 Intercabo Capital S.A. Intercabo SGPS - 100%
11 Intercabo Sul S.A. Intercabo SGPS - 100%
12 Bragatel S.A. Intercabo SGPS - 21.01%
TVTEL - 24.03%
Parfitel - 24.03%
TLCI - 24.03%
Braga Municipality - 6.9%
13 Pluricanal Leiria S.A. Intercabo SGPS - 3.16%
TVTEL - 19.84%
Parfitel - 75%
PP - 1%
MS - 1%
14 Kabelkom Kabeltelevizio Kft ("kk") Kabelkom - 100%
15 CEU Kft Kabelkom - 50% KK - 50%
16 Anfel - Kabelkom Kabelkommunikacios Kft Kabelkom - 60.1% KK -10.2%
Komtavho Rt. Tatabanyai
Onkormanyzat
Varosgondnoksagi Rt. -
29.7%
17 Hajdu - Kabelkom Kabelkommunikacios Kft Kabelkom - 64.6% KK -16.2%
DEKVA Kft. - 19.2%
18 Kabelkom Dunaujvaros Kabelkommunikacios Kft Kabelkom - 70.7% KK - 4.3%
Dunaujvarosi
Varosgazdalkodasi Rt.
Dunaujvaros Onkormanyzata
- 25%
</TABLE>
102
<PAGE>
<TABLE>
<CAPTION>
Company Owner(s)
<S> <C>
19 Telestar Kabelkom Kabelkommunikacios Kft Kabelkom - 75.5% KK - 4%
Heves Megyei Allami
Epitoipari Vallalat
Reti Gyorgy
EVAT Vagyonkezelo
esTavfuto Rt. ELEKTRONIKA
Tervezo es Kivitelezo
Gmk. - 20.5%
20 Kabelkom Nyiregyhaza Kabelkom -57.9% KK - 13.4%
Kabelkommunikacios Kft Nyir-Kabel Szolgaltato es
Kereskedelmi Kft.
Nyiregyhaza Onkormanyzata
- 28.7%
21 Kabelkom Pecsi Kabeltelevizio Kft Kabelkom - 68.6% KK -13.5%
Tryg Kft -17.9%
22 Kabelkom Szekesfehervar Kabelkommunikacios Kabelkom - 3.6% KK -15.3%
Kft Szekesfehervari
Onkormnyzat -81.1%
23 Kabelkom Veszprem Kabelkommunikacios Kabelkom - 67.7% KK -2.4%
Kft Veszpremi
Vayonhasznositasi es
Befektetesi Rt. - 29.9%
24 Kabelkom Szolnok Kabelkommunikacios Kabelkom - 48.1% KK -22.4%
Kft. Others - 29.5%
25 Miskolci Kabel-TV Kft Kabelkom - 42% KK - 58%
26 Multicanal Holdings SRL UIH Romania, Inc - 90%
IMSAT SA - 10%
27 Control Cable Ventures SRL UIH Romania Ventures,
Inc - 51% Control Ploiesti
SA -49%
28 UII - Ireland Limited Liability Company UII - 98%
UII Newco - 0.889%
UA-UII, Inc. - 1.111%
29 UII - Ireland Ltd UII-Ireland LLC - 90%
Riordan Communications.
Ltd. -10%
</TABLE>
103
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
30 Princes Holdings Ltd UII-Ireland Ltd. - 50%
Independent Newspapers
plc - 50%
31 Westward Horizon Ltd Princes - 100%
32 Westward Cable Ltd Westward Horizon - 100%
33 Ballinasloe Electronic Services (Audio Westward Cable - 100%
Vision) Ltd
34 Horizon TV Distribution Ltd Westward Horizon - 100%
35 TV Sparts Ltd Westward Horizon - 100%
36 Independent Wireless Cable Ltd Princes - 100%
37 Cork Communications Ltd Princes - 96%
Others - 4%
38 Culross Investments Ltd Cork Communications Ltd -
100%
39 Kenniv Securities Ltd. Cork Communications - 100%
40 U.C.T. - Netherlands B.V. ("UCT") UII - 100%
41 Tishdoret Achzakot Ltd UCT - 99.3%
UII - 0.7%
42 Tevel Israel International Communications Tishdoret - 46.6%
Ltd. DIC Cable TV Ltd. 48.4%
Shimwell - 5%
43 Israel Cable Programming Ltd. Tevel - 30%
Others - 70%
44 Melita Cable TV PLC Melita Partnership -
99.99%
UII - 0.005%
Melita Cable Holdings Ltd
- 0.005%
45 Media Reseaux Marne S.A. Media Reseaux - 99.5%
(95%) Patrick Drahi - 0.5%
(5%)
46 TV a la Carte B.V.
47 Trnavatel SRO Radio Public - 75%
Satro s.r.o. - 20%
City of Trnava - 5%
</TABLE>
104
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
48 UCI Enterprises Inc. Borrower - 100%
49 Santander de Cable S.A. UIH Spain, Inc. - 25%
50 Burgos S.A. UIH Spain, Inc. - 25%
51 UIH Portugal Inc. Parent - 100%
52 UIH Bulgaria Inc. Parent - 100%
53 UIH Slovakia Inc. Parent - 100%
54 UIH Turkey Inc. Parent - 100%
</TABLE>
105
<PAGE>
Part C - Partnership Group Members
----------------------------------
<TABLE>
<CAPTION>
Partnership Partners
----------- --------
<S> <C>
1 Kabelkom Holding Co. Kabelkom Newco
- 47.2% (economic present),
- 50% (residual economic)
- 50% (voting)
Time Warner Entertainment Company,
L.P.
- 52.8% (economic present)
- 50% (residual economic)
- 50% (voting)
2 United International Investments UII Newco - 50% with respect to
Malta Interests
- 50% with respect to Israel
Interests
- 44.4445% with respect to Ireland
Interests
- 50% voting interest
UA-UII, Inc. - 50% with respect to
Malta Interests
- 50% with respect to Israel
Interests
- 55.5555% with respect to Ireland
Interests
- 50% voting interest
3 Melita Partnership UII - 50%
Melita Cable Holdings Ltd - 50%
4 Kabelkom Management UCI Enterprises, Inc. - 50%
Corporation. Time Warner Entertainment Company,
L.P. -50%
</TABLE>
106
<PAGE>
Schedule 2
----------
Part A - Form of Drawdown Notice
--------------------------------
To: The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB.
Attention: Manager, Loans Agency
and
Attention: Director, Communications Finance
' December, 1997
U.S.$125,000,000 Bridge Loan
Facility Agreement dated ' December, 1997
-----------------------------------------
We refer to the above Agreement and hereby give you notice that we wish to
draw down the Loan in an amount of U.S.$125,000,000 in __ Tranches on __ 1997.
The funds should be applied in accordance with clause 4.2. We select first
Interest Periods in respect of the Tranches as follows:
<TABLE>
<CAPTION>
Amount of Tranche Interest Period
<S> <C>
__ __
__ __
</TABLE>
We confirm that:
(i) so far as we are aware, no event or circumstance has occurred and is
continuing which constitutes a Default; and
(ii) the representations and warranties contained in clause 10 of the
Agreement are true and correct as at the date of this notice as if
made with respect to the facts and circumstances existing at the date
of this notice.
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
For and on behalf of
Belmarken Holding B.V.
.......................................
Authorised Officer
107
<PAGE>
Schedule 2
----------
Part B - Form of Rollover Notice
--------------------------------
To: The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB.
Attention: Manager, Loans Agency
and
Attention: Director, Communications Finance
' 199_
U.S.$125,000,000 Bridge Loan
Facility Agreement dated 5th December, 1997
-------------------------------------------
We refer to the above Agreement and hereby give you notice that we
[select a next Interest Period in respect of the Tranche/the current
Interest Period in respect of which expires on __________ 199_ of _____ months.]
or
[wish to split the Tranche the current Interest Period in respect of which
expires on _________ 199_ into ________ Tranches of ________ [,] [and] ______
[and _______ ] with Interest Periods of ___________ [,] [and] __________ [and
__________] months respectively.]
or
[require the Tranche the current Interest Period in respect of which
expires on ____________ 199_ to be consolidated with the other Tranche which
expires on such date to form one Tranche and select an Interest Period in
respect of __________ months.]
We confirm that:
(i) so far as we are aware, no event or circumstance has occurred and is
continuing which constitutes a Default; and
(ii) the representations and warranties contained in clause 10.1 of the
Agreement which are deemed to be repeated pursuant to clause 10.3 of
the Agreement are true and correct as at the date of this notice as
if made with respect to the facts and circumstances existing at the
date of this notice.
108
<PAGE>
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
For and on behalf of
Belmarken Holding B.V.
................................
Authorised Officer
109
<PAGE>
Schedule 2
----------
Part C - Form of Extension Notice
---------------------------------
To: The Toronto-Dominion Bank,
Triton Court
14/18 Finsbury Square
London EC2A 1DB
Attention: Manager, Loans Agency
and
Attention: Director, Communications Finance
_______ 1998
U.S.$125,000,000 Bridge Loan
Facility Agreement dated 5th December, 1997
-------------------------------------------
We refer to the above Agreement and hereby give you notice that we wish to
extend the maturity of the Loan to the Final Repayment Date.
We confirm that:
(a) all of the Letters of Consent were received by the Agent by 31st
March, 1998;
(b) [either:
mandatory prepayments of the Loan totalling at least U.S.$62,500,000
have been made under clause 6.5(a), (b), (c), (f) and/or (g);
or
mandatory prepayments of the Loan totalling at least U.S.$40,000,000
have been made under clause 6.5(d), following the subscription for
cash for new Ownership Interests in the Borrower, which cash has
ultimately been provided by UIH;]
(c) the ratio of Total Valuation Amount:Net Loan is not less than 4:1;
(d) the credit balance on the Interest Reserve Account exceeds the greater
of:
(i) the Anticipated Interest Amount accruing on the Loan over the
period commencing on the date of this notice and ending on the
Final Repayment Date; and
(ii) U.S.$5,000,000;
110
<PAGE>
(e) no event or circumstance has occurred and is continuing which
constitutes a Default; and
(f) the representations and warranties contained in clause 10.1 of the
Agreement which are deemed to be repeated pursuant to clause 10.3 of
the Agreement are true and correct as at the date of this notice as if
made with respect to the facts and circumstances existing at the date
of this notice.
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
For and on behalf of
Belmarken Holding B.V.
......................................
Authorised Officer
111
<PAGE>
Schedule 3
----------
Documents and evidence required as conditions precedent to the Loan
-------------------------------------------------------------------
(a) Copies, certified as true, complete and up-to-date copies by an
Authorised Officer of each of the Obligors, the Parent, Radio Public and
UIH, of:
(i) the constitutive documents of such person;
(ii) in the case of each Obligor, an extract from the trade register of
the Chamber of Commerce of such Obligor; and
(iii) in the case of each Obligor, of the shareholders' register of such
Obligor.
(b) Copies, certified as true copies by an Authorised Officer of each of the
Obligors, the Parent, Radio Public and UIH, of all necessary corporate
resolutions of such person evidencing approval of this Agreement and the
Security Documents, Sale and Purchase Agreements and Intercompany Loan
Agreements to which it is a party and authorising its appropriate
officers to execute and deliver this Agreement and such Security
Documents, Sale and Purchase Agreements and Intercompany Loan Agreements
and to give all notices and take all other action required by such
person under this Agreement and such Security Documents, Sale and
Purchase Agreements and Intercompany Loan Agreements.
(c) Specimen signatures, authenticated by an Authorised Officer of each of
the Obligors, the Parent, Radio Public and UIH of the persons authorised
in the resolutions referred to in paragraph (b) above, together with an
original of the power of attorney granted by such person in connection
with this Agreement and the Security Documents.
(d) A copy, certified as a true copy by an Authorised Officer of each of the
Obligors, the Parent, Radio Public and UIH, of all consents,
authorisations, licences and approvals required by such person to
authorise, or required by such person in connection with, the execution,
delivery, validity, enforceability and admissibility in evidence of this
Agreement and the Security Documents, Sale and Purchase Agreements and
Intercompany Loan Agreements to which it is a party and the performance
by such person of its obligations under this Agreement and such Security
Documents.
(e) (i) Two opinions (one concerning the memorandum on the security
structure of this transaction (the "Security Structure
Memorandum") of Trenite Van Doorne, special legal advisers to the
Banks in the Netherlands, dated not more than five Banking Days
prior to the Drawdown Date, each in a form acceptable to the
Agent.
112
<PAGE>
(ii) An opinion of Horlings, Brouwer & Horlings, special tax advisors
to the Banks in the Netherlands, dated not more than five Banking
Days prior to the Drawdown Date, in a form acceptable to the
Agent.
(f) (i) Two opinions (one concerning the Security Structure Memorandum) of
Holland & Hart, special legal advisers to the Banks in Colorado
and Delaware, dated not more than five Banking Days prior to the
Drawdown Date, each in a form acceptable to the Agent.
(ii) An opinion of Holme Roberts & Owen LLP, special legal advisors to
the Borrower in Colorado and Delaware, dated not more than five
Banking Days prior to the Drawdown Date, in a form acceptable to
the Agent.
(g) An opinion of Weil Gotshal & Manges, special legal advisers to the Banks
in the Czech Republic, dated not more than five Banking Days prior to
the Drawdown Date, in a form acceptable to the Agent.
(h) An opinion of Coppens van Ommerslaghe & Faures, special legal advisers
to the Banks in Belgium dated not more than five Banking Days prior to
the Drawdown Date, in a form acceptable to the Agent.
(i) An opinion of Norton Rose, Paris, special legal advisers to the Banks in
France, dated not more than five Banking Days prior to the Drawdown
Date, in a form acceptable to the Agent.
(j) Two opinions (one concerning the Security Structure Memorandum) of
Norton Rose, dated not more than five Banking Days prior to the Drawdown
Date, each in a form acceptable to the Agent.
(k) A copy, certified as a true copy by an Authorised Officer of the
Borrower, of a letter from each Obligor's agent for receipt of service
of process referred to in this Agreement and the Security Documents
accepting its appointment.
(l) The documents falling within paragraph (i) of the definition of
"Ownership Rights Securities", the Account Charge and the Security Trust
Deed, duly executed by the Borrower (or, in the case of the Encumbrances
over the Ownership Interests in Kabel Net Holding and Kabel Net Brno,
the Parent) together with all documents, deeds, notices and certificates
required to be delivered pursuant to the terms thereof.
(m) The Disclosure Letter.
(n) The financial statements for the financial year ended on 31 December
1996 referred to in clause 10.1(h)(i) and the quarterly management
accounts referred to in clause 10.1(h)(ii).
113
<PAGE>
(o) A copy of the Management Base Case.
(p) A copy of the pro forma Quarterly Management Accounts to be delivered
pursuant to clause 11.1(f).
(q) Confirmation from the Parent satisfactory to the Agent that the Philips
Transaction (as defined in a NLG 1,100,000,000 revolving credit facility
agreement dated 8th October 1997 and made between the Parent, certain of
its Subsidiaries, a syndicate of banks and The Toronto-Dominion Bank as
arranger, agent and security trustee) has completed and is unconditional
in accordance with its terms save for any condition relating to the
availability of finance to the Parent.
(r) Copies, certified by the Authorised Officer of the Borrower to be true,
complete and up to date copies of:
(i) the Licences;
(ii) the Necessary Authorisations;
(iii) the Sale and Purchase Agreement; and
(iv) the Joint Venture Agreements.
(s) Confirmation satisfactory to the Agent from The Toronto-Dominion Bank,
in its capacity as agent under the Senior Facility Agreement, that the
facility made available thereunder has become fully available for
drawing in accordance with its terms.
(t) A letter of consent duly executed by Rabobank (in respect of a
shareholder covenant relating to KTE dated 7th February 1997) in form
acceptable to the Agent.
(u) Provision by the Borrower of an asset sales plan in a form satisfactory
to the Agent detailing (amongst other things):
(i) an "A" list of prioritised disposal targets the net proceeds of
which are sufficient to repay the Loan in full;
(ii) a "B" list of secondary disposal targets;
(iii) the potential purchasers to be approached in respect of each
disposal target; and
(iv) alternative sources of repayment (including, without limitation,
the raising of additional share capital or Borrowed Money) of the
Loan.
(v) Confirmation from the Parent and the Borrower satisfactory to the Agent
that the Sale and Purchase Agreements have completed and are
114
<PAGE>
unconditional in accordance with their respective terms, save for any
condition relating to the availability of finance to the Borrower.
(w) Deeds of Pledge and Intercompany Loan Agreements in respect of
intercompany loans owing by the Borrower to the Parent as a result of
the Reorganisation (which loans must be in amounts and on terms
acceptable to all the Banks), duly executed by the parties thereto.
(x) Deeds of Pledge and Intercompany Loan Agreements in respect of the
Reorganisation Loans, duly executed by the parties thereto.
(y) The Registration Rights Agreement, duly executed by the parties thereto.
(z) The fees letters referred to in clause 7.1.
(aa) Confirmation from the Parent satisfactory to the Agent that it does not
have outstanding any preferred stock of any nature or any subordinated
Borrowed Money.
(bb) A copy, certified as a true, complete and up-to-date copy by an
Authorised Officer of the Borrower, of the assignment of the Subsidiary
Loans by the Parent to the Borrower.
(cc) Copies, certified as true, complete and up-to-date copies by an
Authorised Officer of the Borrower, of the agreements documenting the
terms of the Subsidiary Loans.
(dd) Deeds of Pledge in respect of the Subsidiary Loans and Deeds of Pledge
by way of disclosed pledge in respect of the Kabel Net Loans, duly
executed by the Security Trustee and the Borrower or, in the case of the
Kabel Net Loans, the Parent.
(ee) A letter from The Toronto-Dominion Bank, in its capacity as agent under
the agreement referred to in (q) above, to the Parent, giving any
necessary waivers and/or consents necessary under the Senior Facility
Agreement to enable the entry into of this Agreement and the Security
Documents and the performance thereof by all the parties thereto.
(ff) Copies of the questionnaires referred to in schedule 10, signed for
identification purposes by an Authorised Officer of the Borrower.
115
<PAGE>
Schedule 4
----------
Form of Substitution Certificate
--------------------------------
Banks are advised not to employ Substitution Certificates without first ensuring
that the transaction complies with all applicable laws and regulations,
including the Financial Services Act 1986 and regulations made thereunder.
To: The Toronto-Dominion Bank,
Triton Court,
14/18 Finsbury Square,
London EC2A 1DB.
Attention: Manager, Loans Agency
and
Attention: Director, Communications Finance
_________ 199_
Substitution Certificate
------------------------
This Substitution Certificate relates to an Agreement (the
"Agreement") dated 5th December, 1997 between Belmarken Holding B.V. as the
Borrower (1), Cable Network Netherlands Holding B.V., Binan Investments B.V. and
Stipdon Investments B.V. as Guarantors (2), The Toronto-Dominion Bank and
Toronto Dominion Capital as Arrangers (3), the banks and financial institutions
whose respective names and addresses are set out in part A of schedule 1 thereto
as Banks (4), The Toronto-Dominion Bank as Agent (5) and The Toronto-Dominion
Bank as Security Trustee (6). Terms defined in the Agreement shall have the same
meaning in this Substitution Certificate.
I. [Name of Existing Bank] (the "Existing Bank") (a) confirms the accuracy of
the summary of its Commitment and Contribution set out in the schedule to
this Substitution Certificate; and (b) requests [Substitute Bank] (the
"Substitute") to accept by way of novation the portion of its Commitment
and Contribution specified in the schedule to this Substitution Certificate
by counter-signing and delivering this Substitution Certificate to the
Agent at its address for the service of notices specified in the Agreement.
II. The Substitute requests the Agent (on behalf of itself, the Arrangers, the
Security Trustee, the Obligors and the Banks) to accept this Substitution
Certificate as being delivered to the Agent pursuant to and for the
purposes of clause 17.3 of the Agreement and clause 10.3 of the Security
Trust Deed, so as to take effect in accordance with its terms on [date of
transfer], [being not earlier than 5 Banking Days after date of delivery of
the Certificate to the Agent] (the "Effective Date").
III. The Agent (on behalf of itself and the other parties to the Agreement)
confirms the novation effected by this Substitution Certificate pursuant to
and for the purposes of clause 17.3 of the Agreement and clause 10.3 of the
Security Trust Deed.
116
<PAGE>
IV. The Substitute confirms:
A. that it has received a copy of the Agreement, the Security Trust Deed
and all other Security Documents and other documentation and
information required by it in connection with the transactions
contemplated by this Substitution Certificate;
B. that it has made its own assessment of the execution, effectiveness,
adequacy, genuineness, validity, enforceability and admissibility in
evidence of the Agreement, the Security Documents and this Substitution
Certificate and has not relied and will not rely on the Existing Bank
or any statements made by the Existing Bank in that respect;
C. that it has made and will continue to make its own appraisal of the
creditworthiness of the Borrower and the other members of the Group and
its own independent investigation of the financial condition, prospects
and affairs of the Borrower and the other members of the Group and has
not relied and will not rely on the Existing Bank, the Agent, the
Arrangers, the Security Trustee or any Bank or any statement, opinion,
forecast or other representation made by the Existing Bank, the Agent,
the Arrangers, the Security Trustee or any Bank in that respect;
D. accordingly none of the Existing Bank, the Agent, the Arrangers, the
Security Trustee or any Bank shall have no liability or responsibility
to the Substitute in respect of any of the foregoing matters[; and]
E. it is a Qualifying Bank.
V. Execution of this Substitution Certificate by the Substitute constitutes
its representation to the Existing Bank and all other parties to the
Agreement and the Security Trust Deed that it has power to become party to
the Agreement and the Security Trust Deed as a Bank on the terms herein and
therein set out and has taken all necessary steps to authorise execution
and delivery of this Substitution Certificate.
VI. The Substitute acknowledges that the Existing Bank has no obligation to
repurchase or reacquire any of the rights and obligations novated by virtue
of this Substitution Certificate or to support, indemnify or compensate the
Substitute for any losses suffered by the Substitute as a consequence of
the novation effected by virtue of this Substitution Certificate.
VII. The Substitute hereby undertakes to the Existing Bank, the Obligors, the
Arrangers, the Security Trustee and the Agent that it will perform in
accordance with their terms all those obligations which by the respective
terms of the Agreement and the Security Trust Deed will be assumed by it
after acceptance of this Substitution Certificate by the Agent.
117
<PAGE>
VIII. This Substitution Certificate is governed by English law and clauses 20.2
and 20.3 of the Agreement are hereby incorporated into this Substitution
Certificate by reference.
Note: This Substitution Certificate is not a security, bond, note, debenture,
- ---- investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
118
<PAGE>
The Schedule
------------
Amount of Next Interest Payment Date Portion novated
--------- -------------------------- ----------------
Contribution (U.S.$)
------------ -------
(U.S.$)
-------
Amount of Portion novated
--------- ---------------
Commitment (U.S.$)
---------- -------
(U.S.$)
-------
*This section will require expansion if the Loan has been split into Tranches
pursuant to clause 5.2(a)(ii).
Administrative Details of Substitute
------------------------------------
Lending office:
Account for payments:
Telephone:
Telefax:
Attention:
[Existing Bank] [Substitute]
By: By:
Date: Date:
The Agent
By:
on its own behalf
and on behalf of the Obligors and the other parties to the Agreement
Date:
119
<PAGE>
Schedule 5
----------
Form of Compliance Certificate
------------------------------
The Toronto-Dominion Bank
Triton Court
14/18 Finsbury Square
London EC2A 1DB
Attention: Manager, Loans Agency __________ 199_
and
Attention: Director, Communications Finance
Dear Sirs
Belmarken Holding B.V.
----------------------
U.S.$125,000,000 Bridge Loan Facility
-------------------------------------
Loan Agreement dated 5th December, 1997
---------------------------------------
(as from time to time amended, varied, extended, restated
---------------------------------------------------------
or replaced the "Agreement")
----------------------------
We refer to the Agreement and deliver this Certificate in respect of
[Quarter Day] pursuant to clause 11.1(i)(ii) thereof. Terms defined in the
Agreement shall have the same meaning when used in this certificate.
We confirm that as at [Quarter Day]:
1 The credit balance on the Interest Reserve Account was.
2 The Anticipated Interest Amount was. [insert calculation details].
3 The Total Valuation Amount was . [insert calculation details].
4 The Net Loan was . [insert calculation details].
Based on the above, we confirm that as at [Quarter Day]:
(a) Interest cover for the purposes of clause 12(a) of the Agreement was .
[insert calculation details].
(b) Asset cover for the purposes of clause 12(b) of the Agreement was .
[insert calculation details].
Accordingly, we confirm that [save as disclosed in this certificate] on
[Quarter Day] the Borrower was in compliance with its undertakings contained in
clause 12 of the Agreement.
120
<PAGE>
We further confirm that, as at [Quarter Day], to the best of our
knowledge and belief the Obligors and Security Providers were in compliance with
their respective obligations (or, in our case, other obligations) under the
Agreement and the Security Documents.
For and on behalf of
Belmarken Holding B.V.
...........................
Authorised Officer
121
<PAGE>
Schedule 6
----------
Licences
--------
ISRAEL - TEVEL
- --------------
TEVEL ISRAEL INTERNATIONAL COMMUNICATIONS LTD.
Franchise dated 19th July, 1990 issued by the State of Israel to Tevel Israel
International Communications Ltd. (formerly Tevel Tishdoret Ben-Leumit Le-Israel
Ltd.).
IRELAND - PHL
- -------------
INDEPENDENT WIRELESS CABLE LIMITED
Licence issued by the Minister for Tourism, Transport and Communications to
Independent Wireless Cable Limited in respect of Cells 7, 8, 9 and 12.
Licence issued by the Minister for Tourism, Transport and Communications to
Independent Wireless Cable Limited in respect of Cells 17, 22 and 23.
CORK COMMUNICATIONS LIMITED
Licence issued by the Minister for Tourism, Transport and Communications to Cork
Communications Limited in respect of Cells 25, 26, 28 and 29.
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Cork Communications Limited.
Licence issued by the Minister for Tourism, Transport and Communications to Cork
Communications Limited related to wired broadcast relay.
HORIZON TV DISTRIBUTION LIMITED
Licence issued by the Minister for Tourism, Transport and Communications to
Horizon TV Distribution Limited in respect of Cells 10, 11, 14 and 15.
Licence issued by the Minister for Tourism, Transport and Communications to
Horizon TV Distribution Limited in respect of Cells 18, 19 and 24.
WESTWARD CABLES LIMITED
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Westward Cables Limited.
122
<PAGE>
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Westward Cables Limited.
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Westward Cables Limited.
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Westward Cables Limited.
Relay Licence issued by the Minister for Tourism, Transport and Communications
to Westward Cables Limited.
MALTA - MELITA
- --------------
MELITA CABLE TV P.L.C.
Agreement dated 3rd June, 1991 between the Government of Malta and Melita Cable
Television Limited (Licence for Malta Cable TV System).
NETHERLANDS - A2000
- -------------------
A2000 HILVERSUM N.V.
Article 21 WTV - Licence dated 10th September, 1996 issued by the Ministry of
Transport and Public Works to A2000 Hilversum B.V.
Article 5 Vergunningenwet - Licence dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to A2000 Hilversum B.V.
Article 25 Vergunningenwet - Licence dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to A2000 Hilversum B.V.
KABELTELEVISIE AMSTERDAM N.V.
Amsterdam:
- ---------
Article 21 WTV - Licence, dated 5th June, 1996 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 9th August, 1996, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
123
<PAGE>
Landsmeer:
- ---------
Article 21 WTV - Licence, dated 5th June, 1996 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 5th June, 1996, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Ouder-Amstel:
- ------------
Article 21 WTV - Licence, dated 29th August, 1996 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 4th June, 1996, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Purmerend:
- ---------
Article 21 WTV - Licence, dated 28th May, 1996 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 28th May, 1996, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Zaanstad:
- --------
Article 21 WTV - Licence, dated 30th May, 1996 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
124
<PAGE>
Article 23 WTV - Licence, dated 30th May, 1996, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Abcoude:
- -------
Article 21 WTV - Licence, dated 24th September, 1993 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 24th July, 1995, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Loenen (Nigtevecht):
- -------------------
Article 21 WTV - Licence, dated 14th April, 1993 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 9th August, 1995, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Weesp:
- -----
Article 21 WTV - Licence, dated 18th October, 1995 issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 23 WTV - Licence, dated 21st July, 1995, issued by the Ministry of
Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
125
<PAGE>
Diemen:
- ------
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Oostzaan:
- --------
Article 5 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Article 25 Vergunningenwet - Licence, dated 2nd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Amsterdam B.V.
Waterland:
- ---------
Article 21 Telecommunications law, Cable TV permit - Licence, dated 5th June,
1996, issued by the Ministry of Transport and Public Works to Kabeltelevisie
Amsterdam B.V.
NETHERLANDS - KTE
- -----------------
KABELTELEVISIE EINDHOVEN N.V.
Article 21 WTV - Licence, dated 31st October, 1996 issued by the Ministry of
Transport and Public Works to the Municipality of Eindhoven.
Article 23 WTV - Licence, dated 18th July, 1996, issued by the Ministry of
Transport and Public Works to the Municipality of Eindhoven.
Article 5 Vergunningenwet - Licence, dated 23rd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Eindhoven B.V.
Article 25 Vergunningenwet - Licence, dated 23rd January, 1997 issued by the
Ministry of Transport and Public Works to Kabeltelevisie Eindhoven B.V.
HUNGARY - KABELKOM
- ------------------
ANFEL-KABELKOM KABELKOMMUNIKACIOS KFT.
Licence dated 20th February, 1996 issued by the Communication Authority to
Anfel-Kabelkom Kabelkommunikacios Kft.
126
<PAGE>
HAJDU KABELKOM KABELKOMMUNIKACIOS KFT.
[Application currently being processed].
KABELKOM-DUNAUJVAROS KABELKOMMUNIKACIOS KFT.
[Application currently being processed]
KABELKOM-NYIREGYHAZA KABELKOMMUNIKACIOS KFT.
Licence dated 15th December, 1992 issued by the Ministry of Transportion,
Communication and Water Conservation to Kabelkom-Nyiregyhaza Kabelkommunikacios
Kft.
KABELKOM PECSI KABELTELEVIZIO KFT.
Licence dated 23rd May, 1997 issued by the Communication Inspectorate for Pecs
Region to Kabelkom Pesci Kabeltelevizio Kft.
KABELKOM-SZEKESFEHERVAR KABELKOMMUNIKACIOS KFT.
[Application currently being processed]
KABELKOM-SZOLNOK KABELKOMMUNIKACIOS KFT
Licence dated 25th January 1996 issued by the Communication Authority to
Kabelkom-Szolnok Kabelkom-Veszprem Kabelkommunikacios Kft.
TELESTAR-KABELKOM KABELKOMMUNIKACIOS KFT.
Licence dated 5th June, 1990 issued by the Ministry of Transportation and
Communication to Telestar-Kabelkom Kabelkommunikacios Kft.
MISKOLCI KABEL-TV KFT.
Licence dated 29th October, 1996 issued by the Communication Authority to
Miskolci Kabel-TV Kft.
CZECH REPUBLIC - KABEL NET
- --------------------------
KABEL NET HOLDING, A.S.
MMDS licence No. 00021273/TI for Broadcasting in Prague dated May 24, 1995
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
MMDS licence No. 00020986/TI for Broadcasting in Brno dated March 31, 1995
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
127
<PAGE>
Beambender Permit No. SKS:136/96 dated March 29, 1996 issued by the Czech
Telecommunication Office to Kabel Net Holding, a.s.
Beambender Permit No. SKS:260/96 dated June 18, 1996 issued by the Czech
Telecommunication Office to Kabel Net Holding, a.s.
Permit for establishing and maintenance of telecommunication equipments No.
25422/1996-6313 dated August 1, 1996 issued by the Czech Telecommunication
Office to Kabel Net Holding, a.s.
Permit No. 258359/96-6313 for establishing of CATV in Praha 9 dated April 22,
1996 issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 2507/95-6313 for operating of CATV in Praha 4 dated January 29, 1996
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 23053/95-6313 for operating of CATV in Praha 4 dated March 31, 1995
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 25433/95-6313 for operating of CATV in Praha 4 dated June 26, 1995
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 25808/95-6313 for operating of CATV in Praha 4 dated March 8, 1996
issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 25480/96-6313 for operating of CATV in Praha 10 dated September 27,
1996 issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
Permit No. 25460/96-6313 for operating of CATV in Praha 9 dated September 27,
1996 issued by the Czech Telecommunication Office to Kabel Net Holding, a.s.
MMDS licence for Broadcasting in Praha No. 014/1993 dated May 6, 1993 issued by
the Radio and Television Broadcasting Council of the Czech Republic to Kabel Net
Holding, s.r.o.
Decision No. Rz 161/95 on change of the MMDS licence No. 014/1993 dated August
30, 1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz 145/94 on change of the MMDS licence No. 014/1993 dated December
27, 1994 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz 148/94 on change of the MMDS licence No. 014/1993 dated December
27, 1994 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
128
<PAGE>
Decision No. Rz 164/95 on change of the MMDS licence No. 014/1993 dated August
30, 1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rzp/147/96-20.11.96/2096 on change of the MMDS Licence No. 014/1993
dated August 27, 1996 issued by the Radio and Television Broadcasting Council of
the Czech Republic to Kabel Net Holding, a.s.
MMDS licence No. 051/93 for Broadcasting in Brno dated March 31, 1994 issued by
the Radio and Television Broadcasting Council of the Czech Republic to Kabel Net
Holding, s.r.o.
Decision No. Rz /168/95 on change of the MMDS licence No. 051/93 dated August
30, 1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz 162/95 on change of the MMDS licence No. 051/93 dated August 30,
1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz/165/95 on change of the MMDS licence No. 051/1993 dated August
30, 1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz/167/95 on change of the MMDS licence No. 051/93 dated August 30,
1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz/6/95 on change of the MMDS licence No. 051/93 dated January 4,
1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz/4/95 on change of the MMDS licence No. 051/93 dated January 4,
1995 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rz/24/97-31.1.97/306 on change of the MMDS licence No. 051/93 dated
January 7, 1997, issued by the Radio and Television Broadcasting Council of the
Czech Republic to Kabel Net Holding, a.s.
Decision No. Rz/151/96-26.11.96/2089 on change of the MMDS licence No. 051/93
dated October 29, 1996 issued by the Radio and Television Broadcasting Council
of the Czech Republic to Kabel Net Holding, a.s.
129
<PAGE>
Decision No. Rzp/146/96-20.11.96/2084 on change of the MMDS licence No. 051/93
dated August 27, 1996 issued by the Radio and Television Broadcasting Council of
the Czech Republic to Kabel Net Holding, a.s.
Decision No. Rz/80/97-15.4.97/784 on change of the MMDS licence No. 051/93 dated
February 18, 1996 issued by the Radio and Television Broadcasting Council of the
Czech Republic to Kabel Net Holding, a.s.
MMDS licence No. 086/95 for broadcasting in Plzen dated November 23, 1995 issued
by the Radio and Television Broadcasting Council of the Czech Republic to Kabel
Net Holding, a.s.
Decision No. Rzp/148/96-20.11.96/2093 on change of the MMDS licence No. 086/95
dated August 27, 1996 issued by the Radio and Television Broadcasting Council of
the Czech Republic to Kabel Net Holding, a.s.
Decision No. Rz/25/97-31.1.97/307 on change of the MMDS licence No. 086/95 dated
January 7, 1997 issued by the Radio and Television Broadcasting Council of the
Czech Republic to Kabel Net Holding, a.s.
Decision No. Rg/4/96/1051 on registration of Kabel Net Holding, a.s., as
operator of broadcasting in Praha 4 dated June 20, 1996 issued by the Radio and
Television Broadcasting Council of the Czech Republic to Kabel Net Holding, a.s.
Decision No. Rgz/14/97-10.4.97/782 on change of registration, dated February 18,
1997 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rgz/18/97-10.4.97/852 on change of registration, dated February 18,
1997 issued by the Radio and Television Broadcasting Council of the Czech
Republic to Kabel Net Holding, a.s.
Decision No. Rg/68/96-1.10.96/1652 on registration of Kabel Net Holdings, a.s.
as operator of broadcasting in Praha 9 dated August 9, 1996 issued by the Radio
and Television Broadcasting Council of the Czech Republic to Kabel Net Holding,
a.s.
Announcement dated May 15, 1997 of the Radio and Television Broadcasting Council
of the Czech Republic regarding changes of registrations Rg/4/96 and Rg/68/96-
1.10.96.
Announcement dated May 15, 1997 of the Radio and Television Broadcasting Council
of the Czech Republic regarding changes of MMDS licences No. 014/1993 and
051/1993.
Statement dated September 22, 1997 of the Radio and Television Broadcasting
Council of the Czech Republic regarding change of shareholders' structure of
United and Philips Communications B.V.
130
<PAGE>
KABEL NET BRNO, A.S.
Permit for establishing and maintenance of telecommunication equipments No. SIR-
121228/96 dated July 26, 1996 issued by the Czech Telecommunication Office to
Kabel Net Brno, a.s.
SLOVAK REPUBLIC - TRNAVATEL
- ---------------------------
TRNAVATEL S.R.O.
Licence dated September 24, 1993 issued by the Radio and Television Broadcasting
Council of the Slovak Republic to SATRO spol. s.r.o.
Licence dated March 26, 1996 issued by the Radio and Television Broadcasting
Council of the Slovak Republic to SATRO spol. s.r.o.
FRANCE - MEDIARESEAUX
- ---------------------
MEDIARESEAUX MARNE S.A.
Decision dated December 12, 1995 given by the Higher Audio-Visual Council to
MediaReseaux Marne S.A.
Concession agreement dated July 25, 1996 between Rosny sous Bois and
MediaReseaux Marne S.A.
Agreement of installation and exploitation of a videocommunications cable
network dated May 24, 1995 between Commune de Pontault-Combault, Commune de
Roissy-en-Brie, Syndicat d'Agglomeration de Marne-le-Vallee - Val Maubuee and
MediaReseaux Marne S.A., as amended.
Addendum no. 1 dated March 29, 1996 to the agreement of installation and
exploitation of a videocommunications cable network dated May 24, 1995 between
Commune de Pontault-Combault, Commune de Roissy-en-Brie, Syndicat
d'Agglomeration de Marne-le-Vallee - Val Maubuee and MediaReseaux Marne S.A.
Addendum dated July 3, 1996 to the agreement of installation and exploitation of
a videocommunications cable network dated May 24, 1995 between Syndicat Mixte de
Videocommunication de l'Est Parisien, MediaReseaux Marne S.A. and Syndicat
d'Agglomeration Nouvelle de Marne-le-Vallee - Val Maubuee.
Addendum no 3-1 dated October 27, 1997 to the agreement of installation and
exploitation of a cable network dated May 24, 1995 between Syndicat Mixte de
Videocommunication de l'Est Parisien and, MediaReseaux Marne S.A.
131
<PAGE>
Addendum no 3-2 dated October 27, 1997 to the agreement of installation and
exploitation of a cable network dated May 24, 1995 between Syndicat Mixte de
Videocommunication de l'Est Parisien and, MediaReseaux Marne S.A.
Addendum no 3-3 dated October 27, 1997 to the agreement of installation and
exploitation of a cable network dated May 24, 1995 between Syndicat Mixte de
Videocommunication de l'Est Parisien and MediaReseaux Marne S.A.
ROMANIA - MULTICANAL
- --------------------
MULTICANAL HOLDINGS S.R.L.
Licence dated March 1, 1994 issued by the National Audio-Visual Council to
Multicanal Holdings S.R.L.
ROMANIA - CONTROL CABLE VENTURES
- --------------------------------
CONROL CABLE VENTURES S.R.L.
Licence dated April 4, 1995 issued by the National Audio-Visual Council to
Control Cable Ventures S.R.L.
Licence dated December 17, 1996 issued by the National Audio-Visual Council to
Control Cable Ventures S.R.L.
PORTUGAL - INTERCABO
- --------------------
INTERCABO CAPITAL S.A.
Authorisation dated March 10, 1995 issued by the Institute of Communications of
Portugal to Intercabo Capital S.A. (formerly Multicanal Capital - Televisao por
Cabo, S.A.)
Certificate dated March 7, 1995 issued by the Institute of Communications of
Portugal.
INTERCABO SUL S.A.
Authorisation dated March 10, 1995 issued by the Institute of Communications of
Portugal to Intercabo Sul S.A. (formerly Multicanal Sul - Televisao por Cabo,
S.A.)
Certificate dated March 7, 1995 issued by the Institute of Communications of
Portugal.
132
<PAGE>
Schedule 7
----------
Permitted Borrowings
--------------------
<TABLE>
<CAPTION>
Principal amount made
---------------------
Facility available thereunder
-------- --------------------
<C> <S> <C>
1 Bank Facility Agreement dated October 16, 1996 NLG 45,000,000
between A2000 Hilversum B.V. as Borrower and ABN
AMRO Bank N.V. as Bank, Agent and Lender
(comprising a Term Loan Facility, a Construction
Loan Facility and a Working Capital Facility).
2 Bank Facility Agreement dated January 31, 1996 NLG 90,000,000
between A2000 Holding N.V. as Borrower and ABN
AMRO Bank N.V. as Bank, Agent and Lender.
3 Bank Facility Agreement dated January 31, 1996 NLG 375,000,000
between Kabeltelevisie Amsterdam B.V. as Borrower
and ABN AMRO Bank N.V. as Lender (comprising a
Term Loan Facility, a Term Construction Loan
Facility and a Working Capital Overdraft
Facility).
4 Credit Facility Agreement dated February 7, 1997 NLG 65,000,000
between Cooperatieve Centrale
Raiffeisenboerenleenbank B.A. as Initial Lender
and Agent and Kabeltelevisie Eindhoven N.V. as
Borrower.
5 Loan Agreement dated December 2, 1985 between NLG 25,000,000
Kabeltelevisie Eindhoven N.V. and Algemeen
burgerlijk pensioenfonds.
6 Loan Agreement dated January 21, 1985 between NLG 3,000,000
Kabeltelevisie Eindhoven N.V. and Stichting
Pensioenfonds voor Fysiotherapeuten.
7 Loan Agreement dated January 21, 1985 between NLG 2,000,000
Kabeltelevisie Eindhoven N.V. and Stichting
Pensioenfonds voor de Beambten in de
Schoenindustrie en de Lederwarenindustrie.
</TABLE>
133
<PAGE>
<TABLE>
<C> <S> <C>
8 Loan Agreement dated October 1, 1993 between NLG 7,000,000
Kabeltelevisie Eindhoven N.V. and nv Bank
Nederlandse Gemeenten.
9 Loan Agreement dated May 15, 1994 between NLG 5,000,000
Kabeltelevisie Eindhoven N.V. and Stichting NMS
Spaarbank.
10 Eight-year Term Bond Facility Agreement dated Lm 9,000,000
September 30, 1996 between Melita Cable TV P.L.C.
as Borrower and ING Bank N.V. as Bank, including
Registered Secured Bond in favour of ING Bank
N.V., as amended.
11 Overdraft Facility Agreement of Melita Cable TV Lm 500,000
P.L.C.
12 Facilities Agreement (including a Term Loan IR(Pounds)80,000,000
Facility, Revolving Credit Facility and an
Interest Rate Swap Facility) dated August 30,
1996 between Princes Holdings Limited, Cork
Communications Ltd., Westward Horizon Ltd., and
Independent Wireless Cable Ltd. as Borrowers,
Princes Holdings Ltd., Independent Wireless Cable
Ltd., Westward Horizon Ltd., Cork Communications
Ltd., Horizon TV Distribution Ltd., Westward
Cables Ltd., Ballinasloe Electronic Services
Audio Vision Ltd., Culross Investments Ltd.,
Kenniv Securities, East Coast Multi-Channel
Television Ltd., Cork Multi-Channel Television
Ltd. and Bagano Ltd. as Guarantors, The Governor
and Company of the Bank of Ireland as Facility
Agent and Security Trustee and Allied Irish Banks
P.L.C., Irish Intercontinental Bank Limited, The
Governor and Company of the Bank of Ireland and
Ulster Bank Markets Limited as Lenders
13 Loan Agreement dated December 4, 1990 between NIS 100,000,000
Tevel Tishdoret Ben-Leumit Le-Israel Ltd. and
Bank Discount LeIsrael Ltd.
14 Loan Agreement dated January 5, 1992 between NIS 3,600,000
Tevel Tishdoret Ben-Leumit Le-Israel Ltd. and
First International Bank.
</TABLE>
134
<PAGE>
15 Loan from the Borrower to Media Reseaux NLG 25,783,479
16 Loan from the Parent to Kabel Net Holding. NLG 19,119,901
17 Loan from the Parent to Kabel Net Brno. NLG 9,094,428
18 Loan from the Borrower to KTE. NLG 25,500,000
19 Loan from the Borrower to CNBH. NLG 3,305,214
20 Loan from the Borrower to Intercabo SGPS Lda NLG 27,953,053
21 Loan from the Borrower to Slovatel s.r.o. NLG 5,257,683
22 Loan from the Borrower to Kabelkom Holding Co. NLG 2,714,354
23 Loan from the Parent to Melita Cable TV P.L.C. NLG 1,504,410
24 Loan from UII-Ireland Ltd to Princes Holding Ltd U.S.$8,358,000
135
<PAGE>
Schedule 8
----------
Permitted Encumbrances
----------------------
1 Bank Facility Agreement dated October 16, 1996 between A2000 Hilversum B.V.
("A2000 Hilversum") as Borrower and ABN AMRO Bank N.V. as Bank, Agent and
Lender (comprising a Term Loan Facility, a Construction Loan Facility and a
Working Capital Facility), and the following mortgages and pledges and the
Encumbrances created or to be created thereby:
(a) deed of mortgage with respect to A2000 Hilversum's real property;
(b) deed of pledge of accounts with respect to future rights and claims of
A2000 Hilversum and any of its Subsidiaries (as such term is defined in
the foregoing Bank Facility Agreement);
(c) deed of pledge of shares and related rights with respect to all issued
and outstanding shares in A2000 Hilversum;
(d) deed of pledge of movable assets on movable property ("roerende zaken")
of A2000 Hilversum and any of its Subsidiaries;
(e) pledges or mortgages on any good ("goed") with respect to which A2000
Hilversum or any of its Subsidiaries now or in the future has the right
to dispose ("beschikkingsbevoegd is"), and on which no security rights
have been created as contemplated under the foregoing items (a) through
(d), to the extent that such good or goods has or have in the aggregate
an economic value exceeding NLG 500,000; and
(f) a negative pledge pursuant to which A2000 Hilversum covenants not to
create, and cause each of its Subsidiaries not to create, except as
otherwise contemplated in the foregoing Bank Facility Agreement, any
security right on or security interest in any assets ("goederen") with
respect to which A2000 Hilversum or any such Subsidiary has the right to
dispose ("beschikkingsbevoegd"), with the exception of (i) liens by
operation of law, (ii) retention of title by a seller of goods in the
ordinary course of business and (iii) except as provided in article 4.4
and article 4.7 of the Acquisition Agreement (as defined in the
foregoing Bank Facility Agreement).
136
<PAGE>
2 Bank Facility Agreement dated January 31, 1996 between A2000 Holding N.V.
("A2000") as Borrower and ABN AMRO Bank N.V. as Bank, Agent and Lender, and
the following mortgages and pledges and the Encumbrances created or to be
created thereby:
(a) deed of pledge of accounts with respect to all present and future rights
and claims of A2000 and any of its Subsidiaries (as such term is defined
in the foregoing Bank Facility Agreement), excluding Kabeltelevisie
Amsterdam B.V. ("KTA") and its subsidiaries;
(b) deed of pledge of shares and related rights with respect to all issued
and outstanding shares in KTA (except for the priority share held by the
Municipality of Amsterdam) and in any Subsidiary (excluding KTA and its
subsidiaries);
(c) pledges or mortgages on any good ("goed") with respect to which A2000 or
any of its Subsidiaries (excluding KTA and its subsidiaries) now or in
the future have the right to dispose ("beschikkingsbevoegd is"), and on
which no security rights have been created as contemplated under the
foregoing items (a) and (b), to the extent that such good or goods has
or have in the aggregate an economic value exceeding NLG 500,000; and
(d) a negative pledge pursuant to which A2000 covenants not to create, and
cause each of its Subsidiaries not to create, except as otherwise
contemplated in the foregoing Bank Facility Agreement, any security
right on or security interest in any assets ("goederen") with respect to
which A2000 or any such Subsidiary has the right to dispose
("beschikkingsbevoegd"), with the exception of (i) liens by operation of
law, (ii) retention of title by a seller of goods in the ordinary course
of business and (iii) except as provided in article 19 of the CAI
Agreements (as defined in the foregoing Bank Facility Agreement).
3 Bank Facility Agreement dated January 31, 1996 between Kabeltelevisie
Amsterdam B.V. ("KTA") as Borrower and ABN AMRO Bank N.V. as Lender
(comprising a Term Loan Facility, a Term Construction Loan Facility and a
Working Capital Overdraft Facility), and the following mortgages and pledges
and the Encumbrances created or to be created thereby:
(a) deed of mortgage with respect to certain of KTA's real property;
(b) deed of pledge of accounts with respect to future rights and claims of
KTA and any of its Subsidiaries (as such term is defined in the
foregoing Bank Facility Agreement);
(c) deed of pledge of shares and related rights with respect to all issued
and outstanding shares in KTA (except for the priority share held by the
Municipality of Amsterdam);
137
<PAGE>
(d) deed of pledge of movable assets on movable property ("roerende zaken")
of KTA and any of its Subsidiaries;
(e) pledges or mortgages on any good ("goed") with respect to which KTA or
any of its Subsidiaries now or in the future has the right to dispose
("beschikkingsbevoegd is"), and on which no security rights have been
created as contemplated under the foregoing items (a) through (d), to
the extent that such good or goods has or have in the aggregate an
economic value exceeding NLG 500,000; and
(f) a negative pledge pursuant to which KTA covenants not to create, and
cause each of its Subsidiaries not to create, except as otherwise
contemplated in the foregoing Bank Facility Agreement, any security
right on or security interest in any assets ("goederen") with respect to
which KTA or any such Subsidiary has the right to dispose
("beschikkingsbevoegd"), with the exception of (i) liens by operation of
law, (ii) retention of title by a seller of goods in the ordinary course
of business and (iii) except as provided in article 19 of the CAI
Agreements (as defined in the foregoing Bank Facility Agreement).
4 Credit Facility Agreement dated February 7, 1997 between Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A. as Initial Lender and Agent and
Kabeltelevisie Eindhoven N.V. ("KTE") as Borrower, and the following pledges
and mortgage and the Encumbrances created or to be created thereby:
(a) pledge on all the movable assets of KTE, including the Other Equipment
(as such term and other capitalized terms used in this paragraph 4 are
defined in the foregoing Credit Facility Agreement), the Project
Agreements, the rights under the Insurances other than the third party
liability insurances, the rights under the Project Account and the
rights under the Permitted Investments;
(b) pledge on all shares presently issued or in the future issued by KTE;
(c) mortgage declaration with respect to KTE's cable networks and ancillary
equipment;
(d) pledge of all future assets of KTE; and
(e) a negative pledge mortgage and pledge declaration with respect to KTE's
property.
138
<PAGE>
5 Eight-year Term Bond Facility Agreement dated September 30, 1996 between
Melita Cable TV P.L.C. ("Melita") as Borrower and ING Bank N.V. as Bank,
including Registered Secured Bond in favour of ING Bank N.V., as amended, and
the following pledges, assignment and delegation and the Encumbrances created
thereby:
(a) pledge of Melita's issued share capital;
(b) pledge of all of the partnership interests in Melita Partnership, a
Colorado general partnership;
(c) pledge (pursuant to a general hypothecary security instrument) of all of
Melita's assets, including real property, both real property owned and
leasehold interests, fixtures, equipment and other personal property,
both now owned and subsequently acquired and the proceeds thereof, and
all of Melita's inventory and accounts receivable, both now or
subsequently existing;
(d) pledges of Melita's interests in designated bank accounts with Mid-Med
Bank Limited;
(e) assignment of contracts of insurance described in Contract of Assignment
of Proceeds of Insurance between Melita and ING Bank N.V.;
(f) delegation of power to exercise Melita's rights under the Agreement
between Melita and the Government of Malta dated 3rd June 1991 by virtue
of which the Government of Malta granted Melita an exclusive cable
operator licence; and
(g) a negative pledge that Melita shall not create or permit to subsist any
encumbrance over all or any of its present or future revenues or assets
other than encumbrances permitted under the foregoing Facility
Agreement.
6 Overdraft Facility Agreement between Melita Cable TV P.L.C. as Borrower and
Midland Bank P.L.C. as Bank and the general hypothec on all of its property
present and future, in general, up to the principal amount of Lm 500,000;
7 Facilities Agreement (including a Term Loan Facility, a Revolving Credit
Facility and an Interest Rate Swap Facility) dated August 30, 1996 between
Princes Holding Limited, Cork Communications Ltd., Westward Horizon Ltd., and
Independent Wireless Cable Ltd. as Borrowers, Princes Holdings Ltd.,
Independent Wireless Cable Ltd., Westward Horizon Ltd., Cork Communications
Ltd., Horizon TV Distribution Ltd., Westward Cables Ltd., Ballinasloe
Electronic Services Audio Vision Ltd., Culross Investments Ltd., Kenniv
Securities, East Coast Multi-Channel Television Ltd., Cork Multi-Channel
Television Ltd. and Bagano Ltd. as Guarantors, The Governor and
139
<PAGE>
Company of the Bank of Ireland as Facility Agent and Security Trustee and Allied
Irish Banks P.L.C., Irish Intercontinental Bank Limited, The Governor and
Company of the Bank of Ireland and Ulster Bank Markets Limited as Lenders, and
the following debentures, assignment, security and pledge and the Encumbrances
created thereby:
(a) debentures incorporating a fixed charge over the present and future
assets (including a charge over all copyright, patents, licences and
supply contracts) of Princes Holding Limited and its subsidiaries and
certain other parties designated in the foregoing Facilities Agreement
("Irish Obligors"), a floating charge over such parties' undertaking
assets that may not be charged effectively as fixed charges and a
floating charge over the present and future book debts of such parties
incorporated in Ireland;
(b) an assignment of all insurance policies held by Irish Obligors;
(c) security over all keyman assurance policies if the same are held by any
Irish Obligor; and
(d) negative pledge given by each Irish Obligor not to create or permit to
subsist any security interest over all or any of its present or future
properties, undertakings, rights, revenues or assets, except as
permitted under the foregoing Facilities Agreement.
8 Loan Agreement dated December 4, 1990 between Tevel Tishdevet Ben-Leumit Le-
Israel Ltd. (now known as Tevel Israel International Communications Ltd.)
("Tevel") as borrower and Bank Discount Le-Israel Ltd as lender, and the
following charges, negative pledge and the Encumbrances created thereby:
(a) a floating charge over the whole of Tevel's assets, except its franchise
rights and converters installed with subscribers;
(b) a fixed charge over the uncalled or unpaid share capital of Tevel's
goodwill;
(c) a fixed charge over any amounts Tevel is entitled to receive from credit
card companies in respect of sales by means of credit cards; and
(d) a negative pledge against any further encumbering of borrower's assets.
140
<PAGE>
Schedule 9
----------
Additional information and documents included within the Information Package
----------------------------------------------------------------------------
Questionnaires completed by or on behalf of the Borrower in respect of the
following Group members, which questionnaires will be signed for identification
purposes by an Authorised Officer of the Borrower:
1. Kabeltel SRO
2. Intercabo LDA
3. Slovatel SRO
4. Travatel SRO
5. Media Reseaux S.A.
6. Santander de Cable S.A.
7. Burgos S.A.
8. Cable Network Brabant Holding B.V.
9. Cable Network Zuidoost Brabant Holding B.V.
10. Cable Network Holding B.V.
11. UCI Enterprises Inc.
12. Kabel Net Holding A.S.
13. Kabel Net Brno A.S.
14. Ceska Programova Spolecnost s.r.o.
15. UIH Romania Inc.
16. UIH Romania Ventures Inc.
17. UPC Kft
18. UIH Spain Inc.
19. Intercabo Centro LDA
20. Intercabo Atlantico LDA
21. Intercabo Norte LDA
22. Intercabo Capital LDA
23. Intercabo Sul LDA
24. Bragatel LLC
25. Pluricanal Leiria LLC
26. Kabeltelevisie Son en Breugel B.V.
27. Kabeltelevisie Amsterdam B.V.
28. TV a la Carte B.V.
29. A2000 Hilversum B.V.
30. Kabeltelevisie Eindhoven N.V.
31. Kabelkom Kabeltelevisio Kft
32. Westward Horizon Ltd
33. Westward Cable Ltd
34. Horizon TV Distribution Ltd
35. Independent Wireless Cable Ltd
36. Cork Communications Ltd
37. UCT - Netherlands B.V.
38. Media Groep West B.V.
39. CEU Kft
141
<PAGE>
40. Anfel - Kabelkom Cable Communications LLC
41. Hadju - Kabelkom Cable Communications LLC
42. Kabelkom Dunaujvaros Cable Communications LLC
43. Telstar Kabelkom Cable Communications LLC
44. Kabelkom Nyiregyhaza Cable Communications LLC
45. Kabelkom Pecse Cable Television LLC
46. Kabelkom Szekesfehervar Cable Communications LLC
47. Kabelkom Veszprem Cable Communications LLC
48. Kabelkom Szolnok Cable Communications LLC
49. Kabelkom Management Corporation
50. Multicanal Holding SRL
51. Control Cable Ventures SRL
52. UII - Ireland LLC
53. UII - Ireland Ltd
54. Princes Holding Ltd
55. Tishdoret Achzakot Ltd
56. Tevel Israel International Communications Ltd
57. Israel Cable Programming Ltd
58. Melita Cable TV P.L.C.
59. Media Reseaux Marne S.A.
60. A2000 Holding B.V.
61. Kabelkom Holding Co.
62. United International Investments
63. Melita Partnership
64. Miskolci Kabel-TV Kft
142
<PAGE>
Schedule 10
-----------
Joint Venture Agreements
------------------------
Belmarken Holding B.V.
- ----------------------
None
Binan Investments B.V.
- ----------------------
None
Cable Network Netherlands Holding B.V.
- --------------------------------------
None
Stipdon Investments B.V.
- ------------------------
None
United International Investments
- --------------------------------
UII Third Amended and Restated Partnership Agreement dated as of June 18, 1992
Investment Agreement dated as of April 8, 1992
Agreement Amending the Investment Agreement and the Third Amended and Restated
Partnership Agreement of UII dated as of December 28, 1992
Amendment No. 1 to Agreement Amending the Investment Agreement and the Third
Amended and Restated Partnership Agreement of UII dated as of June 2, 1994
Amendment to UII Third Amended and Restated Partnership Agreement dated as of
October 5, 1994
Agreement of Amendment of Third Amended and Restated Partnership Agreement of
UII dated as of July 13, 1995
Israel - Tevel
- --------------
U.C.T.-Netherlands B.V.
- -----------------------
None
143
<PAGE>
Tishdoret Achzakot Ltd.
- -----------------------
Tevel Israel International Communications Ltd.
- ----------------------------------------------
Shareholders' Agreement dated as of May 11, 1988 and Addendum dated as of August
29, 1991
Agreement of Amendment of Shareholders' Agreement dated as of April 11, 1995
Memorandum of Agreement dated as of August 29, 1991 and memoranda related
thereto dated as of May 19, 1995 and July 13, 1995
Ireland - PHL
- -------------
UII-Ireland Limited Liability Company
- -------------------------------------
UII-Ireland Limited Liability Company Operating Agreement dated as of June 18,
1992
Amendment to UII-Ireland Liability Company Operating Agreement dated as of July
13, 1995
UII-Ireland, Ltd.
- -----------------
UII-Ireland Ltd. Agreement of Limited Partnership dated as of June 18, 1992
Amendment to UII-Ireland, Ltd. Agreement of Limited Partnership dated as of July
13, 1995
Independent Wireless Cable Limited
- ----------------------------------
Princes Holding Limited
- -----------------------
Subscription and Shareholders' Agreement dated as of April 9, 1992
Amendment No. 1 to Subscription and Shareholders' Agreement dated as of June 18,
1992
Westward Horizon Limited
- ------------------------
None
Cork Communications Limited
- ---------------------------
None
144
<PAGE>
Horizon TV Distribution Limited
- -------------------------------
None
Westward Cables Limited
- -----------------------
None
Malta - Melita
- --------------
Melita Partnership
- ------------------
Melita Partnership Partnership Agreement dated as of May 28, 1991
Agreement of Amendment of Melita Partnership Partnership Agreement dated
December 22, 1992
Amendment No. 1 to Melita Partnership Partnership Agreement dated as of December
29, 1992
Amendment to Melita Partnership Partnership Agreement dated as of July 13, 1995
Shareholders' Agreement dated as of May 28, 1991
Agreement of Amendment of Shareholders' Agreement dated as of December 22,
1992
Melita Cable TV P.L.C.
- ----------------------
Contribution Agreement dated as of May 28, 1991
Agreement of Amendment of Contribution Agreement dated as of December 22, 1992
Netherlands - A2000
- -------------------
A2000 Holding N.V.
- ------------------
Joint Venture Agreement dated as of 13 February 1996
Consent Agreement (amending clause 9.2 (b)) dated as of 27 September 1997
A2000 Hilversum N.V.
- --------------------
None
145
<PAGE>
Kabeltelevisie Amsterdam N.V.
- -----------------------------
Shareholders' Agreement dated as of July 6, 1995
Netherlands - KTE
- -----------------
Kabeltelevisie Eindhoven N.V.
- -----------------------------
None
Hungary-Kabelkom
- ----------------
Kabelkom Holding Co.
- --------------------
Joint Venture Agreement dated as of March 4, 1991
Agreement of Amendment Joint Venture Agreement dated as of July 13, 1995
Kabelkom Kabeltelevizio KFT.
- ----------------------------
Joint Venture Agreement dated as of February 26, 1992
Anfel-Kabelkom Kabelkommunikacios KFT.
- --------------------------------------
Joint Venture Agreement dated as of February 26, 1992
Hajdu Kabelkm Kabelkommunikacios KFT.
- -------------------------------------
Joint Venture Agreement dated as of March 27, 1991
Kabelkom-Dunaujvaros Kabelkommunikacios KFT
- -------------------------------------------
Joint Venture Agreement dated as of August 26, 1991
Kabelkom-Nyiregyhaza Kabelkommunikacios KFT
- -------------------------------------------
Joint Venture Agreement dated as of April 28, 1992
Kabelkom Pecsi Kabeltelevizio KFT
- ---------------------------------
Joint Venture Agreement dated as of April 24, 1991
Kabelkom-Szekesfehervar Kabelkommunikacios KFT
- ----------------------------------------------
Joint Venture Agreement dated as of February 27, 1992
Kabelkom-Szolnok Kabelkommunikacios KFT
- ---------------------------------------
146
<PAGE>
Joint Venture Agreement dated as of January 13, 1993
Kabelkom-Veszprem Kabelkommunikacios KFT
- ----------------------------------------
Joint Venture Agreement dated as of August 7, 1991
Telestar- Kabelkom Kabelkommunikacios KFT.
- ------------------------------------------
Joint Venture Agreement dated as of May 29, 1992
Miskolci Kabel-TV KFT.
- ----------------------
Joint Venture Agreement dated as of August 1, 1996
Czech Republic - Kabel Net
- --------------------------
Kabel Net Holding, A.S.
- -----------------------
None
Kabel Net Brno, A.S.
- --------------------
None
France - Media Reseaux
- ----------------------
Media Reseaux S.A.
- ------------------
None.
Media Reseaux Marne S.A.
- ------------------------
Shareholders' Agreement dated as of January 16, 1996, including the Irrevocable
Promise to Purchase. [In the process of being amended.]
Kabeltelevisie Son en Breugel N.V.
- ----------------------------------
None
147
<PAGE>
Schedule 11
-----------
Key Group Members
-----------------
Unless otherwise noted, "C" denotes Key Group Core Member, "H" denotes holding
entity, "O" denotes operating entity, "H/O" denotes both holding and operating
entity, "L" indicates that the entity holds a Licence, "AC" denotes that annual
audited (subject as provided below) consolidated financial statements prepared
on a local jurisdiction statutory basis will be provided, and "A" denotes that
annual audited (subject as provided below) unconsolidated financial statements
prepared on a local jurisdiction statutory basis will be provided. Each Key
Group Core Member other than United International Investments will also provide
Quarterly Management Accounts on a consolidated basis (if its annual financial
statements are provided on that basis) or an unconsolidated basis (otherwise).
Obligors
- --------
Belmarken Holding B.V. (H) (A)
Binan Investments B.V. (H) (A)
Cable Network Netherlands Holding B.V. (H) (A)
Stipdon Investments B.V. (H) (A)
Other Key Group Members
- -----------------------
United International Investments (C) (H) (A)
Israel - Tevel
- --------------
U.C.T.-Netherlands B.V. (H) (A unaudited)
Tishdoret Achzakot Ltd. (H) (A)
Tevel Israel International Communications Ltd. (C) (O) (L) (A)
Ireland - PHL
- -------------
UII-Ireland Limited Liability Company (H)
UII-Ireland, Ltd. (H)
Princes Holdings Ltd. (C) (H) (AC)
Independent Wireless Cable Limited (O) (L)
Westward Horizon Limited (O)
Cork Communications Limited (O) (L)
Horizon TV Distribution Limited (O) (L)
Westward Cable Limited (O) (L)
148
<PAGE>
Malta - Melita
- --------------
Melita Partnership (H)
Melita Cable TV P.L.C. (C) (O) (L) (A)
Netherlands - A2000
- -------------------
A2000 Holding N.V. (C) (H) (AC)
A2000 Hilversum B.V. (O) (L)
Kabeltelevisie Amsterdam N.V. (O) (L)
Kabeltelevisie Son en Breugel B.V. (O) (L)
Netherlands - KTE
- -----------------
Kabeltelevisie Eindhoven N.V. (C) (O) (L) (A)
Hungary - Kabelkom
- ------------------
Kabelkom Holding Co. (C) (H) (AC unaudited, reviewed by Arthur Andersen)
Kabelkom Kabeltelevizio Kft. (H/O)
Anfel-Kabelkom Kabelkommunikacios Kft. (O)
Hajdu Kabelkom Kabelkommunikacios Kft. (O)
Kabelkom-Dunaujvaros Kabelkommunkacios Kft. (O)
Kabelkom-Nyiregyhaza Kabelkommunikacios Kft. (O)
Kabelkom Pecsi Kabeltelevizio Kft. (O)
Kabelkom-Szekesfehervar Kabelkommunikacios Kft. (O)
Kabelkom-Szolnok Kabelkommunikacios Kft. (O)
Kabelkom- Veszprem Kabelkommunikacios Kft. (O)
Telestar-Kabelkom Kabelkommunikacios Kft. (O)
Miskolci Kabel-TV Kft. (O)
Czech Republic - Kabel Net
- --------------------------
Kabel Net Holding A.S. (C) (O) (L) (A)
Kabel Net Brno A.S. (C) (O) (L) (A)
France - Media Reseaux
- ----------------------
Media Reseaux S.A. (C) (H) (AC)
Media Reseaux Marne S.A. (O) (L)
149
<PAGE>
The Borrower
- ------------
SIGNED for and on behalf of )
BELMARKEN HOLDING B.V. ) /s/ Steve Butler
by: )
The Guarantors
- --------------
SIGNED for and on behalf of )
CABLE NETWORK NETHERLANDS ) /s/ Steve Butler
HOLDING B.V. by: )
SIGNED for and on behalf of )
BINAN INVESTMENTS B.V. ) /s/ Steve Butler
by: )
SIGNED for and on behalf of )
STIPDON INVESTMENTS B.V ) /s/ Steve Butler
by: )
The Arrangers
- -------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: ) /s/ David French
SIGNED for and on behalf of )
TORONTO DOMINION CAPITAL )
by: ) /s/ Stephen Reinstadler
The Bank
- --------
SIGNED for and on behalf of )
TORONTO DOMINION INVESTMENTS, INC. )
by: ) /s/ Martha Gareipy
150
<PAGE>
The Agent
- ---------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: ) /s/ David French
The Security Trustee
- --------------------
SIGNED for and on behalf of )
THE TORONTO-DOMINION BANK )
by: ) /s/ David French
151
<PAGE>
Private and Confidential
THE TORONTO-DOMINION BANK
To: Belmarken Holding B.V. (the "Borrower")
and to: Cable Network Netherlands Holding B.V.
Binan Investments B.V.
Stipdon Investments B.V. (together the "Guarantors")
and to: United and Philips Communications B.V. (the "Parent")
all of: Fred. Roeskestraat 123
P.O. Box 74763
1076 EE Amsterdam
Attention: Chief Financial Officer
11 December, 1997
Dear Sirs,
Waiver and Amendment Letter
---------------------------
1 We refer to the loan agreement dated 5 December 1997 (as amended, restated
and supplemented from time to time, the "Facility Agreement") and made
between the Borrower (1), the Guarantors (2), The Toronto-Dominion Bank
("TDB") and Toronto Dominion Capital as Arrangers (3), the Banks and
financial institutions whose names and addresses are set out in part A of
schedule 1 thereto (4), TDB as Agent (5) and TDB as Security Trustee (6).
The Banks, the Agent, the Security Trustee and the Arrangers shall be
referred to herein as the "Finance Parties".
2 Words and expressions defined in the Facility Agreement shall have the same
meanings when used in this letter.
3 On our own behalf and on behalf of each of the other Finance Parties, we
have agreed that the unsatisfied conditions precedent to the availability
of the Facility Agreement shall, unless otherwise stated, be waived on
condition that the following documents and evidence are provided to the
Agent within 30 days of the date of this letter:
(a) duly and fully completed copies of the questionnaires referred to in
schedule 9 to the Loan Agreement in respect of the following members
of the Group, signed for identification purposes by an Authorised
Officer of the Borrower:
(i) Kabeltel s.r.o.;
<PAGE>
(ii) Slovatel s.r.o.;
(iii) Santander de Cable S.A.;
(iv) Burgos S.A.;
(v) TV a la Carte B.V.;
(vi) Israel Cable programming Ltd; and
(vii) UPC kft;
(b) more fully completed copies of the questionnaires referred to in (a) above
in respect of the following members of the Group:
(i) Anfel-Kabelkom Kabelkommunikacois Kft;
(ii) Miskolci Kabel-TV Kft;
(iii) Telestar-Kabelkom Kabelkommunikacois Kft;
(iv) Kabelkom-Veszprem Kabelkommunikacois Kft;
(v) Kabelkom-Szolnok Kabelkommunikacois Kft;
(vi) Kabelkom-Szekesfehervar Kabelkommunikacois Kft;
(vii) Kabelkom Pecsi Kabelkommunikacois Kft;
(viii) Kabelkom-Dunaujvaros Kabelkommunikacois Kft;
(ix) Kabelkom-Nyiregyhaza Kabelkommunikacois Kft;
(x) KabelKom Management Co.;
(xi) Multicanal Holdings SRL;
(xii) Control Cable Ventures SRL;
(xiii) Independant Wireless Cable Limited;
(xiv) Westward Horizon Cables Limited;
(xv) Cork Communications Limited;
(xvi) Ceska Programova Spolecnost, Spol. sro;
(xvii) Trnvatel Ltd;
(xviii) UCI Enterprises, Inc.;
(xix) UIH Romania Ventures, Inc.;
<PAGE>
(xx) UIH Spain, Inc.; and
(xxi) UIH Romania, Inc;
(c) copies of the Licences held by the following members of the Group:
(i) KabelTelevisie Son en Breugel B.V.;
(ii) Hadju Kabelkom Kabelkommunikacios Kft;
(iii) Kabelkom-Dunaujvaros Kabelkommunikacios Kft;
(iv) Kabelkom-Szekesfehervar Kabelkommunikacios Kft;
(v) Bragatel-Companhia de Televisao por Cabo de Braga LLC; and
(vi) Pluricanal Leivia-Televisao por Cabo Lda;
(d) an opinion from Weil Gotshal & Manges, Prague office, in a form
satisfactory to the Agent, confirming that the Kabel Net Loans have
been duly executed by Kabel Net Brno and Kabel Net Holding;
(e) an opinion from Norton Rose, Paris office, in a form satisfactory to
the Agent, stating that the loan referred to at paragraph 15 of
schedule 7 has been duly executed by Mediareseaux;
(f) a valid assignment by the Parent to the Borrower of the loan made by
the Parent to Control Cable Ventures for U.S.$341,000, and the
execution by the Borrower of a deed of pledge in a form satisfactory
to the Agent in respect of such loan. Clause 11.1(r)(ii) of the
Facility Agreement applies to this condition;
(g) evidence that the Encumbrance over 6667 shares of Kabel Net Holding in
favour of the European Bank for Reconstruction and Development has
been released and the execution by the Parent of a valid pledge over
such shares in favour of the Security Trustee on the same terms as the
pledge over the remaining 3333 shares of Kabel Net Holding given by
the Parent on or about the date of this letter. Clause 11.1(r)(ii) of
the Facility Agreement applies to this condition; and
(h) the letter referred to in paragraph (k) of schedule 3 to the Facility
Agreement in a form satisfactory to the Agent, duly executed by the
parties thereto.
4 The following amendments are hereby made to the Facility Agreement:
(a) Clause 1.2, definition of "UIH Shares":
---------------------------------------
substitute "3,169,151" for "3,169,159";
(b) Clause 10.2:
------------
<PAGE>
by inserting a new clause 10.2(l) as follows:
"no Indebtedness of any person is secured by the Encumbrance over 6667
shares of Kabel Net Holding in favour of the European Bank for
Reconstruction and Development, there is no impediment to the
discharge and release of such Encumbrance and such discharge and
release is purely an administrative matter;"; and
(c) Clause 13.1(s)(iii):
--------------------
insert "to pay to meet any calls on any unpaid or partly paid shares
or stock issued by any other member of the Group or" after "obliged";
(d) Schedule 7, numbers 18 and 19:
-----------------------------
substitute "KTE Newco" for "the Borrower".
Each Obligor and the Parent confirms its agreement to the above amendments
and that its obligations under the Security Documents to which it is a
party remain in full force and effect notwithstanding the making of them.
5 Each Obligor and the Parent represents and warrants to each of the Finance
Parties that it is duly authorised to countersign this letter.
6 Please sign and return the attached copy of this letter to signify your
acceptance of its terms and conditions.
7 This letter is governed by and construed in accordance with English law.
Yours faithfully
For and on behalf of
The Toronto-Dominion Bank
/s/ DAVID FRENCH
...........................
<PAGE>
To: The Toronto-Dominion Bank
We acknowledge receipt of your letter and hereby confirm our agreement to the
terms and conditions thereof.
Yours faithfully
For and on behalf of
Belmarken Holding B.V.
Cable Network Netherlands Holding B.V.
Binan Investments B.V.
Stipdon Investments B.V.
United and Philips Communications B.V.
/s/ STEVE BUTLER
......................................
......................................
......................................
......................................
Date: 11 December 1997
<PAGE>
EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is made as of
December 5, 1997, by and among United International Holdings Inc., a Delaware
corporation ("UIH"), Belmarken Holding B.V., a company incorporated under the
laws of the Kingdom of the Netherlands ("Borrower"), and The Toronto-Dominion
Bank as the Security Trustee (the "Security Trustee").
WHEREAS, by a Loan Agreement dated December 5, 1997, (the "Loan Agreement")
between Borrower, The Toronto-Dominion Bank and Toronto-Dominion Capital (USA),
Inc. as Arrangers, Cable Network Netherlands Holding B.V., Binan Investments
B.V. and Stipdon Investments B.V. (collectively the "Guarantors"), the banks and
financial institutions listed in part A of schedule 1 thereto (the "Banks"), The
Toronto-Dominion Bank as Agent and The Toronto-Dominion Bank as Security
Trustee, the Banks have agreed, according to their several obligations, upon the
terms and conditions therein contained, to make available to Borrower, under the
guarantee of the Guarantors, a term loan facility of up to $125,000,000.
WHEREAS, Borrower is an indirect subsidiary of UIH;
WHEREAS, Borrower owns 3,169,151 shares (the "Shares") of the issued and
outstanding Class A Common Stock of UIH (the "Common Shares"), which Shares are
the subject of a security interest granted pursuant to a Pledge Agreement from
Borrower to the Security Trustee dated December __, 1997 (the "Pledge");
WHEREAS, Borrower, Guarantors, the Security Trustee and other parties are
parties to a Security Trust Deed (the "Deed") dated December 5, 1997 pursuant to
which the Security Trustee holds the Trustee Security Documents (as defined
therein) on trust for the Beneficiaries (as defined therein);
WHEREAS, in consideration of the term loan facility to be made available by
the Banks to Borrower pursuant to the Loan Agreement, UIH has agreed upon the
terms and conditions set forth herein to register the Shares for sale upon
demand of the Security Trustee or any transferee of the Shares.
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties to this Agreement hereby
agree as follows:
1. Required Registration. Upon the receipt by UIH from any Holder (which
---------------------
term includes the Security Trustee and any transferee of the Shares pursuant to
Section 7 hereof) of a written request (a "Request") for the registration of the
Shares, UIH shall prepare and file a registration statement on Form S-1 [or such
other form as may then be used to register the sale of the Shares after a
default by Borrower under the Loan Documents (as hereinafter defined)] with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act"), covering the
<PAGE>
sale of the Shares under the 1933 Act. UIH shall not, without the prior written
consent of such Holder, include any of its other securities in such registration
or effect any other registration of securities the same as or similar to the
Shares by UIH for its own account (other than on Form S-4 or Form S-8) during
the period commencing upon the date such registration statement becomes
effective and ending on the earlier of 120 days following such effective date or
the date on which all Shares included in such registration statement have been
sold. The Company shall not be obligated to effect more than three
registrations pursuant to this Section 1; provided, however, that a registration
-------- -------
shall not count as one of the three demand registrations under this Section 1
until the registration statement covering all of the Shares included in the
Request has been declared or ordered effective.
2. Registration Procedures. If and whenever UIH is required by any
-----------------------
Holder (an "Initiating Holder") pursuant to the provisions of Section 1 or
Section 3 hereof to effect the registration of the Shares under the 1933 Act,
UIH will:
a. prepare and file with the SEC within 30 days of UIH's receipt of a
Request, a registration statement with respect to the Shares, and use its best
efforts to cause such registration statement to become effective as soon as
practicable thereafter but in any event within 90 days of UIH's receipt of the
Request;
b. promptly prepare and file with the SEC such post-effective
amendments to such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration statement
effective until the earlier of (i) the date on which all Shares covered by such
registration statement have been sold, or (ii) 120 days after the effective date
of such registration statement;
c. use its best efforts to register or qualify the Shares for sale
under such other securities or blue sky laws of such states as the Initiating
Holder reasonably requests, and do any and all other acts and things which may
be reasonably necessary or desirable to enable the Initiating Holder to
consummate the disposition of the Shares in such states; provided, however, that
-------- -------
UIH will not be required to (i) qualify generally to do business in any state
where it would not otherwise be required to qualify but for this Section 2c,
(ii) subject itself to taxation in any such state, or (iii) consent to general
service of process in any such state;
d. furnish to the Initiating Holder and to the underwriters of the
Shares a reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus, and such other documents as the Initiating Holder
or underwriters may reasonably request in order to facilitate the public
offering of the Shares;
e. notify the Initiating Holder promptly after it shall receive notice
thereof, of the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has
been filed;
2
<PAGE>
f. notify the Initiating Holder promptly of any request by the SEC for
the amending or supplementing of such registration statement or prospectus or
for additional information;
g. prepare and file with the SEC, promptly upon the request of the
Initiating Holder any amendments or supplements to such registration statement
or prospectus which, in the opinion of counsel for the Initiating Holder are
required under the 1933 Act or the rules and regulations thereunder in
connection with the distribution of the Shares by the Initiating Holder;
h. prepare and promptly file with the SEC, and promptly notify the
Initiating Holder of the filing of, any amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the 1933 Act, any event shall have
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statement therein, in the light of
the circumstances in which they were made, not misleading;
i. advise the Initiating Holder promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
j. at least three days prior to the filing of any amendment or
supplement to such registration statement or prospectus, furnish copies thereof
to the Initiating Holder and refrain from filing any such amendment or
supplement to which the Initiating Holder shall have reasonably objected on the
grounds that such amendment or supplement does not comply in all material
respects with the requirements of the 1933 Act or the rules and regulations
thereunder, unless in the opinion of counsel for UIH the filing of such
amendment or supplement is reasonably necessary to protect UIH from any
liabilities under any applicable federal or state law and such filing will not
violate applicable law;
k. upon request of the Initiating Holder, enter into such customary
agreements (including underwriting agreements in customary form) and take all
such other actions as the Initiating Holder may reasonably request to facilitate
the disposition of the Shares;
l. at the request of the Initiating Holder, furnish on the date or
dates provided for in the underwriting agreement: (i) an opinion of counsel for
UIH addressed to the underwriters, if any, opining as to such matters as may be
reasonably agreed to by such underwriters and UIH; and (ii) a "comfort" letter
or letters from the independent certified public accountants of UIH, addressed
to the underwriters, if any, covering such matters as such underwriters
reasonably request, in which letters such accountants shall
3
<PAGE>
state (without limiting the generality of the foregoing) that they are
independent certified public accountants within the meaning of the 1933 Act and
that in the opinion of such accountants the financial statements and other
financial data of the UIH included in the registration statement or any
amendment or supplement thereto comply in all material respect with the
applicable accounting requirements of the 1933 Act;
m. make available for inspection by the Initiating Holder, any
underwriter participating in the disposition of the Shares pursuant to such
registration statement and any attorney, accountant or other agent retained by
the Initiating Holder or any such underwriter, all financial and other records,
pertinent corporate documents and properties of UIH, and cause UIH's officers,
directors, employees and independent accountants to supply all information
reasonably requested by the Initiating Holder or any such underwriter, attorney,
accountant or agent in connection with such registration statement;
n. cause the Shares to be listed on the NASDAQ National Market; and
o. otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at least
twelve months beginning with the first day of UIH's first full calendar quarter
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder.
3. Company Registration.
--------------------
a. Notice of Registration. If at any time or from time to time the
----------------------
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans; or (ii) a registration
relating solely to a transaction subject to Rule 145 under the 1933 Act, the
Company will:
i. promptly give to each Holder written notice thereof; and
ii. subject to the provisions of Sections 3b, c, d and e below,
include in such registration (and any related qualification under Blue Sky laws
or other compliance) and in any underwriting involved therein all the Shares
specified in a written request or requests made within 20 days after receipt of
such written notice from the Company by any Holder.
b. Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3a.i. In such event the right of any Holder to registration
pursuant to Section 3 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of the Shares in the underwriting to the
extent provided herein. All Holders proposing to
4
<PAGE>
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 3, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Shares to
be included in such registration. The Company shall advise all Holders and
other holders distributing their securities through such underwriting of any
such limitation; and the number of the shares that may be included in the
registration and underwriting shall be allocated among all Holders and such
other holders in proportion, as nearly as practicable, to the respective amounts
of the Shares held by such Holders and securities of the Company held by such
other holders at the time of filing the registration statement in accordance
with paragraphs d and e below. If any Holder disapproves of the terms of any
such underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company and the managing underwriter. Any securities excluded or
withdrawn from such underwriting, in the event that such underwriting represents
the initial underwritten public offering of the Company's securities, shall be
withdrawn from such registration and shall not be transferred in a public
distribution prior to 90 days after the effective date of the registration
statement relating thereto or such other shorter period of time as the
underwriters may require.
c. Right to Terminate Registration. The Company shall have the right
-------------------------------
to terminate or withdraw any registration initiated by it under this Section 3
prior to the effectiveness of such registration, whether or not any Holder has
elected to include Shares in such registration.
d. Priority on Primary Registrations. If a registration under Section
---------------------------------
3 is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, pro rata among the holders of registration rights pursuant to the
--- ----
present terms of agreements between such holders and the Company in existence as
of the date hereof, on the basis of the number of shares requested to be
registered by such holders and (iii) third, pro rata among the Holders of the
--- ----
Shares, on the basis of the number of Shares requested to be registered by
Holders. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocated to any Holder
or other such holder to the nearest one hundred (100) shares.
e. Priority on Secondary Registration. If a registration under
----------------------------------
Section 3 is an underwritten secondary registration on behalf of holders of the
Company's securities other than Holders of the Shares, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the
5
<PAGE>
Company shall include in such registration (i) in the event such registration is
pursuant to a demand by the holders of registration rights pursuant to
agreements between such holders and the Company as in existence as of the date
hereof, pro rata among the (a) first, the securities requested to be included
--- ----
therein by such other holders requesting such registration, (b) second, the
Shares requested to be included therein by the Holders,(c) third, securities
requested to be included in such registration by the Company, and (d) fourth,
other securities requested to be included in such registration by other security
holders seeking to include securities in such registration.
4. Right to Sell the Shares. UIH, Borrower and the Security Trustee
------------------------
agree that the rights of the Security Trustee and the Beneficiaries to require
the sale of the Shares pursuant to a registration statement under the 1933 Act
filed pursuant to the terms of this Agreement and how the net proceeds from any
such sale are to be applied shall be as provided in the Loan Agreement, Pledge,
Deed and other agreements or instruments executed in connection therewith
(collectively the "Loan Documents"). The rights of any Holder who acquires some
or all of the Shares from the Security Trustee shall not be subject to any
provisions of the Loan Documents.
5. Expenses. With respect to a registration requested pursuant to Section
--------
1 or Section 3 hereof, UIH and Borrower shall be jointly and severally
responsible for payment of all fees, costs and expenses of such registration,
including but not limited to the following fees, costs and expenses, all
registration, filing, and stock exchange or NASDAQ fees, printing expenses, fees
and disbursements of counsel and accountants for UIH, fees and disbursements of
other Persons retained by UIH, all legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any states in
which the Shares are to be registered or qualified, and the reasonable fees and
disbursements of counsel for the Initiating Holder. All underwriting discounts
and commissions with respect to any Shares sold pursuant to such registration
shall be paid solely by Borrower.
6. Indemnification.
---------------
a. By UIH. UIH shall indemnify and hold harmless the Security
Trustee, the Beneficiaries, any Initiating Holder and any underwriter (as
defined in the 1933 Act) for the Security Trustee, the Beneficiaries, or any
Initiating Holder, and each Person, if any, who controls the Security Trustee,
the Beneficiaries, any Initiating Holder, or such underwriter within the meaning
of the 1933 Act, from and against any and all loss, damage, liability or claims,
to which the Security Trustee, the Beneficiaries, any Initiating Holder or any
such underwriter or controlling Person becomes subject under the 1933 Act or
otherwise, and subject to the provisions of paragraph c hereof to reimburse
them, from time to time upon request, for any legal or other costs or expenses
reasonably incurred by them in connection with investigating any claims or
defending any actions (as provided in paragraph c hereof), insofar as such
losses, damages, liabilities, claims, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement,
6
<PAGE>
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that UIH will not be liable in any such case to
-------- -------
the extent that any such loss damage, liability, claim, cost or expense arises
out of or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission (other than a statement or omission about UIH) made
in conformity with information furnished by the Security Trustee, the
Beneficiaries, or any Initiating Holder in writing specifically for use in the
preparation of a registration statement or (ii) the failure of the Security
Trustee, the Beneficiaries or any Initiating Holder to deliver a copy of the
registration statement, prospectus or any amendments or supplements thereto
after UIH has furnished them with sufficient copies of the same. The
indemnification required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liabilities are incurred.
b. By the Security Trustee, the Beneficiaries, and any Initiating
Holder. Each of the Security Trustee, the Beneficiaries and any Initiating
Holder will indemnify and hold harmless UIH, and each Person, if any, who
controls UIH, from and against any and all loss, damage, liability or claim, to
which UIH or any controlling Person becomes subject under the 1933 Act or
otherwise and to reimburse them, from time to time upon request, for any legal
or other costs or expenses reasonably incurred by them in connection with
investigating any claims or defending any actions, insofar as such losses,
damages, liabilities, costs, or expenses are caused by any untrue or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in strict conformity with written information
furnished by such party specifically for use in the preparation of such
registration statement.
c. Notice. Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph a or b of this Section 6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provision, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
a or b, promptly notify the indemnifying party in writing of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the
7
<PAGE>
defense thereof, with counsel satisfactory to such indemnified party; provided,
--------
however, if the defendants in any action include both the indemnified party and
- -------
the indemnifying party and there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the indemnified party,
the indemnified party or parties shall have the right to select separate counsel
to participate in the defense of such action on behalf of such indemnified party
or parties; provided, however, that UIH's obligation under paragraph a of this
-------- -------
Section 6 to reimburse any such indemnified party or parties for legal costs and
expenses shall be limited to the reasonable legal costs and expenses of one such
separate counsel. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party pursuant to the provisions of said
paragraph a or b for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the indemnified party shall have employed
counsel in accordance with the proviso of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action, or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party.
d. Contribution. If for any reason the indemnification provided for
in paragraphs a and b is unavailable to an indemnified party or insufficient to
hold it harmless as contemplated by such paragraphs, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations; provided, however, that, in any such case, neither the
-------- -------
Security Trustee, the Beneficiaries or any Initiating Holder will be required to
contribute any amount in excess of the sales price of all such Shares sold by or
on its behalf pursuant to such registration statement.
Promptly after receipt by the Security Trustee, the Beneficiaries or any
Initiating Holder of notice of the commencement of any action, suit or
proceeding in connection with a public offering of the Shares, such Security
Trustee, the Beneficiaries or any Initiating Holder will, if a claim for
contribution in respect thereof is able to be made against another party, notify
the contributing party of the commencement thereof. The omission to so notify
the contributing party will not relieve it from any liability which it may have
to any other party other than for contribution under the 1933 Act. In case any
such action, suit or proceeding is brought against any party, and such party
notifies a contributing party of the commencement thereof, the contributing
party will be entitled to participate therein with the notifying party and any
other contributing party similarly notified.
8
<PAGE>
7. Transfer of Registration Rights. The respective registration rights
-------------------------------
and related obligations provided to the Security Trustee herein may be assigned
(a "Transfer") by the Security Trustee, to any Person that acquires some or all
of the Shares in connection with the exercise by the Security Trustee and the
Beneficiaries of their rights under the Loan Documents; provided, however, that
-------- -------
(a) UIH shall be given written notice by the transferor thereof at the time of
such transfer stating the name and address of the transferee and identifying the
Shares with regard to which such rights are being transferred, (b) the
transferee shall agree in writing to assume the obligations of the transferor
hereunder and (c) the registration rights and related obligations may not be
transferred with any Shares sold in a registered offering.
8. Duty to Provide Information. In the event the any Initiating Holder
---------------------------
requests a registration of Shares, the Initiating Holder shall provide all such
information and materials and shall take all such actions as may be reasonably
required in order to permit UIH to comply with all applicable requirements of
the SEC and applicable state securities laws, and to obtain any desired
acceleration of the effective date of such registration statement.
Specifically, UIH may require the Initiating Holder to furnish UIH with such
information regarding the Initiating Holder and the distribution of the Shares
as UIH may from time to time reasonably request in writing and as shall be
required by law or the SEC.
9. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the SEC which may permit the sale of the Shares
to the public without registration, UIH agrees to:
a. Keep public information available, as those term are understood and
defined in Rule 144 under the 1933 Act, at all times;
b. Use its best efforts to file with the SEC in a timely manner all
reports and other documents required of UIH under the Securities Exchange Act of
1934 (the "1934 Act"); and
c. Furnish to the Security Trustee and any other Holder(s), forthwith
upon request, a written statement by UIH as to its compliance with the reporting
requirements of the 1934 Act, a copy of the most recent annual or quarterly
report of UIH, and such other reports and documents so filed as the Security
Trustee and any other Holder(s) may reasonably request in availing themselves of
any rule or regulation of the SEC allowing the Shares to be sold without
registration.
10. Granting of Registration Rights. UIH shall not, without the prior
-------------------------------
written consent of the Security Trustee or following any Transfer, from Holders
of a majority of the Shares, enter into any agreement after the date hereof
granting any holder or prospective holder of any securities of the Company
registration rights with respect to such securities unless such new registration
rights, including standoff obligations, are subordinate to the registration
rights granted to Holders hereunder.
9
<PAGE>
11. Remedies. The UIH recognizes and agrees that if UIH fails to comply
--------
with its obligations under this Agreement, the Security Trustee may not have an
adequate remedy at law. Such failure will cause the Security Trustee
irreparable harm for which there may be no adequate remedy at law, and UIH
hereby consents to the issuance of an injunction in favor of the Security
Trustee by any court of competent jurisdiction. The right of the Security
Trustee to obtain an injunction hereunder shall not be considered a waiver of
any right on the part of the Security Trustee to recover damages and to assert
any other claims for remedies which the Security Trustee may have at law or in
equity. UIH agrees to bear any expenses incurred by the Security Trustee
including reasonable attorneys fees, in enforcing its rights under this
Agreement.
12. Notice of Misleading Prospectus. UIH shall immediately notify the
-------------------------------
Security Trustee or any Initiating Holder during any time when a registration
statement relating to the Shares is effective under the 1933 Act of the
happening of any event which comes to UIH's attention if as a result of such
event the prospectus included in such registration statement contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statement therein, in light of the circumstances under which they were
made, not misleading, and UIH shall promptly prepare and furnish to such
holders, and file with the SEC a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Shares, such prospectus
will not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
13. No Distribution of Misleading Prospectus. Each Holder of Shares that
----------------------------------------
are included in a registration statement pursuant to this Agreement shall upon
receipt of any notice from UIH of the happening of any event described in
Section 11, such Holders will forthwith discontinue disposition of its Shares
pursuant to the registration statement covering such Shares until such Holder
receives copies of the supplemented or amended prospectus contemplated by
Section 12, and if so directed by UIH, such Holder will deliver to UIH (at UIH's
expense) all copies (including, without limitation, any and all drafts), other
than permanent file copies, then in such Holders' possession, of the prospectus
covering such Shares current at the time of receipt of such notice.
14. Covenant to Cooperate. Borrower agrees to take such actions and
---------------------
execute such documents as may be deemed necessary or desirable by the Security
Trustee or any Initiating Holder to effect the registration of the Shares
pursuant to this Agreement.
15. Termination of Registration Rights. The registration rights granted
----------------------------------
under Section 1 and Section 3 shall terminate upon the earlier of (i) the date
on which all of the Shares have been sold pursuant to an effective registration
statement under the 1933 Act or (ii) the date which is two years after the date
of the first transfer of any of the Shares pursuant to the exercise by the
Security Trustee and the Beneficiaries of their rights under the Loan Documents
in a transaction exempt from the registration and
10
<PAGE>
prospectus delivery requirements of the 1933 Act; or (iii) if there has been no
Transfer of any of the Shares in a transaction exempt from the registration and
prospectus delivery requirements of the 1933 Act, the date on which Borrower has
paid in full all amounts owed by it and Borrower and Guarantors have satisfied
completely all of their obligations under the Loan Documents.
16. Definition of Person. For purposes of this Agreement, the term
--------------------
"Person" shall mean an individual, partnership, limited liability company, joint
venture, trust or other entity or unincorporated organization.
17. The Deed. The Borrower and the Security Trustee hereby acknowledge
--------
that the covenants contained in this Agreement and the security and other
rights, titles and interests constituted by this Agreement and the Secured
Assets (as defined in the Deed) and all other moneys, property and assets paid
to the Security Trustee or held by the Security Trustee pursuant to or in
connection with this Agreement are held by the Security Trustee subject to and
on the terms of the trusts declared in the Deed.
18. Miscellaneous.
-------------
a. Waivers and Amendments. This Agreement may be amended or
----------------------
modified in whole or in part only by a writing which makes reference to this
Agreement executed by UIH, Borrower and the Security Trustee. The obligations of
any party hereunder may be waived (either generally or in a particular instance
and either retroactively or prospectively) only with the written consent of the
party claimed to have given the waiver; provided, however, that any waiver by
-------- -------
any party of any violation of, breach of, or default under any provision of this
Agreement or any other agreement provided for herein shall not be construed as,
or constitute, a continuing waiver of such provision, or waiver of any other
violation of, breach of or default under any other provision of this Agreement
or any other agreement provided for herein.
b. Entire Agreement. This Agreement sets forth the entire
----------------
understanding of the parties hereto and supersedes all prior contracts,
agreements, arrangements, communications, discussions, representations, and
warranties, whether oral or written, among the parties with respect to the
subject matter hereof.
c. Governing Law. This Agreement shall in all respects be governed
-------------
by and construed in accordance with the internal substantive laws of the State
of Colorado without giving effect to the principles of conflicts of law thereof.
d. Notices. Any notice, request or other communication required or
-------
permitted hereunder shall be in writing and be deemed to have been duly given if
personally delivered or five business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, to the parties at
their respective addresses set forth below.
11
<PAGE>
If to UIH:
United International Holdings, Inc.
4643 South Ulster Street
Suite 1300
Denver, CO 80237
Attention: Chief Financial Officer
with a copy to:
Garth B. Jensen, Esq.
Holme Roberts & Owen LLP
1700 Lincoln Street
Suite 4100
Denver, CO 80203
If to Borrower:
Fred Roeskestraat 123
PO Box 74763
1070 BT Amsterdam
Attention: _________________
If to the Security Trustee:
Triton Court
14/18 Finsbury Square
London EC2A 1DB
Attention: Manager, Loan Agency
with a copy to:
Triton Court
14/18 Finsbury Square
London EC2A 1DB
Attention: Director, Communications Finance
Any party by written notice to the others may change the address of the persons
to whom notices or copies thereof shall be directed.
e. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
12
<PAGE>
f. Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Borrower and UIH may not assign or transfer their
rights hereunder without the prior written consent of the Security Trustee. The
Security Trustee shall be entitled to assign all or a portion of its rights,
benefits and obligations hereunder to any Person that acquires all or a portion
of the Shares pursuant to the exercise by the Security Trustee and the
Beneficiaries of their rights under the Loan Documents.
g. Third Parties. Nothing expressed or implied in this Agreement is
-------------
intended, or shall be construed, to confer upon or given any Person other than
the parties hereto any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed, or have caused their
duly authorized representatives to execute, this Registration Rights Agreement
as of the date first written above.
UNITED INTERNATIONAL HOLDINGS INC.
By: /s/ J. TIMOTHY BRYAN
---------------------------------------
Name: J. Timothy Bryan
---------------------------------------
Title: Chief Financial Officer
---------------------------------------
BELMARKEN HOLDING B.V.
By: /s/ STEVE BUTLER
---------------------------------------
Name: Steve Butler
----------------------------------
Title:
---------------------------------
THE TORONTO-DOMINION BANK AS THE SECURITY TRUSTEE
By: /s/ DAVID FRENCH
---------------------------------------
Name: David French
----------------------------------
Title:
---------------------------------
13
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we consent to the incorporation by reference
of our reports, included in this Form 8-K, into previously filed Registration
Statement File Nos. 33-87326, 333-00226, and 33-81876.
/s/ ARTHUR ANDERSEN & CO.
------------------------------------
ARTHUR ANDERSEN & CO.
Amsterdam, The Netherlands
December 22, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants for 8-K filing purposes, we hereby consent to
the incorporation by reference into previously filed Registration Statement File
Nos. 33-81876, 333-00226, and 33-87326 of our report on the 1995 consolidated
accounts of United and Philips Communications B.V., dated 20 May 1996, together
with the 1995 figures as presented on page F-3 to page F-24 included.
/s/ KPMG Accountants N.V.
- ---------------------------------
KPMG Accountants N.V.
Amsterdam, The Netherlands
December 22, 1997
