Exhibit 10.1

 

 

 

PURCHASE AGREEMENT

 

regarding the shares of

 

Suez-Lyonnaise Télécom SA

 

and certain Intercompany Loans

 

dated as of

 

15 March 2004

 

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

 

ARTICLE II SALE OF SHARES AND INTERCOMPANY LOAN; CLOSING

 

2.1

Purchase and Sale of Shares and Intercompany Loan.

 

2.2

Closing Consideration.

 

2.3

Closing Documents.

 

2.4

Time and Place of Closing.

 

2.5

Reference Date and Closing Date.

 

2.6

Provisional Purchase Price and Provisional Consideration Amount.

 

2.7

Final Determination of the Purchase Price.

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE UPC SHAREHOLDER

 

ARTICLE V COVENANTS OF SELLER AND BUYER

 

5.1

Investigation of Business; Access to Properties and Records, Etc.

 

5.2

Efforts; Obtaining Consents.

 

5.3

Competition Authority Clearance.

 

5.4

Further Assurances.

 

5.5

Conduct of the Business and the UPC French Cable Business.

 

5.6

Public Announcements.

 

5.7

Confidentiality.

 

5.8

Provision of Financial Statements, Reports and Certain Other Information.

 

5.9

Conversion of Portions of Intercompany Loan, Buyer Intercompany Loans and UPC
France Intercompany Loan.

 

5.10

Release of Encumbrances.

 

5.11

Affiliate Commercial Contracts.

 

5.12

Tax matters.

 

5.13

Restrictive Covenants.

 

5.14

Insurance.

 

5.15

Sipperec Memorandum of Agreement.

 

5.16

Sarbanes Oxley.

 

ARTICLE VI WORKS COUNCILS

 

ARTICLE VII CONDITIONS TO BUYER’S OBLIGATION TO CLOSE

 

7.1

Representations, Warranties and Covenants of Seller.

 

7.2

Competition Filing.

 

7.3

Notification to the CSA.

 

7.4

Cannes and Epinal Networks.

 

7.5

No Injunction.

 

7.6

2003 Year End RGUs.

 

7.7

2004 RGUs and Revenues.

 

7.8

2003 EBITDA and Revenues.

 

 

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7.9

Noos Run-Rate EBITDA.

 

7.10

Rights of Way Renewal.

 

7.11

No Material Adverse Change.

 

ARTICLE VIII CONDITIONS TO SELLER’S OBLIGATION TO CLOSE

 

8.1

UPC Warranties and Buyer Covenants.

 

8.2

No Injunction.

 

ARTICLE IX SURVIVAL; INDEMNIFICATION

 

9.1

Indemnification by Seller.

 

9.2

Indemnification for Seller Loss.

 

9.3

Disclosures.

 

9.4

Update of Disclosures.

 

9.5

Procedure for update of Disclosure Documents.

 

9.6

Survival.

 

9.7

Limitations to the Indemnity Obligations of Seller.

 

9.8

Limitations to the Indemnity Obligations of the UPC Shareholder.

 

9.9

Loss.

 

9.10

Payment of Claims.

 

9.11

Procedures for Third-Party Claims.

 

9.12

Procedures for Non-Third Party Claims.

 

ARTICLE X TERMINATION

 

10.1

Termination.

 

10.2

Procedure and Effect of Termination.

 

ARTICLE XI MISCELLANEOUS

 

11.1

Counterparts.

 

11.2

Governing Law; Jurisdiction and Forum.

 

11.3

Entire Agreement; Third-Party Beneficiary.

 

11.4

Expenses.

 

11.5

Notices.

 

11.6

Successors and Assigns.

 

11.7

Headings; Definitions.

 

11.8

Amendments and Waivers.

 

11.9

Interpretation; Absence of Presumption.

 

11.10

Severability.

 

ARTICLE XII GUARANTEE

 

 

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SCHEDULES

 

 

 

1

Definitions

 

2.2.4

Escrow Agreement

 

2.3.3

Transfer of Loan Agreement (acte de cession de créance)

 

2.6

Determination of the Cash Consideration, Consideration Shares Amount and the
Purchase Price

 

2.6,3.4.2(a)

Disputed payables

 

2.6,3.4.2(b)

WL Escrow Agreement

 

3.

Seller Representations and Warranties

 

3A.

Seller Specific Warranties

 

4.

UPC Representations and Warranties

 

4A.

UPC Specific Warranties

 

5.11

Buyer Affiliate contracts

 

5.13

Seller existing shareholdings

 

7.4 (b)

C&E Escrow Agreement

 

7.6

RGUs calculation method

 

7.7

2004 RGUs and Revenues

 

A

Shareholders Agreement

 

B

Sipperec Memorandum of Agreement

 

C

The Budget

 

 

 

 

APPENDICES

 

 

 

3.2.3

2004 Monthly EBITDA

 

3.5

2004 Monthly Capex

 

4.2.3

2004 Monthly UPC France EBITDA and Capex

 

 

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This STOCK AND LOAN PURCHASE AGREEMENT (together with the Schedules and
Appendices hereto, this “Agreement”), dated as of 15 March 2004 (the “Signing
Date”), is by and between Suez SA, a société anonyme organized under the laws of
France (“Seller”), MédiaRéseaux SA, a société anonyme organized under the laws
of France (“Buyer”), UPC France Holding BV (the “UPC Shareholder”) and
UnitedGlobalCom, Inc. (“UGC”).

 

UGC is party to this Agreement solely for the purpose of Section 5.16 and
Article XII.

 

WHEREAS as at the date of this Agreement, Seller owns 50.1% of the share capital
and voting rights in Suez-Lyonnaise Télécom SA (the “Company”) which owns and
operates, through its Subsidiaries, a cable business and provides related
services in France.

 

WHEREAS Seller is willing to dispose of its interests in the Company.

 

WHEREAS Buyer has expressed an interest in acquiring 100% of the share capital
and voting rights in the Company and has been invited to perform due diligence
on the Companies.

 

WHEREAS on Closing, Seller will own all of the outstanding shares of the Company
(the “Shares”).

 

WHEREAS Buyer owns all of the UPC French Cable Business.

 

WHEREAS Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller
all of the Shares upon the terms and subject to the conditions set forth herein.

 

WHEREAS Seller wishes, after capitalizing a portion of the Intercompany Loan, to
sell the remaining Intercompany Loan to Buyer upon the terms and subject to the
conditions set forth herein.

 

WHEREAS contemporaneously with the signing of this Agreement, the Parties will
sign the Sipperec Memorandum of Agreement.

 

NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties hereby agree
as follows:

 

ARTICLE I

DEFINITIONS

 

Capitalized terms used in this Agreement have the respective meanings indicated
in Schedule 1.

 

ARTICLE II

SALE OF SHARES AND INTERCOMPANY LOAN; CLOSING

 

2.1 Purchase and Sale of Shares and Intercompany Loan.  At the Closing and
subject to the terms and conditions set forth herein, in consideration for the
Purchase Price, Seller shall sell to Buyer, and Buyer shall purchase from
Seller, all of Seller’s right, title and interest in and

 

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to the Shares and the Intercompany Loan, it being understood that for the
purpose of this Agreement, the Shares and the Intercompany Loan may only be sold
and purchased together.  The Purchase Price calculated in accordance with
Schedule 2.6 will be allocated as follows:

 

(A) TO THE SHARES EXISTING AS AT THE SIGNING DATE (THE “EXISTING SHARES”), AN
AMOUNT EQUAL TO EUR ONE (1), GIVEN THAT THE CAP ON THE BASE CONSIDERATION UNDER
SCHEDULE 2.6 IS SIGNIFICANTLY LOWER THAN THE ANTICIPATED LEVEL OF NOOS FINANCIAL
DEBT AND INTERCOMPANY LOAN EXPECTED AT CLOSING; AND

 

(B) TO THE INTERCOMPANY LOAN, AN AMOUNT EQUAL TO THE BALANCE OF THE PURCHASE
PRICE, SAVE THAT WITH RESPECT TO THE PORTION OF THE INTERCOMPANY LOAN REQUIRED
TO BE CAPITALIZED PURSUANT TO SECTION 5.9.1 AN AMOUNT EQUAL TO THE PURCHASE
PRICE LESS EUR ONE (1) LESS THE FACE VALUE OF THE POST-CAPITALIZATION
INTERCOMPANY LOAN SHALL BE ALLOCATED TO THE SHARES ISSUED PURSUANT TO
SECTION 5.9.1 (THE “CAPITALIZATION SHARES”).

 

The amount of the Purchase Price allocated to the purchase of the Intercompany
Loan under (b) above will be first allocated to the amount (not to exceed EUR85
million) that will be used for the issuance by Buyer of the Consideration Shares
(the “Provisional Consideration Shares Amount”).  The balance of the Purchase
Price shall be allocated to the amount that will be paid by Buyer as the Cash
Consideration calculated pursuant to Schedule 2.6.

 

2.2 Closing Consideration.

 

2.2.1 AT THE CLOSING AND SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
BUYER SHALL PAY TO SELLER THE PROVISIONAL PURCHASE PRICE BY:

 

(A) THE ISSUE TO SELLER, CREDITED AS FULLY PAID, OF A NUMBER OF SHARES
(CALCULATED IN ACCORDANCE WITH SECTION 2.2.2 AND SCHEDULE 2.6) IN BUYER
REPRESENTING A MAXIMUM OF 19.9% OF BUYER’S ISSUED SHARE CAPITAL (THE
“CONSIDERATION SHARES”) BY WAY OF SET-OFF AGAINST BUYER’S DEBT TO SELLER FOR THE
PROVISIONAL CONSIDERATION SHARES AMOUNT; AND

 

(B) THE WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS EQUIVALENT TO THE
PROVISIONAL PURCHASE PRICE LESS (I) THE PROVISIONAL CONSIDERATION SHARES AMOUNT
(THE “CLOSING CASH PAYMENT” INCLUDING, FOR THE AVOIDANCE OF DOUBT THE ESCROW
AMOUNT) AND (II) THE ESCROW AMOUNT, TO THE ACCOUNT SPECIFIED TO BUYER BY SELLER
BY WRITTEN NOTICE DELIVERED TO BUYER AT LEAST THREE BUSINESS DAYS PRIOR TO THE
CLOSING DATE.

 

2.2.2 THE NUMBER OF CONSIDERATION SHARES SHALL BE EQUAL TO A NUMBER OF NEW
SHARES IN BUYER SUCH THAT THE PERCENTAGE REPRESENTED BY THE CONSIDERATION SHARES
COMPARED TO THE AGGREGATE NUMBER OF SHARES IN BUYER (INCLUDING THE CONSIDERATION
SHARES) IS EQUAL TO THE PERCENTAGE REPRESENTED BY THE PROVISIONAL CONSIDERATION
SHARES AMOUNT COMPARED TO THE CLOSING DATE BUYER EQUITY VALUE.  IF THE
PROVISIONAL CONSIDERATION SHARES AMOUNT EXCEEDS EUR 85 MILLION, THE NUMBER OF
CONSIDERATION SHARES AND ACCORDINGLY THE PERCENTAGE OF THE ISSUED SHARE CAPITAL
OF BUYER REPRESENTED BY THE PROVISIONAL CONSIDERATION SHARES

 

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AMOUNT SHALL BE REDUCED UNTIL THE PROVISIONAL CONSIDERATION SHARES AMOUNT IS EUR
85 MILLION.

 

2.2.3 IF THE PROVISIONAL CONSIDERATION SHARES AMOUNT IS EQUAL TO OR LESS THAN
EUR 85 MILLION, THE CLOSING CASH PAYMENT SHALL BE THE PROVISIONAL PURCHASE PRICE
LESS THE PROVISIONAL CONSIDERATION SHARES AMOUNT.

 

2.2.4 AT THE CLOSING, BUYER WILL PLACE INTO AN INTEREST-BEARING ACCOUNT (THE
“ESCROW ACCOUNT”) WITH CRÉDIT LYONNAIS ACTING AS ESCROW AGENT (THE “ESCROW
AGENT”) AN AMOUNT EQUAL TO THE HIGHER OF (A) 10% OF THE CLOSING CASH PAYMENT AND
(B) THE NET AMOUNT OF THE PROVISIONAL PURCHASE PRICE AND/OR PROVISIONAL UPC
FRANCE EQUITY VALUE IN DISPUTE, PROVIDED THAT SUCH AMOUNT IN THE ESCROW ACCOUNT
WILL IN NO EVENT EXCEED 20% OF THE CLOSING CASH PAYMENT (THE “ESCROW AMOUNT”)
PENDING THE DETERMINATION OF THE PURCHASE PRICE IN ACCORDANCE WITH SECTION 2.7
AS A RESERVE AGAINST ANY DIFFERENCE BETWEEN THE PROVISIONAL PURCHASE PRICE AND
THE PURCHASE PRICE.  THE RELEASE OF AMOUNTS HELD IN THE ESCROW ACCOUNT WILL BE
MADE IN ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENT.

 

2.3 Closing Documents.

 

2.3.1 SELLER DELIVERIES.  IN ADDITION TO THE OTHER THINGS REQUIRED TO BE DONE
HEREUNDER, AT THE CLOSING, SELLER SHALL DELIVER OR CAUSE TO BE DELIVERED TO
BUYER THE FOLLOWING: (A) AN EXECUTED COUNTERPART OF THE SHAREHOLDERS AGREEMENT
DATED AS OF THE CLOSING DATE; (B) A CERTIFICATE, DATED THE CLOSING DATE AND
VALIDLY EXECUTED ON BEHALF OF SELLER, TO THE EFFECT THAT THE CONDITION SET FORTH
IN SECTION 7.1 SHALL HAVE BEEN SATISFIED; (C)  AN EXECUTED SHARE TRANSFER ORDER
TRANSFERRING THE EXISTING SHARES, DATED AS OF THE CLOSING DATE; (D) THE SHARE
REGISTER OF THE COMPANY IN WHICH THE TRANSFER OF EXISTING SHARES HAS BEEN
REGISTERED; (E) MINUTES OF THE EXTRAORDINARY GENERAL MEETING OF THE COMPANY AND
COPY OF THE COMPANY’S SHARE REGISTER, EVIDENCING ISSUANCE OF THE CAPITALIZATION
SHARES; (F) AN EXECUTED SHARE TRANSFER ORDER TRANSFERRING THE CAPITALIZATION
SHARES DATED AS OF THE CLOSING DATE; (G) THE SHARE REGISTER OF THE COMPANY IN
WHICH THE TRANSFER OF THE CAPITALIZATION SHARES HAS BEEN REGISTERED; (H) AN
EXECUTED COUNTERPART OF THE TRANSFER OF LOAN AGREEMENT (“ACTE DE CESSION DE
CRÉANCE”) DATED AS OF THE CLOSING DATE; (I) AN EXECUTED COUNTERPART OF THE
ESCROW AGREEMENT, THE C&E ESCROW AGREEMENT, ANY ESCROW AGREEMENTS REQUIRED TO BE
PROVIDED UNDER SCHEDULE 2.6 AND THE WL LETTER OF CREDIT, ALL DATED AS OF THE
CLOSING DATE; AND (J) SUCH OTHER INSTRUMENTS OF SALE, CONVEYANCE, ASSIGNMENT,
TRANSFER AND DELIVERY REASONABLY REQUESTED BY BUYER AS MAY BE NECESSARY OR
APPROPRIATE TO CONFIRM OR CARRY OUT THE PROVISIONS OF THIS AGREEMENT.

 

2.3.2 BUYER DELIVERIES.  IN ADDITION TO THE PAYMENT UNDER SECTION 2.2.1(B), THE
PAYMENT INTO THE ESCROW ACCOUNT UNDER SECTION 2.2.4 AND THE ISSUE OF THE
CONSIDERATION SHARES UNDER SECTION 2.2.1(A) AND THE OTHER THINGS REQUIRED TO BE
DONE HEREUNDER, AT THE CLOSING, BUYER SHALL DELIVER OR CAUSE TO BE DELIVERED TO
SELLER THE FOLLOWING: (A) AN EXECUTED COUNTERPART OF THE SHAREHOLDERS AGREEMENT
DATED AS OF THE CLOSING DATE; (B) MINUTES OF THE EXTRAORDINARY GENERAL MEETING
OF BUYER, AND COPY OF BUYER’S SHARE REGISTER, EVIDENCING ISSUANCE OF THE
CONSIDERATION SHARES; (C) A COPY OF THE DECISION BY THE COMPETITION AUTHORITY
CLEARING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT PURSUANT TO
SECTION 7.2; (D) AN EXECUTED COUNTERPART OF THE TRANSFER OF LOAN AGREEMENT
(“ACTE DE CESSION DE

 

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CRÉANCE”) DATED AS OF THE CLOSING DATE, (E) A CERTIFICATE, DATED THE CLOSING
DATE AND VALIDLY EXECUTED ON BEHALF OF BUYER, TO THE EFFECT THAT THE CONDITION
SET FORTH IN SECTION 8.1 SHALL HAVE BEEN SATISFIED; (F) AN EXECUTED COUNTERPART
OF THE ESCROW AGREEMENT, THE C&E ESCROW AGREEMENT, ANY ESCROW AGREEMENTS
REQUIRED TO BE PROVIDED UNDER SCHEDULE 2.6 AND ANY LETTER OF CREDIT REQUIRED TO
BE PROVIDED BY THE UPC SHAREHOLDER UNDER SECTION 4.3 OF SCHEDULE 2.6, ALL DATED
AS OF THE CLOSING DATE, AND (G) SUCH OTHER INSTRUMENTS AS MAY BE REASONABLY
REQUESTED BY SELLER AS MAY BE NECESSARY OR APPROPRIATE TO CONFIRM OR CARRY OUT
THE PROVISIONS OF THIS AGREEMENT.

 

2.3.3 TRANSFERS OF SHARES AND INTERCOMPANY LOAN.  THE TRANSFER OF THE SHARES
SHALL BE EFFECTED BY MEANS OF SHARE TRANSFER ORDERS (“ORDRE DE MOUVEMENT”).  THE
TRANSFER OF THE INTERCOMPANY LOAN SHALL BE EFFECTED BY MEANS OF THE TRANSFER OF
LOAN AGREEMENT (“ACTE DE CESSION DE CRÉANCE”) AND BUYER WILL PROCURE THAT THE
TRANSFER IS NOTIFIED TO THE COMPANY BY A BAILIFF (“HUISSIER DE JUSTICE”) IN
APPLICATION OF ARTICLE 1690 OF THE FRENCH CIVIL CODE.

 

2.3.4 INCREASE IN CAPITAL OF BUYER.  AT CLOSING, AN EXTRAORDINARY GENERAL
MEETING OF SHAREHOLDERS OF BUYER WILL BE HELD FOR THE PURPOSE OF ISSUING THE
CONSIDERATION SHARES TO SELLER BY WAY OF SET-OFF AGAINST BUYER’S DEBT TO SELLER
FOR THE PROVISIONAL CONSIDERATION SHARES AMOUNT.

 

2.3.5 INCREASE IN CAPITAL OF THE COMPANY.  PRIOR TO CLOSING, SELLER SHALL CAUSE
THE COMPANY TO HOLD ONE OR MORE EXTRAORDINARY GENERAL MEETINGS OF SHAREHOLDERS
FOR THE PURPOSE OF ISSUING THE CAPITALIZATION SHARES.

 

2.4 Time and Place of Closing.  The Closing shall take place on the Closing Date
at 11:00 a.m., Paris time, at the Paris offices of Willkie Farr & Gallagher
unless otherwise agreed by the Parties.

 

2.5 Reference Date and Closing Date.  The “Reference Date” shall be the last day
of the month in which the Parties agree, having cooperated and consulted in good
faith to reach such agreement, the conditions set out in Articles VII and VIII
are expected to be satisfied or waived, unless the Parties reach such agreement
less than 15 days before the end of the month in question, in which case the
Reference Date shall be the last day of the next month unless the Parties
otherwise agree.  The Closing Date will fall on the Business Day immediately
following the Reference Date.  Should the Closing not occur on the scheduled
Closing Date agreed between the Parties pursuant to this Section 2.5 and this
Agreement has not been terminated as a result, the Reference Date and the
Closing Date shall be moved, respectively, so as to occur on the last day of the
month in which the Closing Date was scheduled to occur and the Business Day
immediately following and the Parties shall prepare a replacement Provisional
Purchase Price Report and Provisional UPC France Equity Value Report using the
process in Section 2.6 accordingly.

 

2.6 Provisional Purchase Price and Provisional Consideration Amount.  Not later
than 15 days prior to the scheduled Closing:

 

(A) SELLER WILL DELIVER TO BUYER A PRELIMINARY REPORT (THE “PROVISIONAL PURCHASE
PRICE REPORT”), PREPARED IN GOOD FAITH AND CERTIFIED AS TO COMPLETENESS BY
SELLER AND ACCOMPANIED BY A COMFORT LETTER AS TO ITS PREPARATION FROM SELLER’S
AUDITORS,

 

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SHOWING IN REASONABLE DETAIL SELLER’S PRELIMINARY BEST ESTIMATE OF THE PURCHASE
PRICE (THE “PROVISIONAL PURCHASE PRICE”), THE BASE CONSIDERATION, THE NOOS
FINANCIAL DEBT, THE NOOS WORKING CAPITAL ADJUSTMENT AND THE NOOS CAPITAL
EXPENDITURE SHORTFALL ADJUSTMENT AS AT THE REFERENCE DATE AND BASED ON
MANAGEMENT ACCOUNTS TO THE MONTH PRECEDING THAT CONTAINING THE REFERENCE DATE
AND BUDGET FOR THE MONTH CONTAINING THE REFERENCE DATE; AND

 

(B) BUYER WILL DELIVER TO SELLER A PRELIMINARY REPORT (THE “PROVISIONAL UPC
FRANCE EQUITY VALUE REPORT”), PREPARED IN GOOD FAITH AND CERTIFIED AS TO
COMPLETENESS BY BUYER AND ACCOMPANIED BY A COMFORT LETTER AS TO ITS PREPARATION
FROM BUYER’S AUDITORS, SHOWING IN REASONABLE DETAIL BUYER’S PRELIMINARY BEST
ESTIMATE OF THE UPC FRANCE EQUITY VALUE (THE “PROVISIONAL UPC FRANCE EQUITY
VALUE”), THE BASE UPC FRANCE ENTERPRISE VALUE, THE UPC FRANCE FINANCIAL DEBT,
THE UPC FRANCE WORKING CAPITAL ADJUSTMENT AND THE UPC FRANCE CAPITAL EXPENDITURE
SHORTFALL ADJUSTMENT AS AT THE REFERENCE DATE AND BASED ON MANAGEMENT ACCOUNTS
TO THE MONTH PRECEDING THAT CONTAINING THE REFERENCE DATE AND BUDGET FOR THE
MONTH CONTAINING THE REFERENCE DATE, TOGETHER WITH THE EXPECTED CLOSING DATE
BUYER NET DEBT.

 

Following receipt of the Provisional Purchase Price Report or the Provisional
UPC France Equity Value Report, the recipient Party shall have five (5) Business
Days to review such report and supporting information and to notify any
disagreements with the estimates contained therein.  If, within such five (5)
Business Day period, a notice of disagreement with the estimates set forth in
either report is delivered, Buyer and Seller shall negotiate in good faith to
resolve any such dispute and to reach an agreement on such estimates two (2)
Business Days prior to the Reference Date.  The estimates so agreed upon by
Buyer and Seller, or, if the Parties do not reach such an agreement or a notice
of disagreement with the estimates is not provided within the time provided,
then the estimates set forth in the Provisional Purchase Price Report and the
Provisional UPC France Equity Value Report shall be the basis of a combined
statement prepared by Buyer two (2) Business Days prior to the Reference Date
which shall be used to determine the Provisional Purchase Price and the
Provisional Consideration Shares Amount, without prejudice to the Parties’
objection and audit rights which follow in Section 2.7.

 

2.7 Final Determination of the Purchase Price.

 

2.7.1 THE FINAL REPORT.

 

(A) WITHIN 90 DAYS FOLLOWING THE CLOSING DATE SELLER WILL DELIVER TO BUYER
AUDITED CONSOLIDATED ACCOUNTS (INCLUDING A CONSOLIDATED PROFIT AND LOSS ACCOUNT
AND BALANCE SHEET) FOR THE PERIOD COMMENCING ON JANUARY 1, 2004 AND ENDING AT
THE REFERENCE DATE FOR THE COMPANIES, PREPARED BY THE COMPANY’S MANAGEMENT IN
ACCORDANCE WITH FRENCH GAAP, CONSISTENTLY APPLIED WITH PAST PRINCIPLES AND
PRACTICES AND DULY CERTIFIED BY ERNST & YOUNG ACTING IN THEIR CAPACITY AS
STATUTORY AUDITORS OF THE COMPANY (THE “NOOS REFERENCE DATE ACCOUNTS”);

 

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(B) WITHIN 90 DAYS FOLLOWING THE CLOSING DATE BUYER WILL DELIVER TO SELLER
AUDITED CONSOLIDATED ACCOUNTS (INCLUDING A CONSOLIDATED PROFIT AND LOSS ACCOUNT
AND BALANCE SHEET) FOR THE PERIOD COMMENCING ON JANUARY 1, 2004 AND ENDING AT
THE REFERENCE DATE FOR THE UPC FRENCH CABLE BUSINESS, PREPARED BY BUYER IN
ACCORDANCE WITH FRENCH GAAP, CONSISTENTLY APPLIED WITH PAST PRINCIPLES AND
PRACTICES AND DULY CERTIFIED BY KPMG ACTING IN THEIR CAPACITY AS STATUTORY
AUDITORS OF THE UPC FRENCH CABLE BUSINESS (THE “UPC FRENCH CABLE BUSINESS
REFERENCE DATE ACCOUNTS”);

 

(C) DURING THE 90-DAY PERIOD REFERRED TO ABOVE, ERNST & YOUNG AND KPMG, IN THEIR
RESPECTIVE CAPACITIES AS STATUTORY AUDITORS OF THE COMPANY AND THE UPC FRENCH
CABLE BUSINESS WILL WORK TOGETHER ON AN OPEN BOOK BASIS AND WILL SHARE WITH ONE
ANOTHER THEIR WORK PAPERS, SUBJECT TO EXCHANGE OF CUSTOMARY NON-RELIANCE
LETTERS;

 

(D) WITHIN 30 DAYS FOLLOWING THE RECEIPT OF THE DELIVERIES PROVIDED IN
PARAGRAPHS (A) AND (B), EACH PARTY WILL SPECIFY IN WRITING ANY OBJECTION WITH
RESPECT TO THE NOOS REFERENCE DATE ACCOUNTS OR THE UPC FRENCH CABLE BUSINESS
REFERENCE DATE ACCOUNTS, AS APPLICABLE. THE PARTIES WILL CONSULT WITH ONE
ANOTHER AND THEIR RESPECTIVE AUDITORS TO ATTEMPT TO RESOLVE ALL QUESTIONS AND
POINTS OF DISPUTE DURING SUCH 30-DAY PERIOD;

 

(E) WITHIN 10 DAYS FOLLOWING THE END OF THE 30-DAY PERIOD REFERRED TO IN
PARAGRAPH (D) ABOVE, BUYER WILL DELIVER TO SELLER A FINAL REPORT CONSISTING OF :

 

(I) A FINAL DETERMINATION CALCULATED IN ACCORDANCE WITH SCHEDULE 2.6, BASED ON
THE NOOS REFERENCE DATE ACCOUNTS, SHOWING IN REASONABLE DETAIL ALL AMOUNTS
NECESSARY TO CALCULATE THE PURCHASE PRICE, THE BASE CONSIDERATION, THE NOOS
FINANCIAL DEBT, THE NOOS WORKING CAPITAL ADJUSTMENT AND THE NOOS CAPITAL
EXPENDITURE SHORTFALL ADJUSTMENT TOGETHER WITH ANY DOCUMENTS SUBSTANTIATING THE
ADJUSTMENTS AND CALCULATIONS;

 

(II) A FINAL DETERMINATION CALCULATED IN ACCORDANCE WITH SCHEDULE 2.6, BASED ON
THE UPC FRENCH CABLE BUSINESS REFERENCE DATE ACCOUNTS, SHOWING IN REASONABLE
DETAIL ALL AMOUNTS NECESSARY TO CALCULATE THE UPC FRANCE EQUITY VALUE, THE BASE
UPC FRANCE ENTERPRISE VALUE, THE UPC FRANCE FINANCIAL DEBT, THE UPC FRANCE
WORKING CAPITAL ADJUSTMENT AND THE UPC FRANCE CAPITAL EXPENDITURE SHORTFALL
ADJUSTMENT TOGETHER WITH ANY DOCUMENTS SUBSTANTIATING THE ADJUSTMENTS AND
CALCULATIONS AND THE CLOSING DATE BUYER NET DEBT; AND

 

(III) BASED ON THE DETERMINATIONS IN (I) AND (II), THE PURCHASE PRICE,
CONSIDERATION SHARES AMOUNT AND CORRESPONDING CASH CONSIDERATION.

 

The Final Report will be prepared as at 23:59 hours on the Reference Date,
except with respect to the Closing Date Buyer Net Debt, which will be calculated
immediately following the Closing and shall include in reasonable detail any
unresolved objection of Buyer on the Noos Reference Date Accounts.

 

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2.7.2 DISPUTE RESOLUTION.  IF ANY DISPUTES ARE NOT RESOLVED AT THE TIME THE
FINAL REPORT IS DELIVERED AS DUE, THEN THE PARTIES WILL HAVE A FURTHER 10 DAYS
FROM DELIVERY OF THE FINAL REPORT TO SPECIFY IN WRITING ANY OBJECTIONS WITH
RESPECT TO THE CALCULATION OF THE PURCHASE PRICE AND CONSIDERATION SHARES AMOUNT
AS SET FORTH IN THE FINAL REPORT.  SUBJECT TO THE SIGNING OF A CUSTOMARY
NON-RELIANCE LETTER, EACH PARTY WILL CAUSE ITS AUDITORS TO MAKE AVAILABLE TO THE
OTHER PARTY’S AUDITORS THEIR WORKING PAPERS FOR THE FINAL REPORT AND ITS
REVIEW.  THE PARTIES WILL CONTINUE TO ATTEMPT TO RESOLVE ANY DISPUTE, IN
CONJUNCTION WITH THEIR RESPECTIVE AUDITORS, FOR AN ADDITIONAL 15 DAYS (I.E. A
TOTAL OF 25 DAYS FOLLOWING DELIVERY OF THE FINAL REPORT).

 

2.7.3 RESOLUTION BY INDEPENDENT ACCOUNTANT.  IF ANY OBJECTIONS UNDER
SECTION 2.7.2 ARE NOT RESOLVED WITHIN THE 15-DAY PERIOD SPECIFIED IN THE LAST
SENTENCE OF SECTION 2.7.2, THEN SELLER AND BUYER SHALL JOINTLY APPOINT
PRICEWATERHOUSECOOPERS TO ACT AS AN INDEPENDENT ACCOUNTANT OR, IF
PRICEWATERHOUSECOOPERS REFUSES TO ACT OR IS CONFLICTED FROM ACTING, THE MOST
DILIGENT PARTY SHALL BE ENTITLED TO REQUEST THE PRESIDENT OF THE COMMERCIAL
COURT OF PARIS BY WAY OF SUMMARY PROCEEDINGS (“RÉFÉRÉ”) (THE OTHER PARTY BEING
OFFERED THE OPPORTUNITY TO BE HEARD AT SUCH PROCEEDINGS) TO APPOINT A FIRM OF
ACCOUNTANTS OF GOOD INTERNATIONAL REPUTATION (BUT EXCLUDING ANY FIRM ALREADY
ACTING AS AUDITORS TO EITHER OF THE PARTIES) WHO SHALL BE AN EXPERT IN FRENCH
GAAP AND ACT AS AN EXPERT (THE “INDEPENDENT ACCOUNTANT”).  THE PARTIES SHALL
INSTRUCT THE INDEPENDENT ACCOUNTANT TO ADDRESS AND DETERMINE THE CALCULATION OF
THE PURCHASE PRICE AND/OR THE CONSIDERATION SHARES AMOUNT, AS THE CASE MAY BE,
AND THE CORRESPONDING CASH CONSIDERATION BY WAY OF A BINDING OPINION AND TO
CONCLUDE ITS INVESTIGATION WITHIN 60 DAYS OF ITS RECEIPT OF INSTRUCTION.

 

2.7.4 OPINION OF THE INDEPENDENT ACCOUNTANT.  FOR THE PURPOSE OF ASSESSING THE
PURCHASE PRICE AND/OR THE CONSIDERATION SHARES AMOUNT AND CORRESPONDING CASH
CONSIDERATION, THE INDEPENDENT ACCOUNTANT SHALL APPLY THE PRINCIPLES SET OUT IN
SCHEDULE 2.6. ONCE THE INDEPENDENT ACCOUNTANT HAS ACCEPTED ITS ASSIGNMENT AND
ACKNOWLEDGED THE RULES APPLICABLE THERETO, AND EXCEPT TO THE EXTENT THAT SELLER
AND BUYER AGREE OTHERWISE, THE INDEPENDENT ACCOUNTANT SHALL, PRIOR TO RENDERING
ITS BINDING OPINION, GIVE EACH OF SELLER ON THE ONE HAND AND BUYER ON THE OTHER
HAND, 10 DAYS TO COMMENT ON ITS DRAFT WRITTEN BINDING OPINION.  BUYER AND SELLER
SHALL CO-OPERATE WITH THE INDEPENDENT ACCOUNTANT AND COMPLY WITH ITS REASONABLE
REQUESTS MADE IN CONNECTION WITH THE CARRYING OUT OF ITS DUTIES UNDER THIS
AGREEMENT.  IN PARTICULAR, WITHOUT LIMITATION, BUYER SHALL PROCURE THAT THE
COMPANIES AND UPC FRENCH CABLE BUSINESS SHALL KEEP UP TO DATE AND MAKE AVAILABLE
TO THE INDEPENDENT ACCOUNTANT THEIR RESPECTIVE BOOKS AND RECORDS DURING THE
PERIOD FROM THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANT TO THE DELIVERY OF THE
INDEPENDENT OPINION. SUBJECT TO THE SIGNING BY THE INDEPENDENT ACCOUNTANT OF
CUSTOMARY NON-RELIANCE LETTERS, THE PARTIES WILL CAUSE THEIR AUDITORS TO MAKE
AVAILABLE TO THE INDEPENDENT ACCOUNTANT THEIR WORKING PAPERS FOR THE FINAL
REPORT AND ITS REVIEW.  UPON REACHING ITS BINDING OPINION, THE INDEPENDENT
ACCOUNTANT SHALL CAUSE TO BE PREPARED AND DELIVERED TO EACH OF BUYER AND SELLER
A BINDING OPINION (THE “INDEPENDENT OPINION”) SHOWING THE INDEPENDENT
ACCOUNTANT’S CALCULATION OF THE PURCHASE PRICE AND/OR CONSIDERATION SHARES
AMOUNT AND CORRESPONDING CASH CONSIDERATION.  THE DETERMINATION OF THE FINAL
PURCHASE PRICE AND/OR CONSIDERATION SHARES AMOUNT AND CORRESPONDING CASH
CONSIDERATION RESULTING FROM THE INDEPENDENT ACCOUNTANT SHALL BE FINAL AND
BINDING ON THE PARTIES SAVE IN THE EVENT OF

 

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MANIFEST ERROR (“ERREUR GROSSIÈRE”).  THE INDEPENDENT ACCOUNTANT SHALL ACT IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE 1592 OF THE FRENCH CIVIL CODE.

 

2.7.5 CASH ADJUSTMENT.  (X) THE CASH CONSIDERATION AS DETERMINED UNDER THIS
SECTION 2.7 LESS (Y) THE SUM OF THE CLOSING CASH PAYMENT LESS THE ESCROW AMOUNT,
TOGETHER WITH INTEREST THEREON FROM THE CLOSING DATE TO THE DATE OF PAYMENT AT
THE 30-DAY EURIBOR RATE IS REFERRED TO HEREIN AS THE “CASH ADJUSTMENT”.  IF THE
CASH ADJUSTMENT IS POSITIVE, THEN PAYMENT OF THE CASH ADJUSTMENT WILL BE MADE BY
BUYER TO SELLER WITHIN FIVE (5) BUSINESS DAYS FROM FINAL DETERMINATION OF THE
PURCHASE PRICE IN ACCORDANCE WITH THIS SECTION 2.7 BY:

 

(A) THE RELEASE TO SELLER FROM THE ESCROW ACCOUNT OF AN AMOUNT UP TO THE CASH
ADJUSTMENT (INCLUDING ACCRUED INTEREST), WITH ANY SURPLUS LEFT IN THE ESCROW
ACCOUNT BEING RELEASED TO BUYER; AND

 

(B) TO THE EXTENT THE CASH ADJUSTMENT (INCLUDING ACCRUED INTEREST) EXCEEDS THE
AMOUNT HELD IN THE ESCROW ACCOUNT, BY PAYMENT OF THAT EXCESS BY BUYER.

 

If the Cash Adjustment is zero or negative, then within five (5) Business Days
from final determination of the Purchase Price in accordance with this
Section 2.7:

 

(C) THE ESCROW AMOUNT WILL BE RELEASED TO BUYER FROM THE ESCROW ACCOUNT; AND

 

(D) THE SELLER WILL PAY TO THE BUYER AN AMOUNT EQUAL TO THE ABSOLUTE VALUE OF
THE CASH ADJUSTMENT (PLUS ACCRUED INTEREST THEREON).

 

2.7.6 REPAYMENT OF UPC GROUP LOANS.  SELLER ACKNOWLEDGES THAT, NOTWITHSTANDING
THE PROVISIONS OF THE SHAREHOLDERS AGREEMENT, ANY CASH ADJUSTMENT OR RELEASE
FROM THE ESCROW ACCOUNT PAID TO BUYER PURSUANT TO SECTION 2.7.5 SHALL BE APPLIED
BY BUYER IN REPAYMENT OF AN EQUIVALENT AMOUNT OF INTERCOMPANY LOANS FROM THE UPC
GROUP TO BUYER.

 

2.7.7 FEES OF INDEPENDENT ACCOUNTANT.  ALL FEES AND EXPENSES OF THE AUDITORS
ENGAGED BY BUYER AND SELLER AND THE INDEPENDENT ACCOUNTANT SHALL BE BORNE
EQUALLY BY SELLER ON THE ONE HAND AND BUYER ON THE OTHER HAND.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to, and agrees with, Buyer that on and as
of each of the Signing Date and the Closing Date, subject to the provisions of
Sections 9.3 to 9.5 of this Agreement, each and every statement set out in
Schedules 3 and 3A (the “Seller Warranties”) is true and correct in all
respects.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE UPC SHAREHOLDER

 

The UPC Shareholder represents and warrants to, and agrees with, Seller that on
and as of each of the Signing Date and the Closing Date, subject to the
provisions of Sections 9.3 to 9.5 of this

 

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Agreement, each and every statement set out in Schedules 4 and 4A (the “UPC
Warranties”) is true and correct in all respects.

 

ARTICLE V

COVENANTS OF SELLER AND BUYER

 

5.1 Investigation of Business; Access to Properties and Records, Etc.

 

5.1.1 CONTINUING RIGHT OF ACCESS.  FROM THE SIGNING DATE TO THE CLOSING DATE,
BUT SUBJECT TO ANY APPLICABLE LEGAL OR REGULATORY RESTRICTION RESPECTING
COMPETITION MATTERS, SELLER SHALL CAUSE TO BE AFFORDED TO BUYER AND ITS
REPRESENTATIVES REASONABLE ACCESS TO THE COMPANY’S OFFICES, BOOKS AND RECORDS
AND BUYER SHALL CAUSE TO BE AFFORDED TO SELLER AND ITS REPRESENTATIVES
REASONABLE ACCESS TO THE UPC FRENCH CABLE BUSINESS’ OFFICES, BOOKS AND RECORDS,
BOTH DURING NORMAL BUSINESS HOURS, IN ORDER THAT BUYER AND SELLER, AS THE CASE
MAY BE, MAY HAVE OPPORTUNITY TO MAKE SUCH INVESTIGATIONS AS IT MAY REASONABLY
REQUIRE OF THE AFFAIRS OF THE COMPANY AND THE UPC FRENCH CABLE BUSINESS, AS THE
CASE MAY BE, PROVIDED THAT SUCH INVESTIGATION SHALL ONLY BE UPON REASONABLE
NOTICE AND SHALL NOT UNREASONABLY DISRUPT PERSONNEL AND OPERATIONS AND SHALL BE
AT THE INVESTIGATING PARTY’S SOLE RISK AND EXPENSE.  ALL REQUESTS FOR ACCESS TO
THE OFFICES, BOOKS AND RECORDS OF THE COMPANY AND THE UPC FRENCH CABLE BUSINESS,
AS THE CASE MAY BE, SHALL BE MADE TO SUCH REPRESENTATIVES OF SELLER OR BUYER, AS
THE CASE MAY BE, AS SELLER OR BUYER, AS THE CASE MAY BE, SHALL DESIGNATE, WHO
SHALL BE SOLELY RESPONSIBLE FOR COORDINATING ALL SUCH REQUESTS AND ALL ACCESS
PERMITTED HEREUNDER.  IT IS FURTHER AGREED THAT PRIOR TO CLOSING NEITHER BUYER
NOR ITS REPRESENTATIVES NOR SELLER NOR ITS REPRESENTATIVES, AS THE CASE MAY BE,
SHALL CONTACT ANY OF THE EMPLOYEES, CUSTOMERS, SUPPLIERS, JOINT VENTURE PARTNERS
OR OTHER ASSOCIATES OR AFFILIATES OF (I) SELLER OR THE COMPANY OR BUYER OR (II)
THE UPC FRENCH CABLE BUSINESS, AS THE CASE MAY BE, IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY, WHETHER IN PERSON OR BY TELEPHONE, MAIL OR
OTHER MEANS OF COMMUNICATION, WITHOUT THE SPECIFIC PRIOR WRITTEN AUTHORIZATION
OF SUCH REPRESENTATIVES OF SELLER OR BUYER, AS THE CASE MAY BE.

 

5.1.2 COMPANY RECORDS.  SELLER WILL ENSURE THAT ALL BOOKS AND RECORDS OF THE
COMPANIES, WHETHER IN PAPER OR ELECTRONIC FORM, ARE IN THE POSSESSION OF THE
COMPANIES AT CLOSING.

 

5.1.3 RETENTION OF RECORDS.  BUYER AGREES THAT FOR SO LONG AS BUYER OWNS THE
SHARES (A) TO CAUSE THE COMPANIES TO MAINTAIN THE BOOKS AND RECORDS OF THE
COMPANIES EXISTING ON THE CLOSING DATE THAT ARE IN THE POSSESSION OF THE
COMPANIES AND NOT TO DESTROY OR DISPOSE OF ANY THEREOF FOR A PERIOD OF 5 YEARS
FROM THE CLOSING DATE OR SUCH LONGER TIME AS EITHER MAY BE REQUIRED BY LAW OR,
IN THE CASE OF ALL RECORDS, SCHEDULES AND WORK PAPERS RELATING TO ANY TAX
RETURNS OR AUDITS, UNTIL THE EXPIRATION OF ALL APPLICABLE STATUTES OF
LIMITATIONS AND (B) AT ANY TIME AND FROM TIME TO TIME FOLLOWING THE CLOSING DATE
TO DIRECT THE COMPANIES TO AFFORD SELLER, ITS AFFILIATES, REPRESENTATIVES,
ACCOUNTANTS AND COUNSEL AND OTHER ADVISORS, DURING NORMAL BUSINESS HOURS, UPON
REASONABLE REQUEST, FULL ACCESS TO SUCH BOOKS, RECORDS AND OTHER DATA (INCLUDING
THE RIGHT TO PHOTOCOPY THE SAME) AND TO APPROPRIATE EMPLOYEES TO THE EXTENT THAT
SUCH ACCESS MAY BE REQUESTED FOR ANY LEGITIMATE PURPOSE, SUBJECT TO APPROPRIATE
LIMITATIONS OF NON-DISCLOSURE AND USE AS BUYER MAY REQUEST AT THE TIME OF
PROPOSED DISCLOSURE, AT NO COST TO SELLER (OTHER THAN FOR REASONABLE
OUT-OF-POCKET EXPENSES).  IN ADDITION, WITH RESPECT TO PARAGRAPH (XVI) OF
SCHEDULE 3A, BUYER SHALL

 

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PROVIDE SELLER WITH THE TAX RETURNS FOR THE COMPANIES FOR ANY TAX PERIOD
FOLLOWING BETWEEN JANUARY 1, 2004 AND DECEMBER 31, 2013, WITHIN 15 DAYS
FOLLOWING FILING THEREOF WITH THE RELEVANT TAX AUTHORITIES.

 

5.2 Efforts; Obtaining Consents.

 

5.2.1 OBLIGATIONS TO SEEK CONSENTS.  SUBJECT TO THE TERMS AND CONDITIONS HEREIN
PROVIDED, EACH PARTY SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO TAKE OR
CAUSE TO BE TAKEN ALL ACTIONS AND TO DO OR CAUSE TO BE DONE ALL THINGS
NECESSARY, PROPER OR ADVISABLE TO CONSUMMATE AND MAKE EFFECTIVE AS PROMPTLY AS
PRACTICABLE THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO COOPERATE WITH THE
OTHER IN CONNECTION WITH THE FOREGOING, INCLUDING USING ALL COMMERCIALLY
REASONABLE EFFORTS (A) TO SATISFY ANY APPLICABLE CONDITIONS AND TO OBTAIN ALL
NECESSARY WAIVERS, CONSENTS AND APPROVALS FROM OTHER PARTIES TO MATERIAL LOAN
AGREEMENTS, LEASES AND OTHER CONTRACTS WITH THIRD PARTIES, (B) TO OBTAIN ALL
CONSENTS, APPROVALS AND AUTHORIZATIONS THAT ARE REQUIRED TO BE OBTAINED UNDER
ANY NATIONAL, STATE, LOCAL OR FOREIGN LAW OR REGULATION, (C) TO LIFT OR RESCIND
ANY INJUNCTION OR RESTRAINING ORDER OR OTHER ORDER ADVERSELY AFFECTING THE
ABILITY OF THE PARTIES TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (D)
TO EFFECT ALL NECESSARY GOVERNMENTAL REGISTRATIONS AND FILINGS AND SUBMISSIONS
OF INFORMATION REQUESTED BY ANY GOVERNMENT AUTHORITY AND TO FULFIL ALL
CONDITIONS SET FORTH IN ARTICLES VII AND VIII OF THIS AGREEMENT. ALL NOTICES AND
APPLICATIONS TO, FILINGS WITH, AND OTHER CONTACTS WITH ANY GOVERNMENT AUTHORITY
(OTHER THAN THE COMPETITION AUTHORITY) RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE MADE BY ANY PARTY ONLY AFTER PRIOR CONSULTATION WITH AND
APPROVAL BY THE OTHER PARTY, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD
OR DELAYED. EACH PARTY FURTHER SHALL, WITH RESPECT TO ANY THREATENED OR PENDING
PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER, DECREE OR RULING OR STATUTE,
RULE, REGULATION OR EXECUTIVE ORDER THAT WOULD ADVERSELY AFFECT THE ABILITY OF
THE PARTIES TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, USE ALL
REASONABLE EFFORTS TO PREVENT THE ENTRY, ENACTMENT OR PROMULGATION THEREOF, AS
THE CASE MAY BE.  NOTWITHSTANDING THE FOREGOING, (Y) THE PROVISIONS OF
SECTION 7.2 SHALL APPLY TO THE IMPOSITION OF CONDITIONS TO OBTAINING COMPETITION
AUTHORITY CLEARANCE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND (Z)
SUBJECT TO SECTION 7.2, BUYER WILL NOT BE REQUIRED TO TAKE ANY ACTION WHICH
WOULD RESULT IN A MATERIALLY PREJUDICIAL EFFECT ON THE BUSINESS OF BUYER OR ANY
OF ITS AFFILIATES.

 

5.2.2 MATERIAL COMMUNICATIONS.  EACH PARTY SHALL PROMPTLY INFORM THE OTHER PARTY
OF ANY MATERIAL COMMUNICATION FROM ANY GOVERNMENT AUTHORITY REGARDING ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.  IF EITHER PARTY OR ANY AFFILIATE THEREOF
RECEIVES A REQUEST FOR ADDITIONAL INFORMATION OR DOCUMENTARY MATERIAL FROM ANY
SUCH GOVERNMENT AUTHORITY WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY,
THEN SUCH PARTY WILL ENDEAVOR IN GOOD FAITH TO MAKE OR CAUSE TO BE MADE, AS SOON
AS REASONABLY PRACTICABLE AND AFTER CONSULTATION WITH THE OTHER PARTY, AN
APPROPRIATE RESPONSE IN COMPLIANCE WITH SUCH REQUEST.  THE PROVISIONS OF
SECTIONS 5.3 AND 7.2 RATHER THAN THIS SECTION 5.2.2 SHALL APPLY IN RESPECT OF
THE COMPETITION AUTHORITY.

 

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5.3 Competition Authority Clearance.

 

5.3.1 COOPERATION WITH COMPETITION AUTHORITY.  THE PARTIES SHALL USE THEIR
COMMERCIALLY REASONABLE EFFORTS TO CO-OPERATE WITH THE RELEVANT COMPETITION
AUTHORITY IN ORDER TO ENABLE IT TO COMPLETE ITS REQUIRED ANALYSIS.

 

5.3.2 NOTIFICATION; PROCEDURE WITH COMPETITION AUTHORITY.

 

(A) BUYER SHALL FILE WITH THE COMPETITION AUTHORITY A NOTIFICATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  SELLER WILL PROVIDE TO BUYER, ON A
TIMELY BASIS, ALL INFORMATION REQUIRED IN CONNECTION WITH SUCH FILING.  TO
FACILITATE THIS PROCESS, SELLER WILL PROVIDE TO BUYER A SENIOR POINT OF CONTACT
WITHIN SELLER’S ORGANIZATION THAT HAS KNOWLEDGE OF AND ACCESS TO ALL ECONOMIC
DATA REGARDING SELLER AND THE BUSINESS, AND WHO WILL BE AVAILABLE TO WORK IN
COOPERATION WITH BUYER DURING THE TIME NECESSARY TO COMPLETE THE INITIAL
NOTIFICATION FORM FOR THE COMPETITION AUTHORITY.

 

(B) EACH PARTY WILL REASONABLY COMPLY WITH ALL INFORMATION REQUESTS OF THE
COMPETITION AUTHORITY.  ANY INFORMATION REQUESTS IN THIS RESPECT BETWEEN THE
PARTIES WILL BE DONE IN WRITING.

 

(C) TO THE EXTENT PRACTICAL, EACH PARTY WILL INFORM THE OTHER IN ADVANCE OF ALL
COMMUNICATIONS WITH REPRESENTATIVES OF THE COMPETITION AUTHORITY IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND WILL PROVIDE ALL INFORMATION
NECESSARY AS TO THE STATUS OF THE PROCEDURE WITH THE COMPETITION AUTHORITY. 
BUYER WILL CO-OPERATE AND CONSULT WITH SELLER IN CONNECTION WITH (X) ALL KEY
COMMUNICATIONS WITH THE COMPETITION AUTHORITY AND (Y) KEY STRATEGIC DECISIONS
REGARDING SEEKING COMPETITION AUTHORITY APPROVAL OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, BUT BUYER WILL HAVE FINAL DECISION MAKING
AUTHORITY AS TO ALL SUCH MATTERS FOLLOWING SUCH CONSULTATION.  BUYER SHALL
SELECT ANY ECONOMISTS AND OTHER EXPERTS IN CONNECTION WITH THE COMPETITION
AUTHORITY PROCEDURE.

 

5.3.3 FAILURE TO OBTAIN CLEARANCE.  IF THE COMPETITION AUTHORITY DOES NOT CLEAR
THE PROPOSED ACQUISITION WITHOUT CONDITION (EXCEPTING ONLY THOSE, IF ANY, AGREED
TO IN WRITING BY BUYER PURSUANT TO SECTION 7.2), OR IF THE COMPETITION AUTHORITY
CLEARS THE PROPOSED ACQUISITION BUT THE CLOSING IS ENJOINED PRIOR TO CLOSING,
THEN THE PARTIES SHALL MEET AND DECIDE WHETHER OR NOT BUYER SHOULD APPEAL SUCH
DECISION OR INJUNCTION.  SELLER WILL FULLY CO-OPERATE WITH BUYER IN ANY SUCH
APPEAL.

 

5.3.4 COSTS.  BUYER WILL PAY THE FILING FEES AND COSTS ASSOCIATED WITH THE
COMPETITION AUTHORITY FILING (OTHER THAN FEES AND COSTS OF SELLER’S ADVISORS AND
COUNSEL) AND ALL FEES AND EXPENSES OF ECONOMISTS AND OTHER EXPERTS ENGAGED BY
BUYER.  SELLER WILL PAY ALL REASONABLE FILING FEES AND COSTS ASSOCIATED WITH
RESPECT TO OTHER PERMITS AND ANY REQUIRED CONSENTS AND ALL FEES AND COSTS OF ITS
ADVISORS AND COUNSEL WITH RESPECT TO THE COMPETITION AUTHORITY FILING.

 

5.4 Further Assurances.  Each Party shall, and shall cause its Affiliates to,
from time to time, whether before, at or after the Closing Date, execute,
acknowledge and deliver such reasonable further instruments of conveyance and
transfer, notices, assumptions, releases

 

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and acquittances and take such other reasonable actions as may be reasonably
necessary or appropriate to carry out the purposes and intents hereof.

 

5.5 Conduct of the Business and the UPC French Cable Business.

 

5.5.1 STEERING COMMITTEE.  AS FROM THE SIGNING DATE, THE PARTIES SHALL SET UP A
STEERING COMMITTEE CONSISTING OF 4 MEMBERS, 2 REPRESENTING BUYER AND 2
REPRESENTING SELLER (THE “STEERING COMMITTEE”).

 

5.5.2 CONDUCT OF THE BUSINESS.  FROM THE SIGNING DATE TO THE CLOSING, SELLER
SHALL PROCURE THAT EACH OF THE COMPANIES OPERATES ITS BUSINESS IN THE ORDINARY
COURSE OF ITS BUSINESS CONSISTENTLY WITH PAST PRACTICE SO AS TO PRESERVE THE
VALUE AND GOODWILL OF ITS BUSINESS.  NONE OF THE DECISIONS LISTED BELOW SHALL BE
TAKEN BY THE COMPANIES, WITHOUT THE AGREEMENT OF THE STEERING COMMITTEE:

 

(A) CHANGE THEIR ACCOUNTING METHODS OR PRACTICES (AS SUCH ACCOUNTING METHODS OR
PRACTICES ARE DESCRIBED IN THE APPENDIX TO THE AUDITED ANNUAL ACCOUNTS OF THAT
COMPANY) UNLESS PROVIDED FOR BY LAW;

 

(B) INCUR ANY OBLIGATION OR LIABILITY MATERIAL TO THE OPERATION OF THE BUSINESS,
(WHETHER ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE) EXCEPT IN THE ORDINARY
COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE OR IN CONNECTION WITH SELLER’S
REFINANCING BY WAY OF INTERCOMPANY LOAN PRIOR TO THE REFERENCE DATE OF (I) THE
THIRD PARTY BANKING DEBTS OF THE COMPANIES IN A MAXIMUM AMOUNT OF EUR 250
MILLION AND (II) THE DEFERRED PURCHASE PRICE PAYABLE TO NTL INC.;

 

(C) MORTGAGE, PLEDGE OR SUBJECT TO ANY ENCUMBRANCES ANY OF THEIR ASSETS,
PROPERTIES OR RIGHTS, EXCEPT ENCUMBRANCES FOR TAXES NOT YET DUE AND PAYABLE AND
PURCHASE MONEY OR OTHER MINOR ENCUMBRANCES ARISING IN THE ORDINARY COURSE OF
BUSINESS;

 

(D) ENTER INTO ANY ARRANGEMENT, COMMITMENT OR AGREEMENT CREATING ANY ENCUMBRANCE
RELATING TO ITS SHARES OR LIMITING OR RESTRICTING IN ANY MANNER THE
TRANSFERABILITY OF ITS SHARES, OR PROVIDING FOR THE VOTING OF ITS SHARES,
OPTIONS, WARRANTS, OR OTHER RIGHTS TO PURCHASE ANY OF SUCH SECURITIES FROM ANY
THIRD PARTY;

 

(E) SELL OR TRANSFER ANY OF THEIR ASSETS MATERIAL TO THE OPERATION OF THE
BUSINESS OR CANCEL ANY DEBTS OR CLAIMS OR WAIVE ANY RIGHTS, EXCEPT IN THE
ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE;

 

(F) DECLARE, SET ASIDE, MAKE OR PAY ANY DIVIDEND OR OTHER DISTRIBUTION IN
RESPECT OF, OR REDEEM ANY OF, THEIR SHARE CAPITAL (IN CASH OR OTHERWISE);

 

(G) ENTER INTO ANY JOINT VENTURE OR SIMILAR ARRANGEMENT;

 

(H) ACQUIRE, BY MERGER, CONSOLIDATION, PURCHASE OF STOCK OR ASSETS OR OTHERWISE,
ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR OTHER BUSINESS ORGANIZATION;

 

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(I) REORGANIZE, DISSOLVE OR ENTER INTO ANY PLAN OF LIQUIDATION OR DISSOLUTION OR
SIMILAR PROCEEDING;

 

(J) CANCEL, TERMINATE OR FAIL TO MAINTAIN ANY INSURANCE POLICY COMPARABLE IN
AMOUNT AND SCOPE TO CURRENT COVERAGE, EXCEPT IF REPLACED BY A NEW INSURANCE
POLICY PROVIDING FOR AT LEAST THE SAME COVERAGE AT PREMIUMS NOT MATERIALLY
HIGHER THAN THE INSURANCE POLICY BEING REPLACED;

 

(K) ACQUIRE OR AGREE TO ACQUIRE ANY ASSETS OR MAKE ANY INVESTMENT (OR ANY
COMMITMENT RELATING TO ANY SUCH INVESTMENT) FOR AN AMOUNT GREATER THAN EUR
2,000,000, OR COMMIT TO MAKE ANY CAPITAL EXPENDITURE IN EXCESS OF EUR 2,000,000,
OR ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT USED IN ITS OPERATIONS OTHER THAN
ORDINARY REPAIRS AND MAINTENANCE BUT, IN EACH CASE, EXCLUDING ANY INVESTMENT SET
FORTH IN THE BUDGET;

 

(L) ENTER INTO ANY NEW MATERIAL CONTRACT, OR AGREE TO ANY AMENDMENT THERETO, OR
ANY MASTER AGREEMENT (“CONTRAT CADRE”), GENERAL OR SPECIFIC CONDITIONS FOR THE
PURCHASE AND/OR SALE OF SERVICES, PRODUCTS OR EQUIPMENT LIKELY TO REQUIRE FUTURE
CASH OUTLAYS IN EXCESS OF EUR 2,000,000 OR NEW COMMITMENTS TO DISBURSE CASH IN
EXCESS OF EUR 2,000,000 IN ONE OR A SERIES OF PAYMENTS FOR THE SAME UNDERLYING
TRANSACTION;

 

(M) CHANGE ITS DIGITAL OR ANALOGUE TELEVISION LINEUP OR SUBSCRIPTION PACKAGES IN
ANY MATERIAL RESPECT EXCEPT FOR THE CHANGE IN THE DIGITAL OFFERING FROM STAR
SYSTEM TO A TIERED SYSTEM OR DISCONTINUE THE PROVISION OF ANY OF ITS MATERIAL
PRODUCTS OR SERVICES OR CHANGE OR FAIL TO APPLY CONSISTENTLY ITS DISCONNECT
POLICIES;

 

(N) ENTER INTO ANY, OR AMEND, ITS AGREEMENT WITH TPS OR CANAL+ OR ENTER INTO ANY
NEW, OR AMEND ANY EXISTING OTHER, AGREEMENT WITH ANY CONTENT PROVIDER THAT
EITHER (A) HAS A TERM OF MORE THAN TWO YEARS OR (B) PAYS THE PROGRAMMER ON OTHER
THAN A PER ACTUAL SUBSCRIBER BASIS;

 

(O) AMEND OR VOLUNTARILY TERMINATE OR FAIL TO PERFORM ANY MATERIAL CONTRACT;

 

(P) COMMENCE, COMPROMISE OR DISCONTINUE ANY LEGAL OR ARBITRATION PROCEEDINGS
(OTHER THAN ROUTINE DEBT COLLECTION) THE AMOUNT OF WHICH IS IN EXCESS OF EUR
1,000,000; OR

 

(Q) LAY-OFF MORE THAN 15 OF ITS EMPLOYEES;

 

(R) MAKE ANY AMENDMENTS TO THE ORGANIZATIONAL DOCUMENTS OF ANY OF THE COMPANIES
EXCEPT AS REQUIRED PURSUANT TO SECTION 5.9.1;

 

(S) ENTER INTO ANY EXTRAORDINARY TRANSACTIONS, INCLUDING ACQUISITIONS, MERGERS
(“FUSION”), SPIN-OFFS OR SPLIT-OFFS (“SCISSIONS OU APPORTS PARTIELS D’ACTIFS”),
ON-GOING BUSINESS SALES (“CESSION DE FONDS DE COMMERCE”) OR BUSINESS RENTAL
AGREEMENTS (“LOCATION GÉRANCE”);

 

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(T) DISPOSE OF ANY PATENTS, TRADEMARKS OR COPYRIGHTS OR ANY PATENT, TRADEMARK OR
COPYRIGHT APPLICATIONS;

 

(U) FAIL TO DISCHARGE OR SATISFY ANY ENCUMBRANCE OR PAY OR SATISFY ANY
OBLIGATION OR LIABILITY (WHETHER ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE),
OTHER THAN LIABILITIES BEING CONTESTED IN GOOD FAITH AND FOR WHICH ADEQUATE
RESERVES HAVE BEEN PROVIDED AND ENCUMBRANCES ARISING IN THE ORDINARY COURSE OF
BUSINESS;

 

(V) ISSUE ANY SECURITIES OF ANY NATURE WHATSOEVER OR ENTER INTO ANY AGREEMENT TO
ISSUE ANY SECURITIES EXCEPT AS PROVIDED FOR IN SECTION 5.9.1;

 

(W) ENTER INTO ANY NEW (OR AMEND ANY EXISTING) EMPLOYEE BENEFIT PLAN, GRANT ANY
GENERAL INCREASE IN THE COMPENSATION (INCLUDING BONUS CONSISTENT WITH PAST
PRACTICE GRANTED IN THE ORDINARY COURSE OF BUSINESS AND PROFIT SHARING PLAN) OF,
OR INCREASE THE DURATION OF ANY EMPLOYMENT CONTRACTS WITH THE MANAGEMENT OR
EMPLOYEES OF THE COMPANIES, EXCEPT AS REQUIRED BY LAW;

 

(X) INCUR ANY OBLIGATION OR LIABILITY FOR THE PAYMENT OF SEVERANCE BENEFITS;

 

(Y) TERMINATE THE EMPLOYMENT OR OFFICE OF ANY OF ITS OFFICERS OR KEY EMPLOYEES
OR APPOINT ANY NEW OFFICER OR KEY EMPLOYEE OR MATERIALLY ALTER THE EMPLOYMENT OR
ENGAGEMENT OF ANY OFFICER OR KEY EMPLOYEE;

 

(Z) ENTER INTO ANY NEW, OR MATERIALLY AMEND ANY EXISTING, UNION AGREEMENT OR
WORK COUNCIL AGREEMENT OR PENSION FUND OR PRIVATE BENEFITS ARRANGEMENTS UNLESS
PROVIDED FOR BY LAW;

 

(AA) GRANT ANY THIRD PARTY ACCESS OR USE RIGHTS OVER ANY PORTION OF THE CABLE
NETWORKS;

 

(BB) RESTRICT THE ABILITY OF THE COMPANIES TO COMPETE OR ENTER IN ANY MARKET OR
OFFER ANY PRODUCT OR SERVICE;

 

(CC) BORROW MONEY UNDER MEZZANINE OR HIGH YIELD TYPES OF FINANCING FROM ANY
PARTY (INCLUDING AFFILIATES); OR

 

(DD) ADOPT A NEW BUDGET FOR 2004.

 

5.5.3 CONDUCT OF THE UPC FRENCH CABLE BUSINESS.  FROM THE SIGNING DATE UNTIL THE
CLOSING, BUYER SHALL PROCURE THAT (I) THE UPC FRENCH CABLE BUSINESS SHALL BE
CARRIED OUT IN THE ORDINARY COURSE OF BUSINESS GENERALLY CONSISTENT WITH PAST
PRACTICE AND SO AS TO PRESERVE THE VALUE AND GOODWILL OF THE BUSINESS AND (II)
THE STEERING COMMITTEE IS KEPT INFORMED OF ANY AND ALL MATERIAL DEVELOPMENTS IN
RELATION TO SUCH BUSINESS.  ADDITIONALLY, BUYER SHALL PROCURE THAT NO UPC FRANCE
COMPANY DOES ANY OF THE FOLLOWING BETWEEN THE SIGNING DATE AND CLOSING WITHOUT
THE CONSENT OF THE STEERING COMMITTEE:

 

(A) CARRY OUT ANY MAJOR BUSINESS COMBINATION (AS DEFINED IN THE SHAREHOLDERS
AGREEMENT);

 

14

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(B) MAKE A FUNDAMENTAL CHANGE IN THE BUSINESS STRATEGY OF THE UPC FRANCE
COMPANIES SUCH THAT THE UPC FRANCE COMPANIES’ BUSINESSES ARE NOT WHOLLY IN
TELECOMMUNICATIONS, DATA DISTRIBUTION AND/OR CONTENT, WITH RELATED GOODS AND
SERVICES;

 

(C) ENTER INTO ANY NEW MATERIAL INTRAGROUP ARRANGEMENTS THAT WOULD REQUIRE THE
UNANIMOUS AFFIRMATIVE VOTE OF THE DIRECTOR(S) NOMINATED BY SELLER UNDER THE
SHAREHOLDERS AGREEMENT, EXCEPT AS PROVIDED FOR IN SECTION 5.9.2;

 

(D) OTHERWISE DO ANY TRANSACTIONS, OR SERIES OF TRANSACTIONS, THE RESULT OF
WHICH WOULD FUNDAMENTALLY CHANGE THE NATURE OR VALUE OF THE UPC FRENCH CABLE
BUSINESS.

 

5.5.4 THE PARTIES AGREE THAT THE RIGHTS UNDER THIS SECTION 5.5 WILL BE EXERCISED
IN COMPLIANCE WITH RELEVANT COMPETITION LAWS.

 

5.5.5 NO APPROVAL BY THE STEERING COMMITTEE OR BY ANY PARTY AS TO ANY ACTION
BETWEEN THE SIGNING DATE AND CLOSING SHALL AFFECT THE DETERMINATION OF THE
PURCHASE PRICE AND CONSIDERATION SHARES AMOUNT, INCLUDING WITH RESPECT TO:

 

(A) THE CALCULATION OF THE NOOS ACTUAL ADJUSTED EBITDA OR ACTUAL ADJUSTED UPC
FRANCE EBITDA;

 

(B) THE NOOS WORKING CAPITAL ADJUSTMENT OR THE UPC FRANCE WORKING CAPITAL
ADJUSTMENT (BOTH AS DEFINED IN SCHEDULE 2.6); OR

 

(C) THE NOOS CAPITAL EXPENDITURE SHORTFALL ADJUSTMENT OR THE UPC FRANCE CAPITAL
EXPENDITURE SHORTFALL ADJUSTMENT (BOTH AS DEFINED IN SCHEDULE 2.6).

 

5.6 Public Announcements.  Subject to applicable laws and stock exchange
requirements, from the Signing Date until the Closing Date, each Party shall
consult with the other before issuing, or permitting any agent or Affiliate to
issue, any press releases or otherwise making or permitting any agent or
Affiliate to make, any public statements with respect to this Agreement and the
transactions contemplated hereby.

 

5.7 Confidentiality.  Each Party agrees as a separate and independent agreement
that (save as may be required by law or regulation or for the purpose of
obtaining in connection with the transactions contemplated in this Agreement any
Governmental Authorization or third party consents under any applicable
agreement relating to the Companies or the UPC France Companies, as applicable,
their respective share capital, assets or business, and then only to the extent
so required) it will not at any time hereafter divulge (other than in accordance
with Section 5.6) any information in relation to the affairs or businesses of
the Companies, the UPC France Companies or the subject matter of this Agreement
from the Signing Date until Closing or termination of this Agreement, whichever
is the earlier.

 

5.8 Provision of Financial Statements, Reports and Certain Other Information.

 

(A) EACH PARTY SHALL DELIVER OR CAUSE THE COMPANIES OR THE UPC FRANCE COMPANIES,
AS APPLICABLE, TO DELIVER TO THE OTHER PARTY WITHIN 20 DAYS FOLLOWING THE CLOSE
OF EACH

 

15

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MONTH THE MANAGEMENT FINANCIAL REPORT FOR SUCH PRIOR MONTH AS WELL AS OTHER
MATERIAL REPORTS THAT ARE PREPARED IN THE ORDINARY COURSE OF THE BUSINESS BY OR
FOR THE COMPANIES OR THE UPC FRANCE COMPANIES, AS APPLICABLE, WITH RESPECT TO
THE OPERATIONS OF THEIR BUSINESS BETWEEN THE SIGNING DATE AND THE REFERENCE
DATE.

 

(B) EACH PARTY SHALL DELIVER TO THE OTHER PARTY THE 2003 FINANCIAL STATEMENTS OR
THE UPC 2003 FINANCIAL STATEMENTS, AS APPLICABLE, WITHIN 3 DAYS FOLLOWING THE
DELIVERY BY THE STATUTORY AUDITORS OF THEIR REPORT ON SUCH FINANCIAL STATEMENTS.

 

(C) SUBJECT TO ANY APPLICABLE LEGAL OR REGULATORY RESTRICTION REGARDING
COMPETITION MATTERS, SELLER SHALL DELIVER OR CAUSE THE COMPANIES TO DELIVER
MATERIAL AGREEMENTS AND DOCUMENTS THAT ARE CONCLUDED AFTER THE SIGNING DATE AND
RELATE TO (I) ANY CHANGES OR PROPOSED FUTURE CHANGES IN RATES CHARGED TO
SUBSCRIBERS OR OTHER CUSTOMERS OF ANY OF THE COMPANIES, INCLUDING ANY LEGAL
PROCEEDING INITIATED IN RESPECT OF SAME, (II) ANY OF THE EXPLOITATION AGREEMENTS
AND (III) TPS, CANAL+, AND OTHER MATERIAL PROGRAMMING CONTRACTS, OR (IV) ANY
GOVERNMENT AUTHORITY.

 

5.9 Conversion of Portions of Intercompany Loan, Buyer Intercompany Loans and
UPC France Intercompany Loan.

 

5.9.1 PRIOR TO THE CLOSING DATE, SELLER SHALL CAPITALIZE SUCH AMOUNT OF THE
INTERCOMPANY LOAN AS EXCEEDS THE LOWER OF (A) THE PROVISIONAL PURCHASE PRICE
LESS EUR 100 MILLION, AND (B) SIX TIMES THE 2003 EBITDA (AS CALCULATED IN
SECTION 7.8).  SUCH CAPITALIZATION OF THE INTERCOMPANY LOAN SHALL BE DONE SO AS
NOT TO CREATE INCOME TO THE COMPANIES.

 

5.9.2 PRIOR TO THE CLOSING DATE, BUYER SHALL PROCURE THAT BUYER INTERCOMPANY
LOANS ARE PAID OFF OR CAPITALIZED SO THAT THE DEBT AT BUYER AT CLOSING DOES NOT
EXCEED EUR 60 MILLION AND BUYER SHALL PAY OFF OR CAPITALIZE THE UPC FRANCE
INTERCOMPANY LOANS TO THE UPC FRANCE COMPANIES.  ANY SUCH CAPITALIZATION OF
BUYER INTERCOMPANY LOANS AND UPC FRANCE INTERCOMPANY LOANS SHALL BE DONE SO AS
NOT TO CREATE INCOME TO THE UPC FRANCE COMPANIES.

 

5.10 Release of Encumbrances.  Prior to the Closing, Seller will cause all
Encumbrances (if any) with respect to the assets of the Companies to be released
so that at the Closing, no Encumbrances shall exist with respect to the assets
of the Companies.

 

5.11 Affiliate Commercial Contracts.  The Parties will use best efforts to agree
the material terms of the contracts with respect to the services listed in
Schedule 5.11 prior to Closing, recognizing the key principles of (i) permitting
Buyer and its Affiliates to realize synergies within the UPC Group and (ii) that
the contracts must be in the corporate interest of Buyer, taking into account,
in particular, the preservation of the interests of both shareholders in Buyer,
but agreement on the material terms of such contracts will not be a condition to
Closing.  To the extent agreement with respect to the material terms of
contracts for the services listed in Schedule 5.11 is reached prior to Closing,
Exhibit 2.2(c)(2) to the Shareholders Agreement will contain at Closing a
summary of such services and the corresponding material terms.  As to any
services for which agreement on material terms is not reached before Closing,
Buyer may nevertheless proceed after

 

16

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Closing with the implementation of such service arrangements, subject to and in
accordance with the procedures of Section 2.2(c)(2) of the Shareholders
Agreement.

 

5.12 Tax matters.

 

(A) SELLER SHALL PREPARE AND FILE, OR CAUSE TO BE PREPARED AND FILED, ALL TAX
RETURNS WITH RESPECT TO THE COMPANIES (I) FOR ANY TAX PERIOD THAT ENDS PRIOR TO
CLOSING AND (II) THAT REQUIRE TO BE FILED BEFORE CLOSING. SELLER WILL PREPARE
ALL SUCH RETURNS IN ACCORDANCE WITH PAST PRACTICES OF THE COMPANIES.

 

(B) BUYER SHALL PREPARE AND FILE, OR CAUSE TO BE PREPARED AND FILED, ALL TAX
RETURNS WITH RESPECT TO THE COMPANIES (I) FOR ENTIRE TAX PERIODS THAT END PRIOR
TO CLOSING AND (II) THAT ARE REQUIRED TO BE FILED AFTER CLOSING.  UNLESS
OTHERWISE REQUIRED BY APPLICABLE LAW, BUYER SHALL PREPARE SUCH RETURNS IN
ACCORDANCE WITH THE PRACTICES OF THE UPC FRANCE COMPANIES, GIVING DUE REGARD TO
THE PRIOR TAX POSITIONS OF THE COMPANIES AND THAT SUCH RETURNS COULD INCREASE
THE PRE-CLOSING LIABILITY TO TAX OF THE COMPANIES.

 

(C) BUYER SHALL PREPARE AND FILE, OR CAUSE TO BE PREPARED AND FILED, ALL TAX
RETURNS WITH RESPECT TO THE COMPANIES FOR STRADDLE PERIODS (ANY TAX PERIOD
BEGINNING PRIOR TO THE CLOSING AND ENDING AFTER THE CLOSING) AND SHALL PROVIDE
SELLER WITH A STATEMENT SETTING FORTH THE ALLOCATION OF LIABILITY FOR TAXES
SHOWN ON SUCH RETURNS BETWEEN THE PORTION OF THE STRADDLE PERIOD ENDING ON
CLOSING AND THE PORTION OF THE STRADDLE PERIOD BEGINNING AFTER CLOSING.  UNLESS
OTHERWISE REQUIRED BY APPLICABLE LAW, BUYER SHALL PREPARE SUCH TAX RETURNS IN
ACCORDANCE WITH THE PAST PRACTICES OF THE COMPANIES. SELLER SHALL HAVE THE RIGHT
TO REVIEW AND APPROVE SUCH TAX RETURNS AND SUCH ALLOCATION STATEMENT AND TO
CONSENT TO THE FILING OF ANY SUCH RETURNS, WHICH APPROVAL AND CONSENT SHALL NOT
BE UNREASONABLY WITHHELD.

 

(D) SELLER SHALL PAY, OR CAUSE TO BE PAID, ALL TAXES SHOWN ON THE TAX RETURNS
REQUIRED TO BE FILED BY SELLER PURSUANT TO SECTION 5.12(A) ABOVE ON OR PRIOR TO
THE DUE DATE FOR PAYMENT THEREOF.

 

(E) BUYER SHALL PAY, OR CAUSE TO BE PAID, ALL TAXES SHOWN AS DUE ON EACH TAX
RETURN REQUIRED TO BE FILED BY BUYER PURSUANT TO SECTION 5.12(B) ABOVE ON OR
PRIOR TO THE DUE DATE FOR PAYMENT THEREOF.  EXCEPT TO THE EXTENT TAKEN INTO
ACCOUNT IN THE NOOS REFERENCE DATE ACCOUNTS, SELLER SHALL PAY, NO LATER THAN
THREE DAYS PRIOR TO THE DUE DATE FOR PAYMENT THEREOF, TO OR AT THE DIRECTION OF
BUYER, AN AMOUNT EQUAL TO ALL SUCH TAXES SHOWN AS DUE ON SUCH RETURN (IT BEING
UNDERSTOOD THAT SELLER SHALL NOT BE REQUIRED TO PAY BUYER OR THE RELEVANT
COMPANY FOR ANY TAXES PREVIOUSLY PAID BY SELLER OR THE RELEVANT COMPANY PRIOR TO
CLOSING (INCLUDING, FOR EXAMPLE, BY WAY OF PAYMENT OF ESTIMATED TAXES IN THE
NOOS REFERENCE DATE ACCOUNTS)).

 

(F) BUYER SHALL PAY, OR CAUSE TO BE PAID, ALL TAXES SHOWN AS DUE ON EACH TAX
RETURN REQUIRED TO BE FILED BY BUYER PURSUANT TO SECTION 5.12(C) ABOVE ON OR
PRIOR TO THE DUE DATE FOR PAYMENT THEREOF.  EXCEPT TO THE EXTENT TAKEN INTO
ACCOUNT IN THE NOOS REFERENCE DATE ACCOUNTS, SELLER SHALL PAY, NO LATER THAN
THREE DAYS PRIOR TO THE

 

17

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DUE DATE FOR PAYMENT THEREOF, TO OR AT THE DIRECTION OF BUYER, AN AMOUNT EQUAL
TO ALL SUCH TAXES THAT RELATE TO THE PORTION OF THE STRADDLE PERIOD ENDING ON
CLOSING (IT BEING UNDERSTOOD THAT SELLER SHALL NOT BE REQUIRED TO PAY BUYER OR
THE RELEVANT COMPANY FOR ANY TAXES PREVIOUSLY PAID BY SELLER OR THE RELEVANT
COMPANY PRIOR TO CLOSING (INCLUDING, FOR EXAMPLE, BY WAY OF PAYMENT OF ESTIMATED
TAXES IN THE NOOS REFERENCE DATE ACCOUNTS)).  THE PORTION OF SUCH TAXES REQUIRED
TO BE REIMBURSED BY SELLER PURSUANT TO THIS PARAGRAPH SHALL BE DETERMINED IN THE
MANNER SET FORTH IN SECTION 5.12(H).

 

(G) FOR PURPOSES OF THIS SECTION 5.12, THE PARTIES AGREE TO ALLOCATE TAX ITEMS
BETWEEN PRE-CLOSING TAX PERIODS AND POST-CLOSING TAX PERIODS THAT END AND BEGIN,
RESPECTIVELY, ON CLOSING ON THE BASIS OF A “CLOSING OF THE BOOKS” ON CLOSING.

 

(H) FOR PURPOSES OF THIS ARTICLE, IN THE CASE OF ANY TAXES THAT ARE IMPOSED WITH
RESPECT TO A STRADDLE PERIOD ON A PERIODIC BASIS, THE PORTION OF SUCH TAX
RELATED TO THE PORTION OF SUCH TAX PERIOD ENDING ON AND INCLUDING THE CLOSING
DATE SHALL:

 

(I) IN THE CASE OF ANY TAXES OTHER THAN CORPORATE INCOME TAX (INCLUDING
ADDITIONAL SURTAXES), EMPLOYEE PROFIT SHARING, VAT, REGISTRATION DUTIES, PAYROLL
TAXES, WITHHOLDING TAXES, BE DEEMED TO BE THE AMOUNT OF SUCH TAX FOR THE ENTIRE
TAX PERIOD MULTIPLIED BY A FRACTION THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS
IN THE TAX PERIOD ENDING ON AND INCLUDING CLOSING AND THE DENOMINATOR OF WHICH
IS THE NUMBER OF DAYS IN THE ENTIRE TAX PERIOD, AND

 

(II) IN THE CASE OF CORPORATE INCOME TAX (INCLUDING ADDITIONAL SURTAXES),
EMPLOYEE PROFIT SHARING, VAT, REGISTRATION DUTIES, PAYROLL TAXES, WITHHOLDING
TAXES, BE DEEMED EQUAL TO THE AMOUNT WHICH WOULD BE PAYABLE IF THE RELEVANT TAX
PERIOD ENDED ON AND INCLUDED CLOSING.  ALL DETERMINATIONS NECESSARY TO GIVE
EFFECT TO THE ALLOCATION SET FORTH IN THIS CLAUSE (II) SHALL BE MADE IN A MANNER
CONSISTENT WITH PRIOR PRACTICE OF THE COMPANIES.

 

(I) BUYER COVENANTS THAT FROM CLOSING, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT OR REQUIRED BY APPLICABLE LAW, IT WILL NOT CAUSE OR PERMIT ANY
COMPANY (I) TO TAKE ANY ACTION FROM CLOSING OTHER THAN IN THE ORDINARY COURSE OF
BUSINESS (“ACTE ANORMAL DE GESTION”), (II) TO MAKE OR CHANGE ANY TAX ELECTION,
AMEND ANY TAX RETURN OR TAKE ANY TAX POSITION ON ANY TAX RETURN IN EACH CASE
WITH RESPECT TO A TAX PERIOD PRIOR TO CLOSING OR (III) TO TAKE ANY ACTION, OR
ENTER INTO ANY TRANSACTION, MERGER OR RESTRUCTURING WITH RESPECT TO A TAX PERIOD
AFTER CLOSING (OR PORTION OF A STRADDLE PERIOD AFTER CLOSING), THAT WOULD RESULT
IN ANY INCREASED TAX LIABILITY OR REDUCTION OF ANY TAX ASSET OF SELLER.  A
REDUCTION IN A TAX ASSET SHALL BE DEEMED TO OCCUR ONLY AS AND WHEN SELLER WOULD
OTHERWISE HAVE REALIZED AN ACTUAL REDUCTION IN CASH TAXES TO BE PAID BUT FOR THE
REDUCTION OF SUCH TAX ASSET.

 

(J) BUYER SHALL PROMPTLY PAY OR CAUSE TO BE PAID TO SELLER ALL REFUNDS OF TAXES
AND INTEREST THEREON RECEIVED BY BUYER OR ANY COMPANY ATTRIBUTABLE TO TAXES PAID
BY SELLER OR

 

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ANY COMPANY WITH RESPECT TO ANY TAX PERIOD PRIOR TO CLOSING OR THE PORTION OF
ANY STRADDLE PERIOD ENDING ON CLOSING.

 

(K) SELLER COVENANTS THAT FROM THE DATE HEREOF UNTIL CLOSING, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR REQUIRED BY APPLICABLE LAW, IT
WILL NOT CAUSE OR PERMIT ANY COMPANY TO TAKE ANY ACTION, OR ENTER INTO ANY
TRANSACTION, MERGER OR RESTRUCTURING THAT WOULD RESULT IN ANY INCREASED TAX
LIABILITY OR REDUCTION OF ANY TAX ASSET OF ANY COMPANY IN RESPECT OF ANY TAX
PERIOD AFTER CLOSING (OR PORTION OF ANY STRADDLE PERIOD BEGINNING AFTER
CLOSING).  A REDUCTION IN ANY TAX ASSET SHALL BE DEEMED TO OCCUR ONLY AS AND
WHEN BUYER WOULD OTHERWISE HAVE REALIZED AN ACTUAL REDUCTION IN CASH TAXES TO BE
PAID BUT FOR THE REDUCTION OF SUCH TAX ASSETS.

 

(L) BUYER AND SELLER AGREE TO FURNISH OR CAUSE TO BE FURNISHED TO EACH OTHER,
UPON REASONABLE REQUEST, AS PROMPTLY AS PRACTICABLE, SUCH INFORMATION (INCLUDING
ACCESS TO BOOKS, ACCOUNTS, PERSONNEL, CORRESPONDENCE AND DOCUMENTATION OF THE
COMPANIES) AND ASSISTANCE RELATING TO THE COMPANIES AS IS REASONABLY NECESSARY
FOR THE FILING OF ANY RETURN, FOR THE PREPARATION FOR ANY AUDIT, FOR THE
PROSECUTION OR DEFENSE OF ANY CLAIM, SUIT OR PROCEEDING RELATING TO ANY PROPOSED
ADJUSTMENT.

 

(M) BUYER SHALL DEVOTE, OR CAUSE TO BE DEVOTED BY THE COMPANIES, REASONABLE
RESOURCES TO DEALING WITH ALL PRE-CLOSING TAX AFFAIRS AND SHALL USE REASONABLE
ENDEAVORS TO ENSURE THAT THEY ARE FINALIZED AS SOON AS REASONABLY PRACTICABLE.

 

(N) BUYER AND SELLER SHALL COOPERATE WITH EACH OTHER IN THE CONDUCT OF ANY AUDIT
OR OTHER PROCEEDINGS INVOLVING THE COMPANIES FOR ANY TAX PURPOSES AND EACH SHALL
EXECUTE AND DELIVER SUCH POWERS OF ATTORNEY AND OTHER DOCUMENTS AS ARE NECESSARY
TO CARRY OUT THE INTENT OF THIS SUBSECTION.

 

5.13 Restrictive Covenants.

 

(A) FROM CLOSING, SELLER HEREBY UNDERTAKES TO BUYER FOR THE BENEFIT OF BUYER,
ITS LEGAL SUCCESSORS IN INTERESTS AND FOR EACH OF ITS SUBSIDIARIES AS MAY EXIST
FROM TIME TO TIME, THAT NEITHER SELLER, NOR ANY OF ITS AFFILIATES, WILL EITHER
ALONE OR JOINTLY WITH OTHERS, WHETHER AS PRINCIPAL, AGENT, MANAGER, SHAREHOLDER
OR IN ANY OTHER CAPACITY, DIRECTLY OR INDIRECTLY THROUGH ANY OTHER PERSON, FOR
ITS OWN BENEFIT OR THAT OF OTHERS, AT ANY TIME DURING THE PERIOD THAT IS THE
SHORTER OF (I) THREE YEARS FOLLOWING THE CLOSING DATE OR (II) THE DATE THAT IS
ONE YEAR FOLLOWING THE DATE THAT SELLER OR ANY ITS AFFILIATES CEASES TO REMAIN A
SHAREHOLDER IN BUYER (THE “RESTRICTED PERIOD”): ENGAGE IN, CARRY ON OR INVEST IN
THE BUSINESS OF OWNING OR OPERATING CABLE, SATELLITE, WIRELESS, OR VIDEO DSL
NETWORKS (THE “RESTRICTED BUSINESS”) WITHIN FRANCE (OTHER THAN THE EXISTING
SHAREHOLDINGS LISTED IN SCHEDULE 5.13 OR AS A PASSIVE HOLDER FOR INVESTMENT ONLY
OF NO MORE THAN 5% OF ANY CLASS OF SHARES OR OTHER SECURITIES IN ANY ENTITY THAT
IS SO ENGAGING, CARRYING ON OR INVESTING IN A RESTRICTED BUSINESS).  THE
FOREGOING COVENANT IS AGREED TO BE FAIR AND REASONABLE TO PROTECT THE VALUE OF
THE INTERESTS BEING ACQUIRED BY BUYER AND EXTENSION OF THE COVENANT FOR THE ONE
YEAR PERIOD FOLLOWING THE DATE THAT SELLER OR ANY OF ITS

 

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AFFILIATES CEASES TO REMAIN A SHAREHOLDER IN BUYER IS AGREED TO BE FAIR AND
REASONABLE TO PROTECT CONFIDENTIAL INFORMATION OF BUYER TO WHICH SELLER WILL
HAVE ACCESS AS A SHAREHOLDER IN BUYER.  IF FOR ANY REASON THIS RESTRICTION IS
FOUND TO BE VOID OR INEFFECTIVE BUT WOULD BE VALID AND EFFECTIVE IF THE DURATION
OR AREA OF APPLICATION WERE REDUCED OR IF ANY OTHER ADJUSTMENT WERE TO BE MADE
SUCH RESTRICTION SHALL APPLY WITH SUCH MODIFICATION AS MAY BE NECESSARY TO MAKE
IT VALID AND EFFECTIVE.

 

(B) FOR A PERIOD BEGINNING ON THE DATE HEREOF AND CONTINUING FOR A PERIOD ENDING
ONE YEAR FOLLOWING THE CLOSING DATE, NEITHER SELLER NOR ANY OF ITS AFFILIATES
WILL SOLICIT OR ACTIVELY SEEK TO HIRE (OTHER THAN PURSUANT TO GENERAL EMPLOYMENT
SOLICITATIONS SUCH AS JOB ADVERTISEMENTS) ANY KEY EMPLOYEE WHO DURING SUCH
PERIOD IS EMPLOYED IN THE BUSINESS, WHETHER OR NOT SUCH PERSON WOULD COMMIT ANY
BREACH OF HIS CONTRACT OF SERVICE IN LEAVING SUCH EMPLOYMENT.  SELLER WILL NOT
BE IN BREACH OF THIS PARAGRAPH IF IT OR ITS AFFILIATE EMPLOYS ANY SUCH PERSON
AFTER SUCH PERSON HAS RESPONDED TO A GENERAL ADVERTISEMENT.

 

5.14 Insurance.  Seller will procure that the Companies do not terminate any of
their insurance coverage prior to Closing.  For policies of the Companies that
are scheduled to expire within 90 days following Closing, Seller will consult
with Buyer as to whether to extend such policies or instead obtain coverage
under UPC group policies. If Buyer so requests Seller in writing at least 30
days prior to the Closing Date, Seller will continue to provide to the Companies
civil liability insurance coverage in an amount of EUR 50 million under its
umbrella insurance policy for a period of no longer than three months after
Closing at a cost no higher than the cost charged to the Companies for such
coverage during the three month period prior to Closing.

 

5.15 Sipperec Memorandum of Agreement.  Prior to the Closing Date, Seller shall
comply, and cause the Companies to comply, with their obligations under the
Sipperec Memorandum of Agreement.

 

5.16 Sarbanes Oxley.  From the Signing Date, Seller will cause its chief
compliance officer to work with UGC or its designee to accelerate the Companies’
Sarbanes Oxley compliance program to help UGC to be Sarbanes Oxley compliant
with regard to the Companies’ business on a timely basis.

 

ARTICLE VI

WORKS COUNCILS

 

Each of the Parties represents and warrants that, prior to the Signing Date, it
has complied with its obligations to conduct consultations with its works
council as required by French law.

 

ARTICLE VII

CONDITIONS TO BUYER’S OBLIGATION TO CLOSE

 

Buyer’s obligation to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver in writing by Buyer, on or prior
to the Closing Date, of all of the following conditions:

 

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7.1 Representations, Warranties and Covenants of Seller.  Subject to the
provisions of Section 9.4, the Seller Warranties in paragraphs 1, 2, 4, 5, 6, 7,
9, 10(e), 10(f) and 10(g), 10(h), 11(a), 11(b), 11(c), 12(a), 13(d), 14(a) and
14(c), 15(c), 16(f), 18 and 19 of Schedule 3 and the Seller Specific Warranties
in Schedule 3A 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 and as of such date.  The covenants and agreements
of Seller to be performed on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all material respects on and as of
the Closing Date.

 

7.2 Competition Filing.

 

(A) THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN CLEARED BY
THE COMPETITION AUTHORITY AT THE END OF THE PHASE 1 INVESTIGATION PERIOD WITHOUT
THE WITHHOLDING BY THE COMPETITION AUTHORITY OF ITS APPROVAL TO PROVISIONS OR
PORTIONS OF THIS AGREEMENT AND WITHOUT THE IMPOSITION OF ANY CONDITION BY THE
COMPETITION AUTHORITY, OR A REQUIREMENT THAT BUYER PROPOSE ANY UNDERTAKING TO
THE COMPETITION AUTHORITY AS A CONCESSION TO OBTAIN CLEARANCE, THAT IN BUYER’S
JUDGMENT ACTING IN GOOD FAITH, WILL OR COULD HAVE A MATERIALLY PREJUDICIAL
EFFECT ON THE BUSINESS, ITS BUSINESS OR THE BUSINESS OF ANY LIBERTY AFFILIATE;
OR

 

(B) IF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL NOT HAVE BEEN SO
CLEARED BY THE COMPETITION AUTHORITY AT THE END OF THE PHASE 1 INVESTIGATION
PERIOD BUT BUYER HAS WAIVED PART (A) OF THIS CONDITION, THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN CLEARED BY THE COMPETITION
AUTHORITY AT THE END OF THE PHASE 2 INVESTIGATION PERIOD WITHOUT THE WITHHOLDING
BY THE COMPETITION AUTHORITY OF ITS APPROVAL TO PROVISIONS OR PORTIONS OF THIS
AGREEMENT AND WITHOUT THE IMPOSITION OF ANY CONDITION BY THE COMPETITION
AUTHORITY, OR A REQUIREMENT THAT BUYER PROPOSE ANY UNDERTAKING TO THE
COMPETITION AUTHORITY AS A CONCESSION TO OBTAIN CLEARANCE, THAT IN BUYER’S
JUDGMENT ACTING IN GOOD FAITH, WILL OR COULD HAVE A MATERIALLY PREJUDICIAL
EFFECT ON THE BUSINESS, ITS BUSINESS OR THE BUSINESS OF ANY OF ITS AFFILIATES OR
THAT OF ANY LIBERTY AFFILIATE.

 

If Buyer decides that any condition imposed or undertaking required by the
Competition Authority will or could have a material adverse effect of the type
referred to in this Section 7.2, Buyer will provide a reasoned, confidential
explanation of its decision to Seller or its counsel.

 

7.3 Notification to the CSA.  Notification by Seller of the transactions
contemplated by this Agreement and the proposed change in the ownership of the
Company having been made to the French broadcasting authority (CSA).

 

7.4 Cannes and Epinal Networks.  Either:

 

(A) THE IRREVOCABLE TRANSFER OF OWNERSHIP OF THE CANNES AND EPINAL NETWORKS
TOGETHER WITH ALL ASSETS USED IN THE PROVISION OF SERVICES WITHIN THESE AREAS TO
RAPP 16 SA WHICH TRANSFER TERMS INCLUDE ONLY THOSE REPRESENTATIONS AND
WARRANTIES ACCEPTABLE

 

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TO BUYER, ACTING REASONABLY, THE CONSIDERATION FOR SUCH PURCHASE TO BE FINANCED
BY SELLER BEFORE THE REFERENCE DATE BY WAY OF INCREASE IN THE INTERCOMPANY LOAN;
OR

 

(B) THE PAYMENT BY THE COMPANY (FINANCED BY AN INCREASE IN THE INTERCOMPANY
LOAN) INTO THE C&E ESCROW ACCOUNT BEFORE THE REFERENCE DATE OF AN AMOUNT EQUAL
TO THE AGREED PURCHASE PRICE OF EUR 12,710,772 PLUS ANY ACCRUED INTEREST, VAT
AND REAL ESTATE TRANSFER TAX DUE ON THE TRANSFER OF THE CANNES AND EPINAL
NETWORKS AND ASSETS BY FRANCE TELECOM (BUT SO THAT ANY SUCH PAYMENT AND ANY
CORRESPONDING LIABILITY WILL NOT BE TAKEN INTO ACCOUNT IN CALCULATING THE NOOS
WORKING CAPITAL ADJUSTMENT).  SUCH AMOUNT TO BE RELEASED UP TO THE AMOUNT OF THE
PURCHASE PRICE DUE ON THE TRANSFER OF THE CANNES AND EPINAL NETWORKS ON THE
COMPLETION OF SUCH TRANSFER IN ACCORDANCE WITH THE C&E ESCROW AGREEMENT.  IF THE
PURCHASE PRICE DUE ON THE TRANSFER OF THE CANNES AND EPINAL NETWORKS IS HIGHER
THAN SUCH AMOUNT, SELLER WILL PAY SUCH NECESSARY ADDITIONAL AMOUNT INTO THE C&E
ESCROW ACCOUNT WITHIN TEN (10) BUSINESS DAYS OF BECOMING AWARE OF THE NEED FOR
SUCH INCREASED PURCHASE PRICE.  IF THERE IS A SURPLUS IN THE C&E ESCROW ACCOUNT
AFTER PAYMENT OF THE PURCHASE PRICE DUE ON THE TRANSFER OF THE CANNES AND EPINAL
NETWORKS, SUCH SURPLUS SHALL BE RELEASED TO THE COMPANY.

 

7.5 No Injunction.  At the Closing Date, there shall be no injunction,
restraining order or decree of any nature of any court or Government Authority
of competent jurisdiction that is in effect that restrains or prohibits the
transactions contemplated by this Agreement.

 

7.6 2003 Year End RGUs.  The number of RGUs as at December 31, 2003, as
calculated in accordance with the principles and methods set forth in
Schedule 7.6, is no more than 3.75% below any of the figures set out below:

 

CATV analog RGUs:

 

189,553

 

 

 

 

 

Digital TV RGUs:

 

429,923

 

 

 

 

 

Data RGUs:

 

191,300

 

 

7.7 2004 RGUs and Revenues.  Figures for any of (a) digital video RGUs, (b)
aggregate digital and analog video RGUs, (c) data RGUs and (d) cumulative
revenues, as at the end of the last month before the Closing Date for which
figures are available being no more than 10% below the figures shown as at the
end of such month in the Budget as set forth in Schedule 7.7.

 

7.8 2003 EBITDA and Revenues.  Delivery by Seller of the 2003 Financial
Statements prepared in accordance with French GAAP (a) prepared with a clean
audit opinion; and (b) showing no adverse deviation of more than 3.75% from the
EBITDA and revenue figures set out below :

 

EBITDA:                            EUR 61 million (calculated, for this purpose,
in accordance with Section 3.2.2 of Schedule 2.6 but excluding adjustment under
Sections 3.2.2 (c) (f) (g) and (h) of Schedule 2.6)

 

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Revenues:                     EUR 296 million

 

7.9 Noos Run-Rate EBITDA.  That the Noos Run-Rate EBITDA of the Business as at
Closing as demonstrated by the Management Financial Reports is no less than EUR
70 million.

 

7.10 Rights of Way Renewal.  Seller and/or the Company has commenced negotiation
for the renewal of the rights of way agreements for Paris (expiring on
November 17, 2004), Neuilly sur seine (expiring on September 4, 2004) and
Boulogne Billancourt (expiring on December 22, 2004) in accordance with the
terms of those agreements.

 

7.11 No Material Adverse Change.  At any time after the Signing Date there shall
not have occurred a Material Adverse Change.

 

ARTICLE VIII

CONDITIONS TO SELLER’S OBLIGATION TO CLOSE

 

The obligation of Seller to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver by Seller, on or prior
to the Closing Date, of all of the following conditions:

 

8.1 UPC Warranties and Buyer Covenants.  Subject to the provisions of
Section 9.4, the UPC Warranties in paragraphs 1, 2, 4, 5, 6, 7, 10(f) and 10(g),
10(h), 11(a), 11(b), 11(c), 13(d), 14(a) and 14(c), 15(c), 16(f), 18 and 19 of
Schedule 4 and the UPC Specific Warranties in Schedule 4A 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 and as of
such date.  The covenants and agreements of Buyer to be performed on or before
the Closing Date in accordance with this Agreement shall have been duly
performed in all material respects on and as of the Closing Date.

 

8.2 No Injunction.  At the Closing Date, there shall be no injunction,
restraining order or decree of any nature of any court or Government Authority
of competent jurisdiction that is in effect that restrains or prohibits the
transactions contemplated by this Agreement.

 

ARTICLE IX

SURVIVAL; INDEMNIFICATION

 

9.1 Indemnification by Seller.  Subject to the terms and conditions provided in
this Article IX, Seller shall indemnify Buyer for the amount of any damage
(“préjudice”), loss, debt, penalty or payment (including reasonable attorney’s
fees, court costs and out-of-pocket expenses) provided that such damage
(“préjudice”), loss, debt or penalty results or has resulted in an immediate or
deferred payment or transfer in cash or in kind (a “Buyer Loss”), borne or made
by Buyer as a consequence of:

 

(A) ANY SELLER WARRANTY OR ANY WARRANTY UNDER THE SIPPEREC MEMORANDUM OF
AGREEMENT BEING UNTRUE, INACCURATE OR INCOMPLETE; OR

 

(B) THE BREACH OF ANY COVENANT MADE BY SELLER UNDER THIS AGREEMENT OR UNDER THE
SIPPEREC MEMORANDUM OF AGREEMENT.

 

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Where Buyer is the beneficiary of an indemnity payment under this Section 9.1,
Buyer may direct Seller to make such payment to one or more of the Companies,
thereby creating a debt obligation from such company to Buyer.  If Seller pays
any sum under this Section 9.1, the amount of the Purchase Price shall be deemed
to be reduced by the amount of any such payment.

 

9.2 Indemnification for Seller Loss.  Subject to the terms and conditions
provided in this Article IX, the UPC Shareholder shall indemnify, at the UPC
Shareholder’s option, either Seller or Buyer or the relevant UPC France
Companies (save that Seller shall be the “Indemnified Party” under this
Section 9.2 for the purposes of Section 9.6.4) for the amount of any damage
(“préjudice”), loss, debt, penalty or payment (including reasonable attorney’s
fees, court costs and out-of-pocket expenses) provided that such damage
(“préjudice”), loss, debt or penalty results or has resulted in an immediate or
deferred payment or transfer in cash or in kind (a “Seller Loss”), borne or made
by Seller or Buyer or the Companies as a consequence of:

 

(A) ANY UPC WARRANTY BEING UNTRUE, INACCURATE OR INCOMPLETE; OR

 

(B) THE BREACH OF ANY COVENANT MADE BY BUYER UNDER THIS AGREEMENT.

 

Payment of Seller Loss under this Section 9.2 will be made in a way that is (i)
non-dilutive to the interests of Seller in Buyer and (ii) tax-effective for
Seller, Buyer, the Companies and the UPC Shareholder.  Should the UPC
Shareholder choose to pay Seller Loss under this Section 9.2 to Buyer or the
Companies, the Parties will use their reasonable endeavors to seek to agree the
manner of such payment within 30 days of the final determination of the Seller
Loss.  In the absence of agreement, the UPC Shareholder shall make such payment
using one of the two following options:

 

OPTION 1:

 

(i)                                     The UPC Shareholder will procure that
Buyer issues a number of shares in Buyer to each of the UPC Shareholder and
Seller in proportion to their existing holdings in Buyer.

 

(ii)                                  The shares issued to the UPC Shareholder
shall be Class A Common Stock and shall be issued at an aggregate premium equal
to the Seller Loss less the aggregate nominal value of all the issued shares in
Buyer (including the shares referred to in paragraphs (ii) and (iii).

 

(iii)                               The shares issued to Seller shall be Class B
Common Stock and shall be issued at par.

 

OPTION 2:

 

(i)                                     The UPC Shareholder will procure that
Buyer issues a number of shares to the UPC Shareholder which shares’ nominal
value would be equal to Seller Loss.  Seller agrees to waive its pre-emption
rights in relation to the issue of such shares.

 

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(ii)                                  The shares issued to the UPC Shareholder
shall be Class A Common Stock.

 

(iii)                               The UPC Shareholder will grant Seller a call
option exercisable at an aggregate exercise price of EUR 1 over a proportion of
such shares equal to the proportion of the issued capital of Buyer (excluding
the shares issued pursuant to paragraph (ii)) represented by Seller’s shares in
Buyer.  Such shares transferred to Seller pursuant to the call option shall
become Class B Common Stock.

 

9.3 Disclosures.  Seller and the UPC Shareholder shall not be liable for any
claim pursuant to this Article IX relating to any matter specifically disclosed
in the Exhibits to the Seller Warranties (with respect to a Buyer Loss) or in
the Exhibits to the UPC Warranties (with respect to a Seller Loss) provided, in
each case, that such disclosures and information (the “Disclosure Documents”)
were sufficiently clear and specific to enable Seller or Buyer, as the case may
be, to assess the related risks. For the avoidance of doubt, it is hereby
specified that the Seller Specific Warranties and the UPC Specific Warranties
shall not be affected, in any manner whatsoever, by the content of the
Disclosure Documents.

 

9.4 Update of Disclosures.  For the purposes of Sections 7.1 and 8.1 of this
Agreement, Seller and the UPC Shareholder may, prior to Closing, update any
information set forth in their respective Disclosure Documents to reflect any
fact, matter or circumstance occurred following the Signing Date, to the extent
that such fact, matter or circumstance:

 

(A) OCCURRED IN THE ORDINARY COURSE OF THE BUSINESS; AND

 

(B) AROSE OTHER THAN AS A RESULT OF A BREACH OF THE OBLIGATIONS OF SELLER UNDER
ARTICLE V OF THIS AGREEMENT (WITH RESPECT TO ANY UPDATE OF THE EXHIBITS TO
SELLER WARRANTIES), OR A BREACH OF THE OBLIGATIONS OF BUYER UNDER ARTICLE V
(WITH RESPECT TO ANY UPDATE OF THE EXHIBITS TO THE UPC WARRANTIES).

 

9.5 Procedure for update of Disclosure Documents.  In the event that Seller or
the UPC Shareholder wishes to update any Exhibits to the Seller Warranties or to
the UPC Warranties, as applicable, in accordance with Section 9.4 it shall
submit the corresponding change to the other Party in writing no later than
eight (8) days prior to Closing and the Parties shall discuss in good faith when
agreeing upon any such change.  Should the Parties fail to agree upon such
change, the Seller Warranties and the UPC Warranties will remain applicable
without giving effect to the updated Exhibits not agreed upon.

 

9.6 Survival.

 

9.6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS.  SUBJECT TO THE
LIMITATIONS IN THIS SECTION 9.6, ALL OF THE REPRESENTATIONS AND WARRANTIES,
COVENANTS AND AGREEMENTS OF THE PARTIES CONTAINED IN THIS AGREEMENT AND IN ANY
SCHEDULE TO THIS AGREEMENT AND IN ANY CERTIFICATE OR AGREEMENT TO BE DELIVERED
AT THE CLOSING SHALL SURVIVE THE CLOSING.

 

9.6.2 SURVIVAL PERIOD.  EXCEPT AS PROVIDED IN SECTIONS 9.6.2(A) TO (I)
INCLUSIVE, ALL REPRESENTATIONS AND WARRANTIES AND ALL COVENANTS AND AGREEMENTS
OF THE PARTIES SHALL SURVIVE FOR A PERIOD OF TWO YEARS FOLLOWING THE CLOSING.

 

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(A) ALL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING TAXES, SOCIAL
SECURITY CONTRIBUTIONS OR CUSTOMS SHALL SURVIVE FOR A PERIOD ENDING ON THE LATER
OF (A) THE EXPIRATION DATE OF THE STATUTE OF LIMITATIONS APPLICABLE TO SUCH
CLAIMS AND (B) 90 DAYS AFTER THE FINAL ADMINISTRATIVE OR JUDICIAL DETERMINATION
OF ANY SUCH TAX, SOCIAL SECURITY CONTRIBUTIONS OR CUSTOMS LIABILITY SAVE THAT
THE WARRANTIES IN PARAGRAPH (XVI) OF SCHEDULE 3A SHALL SURVIVE FOR A PERIOD
ENDING 90 DAYS AFTER THE FINAL ADMINISTRATIVE OR JUDICIAL DETERMINATION OF ANY
TAX RELATING TO THE FISCAL YEAR ENDING 2013.

 

(B) THE SELLER WARRANTIES IN PARAGRAPHS (IX) AND (X) OF SCHEDULE 3A SHALL
SURVIVE FOR A PERIOD OF SIX MONTHS FOLLOWING (I) FINAL BINDING JUDGMENT WITHOUT
THE POSSIBILITY OF APPEAL OR (II) A FINAL SETTLEMENT, OF EACH RELEVANT
LITIGATION CLAIM.

 

(C) THE FOLLOWING SELLER WARRANTIES SHALL SURVIVE FOR A PERIOD OF FIVE YEARS
FOLLOWING CLOSING:

 

(I) PARAGRAPHS 10 (A) (B) (C) (D) (H) AND PARAGRAPH 11 (D) (E) (F) OF
SCHEDULE 3; AND

 

(II) PARAGRAPHS (I) (II) (III) (IV) (V) (VI) (VII) (VIII) OF SCHEDULE 3A.

 

(D) THE SELLER WARRANTIES IN PARAGRAPH 6 OF SCHEDULE 3 AND SELLER WARRANTIES IN
PARAGRAPH (XIII) OF SCHEDULE 3A AND THE REPRESENTATIONS AND COVENANTS IN THE
SIPPEREC MEMORANDUM OF AGREEMENT AS REGARDS SIPPEREC 3 SHALL SURVIVE
INDEFINITELY.

 

(E) THE SELLER WARRANTIES IN PARAGRAPH (XI) OF SCHEDULE 3A AND THE
REPRESENTATIONS AND PRE-CLOSING COVENANTS IN THE SIPPEREC MEMORANDUM OF
AGREEMENT AS REGARDS SIPPEREC 1 AND 2 SHALL SURVIVE FOR A PERIOD OF THE LONGER
OF (X) TWO YEARS AFTER CLOSING AND (Y) THE EARLIER OF (AA) THREE (3) MONTHS
AFTER THE SIGNATURE OF A BINDING SETTLEMENT AGREEMENT WITH SIPPEREC REGARDING
ALL OUTSTANDING ISSUES BETWEEN THE COMPANIES AND SIPPEREC, AND (BB) DECEMBER 31,
2006.

 

(F) THE UPC WARRANTIES IN PARAGRAPH (III) OF SCHEDULE 4A SHALL SURVIVE FOR A
PERIOD OF SIX MONTHS FOLLOWING (I) FINAL BINDING JUDGMENT WITHOUT THE
POSSIBILITY OF APPEAL OR (II) FINAL SETTLEMENT, OF EACH RELEVANT LITIGATION
CLAIM.

 

(G) THE FOLLOWING UPC WARRANTIES SHALL SURVIVE FOR A PERIOD OF FIVE YEARS
FOLLOWING CLOSING:

 

(I) PARAGRAPHS 10(A) (B) (C) (D) (H) AND 11(D) (E) (F) OF SCHEDULE 4; AND

 

(II) PARAGRAPHS (I) (II) (IV) AND (V) OF SCHEDULE 4A.

 

(H) THE UPC WARRANTIES IN PARAGRAPH 6 OF SCHEDULE 4 SHALL SURVIVE INDEFINITELY.

 

(I) THE REPRESENTATIONS AND WARRANTIES AND ALL COVENANTS AND AGREEMENTS OF BUYER
AND THE UPC SHAREHOLDER SHALL TERMINATE UPON SELLER CEASING TO BE A SHAREHOLDER
IN BUYER.

 

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9.6.3 THE RESTRICTIONS ON EITHER PARTIES’ RIGHTS UNDER THIS SECTION 9.6 AND
SECTION 9.7 ARE WITHOUT PREJUDICE TO THE RIGHTS OF THE PARTIES TO THE SIPPEREC
MEMORANDUM OF AGREEMENT TO REQUIRE PERFORMANCE, SEEK REDRESS OR ENFORCE REMEDIES
UNDER THAT AGREEMENT.

 

9.6.4 FOR THE AVOIDANCE OF DOUBT, NO CLAIM MAY BE MADE AFTER THE DATES SPECIFIED
IN SECTION 9.6.2 BUT THE ABILITY TO CONTINUE THE PURSUIT OF ANY CLAIM AND THE
RIGHT OF INDEMNIFICATION OF BUYER OR SELLER, AS THE CASE MAY BE (EACH, THE
“INDEMNIFIED PARTY”) SHALL BE MAINTAINED AFTER THE DATES SPECIFIED IN
SECTION 9.6.2 FOR ANY CLAIM WHICH MAY HAVE BEEN NOTIFIED BY THE INDEMNIFIED
PARTY TO THE UPC SHAREHOLDER, BUYER OR SELLER, AS THE CASE MAY BE, PRIOR TO
THOSE SPECIFIED DATES.

 

9.7 Limitations to the Indemnity Obligations of Seller.

 

9.7.1 DE MINIMIS.  EXCEPT FOR BUYER LOSS RELATED TO THE SELLER WARRANTIES IN
PARAGRAPHS 6 AND 16(C)(V) OF SCHEDULE 3 AND PARAGRAPH (XIII) OF SCHEDULE 3A AND
THE REPRESENTATIONS AND COVENANTS IN THE SIPPEREC MEMORANDUM OF AGREEMENT
PERTAINING TO SIPPEREC 3, SELLER SHALL NOT BE LIABLE FOR ANY BUYER LOSS UNLESS
THE AMOUNT OF THE LIABILITY IN CONNECTION WITH SUCH INDIVIDUAL BUYER LOSS
PURSUANT TO THIS ARTICLE IX EXCEEDS EUR 50,000, IN WHICH CASE BUYER SHALL BE
ENTITLED TO CLAIM THE WHOLE AMOUNT OF SUCH CLAIM AND NOT MERELY THE EXCESS.

 

9.7.2 THRESHOLD AND DEDUCTIBLE.  EXCEPT FOR BUYER LOSS RELATED TO THE SELLER
WARRANTIES IN PARAGRAPH 6 OF SCHEDULE 3 AND SELLER SPECIFIC WARRANTIES IN
SCHEDULE 3A AND THE REPRESENTATIONS AND COVENANTS IN THE SIPPEREC MEMORANDUM OF
AGREEMENT PERTAINING TO SIPPEREC 3, SELLER SHALL NOT BE LIABLE FOR ANY BUYER
LOSS UNLESS THE AGGREGATE AMOUNT OF THE LIABILITY OF SELLER PURSUANT TO THIS
ARTICLE IX EXCEEDS EUR 8,000,000, IN WHICH EVENT SELLER SHALL BE LIABLE ONLY FOR
THE AMOUNT IN EXCESS OF EUR 2,500,000.

 

9.7.3 LIABILITY CEILINGS.  THE MAXIMUM AGGREGATE LIABILITY FOR BUYER LOSSES
WHICH ARE PAYABLE BY SELLER TO BUYER SHALL NOT EXCEED 25% OF THE PURCHASE PRICE,
EXCEPT THAT THE FOLLOWING SPECIFIC CEILINGS SHALL APPLY TO ANY CLAIM FOR ANY
BREACH BY SELLER OF THE FOLLOWING SELLER WARRANTIES:

 

(A) THE PURCHASE PRICE, WITH RESPECT TO THE SELLER WARRANTIES IN PARAGRAPH 6 OF
SCHEDULE 3 AND PARAGRAPHS (XIV) (XV) AND (XVI) OF SCHEDULE 3A;

 

(B) EUR 125,000,000, IN AGGREGATE, WITH RESPECT TO CLAIMS UNDER PARAGRAPHS (I)
TO (X) OF SCHEDULE 3A; AND

 

(C) SELLER’S LIABILITY FOR BUYER LOSS UNDER THE SELLER WARRANTY IN PARAGRAPH
(XIII) OF SCHEDULE 3A AND THE REPRESENTATIONS AND COVENANTS IN THE SIPPEREC
MEMORANDUM OF AGREEMENT (IN SO FAR AS THEY RELATE TO SIPPEREC 3) SHALL BE
WITHOUT LIMIT.

 

It is agreed that the aggregate maximum amount of liability for Buyer Losses
(other than Buyer Losses referred to under (c) above) shall be equal to the
Purchase Price.

 

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9.8 Limitations to the Indemnity Obligations of the UPC Shareholder.

 

9.8.1 DE MINIMIS.  EXCEPT FOR SELLER LOSS RELATED TO THE UPC WARRANTIES IN
PARAGRAPH 6 OF SCHEDULE 4, THE UPC SHAREHOLDER SHALL NOT BE LIABLE FOR ANY
SELLER LOSS UNLESS THE AMOUNT OF THE LIABILITY IN CONNECTION WITH SUCH
INDIVIDUAL SELLER LOSS PURSUANT TO THIS ARTICLE IX EXCEEDS EUR 50,000, IN WHICH
CASE SELLER SHALL BE ENTITLED TO CLAIM THE WHOLE AMOUNT OF SUCH CLAIM AND NOT
MERELY THE EXCESS.

 

9.8.2 THRESHOLD AND DEDUCTIBLE.  EXCEPT FOR SELLER LOSS RELATED TO THE UPC
WARRANTIES IN PARAGRAPHS 6 OF SCHEDULE 4 AND PARAGRAPHS (I) (III) (IV) (V) OF
SCHEDULE 4A, THE UPC SHAREHOLDER SHALL NOT BE LIABLE FOR ANY SELLER LOSS UNLESS
THE AGGREGATE AMOUNT OF THE LIABILITY OF THE UPC SHAREHOLDER PURSUANT TO THIS
ARTICLE IX EXCEEDS EUR 5,000,000, IN WHICH EVENT THE UPC SHAREHOLDER SHALL BE
LIABLE ONLY FOR THE AMOUNT IN EXCESS OF EUR 2,500,000.

 

9.8.3 LIABILITY CEILINGS.  THE MAXIMUM AGGREGATE LIABILITY FOR SELLER LOSSES
SHALL NOT EXCEED 25% OF THE UPC FRANCE EQUITY VALUE, EXCEPT THAT THE LIABILITY
CEILING WITH RESPECT TO ANY CLAIM UNDER PARAGRAPH 6 OF SCHEDULE 4 AND PARAGRAPHS
(I) (III) (IV) (V) OF SCHEDULE 4A SHALL BE THE UPC FRANCE EQUITY VALUE. IT IS
AGREED THAT THE MAXIMUM AGGREGATE AMOUNT OF LIABILITY FOR SELLER LOSSES SHALL
NOT EXCEED THE UPC FRANCE EQUITY VALUE.

 

9.9 Loss.

 

9.9.1 CALCULATION OF THE LOSS.  IN CALCULATING BUYER LOSS OR SELLER LOSS, AS THE
CASE MAY BE, THE FOLLOWING SHALL APPLY:

 

(A) THE AMOUNT OF ANY LOSS SHALL BE REDUCED BY THE AMOUNT OF ANY PROVISION OR
OVERPROVISION, WHERE, FOR THE PURPOSE OF THIS PARAGRAPH (A):

 

(I) “PROVISION” SHALL MEAN A PROVISION WHICH (AA) WAS INCLUDED IN THE ACCOUNTS
OF THE COMPANY IN WHICH THE LOSS WAS INCURRED, SUFFERED OR SUSTAINED AND (BB) IT
HAS BEEN ESTABLISHED, AS AT THE DATE OF THE CLAIM, THAT IT RELATES DIRECTLY TO
THE SAME NATURE OF RISK AND THE SAME SPECIFIC ACCOUNT IN THE LINE ITEM IN SUCH
ACCOUNTS AS THE MATTER GIVING RISE TO THE LOSS, AND

 

(II) “OVERPROVISION” SHALL MEAN THE AMOUNT OF ANY PROVISION WHICH HAS BEEN
ESTABLISHED TO HAVE NOT BEEN USED AT THE DATE OF THE DETERMINATION OF THE AMOUNT
OF ANY INDEMNIFICATION DUE BY THE INDEMNIFYING PARTY, PROVIDED THAT THE SUBJECT
MATTER OF SUCH PROVISION HAS BEEN DEFINITIVELY EXTINGUISHED AT SUCH DATE.

 

(B) THE AMOUNT OF ANY LOSS SHALL BE REDUCED BY THE AMOUNT OF ANY INDEMNIFICATION
ACTUALLY PAID TO THE INDEMNIFIED PARTY (OR TO THE RELEVANT COMPANY) BY ANY THIRD
PARTY WITH RESPECT TO SUCH LOSS (INCLUDING ANY INSURANCE PROCEEDS, SAVE THAT
LOSS SHALL INCLUDE ANY INCREASE IN PREMIUM AS A RESULT OF SUCH INSURANCE CLAIM)
AND, AS THE CASE MAY BE, ANY AMOUNT TAKEN INTO CONSIDERATION FOR THE PURPOSE OF
DETERMINING THE PURCHASE PRICE OR THE CONSIDERATION SHARES AMOUNT SPECIFICALLY
ON ACCOUNT OF THE MATTER GIVING RISE TO THE LOSS;

 

(C) THE INDEMNITY SHALL BE COMPUTED TAKING INTO ACCOUNT ANY TAX SAVING WHICH THE
INDEMNIFIED PARTY OR THE RELEVANT COMPANY BENEFITS FROM AS A RESULT OF THE LOSS;

 

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(D) IF A CLAIM IS MADE IN CONNECTION WITH A TAX REASSESSMENT WHICH RESULTS IN A
TIMING DIFFERENCE (E.G. A DEFERRAL OF AN EXPENSE OR OF AN INCOME FROM ONE FISCAL
YEAR TO ANOTHER OR A DEFERRAL OF A VAT DEDUCTION), THE LOSS INDEMNIFIABLE
THEREUNDER WILL BE LIMITED TO PENALTIES AND INTEREST FOR LATE PAYMENT INCURRED
BY THE COMPANIES AS A CONSEQUENCE OF THE SAID REASSESSMENT; AND

 

(E) WHERE THE SELLER LOSS RELATES TO A LOSS AT BUYER OR ANY OF THE COMPANIES,
AND THE UPC SHAREHOLDER DECIDES TO INDEMNIFY SELLER IN ACCORDANCE WITH
SECTION 9.2, SELLER SHALL ONLY BE ENTITLED TO A PAYMENT IN RESPECT OF SELLER
LOSS FROM THE UPC SHAREHOLDER EQUAL TO A PERCENTAGE OF THE LOSS AT BUYER OR ANY
OF THE COMPANIES EQUIVALENT TO ITS PERCENTAGE SHAREHOLDING IN BUYER.

 

9.9.2 NO DOUBLE RECOVERY.  THE INDEMNIFIED PARTY SHALL NOT BE ENTITLED TO BE
INDEMNIFIED UNDER THIS AGREEMENT MORE THAN ONCE IN RESPECT OF THE SAME LOSS.

 

9.10 Payment of Claims.  Buyer Losses and Seller Losses (collectively, “Losses”)
shall be paid by Seller or the UPC Shareholder, respectively, as the case may be
(each, an “Indemnifying Party”):

 

(A) PROMPTLY UPON THE EXPIRATION OF THE 45-DAY TIME PERIOD PROVIDED FOR IN
SECTION 9.11, IN THE ABSENCE OF AN OBJECTION BY THE INDEMNIFYING PARTY OF A
DIRECT CLAIM; OR

 

(B) PROMPTLY UPON THE DATE OF AN ENFORCEABLE FINAL AWARD OR COURT DECISION (WITH
THE EXCEPTION OF A PROVISIONAL ORDER), IN THE EVENT OF A LEGAL CHALLENGE BY THE
INDEMNIFYING PARTY OF A DIRECT CLAIM OR IN THE EVENT OF A THIRD PARTY CLAIM; OR

 

(C) ON THE DATE ON WHICH THE PARTIES CONCLUDE A SETTLEMENT AGREEMENT.

 

9.11 Procedures for Third-Party Claims.  Promptly after the receipt by any
Indemnified Party of a notice of any claim, action, suit or proceeding by any
third party that may be subject to indemnification hereunder, such Indemnified
Party shall give prompt written notice of such claim to the Indemnifying Party,
stating the nature and basis of the claim and the amount thereof, to the extent
known, along with copies of the relevant documents evidencing the claim and the
basis for indemnification sought.  Failure of the Indemnified Party to give
prompt written notice in accordance with the foregoing requirements shall not
relieve the Indemnifying Party from liability on account of this
indemnification, except (a) if and to the extent that the Indemnifying Party is
actually prejudiced thereby or (b) a claims notice is not given within the
survival period for the applicable representation, warranty, covenant or
agreement under Section 9.6, in which case any claim for indemnification shall
expire and terminate.  The Indemnifying Party shall have 45 days from receipt of
any such notice of claim (x) to give written notice to assume the defense
thereof and thereby admit to its liability for indemnification hereunder (except
that where a notified claim relates to a Seller Specific Warranty or a UPC
Specific Warranty the Indemnifying Party’s right to assume the defense thereof
shall be automatic unless the Indemnifying Party does not respond following such
45 day period to a second notice of claim by the Indemnified Party within five
Business Days in which event the Indemnified Party shall be entitled to assume
the defense thereof) or to otherwise admit

 

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to its liability for indemnification hereunder or (y) to dispute the claim of
indemnification of the Indemnified Party, in which case the Indemnified Party
may defend the claim and any dispute between the Parties will be resolved
pursuant to Section 11.2.  If written notice to the effect set forth in clause
(x) of the immediately preceding sentence is given by the Indemnifying Party,
then the Indemnifying Party shall have the right to assume the defense of the
Indemnified Party against the third party claim with counsel of its choice
reasonably satisfactory to the Indemnified Party.  So long as the Indemnifying
Party has assumed the defense of the third party claim in accordance herewith,
(a) the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the third party claim, (b) the
Indemnified Party will not file any papers or consent to the entry of any
judgment or enter into any settlement with respect to the third party claim
without the prior written consent of the Indemnifying Party (not to be withheld
or delayed unreasonably), and (c) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the third
party claim without the prior written consent of the Indemnified Party (not to
be withheld or delayed unreasonably).  The Parties agree that the consent of the
Indemnified Party under (c) above will not be required if money damages only are
to be paid by the Indemnifying Party under any such judgment or settlement of a
third party claim and there is no future impact as a result on the Indemnified
Party’s business.  The Indemnified Party shall use commercially reasonable
efforts to minimize Losses from claims by third parties and the Parties shall
act in good faith in responding to, defending against, settling or otherwise
dealing with such claims.  The Parties shall also reasonably cooperate in any
such defense and give each other reasonable access to all information relevant
thereto.  Whether or not the Indemnifying Party shall have assumed the defense,
the Indemnifying Party shall not be obligated to indemnify the Indemnified Party
hereunder for any settlement entered into without the Indemnifying Party’s prior
written consent, which consent shall not be unreasonably withheld or delayed.

 

9.12 Procedures for Non-Third Party Claims.  The Indemnified Party shall notify
the Indemnifying Party promptly of its discovery of any matter giving rise to
the claim of indemnity pursuant hereto, stating the nature and basis of the
claim and the amount thereof, to the extent known, along with copies of the
relevant documents evidencing the claim and the basis for indemnification
sought.  Failure of the Indemnified Party to give prompt written notice in
accordance with the foregoing requirements shall not relieve the Indemnifying
Party from liability on account of this indemnification, except (a) if and to
the extent that the Indemnifying Party is actually prejudiced thereby or (b) a
claims notice is not given within the survival period for the applicable
representation, warranty, covenant or agreement under Section 9.6, in which case
any claim for indemnification shall expire and terminate.  The Indemnifying
Party shall have 45 days from receipt of any such notice to (x) take steps to
remedy the default or breach that is the subject of the claims notice or (y)
give written notice of dispute of the claim to the Indemnified Party in which
case the dispute between the Parties will be resolved pursuant to Section 11.2. 
The Indemnified Party shall use commercially reasonable efforts to minimize
Losses.  The Indemnified Party shall cooperate and assist the Indemnifying Party
in determining the validity of any claim for indemnity by the Indemnified Party
and in otherwise resolving such matters.  Such assistance and cooperation will
include providing reasonable access to and copies of information, records and
documents relating to such matters, furnishing

 

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employees to assist in the investigation, defense and resolution of such matters
and providing legal and business assistance with respect to such matters,
provided that such access shall not unreasonably disrupt personnel or
operations.

 

ARTICLE X

TERMINATION

 

10.1 Termination.  This Agreement may be terminated at any time prior to the
Closing:

 

10.1.1 MUTUAL CONSENT.  BY MUTUAL CONSENT OF THE PARTIES.

 

10.1.2 IF CLOSING DOES NOT OCCUR.  BY SELLER OR BUYER, ON OR AFTER DECEMBER 31,
2004 IF THE CLOSING SHALL NOT HAVE OCCURRED BY SUCH DATE, PROVIDED THAT THE
PARTY SEEKING TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 10.1.2 IS NOT THEN
IN MATERIAL BREACH OF THIS AGREEMENT AND PROVIDED FURTHER THAT THE RIGHT TO
TERMINATE THIS AGREEMENT UNDER THIS SECTION 10.1.2 SHALL NOT BE AVAILABLE TO ANY
PARTY WHOSE FAILURE TO FULFIL ANY OBLIGATION UNDER THIS AGREEMENT HAS BEEN THE
CAUSE OF, OR RESULTED IN, THE FAILURE OF THE CLOSING TO OCCUR ON OR BEFORE SUCH
DATE.

 

10.1.3 IF CLOSING IS ENJOINED.  BY BUYER OR SELLER, IF ANY COURT OF COMPETENT
JURISDICTION OR OTHER GOVERNMENT AUTHORITY SHALL HAVE ISSUED AN ORDER, DECREE OR
RULING ENJOINING OR OTHERWISE PROHIBITING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT (UNLESS SUCH ORDER, DECREE OR RULING HAS BEEN WITHDRAWN, REVERSED OR
OTHERWISE MADE INAPPLICABLE), PROVIDED THAT THE PARTY SEEKING TO TERMINATE THIS
AGREEMENT UNDER THIS SECTION 10.1.3 IS NOT THEN IN MATERIAL BREACH OF THIS
AGREEMENT AND PROVIDED FURTHER THAT THE RIGHT TO TERMINATE THIS AGREEMENT UNDER
THIS SECTION 10.1.3 SHALL NOT BE AVAILABLE TO ANY PARTY WHO SHALL NOT HAVE USED
COMMERCIALLY REASONABLE EFFORTS TO AVOID THE ISSUANCE OF SUCH ORDER, DECREE OR
RULING.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, SAVE FOR SECTION 7.2,
THE FAILURE OF ANY ADVERSELY AFFECTED PARTY TO ACCEPT ANY WITHHOLDING BY THE
COMPETITION AUTHORITY OF ITS APPROVAL TO PROVISIONS OR PORTIONS OF THIS
AGREEMENT OR THE IMPOSITION OF ANY CONDITION BY THE COMPETITION AUTHORITY SHALL
NOT PRECLUDE IT FROM EXERCISING ITS TERMINATION RIGHTS UNDER THIS SECTION 10.1.3
AND NO PARTY SHALL BE REQUIRED TO ACCEPT ANY CONDITION IF CLOSING IS ENJOINED ON
COMPETITION GROUNDS BY THE COMPETITION AUTHORITY OR BY A COURT FOLLOWING CONSENT
BY THE COMPETITION AUTHORITY.

 

10.1.4 BREACH BY SELLER.  BY BUYER IF SELLER HAS BREACHED ANY OF ITS COVENANTS
IN THIS AGREEMENT IN ANY MATERIAL RESPECT AND AFTER NOTICE OF SUCH BREACH HAS
NOT CURED SUCH BREACH BY SELLER WITHIN THIRTY (30) DAYS FOLLOWING WRITTEN
NOTICE.

 

10.1.5 BREACH BY BUYER.  BY SELLER IF BUYER HAS BREACHED ANY OF ITS COVENANTS IN
THIS AGREEMENT IN ANY MATERIAL RESPECT AND AFTER NOTICE OF SUCH BREACH HAS NOT
CURED SUCH BREACH BY BUYER WITHIN THIRTY (30) DAYS FOLLOWING WRITTEN NOTICE.

 

10.2 Procedure and Effect of Termination.  In the event of termination of this
Agreement pursuant to Section 10.1, written notice thereof shall forthwith be
given by the terminating Party to the other Party, and this Agreement shall
thereupon terminate and become void and have no effect, and the transactions
contemplated hereby shall be abandoned without further action by the Parties,
except that the provisions of Sections 5.1.3 and 10.2 and Article XI

 

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shall survive the termination of this Agreement, provided that such termination
shall not relieve either Party of any liability for any material breach of any
covenant or agreement contained in this Agreement.  If this Agreement shall be
terminated, all filings, applications and other submissions made in accordance
with this Agreement shall, to the extent practicable, be withdrawn from the
Persons to whom they were made.

 

ARTICLE XI

MISCELLANEOUS

 

11.1 Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall be considered
one and the same agreement, and shall become effective when one or more
counterparts have been signed by each of the Parties and delivered to the other
Parties.  Copies of executed counterparts transmitted by telecopy, telefax or
other electronic transmission service shall be considered original executed
counterparts for purposes of this Section, provided that actual receipt of
original executed counterparts is confirmed.

 

11.2 Governing Law; Jurisdiction and Forum.

 

11.2.1 ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
WHICH CANNOT BE SETTLED AMICABLY SHALL BE SUBMITTED TO THE EXCLUSIVE
JURISDICTION OF THE COURTS IN PARIS, FRANCE.

 

11.2.2 THE VALIDITY, CONSTRUCTION, PERFORMANCE AND ENFORCEABILITY OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF FRANCE, WITHOUT APPLICATION OF ITS
CONFLICT OF LAWS PRINCIPLES.

 

11.3 Entire Agreement; Third-Party Beneficiary.  This Agreement (including
agreements incorporated herein) contain the entire agreement between the Parties
with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the Parties other than
those set forth or referred to herein.  Except for those provisions hereof
respecting the Indemnified Parties, which are intended to benefit and to be
enforceable (subject to the terms and conditions herein provided) by such
Indemnified Parties, this Agreement is not intended to confer upon any Person
not a Party hereto (or its successors and assigns permitted hereby) any rights
or remedies hereunder.

 

11.4 Expenses.  Except as set forth in this Agreement, whether or not the
transactions contemplated by this Agreement are consummated, all advisory, legal
and other costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (“Transaction Costs”) shall be paid by the
Party incurring such costs and expenses.  None of Seller’s Transaction Costs
shall be borne by the Companies and none of UPC Group’s Transaction Costs shall
be borne by Buyer.

 

11.5 Notices.  All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission service
to the appropriate address or number as set forth below.  Notices shall be
effective only upon actual receipt.  Notices to Buyer shall be addressed to:

 

Anton Tuijten

 

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Boeing Avenue 53

1119 PE Schiphol-Rijk

Postbus 74763

1070 BT Amsterdam

The Netherlands

Fax : +31 20 779 9871

 

with a copy to:

 

Jim Ryan (Fax: +31 20 778 9453) at the same address

 

and

 

Pierre Roy-Contancin

UPC France

10, rue Albert Einstein

77437 Marne-la-Vallée cedex 02

France

Fax : +33 1 64 61 42 32

 

or at such other address and to the attention of such other Person as Buyer may
designate by written notice to Seller.  Notices to Seller shall be addressed to:

 

Patrick Buffet

16, rue de la Ville l’Evêque

75008 Paris

France

Fax : +33 1 40 06 64 15

 

with a copy to:

 

Michel Sirat (Fax: +33 1 40 06 6682) and Patrice Herbet (Fax: +33 1 40 06 6622)
at the same address

 

or at such other address and to the attention of such other Person as Seller may
designate by written notice to Buyer.

 

11.6 Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns, provided
that no Party may assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the other Party.

 

11.7 Headings; Definitions.  The Section, Article and other headings contained
in this Agreement are inserted for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement.  All references to
Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated.  All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.

 

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11.8 Amendments and Waivers.  This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by the Party against
whom enforcement of any such modification or amendment is sought.  Any Party
may, only by an instrument in writing, waive compliance by any other Party with
any term or provision hereof on the part of such other Party to be performed or
complied with.  The waiver by any Party of a breach of any term or provision
hereof shall not be construed as a waiver of any subsequent breach.

 

11.9 Interpretation; Absence of Presumption.

 

11.9.1 FOR PURPOSES OF THIS AGREEMENT, (A) WORDS IN THE SINGULAR SHALL BE HELD
TO INCLUDE THE PLURAL AND VICE VERSA AND WORDS OF ONE GENDER SHALL BE HELD TO
INCLUDE THE OTHER GENDERS AS THE CONTEXT REQUIRES, (B) THE TERMS “HEREOF,”
“HEREIN” AND “HEREWITH” AND WORDS OF SIMILAR IMPORT SHALL, UNLESS OTHERWISE
STATED, BE CONSTRUED TO REFER TO THIS AGREEMENT AS A WHOLE (INCLUDING ALL OF THE
SCHEDULES HERETO) AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT, AND
ARTICLE, SECTION, PARAGRAPH AND SCHEDULE REFERENCES ARE TO THE ARTICLES,
SECTIONS, PARAGRAPHS AND SCHEDULES TO THIS AGREEMENT UNLESS OTHERWISE SPECIFIED,
THE WORD “INCLUDING” AND WORDS OF SIMILAR IMPORT WHEN USED IN THIS AGREEMENT
SHALL MEAN “INCLUDING, WITHOUT LIMITATION,” UNLESS THE CONTEXT OTHERWISE
REQUIRES OR UNLESS OTHERWISE SPECIFIED, THE WORD “OR” SHALL NOT BE EXCLUSIVE
AND   PROVISIONS SHALL APPLY, WHEN APPROPRIATE, TO SUCCESSIVE EVENTS AND
TRANSACTIONS.

 

11.9.2 THIS AGREEMENT SHALL BE CONSTRUED WITHOUT REGARD TO ANY PRESUMPTION OR
RULE REQUIRING CONSTRUCTION OR INTERPRETATION AGAINST THE PARTY DRAFTING OR
CAUSING ANY INSTRUMENT TO BE DRAFTED.

 

11.9.3 IT IS UNDERSTOOD AND AGREED THAT NEITHER THE SPECIFICATION OF ANY EURO
AMOUNT IN THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT NOR THE
INCLUSION OF ANY SPECIFIC ITEM IN THE SCHEDULES TO THIS AGREEMENT IS INTENDED TO
IMPLY THAT SUCH AMOUNTS OR HIGHER OR LOWER AMOUNTS, OR THE ITEMS SO INCLUDED OR
OTHER ITEMS, ARE OR ARE NOT MATERIAL, AND NO PARTY SHALL USE THE FACT OF THE
SETTING OF SUCH AMOUNTS OR THE FACT OF THE INCLUSION OF ANY SUCH ITEM IN THE
SCHEDULES TO THIS AGREEMENT IN ANY DISPUTE OR CONTROVERSY BETWEEN THE PARTIES AS
TO WHETHER ANY OBLIGATION, ITEM OR MATTER IS OR IS NOT MATERIAL FOR PURPOSES
HEREOF.

 

11.10 Severability.  Any provision hereof which is invalid or unenforceable in
any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof
or the validity or enforceability of such provision in any other jurisdiction. 
The Parties shall negotiate in good faith to replace any provision so held to be
invalid or unenforceable so as to implement most effectively the transactions
contemplated by such provision in accordance with the Parties’ original intent.

 

ARTICLE XII

GUARANTEE

 

12.1 UGC hereby guaranties to Seller the full, prompt and complete performance
by:

 

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(A) BUYER OF ITS PAYMENT OBLIGATIONS UNDER SECTIONS 2.2.1 AND 2.7.5; AND

 

(B) THE UPC SHAREHOLDER OF ITS PAYMENT OBLIGATIONS UNDER SECTION 9.2.

 

12.2 The guarantees in this Article XII shall continue in force until all the
obligations of Buyer and the UPC Shareholder, as the case may be, under those
Sections have been fully performed.

 

IN WITNESS WHEREOF, THIS AGREEMENT HAS BEEN SIGNED BY OR ON BEHALF OF EACH OF
THE PARTIES AS OF THE DAY FIRST ABOVE WRITTEN.

 

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SUEZ SA

 

 

 

By:

/s/ Patrick Buffet

 

 

 

 

 

 

Name: Patrick Buffet

 

 

 

 

 

Title:

 

 

 

 

 

MÉDIARÉSEAUX SA

 

 

 

By:

/s/ Anton M. Tuijten

 

 

 

 

 

 

Name: Anton M. Tuijten

 

 

 

 

 

Title:

 

 

 

 

 

UPC FRANCE HOLDING BV

 

 

 

By:

/s/ Anton M. Tuijten / /s/ Gene Musselman

 

 

 

 

 

 

Name: Anton M. Tuijten/Gene Musselman

 

 

 

 

 

Title:

 

 

 

 

 

UNITEDGLOBALCOM, INC.

 

 

 

By:

/s/ Anton M. Tuijten / /s/ Shane O’Neill

 

 

 

 

 

 

Name: Anton M. Tuijten/Shane O’Neill

 

 

 

 

 

Title:

 

36

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SCHEDULE 1

 

DEFINITIONS

 

“0G Cable Networks” shall mean the Cable Networks that were included in the
so-called “Olivia” transaction entered into between France Telecom and Seller in
May 2001, including Cable Networks located in the following municipalities: 
Paris, Boulogne, Neuilly, Levallois, Vincennes, Saint Mandé, Saint Germain,
Cannes, Dijon and Epinal.

 

“1G Cable Networks” shall mean the Cable Networks located in the 1G
Municipalities.

 

“1G Municipalities” shall mean Mantes, Massy, Evry, Sèvres/St. Cloud/Suresnes
(the so-called “3S”), and Toulon.

 

“2003 Financial Statements” shall mean the consolidated balance sheet for the
Companies as of December 31, 2003 and income statement and statement of cash
flows for the Companies for the 12 calendar month period ending on December 31,
2003, together with the explanatory notes thereto, which are audited by Ernst &
Young.

 

“30-Day EURIBOR Rate” shall mean as at any date, the rate per annum at which
Euro deposits were offered for one month shown on the Reuters Screen as at 11.00
a.m. (Brussels time) on that date.  For this purpose, “Reuters Screen” means the
display designated as the EURIBOR= page on the Reuters system or such other page
on that system as may replace the EURIBOR= page on the Reuters system for the
purpose of displaying interbank offered rates for Euro deposits within member
states of the European Union which are participants in European monetary union.

 

“Accounting Principles” shall mean with respect to the Companies French GAAP
applied on a consistent basis by the Companies as detailed in the Appendix to
the 2003 Financial Statements and US GAAP applied on a consistent basis with
respect to the UPC France Companies.

 

“Affiliate” shall mean, with respect to any Person, any other Person that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with such Person, and, if such a Person is an
individual, any member of the immediate family (including parents, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust.  As used in this definition, “control”
(including, with correlative meanings, “controlled” and “under common control
with”) shall have the meaning given to it in Article L233-3 of the French
Commercial Code.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Base Consideration” shall have the meaning set forth in Schedule 2.6.

 

“Base UPC France Enterprise Value” shall have the meaning set forth in
Schedule 2.6.

 

“Budget” shall mean with respect to the Companies the budget attached as
Schedule C.

 

“Business” shall mean the business of the Companies as at the Signing Date, as
the same may change between the Signing Date and the Closing Date in accordance
with the terms of this Agreement, which consists of providing internet services
and analogue cable television and

 

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radio signals to residential and business customers, digital television services
and telephony services to residential customers and video and data
communications services and facilities to business customers.

 

“Business Day” shall mean any day other than Saturday, Sunday or a day on which
banks are required or permitted to close in Paris and Amsterdam.

 

“Buyer” shall have the meaning set forth in the Preamble.

 

“Buyer Intercompany Loans” means all loans from the UPC Group to Buyer.

 

“Buyer Loss” shall have the meaning set forth in Section 9.1.

 

“C&E Escrow Account” means the escrow account referred to in Section 7.4(b).

 

“C&E Escrow Agreement” means the escrow agreement that may be entered into
between Seller, Buyer and the Escrow Agent at the Closing to be agreed between
Signing and Closing in order for the option in Section 7.4(b) to be available.

 

“Cable Networks” shall mean any electronic communications network controlled or
operated by any of the Companies.

 

“Cable Networks Agreements” shall mean any agreement entered into between any of
the Companies and the Municipalities for the deployment and/or the operation of
Cable Networks.

 

“Cannes and Epinal Networks” means the 0G Networks located in Cannes and Epinal.

 

“Capitalization Shares” shall have the meaning set forth in Section 2.1(b).

 

“Cash Adjustment” shall have the meaning set forth in Section 2.7.5.

 

“Cash Consideration” shall have the meaning set forth in Schedule 2.6.

 

“Change of Control” shall mean any transfer of control over the business of the
Companies or the UPC France Companies, as the case may be, to a third party,
whether as a result of a transfer or other transmission of shares or voting
rights or the subscription of shares or otherwise.

 

“Closing” (and, with a correlative meaning, “Close”) shall mean the consummation
of the purchase of the Shares and Intercompany Loan by Buyer from Seller.

 

“Closing Cash Payment” shall have the meaning set forth in Section 2.2.1(b).

 

“Closing Date” shall mean the Business Day immediately following the Reference
Date.

 

“Closing Date Buyer Equity Value” shall have the meaning set forth in
Schedule 2.6.

 

“Closing Date Buyer Net Debt” shall have the meaning set forth in Schedule 2.6.

 

“Companies” shall mean the Company and all of its Subsidiaries.

 

“Company” shall have the meaning set forth in the Recitals.

 

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“Competition Authority” shall mean the European Commission, the French Ministry
of Economy and Finance, and/or the French Competition Council, as the case may
be.

 

“Consideration Shares” shall have the meaning set forth in Section 2.2.1(a).

 

“Consideration Shares Amount” shall have the meaning set forth in Schedule 2.6.

 

“Disclosure Documents” shall have the meaning set forth in Section 9.3.

 

“EBITDA” shall have the meaning set forth in Schedule 2.6.

 

“Encumbrances” shall mean any rights of pledge, mortgage or usufruct, charges,
liens, or attachments or obligation or commitment to grant any rights of pledge,
mortgage or usufruct, charges, liens, or attachments at a future date.

 

“Environmental, Health and Safety Law” shall mean any applicable law or
regulation regarding (i) emissions, discharges or wastes in the environment
(including without limitation ambient air, surface water, ground water or land)
or otherwise regulating the manufacturing, processing, distribution, use,
treatments, storage, disposal, transport or handling of pollutants,
contaminants, asbestos, chemicals or toxic or hazardous substances or wastes or
environmental protection and (ii) health and safety of persons or property,
including the protection of the health and safety of employees.

 

“Escrow Account” shall have the meaning set forth in Section 2.2.4.

 

“Escrow Agent” shall have the meaning set forth in Section 2.2.4.

 

“Escrow Agreement” means the escrow agreement to be entered into between Seller,
Buyer and the Escrow Agent at the Closing in the form attached in
Schedule 2.2.4.

 

“Escrow Amount” shall have the meaning set forth in Section 2.2.4.

 

“Existing Shares” shall have the meaning set forth in Section 2.1.(a).

 

“Exploitation Agreements” shall mean agreements between municipalities and the
Companies or the UPC France Companies pursuant to which the Companies or the UPC
France Companies, as the case may be, exploit and maintain networks in such
municipalities, including side letters related to such agreements.

 

“Final Report” shall have the meaning set forth in Section 2.7.1.

 

“France Telecom 0G Network Infrastructure Agreements” shall mean (i) the
agreement dated May 18, 2001 between France Telecom and Rapp 16 SA relating to
the use of France Telecom infrastructure for the 0G Networks, and (ii) the
cahier des charges dated May 18, 2001.

 

“France Telecom 1G Network Infrastructure Agreements” shall mean the agreement
dated May 6, 1999 between France Telecom and NTL Inc., as amended by the letter
agreement dated November 22, 2001.

 

“French GAAP” shall mean the accounting principles generally accepted in France.

 

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“Government Authority” shall mean any government or state (or any subdivision
thereof), whether domestic, foreign or multinational (including European
Community), or any agency, authority, bureau, commission, department or similar
body or instrumentality thereof, or any governmental court or tribunal.

 

“Governmental Authorizations” shall mean any license, exemption, consent or
other authorization or clearance, howsoever named from a Government Authority.

 

“Indebtedness” shall mean indebtedness or other liabilities or obligations of
the Companies (other than the Intercompany Debt), in each case in respect of
borrowed money, including obligations evidenced by mortgages, notes, bonds,
debentures or similar instruments, and obligations under capital leases and
obligations with respect to letters of credit or swaps, any unpaid interest
owing on any such obligations, and any guarantees, assumptions or similar
obligations with respect to any of the foregoing, but shall exclude all Taxes
and obligations and liabilities in respect of Taxes.

 

“Indemnified Party” shall have the meaning set forth in Section 9.6.4.

 

“Indemnifying Party” shall have the meaning set forth in Section 9.10.

 

“Independent Accountant” shall have the meaning set forth in Section 2.7.3.

 

“Independent Opinion” shall have the meaning set forth in Section 2.7.4.

 

“Intercompany Loan” shall mean the intercompany loan under the agreement dated
14 May, 2002, in the original principal amount of EUR 700 million by Seller as
lender to the Company as borrower, together with all accrued interest thereon.

 

“Key Employees” shall mean:

 

• Chairman, Patrick Leleu

• COO, Mathias Hautefort

• Controller, Steve Lawson

• Regional Director, Philippe Carillon

• Sale & Marketing, Jacques Guerreau

• IT Director, Claude Glacet

• CFO, Frederic Rombaut

• HR Director, Herve Hannebicque

• Customer Care Director, Franck Guenot

• Network Director, Jean-Paul Tissandier

• PR, Flavie Bitan

• Technology, Jean Villard (independent contractor)

 

“Liabilities” means as reflected in accordance with French GAAP on the audited
consolidated balance sheet for the Company as of the applicable date, the sum,
without duplication of amounts, of all amounts and provisions that are included
and classified as current or long-term liabilities (including deferred income).

 

“Liberty” shall mean Liberty, a Delaware Corporation.

 

“Liberty Affiliate” means any of:

 

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(a)                                  Liberty;

 

(b)                                 any entity that acquires all or
substantially all of the assets of Liberty or any successor to Liberty, or any
New Liberty International Co, by operation or law (including in connection with
a merger, consolidation or other business combination) or otherwise (a “Liberty
Successor Entity”);

 

(c)                                  any entity in which immediately following
its formation, the executive officers and directors of Liberty or any Liberty
Successor Entity, together with its common shareholders, directly or indirectly
hold in the aggregate a majority of the voting securities in such entity and
which immediately following its formation, holds, directly or indirectly, a
majority of shares in UGC or any successor thereto in regard to all or
substantially all of UGC’s European broadband distribution assets (“New Liberty
International Co”); and

 

(d)                                 any entity that is directly or indirectly
controlled by Liberty, a Liberty Successor Entity or a New Liberty International
Co.

 

For purposes of this Agreement, John Malone will not be considered a Liberty
Affiliate.

 

“Losses” shall have the meaning set forth in Section 9.10.

 

“Management Financial Reports” shall mean the unaudited management balance sheet
income statement and statements of cash flows of the Companies, or the UPC
France Companies, as the case may be, for each succeeding month period beginning
with 1st March 2004 and ending on the last full month prior to the Closing Date
which will be established in the same format and include as to the Companies
only the same level of detail as the monthly management reports of the Companies
for the two (2) months prior to the Signing Date, which have been provided to
Buyer.  With respect to the UPC France Companies, the Management Financial
Reports shall be prepared in accordance with prior practice.

 

“Material Adverse Change” and “Material Adverse Effect” shall mean any change,
effect or development that either individually or in combination with other
changes, effects or developments are materially adverse to the assets, business,
financial condition, results of operation, expected operations or operational
condition of the Companies or the UPC France Companies, as the case may be,
taken as a whole.  Changes, effects or developments that have only a short-term
or transitory impact on the Companies or the UPC France Companies, as the case
may be, will not be sufficient in and of themselves to constitute a Material
Adverse Change or Material Adverse Effect.  For the sake of clarity, it is
acknowledged and agreed that the implementation of the EU directive Paquet
telecom shall not constitute a Material Adverse Change or a Material Adverse
Effect under this Agreement.

 

“Material Contract” shall mean all agreements to which any of the Companies is a
party or is bound (a) which purport to limit in any material respect, after the
Closing, the manner in which, or the localities in which, all or any material
portion of the current Business of the Companies is conducted, (b) which involve
or are expected by the management of the Company to involve aggregate payments
by a party thereto of EUR 2,500,000 or more per annum, which are to be performed
in whole or in part after the Closing Date, (c) which would prohibit or
materially delay the transactions contemplated by this Agreement, (d) imposing
or creating an Encumbrance with respect to the Shares or any part of the assets
of the Companies, (e) that is an Exploitation Agreement, (f) which primarily
relate to the

 

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distribution of television programs or channels or to
pay-per-view/near-video-on-demand licenses or to the supply of backbone or
network access capacity or interconnection rights, and involve aggregate
payments by a party thereto of EUR 2,500,000 or more per annum or (g) between
any of the Companies and Seller or any Affiliated company (other than the
Companies) of Seller.

 

“Minority Interest Company” shall mean Mantes TV Câble SAELM and Vidéocable 91
SLEC.

 

“Municipalities” shall mean any municipality or group of municipalities having
entered into an Exploitation Agreement with the Companies or the UPC France
Companies.

 

“Noos Capital Expenditure Shortfall Adjustment” shall have the meaning set forth
in Schedule 2.6.

 

“Noos Financial Debt” shall have the meaning set forth in Schedule 2.6.

 

“Noos Reference Date Accounts” and “Reference Date Accounts” shall have the
meaning set forth in Section 2.7.1(a).

 

“Noos Working Capital Adjustment” shall have the meaning set forth in
Schedule 2.6.

 

“Organizational Documents” shall mean the articles of incorporation (“statuts”)
or equivalent organizational document or charter of any Person.

 

“Parties” shall mean the parties to this Agreement.  For the sake of clarity,
UGC is party to this Agreement solely for the purpose of Section 5.16 and
Article XII.

 

“Permit” shall mean any license, exemption, consent or other authorization or
clearance, howsoever named from a Government Authority.

 

“Person” shall mean any individual, corporation, partnership, joint venture,
trust, unincorporated organization, other form of business or legal entity or
Government Authority.

 

“Programming Contracts” shall mean any agreements entered into between a Company
and a supplier of programming services providing for the supply of content to be
distributed on a Cable Network.

 

“Provisional Consideration Shares Amount” shall have the meaning set forth in
Section 2.1.

 

“Provisional Purchase Price” shall have the meaning set forth in Section 2.6(a).

 

“Provisional Purchase Price Report” shall have the meaning set forth in
Section 2.6(a).

 

“Provisional UPC France Equity Value” shall have the meaning set forth in
Section 2.6(b).

 

“Provisional UPC France Equity Value Report” shall have the meaning set forth in
Section 2.6(b).

 

“Purchase Price” shall have the meaning set forth in Schedule 2.6.

 

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“RGU” means an economic accounting unit corresponding to the provision of a sole
CATV or Internet access service to a given subscriber (excluding, for the
avoidance of doubt, “lifeline” (“Service Antenne”) and subscribers who are not
billed) and accounted for on a consistent basis with the 2004 business plan
previously furnished to Buyer and the Company’s billing system.

 

“Reference Date” shall have the meaning set forth in Section 2.5.

 

“Restricted Business” shall have the meaning set forth in Section 5.13(a).

 

“Restricted Period” shall have the meaning set forth in Section 5.13(a).

 

“Seller” shall have the meaning set forth in the Preamble.

 

“Seller Loss” shall have the meaning set forth in Section 9.2.

 

“Seller’s Knowledge” means the actual current knowledge of Patrick Buffet and
Patrick Lefort after a customary review of their files.

 

“Seller Specific Warranties” means Seller Warranties in Schedule 3A.

 

“Seller Warranties” shall have the meaning set forth in Article III.

 

“Shareholders Agreement” means the agreement between UPC France Holding BV and
Seller, as shareholders in Buyer, and UGC in the form attached as Schedule A.

 

“Shares” shall have the meaning set forth in the Recitals.

 

“Signing Date” shall have the meaning set forth in the Preamble.

 

“Sipperec” shall mean the Syndicat Intercommunal de la Périphérie de Paris pour
l’Electricité et les Réseaux de Communication, an entity representing a group of
French municipalities, having its principal address at 193-197 rue de Bercy,
Paris 75012 France.

 

“Sipperec 3 Agreement” shall mean the Concession Agreement dated November 17,
2000 entered into between Lyonnaise Communications SA and Sipperec.

 

“Sipperec Memorandum of Agreement” means the agreement between Buyer, Seller and
UPC France Holding BV in the form attached as Schedule B.

 

“Sipperec Settlement Agreements” shall mean the following agreements between
Sipperec and Lyonnaise Communications SA:  (i) Procès Verbal de
Conciliation-Plaque Nord, dated September 4, 2003; (ii) Procès Verbal de
Conciliation – Plaque Sud, dated September 4, 2003; and (iii) Procès Verbal de
Conciliation – Sipperec 3, dated September 22, 2003.

 

“Steering Committee” shall have the meaning set forth in Section 5.5.

 

“Subsidiary” of any Person shall mean any corporation, partnership, limited
liability company or other business entity of which at least a majority of the
outstanding capital stock (or similar interests) having voting power under
ordinary circumstances to elect directors (or similar governing body members)
shall at the time be held, directly or indirectly, by such Person or by such
Person and one or more Subsidiaries of such Person.

 

7

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“Tax Asset” means any net operating loss, net capital loss or other credit that
could be carried forward or back to reduce Taxes.

 

“Taxes” means any form of taxation, duties, imposts and levies, whether in
France or elsewhere, including (accrued and non-accrued) income tax, corporation
tax, advance corporation tax, precompte, capital tax, real estate tax, capital
gains tax, inheritance tax, value added tax, customs and other import or export
duties, excise duties, stamp duties, social security or other similar
contributions, and any interest, penalty, surcharge or fine relating to these
Taxes.

 

“Transaction Costs” shall have the meaning set forth in Section 11.4.

 

“Transaction Documents” shall mean this Agreement, the Shareholders Agreement,
the Sipperec Memorandum of Agreement and the other closing agreements and
documents between the Parties referred to in this Agreement.

 

“Transfer of Loan Agreement” shall mean the agreement in the form attached in
Schedule 2.3.3.

 

“UGC” shall have the meaning set forth in the Preamble.

 

“UPC 2003 Financial Statements” shall mean the consolidated balance sheet for
the UPC France Companies as of December 31, 2003 and income statement and
statement of cash flows for the UPC France Companies for the twelve (12)
calendar month period ending on December 31, 2003, together with the explanatory
notes thereto, which are audited by KPMG.

 

“UPC Cable Networks” shall mean any electronic communications network controlled
or operated by any of the UPC France Companies.

 

“UPC Cable Networks Agreements” shall mean any agreement entered into between
any of the UPC France Companies and the Municipalities for the deployment and/or
the operation of UPC Cable Networks.

 

“UPC France Capital Expenditure Shortfall Adjustment” shall have the meaning set
forth in Schedule 2.6.

 

“UPC France Companies” shall mean Buyer and all of its Subsidiaries (other than
the Companies).

 

“UPC France Equity Value” shall have the meaning set forth in Schedule 2.6.

 

“UPC France Financial Debt” shall have the meaning set forth in Schedule 2.6.

 

“UPC France Intercompany Loan” shall mean all loans from the UPC Group to a UPC
France Company other than Buyer.

 

“UPC France Working Capital Adjustment” shall have the meaning set forth in
Schedule 2.6.

 

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“UPC French Cable Business” shall mean ownership and operation by UPC France SA
and InterComm France Holding SA and their Subsidiaries of cable TV, cable
Internet and telephony services in France.

 

“UPC French Cable Business Reference Date Accounts” shall have the meaning set
forth in Section 2.7.1(b).

 

“UPC Group” shall mean UGC and its Affiliates excluding the UPC France Companies
and after Closing, excluding the Companies.

 

“UPC Material Contract” shall mean all agreements to which any of the UPC France
Companies is a party or is bound (a) which purport to limit in any material
respect, after the Closing, the manner in which, or the localities in which, all
or any material portion of the current business of the UPC France Companies is
conducted, (b) which involve or are expected by the management of Buyer to
involve aggregate payments by a party thereto of EUR 2,500,000 or more per
annum, which are to be performed in whole or in part after the Closing Date, (c)
which would prohibit or materially delay the transactions contemplated by this
Agreement, (d) imposing or creating an Encumbrance with respect to the
Consideration Shares or any part of the assets of the UPC France Companies, (e)
that is an Exploitation Agreement, (f) which primarily relate to the
distribution of television programs or channels or to
pay-per-view/near-video-on-demand licenses or to the supply of backbone or
network access capacity or interconnection rights, and involve aggregate
payments by a party thereto of EUR 2,500,000 or more per annum or (g) between
any of the UPC France Companies and Buyer or any Affiliated company (other than
the UPC France Companies) of Buyer.

 

“UPC Programming Contracts” shall mean any agreements entered into between a UPC
France Company and a supplier of programming services providing for the supply
of content to be distributed on a UPC Cable Network.

 

“UPC Shareholder” shall have the meaning set forth in the Preamble.

 

“UPC Shareholder’s Knowledge” means the actual current knowledge of Pierre
Roy-Contancin, François Marie and Jack Mikallof, after a customary review of
their files.

 

“UPC Specific Warranties” means the UPC Warranties in Schedule 4A.

 

“UPC Warranties” shall have the meaning set forth in Article IV.

 

“US GAAP” shall mean the accounting principles generally accepted in the United
States of America.

 

“WL Escrow Account” shall have the meaning set forth in Schedule 2.6.

 

“WL Escrow Agreement” means the escrow agreement to be entered into between
Seller, Buyer and the Escrow Agent at the Closing in the form attached in
Schedule 2.6, 3.4.2(b).

 

“WL Letter of Credit” shall have the meaning set forth in Schedule 2.6.

 

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SCHEDULE 2.6

 

DETERMINATION OF THE CASH CONSIDERATION, CONSIDERATION
SHARES AMOUNT AND THE PURCHASE PRICE

 

1.                                      CASH CONSIDERATION

 

The Cash Consideration = Purchase Price minus Consideration Shares Amount

 

2.                                      CONSIDERATION SHARES AMOUNT

 

1                                          The Consideration Shares Amount = the
lesser of (A) .199 times Closing Date Buyer Equity Value or (B) EUR85 million
(the “Consideration Shares Amount Cap”).

 

2                                          The Closing Date Buyer Equity Value =

 

2.1                                 the Purchase Price; plus

 

2.2                                 the UPC France Equity Value; minus

 

2.3                                 Closing Date Buyer Net Debt.

 

2.4                                 As provided in Section 2.2.2 of this
Agreement, if the Consideration Shares Amount would exceed the Consideration
Shares Amount Cap, then the number of shares in Buyer and corresponding
percentage interest in Buyer of Seller will be reduced so that Seller’s
shareholding = number of shares of Buyer times EUR 85 million divided by the
Closing Date Buyer Equity Value.

 

3.                                      CALCULATION OF THE PURCHASE PRICE

 

3.1                                 Purchase Price

 

The Purchase Price will be calculated as follows:

 

(a)                                  Base Consideration (as set out in
Section 3.2 below);

 

(B)                                 LESS THE NOOS FINANCIAL DEBT (AS SET OUT IN
SECTION 3.3 BELOW);

 

(C)                                  PLUS OR LESS THE NOOS WORKING CAPITAL
ADJUSTMENT, DEPENDING ON WHETHER THE ADJUSTMENT IS POSITIVE OR NEGATIVE (AS SET
OUT IN SECTION 3.4 BELOW);

 

(D)                                 LESS THE NOOS CAPITAL EXPENDITURE SHORTFALL
ADJUSTMENT (AS SET OUT IN SECTION 3.5 BELOW).

 

3.2                                 Base Consideration

 

3.2.1                        The Base Consideration will be calculated in
accordance with the following formula (subject to a limitation on the maximum
amount of EUR 660,000,000):

 

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7.25 x Noos Run-Rate EBITDA

 

Where the “Noos Run-Rate EBITDA” is equal to (i) the Noos Actual Adjusted EBITDA
(as defined in Section 3.2.2 below) for the period commencing on 1st
January 2004 and ending on the Reference Date (ii) divided by the Noos Budgeted
Adjusted EBITDA (as defined in Section 3.2.3 below) for the period commencing on
1st January 2004 and ending on the Reference Date and (iii) multiplied by EUR 86
million.

 

3.2.2                        The Noos Actual Adjusted EBITDA will be calculated
on the basis of the Reference Date Accounts, in accordance with French GAAP
applied in a consistent manner.

 

The Noos Actual Adjusted EBITDA will be equal to the algebraic sum of the
following items:

 

(A)                             THE AMOUNT OF THE OPERATING INCOME (“RÉSULTAT
D’EXPLOITATION”) AS SHOWN IN THE REFERENCE DATE ACCOUNTS;

 

(B)                               PLUS THE NET AMOUNT OF THE DEPRECIATION AND
AMORTIZATION EXPENSE OF TANGIBLE AND INTANGIBLE ASSETS (“DOTATIONS
AMORTISSEMENTS ET PROVISIONS”) AS SHOWN IN THE REFERENCE DATE ACCOUNTS;

 

(C)                               PLUS THE NET AMOUNT OF THE DEPRECIATION
EXPENSE OF CURRENT ASSETS ( “DOTATIONS PROVISIONS SUR ACTIF CIRCULANT” ) AS
SHOWN IN THE REFERENCE DATE ACCOUNTS;

 

(D)                               Plus the net amount of the depreciation
expense of changes in provisions for contingencies and losses (“Dotations
provisions pour risques et charges”) as shown in the Reference Date Accounts;

 

(E)                                 Minus the net amount of the depreciation and
amortization income (“Reprises amortissements et provisions”) as shown in the
Reference Date Accounts;

 

such amount (the “Noos Actual EBITDA”) being adjusted, as the case may be, for
the following items to the extent they have been included in the Noos Actual
EBITDA:

 

(A)                                  PLUS THE AMOUNT OF ALL FEES, SUCCESS FEES
AND EXPENSES RELATING TO NON RECURRING ACTIVITIES RECORDED IN THE REFERENCE DATE
ACCOUNTS;

 

(B)                                 PLUS THE AMOUNT OF ANY RESTRUCTURING COSTS
RELATING TO THE “2003 VOLUNTARY DEPARTURE PLAN AND RESTRUCTURING ACTION PLAN”
AND OTHER BUSINESS OPTIMIZATION EXPENSES RELATED TO THE “2003 VOLUNTARY
DEPARTURE PLAN AND RESTRUCTURING ACTION PLAN” RECORDED AS SHOWN IN THE REFERENCE
DATE ACCOUNTS;

 

(C)                                  PLUS THE AMOUNT OF SELLER’S DOMICILIATION
FEES (“FRAIS DE DOMICILIATION”) DEFINED ON A CONSISTENT BASIS WITH THE 2003
FINANCIAL STATEMENTS, RECORDED IN THE REFERENCE DATE ACCOUNTS;

 

(D)                                 PLUS THE AMOUNT OF FINANCIAL AND BANK
RELATED CHARGES, SUCH AS FEES RELATED TO ANY SELLER GUARANTEE OR LETTER OF
COMFORT OR FEES RELATED TO BANK DEBT (BUT ANY

 

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BANKING COST FOR RUNNING DIRECT DEBIT FOR CLIENT ACCOUNTS WILL NOT BE ADDED
BACK), AS RECORDED IN THE REFERENCE DATE ACCOUNTS;

 

(E)                                  PLUS THE AMOUNT OF ANY BAD DEBT LOSSES
(“PERTES SUR CRÉANCES IRRÉCOUVRABLES”) RECORDED IN THE REFERENCE DATE ACCOUNTS;

 

(F)                                    LESS THE AMOUNT OF THE BAD DEBTS (DEFINED
AND CALCULATED AS PER SECTION 3.2.4 BELOW);

 

(G)                                 LESS THE AMOUNT OF ANY ONE-TIME CREDIT
RESULTING FROM NON-RECURRING AND NON-STANDARD REVERSAL OF ACCRUALS WHERE EITHER
NO CORRESPONDING OR SIMILAR CHARGE IS ACCOUNTED FOR IN CONNECTION THEREWITH OR A
CORRESPONDING CHARGE IS ACCOUNTED FOR, IN WHICH CASE THE AMOUNT OF THE ONE-TIME
CREDIT SHALL BE TAKEN INTO ACCOUNT ONLY FOR THE PORTION OF THE REVERSAL
EXCEEDING SUCH CHARGE IN THE RELEVANT PERIOD;

 

(H)                                 PLUS THE AMOUNT OF ANY ONE-TIME DEBIT
RESULTING FROM NON-RECURRING AND NON-STANDARD EXPENSES, WHERE EITHER NO
CORRESPONDING OR SIMILAR INCOME IS ACCOUNTED FOR IN CONNECTION THEREWITH OR A
CORRESPONDING INCOME IS ACCOUNTED FOR, IN WHICH CASE THE AMOUNT OF THE ONE-TIME
DEBIT SHALL BE TAKEN INTO ACCOUNT ONLY FOR THE PORTION OF THE DEBIT EXCEEDING
THE CORRESPONDING INCOME IN THE RELEVANT PERIOD.

 

The Noos Actual EBITDA, if and when adjusted in accordance with this
Section 3.2.2, being referred to hereinafter as the “Noos Actual Adjusted
EBITDA”.

 

3.2.3                        The “Noos Budgeted Adjusted EBITDA” will be
calculated as follows:

 

(a)                                  Cumulative amount of the monthly budgeted
EBITDA appearing in the schedule attached in Appendix 3.2.3 to this Schedule 2.6
with respect to any month elapsed between 1st January 2004 and the Reference
Date;

 

(B)                                 LESS THE AMOUNT OF THE BAD DEBTS (AS DEFINED
IN SECTION 3.2.4 BELOW).

 

3.2.4                        For the purposes of calculating Noos Actual
Adjusted EBITDA and Noos Budgeted Adjusted EBITDA, “Bad Debts” means the amount
calculated as follows:

 

EUR 5million x (number of months elapsed between 1st January 2004 and the
Reference Date / 12).

 

3.2.5                        When calculating the Noos Actual Adjusted EBITDA
and the Noos Budgeted Adjusted EBITDA, the following further principles shall be
applied:

 

(a)                                  EBITDA will exclude all one-time
restructuring costs;

 

(b)                                subscriber acquisition costs (direct and
indirect marketing costs, reconnection costs) shall not be capitalized, except
for physical first connection costs (drop lines);

 

(C)                                  CAPITALIZATION OF LABOR COST WILL BE ON A
BASIS CONSISTENT WITH PRIOR PRACTICE;

 

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(D)                                 ACCRUALS WILL BE PREPARED AT CLOSING ON A
BASIS CONSISTENT WITH THE PRINCIPLES USED DURING PRIOR PERIODS AND MORE
GENERALLY, ALL ITEMS RECORDED IN THE LOSS AND INCOME STATEMENT INCLUDED IN THE
REFERENCE DATE ACCOUNTS WILL BE PREPARED ON A BASIS CONSISTENT WITH THE
PRINCIPLES USED DURING PRIOR PERIODS;

 

(E)                                  ALL JUDGMENTAL AREAS INCLUDING, WITHOUT
LIMITATION, BAD DEBT PROVISION (RECORDED AS “PROVISION POUR CRÉANCES
DOUTEUSES”), HOLIDAY ACCRUALS (“PROVISION POUR CONGES PAYÉS”), PROGRAMMING
ACCRUALS (RECORDED AS “PROVISIONS POUR CHARGES DE PROGRAMME”) WILL BE MADE ON A
BASIS CONSISTENT WITH THE PRINCIPLES USED DURING PRIOR PERIODS;

 

(F)                                    IF THERE ARE ONE-OFF DISCRETIONARY ITEMS
OR DISCRETIONARY MARKETING COSTS (BY WAY OF EXAMPLES, NEWSPAPER, TELEVISION,
RADIO AND OTHER MEDIA ADVERTISING AND DIRECT MARKETING CAMPAIGNS) IN THE BUDGET
FOR THE PERIOD COMMENCING ON 1ST JANUARY 2004 AND ENDING ON THE REFERENCE DATE
WHICH ARE NOT SPENT IN THE RELEVANT PERIOD, THEIR AMOUNT WILL BE NEUTRALIZED AS
FOLLOWS: IN THE FORMULA SET FORTH IN SECTION 3.2.1 FOR THE CALCULATION OF THE
NOOS RUN-RATE EBITDA, THE AMOUNT OF ANY SUCH ONE-OFF DISCRETIONARY ITEM OR
DISCRETIONARY MARKETING COSTS WILL BE ADDED TO THE NUMERATOR WITH NO ADJUSTMENT
OF THE DENOMINATOR (SO THAT BOTH NOOS ACTUAL ADJUSTED EBITDA AND NOOS BUDGETED
ADJUSTED EBITDA ARE CALCULATED WITH THE SAME LEVEL OF THOSE DISCRETIONARY ITEMS
AND DISCRETIONARY MARKETING COSTS).

 

3.3                                 Noos Financial Debt

 

The “Noos Financial Debt” shall be calculated based on the Reference Date
Accounts as follows:

 

(a)                                  all outstanding financial debt (including
short and long-term debt of a financial nature) for borrowed money from third
parties, excluding the Intercompany Loan, as recorded in the Reference Date
Accounts;

 

(B)                                 ALL FINANCIAL OBLIGATIONS EVIDENCED BY A
NOTE, BOND, DEBENTURE OR SIMILAR INSTRUMENT OR GUARANTY RECORDED IN THE
REFERENCE DATE ACCOUNTS AND INCLUDING THE DEFERRED PURCHASE PRICE PAYMENT TO
NTL, INC. IF OUTSTANDING ON THE REFERENCE DATE;

 

(C)                                  ALL OBLIGATIONS RELATED TO CAPITAL LEASES
RECORDED FOR IN THE REFERENCE DATE ACCOUNTS;

 

(D)                                 ANY FINANCING OF ACCOUNTS RECEIVABLE OR
INVENTORY (E.G.: SECURITIZATION, DISCOUNTED NOTES) INCLUDING THOSE WITHOUT
RECOURSE, RECORDED IN THE REFERENCE DATE ACCOUNTS;

 

(E)                                  ANY ACCRUED INTEREST, PENALTIES, PREMIUM
AND ANY FEES OR EXPENSES RELATING TO THE FOREGOING, RECORDED IN THE REFERENCE
DATE ACCOUNTS;

 

Minus

 

(F)                                    CASH AND SHORT TERM SECURITIES RECORDED
AS “VALEURS FINANCIÈRES”, “DISPONIBILITÉS”, “VALEURS MOBILIÈRES DE PLACEMENT”,
AS SHOWN IN THE REFERENCE DATE ACCOUNTS;

 

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(G)                                 LESS ANY CASH DEPOSIT IN THE C&E ESCROW
ACCOUNT, IF SELLER HAS ELECTED TO CAUSE THE COMPANY TO EFFECT SUCH CASH DEPOSIT
IN ACCORDANCE WITH SECTION 7.4 (B) OF THIS AGREEMENT.

 

3.4                                 Noos Working Capital Adjustment

 

3.4.1                        Actual Reference Date Noos Working Capital and
Normalized Noos Working Capital

 

For the purpose of calculating the Noos Working Capital Adjustment, the Actual
Reference Date Noos Working Capital and the Normalized Noos Working Capital (as
defined below respectively) shall be calculated on the basis of the Reference
Date Accounts.

 

When calculating each of the Actual Reference Date Noos Working Capital and the
Normalized Noos Working Capital (i) French GAAP shall be applied on a consistent
basis with the preparation of the 2003 Financial Statements, (ii)  to the extent
they are consistent with French GAAP, the accounting methods, practices and
procedures used by the Company for the preparation of the 2003 Financial
Statements shall be applied (together with any classification, judgment and
estimation methodology applied on a consistent basis) and (iii) the items listed
in Section 3.4.2(a), together with the WL Escrow Amount and WL Letter of Credit,
shall be excluded.

 

(a)                                  If the Actual Reference Date Noos Working
Capital minus the Normalized Noos Working Capital divided by the Normalized Noos
Working Capital (the “Adjustment Percentage”) is less negative than minus five
percent (-5%) (eg -3%) and it is less positive than plus five percent (+5%) (eg
+3%), then the Noos Working Capital Adjustment shall be deemed to equal zero and
there shall be no corresponding adjustment to the Purchase Price.

 

(B)                                 IF THE ADJUSTMENT PERCENTAGE IS MORE
NEGATIVE THAN MINUS FIVE PERCENT (-5%) (EG -7%) OR MORE POSITIVE THAN PLUS FIVE
PERCENT (+5%) (EG +7%), THEN THE NOOS WORKING CAPITAL ADJUSTMENT SHALL BE THE
TOTAL AMOUNT EQUAL TO THE ACTUAL REFERENCE DATE NOOS WORKING CAPITAL MINUS THE
NORMALIZED NOOS WORKING CAPITAL AND:

 

(i)                                     if such difference is negative, then the
Purchase Price shall be reduced by such difference and

 

(ii)                                  if such difference is positive, then the
Purchase Price shall be increased by such difference.

 

“Actual Reference Date Noos Working Capital” means:

 

(a)                                  the sum of the following items:

 

(i)                                     the amount for which the receivable
trade accounts, including unbilled revenues consistent with prior practice, with
VAT, net of allowance for doubtful accounts and excluding inter-company balances
(“Clients et comptes rattachés, net”), are accounted for in the Reference Date
Accounts;

 

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(ii)                                  the amount for which inventories net of
reserves (“Stocks et en-cours, net”) are accounted for in the Reference Date
Accounts;

 

(iii)                               the amount for which other current
receivables net of reserves (“Créances diverses”), including taxes receivables
and VAT receivables, are accounted for in the Reference Date Accounts;

 

(iv)                              the amount for which prepaid expenses
(“Charges constatées d’avance”) are is accounted for in the Reference Date
Accounts, to the extent the Companies remain entitled to receive after Closing
the benefits of the services or items in respect of which such prepayment was
made;

 

(v)                                 the amount for which expenses to amortize
(“Charges à repartir”) are accounted for in the Reference Date Accounts,

 

Minus

 

(B)                                 THE SUM OF THE FOLLOWING ITEMS

 

(I)                                     THE AMOUNT FOR WHICH PAYABLE TRADE
ACCOUNTS AND UNRECORDED INVOICES PLUS VAT (“FOURNISSEURS ET COMPTES RATTACHÉS”
AND “DETTES SUR IMMOBILISATIONS”) NET OF SUPPLIER ADVANCES AND DEPOSITS MADE TO
SUPPLIERS (“AVANCES ET ACOMPTES VERSÉS”), EXCLUDING INTER-COMPANY BALANCES ARE
ACCOUNTED FOR IN THE REFERENCE DATE ACCOUNTS AND EXCLUDING THE WARRANTED
LIABILITY ITEMS, AS DEFINED IN SECTION 3.4.2(A);

 

(II)                                  THE AMOUNT FOR WHICH CUSTOMER ADVANCES AND
PREPAYMENTS (“AVANCES ET ACOMPTES REÇUS”) ARE ACCOUNTED FOR IN THE REFERENCE
DATE ACCOUNTS;

 

(III)                               THE AMOUNT FOR WHICH CURRENT TAXES PAYABLE
(“DETTES FISCALES”) ARE ACCOUNTED FOR IN THE REFERENCE DATE ACCOUNTS;

 

(IV)                              THE AMOUNT FOR WHICH CURRENT ACCRUED
COMPENSATION (“DETTES SOCIALES”) ARE ACCOUNTED FOR IN THE REFERENCE DATE
ACCOUNTS;

 

(V)                                 THE AMOUNT FOR WHICH DEFERRED REVENUES
(“PRODUITS CONSTATÉS D’AVANCE”) ARE ACCOUNTED FOR IN THE REFERENCE DATE
ACCOUNTS.

 

“Normalized Noos Working Capital” means:

 

(a)                                  the sum of the following items:

 

(I)                                   THE AMOUNT FOR WHICH THE RECEIVABLE TRADE
ACCOUNTS NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS AND EXCLUDING INTER-COMPANY
BALANCES (“CLIENTS ET COMPTES RATTACHÉS, NET”) ARE ACCOUNTED FOR IN THE
REFERENCE DATE ACCOUNTS AND WHICH ARE STIPULATED TO BE EQUAL TO 20 DAYS AMOUNT
(AS DEFINED BELOW) OF SALES (“CHIFFRE D’AFFAIRES”) PLUS THE VAT THAT WOULD BE
INCLUDED IN SUCH STIPULATED RECEIVABLES;

 

(ii)                                  the amount for which inventories net of
reserves (“Stocks et en-cours, net”) are accounted for in the Reference Date
Accounts;

 

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(iii)                               the amount for which other current
receivables net of reserves (“Créances diverses”) including Taxes receivables
and VAT receivables are accounted for in the Reference Date Accounts;

 

(iv)                              the amount for which prepaid expenses
(“Charges constatées d’avance”) are is accounted for in the Reference Date
Accounts, to the extent the Companies remain entitled to receive after Closing
the benefits of the services or items in respect of which such prepayment was
made;

 

(v)                                 the amount for which expenses to amortize
(“Charges à repartir”) are accounted for in the Reference Date Accounts,

 

Minus

 

(b)                                 the sum of the following items

 

(i)                                   the amount for which payable trade
accounts and unrecorded invoices plus VAT (“Fournisseurs et comptes rattachés”
and “Dettes sur immobilisations”) net of supplier advances and deposits made to
suppliers (“Avances et acomptes versés”), excluding inter-company balances are
accounted for in the Reference Date Accounts and which are stipulated to be
equal to 100 Days Amount (as defined below) of Expenses, plus the VAT that would
be included in such Expenses;

 

(ii)                                  the amount for which customer advances and
prepayments (“Avances et acomptes reçus”) are accounted for in the Reference
Date Accounts;

 

(iii)                               the amount for which current Taxes payable
(“Dettes fiscales”) are accounted for in the Reference Date Accounts;

 

(iv)                              the amount for which current accrued
compensation (“Dettes sociales”) are accounted for in the Reference Date
Accounts;

 

(v)                                 the amount for which deferred revenues
(“Produits constatés d’avance”) are accounted for in the Reference Date
Accounts.

 

For the sake of clarity, it is understood that the Actual Reference Date Noos
Working Capital and the Normalized Noos Working Capital shall not include any of
the following items:

 

(i)                                     deferred tax assets and liabilities
(“impôts différés actifs et impôts différés passifs”) as shown in the Reference
Date Accounts; or

 

(ii)                                  customer deposits (“Dépôts de garantie”)
as shown in the Reference Date Accounts.

 

For the purpose of this Schedule 2.6, “Day Amount” shall mean, with respect to
any item, the amount for which such item is accounted for in the Reference Date
Accounts (i) divided by the number of months elapsed between 1st January 2004
and the Reference Date multiplied by 12 and (ii) divided by 365.

 

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For the purpose of calculating Normalized Noos Working Capital, “Expenses” shall
mean the sum of the following items (as shown in the Reference Date Accounts):

 

•                                          “Achats de marchandises”

•                                          “Variation de stocks de marchandises”

•                                          “Autres achats et charges externes”

•                                          “Autres charges d’exploitation”

•                                          “Acquisitions d’immobilisations
incorporelles”

•                                          “Acquisitions d’immobilisations
corporelles”

 

3.4.2                        Warranted Liability Items

 

(a)                                  The Parties have agreed that Seller will be
permitted to exclude from payables for purposes of the calculation of the Actual
Reference Date Noos Working Capital, the following types of items, provided that
Seller funds at Closing the WL Escrow Amount and provides at Closing the WL
Letter of Credit.  The foregoing items are called herein the “Warranted
Liability Items”.  The Warranted Liability Items will be reviewed as part of the
finalization of the Noos Reference Date Accounts.  Seller shall compensate Buyer
for all Warranted Liability Items, net of the amount of the corresponding
assets, booked in the Reference Date Accounts as and when paid by the Companies
after Closing.

 

(i)                                     SACEM and ANGOA payables (net of the
amount of the corresponding assets), only for the portion of the net amount
thereof exceeding an amount equal to 90 Days Amount (as defined in
Section 3.4.1) of operating expenses relating to SACEM and ANGOA plus VAT on
these operating expenses and accrued Sipperec penalties; and

 

(ii)                                  The disputed payables listed in
Schedule 2.6, 3.4.2(a) which will not exceed EUR 6,033,346.

 

(b)                                Prior to Closing, Seller and Buyer shall
conclude with Crédit Lyonnaise (the “WL Escrow Agent”) an escrow agreement in
the form attached as Schedule 2.6, 3.4.2(b) (the “WL Escrow Agreement”) and
Seller, at Closing, shall place in an interest-bearing account (the “WL Escrow
Account”) with the WL Escrow Agent an amount equal to 10% of the aggregate
liability of the Warranted Liability Items (funds deposited from time to time in
such account are called herein the “WL Escrow Amount”).  Interest earned on
funds in the WL Escrow Account shall be for the account of Seller to the extent
remaining in the account when it is dissolved.  Additionally, at Closing, Seller
shall deliver an unconditional standby letter of credit from a creditworthy bank
acceptable to Buyer in an amount equal to 40% of the Warranted Liability Items
for a term of not less than two years (the “WL Letter of Credit”).  If the WL
Letter of Credit is not renewed at least 30 days prior to expiry, Buyer may draw
the full amount of the WL Letter of Credit and place the proceeds thereof in the
WL Escrow Account.

 

(C)                                  IF AND WHEN ANY OF THE COMPANIES PAYS ANY
OF THE WARRANTED LIABILITY ITEMS, SELLER SHALL HAVE AN ABSOLUTE OBLIGATION UPON
WRITTEN NOTICE FROM BUYER TO IMMEDIATELY PAY OR REPAY THAT AMOUNT, REGARDLESS OF
ITS SIZE, TO BUYER OR,

 

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where the amount is paid from the WL Escrow Amount, replenish the WL Escrow
Amount and/or if the WL Letter of Credit is drawn to pay the same, to replenish
the WL Letter of Credit such that the WL Escrow Amount is equal to 10% of the
remaining Warranted Liability Items and the WL Letter of Credit is equal to 40%
of the remaining Warranted Liability Items.

 

(D)                                 BUYER OR ANY OF THE COMPANIES SHALL BE ABLE
TO DRAW FUNDS FROM THE WL ESCROW ACCOUNT AND TO DRAW ON THE WL LETTER OF CREDIT
BY PROVIDING A CERTIFICATE THAT THE AMOUNT IS REQUIRED TO BE PAID.  A COPY OF
SUCH CERTIFICATE AND THE CORRESPONDING INVOICE SHALL BE PROVIDED TO SELLER. 
FOLLOWING PAYMENT, BUYER SHALL PROVIDE APPROPRIATE EVIDENCE THAT PAYMENT OF SUCH
INVOICE HAS BEEN EFFECTED TO SELLER.

 

(E)                                  AT THE FIFTH ANNIVERSARY OF CLOSING, THE WL
ESCROW AGREEMENT SHALL TERMINATE AND ANY AMOUNTS PLACED WITH THE WL ESCROW AGENT
(PLUS INTEREST THEREON) SHALL BE RELEASED IN FAVOR OF SELLER, AND THE WL LETTER
OF CREDIT RELEASED, EXCEPT IN BOTH CASES FOR ANY DEMANDS FOR PAYMENT OF
WARRANTED LIABILITY ITEMS THEN OUTSTANDING.

 

3.5                                 Noos Capital Expenditure Shortfall
Adjustment

 

The “Noos Capital Expenditure Shortfall Adjustment” will be calculated as
follows:

 

Total budgeted Capital Expenditures for the Companies, excluding budgeted
Capital Expenditures related to customer acquisitions, for the period from
January 1, 2004 through the Reference Date, appearing in the schedule attached
in Appendix 3.5 to this Schedule 2.6;

 

Less Actual Capital Expenditures for the Companies, excluding actual Capital
Expenditures related to customer acquisitions, for the period from January 1,
2004 through the Reference Date, as shown in the Reference Date Accounts;

 

provided such difference is greater than zero.

 

4.                                      UPC FRANCE EQUITY VALUE

 

4.1                                 UPC France Equity Value

 

The UPC France Equity Value will be calculated as follows:

 

(a)                                  Base UPC France Enterprise Value (as set
out in Section 4.2 below).

 

(B)                                 LESS THE UPC FRANCE FINANCIAL DEBT (SEE
SECTION 4.3 BELOW).

 

(C)                                  PLUS OR LESS THE UPC FRANCE WORKING CAPITAL
ADJUSTMENT, DEPENDING ON WHETHER THE ADJUSTMENT IS POSITIVE OR NEGATIVE (AS SET
OUT IN SECTION 4.4 BELOW).

 

(D)                                 LESS THE UPC FRANCE CAPITAL EXPENDITURE
SHORTFALL ADJUSTMENT (AS SET OUT IN SECTION 4.5 BELOW).

 

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4.2                                 Base UPC France Enterprise Value

 

4.2.1                        The “Base UPC France Enterprise Value” will be
calculated as follows (subject to a limitation on the maximum amount of the Base
UPC Enterprise Value of EUR 103 million):

 

7.25 x UPC France Run-Rate EBITDA

 

Where:

 

“UPC France Run-Rate EBITDA” means:

 

Actual Adjusted UPC France EBITDA for the period
from January 1, 2004 through the Reference Date

x EUR13.4 million

Budgeted Adjusted UPC France EBITDA for the period
from January 1, 2004 through the Reference Date

 

4.2.2                        Actual Adjusted UPC France EBITDA will be prepared
in accordance with French GAAP consistently applied.  When calculating the
Actual Adjusted UPC France EBITDA, the principles set forth in Section 3.2.2
shall apply mutatis mutandis.

 

4.2.3                        The Budgeted Adjusted UPC France EBITDA will be
calculated as follows:

 

(a)                                  Cumulative amount of the monthly Budgeted
UPC France EBITDA appearing in the schedule attached in Appendix 4.2.3 to this
Schedule 2.6 with respect to any month elapsed between 1st January 2004 and the
Reference Date;

 

(b)                                 Less the amount of the Bad Debts (as defined
in Section 4.2.4 below).

 

4.2.4                        For the purposes of calculating Actual Adjusted UPC
France EBITDA and Budgeted Adjusted UPC France EBITDA, “Bad Debts” means an
amount equal to 2% of revenue for the period from January 1, 2004 through the
Reference Date.

 

4.2.5                        When calculating the Actual Adjusted UPC France
EBITDA and the Budgeted Adjusted UPC France EBITDA, the principles set forth in
Section 3.2.5 shall apply mutatis mutandis.

 

4.3                                 UPC France Financial Debt

 

The UPC France Financial Debt shall be calculated for the UPC France Companies,
excluding Buyer, based on the UPC French Cable Business Reference Date Accounts
as follows:

 

(a)                                  all outstanding financial debt (including
short and long-term debt of a financial nature) for borrowed money from third
parties including vis-à-vis any UPC Affiliate that is not a UPC France Company
(but excluding intercompany trading balances with Chello) in the ordinary course
of business, recorded in the UPC French Cable Business Reference Date Accounts;

 

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(b)                                all financial obligations evidenced by a
note, bond, debenture, guaranty or similar instrument recorded in the UPC French
Cable Business Reference Date Accounts that are not payable to a UPC France
Company;

 

(c)                                  all obligations related to capital leases
recorded for in the UPC French Cable Business Reference Date Accounts;

 

(D)                                ANY FINANCING OF ACCOUNTS RECEIVABLE OR
INVENTORY (E.G.: SECURITIZATION, DISCOUNTED NOTES) INCLUDING THOSE WITHOUT
RECOURSE, RECORDED IN THE UPC FRENCH CABLE BUSINESS REFERENCE DATE ACCOUNTS;

 

(E)                                  ANY ACCRUED INTERESTS, PENALTIES, PREMIUM
AND ANY FEES OR EXPENSES RELATING TO THE FOREGOING, RECORDED IN THE UPC FRENCH
CABLE BUSINESS REFERENCE DATE ACCOUNTS;

 

Minus

 

(F)                                    CASH AND SHORT TERM SECURITIES RECORDED
AS “VALEURS FINANCIÈRES”, “DISPONIBILITÉS”, “VALEURS MOBILIÈRES DE PLACEMENT”,
AS SHOWN IN THE UPC FRENCH CABLE BUSINESS REFERENCE DATE ACCOUNTS.

 

UPC France Financial Debt shall exclude all loans and other obligations between
UPC France Companies and all intra-group loans that are capitalized or otherwise
paid off before Closing.  Buyer intends to restructure the capital leases
pertaining to the Cité Cable group, which the UPC France Companies treat as debt
(the “Capital Leases”).  Buyer is seeking to obtain a reduction of EUR 7
million.  Buyer may exclude up to EUR 7 million of the Capital Leases from the
calculation of UPC France Financial Debt (the “Excluded Capital Lease Amount”),
provided Buyer establishes an interest-bearing cash escrow with Crédit Lyonnaise
or another bank acceptable to Seller and/or a standby letter of credit from
Crédit Lyonnaise or another creditworthy bank acceptable to Seller in a total
amount equal to 50% of the Excluded Capital Lease Amount.  The escrow and/or
letter of credit will remain outstanding until a restructuring of the Capital
Leases is achieved.  If Buyer has not obtained a restructuring so as to obtain a
reduction in the Capital Leases outstanding equal to the Excluded Capital Lease
Amount by the date (the “CL Settlement Date”) that is 24 months following the
Closing Date (any portion of the Excluded Capital Lease Amount that has not been
successfully reduced being referred to as the “Remaining CL Amount”), then the
UPC Shareholder will then make a cash settlement to Seller in the amount equal
to 19.9% of the Remaining CL Amount.  For avoidance of doubt, the charges under
the Capital Leases will not be included in the calculation of UPC France
Run-Rate EBITDA.  The UPC Shareholder will pay, and indemnify Buyer and the UPC
France Companies from, the lease payments attributable to the Excluded Capital
Lease Amount between Closing and the CL Settlement Date.

 

4.4                                 UPC France Working Capital Adjustment

 

The UPC France Working Capital Adjustment Amount will be calculated mutatis
mutandis as per Section 3.4.1 without any reference to Sipperec which is
non-applicable and the amount in (b)(i) of the definition of Normalized Noos
Working Capital shall be stipulated to be 130 Days Amount of Expenses, rather
than 100 Days Amount.

 

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4.5                                 UPC France Capital Expenditure Shortfall
Adjustment

 

The UPC France Capital Expenditure Shortfall Adjustment will be calculated as
follows:

 

Total budgeted Capital Expenditures for the UPC France Companies (appearing in
the schedule attached in Appendix 4.5 to this Schedule 2.6), excluding budgeted
Capital Expenditures related to customer acquisitions, for the period from
January 1, 2004 through the Reference Date;

 

Less Actual Capital Expenditures for the UPC France Companies, excluding actual
Capital Expenditures related to customer acquisitions, for the period from
January 1, 2004 through the Reference Date;

 

provided such difference is greater than zero.

 

5.                                      CLOSING DATE BUYER NET DEBT

 

1.                                       “Closing Date Buyer Net Debt” means
Closing Date Buyer Gross Debt less Buyer Cash.

 

2.                                       “Closing Date Buyer Gross Debt” means
the following as at Closing and without duplication, and excluding Noos
Financial Debt and UPC France Financial Debt (which are separately adjusted for
as provided above):

 

2.1                                 All outstanding loans and open accounts and
bank account overdrafts of Buyer, whether a current liability or a long-term
liability.

 

2.2                                 All obligations of Buyer evidenced by a
note, bond, debenture, guaranty or similar instrument.

 

3.                                       “Buyer Cash” means cash and cash
equivalents on hand within Buyer and its subsidiaries at Closing, but only if
and to the extent that such cash is not taken into account in calculating the
Noos Working Capital Adjustment Amount or the UPC France Working Capital
Adjustment Amount.

 

4.                                       The new intergroup financing that is
contemplated to be made by the UPC Group to Buyer at Closing shall bear interest
at EURIBOR plus 5.5% per annum.

 

6.                                      BUDGETS

 

The respective detailed 2004 budgets for the Companies and the UPC France
Companies are attached at Schedule C and to this Schedule 2.6 respectively.

 

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