Exhibit 10.3

 

CONFORMED COPY

 

 

SCHEDULE 1

 

RESTATED CREDIT AGREEMENT

 

DATED 26TH OCTOBER, 2000

 

AS AMENDED AND RESTATED PURSUANT TO AN AMENDMENT AND
RESTATEMENT AGREEMENT DATED 16TH JANUARY, 2004

 

€3,500,000,000

 

and

 

US$347,500,000 and €95,000,000

 

SENIOR SECURED CREDIT FACILITY

 

for

 

UPC DISTRIBUTION HOLDING B.V.

 

and

 

UPC FINANCING PARTNERSHIP

as Borrowers

 

arranged by

 

CHASE MANHATTAN plc
TD BANK EUROPE LIMITED
ABN AMRO BANK N.V.
BANK OF AMERICA INTERNATIONAL LIMITED
BNP PARIBAS
CIBC WORLD MARKETS plc
CRÉDIT LYONNAIS
FORTIS BANK (NEDERLAND) N.V.
and
THE ROYAL BANK OF SCOTLAND plc

 

with

 

TD BANK EUROPE LIMITED

and

TORONTO DOMINION (TEXAS), INC.,

acting as Facility Agents

 

[ex103image002.gif]

LONDON

 

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CONTENTS

 

Clause

 

1.

Interpretation

 

2.

The Facilities

 

3.

Purpose

 

4.

Conditions Precedent

 

5.

Advances

 

6.

Repayment

 

7.

Cancellation and Prepayment

 

8.

Interest

 

9.

Payments

 

10.

Tax Gross-up and Indemnities

 

11.

Market Disruption

 

12.

Increased Costs

 

13.

Illegality and Mitigation

 

14.

Guarantee

 

15.

Representations and Warranties

 

16.

Undertakings

 

17.

Financial Covenants

 

18.

Default

 

19.

Facility Agent, Security Agent, Lead Arrangers and Lenders

 

20.

Fees

 

21.

Expenses

 

22.

Stamp Duties

 

23.

Indemnities

 

24.

Evidence and Calculations

 

25.

Amendments and Waivers

 

26.

Changes to the Parties

 

27.

Disclosure of Information

 

28.

Set-off

 

29.

Pro Rata Sharing

 

30.

Severability

 

31.

Counterparts

 

32.

Notices

 

33.

Language

 

34.

Jurisdiction

 

35.

Waiver or Immunity

 

36.

Waiver of Trial by Jury

 

37.

Governing Law

 

 

 

 

Schedule

 

 

 

 

1.

Original Parties

 

 

Part 1                  Original Guarantors

 

 

Part 2                  Original Lenders and Commitments

 

2.

Conditions Precedent Documents

 

 

Part 1                  To be Delivered before the First Advance

 

 

Part 2                  To be Delivered by an Additional Guarantor

 

3.

Mandatory Cost Formulae

 

4.

Form of Request and Cancellation Notice

 

 

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Part 1                  Form of Request

 

 

Part 2                  Form of Cancellation and/or Prepayment Notice

 

5.

Forms of Accession Documents

 

 

Part 1                  Novation Certificate

 

 

Part 2                  Guarantor Accession Agreement

 

 

Part 3                  Form of Verification Letter

 

6.

Form of Confidentiality Undertaking

 

 

Part 1                  Form of LMA Confidentiality Undertaking

 

 

Part 2                  Form of LSTA Confidentiality Undertaking

 

7.

Security Documents

 

8.

Relevant Security Interests

 

9.

Relevant Financial Indebtedness

 

10.

Borrower Group Structure

 

11.

Shareholders’ Agreements

 

 

 

 

Signatories

 

 

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THIS AGREEMENT originally dated 26th October, 2000 as amended and restated
pursuant to the Amendment and Restatement Agreement to which this Agreement is
scheduled, and as previously amended by a series of letters during the period
from 1st March, 2002 to 23rd July, 2003 and made

 

BETWEEN:

 

(1)                                  UPC DISTRIBUTION HOLDING B.V. (UPC
Distribution);

 

(2)                                  UPC FINANCING PARTNERSHIP, a general
partnership formed under the laws of Delaware, United States and, as of the
Signing Date, with its principal place of business at 4643 South Ulster Street,
Suite 1300, Denver, Colorado 80237, USA (the US Borrower);

 

(3)                                  THE COMPANIES identified as guarantors in
Part 1 of Schedule 1 (Original Guarantors) (the Original Guarantors);

 

(4)                                  CHASE MANHATTAN plc, TD BANK EUROPE
LIMITED, ABN AMRO BANK N.V., BANK OF AMERICA INTERNATIONAL LIMITED, BNP PARIBAS,
CIBC WORLD MARKETS plc, CRÉDIT LYONNAIS, FORTIS BANK (NEDERLAND) N.V., and THE
ROYAL BANK OF SCOTLAND plc as lead arrangers (in this capacity, the Lead
Arrangers);

 

(5)                                  THE BANKS AND FINANCIAL INSTITUTIONS listed
in Part 2 of Schedule 1 (Original Lenders and Commitments) as lenders (the
Original Lenders);

 

(6)                                  TD BANK EUROPE LIMITED and TORONTO DOMINION
(TEXAS), INC., as facility agents; and

 

(7)                                  TD BANK EUROPE LIMITED as security agent
for the Finance Parties (in this capacity, the Security Agent).

 

IT IS AGREED as follows:

 

1.                                      INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

Accounting Period in relation to any person means any period of approximately
three months or one year for which accounts of such person are required to be
delivered pursuant to this Agreement.

 

Acquisition means the acquisition, whether by one or a series of transactions,
(including, without limitation, by purchase, subscription or otherwise) of all
or any part of the share capital or equivalent of any company or other person
(including, without limitation, any partnership or joint venture) or any asset
or assets of any company or other person (including, without limitation, any
partnership or joint venture) constituting a business or separate line of
business of that company or other person.

 

Acquisition Business Plan means, in respect of an Acquisition, a business plan
for the Borrower Group (including the Target to be acquired) which has been
reviewed by Deloitte & Touche and which sets out the management plan for the
period from the date of the proposed Acquisition (taking into account the
Acquisition Cost of such Acquisition and financial

 

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projections relating to the Target) up to and including the last Final Repayment
Date and based on assumptions which are no more aggressive (when taken as a
whole) than those used in preparation of the Business Plan.

 

Acquisition Cost means, in relation to an Acquisition, the value of the
consideration for that Acquisition at the time of completion of the Acquisition
and for this purpose:

 

(a)                                  the value at the time of completion of the
Acquisition of any consideration to be paid or delivered after the time of
completion of the Acquisition will be determined in accordance with GAAP
(provided that, for the purposes only of sub-paragraph (c)(i) of the definition
of “Permitted Acquisition”, sub-paragraph (b)(i) of the definition of “Permitted
Joint Venture” and Clause 16.11(b)(ii) (Acquisitions and mergers) and the
definition of “Borrower Group Capitalisation” in Clause 17.1 (Financial
definitions), the value of any such deferred consideration shall only be
included in the calculation of the Acquisition Cost of an Acquisition at the
time such deferred consideration is paid or delivered);

 

(b)                                 if the entity acquired becomes a member of
the Borrower Group as a result of the Acquisition, the aggregate principal
amount of Financial Indebtedness of any entity  acquired outstanding at the time
of completion of the Acquisition (including without limitation any Lending
Transaction (as defined in Clause 16.14(g) (Loans and guarantees) made by a
member of the Borrower Group in connection with the relevant Acquisition) will
be counted as part of the consideration for that Acquisition;

 

(c)                                  if the entity acquired does not become a
member of the Borrower Group as a result of the Acquisition, the aggregate
principal amount of Financial Indebtedness of the entity acquired at the time of
completion of the Acquisition will be counted as part of the consideration for
that Acquisition to the extent of the aggregate principal amount of the payment
and repayment obligations in respect of such Financial Indebtedness assumed or
guaranteed by any member of the Borrower Group; and

 

(d)                                 subject to paragraphs (a), (b) and (c)
above, the value at the time of completion of the Acquisition of any non-cash
consideration will be determined in accordance with GAAP,

 

expressed in euros, if required, using the Agent’s Spot Rate of Exchange on the
date of completion of the Acquisition.

 

Additional Acquisition means a Majority Acquisition (as defined in paragraph (c)
of the definition of “Permitted Acquisition”) where the business of the acquired
entity or the business acquired, as the case may be:

 

(a)                                  is of the same nature as the business of
the Borrower Group as at the Effective Date; and

 

(b)                                 is being carried on only in:

 

(i)                                     a jurisdiction in which a member of the
Borrower Group is incorporated and is operating (including Poland if UPC Polska
is a member of the Borrower Group on the date of the Additional Acquisition); or

 

(ii)                                  Poland, but only in the case of the UPC
Polska Acquisition.

 

Additional Facility has the meaning given in the New Facility Agreement.

 

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Additional Guarantor means:

 

(a)                                  a Subsidiary of UPC Distribution; and

 

(b)                                 any UPC Distribution Holdco (other than UPC
Holding),

 

which in each case becomes an Additional Guarantor in accordance with Clause
26.4 (Additional Guarantors).

 

Additional Permitted Acquisition means an Acquisition permitted under paragraph
(d) of the definition of “Permitted Acquisition”.

 

Additional Prepayment Cap has been reached means an aggregate amount of at
least  €600,000,000 has been applied by UPC Distribution in permanent prepayment
and cancellation of the Facilities and/or the New Facility under any of the
following clauses:

 

(a)                                  Clause 7.6A(a)(i) and (b)(i) (Mandatory
prepayment from Third Party Debt proceeds) of this Agreement;

 

(b)                                 clause 7.6A(a) and (b) (Mandatory prepayment
from Third Party Debt proceeds) of the New Facility Agreement;

 

(c)                                  Clause 7.5(c)(i) and (d)(i) (Mandatory
prepayment from Excess Cash Flow and Net Equity Proceeds) of this Agreement;

 

(d)                                 clause 7.5(d)(i) and (d)(ii) (Mandatory
prepayment from Excess Cash Flow and Net Equity Proceeds) of the New Facility
Agreement;

 

(e)                                  Clause 7.3 (Voluntary prepayment) of this
Agreement; and

 

(f)                                    clause 7.3 (Voluntary prepayment) of the
New Facility Agreement.

 

Advance means a Facility A Advance, Facility B Advance or Facility C Advance.

 

Affiliate means, in respect of a person, a direct or indirect Subsidiary or
Holding Company of that person or any other person which is under common control
with that person (and for this purpose, control has the meaning given to it in
section 416 of the Income and Corporation Taxes Act 1988 in force as at the
Signing Date).

 

Agent means the Facility Agent or the Security Agent (or both), as the context
requires.

 

Agent’s Spot Rate of Exchange means the spot rate of exchange as determined by
the Facility Agent for the purchase of the relevant Optional Currency in the
London foreign exchange market with euros or US Dollars (or any other relevant
currency) (as applicable) at or about 11.00 a.m. on a particular day.

 

Amendment and Restatement Agreement means the amendment and restatement
agreement dated January, 2004 between, inter alios, UPC Distribution and the
Facility Agents, on behalf of the Finance Parties, pursuant to which this
Agreement was amended and restated.

 

Amendment Fee Letter means the letter between the Facility Agent and UPC
Distribution dealing with the amendment fees payable to the Lenders in
connection with the Amendment and Restatement Agreement.

 

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Anniversary means an anniversary of the Signing Date.

 

Annualised EBITDA has the meaning given to it in Clause 17.1 (Financial
definitions).

 

Anti-Terrorism Law means each of:

 

(a)                                  Executive Order No. 13224 of September 23,
2001 – Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (the Executive Order);

 

(b)                                 the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56 (commonly known as the USA Patriot Act);

 

(c)                                  the Money Laundering Control Act of 1986,
Public Law 99-570; and

 

(d)                                 any similar law enacted in the United States
of America subsequent to the date of this Agreement.

 

Approved Stock Options means any options, warrants, rights to purchase or other
equivalents (however designated) issued or granted by a member of the Borrower
Group to any former, present or future officers, consultants, directors and/or
employees of any member of the Borrower Group or its Associated Companies to
subscribe for share capital or similar rights of ownership in that member of the
Borrower Group provided that the maximum aggregate amount of such options,
warrants, rights to purchase or other equivalents (however designated) shall not
exceed (i) 8 per cent. of its issued share capital, in the case of Stipdon and
any Subsidiary of Stipdon (provided that the aggregate amount of such options,
warrants, rights to purchase or other equivalents issued by Stipdon and its
Subsidiaries does not exceed 8 per cent. of the issued share capital of Stipdon)
and (ii) 7.5 per cent. of its issued share capital or similar rights of
ownership, in the case of each other member of the Borrower Group.

 

Approved Transaction means the transactions announced by UPC and UGC on 26th
June, 2000 and described in UPC’s Current Report on Form 8-K as filed with the
US Securities and Exchange Commission on 11th July, 2000 or one or a series of
related transactions resulting in the completion of the transactions so
described.  No such transaction has occurred as of 14th January, 2004.

 

Associated Company of a person means:

 

(a)                                  any other person which is directly or
indirectly Controlled by, under common Control with or Controlling such person;
or

 

(b)                                 any other person owning beneficially and/or
legally directly or indirectly 10 per cent. or more of the equity interest in
such person or 10 per cent. of whose equity is owned beneficially and/or legally
directly or indirectly by such person.

 

Auditors means KPMG or such other leading firm of independent and
internationally recognised accountants appointed by UPC Distribution as its
auditors for the purposes of preparing the audited consolidated accounts of UPC
Distribution.

 

Belmarken means Belmarken Holding B.V., a private limited liability company
incorporated under the laws of The Netherlands and, as of the Signing Date, with
its registered office at

 

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Amsterdam and its business office at Boeing Avenue 53, 1119 PE Schiphol Rijk,
Amsterdam, The Netherlands.

 

Beneficiaries has the meaning given to it in the Security Deed.

 

Borrower means each of UPC Distribution and the US Borrower.

 

Borrower Group means:

 

(a)                                  UPC Distribution and its Subsidiaries from
time to time, excluding Unrestricted Subsidiaries; and

 

(b)                                 the US Borrower.

 

Break Costs means the amount (if any) by which:

 

(a)                                  the amount of interest (excluding the
Margin and any Mandatory Costs) which a Lender should have received for the
period from the date of receipt of all or any part of its participation in an
Advance or Unpaid Sum to the last day of the current Interest Period in respect
of that Advance or Unpaid Sum, had the principal amount or Unpaid Sum received
been paid on the last day of that Interest Period,

 

exceeds:

 

(b)                                 the amount of interest which that Lender
would be able to obtain by placing an amount equal to the principal amount or
Unpaid Sum received by it on deposit with a leading bank in the London interbank
market for a period starting on the Business Day following receipt or recovery
and ending on the last day of the current Interest Period.

 

Business means any business of the Borrower Group:

 

(a)                                  that consists of the upgrade, construction,
creation, development, marketing, acquisition (to the extent permitted under
this Agreement), operation, utilisation and maintenance of networks that use
existing or future technology for the transmission, reception and delivery of
voice, video and/or other data (including networks that transmit, receive and/or
deliver services such as multi-channel television and radio, programming,
telephony, Internet services and content, high speed data transmission, video,
multi-media and related activities); or

 

(b)                                 that supports, is incidental to or is
related to any such business; or

 

(c)                                  that comprises being a Holding Company of
one or more persons engaged in such business,

 

and references to business or ordinary course of business shall be similarly
construed.

 

Business Day means:

 

(a)                                  a day (other than a Saturday or Sunday) on
which banks are open for general business in:

 

(i)                                     London and Amsterdam;

 

(ii)                                  in relation to a transaction involving US
Dollars, New York; and

 

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(iii)                               in relation to a transaction involving an
Optional Currency, the principal financial centre of the country of that
Optional Currency; or

 

(b)                                 in relation to a rate fixing day or a
payment date for euros, a TARGET Day.

 

Business Plan means the business plan for the Borrower Group for the period from
the Effective Date to, as a minimum, the Final Maturity Date (as defined in the
New Facility Agreement) as provided to the Facility Agent prior to the Effective
Date.

 

Cancellation Notice means a notice of cancellation and/or prepayment
substantially in the form of Part 2 of Schedule 4 (Form of Cancellation and/or
Prepayment Notice).

 

Capital Expenditure means any expenditure which is or will be treated as a
capital expenditure in the audited consolidated financial statements of the
Borrower Group in accordance with GAAP.

 

Cash Flow means, for any period, as set out in the most recent annual or
semi-annual financial statements of or in respect of the Target for that period,
EBITDA of or relating to the Target for such period:

 

(a)                                  minus Capital Expenditure of or relating to
the Target for such period;

 

(b)                                 minus all Taxes actually paid and/or falling
due for payment by or in respect of the Target during such period;

 

(c)                                  minus the amount of all dividends,
redemptions and other distributions payable by the Target during such period on,
or in respect of any of its share capital not held by a member of the Borrower
Group;

 

(d)                                 minus any increase or plus any decrease in
working capital of or in respect of the Target for such period;

 

(e)                                  minus the aggregate of Interest payable by
or in respect of the Target during such period; and

 

(f)                                    minus all extraordinary or exceptional
items (including one off restructuring costs) which were paid by the Target
during such period on (net of any cash proceeds of insurance or warranty claims
which relate to such items) and plus all extraordinary or exceptional items
which were received by or in respect of the Target during such period.

 

For the purposes of the above calculation no item shall be effectively deducted
or credited more than once.

 

Cash Flow Positive means, in respect of any Acquisition, for any prospective
period, the sum of projected EBITDA of or relating to the Target for such
period:

 

(a)                                  minus projected Capital Expenditure of or
in respect of the Target for such period;

 

(b)                                 minus all Taxes projected as falling due and
payable by or in respect of the Target during such period;

 

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(c)                                  minus the amount of all dividends,
redemptions and other distributions projected to be payable by the Target during
such period on, or in respect of any of its share capital not held by a member
of the Borrower Group;

 

(d)                                 minus any projected increase or plus any
projected decrease in or in respect of working capital of or in respect of the
Target for such period;

 

(e)                                  minus the amount of Interest projected to
be payable by or in respect of the Target during such period, plus any Interest
that is projected to be received by or in respect of the Target during such
period;

 

(f)                                    minus all extraordinary or exceptional
items (including one off restructuring costs) which are projected to be paid by
the Target during such period on (net of any cash proceeds of insurance or
warranty claims which relate to such items) and plus all extraordinary or
exceptional items which are projected to be received by or in respect of the
Target during such period; and

 

(g)                                 plus the amount of all Relevant Equity
Injections (if any) referred to in sub-paragraphs (c)(i)(A), (c)(i)(B) or (d)(i)
of the definition of Permitted Acquisition or sub-paragraphs (b)(i)(A) or
(b)(i)(B) of the definition of Permitted Joint Venture,

 

is greater than zero.

 

For the purposes of the above calculation no item shall be effectively deducted
or credited more than once and all items shall be calculated by reference to,
and in accordance with the principles used in preparation of, the relevant
Acquisition Business Plan.

 

Change of Control has the meaning given to it in Clause 7.4(a) (Change of
Control).

 

CNA means Cable Networks Austria Holding B.V., a private limited liability
company incorporated under the laws of The Netherlands and, as of the Signing
Date, with its registered office at Amsterdam and its business office at Boeing
Avenue 53, 1119 PE Schiphol Rijk, Amsterdam, The Netherlands.

 

Code means the United States Internal Revenue Code of 1986, as amended and any
rule or regulation issued thereunder from time to time in effect.

 

Commitments means the Facility A Commitments, Facility B Commitments and/or
Facility C Commitments.

 

Confidentiality Undertaking means a confidentiality undertaking substantially in
the recommended form of either the LMA as set out in Part 1 of Schedule 6 (Form
of LMA Confidentiality Undertaking) or the LSTA as set out in Part 2 of
Schedule 6 or in any other form agreed between UPC Distribution and the Facility
Agent.

 

Connected Acquisition means an acquisition (including without limitation by
purchase, subscription or otherwise) of:

 

(a)                                  all or any part of the share capital or
equivalent of a person or company (including without limitation any partnership
or joint venture) owned by UGCE Inc., UPC or any of their respective
Subsidiaries; or

 

(b)                                 any asset or assets owned by UGCE Inc., UPC
or any of their respective Subsidiaries,

 

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but does not include:

 

(i)                                     the UPC Polska Acquisition; or

 

(ii)                                  an Acquisition from a member of the UGCE
Borrower Group where, within the 12 months preceding such Acquisition, the
acquired assets or shares were themselves acquired by a member of the UGCE
Borrower Group on substantially the same terms and for substantially the same
consideration; (in the case of an Acquisition of part only of the assets or
shares initially acquired by the member of the UGCE Borrower Group, the
consideration payable for that part of those assets or shares must have been
allocated to such assets or shares in the business plan prepared by the relevant
member of the UGCE Borrower Group at the time of the initial Acquisition and
must be substantially the same as the consideration paid by such member of the
UGCE Borrower Group for those assets or shares).

 

Consultant means Booz Allen & Hamilton.

 

Consultant’s Report means the report dated on or about July 2000 from the
Consultant addressed to Chase Manhattan plc and TD Securities in relation to the
10 year business plan of UPC Distribution.

 

Control means the power of a person:

 

(a)                                  by means of the holding of shares or the
possession of voting power in or in relation to any other person; or

 

(b)                                 by virtue of any powers conferred by the
articles of association or other documents regulating any other person,

 

to direct or cause the direction of the management and policies of that other
person,

 

and Controlled and Controlling have a corresponding meaning.

 

Current Assets means, at any relevant time, the aggregate of the current assets
(excluding cash) of the Borrower Group at such time which would be included as
current assets in a consolidated balance sheet of the Borrower Group drawn up at
such time in accordance with GAAP.

 

Current Liabilities means, at any relevant time, the aggregate of the current
liabilities (excluding short term debt and overdrafts) of the Borrower Group at
such time which would be included as current liabilities in a consolidated
balance sheet of the Borrower Group drawn up at each time in accordance with
GAAP.

 

Dangerous Substance means any radioactive emissions and any natural or
artificial substance (whether in solid or liquid form or in the form of a gas or
vapour and whether alone or in combination with any other substance) which,
taking into account the concentrations and quantities present and the manner in
which it is being used or handled, it is reasonably foreseeable will cause harm
to man or any other living organism or damage to the Environment including any
controlled, special, hazardous, toxic, radioactive or dangerous waste.

 

Default means an Event of Default or any event or circumstances specified in
Clause 18 (Default) which would (with the expiry of a grace period or the giving
of notice) be an Event of Default.

 

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Derby and EPG Agreements means:

 

(a)                                  the licence agreement dated 29th September,
2003 between, inter alios, UPC Exploitation II B.V., UPC Exploitation Holding
B.V., UPC and UPC Distribution relating to the derby billing system and the
electronic programming guide; and

 

(b)                                 the escrow agreement dated 29th September,
2003 on the deposit of sources regarding the derby billing system and the
electronic programming guide system between UPC Exploitation II B.V., Allen &
Overy and UPC Distribution.

 

Derby and EPG Share Pledges means:

 

(a)                                  the share pledge dated 29th September, 2003
entered into between, inter alios, UPC Distribution as pledgee and UPC
Exploitation Holding B.V. as pledgor relating to all of the shares in UPC
Exploitation II B.V.; and

 

(b)                                 the share pledge dated 29th September, 2003
entered into between UPC Distribution as pledgee and UPC as pledgor relating to
all of the shares in UPC Exploitation Holding B.V.

 

Designated Party means any person listed:

 

(a)                                  in the Annex to the Executive Order;

 

(b)                                 on the “Specially Designated Nationals and
Blocked Persons” list maintained by the Office of Foreign Assets Control of the
United States Department of the Treasury; or

 

(c)                                  in any successor list to either of the
foregoing.

 

Distribution Business means:

 

(a)                                  the business of upgrading, constructing,
creating, developing, acquiring, operating, owning, leasing and maintaining
cable television networks (including for avoidance of doubt master antenna
television, satellite master antenna television, single and multi-channel
microwave single or multi-point distribution systems and direct-to-home
satellite systems) for the transmission, reception and/or delivery of
multi-channel television and radio programming, telephony and internet and/or
data services to the residential markets; or

 

(b)                                 any business which is incidental to or
related to and, in either case, material to such business.

 

Dutch Banking Act means the Dutch Act on the Supervision of the Credit System
1992 (Wet toezicht Kredietwezen 1992), including the Dutch Exemption Regulation.

 

Dutch Exemption Regulation means the Exemption Regulation of the Minister of
Finance of 26th June, 2002 (Vrijstellingsregeling Wtk 1992), including the
Policy Guidelines.

 

Eastern Europe means Europe other than Western Europe.

 

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Eastern European Acquisition means an acquisition (including, without
limitation, by purchase, subscription or otherwise) of:

 

(a)                                  all or any part of the share capital or
equivalent of a person or company (including, without limitation any partnership
or joint venture) incorporated or carrying on a material part of its business in
Eastern Europe; or

 

(b)                                 any asset or assets constituting a business
or separate line of business, a material part of which is being carried on in
Eastern Europe,

 

but excluding any such acquisition in relation to an entity which is a
Subsidiary of UPC on the Signing Date and is incorporated or carries on business
in Poland on the Signing Date.

 

EBITDA has the meaning given to it in Clause 17.1 (Financial definitions).

 

Effective Date has the meaning given to it in the Amendment and Restatement
Agreement.

 

Environment means the media of air, water and land (wherever occurring) and in
relation to the media of air and water includes, without limitation, the air and
water within buildings and the air and water within other natural or man-made
structures above or below ground and any water contained in any underground
strata.

 

Environmental Claim means any claim by any person:

 

(a)                                  in respect of any loss or liability
suffered or incurred by that person as a result of or in connection with any
violation of Environmental Law; or

 

(b)                                 that arises as a result of or in connection
with Environmental Contamination and that could give rise to any remedy or
penalty (whether interim or final) that may be enforced or assessed by private
or public legal action or administrative order or proceedings including, without
limitation, any such claim that arises from injury to persons or property.

 

Environmental Contamination means each of the following and their consequences:

 

(a)                                  any release, emission, leakage or spillage
of any Dangerous Substance at or from any site owned or occupied by any member
of the Borrower Group into any part of the Environment; or

 

(b)                                 any accident, fire, explosion or sudden
event at any site owned or occupied by any member of the Borrower Group which is
directly caused by or attributable to any Dangerous Substance; or

 

(c)                                  any other pollution of the Environment
arising at or from any site owned or occupied by any member of the Borrower
Group.

 

Environmental Law means all legislation, regulations or orders (insofar as such
regulations or orders have the force of law) to the extent that it relates to
the protection or impairment of the Environment or the control of Dangerous
Substances (whether or not in force at the date of this Agreement) which are
capable of enforcement in any applicable jurisdiction by legal process.

 

Environmental Licence means any permit, licence, authorisation, consent, filing,
registration or other approval required by any Environmental Law.

 

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ERISA means the United States Employee Retirement Income Security Act of 1974,
as amended.

 

ERISA Affiliate means each trade or business, whether or not incorporated, that
would be treated as a single employer with any member of the Borrower Group
under section 414 of the United States Internal Revenue Code of 1986, as
amended.  When any provision of this Agreement relates to a past event, the term
ERISA Affiliate includes any person that was an ERISA Affiliate of a member of
the Borrower Group at the time of that past event.

 

EURIBOR means in relation to any Advance or Unpaid Sum denominated in euros:

 

(a)                                  the applicable Screen Rate for deposits in
the currency of the relevant Advance or Unpaid Sum for a period equal or
comparable to the required period at or about 11.00 a.m. (Brussels time) on the
applicable Rate Fixing Day; or

 

(b)                                 if the rate cannot be determined under
paragraph (a) above, the arithmetic mean (rounded upwards, if necessary, to the
nearest four decimal places) of the respective rates, as supplied to the
Facility Agent at its request, quoted by the Reference Banks to leading banks
for the offering of deposits in euros for the required period in the London
interbank market at or about 11.00 a.m. on the Rate Fixing Day for such period,

 

and for the purposes of this definition, required period means the Interest
Period of an Advance or the period in respect of which EURIBOR falls to be
determined in relation to any Unpaid Sum.

 

€, euro or euros means the single currency of the Participating Member States.

 

Event of Default means an event specified as such in Clause 18 (Default).

 

Excess Cash Flow means the aggregate consolidated EBITDA of the Borrower Group
calculated for the most recently ended financial year (beginning with the
financial year ending on 31st December, 2004), as shown in the quarterly
management accounts delivered to the Facility Agent pursuant to Clause 16.2(b)
(Financial information) in respect of the financial quarter ending on 31st
December in any relevant year:

 

(a)                                  less:

 

(i)                                     any interest and other charges in
respect of Financial Indebtedness of the Borrower Group paid during such
financial year;

 

(ii)                                  repayments and/or prepayments of any
Financial Indebtedness of the Borrower Group paid during such financial year;
and

 

(iii)                               capital expenditure of the Borrower Group
incurred during such financial year; and

 

(b)                                 either (i) plus any amount by which Net
Working Capital at the commencement of such financial year exceeds Net Working
Capital at the close of such financial year or, as appropriate, (ii) minus any
amount by which Net Working Capital at the end of such financial year exceeds
Net Working Capital at the beginning of such financial year.

 

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For the purposes of this definition of “Excess Cash Flow”, Net Working Capital
means, at any time, the aggregate of the Current Assets of the Borrower Group at
such time less the aggregate of the Current Liabilities of the Borrower Group at
such time.

 

Facility means each of Facility A, Facility B and Facility C.

 

Facility A means the €750,000,000 revolving credit facility referred to in
Clause 2.1(a) (Facilities).

 

Facility A Advance means an advance made to UPC Distribution under Facility A.

 

Facility A Availability Period means the period from and including the Signing
Date up to and including the Facility A Final Maturity Date or such earlier date
on which the Total Facility A Commitments have been cancelled in full or such
later date as all the Lenders may agree in writing.

 

Facility A Commitment means:

 

(a)                                  in relation to an Original Lender, the
amount in euros set opposite its name under the heading “Facility A Commitment”
in Part 2 of Schedule 1 (Original Lenders and Commitments) and the amount of any
other Facility A Commitment transferred to it under this Agreement; and

 

(b)                                 in relation to any other Lender, the amount
in euros of any Facility A Commitment transferred to it in accordance with this
Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

Facility A Final Maturity Date means 30th June, 2008 or, if that day is not a
Business Day, the preceding Business Day.

 

Facility A Lender means a Lender under Facility A.

 

Facility Agent means:

 

(a)                                  TD Bank Europe Limited in its capacity as
facility agent under or in connection with Facility A, Facility B or Facility
C1;

 

(b)                                 Toronto Dominion (Texas), Inc., in its
capacity as facility agent under or in connection with Facility C2; or

 

(c)                                  both,

 

in each case as the context requires; provided that references in this Agreement
to Facility Agent which do not relate solely and specifically to Facility C2
shall be deemed to refer to TD Bank Europe Limited in its capacity as facility
agent under or in connection with the Facility.

 

Facility B means the €2,750,000,000 term loan facility referred to in Clause
2.1(b) (Facilities).

 

Facility B Advance means an advance made to UPC Distribution under Facility B.

 

Facility B Availability Period means the period from and including the Signing
Date up to and including 31st December, 2003 or such earlier date on which the
Total Facility B

 

12

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Commitments have been cancelled in full or such later date as all the Lenders
may agree in writing.

 

Facility B Commitment means:

 

(a)                                  in relation to an Original Lender, the
amount in euros set opposite its name under the heading “Facility B Commitment”
in Part 2 of Schedule 1 (Original Lenders and Commitments) and the amount of any
other Facility B Commitment transferred to it under this Agreement; and

 

(b)                                 in relation to any other Lender, the amount
in euros of any Facility B Commitment transferred to it in accordance with this
Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

Facility B Lender means a Lender under Facility B.

 

Facility C means the US$347,500,000 and €95,000,000 term loan facility referred
to in Clause 2.1(c) (Facilities).

 

Facility C Advance means a Facility C1 Advance or a Facility C2 Advance.

 

Facility C1 means the €95,000,000 term loan facility which forms a sub-tranche
of Facility C.

 

Facility C1 Advance means a euro-denominated advance made to UPC Distribution
under Facility C.

 

Facility C2 means the US$347,500,000 term loan facility which forms a
sub-tranche of Facility C.

 

Facility C2 Advance means a US Dollar-denominated advance made to the US
Borrower under Facility C.

 

Facility C Availability Period means the period from and including the Signing
Date up to and including the earlier of:

 

(a)                                  the first Utilisation Date under the
Facilities; or

 

(b)                                 the date falling 30 days after the Signing
Date,

 

or such earlier date on which the Total Facility C Commitments have been
cancelled in full or such later date as all the Lenders may agree in writing.

 

Facility C Commitment means, in relation to a Lender, the aggregate for the time
being of its:

 

(a)                                  Facility C1 Commitments; and

 

(b)                                 Facility C2 Commitments (translated into
euros on the basis of:

 

(i)                                     (if and to the extent that any member of
the Borrower Group has entered into any currency Senior Hedging Agreement(s) in
respect of a Facility C2 Advance) the rate at which any such Facility C2 Advance
was swapped into euros; and

 

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(ii)                                  to the extent the Borrower Group has not
entered into any currency Senior Hedging Agreements in relation to Facility C2
Advances or the Facility C2 Commitments are undrawn, the Agent’s Spot Rate of
Exchange on the Utilisation Date).

 

Facility C1 Commitment means:

 

(a)                                  in relation to an Original Lender, the
amount in euros set opposite its name under the heading “Facility C1 Commitment”
in Part 2 of Schedule 1 (Original Lenders and Commitments) and the amount of any
other Facility C1 Commitment transferred to it under this Agreement; and

 

(b)                                 in relation to any other Lender, the amount
in euros of any Facility C1 Commitment transferred to it in accordance with this
Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

Facility C2 Commitment means:

 

(a)                                  in relation to an Original Lender, the
amount in US Dollars set opposite its name under the heading “Facility C2
Commitment” in Part 2 of Schedule 1 (Original Lenders and Commitments) and the
amount of any other Facility C2 Commitment transferred to it under this
Agreement; and

 

(b)                                 in relation to any other Lender, the amount
in US Dollars of any Facility C2 Commitment transferred to it in accordance with
this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

Facility C Lender means a Lender under Facility C.

 

Facility Office means the office(s) notified by a Lender to the Facility Agent:

 

(a)                                  on or before the date it becomes a Lender;
or

 

(b)                                 by not less than five Business Days’ notice,

 

as the office(s) through which it will perform all or any of its obligations
under this Agreement.

 

Fee Letter means each of:

 

(a)                                  the letter between Chase Manhattan plc, TD
Bank Europe Limited, Cable Networks Netherlands Holding B.V. and UPC dated 24th
May, 2000 dealing with underwriting fees;

 

(b)                                 the letter between the Facility Agent and
the Borrowers dated on or about the Signing Date dealing with agency fees; and

 

(c)                                  the Amendment Fee Letter,

 

in each case setting out the amount of various fees referred to in Clause 20
(Fees).

 

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Final Repayment Date means:

 

(a)                                  when designated Facility B, 30th June, 
2008; and

 

(b)                                 when designated Facility C, 31st March,
2009,

 

or in each case, if that day is not a Business Day, the immediately preceding
Business Day (and without any such designation means the Facility B Final
Repayment Date or the Facility C Final Repayment Date, as applicable).

 

Finance Document means this Agreement, a Security Document, the Security Deed, a
Fee Letter, a Guarantor Accession Agreement, the Syndication Letter, a Novation
Certificate, the Intercreditor Agreement and any other document designated in
writing as such by the Facility Agent and UPC Distribution.

 

Finance Party means a Lead Arranger, a Lender, the Facility Agent or the
Security Agent.

 

Financial Indebtedness means, without double counting, indebtedness in respect
of:

 

(a)                                  money borrowed or raised and debit balances
at banks;

 

(b)                                 any bond, note, loan stock, debenture or
similar debt instrument;

 

(c)                                  acceptance or documentary credit
facilities;

 

(d)                                 receivables sold or discounted (otherwise
than on a non-recourse basis and other than in the normal course of business for
collection);

 

(e)                                  payments for assets acquired or services
supplied deferred for a period of over 180 days (or 360 days if such deferral is
in accordance with the terms pursuant to which the relevant assets were or are
to be acquired or services were or are to be supplied) after the relevant assets
were or are to be acquired or the relevant services were or are to be supplied;

 

(f)                                    finance leases and hire purchase
contracts to the extent that they constitute capital leases within the meaning
of GAAP, provided that indebtedness in respect of network leases shall only be
included in this paragraph (f) for the purposes of the definition of “Excess
Cash Flow” and Clause 18.5 (Cross default);

 

(g)                                 any other transaction (including without
limitation forward sale or purchase agreements) having the commercial effect of
a borrowing or raising of money or any of (b) to (f) above;

 

(h)                                 (for the purposes of Clause 18.5 (Cross
default) only) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or price (and, when
calculating the value of any derivative transaction, only the marked-to-market
value shall be taken into account); and

 

(i)                                     guarantees in respect of indebtedness of
any person falling within any of paragraphs (a) to (g) above (including for the
avoidance of doubt, without double counting, guarantees given by a member of the
Borrower Group for the indebtedness of the type falling within (a) to (g) above
of another member of the Borrower Group),

 

15

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provided that indebtedness which has been cash-collateralised shall not be
included in any calculation of Financial Indebtedness to the extent so
cash-collateralised and indebtedness which is in the nature of equity (other
than redeemable shares) shall not be regarded as Financial Indebtedness.

 

GAAP means generally accepted accounting principles and practices in the United
States.

 

Guaranteed Document means each Finance Document, the High Yield Hedging
Agreements and the Senior Hedging Agreements.

 

Guarantor means each Original Guarantor and each Additional Guarantor.

 

Guarantor Accession Agreement means a deed in the form of Part 2 of Schedule 5
(Guarantor Accession Agreement), with such amendments as the Facility Agent may
approve or reasonably require (including, without limitation, any limitation on
the obligations of the relevant Additional Guarantor which has been approved by
the Facility Agent pursuant to Clause 26.4(a)(v) (Additional Guarantors)).

 

Hedging Counterparty means each High Yield Hedging Counterparty and each Senior
Hedging Counterparty.

 

High Yield Hedging Agreements has the meaning given to it in the Security Deed.

 

High Yield Hedging Bank means a Lender or its Affiliate or a “Lender” or its
“Affiliate” as defined in the New Facility Agreement which is or becomes a party
to the New Security Deed and/or the Security Deed as a High Yield Hedging Bank.

 

High Yield Hedging Counterparty means any member of the UGCE Borrower Group that
enters into a High Yield Hedging Agreement.

 

High Yield Notes means high yield debt securities or other instruments not
mandatorily convertible into equity, in each case issued by a company which is a
member of the UGCE Borrower Group.

 

Holding Company means, in relation to a person, an entity of which that person
is a Subsidiary.

 

Indentures means each of:

 

(a)                                  the indenture dated as of 30th July, 1999
between UPC and Citibank N.A. in relation to US$735,000,000 12½ per cent. senior
discount notes due 2009;

 

(b)                                 the indenture dated 5th February, 1998
between UGC and Firstar Bank of Minnesota N.A. (the UGC Trustee) for the
$1,375,000,000 10¾ per cent. senior secured discount notes due 2009;

 

(c)                                  the indenture dated 15th April, 1999
between UGC and the UGC Trustee for the $355,000,000 senior discount notes due
2009;

 

(d)                                 the indenture dated 30th July, 1999 between
UPC and Citibank N.A. for the $800,000,000 10 7/8 per cent. senior notes due
2009 and the €300,000,000 10 7/8 per cent. senior notes due 2009;

 

16

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(e)                                  the indenture dated 29th October, 1999
between UPC and Citibank N.A. for the $200,000,000 10 7/8 per cent. senior notes
due 2007 and the €100,000,000 10 7/8 per cent. senior notes due 2007;

 

(f)                                    the indenture dated 29th October, 1999
between UPC and Citibank N.A. for the $252,000,000 11¼ per cent. senior notes
due 2009 and the €101,000,000 11¼ per cent. senior notes due 2009;

 

(g)                                 the indenture dated 29th October, 1999
between UPC and Citibank N.A. for the $478,000,000 13 3/8 per cent. senior
discount notes due 2009 and the €191,000,000 13 3/8 per cent. senior discount
notes due 2009;

 

(h)                                 the indenture dated 20th January, 2000
between UPC and Citibank N.A. for the $300,000,000 11½ per cent. senior notes
due 2010;

 

(i)                                     the indenture dated 20th January, 2000
between UPC and Citibank N.A. for $600,000,000 11¼ per cent. senior notes due
2010 and the €200,000,000 11¼ per cent. senior notes due 2010; and

 

(j)                                     the indenture dated 20th January, 2000
between UPC and Citibank N.A. for the $1,000,000,000 13¾ per cent. senior
discount notes due 2010,

 

in each case as in effect on the Signing Date.

 

Information Memorandum means the information memorandum dated June, 2000 as
updated by the information memorandum dated July, 2000 prepared in connection
with syndication of the Facilities, and as further updated, if applicable, by an
information memorandum to be prepared for the purposes of general syndication of
the Facilities.

 

Intellectual Property Rights means all know-how, patents, trade marks, designs
and design rights, trading names, copyrights (including any copyright in
computer software), database rights and other intellectual property rights
anywhere in the world (in each case whether registered or not and including all
applications for the same).

 

Interconnect Agreements means each interconnection agreement, network contract,
franchise agreement, telecommunications service agreement and any agreement of a
similar nature entered into by any member of the Borrower Group in connection
with the conduct of its business as may be permitted by the terms of this
Agreement (including any interconnect agreements maintained pursuant to Clause
16.20 (Inter-connection and chello)).

 

Intercreditor Agreement means the intercreditor deed entered into on or about
the date of the Amendment and Restatement Agreement between, among others, the
Facility Agents and the Security Agent, the facility agent and security agent
under the New Facility Agreement and UPC Distribution.

 

Interest has the meaning given to it in Clause 17.1 (Financial definitions).

 

Interest Date means the last day of an Interest Period.

 

Interest Period means each period determined in accordance with Clause 8
(Interest).

 

Lender means:

 

(a)                                  any Original Lender; and

 

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(b)                                 any person which has become a New Lender (as
defined in Clause 26.2 (Transfers by Lenders)) in accordance with Clause 26
(Changes to the Parties),

 

which in each case has not ceased to be a Party in accordance with the terms of
this Agreement.

 

LIBOR means in relation to any Advance or Unpaid Sum denominated in US Dollars
or in an Optional Currency (other than euros):

 

(a)                                  the applicable Screen Rate for deposits in
the currency of the relevant Advance or Unpaid Sum for a period equal or
comparable to the required period at or about 11.00 a.m. on the applicable Rate
Fixing Day; or

 

(b)                                 (if no Screen Rate is available for the
required currency or required period of that Advance or Unpaid Sum) the
arithmetic mean (rounded upwards, if necessary, to the nearest four decimal
places) of the respective rates, as supplied to the Facility Agent at its
request, quoted by the Reference Banks to leading banks for the offering of
deposits in the required currency and for the required period in the London
interbank market at or about 11.00 a.m. on the Rate Fixing Day for such period,

 

and for the purposes of this definition, required period means the applicable
Interest Period of an Advance or the period in respect of which LIBOR falls to
be determined in relation to any Unpaid Sum.

 

Licence means each approval, consent, authorisation and licence from, and all
filings, registrations and agreements with any governmental or regulatory
authority, in each case granted, issued, made or entered into pursuant to any
Telecommunications and Cable Law necessary in order to enable each member of the
Borrower Group to carry on its business as may be permitted by the terms of this
Agreement.

 

LMA means the Loan Market Association.

 

Majority Acquisition has the meaning given in paragraph (c) of the definition of
“Permitted Acquisition”.

 

Majority Facility C Lenders means, at any time Lenders the aggregate of whose
undrawn Facility C Commitments and participations in outstanding Facility C
Advances (calculated by reference to the Original Euro Amount of such Advances)
exceeds 66 2/3 per cent. of the undrawn Total Facility C Commitments and the
Original Euro Amount of outstanding Facility C Advances.

 

Majority Lenders means, at any time Lenders the aggregate of whose undrawn
Facility A Commitments, undrawn Facility B Commitments and undrawn Facility C
Commitments and participations in outstanding Facility A Advances, Facility B
Advances and Facility C Advances (calculated by reference to the Original Euro
Amount of such Advances) exceeds 662/3 per cent. of the aggregate undrawn Total
Facility A Commitments, undrawn Total Facility B Commitments, undrawn Total
Facility C Commitments and the Original Euro Amount of outstanding Advances.

 

Management Fees means any management, consultancy or similar fees payable by any
member of the Borrower Group to any Restricted Person.

 

Mandatory Cost means the percentage rate per annum calculated by the Facility
Agent in accordance with Schedule 3 (Mandatory Cost Formulae).

 

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Margin means, in relation to an Advance at any time, the percentage rate per
annum determined to be the Margin applicable to that Advance in accordance with
Clause 8.10 (Margin).

 

Material Adverse Effect means any event or circumstance which has a material
adverse effect on the ability of the Obligors (taken as a whole) to perform
their payment or other material obligations under any of the Finance Documents.

 

Material Contracts means:

 

(a)                                  the Interconnect Agreements;

 

(b)                                 the agreement between chello Broadband N.V.
and UPC Distribution documenting the arrangement under which chello Broadband
N.V. and UPC Distribution share the subscriber revenues generated from the
chello broadband internet service;

 

(c)                                  the Priority Pledge;

 

(d)                                 the Derby and EPG Pledges;

 

(e)                                  the Derby and EPG Agreements;

 

(f)                                    the Shareholders’ Agreements, as from
time to time amended, varied, restated or replaced, in each case in a manner
that does not constitute an Event of Default under Clause 18.18 (Material
Contracts); and

 

(g)                                 each other agreement agreed as such by the
Facility Agent and UPC Distribution.

 

Material Subsidiary means any Subsidiary of UPC Distribution which accounts for
more than five per cent. of one or more of:

 

(a)                                  the book value of the consolidated assets
of the Borrower Group; or

 

(b)                                 the consolidated revenues of the Borrower
Group; or

 

(c)                                  consolidated EBITDA of the Borrower Group,

 

all as shown in the financial statements most recently delivered under Clause
16.2(a) or (b) (Financial information) (except that for purposes of determining
the consolidated revenues and consolidated EBITDA of the Borrower Group in
respect of the financial statements delivered under Clause 16.2(b) (Financial
information), the respective amounts of such revenues and such EBITDA shall
equal two times the consolidated revenues and consolidated EBITDA, respectively,
of the Borrower Group during the relevant Ratio Period ending on the date to
which such financial statements are prepared).

 

If a Subsidiary which is not a Material Subsidiary on the basis of the most
recent such financial statements most recently delivered receives on any date
(the Relevant Date) a transfer of assets or the right to receive any revenues or
other earnings which, taken together with the existing assets or, as the case
may be, revenues or earnings of that Subsidiary, would satisfy either of the
tests in paragraphs (a), (b) or (c) above, then that Subsidiary shall also be a
Material Subsidiary on and from the Relevant Date.  If a Material Subsidiary
disposes of any assets or the right to receive any revenues or earnings such
that it would on the basis of the most recent such financial statements most
recently delivered cease to be a Material

 

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Subsidiary, then it shall be excluded as a Material Subsidiary on and from the
date it makes such disposal.

 

Necessary Authorisations means all material approvals, consents, authorisations
and licences (other than the Licences) from, all rights granted by and all
filings, registrations and agreements with, any government or other regulatory
authority necessary in order to enable each member of the Borrower Group to
carry on its business as may be permitted by the terms of this Agreement as
carried on by it at the relevant time.

 

Net Equity Proceeds means any cash proceeds (net of issue expenses) received by
or for the account of a member of UGCE Borrower Group from any issued securities
constituting or convertible or exchangeable (with or without conditions) into,
share capital of that member of the UGCE Borrower Group (but excluding any
proceeds received from an issue of Relevant Convertible Preference Shares).

 

Net Proceeds means the aggregate cash (or cash equivalent) proceeds received by
any member of the Borrower Group in consideration for or otherwise in respect of
a relevant disposal, net of all Taxes applicable on, or to any gain resulting
from, that disposal and of all reasonable costs, fees and expenses properly
incurred by continuing members of the Borrower Group in arranging and effecting
that disposal.

 

Network means the networks operated from time to time by any member of the
Borrower Group pursuant to the Licences and in accordance with this Agreement.

 

New Beneficiaries means the Beneficiaries as defined in the New Security Deed.

 

New Facility means the €1,072,000,000 secured credit facility provided pursuant
to the New Facility Agreement, consisting of the New Facility D and the
Additional Facility.

 

New Facility D means “Facility D” as defined in the New Facility Agreement.

 

New Facility Agreement means the €1,072,000,000 secured credit agreement between
TD Bank Europe Limited as facility agent, UPC Distribution as borrower, the New
Facility Lenders and others dated on or about January, 2004.

 

New Facility Borrower means a Borrower as defined in the New Facility Agreement.

 

New Facility Lender means a Lender as defined in the New Facility Agreement.

 

New Finance Document means a Finance Document as defined in the New Facility
Agreement.

 

New Security Deed means the security deed entered into on or about the date of
the Amendment and Restatement Agreement between, among others, each Obligor, the
facility agent and security agent under the New Facility Agreement, the New
Facility Lenders, the High Yield Hedging Banks and each Subordinated Creditor
and includes each Deed of Accession (as defined in the New Security Deed)
entered into in relation to the New Security Deed.

 

New Security Document means:

 

(a)                                  the Security Documents as defined in
paragraph (a) of the definition of “Security Documents” in the New Facility
Agreement; and

 

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(b)                                 any other Security Document as defined in
paragraph (b) of the definition of “Security Documents” in the New Facility
Agreement, provided that the Security Interest(s) granted under any such
Security Document are simultaneously granted on the same terms (save for
variations directly attributable to the identity of the parties and the loan
amounts) to the Security Agent on behalf of the Beneficiaries to secure the
Secured Obligations (as defined in the Security Deed).

 

non-Distribution Business Assets has the meaning given to it in Clause
16.10(b)(x) (Disposals).

 

Norwegian Kroner means the lawful currency of Norway for the time being.

 

Novation Certificate has the meaning given to it in Clause 26.3(a)(i) (Procedure
for novations).

 

Obligor means a Borrower or a Guarantor including, for the purposes of Clause 18
(Default), any Subsidiary of UPC Distribution that is required to become a
Guarantor under Clause 26.4 (Additional Guarantors) but has not yet become a
Guarantor.

 

Obligor Pledge of Shareholder Loans means the deeds of pledge of shareholder
loans entered into between certain Obligors and the Security Agent listed in
sub-paragraphs 3(a), (c), (d), (e), (f) and (g) of Schedule 7 (Security
Documents) and any other deed of pledge of shareholder loans in substantially
the same form entered into by an Obligor pursuant to any such deed of pledge or
Clause 16.14(a) (Loans and guarantees) or Clause 26.4 (Additional Guarantors).

 

Obligors’ Framework Agreement means the Framework Agreement (as defined in any
Obligor Pledge of Shareholder Loans).

 

Optional Currency means Norwegian Kroner, Swedish Kroner or any other currency
readily available in the amount required and freely convertible into euros in
the European interbank market on the relevant Rate Fixing Day and the relevant
Utilisation Date and approved by the Facility Agent (acting on the instructions
of all the Facility A Lenders) on or prior to receipt by the Facility Agent of
the relevant Request for a Facility A Advance denominated in that currency.

 

Original Borrower Group Financial Statements means the financial statements of
the Borrower Group for the Accounting Period ended 31st March, 2000 (comprising
the unaudited compiled financial statements of each of the Obligors for the
Accounting Period ended 31st March, 2000 and a combination of those financial
statements).

 

Original Euro Amount means:

 

(a)                                  the principal amount of a Facility A
Advance, Facility B Advance or Facility C Advance (as applicable) denominated in
euros; or

 

(b)                                 the principal amount of a Facility A
Advance, Facility B Advance or Facility C Advance (as applicable) denominated in
any other currency, translated into euros on the basis of the Agent’s Spot Rate
of Exchange on the date of receipt by the Facility Agent of the Request for the
relevant Advance (in the case of a Facility A Advance or a Facility B Advance)
or on the Utilisation Date (in the case of a Facility C2 Advance).

 

21

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Participating Member State means a member state of the European Community that
adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Community for Economic Monetary Union.

 

Party means a party to this Agreement.

 

Permitted Acquisition means:

 

(a)                                  [intentionally left blank]

 

(b)                                 any Acquisition of a member of the Borrower
Group by any other member of the Borrower Group as part of the solvent
reorganisation of the Borrower Group; or

 

(c)                                  any Acquisition where, upon completion of
the Acquisition, the person acquired will be a Subsidiary of UPC Distribution or
where UPC Distribution or one of its Subsidiaries which is a member of the
Borrower Group will own directly or indirectly greater than a 50 per cent.
interest in the asset or assets constituting the acquired business (a Majority
Acquisition) and where:

 

(i)                                     the Acquisition Cost of that Majority
Acquisition, when aggregated with the Acquisition Cost of all Majority
Acquisitions made since the Signing Date, but deducting:

 

(A)                              the amount of any such Acquisition Cost which
has been directly or indirectly funded (whether before, at or after the time of
completion of the Acquisition) by the proceeds of a Relevant Equity Injection
(other than any Relevant Equity Injection referred to in sub- paragraph
(c)(i)(B) or paragraph (c)(i)(l) below);

 

(B)                                the amount of any such Acquisition Cost which
has been directly funded (in whole or in part) by the proceeds of a drawing
under Facility A, provided that such deduction shall only be made to the extent
that, prior to the date of the Majority Acquisition, the outstandings under
Facility A were reduced out of the proceeds of a Relevant Equity Injection (and
excluding the amount of any such reduction of outstandings under Facility A to
the extent that Facility A has previously been drawn for the purposes of funding
(in whole or in part) a Permitted Acquisition) and further provided that, at the
time such reduction was made, UPC Distribution delivered to the Facility Agent a
certificate signed by two managing directors or the sole managing director of
UPC Distribution certifying:

 

I.                                         that the amount of the reduction was
funded from a Relevant Equity Injection; and

 

II.                                     that UPC Distribution intended to draw
an amount up to such amount under Facility A following the date of the 
reduction in order to fund a Permitted Acquisition;

 

(C)                                the Acquisition Cost of all such Majority
Acquisitions of any entity in which a member of the Borrower Group has an
ownership interest at the Signing Date or acquired an ownership interest
pursuant to the Restructuring;

 

22

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(D)                               the Acquisition Cost of any Acquisition
constituting a Majority Acquisition made pursuant to paragraph (b) above; and

 

(E)                                 the Acquisition Cost of the Acquisition of
one or more cable television networks in the Netherlands, as disclosed in
writing to the Facility Agent before the Signing Date, and/or any business which
is incidental or related thereto, in an aggregate amount that does not exceed
€60,000,000,

 

does not exceed:

 

(1)                                  (except in the case of a Connected
Acquisition) the sum of (x) €250,000,000 and (y) an amount equal to the proceeds
of all Relevant Equity Injections made since the Effective Date, to the extent
only that the proceeds of such Relevant Equity Injection have been applied to
permanently prepay and cancel the outstandings under Facility A, Facility B,
Facility C or New Facility D since the Effective Date provided that, at the time
that any such prepayment and cancellation was made, UPC Distribution delivered
to the Facility Agent a certificate signed by two managing directors or the sole
managing director of UPC Distribution certifying that the amount of the
prepayment and cancellation was funded from a Relevant  Equity Injection;

 

(2)                                  in the case of a Connected Acquisition, €0;
or

 

(3)                                  in the case of the UPC Polska Acquisition,
and subject always to sub-paragraph (1) above, the aggregate principal amount of
any debt securities issued by UPC Polska (together with any interest owing in
respect of such debt securities) in connection with the UPC Polska
Restructuring;

 

(ii)                                  if the higher of the Acquisition Cost and
the book value of any Majority Acquisition (or, where an opinion confirming the
fairness of the relevant Majority Acquisition from a financial point of view has
been issued by an independent third party, the Acquisition Cost of any Majority
Acquisition):

 

(A)                              is greater than €100,000,000 and no more than
€150,000,000, UPC Distribution delivers a certificate to the Facility Agent
signed by two managing directors or the sole managing director, as the case may
be, of UPC Distribution and certifying; or

 

(B)                                is greater than €150,000,000, UPC
Distribution delivers to the Facility Agent financial projections based on
assumptions which are no more aggressive (when taken as a whole) than those used
in the preparation of the Business Plan which demonstrate,

 

that the Borrowers will be in compliance with Clause 6 (Repayment) and the
undertakings set out in Clause 17 (Financial Covenants) for the period from
completion of the Acquisition (taking into account the Acquisition Cost of such
Majority Acquisition (but deducting from that Acquisition Cost the value of any
consideration referred to in paragraph (a) of the definition of “Acquisition
Cost”) and financial projections relating to the acquired business or asset(s))
to the last Final Repayment Date;

 

23

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(iii)                               the business of the acquired entity or the
business acquired, as the case may be, is of the same nature as the business of
the Borrower Group as at the Signing Date and is carried out principally in
Europe;

 

(iv)                              in the case of any Majority Acquisition where
the Acquisition Cost is €40,000,000 or greater, UPC Distribution delivers to the
Facility Agent an Acquisition Business Plan which:

 

(A)                              must contain cash flow projections which show
that the Target will be Cash Flow Positive (taking into account the amount of
any Relevant Equity Injection referred to in sub-paragraph (c)(i)(A) and
(c)(i)(B) above) from the date of the proposed Majority Acquisition up to and
including the last Final Repayment Date; and

 

(B)                                in relation to any Majority Acquisition
completed prior to 31st December, 2006, must contain cash flow projections which
show that the sum of the undrawn Total Facility A Commitments and Unrestricted
Cash, taking into account the proposed Majority Acquisition, is projected to be
greater than €100,000,000 on 31st December, 2006;

 

(v)                                 UPC Distribution delivers to the Facility
Agent the most recent annual or semi-annual financial statements of or relating
to the Target, together with a certificate signed by two managing directors or
the sole managing director, as the case may be, of UPC Distribution certifying
the amount of the Cash Flow of the Target for the most recent half financial
year of, or relating to, the Target and setting out the supporting calculations;

 

(vi)                              no Default has occurred and is continuing or
would be caused by the Majority Acquisition; and

 

(vii)                           the Acquisition Cost of that Majority
Acquisition is not funded from the proceeds of an advance drawn by a New
Facility Borrower under the Additional Facility; or

 

(d)                                 any Additional Acquisition where:

 

(i)                                     the Acquisition Cost of that Additional
Acquisition, when aggregated with the Acquisition Cost of all Additional
Acquisitions made since the Effective Date, but deducting the amount of any such
Acquisition Cost which has been directly or indirectly funded (whether before,
after or at completion of the Additional Acquisition) by the proceeds of any
Relevant Equity Injection, does not exceed €1,000,000,000;

 

(ii)                                  UPC Distribution delivers to the Facility
Agent the most recent annual or semi-annual financial statements of the Target,
together with a certificate, signed by two managing directors or the sole
managing director of UPC Distribution, which certifies that the ratio of Senior
Debt to Annualised EBITDA (including any Senior Debt used to fund the
Acquisition Cost of that Additional Acquisition) for the most recent half
financial year set out in the most recent financial statements of the Target is:

 

(A)                              less than 4.0:1; or

 

24

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(B)                                at least 1.0 (one) times lower than the ratio
of Senior Debt to Annualised EBITDA of the Borrower Group for the most recent
Ratio Period, as shown in the most recent set of financial statements delivered
under Clause 16.2(a) or (b) (Financial information); and

 

(iii)                               an Acquisition Business Plan which, in the
case of any Additional Acquisition where the Acquisition Cost is €25,000,000 or
greater, must contain cash flow projections which show that the Target will be
Cash Flow Positive (taking into account the amount of any Relevant Equity
Injection referred to in sub-paragraph (d)(i) above) from the date of the
proposed Additional Acquisition up to and including the last Final Repayment
Date;

 

(iv)                              UPC Distribution delivers to the Facility
Agent the most recent annual or semi-annual financial statements of or relating
to the Target, together with a certificate signed by two managing directors or
the sole managing director, as the case may be, of UPC Distribution certifying
the amount of the Cash Flow of the Target for the most recent half financial
year of, or relating to, the Target and setting out supporting calculations;

 

(v)                                 no Default has occurred and is continuing or
would be caused by the Additional Acquisition; and

 

(vi)                              the Acquisition Cost of that Additional
Acquisition is funded (in whole or in part) by one or more advances drawn by UPC
Distribution under an Additional Facility and any balance of the Acquisition
Cost not funded by drawings under an Additional Facility are funded directly or
indirectly by one or more Relevant Equity Injections.

 

(e)                                  any Majority Acquisition which is also an
Additional Acquisition where:

 

(i)                                     the Acquisition Cost of that Acquisition
exceeds both the available limit permitted for Majority Acquisitions under
sub-paragraph (c)(i)(1) above at the relevant time (the Majority Acquisitions
Available Limit) and the available limit permitted for Additional Acquisitions
under sub-paragraph (d)(i) above at the relevant time (the Additional
Acquisitions Available Limit) but does not exceed the aggregate of the Majority
Acquisitions Available Limit and the Additional Acquisitions Available Limit;

 

(ii)                                  that Acquisition satisfies all the
requirements set out in paragraphs (c) and (d) above other than:

 

(A)                              the Acquisition Cost being in excess of the
Majority Acquisitions Available Limit and the Additional Acquisitions Available
Limit as described above; and

 

(B)                                sub-paragraphs (c)(vii) and (d)(vi); and

 

(iii)                               the Acquisition Cost of that Acquisition is
funded (up to the amount of the Additional Acquisitions Available Limit) wholly
or partly from the proceeds of a drawing under an Additional Facility and any
balance not funded by drawings under an Additional Facility (up to the
Additional Acquisitions Available Limit) are funded directly or indirectly by
one or more Relevant Equity Injections, with the balance of the Acquisition Cost
(in excess of the

 

25

--------------------------------------------------------------------------------

 

Additional Acquisitions Available Limit) funded by any other means permitted
under this Agreement.

 

All references in this definition to euro or € shall, where applicable, mean the
equivalent in any other currency, converted to euro, based on the Agent’s Spot
Rate of Exchange at the relevant time.

 

Permitted Business means the carrying on of the Business in Europe.

 

Permitted Financial Indebtedness has the meaning given to it in Clause 16.12(b)
(Restrictions on Financial Indebtedness).

 

Permitted Joint Venture means:

 

(a)                                  any Acquisition referred to in paragraph
(b) of the definition of “Permitted Acquisition” and any Acquisition as a result
of a reorganisation of a person that is not a Subsidiary of UPC Distribution but
in which a member of the Borrower Group has an interest, provided that such
reorganisation does not result in an overall increase in the value of the
Borrower Group’s interest in that person, other than adjustments to the basis of
any member of the Borrower Group’s interest in accordance with GAAP; or

 

(b)                                 any Acquisition where, upon completion of
the Acquisition, the person acquired will not be a Subsidiary of UPC
Distribution or where UPC Distribution or one of its Subsidiaries which is a
member of the Borrower Group will own directly or indirectly no more than a 50
per cent. interest in the asset or assets constituting the acquired business (a
JV Minority Acquisition) and where:

 

(i)                                     the Acquisition Cost of that JV Minority
Acquisition, when aggregated with the Acquisition Cost of all JV Minority
Acquisitions made since the Signing Date, but deducting:

 

(A)                              the amount of any such Acquisition Cost which
has been directly or indirectly funded (whether before, at or after, the time of
completion of the Acquisition) by the proceeds of a Relevant Equity Injection
(other than any Relevant Equity Injection referred to in sub-paragraph (b)(i)(B)
or sub-paragraph (b)(i)(1) below);

 

(B)                                the amount of any such Acquisition Cost which
has been directly funded (in whole or in part) by the proceeds of a drawing
under Facility A, provided that such deduction shall only be made to the extent
that, prior to the date of the JV Minority Acquisition, the outstandings under
Facility A were reduced out of the proceeds of a Relevant Equity Injection (and
excluding the amount of any such reduction of outstandings under Facility A to
the extent that Facility A has previously been drawn for the purposes of funding
(in whole or in part) a Permitted Joint Venture) and further provided that, at
the time such reduction was made, UPC Distribution delivered to the Facility
Agent a certificate signed by two managing directors or the sole managing
director of UPC Distribution certifying:

 

I.                                         that the amount of the reduction was
funded from a Relevant Equity Injection; and

 

26

--------------------------------------------------------------------------------

 

II.                                     that UPC Distribution intended to draw
an amount up to such amount under Facility A following the date of the reduction
in order to fund a Permitted Joint Venture;

 

(C)                                the Acquisition Cost of all such JV Minority
Acquisitions of any entity in which a member of the Borrower Group has an
ownership interest at the Signing Date or acquired an ownership interest
pursuant to the Restructuring; and

 

(D)                               the Acquisition Cost of any Acquisition
constituting a JV Minority Acquisition made pursuant to paragraph (a) above,

 

does not exceed:

 

(1)                              (except in the case of a Connected Acquisition)
the sum of (x)  €250,000,000 and (y) an amount equal to the proceeds  of all
Relevant Equity Injections made since the Effective Date, to the extent only
that the proceeds of such Relevant Equity Injection have been applied to
permanently prepay and cancel the outstandings under Facility A, Facility B,
Facility C or New Facility D since the Effective Date provided that, at the time
that any such prepayment and cancellation was made, UPC Distribution delivered
to the Facility Agent a certificate signed by two managing directors or the sole
managing director of UPC Distribution certifying that the amount of the
prepayment and cancellation was funded from a Relevant Equity Injection; or

 

(2)                               in the case of a Connected Acquisition, €0;

 

(ii)                                  if the higher of the Acquisition Cost and
the book value of any JV Minority Acquisition (or, where an opinion confirming
the fairness of the relevant JV Minority Acquisition from a financial point of
view has been issued by an independent third party, the Acquisition Cost of any
JV Minority Acquisition):

 

(A)                              is greater than €50,000,000, UPC Distribution
delivers a certificate to the Facility Agent signed by two managing directors or
the sole managing director, as the case may be, of UPC Distribution and
certifying; or

 

(B)                                is greater than €100,000,000, UPC
Distribution delivers to the Facility Agent financial projections based on
assumptions which are no more aggressive (when taken as a whole) than those used
in the preparation of the Business Plan which demonstrate,

 

that the Borrowers will be in compliance with Clause 6 (Repayment) and the
undertakings set out in Clause 17 (Financial Covenants) for the period from
completion of the JV Minority Acquisition (taking into account the Acquisition
Cost of such JV Minority Acquisition (but deducting from that Acquisition Cost
the value of any consideration referred to in paragraph (a) of the definition of
“Acquisition Cost”) and financial projections relating to the acquired business
or asset(s)) to the last Final Repayment Date;

 

27

--------------------------------------------------------------------------------

 

(iii)                               the business of the acquired entity or the
business acquired, as the case may be, is of the same nature as the business of
the Borrower Group as at the Signing Date and is carried out principally in
Europe;

 

(iv)                              in the case of any JV Minority Acquisition
where the Acquisition Cost is €40,000,000 or greater, UPC Distribution delivers
to the Facility Agent an Acquisition Business Plan which:

 

(A)                              must contain cash flow projections which show
that the Target will be Cash Flow Positive (taking into account the amount of
any Relevant Equity Injection referred to in sub-paragraph (b)(i)(A) and
(b)(i)(B) above) from the date of the proposed JV Minority Acquisition up to and
including the last Final Repayment Date; and

 

(B)                                in relation to any JV Minority Acquisition
completed prior to 31st December, 2006, must contain cash flow projection which
show that the sum of the undrawn Total Facility A Commitments and Unrestricted
Cash, taking into account the proposed JV Minority Acquisition, is projected to
be greater than €100,000,000 on 31st December, 2006;

 

(v)                                 UPC Distribution delivers to the Facility
Agent the most recent annual or semi-annual financial statements of or relating
to the Target, together with a certificate signed by two managing directors or
the sole managing director, as the case may be, of UPC Distribution certifying
the amount of the Cash Flow of the Target for the most recent half financial
year of, or relating to, the Target and setting out the supporting calculations;

 

(vi)                              no Default has occurred and is continuing or
would be caused by the JV Minority Acquisition; and

 

(vii)                           the Acquisition Cost of that JV Minority
Acquisition is not funded from the proceeds of an advance drawn by a New
Facility Borrower under the Additional Facility.

 

Permitted Payment has the meaning given to it in Clause 16.13(c) (Restricted
Payments).

 

Permitted Security Interest means:

 

(a)                                  any Security Interest arising hereunder or
under any Security Document;

 

(b)                                 any Security Interest arising under any New
Security Document;

 

(c)                                  any liens arising in the ordinary course of
business by way of contract which secure indebtedness under any agreement for
the supply of goods or services in respect of which payment is not deferred for
more than 180 days (or 360 days if such deferral is in accordance with the terms
pursuant to which the relevant goods were acquired or services were provided);

 

(d)                                 any Security Interest imposed by any
taxation or governmental authority in respect of amounts which are being
contested in good faith and not yet payable and for which adequate reserves have
been set aside in the books of the Borrower Group (or, as the case may be, UPC
Distribution Holdco) in respect of the same in accordance with GAAP;

 

28

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(e)                                  any Security Interests approved in writing
by the Agent (acting on the instructions of the Majority Lenders);

 

(f)                                    any Security Interest in favour of any
bank incurred in relation to any cash management arrangements;

 

(g)                                 rights of set-off arising in the ordinary
course of business;

 

(h)                                 any Security Interest securing any Financial
Indebtedness referred to in Clause 16.12(b)(xi) (Restrictions on Financial
Indebtedness), provided that (A) such Security Interest was not created in
contemplation of the acquisition of such company, (B) the debt secured by such
Security Interest is not increased beyond that secured at the date the company
in question is acquired and such Security Interest secures only that debt and
(C) such Encumbrance is discharged within 12 months of completion of the
relevant acquisition;

 

(i)                                     any Security Interest over
non-Distribution Business Assets referred to in Clause 16.12(b)(xii)
(Restrictions on Financial Indebtedness), securing Financial Indebtedness
described therein or any other obligation in respect of such non-Distribution
Business Assets;

 

(j)                                     the Security Interest arising under the
deed of pledge and deed of mortgage (the KTA Pledge and Mortgage) that was
granted to the Municipality of Amsterdam by Kabletelevise Amsterdam B.V. (KTA)
on 8th May, 2002 under the agreement between the Municipality of Amsterdam and
KTA in respect of the construction, maintenance and operation of a cable network
in the Municipality of Amsterdam provided that no material changes are made to
the terms of the KTA Pledge and Mortgage;

 

(k)                                  Security Interests arising under agreements
entered into in the ordinary course of business relating to (i) network leases
or (ii) the leasing of (A) buildings; (B) cars; and (C) other operational
equipment; and

 

(l)                                     any Security Interests not falling
within paragraphs (a) to (k) above and securing indebtedness (other than
indebtedness in relation to an Acquisition) not exceeding €15,000,000 (or its
equivalent).

 

Plan means a plan that is subject to section 302 or regulated by Title IV of
ERISA maintained by any member of the Borrower Group or any ERISA Affiliate
currently or at any time within the last five years, or to which any member of
the Borrower Group or any ERISA Affiliate is required to make payments or
contributions or has made payments or contributions within the past five years.

 

Pledge of Subordinated Shareholder Loans means the deed of pledge and
subordination of Subordinated Shareholder Loans entered into between certain
Restricted Persons and the Security Agent listed in sub-paragraph 3(b) of
Schedule 7 (Security Documents) and any other deed of pledge entered into
pursuant to any such deed of pledge or Clause 16.25(a) (Shareholder Loans).

 

29

--------------------------------------------------------------------------------

 

Priority Pledge means the pledge entered into between UPC Distribution as
pledgee and Priority Telecom Netherlands N.V. as pledgor dated 30th August, 2002
in relation to telephony switches.

 

Professional Market Party means a professional market party (professionele
marktpartij) under the Dutch Exemption Regulation.

 

Rate Fixing Day means:

 

(a)                                  the Utilisation Date of an Advance
denominated in Sterling;

 

(b)                                 the second Business Day before the
Utilisation Date of an Advance denominated in a currency other than euros or
Sterling; or

 

(c)                                  the second TARGET Day before the
Utilisation Date of an Advance denominated in euros,

 

or such other day on which it is market practice in the London or, as the case
may be, European interbank market for leading banks to give quotations in the
relevant currency for delivery on the first day of the relevant Utilisation
Date.

 

Ratio Period has the meaning given to it in Clause 17.1 (Financial definitions).

 

Reference Banks means, subject to Clause 26.5 (Reference Banks), the principal
London offices of JPMorgan Chase Bank, The Toronto-Dominion Bank and CIBC World
Markets plc.

 

Related Fund means, with respect to any Facility C Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is administered or managed by (a) that Facility C Lender, (b) any Affiliate of
that Facility C Lender or (c) the same investment adviser (or an Affiliate of
that investment adviser) that administers or manages that Facility C Lender.

 

Relevant Convertible Preference Shares means, at any time, convertible
preference shares issued by a member of the UGCE Borrower Group but excluding
convertible preference shares that cannot in accordance with their terms be
redeemed for cash:

 

(a)                                  before the date on which all amounts
outstanding under the Finance Documents and the New Finance Documents have been
repaid or prepaid in full; or

 

(b)                                 (if they can be redeemed for cash before
that date) until the ratio of Senior Debt to Annualised EBITDA (i) is 3.5:1 or
less for the two immediately preceding consecutive Ratio Periods and (ii) will
be less than 3.5:1 immediately after such cash redemption.

 

Relevant Eastern European Subsidiary means any Subsidiary of any Obligor which
Subsidiary is incorporated and has all its material operations in Eastern
Europe, provided that the aggregate of the contributions of the Relevant Eastern
European Subsidiaries to the consolidated total assets, consolidated revenues
and consolidated EBITDA of the Borrower Group attributable to Eastern Europe
does not exceed in aggregate 10 per cent.

 

For the purposes of this definition, consolidated revenues and consolidated
EBITDA of the Borrower Group or any Subsidiary of an Obligor shall be determined
by reference to the 12 month period ending on the most recent date in respect of
which financial statements have

 

30

--------------------------------------------------------------------------------

 

been delivered to the Facility Agent under Clause 16.2(b) (Financial
information) and consolidated total assets shall be determined as at such date
by reference to such financial statements.

 

Relevant Equity Injection means equity subscribed in UPC Distribution or one or
more of its Subsidiaries which is a member of the Borrower Group (in each case
other than by another member of the Borrower Group) or the proceeds of
Subordinated Shareholder Loans (including, without limitation, the proceeds of
any such equity subscription or Subordinated Shareholder Loan which are provided
to refinance any such equity subscription or Subordinated Shareholder Loans
previously provided), in each case only to the extent that (1) such proceeds
have not been repaid or prepaid or redeemed in accordance with Clause 16.13
(Restricted Payments) and (2) such proceeds have not been subscribed or funded
in order to fund mandatory prepayments by a Borrower pursuant to any provision
of this Agreement or any provision of the New Facility Agreement under which any
Borrower is required to make a mandatory prepayment of all or part of any
Advance.

 

Relevant Event means a Default in relation to (a) Clause 18.2 (Non-payment) or
(b) Clause 17.2 (Financial ratios).

 

Repayment Date means each date identified in Clause 6.1 (Repayment of Facility A
Advances).

 

Repayment Instalment means each Facility B Repayment Instalment (as defined in
Clause 6.2 (Repayment of Facility B Advances)) and each Facility C Repayment
Instalment (as defined in Clause 6.3 (Repayment of Facility C Advances)).

 

Reportable Event means:

 

(a)                                  an event specified as such in section 4043
of ERISA or any regulation promulgated thereunder with respect to a Plan that is
subject to Title IV of ERISA, other than an event in relation to which the
requirement to give 30 days notice of that event is waived by any regulation; or

 

(b)                                 a failure to meet the minimum funding
standard under section 412 of the Code or section 302 of ERISA with respect to a
Plan that is subject to such sections of the Code and ERISA, whether or not
there has been any waiver of notice or waiver of the minimum funding standard
under section 412 of the Code.

 

Request means a request made by a Borrower to utilise any of the Facilities and,
subject to Clause 5.2 (Form of Request), substantially in the form of Part 1 of
Schedule 4 (Form of Request).

 

Requested Amount means the amount requested in a Request.

 

Restricted Payment has the meaning given to it in Clause 16.13(b) (Restricted
Payments).

 

Restricted Person means UGCE Inc., UPC, Belmarken, UPC Holding, any other
company (not being a member of the Borrower Group) which is a Subsidiary of, or
an Associated Company of, UGCE Inc. (other than Associated Companies of UGCE
Inc. which are its Associated Companies by virtue of controlling UGCE Inc. or
owning beneficially and/or legally directly or indirectly 10 per cent. or more
of the equity interests in UGCE Inc.).

 

Restricted Person’s Framework Agreement means the Framework Agreement as defined
in any Pledge of Subordinated Shareholder Loans.

 

31

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Restructuring means the transfer of share capital and intercompany receivables
that took place following the Signing Date so that the Borrower Group was
restructured to consist of UPC Distribution and its Subsidiaries as described in
the structure chart set out at Schedule 10 (Borrower Group Structure).

 

Rollover Advance means one or more Facility A Advances:

 

(a)                                  made or to be made on the same day that a
maturing Facility A Advance is due to be repaid;

 

(b)                                 the aggregate Original Euro Amount of which
is equal to or less than the Original Euro Amount of the maturing Facility A
Advance; and

 

(c)                                  made or to be made to UPC Distribution for
the purpose of refinancing a maturing Facility A Advance.

 

Sale and Purchase Agreements means the following sale and purchase agreements
relating to the sale and transfer of shares and receivables entered into on 9th
April, 2003 between:

 

(a)                                  UPC, Belmarken, UPC Holding, UPC
Distribution and UPC Operations B.V.;

 

(b)                                 UPC, Belmarken, UPC Holding and UPC Services
B.V.;

 

(c)                                  UPC, Belmarken, UPC Holding, UPC
Distribution and UPC Holding Services B.V.; and

 

(d)                                 UPC, Belmarken, UPC Holding, UPC
Distribution and UPC Services Ltd.

 

Screen Rate means:

 

(a)                                  in relation to LIBOR, the British Bankers
Association Interest Settlement Rate for the relevant currency and period; and

 

(b)                                 in relation to EURIBOR, the percentage rate
per annum determined by the Banking Federation of the European Union for the
relevant period,

 

displayed on the appropriate page of the Reuters screen.  If that page is
replaced or the service ceases to be available, the Facility Agent may specify
another page or service displaying the appropriate rate after consultation with
UPC Distribution and the Lenders.

 

Security Deed means the Security Deed dated 26th October, 2000 between, among
others, each Obligor, the Facility Agent, the Security Agent, the Lenders, the
Senior Hedging Banks, the High Yield Hedging Banks and each Subordinated
Creditor and includes each Deed of Accession (as defined in the Security Deed)
entered into in relation to the Security Deed.

 

Security Documents means:

 

(a)                                  the documents listed in Schedule 7
(Security Documents); and

 

(b)                                 such other security documents as may from
time to time be entered into in favour of any Beneficiary pursuant to any of the
Finance Documents (including without limitation any other Obligor Pledge of
Shareholder Loans or Pledge of Subordinated Shareholder Loans, any security
document referred to in Clause 16.23 (UPC Distribution Pledged Account), Clause
16.24 (Share security) or Clause  16.26

 

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(Further security over receivables) and any security document provided to the
Security Agent in connection with the accession of an Additional Guarantor
pursuant to Clause 26.4 (Additional Guarantors) and Part 2 of Schedule 2
(Conditions Precedent Documents) or otherwise.

 

Security Interest means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust arrangement
for the purpose of providing security or other security interest of any kind
securing any obligation of any person or any other arrangement having the effect
of conferring rights of retention or other disposal rights over an asset
(including without limitation title transfer and/or retention arrangements
having a similar effect or a deposit of money with the primary intention of
affording a right of set-off) and includes any agreement to create any of the
foregoing but does not include (a) liens arising in the ordinary course of
business by operation of law and not by way of contract and (b) any grant of
indefeasible rights of use or equivalent arrangements with respect to network
capacity, communications, fibre capacity or conduit.

 

Security Provider’s Deed of Accession has the meaning given to it in the
Security Deed.

 

Senior Beneficiary has the meaning given to the term in the Security Deed.

 

Senior Debt has the meaning given to it in Clause 17.1 (Financial definitions).

 

Senior Hedging Agreements means any and all interest rate and/or currency swap
and/or interest rate and/or currency cap and/or other interest rate and/or
currency hedging agreements entered into or to be entered into by any member of
the Borrower Group with any of the Senior Hedging Banks from time to time in
relation to the Borrower Group’s floating rate interest exposure and/or currency
exposure and for the avoidance of doubt shall include, without limitation, the
hedging arrangements entered into between UPC Distribution and Bank of America,
N.A. and the hedging arrangements entered into between UPC Distribution and JP
Morgan Chase Bank, each as described in schedules 1 and 2 respectively of the
letter dated 20th December, 2002 between the Facility Agent on behalf of the
Majority Lenders and UPC Distribution.

 

Senior Hedging Bank means a Lender or its Affiliate or a “Lender” or its
“Affiliate” as defined in the New Facility Agreement which is or becomes a party
to the Security Deed as a senior hedging bank.

 

Senior Hedging Counterparty means any member of the Borrower Group that enters
into a Senior Hedging Agreement.

 

Serviceable Subordinated Debt means any Financial Indebtedness not prohibited by
the Finance Documents or the New Finance Documents (including, for the avoidance
of doubt, High Yield Notes and Relevant Convertible Preference Shares) which is
raised by an entity that is not a member of the Borrower Group, all or part of
the proceeds of which are on-lent directly or indirectly to a member of the
Borrower Group by a Subordinated Creditor by means of a Subordinated Shareholder
Loan provided that all or part of such proceeds are applied in permanent
prepayment and cancellation of the Facilities in accordance with this Agreement
or of the New Facility D in accordance with the New Facility Agreement.

 

Shareholder means UGCE Inc. or a Subsidiary (as defined in any relevant
Indenture) of UGCE Inc.

 

Shareholders’ Agreements means the agreements listed in Schedule 11
(Shareholders’ Agreements).

 

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Signing Date means the date of this Agreement.

 

Sterling means the lawful currency for the time being of the United Kingdom.

 

Subordinated Creditor means any Restricted Person who has, at any relevant time,
entered into a Pledge of Subordinated Shareholder Loans and the Security Deed or
a Security Provider’s Deed of Accession.

 

Subordinated Shareholder Loans means any Financial Indebtedness of any member of
the Borrower Group owed to a Subordinated Creditor.

 

Subsidiary of a person means any company or entity directly or indirectly
controlled by such person, for which purpose control means ownership of more
than 50 per cent. of the economic and/or voting share capital (or equivalent
right of ownership of such company or entity).

 

Swedish Kronor means the lawful currency of Sweden for the time being.

 

Syndication Letter means the letter dated on or about the Signing Date between
the Borrowers and the Lead Arrangers relating to the syndication of the
Facilities.

 

Target means any assets or entity which is or are the subject of an Acquisition
or Additional Acquisition (as applicable) in accordance with the terms of this
Agreement.

 

TARGET Day means a day on which the Trans-European Automated Real-Time Gross
Settlement (TARGET) System is operating.

 

Taxes or Tax means all present and future taxes, imposts, duties, levies, fees
or charges of a similar nature, together with interest thereon and penalties in
respect thereof.

 

Telecommunications and Cable Law means all laws, statutes, regulations and
judgments relating to telecommunications, cable television and data services
applicable to any member of the Borrower Group and/or the business carried on by
any member of the Borrower Group in any jurisdiction in which a member of the
Borrower Group is incorporated or formed or in which such member has its
principal place of business or owns any material assets.

 

Telekabel Wien means Telekabel Wien GmbH a company incorporated under the laws
of Austria with its corporate seat at Erlachgasse 116, 1100 Wien, Austria and
with registration number FN 84116a.

 

Third Party Debt means any Financial Indebtedness which is owed to any person
other than a member of the Wider Group (but, for the avoidance of doubt,
excluding any indebtedness arising under any instrument that does not impose any
obligations on the obligor to make any cash payment and does not permit such
obligor to elect to make any cash payments and to the extent only that such
instrument is not amended so as to become an instrument under which there are
(or may be) cash payment obligations).

 

Total Cash Interest has the meaning given to it in Clause 17.1 (Financial
definitions).

 

Total Debt has the meaning given to it in Clause 17.1 (Financial definitions).

 

Total Facility A Commitments means the aggregate for the time being of the
Facility A Commitments.

 

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Total Facility B Commitments means the aggregate for the time being of the
Facility B Commitments.

 

Total Facility C Commitments means the aggregate for the time being of the
Facility C Commitments.

 

UGC means UnitedGlobalCom, Inc. a corporation incorporated in the State of
Delaware, United States and, as of the Signing Date, having its business office
at 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237 U.S.A.

 

UGCE Borrower Group means:

 

(a)                                  UGCE Inc.;

 

(b)                                 any other company of which UPC Distribution
is a Subsidiary and which is a Subsidiary of UGCE Inc.; and

 

(c)                                  UPC Holding II.

 

UGCE Inc. means:

 

(a)                                  UGC Europe Inc. a company organised under
the laws of the State of Delaware with its principal place of business at Boeing
Avenue 53, 1119 PE Schiphol Rijk, Amsterdam, The Netherlands; and

 

(b)                                 if the entity referred to in (a) above:

 

(i)                                     consolidates with or merges with any
other person or persons; or

 

(ii)                                  directly or indirectly, sells, leases,
conveys or transfers all or substantially all of its assets to any other person
or persons,

 

the successor person formed by such consolidation or into which such entity is
merged or to which such conveyance, transfer or lease is made.

 

United States or US means the United States of America.

 

Unpaid Sum means any sum due and payable but unpaid by an Obligor under the
Finance Documents.

 

Unrestricted Cash has the meaning given to that term under GAAP.

 

Unrestricted Subsidiary means each Subsidiary of UPC Distribution and, prior to
the Restructuring, each Subsidiary of each Obligor that is not a Subsidiary of
UPC Distribution, the acquisition cost of which and whose on-going funding
requirements are not funded directly or indirectly (in whole or in part) by any
member of the Borrower Group by way of drawings under the Facilities and which
is designated by UPC Distribution in writing as an Unrestricted Subsidiary.

 

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UPC means United Pan-Europe Communications N.V., a public limited liability
company incorporated under the laws of The Netherlands and, as of the Signing
Date, with its registered office at Amsterdam and its business office at Boeing
Avenue 53, 1119 PE Schiphol Rijk, Amsterdam, The Netherlands.

 

UPC Distribution Holdco means the immediate Holding Company of UPC Distribution
from time to time, being UPC Holding as of the Signing Date.

 

UPC Distribution Pledged Account has the meaning given in Clause 16.23(b) (UPC
Distribution Pledged Account)

 

UPC Holding means UPC Holding B.V., a limited liability company incorporated
under the laws of The Netherlands and, as of the Signing Date, with its
registered office at Amsterdam and its business office at Boeing Avenue 53, 1119
PE Schiphol Rijk, Amsterdam, The Netherlands.

 

UPC Holding II means UPC Holding II B.V., a limited liability company
incorporated under the laws of The Netherlands and, as of the Signing Date, with
its registered office at Amsterdam and its business office at Boeing Avenue 53,
1119 PE Schiphol Rijk, Amsterdam, The Netherlands.

 

UPC Polska means:

 

(a)                                  UPC Polska, Inc.; and

 

(b)                                 if the entity referred to in (a) above:

 

(i)                                     consolidates with or merges with or is
acquired by any other person or persons; or

 

(ii)                                  directly or indirectly, sells, leases,
conveys or transfers all or substantially all of its assets to any other person
or persons,

 

the successor person (including any Holding Company which holds all the shares
of UPC Polska) formed by such consolidation or into which such entity is merged
or to which such conveyance, transfer or lease is made.

 

UPC Polska Acquisition means the Majority Acquisition by a member of the
Borrower Group of all or any part of the share capital or assets of UPC Polska.

 

UPC Polska Restructuring means the proposed financial restructuring relating to
UPC Polska, as particularly described in the First Amended Disclosure Statement
dated 27th October, 2003, pursuant to which UPC Polska intends to restructure
its capital structure and effectuate an overall compromise and settlement with
certain parties and co-issue notes, stock and distribute cash in consideration
for the transfer of claims outstanding under certain notes.

 

US Dollars and US$ means the lawful currency for the time being of the United
States.

 

US Obligor has the meaning given to it in Clause 18.6(c) (Insolvency).

 

Utilisation Date means, in relation to each Advance, the date specified as such
in the relevant Request or, on and after the making and/or issue thereof
pursuant to such Request, the date on which it was made and/or issued.

 

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VAT means value added or similar tax.

 

Verification Letter means a letter substantially in the form of Part 3 of
Schedule 5 (Form of Verification Letter).

 

Western Europe means the countries that comprise the European Community as at
the Effective Date, Scandinavia and Switzerland.

 

Wider Group means UGCE Inc. and each of its Affiliates including (for the
avoidance of doubt) UGC and Liberty Media Corporation or any of their respective
Subsidiaries.

 

1.2                               Construction

 

(a)                                  In this Agreement, unless the contrary
intention appears, a reference to:

 

(i)                                     a document being in the agreed form
means a document (A) in a form previously agreed in writing by or on behalf of
the Facility Agent and UPC Distribution, or (B) in a form substantially as set
out in any Schedule to any Finance Document, or (C) (if not falling within (A)
or (B) above) in form and substance satisfactory to the Lenders and initialled
by or on behalf of the Facility Agent and UPC Distribution for the purposes of
identification;

 

amendment includes a supplement, novation or re-enactment and amended is to be
construed accordingly;

 

assets includes all or any part of any business, undertaking, real property,
personal property, uncalled capital and any rights (whether actual or
contingent, present or future) to receive, or require delivery of, any of the
foregoing;

 

references to the equivalent of an amount specified in a particular currency
(the specified currency amount) shall be construed as a reference to the amount
of the other relevant currency which can be purchased with the specified
currency amount in the London foreign exchange market at or about 11.00 a.m. on
the day on which the calculation falls to be made for spot delivery as
determined by the Facility Agent in accordance with its customary practices;

 

European interbank market means the interbank market for euro operating in
Participating Member States;

 

a guarantee includes a reference to an indemnity or other assurance against
financial loss including, without limitation, an obligation to purchase assets
or services as a consequence of a default by any other person to pay any
indebtedness and guaranteed shall be construed accordingly;

 

indebtedness is a reference to any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future, actual
or contingent;

 

a month is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar month, except
that, if there is no numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in that month;

 

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permanent prepayment and cancellation means, in relation to any facility, a
permanent prepayment of outstanding advances under that facility with a
corresponding permanent cancellation of the total commitments in relation to
that facility;

 

a person includes any individual, firm, company, corporation, unincorporated
body of persons or any state or any of its agencies;

 

a regulation includes any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law but,
if not having the force of law, only if compliance therewith is in accordance
with the general practice of the relevant persons to whom it is intended to
apply or, in the case of Clause 12 (Increased Costs) only, the relevant Finance
Party or its Holding Company) of any agency, authority, central bank or
government department or any self-regulatory or other national or supra-national
authority;

 

(ii)                                  a provision of a law is a reference to
that provision as amended, re-enacted or extended;

 

(iii)                               a Clause or a Schedule is a reference to a
clause of or a schedule to this Agreement;

 

(iv)                              a person includes its successors, transferees
and assigns;

 

(v)                                 (or to any specified provision of) this
Agreement or any other document shall be construed, save where expressly
provided to the contrary in this Agreement, as a reference to this Agreement,
that provision or that document as in force for the time being and as from time
to time amended in accordance with its terms, or, as the case may be, with the
agreement of the relevant parties and (where such consent is, by the terms of
this Agreement or the relevant document, required to be obtained as a condition
to such amendment being permitted) the prior written consent of the Facility
Agent, all of the Lenders or the Majority Lenders or Majority Facility C Lenders
(as the case may be);

 

(vi)                              other than in the definition of “EURIBOR” in
Clause 1.1 (Definitions), a time of day is a reference to London time; and

 

(vii)                           words importing the plural include the singular
and vice versa.

 

(b)                                 Unless the contrary intention appears, a
term used in any other Finance Document or in any notice given under or in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement.

 

(c)                                  The index to and the headings in this
Agreement are for convenience only and are to be ignored in construing this
Agreement.

 

(d)                                 Unless expressly provided to the contrary in
a Finance Document, a person who is not a party to a Finance Document may not
enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

 

(e)                                  Notwithstanding any term of any Finance
Document, the consent of any third party is not required for any variation
(including any release or compromise of any liability under) or termination of
that Finance Document.

 

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1.3                               Replacement Facility

 

This Agreement, the other Finance Documents and any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith replace the €1,000,000,000 Loan and Note Issuance Agreement dated 27th
July, 1999 between, amongst others, UPC Facility B.V., Telekabel Wien and UPC
Norge A/S (formerly Janco Multicom A/S) as borrowers and The Toronto-Dominion
Bank as agent (the UPCF Facility Agreement) and any related notes, guarantees,
collateral documents, instruments and agreements executed in connection with the
UPCF Facility Agreement except as provided in this Agreement or otherwise.

 

1.4                               New Facility Agreement

 

(a)                                  Unless expressly stated to the contrary and
subject to paragraph (b), references in any of the Finance Documents to the New
Finance Documents and to terms defined in, and provisions of, any of the New
Finance Documents, shall be references to the relevant New Finance Document and
such terms and provisions as at the Effective Date, as the same may be amended
with the prior written approval of the Facility Agent (acting on the
instructions of the Majority Lenders) from time to time.

 

(b)                                 References in any of the Finance Documents
to any Finance Party (as defined in the New Facility Agreement) shall include
such Finance Party’s permitted successors, transferees or assigns from time to
time.

 

2.                                      THE FACILITIES

 

2.1                               Facilities

 

The relevant Lenders grant to the Borrowers:

 

(a)                                  a committed €750,000,000 multicurrency
revolving credit facility under which the relevant Lenders will, when requested
by UPC Distribution, make cash advances in euros or Optional Currencies to UPC
Distribution on a revolving basis during the Facility A Availability Period;

 

(b)                                 a committed €2,750,000,000 term loan
facility under which the relevant Lenders will, when requested by UPC
Distribution, make cash advances in euros or Optional Currencies to UPC
Distribution during the Facility B Availability Period; and

 

(c)                                  a committed US$347,500,000 and €95,000,000
term loan facility under which the relevant Lenders will, when requested by the
relevant Borrower, make cash advances in euros (in the case of UPC Distribution)
or US Dollars (in the case of the US Borrower) (as applicable) to the relevant
Borrower during the Facility C Availability Period,

 

in each case subject to the terms of this Agreement.

 

2.2                               Overall facility limits

 

(a)                                  The aggregate Original Euro Amount of all
outstanding Facility A Advances shall not at any time exceed the Total Facility
A Commitments.

 

(b)                                 The aggregate Original Euro Amount of all
outstanding Facility B Advances shall not at any time exceed the Total Facility
B Commitments.

 

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(c)                                  (i)                                     The
aggregate amount of all outstanding Facility C1 Advances shall not at any time
exceed the aggregate of the Facility C1 Commitments;

 

(ii)                                  The aggregate amount of all outstanding
Facility C2 Advances shall not at any time exceed the aggregate of the Facility
C2 Commitments.

 

(d)                                 The aggregate Original Euro Amount of:

 

(i)                                     the participations of a Lender in
Facility A Advances shall not at any time exceed that Lender’s Facility A
Commitment at that time; and

 

(ii)                                  the participations of a Lender in Facility
B Advances shall not at any time exceed that Lender’s Facility B Commitment at
that time.

 

(e)                                  (i)                                     The
aggregate amount of the participations of a Lender in Facility C1 Advances shall
not at any time exceed that Lender’s Facility C1 Commitment at that time; and

 

(ii)                                  The aggregate amount of the participations
of a Lender in Facility C2 Advances shall not at any time exceed that Lender’s
Facility C2 Commitment at that time.

 

2.3                               Number of Requests and Advances

 

(a)                                  Unless the Facility Agent agrees otherwise,
no more than one Request for Advances may be delivered on any one day but that
Request may, subject to paragraph (b) below, specify any number of Advances from
any Facility or all of them.

 

(b)                                 Unless the Facility Agent agrees otherwise,
no more than 50 Advances may be outstanding at any one time.

 

(c)                                  No more than one Request may be made for
Facility C Advances under this Agreement.

 

2.4                               Nature of a Finance Party’s rights and
obligations

 

(a)                                  The obligations of a Finance Party under
the Finance Documents are several.  Failure of a Finance Party to carry out
those obligations does not relieve any other Party of its obligations under the
Finance Documents.  No Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.

 

(b)                                 The rights of a Finance Party under the
Finance Documents are divided rights.  A Finance Party may, except as otherwise
stated in the Finance Documents, separately enforce those rights.

 

(c)                                  Each of the Obligors and each of the
Finance Parties agrees that the Security Agent shall be the joint and several
creditor (hoofdelijk crediteur) of each and every obligation of any Obligor
towards each of the Finance Parties under any Finance Document, and that
accordingly the Security Agent will have its own independent claim as creditor
and not as agent against each Obligor to demand performance by the relevant
Obligor of those obligations.  However, any discharge of any such obligation to
either of the Security Agent or the relevant Finance Party shall, to the same
extent, discharge the corresponding obligation owing to the other.

 

(d)                                 Without limiting or affecting the Security
Agent’s rights against any Obligor (whether under this paragraph or under any
other provision of the Finance Documents), the Security Agent agrees with each
other Finance Party (on a several and divided basis) that, subject as set out in

 

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the next sentence, it will not exercise its rights as a joint and several
creditor with a Finance Party except with the prior written consent of the
relevant Finance Party.  However, for the avoidance of doubt, nothing in the
previous sentence shall in any way limit the Agent’s right to act in the
protection or preservation of rights under or to enforce any Security Document
or the Security Deed as contemplated by the Finance Documents (or to do any act
reasonably incidental to any of the foregoing).

 

2.5                               UPC Distribution as Obligors’ agent

 

Each Obligor:

 

(a)                                  irrevocably authorises and instructs UPC
Distribution to give and receive as agent on its behalf all notices (including
Requests) and sign all documents in connection with the Finance Documents on its
behalf (including but not limited to amendments and variations and execution of
any new Finance Documents) and take such other action as may be necessary or
desirable under or in connection with the Finance Documents; and

 

(b)                                 confirms that it will be bound by any action
taken by UPC Distribution under or in connection with the Finance Documents.

 

2.6                               Actions of UPC Distribution as Obligors’ agent

 

The respective liabilities of each of the Obligors under the Finance Documents
shall not be in any way affected by:

 

(a)                                  any irregularity (or purported
irregularity) in any act done by or any failure (or purported failure) by UPC
Distribution;

 

(b)                                 UPC Distribution acting (or purporting to
act) in any respect outside any authority conferred upon it by any Obligor; or

 

(c)                                  the failure (or purported failure) by or
inability (or purported inability) of UPC Distribution to inform any Obligor of
receipt by it of any notification under this Agreement or any other Finance
Document.

 

3.                                      PURPOSE

 

3.1                               Purpose

 

(a)                                  Each Advance will be applied:

 

(i)                                     in the case of Facility A, to finance
the general corporate and working capital purposes of the Borrower Group,
including to finance capital expenditure and the making of acquisitions by the
Borrower Group (to the extent permitted by this Agreement);

 

(ii)                                  in the case of Facility B, to refinance in
part the Financial Indebtedness described in Schedule 9 (Relevant Financial
Indebtedness) and to finance capital expenditure and the making of acquisitions
by the Borrower Group; and

 

(iii)                               in the case of Facility C, to refinance in
part the Financial Indebtedness described in Schedule 9 (Relevant Financial
Indebtedness)

 

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(b)                                 (i)                                     Each
Obligor (other than UPC Distribution Holdco) will not, and will procure that
none of its Subsidiaries which are members of the Borrower Group will, use the
proceeds of Advances drawn under the Facilities in aggregate in excess of
€750,000,000 (including without limitation by way of transfer, loan,
subscription of equity or other investment (each a Relevant Investment)) in the
business of members of the Borrower Group incorporated or principally carrying
on business in Eastern Europe.

 

3.2                               No monitoring

 

Without affecting the obligations of the Borrowers in any way, no Finance Party
is bound to monitor or verify the application of the proceeds of any Advance.

 

4.                                      CONDITIONS PRECEDENT

 

4.1                               Documentary conditions precedent

 

No Borrower may draw an Advance under this Agreement until the Facility Agent
has notified UPC Distribution and the Lenders that it has received all of the
documents set out in Part 1 of Schedule 2 (Conditions Precedent Documents) in
form and substance satisfactory to the Facility Agent.  The Facility Agent will
confirm to UPC Distribution that it has received such documents as soon as
practicable upon receiving all of them in form and substance satisfactory to it.

 

4.2                               Further conditions precedent

 

The obligations of each Lender in respect of each Advance are subject to the
further conditions precedent that on the date of the Request for that Advance
and on the proposed Utilisation Date:

 

(a)                                  except in the case of a Rollover Advance,
the representations and warranties in Clause 15 (Representations and Warranties)
to be repeated on those dates are and will be immediately after the relevant
Advance is drawn down correct in all material respects; and

 

(b)                                 in the case of a Rollover Advance, no Event
of Default is outstanding or would result from the proposed Advance and, in the
case of other Advances, no Default is outstanding or would result from the
proposed Advance; and

 

(c)                                  except in the case of a Rollover Advance,
no Change of Control has occurred where the event has not been waived by the
Majority Lenders.

 

4.3                               Pro forma covenant compliance

 

No Borrower may Request or obtain any Advance in an amount which, when
aggregated with all other Advances (other than Rollover Advances) (and all
Advances (in each case as defined in the New Facility Agreement) (the Relevant
Advances) made since the last day of the most recent Ratio Period ending prior
to the proposed date of that Advance for which financial statements have been
delivered pursuant to Clause 4.1 (Documentary conditions precedent) or Clause
16.2(a) or (b) (Financial information) (the Relevant Ratio Period) would cause
UPC Distribution to fail to be in compliance with the financial ratios set out
in Clause 17.2 (Financial ratios) for the Relevant Ratio Period, if such
financial ratios were re-tested for the Relevant Ratio Period after adding the
aggregate amount of all such Relevant Advances to the amount of Senior Debt and
Total Debt used in calculating such ratios.

 

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4.4                               Deferred Acquisition Costs

 

Where a member of the Borrower Group has made an Acquisition permitted by Clause
16.11 (Acquisitions and mergers), no Borrower may Request, or apply the proceeds
of, any Advance for the purpose of paying any consideration referred to in
paragraph (a) of the definition of “Acquisition Cost” in relation to that
Acquisition, unless UPC Distribution delivers to the Facility Agent on or before
the date of each relevant Request:

 

(a)                                  where the Acquisition Cost of the
acquisition was greater than €100,000,000 and no more than €150,000,000, a
certificate signed by two managing directors or the sole managing director, as
the case may be, of UPC Distribution and certifying; or

 

(b)                                 where the Acquisition Cost of the
acquisition was greater than €150,000,000, financial projections based on
assumptions which are no more aggressive (when taken as a whole) than those used
in the preparation of the Business Plan which demonstrate,

 

that the Borrowers will be in compliance with Clause 6 (Repayment) and the
undertakings set out in Clause 17 (Financial Covenants) for the period from the
Utilisation Date of such Advance (taking into account (i) the Acquisition Cost
of such acquisition (but deducting from that Acquisition Cost the value of any
consideration referred to in paragraph (a) of the definition of “Acquisition
Cost” which has yet to be paid or delivered), (ii) the amount of such Advance
and (iii) financial projections relating to the acquired business or asset(s))
to the last Final Repayment Date.

 

5.                                      ADVANCES

 

5.1                               Delivery of Request

 

Subject to the terms of this Agreement, a Borrower may request an Advance by
delivering to the Facility Agent by not later than 11.00 a.m. on the third
Business Day, before the proposed Utilisation Date, a duly completed Request.

 

5.2                               Form of Request

 

Each Request shall specify (where applicable):

 

(a)                                  the relevant Facility;

 

(b)                                 the proposed Utilisation Date, which shall
be a Business Day falling during the Facility A Availability Period (in the case
of a Facility A Advance), the Facility B Availability Period (in the case of a
Facility B Advance) or the Facility C Availability Period (in the case of a
Facility C Advance);

 

(c)                                  the currency of the proposed Advance which
must be euros or an Optional Currency (in the case of a Facility A Advance or
Facility B Advance), euros (in the case of a Facility C1 Advance) or US Dollars
(in the case of a Facility C2 Advance);

 

(d)                                 the principal amount of the proposed Advance
which:

 

(i)                                     for an Advance denominated in euros,
shall be a minimum amount of €10,000,000;

 

43

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(ii)                                  for an Advance denominated in US Dollars,
shall be a minimum amount of US$10,000,000; and

 

(iii)                               for an Advance denominated in any other
Optional Currency, shall be a minimum amount equivalent to €5,000,000 (in each
case using the Agent’s Spot Rate of Exchange);

 

(e)                                  the Interest Period of the Advance, which
must be a period complying with Clause 8 (Interest); and

 

(f)                                    unless previously notified to the
Facility Agent in writing and not revoked, the details of the bank and account
to which the proceeds of the proposed Advance are to be made available, which
must comply with Clause 9 (Payments).

 

Subject to the terms of this Agreement, each Request shall be irrevocable and
the relevant Borrower shall be bound to borrow an Advance in accordance with
such Request.

 

5.3                               Notification to the Lenders

 

The Facility Agent shall promptly notify each Lender participating in the
relevant Advance of each Request for an Advance and the amount of its
participation in the Advance.

 

5.4                               Participations in Advances

 

(a)                                  Subject to the terms of this Agreement,
each Lender shall, on the date specified in any Request for an Advance, make
available to the Facility Agent for the account of the relevant Borrower the
amount of its participation in that Advance.  All such amounts shall be made
available to the Facility Agent in accordance with Clause 9.2 (Funds) for
disbursement to or to the order of the relevant Borrower in accordance with the
provisions of this Agreement.

 

(b)                                 The amount of a Lender’s participation in an
Advance will be the proportion (applied to the amount set out in the Request)
which:

 

(i)                                     in the case of a Facility A Advance, its
Facility A Commitment bears to the Total Facility A Commitments;

 

(ii)                                  in the case of a Facility B Advance, its
Facility B Commitment bears to the Total Facility B Commitments;

 

(iii)                               in the case of a Facility C1 Advance, its
Facility C1 Commitment bears to the aggregate of the Facility C1 Commitments;
and

 

(iv)                              in the case of a Facility C2 Advance, its
Facility C2 Commitment bears to the aggregate of the Facility C2 Commitments.

 

(c)                                  If an Advance is to be drawn down in an
Optional Currency, the amount of each Lender’s participation in that Advance
will be determined by converting into that Optional Currency the Lender’s
participation in the Original Euro Amount of that Advance on the basis of the
Agent’s Spot Rate of Exchange three Business Days before its Utilisation Date.

 

44

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5.5                               Conditions relating to Optional Currencies

 

(a)                                  If the Facility Agent has received a
written request from a Borrower for a currency to be approved as an Optional
Currency, the Facility Agent will confirm to that Borrower by 10.00 a.m. on the
day two Business Days after receipt of such request:

 

(i)                                     whether or not the Lenders have granted
their approval; and

 

(ii)                                  if approval has been granted, the minimum
amount (and, if required, integral multiples) for any subsequent Advance to be
drawn in that currency.

 

(b)                                 Advances denominated in euro will only be
made available in the euro unit.

 

6.                                      REPAYMENT

 

6.1                               Repayment of Facility A Advances

 

(a)                                  UPC Distribution shall repay each Facility
A Advance in full on the Interest Date for that Advance to the Facility Agent
for the Lenders, but since Facility A is available on a revolving basis amounts
repaid may be reborrowed during the Facility A Availability Period subject to
the terms of this Agreement.

 

(b)                                 On each date on which the Facility A
Commitments are cancelled under Clause 7.1(d) (Automatic Cancellation of the
Commitments), UPC Distribution shall repay sufficient Facility A Advances to
ensure that the Facility A Advances do not exceed the Total Facility A
Commitments as so reduced.

 

(c)                                  No Facility A Advance may be outstanding
after the end of the Facility A Availability Period.

 

6.2                               Repayment of Facility B Advances

 

UPC Distribution shall procure that, subject to the application of Clause 7
(Cancellation and Prepayment), the outstanding Facility B Advances shall be
repaid in full by payment of semi-annual instalments (each a Facility B
Repayment Instalment) on each date set out in column (1) below (each date for
repayment being a Facility B Repayment Date) up to and including the Final
Repayment Date for Facility B.  Each Facility B Repayment Instalment (other than
the last) shall be in an Original Euro Amount equal as nearly as possible
(rounded upwards if necessary) to the percentage, set out in column (2) below
opposite the relevant Facility B Repayment Date, of the total outstanding amount
of Facility B Advances on the last day of the Facility B Availability Period. 
The final Facility B Repayment Instalment shall comprise all Facility B Advances
outstanding on the Facility B Final Repayment Date:

 

(1)
Facility B Repayment Date

 

(2)
Relevant Percentage

 

 

 

 

 

30th June, 2004

 

6.25

%

 

 

 

 

31st December, 2004

 

6.25

%

 

 

 

 

30th June, 2005

 

11.25

%

 

 

 

 

31st December, 2005

 

11.25

%

 

 

 

 

30th June, 2006

 

16.25

%

 

 

 

 

31st December, 2006

 

16.25

%

 

 

 

 

30th June, 2007

 

11.25

%

 

 

 

 

31st December, 2007

 

11.25

%

 

 

 

 

Facility B Final Repayment Date

 

The aggregate amount of all outstanding Facility B Advances

 

 

45

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6.3                               Repayment of Facility C Advances

 

(a)                                  The Borrowers shall procure that, subject
to the application of Clause 7 (Cancellation and Prepayment), the outstanding
Facility C Advances shall be repaid in full by payment of semi annual
instalments (each a Facility C Repayment Instalment) on each date specified in
column (1) below (each date for repayment being a Facility C Repayment Date) up
to and including the Final Repayment Date for Facility C.  Each Facility C
Repayment Instalment (other than the last) shall be in an Original Euro Amount
equal as nearly as possible (rounded upwards if necessary) to the percentage,
set out in column (2) below opposite the relevant Facility C Repayment Date, of
the total outstanding amount of Facility C Advances on the last day of the
Facility C Availability Period.  The Final Facility C Repayment Instalment shall
comprise all Facility C Advances outstanding on the Facility C Final Repayment
Date.

 

(1)
Facility C Repayment Date

 

(2)
Relevant Percentage

 

 

 

 

 

30th June, 2004

 

0.50

%

 

 

 

 

31st December, 2004

 

0.50

%

 

 

 

 

30th June, 2005

 

0.50

%

 

 

 

 

31st December, 2005

 

0.50

%

 

 

 

 

30th June, 2006

 

0.50

%

 

 

 

 

31st December, 2006

 

0.50

%

 

 

 

 

30th June, 2007

 

0.50

%

 

 

 

 

31st December, 2007

 

0.50

%

 

 

 

 

30th June, 2008

 

24.00

%

 

 

 

 

31st December, 2008

 

24.00

%

 

 

 

 

Facility C Final Repayment Date

 

The aggregate amount of all outstanding Facility C Advances

 

 

(b)                                 Each such Facility C Repayment Instalment
shall be applied pro rata against the outstanding Original Euro Amount of
Facility C1 Advances and Facility C2 Advances.  For the avoidance of doubt, any
amounts paid under this Clause 6.3 to a Lender in respect of a Facility C2
Advance shall be paid in US Dollars, as required pursuant to Clause 9.4(a)
(Currency).

 

46

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6.4                               Adjustment of Facility B Advances

 

(a)                                  For each Facility B Advance in an Optional
Currency, there shall be calculated the difference between the amount of the
relevant Advance (in that Optional Currency) for the current Interest Period and
for the next Interest Period.  The amount of the Facility B Advance for the next
Interest Period will be determined by notionally converting into that Optional
Currency the Original Euro Amount of the Facility B Advance on the basis of the
Agent’s Spot Rate of Exchange three Business Days before the commencement of
that Interest Period.

 

(b)                                 At the end of the current Interest Period
(but subject always to paragraph (c) below):

 

(i)                                     if the amount of the Facility B Advance
for the next Interest Period is less than for the preceding Interest Period, UPC
Distribution shall repay the difference; or

 

(ii)                                  if the amount of the Facility B Advance
for the next Interest Period is greater, each Lender shall forthwith make
available to the Facility Agent for UPC Distribution its participation in the
difference.

 

(c)                                  If the Agent’s Spot Rate of Exchange for
the next Interest Period shows an appreciation or depreciation of the Optional
Currency against euros of less than five per cent. when compared with the
Original Exchange Rate, no amounts are payable in respect of the difference.  In
this Clause 6, Original Exchange Rate means the Agent’s Spot Rate of Exchange
used for determining the amount of the Optional Currency for the Interest Period
which is the later of the following:

 

(i)                                     the first Interest Period of the
relevant Advance; and

 

(ii)                                  the most recent Interest Period
immediately prior to which a difference was required to be paid under this
Clause 6.4.

 

6.5                               Prepayments and repayments

 

If a Facility B Advance is to be repaid or prepaid by reference to an Original
Euro Amount, the Optional Currency amount to be repaid or prepaid shall be
determined by reference to the Agent’s Spot Rate of Exchange used for
determining the Optional Currency amount of that Facility B Advance under Clause
5.4(c) (Participations in Advances) or, if applicable, the Original Exchange
Rate.

 

6.6                               Notification

 

The Agent shall notify the Lenders and UPC Distribution of Optional Currency
amounts (and the applicable Agent’s Spot Rate of Exchange) promptly after they
are ascertained under this Agreement.

 

7.                                      CANCELLATION AND PREPAYMENT

 

7.1                               Automatic Cancellation of the Commitments

 

(a)                                  The Facility A Commitment of each Lender
shall be automatically cancelled at the close of business in London on the last
day of the Facility A Availability Period.

 

(b)                                 The undrawn Facility B Commitment of each
Lender shall be automatically cancelled at the close of business in London on
the last day of the Facility B Availability Period.

 

47

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(c)                                  The undrawn Facility C Commitment of each
Lender shall be automatically cancelled at the close of business in London on
the last day of the Facility C Availability Period.

 

(d)                                 The Facility A Commitments will be
cancelled, such that, at the close of business in London on each date set out in
column (1) below, the Total Facility A Commitments will be reduced to the amount
set opposite that date in column (2) below.

 

(1)
Date

 

(2)
Facility A Total Commitment after reduction

 

 

 

€

 

30th June, 2005

 

666,750,000

 

 

 

 

 

30th June, 2006

 

583,400,000

 

 

 

 

 

30th June, 2007

 

500,000,000

 

 

(e)                                  Each reduction of the Facility A
Commitments under paragraph (d) above shall be applied against the Facility A
Commitment of each Lender pro rata.

 

7.2                               Voluntary cancellation

 

UPC Distribution may, by delivering to the Facility Agent a duly completed
Cancellation Notice not less than five Business Days prior to the due date of
cancellation, cancel the unutilised portion of the Total Facility A Commitments
and/or Total Facility B Commitments and/or Total Facility C Commitments in whole
or in part (but, if in part, in an aggregate minimum amount of €10,000,000 (in
the case of Facility A or Facility B) and an aggregate minimum Original Euro
Amount of €10,000,000 (in the case of Facility C) in such proportions as UPC
Distribution may specify in the Cancellation Notice) on the date specified in
the Cancellation Notice.  Any cancellation in part shall be applied against the
relevant Facility A Commitment, Facility B Commitment or, as the case may be,
Facility C Commitment of each Lender pro rata.

 

7.3                               Voluntary prepayment

 

(a)                                  UPC Distribution may, by delivering to the
Facility Agent a duly completed Cancellation Notice not less than five Business
Days prior to the due date of prepayment, prepay the whole or any part, (but if
in part in an aggregate minimum Original Euro Amount of €10,000,000) of the
outstanding Advances made to it under Facility A, Facility B or (subject to
Clause 7.10(c) (Facility C Call protection)) Facility C.

 

(b)                                 Any voluntary prepayment made under
paragraph (a) above will be applied (subject to Clause 7.8 (Order of
application) and Clause 7.10(c) (Facility C Call protection)) against:

 

(i)                                     Facility A, Facility B or Facility C in
such proportions as may be specified by UPC Distribution in the notice of
prepayment;

 

(ii)                                  (in the case of Facility A), all the
Facility A Advances pro rata or against such Facility A Advances as UPC
Distribution may designate in the Cancellation Notice;

 

48

--------------------------------------------------------------------------------

 

(iii)                               (in the case of Facility B or Facility C),
the Repayment Instalments for Facility B or (as the case may be) Facility C, in
whole or in part and in any order designated by UPC Distribution in the
Cancellation Notice.

 

7.4                               Change of Control

 

(a)                                  If:

 

(i)                                     UGC ceases:

 

(A)                              directly or indirectly to own more than 50 per
cent. of the issued share capital of UGCE Inc.; and

 

(B)                                to Control UGCE Inc.; or

 

(ii)                                  after completion of the Approved
Transaction, Liberty Media Corporation together with one or more of its
Associated Companies does not or ceases to directly or indirectly own 10 per
cent. or more of the issued share capital of UGCE Inc. from time to time; or

 

(iii)                               UGCE Inc. does not or ceases to own,
directly or indirectly through one or more of its Subsidiaries or other persons
Controlled by it, the legal and beneficial interest in more than 50 per cent. of
the voting and economic rights attaching to the issued share capital of, or
otherwise ceases to Control,  UPC Distribution Holdco, (except as a result of a
merger or consolidation of UPC Distribution Holdco with or into a Shareholder,
provided that such merger or consolidation is in accordance with paragraph (b)
below); or

 

(iv)                              in accordance with the terms of any share
pledge in favour of the Security Agent over the issued share capital of UPC
Distribution and UPC Holding II, UPC Distribution Holdco does not or ceases to
own directly (or indirectly through one or more of its Subsidiaries or other
persons Controlled by it, subject to such Subsidiary or person complying with
Clause 26.4(a) (Additional Guarantors)) the legal and beneficial interest in 100
per cent. of the issued share capital of UPC Distribution and UPC Holding II or
otherwise ceases to Control UPC Distribution and UPC Holding II; or

 

(v)                                 in accordance with the terms of the share
pledges in favour of the Security Agent over the issued share capital of each of
the Obligors (other than UPC Distribution Holdco, UPC Holding II, the US
Borrower and UPC Distribution), UPC Distribution does not or ceases to own
directly or indirectly through one or more of its Subsidiaries or other persons
Controlled by it, the legal and beneficial interest in at least 75 per cent. of
the voting and economic rights attaching to the issued share capital of any
Obligor (other than UPC Distribution Holdco, UPC Holding II, the US Borrower or
UPC Distribution) or otherwise ceases to Control such Obligor; or

 

(vi)                              UPC Distribution and UPC Holding II do not or
cease to own, in accordance with the terms of the pledge referred to in
paragraph 2 of Schedule 7 (Security Documents), the legal and beneficial
interest in 100 per cent. of the partnership interests and economic rights
attaching to the partnership interests of, or otherwise ceases to Control, the
US Borrower,

 

(any of the events described in (i) to (vi) above being a Change of Control):

 

49

--------------------------------------------------------------------------------

 

(A)                              UPC Distribution shall promptly notify the
Facility Agent upon becoming aware of a Change of Control; and

 

(B)                                if the Majority Lenders so require, the
Facility Agent shall, by not less than 20 Business Days’ notice to UPC
Distribution, cancel each Facility and declare all outstanding Advances,
together with accrued interest and all other relevant amounts accrued under the
Finance Documents immediately due and payable, whereupon each Facility will be
cancelled and all such outstanding amounts will become immediately due and
payable.

 

(b)                                 UPC Distribution Holdco shall not enter into
a merger or consolidation with or into a Shareholder (the resulting entity being
the UPC Merged Entity) unless:

 

(i)                                     reasonable details of the proposed
merger concerning the matters set out in sub-paragraphs (ii) and (iii) below are
provided to the Facility Agent at least 10 days before the merger is to be
entered into;

 

(ii)                                  the UPC Merged Entity will be liable for
the obligations of UPC Distribution Holdco (including the obligations under the
Finance Documents), which obligations will continue in full force and effect
after the merger, and entitled to the benefit of all rights of UPC Distribution
Holdco; and

 

(iii)                               the UPC Merged Entity has entered into
Security Documents (if applicable) which provide security over the same assets
of at least an equivalent nature and ranking to the security provided by UPC
Distribution Holdco pursuant to any Security Documents entered into by it and
such Security Documents are the legal, valid and binding obligations of the UPC
Merged Entity enforceable in accordance with their terms subject (to the extent
applicable) to substantially similar qualifications to those made in the legal
opinions referred to in Schedule 2 (Conditions Precedent Documents).

 

7.5                               Mandatory prepayment from Excess Cash Flow and
Net Equity Proceeds

 

(a)                                  Subject to paragraph (b) below and Clause
7.7 (Date for prepayment), within 10 Business Days of the delivery of the
Borrower Group’s audited consolidated financial statements which relate to any
financial year of the Borrower Group (starting with the annual Accounting Period
ending 31st December, 2004) under Clause 16.2 (Financial information) the
Borrowers (unless otherwise agreed in writing by the Facility Agent acting on
the instructions of the Majority Lenders) shall prepay, or procure that there is
prepaid, an amount of the Facilities equal to 50 per cent. of the Excess Cash
Flow for such financial year.

 

(b)                                 The Borrowers shall not be required to make
any prepayments under paragraph (a) above:

 

(i)                                     after the date on which the Facility
Agent receives financial statements delivered under Clause 16.2(b) (Financial
information) which show that, for the two most recent Ratio Periods, the ratio
of Senior Debt to Annualised EBITDA is less than or equal to 3.5:1; or

 

(ii)                                  if the amount of Excess Cash Flow in
respect of the relevant financial year is less than €5,000,000.

 

(c)                                  Subject to Clause 7.7 (Date for prepayment)
and paragraph (e) below, where Net Equity Proceeds and/or the proceeds of an
issue of Relevant Convertible Preference Shares (as set out below) are received
by or for the account of any member of the UGCE Borrower Group

 

50

--------------------------------------------------------------------------------

 

prior to 31st December, 2004, UPC Distribution shall, within ten Business Days
of receipt of such proceeds:

 

(i)                                     until the Additional Prepayment Cap has
been reached:

 

(A)                              in the case of the receipt of Net Equity
Proceeds, prepay or procure that there is prepaid an amount of the Facilities
equal to 10 per cent. of the Net Equity Proceeds.  Such amount shall be applied
first against outstanding Facility B Advances and outstanding Facility C
Advances pro rata and second against outstanding Facility A Advances, in each
case in accordance with Clause 7.8(a)(i) (Order of Application);

 

(B)                                in addition to any prepayments made under
sub-paragraph (c)(i)(A) above, in the case of the receipt of the proceeds of an
issue of Relevant Convertible Preference Shares (whether or not such Relevant
Convertible Preference Shares also constitute Net Equity Proceeds) prepay or
procure that there is prepaid an amount of the outstanding Facility B Advances
equal to 90 per cent. of the proceeds of the Relevant Convertible Preference
Shares.  Such amount shall be applied against outstanding Facility B Advances in
order of maturity in accordance with Clause 7.8(a)(iii) (Order of application);
and

 

(ii)                                  after the Additional Prepayment Cap has
been reached:

 

(A)                              in the case of the receipt of Net Equity
Proceeds, prepay or procure that there is prepaid an amount of the Facilities
equal to 10 per cent. of the balance of the Net Equity Proceeds which have not
been taken into account when calculating the payments to be made under
sub-paragraph (c)(i) above.  Such amount shall be applied first against
outstanding Facility B Advances and outstanding Facility C Advances pro rata and
second against outstanding Facility A Advances, in each case in accordance with
Clause 7.8(a)(i) (Order of Application);

 

(B)                                in addition to any prepayments made under
sub-paragraph (c)(ii)(A) above, in the case of the receipt of the proceeds of an
issue of Relevant Convertible Preference Shares (whether or not such Relevant
Convertible Preference Shares also constitute Net Equity Proceeds) prepay or
procure that there is prepaid an amount of the outstanding Facility B Advances
equal to 40 per cent. of the balance, which have not been taken into account
when calculating the payments to be made under sub-paragraph (c)(i) above, of
the proceeds of the Relevant Convertible Preference Shares.  Such amount shall
be applied in prepayment of outstanding Facility B Advances in order of maturity
in accordance with Clause 7.8(a)(iii) (Order of application).

 

(d)                                 Subject to Clause 7.7 (Date for prepayment)
and paragraph (e) below, where proceeds of an issue of Relevant Convertible
Preference Shares or Net Equity Proceeds are received by any member of the UGCE
Borrower Group for or on account of a member of the UGCE Borrower Group on or
after 31st December, 2004, UPC Distribution shall, within ten Business Days of
receipt by any member of the UGCE Borrower Group of the proceeds of an issue of
Relevant Convertible Preference Shares or Net Equity Proceeds (as applicable):

 

(i)                                     until the Additional Prepayment Cap has
been reached:

 

(A)                              in the case of receipt of Net Equity Proceeds,
prepay or procure that there is prepaid an amount of the Facilities equal to 10
per cent. of the Net Equity

 

51

--------------------------------------------------------------------------------

 

Proceeds.  Such amount shall be applied first against outstanding Facility B
Advances and outstanding Facility C Advances pro rata and second against
outstanding Facility A Advances, in each case in accordance with Clause
7.8(a)(i) (Order of Application);

 

(B)                                in addition to any prepayments made under
sub-paragraph (d)(i)(A) above and subject to clause 7.5(d)(ii) and (e) and
clause 7.7 (Date for Prepayment) of the New Facility Agreement (each of which is
the equivalent of Clause 7.5(d)(i)(c) and (e) and Clause 7.7 of this Agreement),
in the case of the receipt of the proceeds of an issue of Relevant Convertible
Preference Shares (whether or not such Relevant Convertible Preference Shares
also constitute Net Equity Proceeds) prepay or procure that there is prepaid an
amount of the New Facility D equal to 90 per cent. of the proceeds of the
Relevant Convertible Preference Shares.  Such amount shall be applied pro rata
against all amounts outstanding under New Facility D; and

 

(C)                                to the extent that the amount required to be
repaid under the Facility D as set out in sub-paragraph (d)(i)(B) above exceeds
the amounts outstanding under Facility D at the relevant time, prepay or procure
that there is prepaid:

 

I.                                         until all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding Facility B
Advances in an amount equal to the amount of such excess.  Such amount shall be
applied against outstanding Facility B Advances in order of maturity in
accordance with Clause 7.8(a)(iii) (Order of application); and

 

II.                                     after all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding Facility B
Advances or outstanding Facility C Advances in an aggregate amount equal to the
amount of such excess.  Such amount shall be applied against outstanding
Facility B Advances or Facility C Advances, as may be designated by the Borrower
in the Cancellation Notice, in order of maturity in accordance with Clause
7.8(a)(iii) (Order of Application); and

 

(ii)                                  after the Additional Prepayment Cap has
been reached:

 

(A)                              in the case of receipt of Net Equity Proceeds,
prepay or procure that there is prepaid an amount of the Facilities equal to 10
per cent. of the balance of the Net Equity Proceeds which have not been taken
into account when calculating the payments to be made under sub-paragraph (d)(i)
above.  Such amount shall be applied first against outstanding Facility B
Advances and outstanding Facility C Advances pro rata and second against
outstanding Facility A Advances, in each case in accordance with Clause
7.8(a)(i) (Order of Application);

 

(B)                                in addition to any prepayments made under
sub-paragraph (d)(ii)(A) above and subject to clause 7.5(d)(iv) and (e) and
clause 7.7 (Date for Prepayment) of the New Facility Agreement (each of which is
the equivalent of Clause 7.5(d)(ii)(c) and (e) and Clause 7.7 of this
Agreement), in the case of the receipt of the proceeds of an issue of Relevant
Convertible Preference Shares

 

52

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(whether or not such Relevant Convertible Preference Shares also constitute Net
Equity Proceeds) prepay or procure that there is prepaid an amount of New
Facility D equal to 40 per cent. of the balance of the proceeds of the Relevant
Convertible Preference Shares which have not been taken into account when
calculating the payments to be made under sub-paragraph (d)(i) above.  Such
amount shall be applied pro rata against all amounts outstanding under Facility
D; and

 

(C)                                to the extent that the amount required to be
repaid under the New Facility D as set out in sub-paragraph (d)(ii)(B) above
exceeds the amounts outstanding under the New Facility D at the relevant time,
prepay or procure that there is prepaid:

 

I.                                         until all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding Facility B
Advances in an amount equal to the amount of such excess.  Such amount shall be
applied against outstanding Facility B Advances in order of maturity in
accordance with Clause 7.8(a)(iii) (Order of application); and

 

II.                                     after all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding Facility B
Advances or outstanding Facility C Advances in an aggregate amount equal to the
amount of such excess.  Such amount shall be applied against outstanding
Facility B Advances or Facility C Advances, as may be designated by the Borrower
in the Cancellation Notice, in order of maturity in accordance with Clause
7.8(a)(iii) (Order of Application); and

 

(iii)                               prepay or procure that there is prepaid, in
accordance with clause 7.5(c) (Mandatory prepayment from Excess Cash Flow and
Net Equity Proceeds) of the New Facility Agreement, an amount of New Facility D
equal to the Make-Whole Amount (as defined in that clause).

 

(e)                                  UPC Distribution shall not be required to
make any prepayments of the Facilities under paragraphs (c) or (d) above:

 

(i)                                     provided that the most recently
delivered financial statements provided to the Facility Agent under Clause
16.2(b) (Financial information) show that, for the two most recent Ratio
Periods, the applicable ratio for the purposes of Clause 17.2(a) (Financial
ratios) is 3.5:1 or less;

 

(ii)                                  to the extent that such Net Equity
Proceeds are provided by another member of the UGCE Borrower Group which is
funding such acquisition by means of proceeds which have previously been treated
as “Net Equity Proceeds” of that member of the UGCE Borrower Group for the
purposes of Clause 7.5(c) above;

 

(iii)                               in respect of Net Equity Proceeds in respect
of a new issue of shares by any member of the UGCE Borrower Group subscribed for
by any other member of the UGCE Borrower Group; or

 

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(iv)                              in respect of Net Equity Proceeds relating to
any issuance of shares where all of the shares issued are subscribed for by any
member of the Wider Group.

 

7.6                               Prepayment from disposal proceeds

 

(a)                                  [Intentionally left blank]

 

(b)                                 If the Net Proceeds of disposals of assets
comprising or contributing in aggregate a percentage value of 5 per cent. or
less of the total assets, revenues and EBITDA of the Borrower Group are either:

 

(i)                                     reinvested in the business of the
Borrower Group within 12 months of receipt; or

 

(ii)                                  deposited immediately with the Facility
Agent and applied in prepayment of the Facilities and reduction of the Total
Facility A Commitments, Total Facility B Commitments and Total Facility C
Commitments in accordance with the mechanics set out in Clauses 7.7 (Date for
prepayment) and 7.8 (Order of application),

 

the percentage value of such assets shall not be taken into account for the
purposes of Clause 16.10(b)(ix) (Disposals).

 

(c)                                  For the purposes of paragraph (b) above and
Clause 16.10(b) (Disposals), percentage value of an asset disposed of means the
percentage of the total assets, revenues and EBITDA of the Borrower Group (as
the case may be) attributable to such asset in respect of the financial year (in
the case of revenues and EBITDA) or as at the end of the financial year (in the
case of total assets) immediately preceding the financial year in which the
asset is disposed of and for the avoidance of doubt, the value of assets
disposed of will be calculated on an increasing percentage basis such that any
percentage value will automatically be added to the percentage value of any
subsequent disposal.  For the purpose of this Clause 7.6(c), all calculations
shall be by reference to the annual consolidated financial statements of UPC
Distribution or, as the case may be, the annual combined financial statements of
the Borrower Group required to be produced pursuant to this Agreement.

 

(d)                                 If valid and enforceable security agreements
(in form and substance satisfactory to the Facility Agent) have been entered
into between, inter alia, KTA and the Security Agent granting security over
KTA’s cable network assets in favour of the Security Agent (the KTA Security
Agreements), UPC Distribution shall:

 

(i)                                     within five Business Days of such KTA
Default, apply €100,000,000 in prepayment of the Facilities (or, if less the
amount of the Facilities); and

 

(ii)                                  promptly following enforcement by the
Security Agent of the security constituted by the KTA Security Agreements (and
in any event within five Business Days of receipt by the Security Agent of the
proceeds of such enforcement), apply an amount equal to the net proceeds of such
enforcement (after the deduction of all enforcement costs), to the extent that
such net enforcement proceeds exceed €100,000,000, in prepayment of the
Facilities (or, if less the amount of the Facilities).

 

The obligations of UPC Distribution under this Clause 7.6(d) shall be satisfied
in full on receipt by the Security Agent of the proceeds of enforcement of the
security constituted by the KTA Security Agreements.

 

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7.6A                      Mandatory prepayment from Third Party Debt proceeds

 

Subject to Clause 7.7 (Date for prepayment), if any member of the UGCE Borrower
Group incurs Third Party Debt and Clause 16.12(d)(i) (Restrictions on Financial
Indebtedness) applies to such Third Party Debt, UPC Distribution shall, within
ten Business Days of receipt by such member of the UGCE Borrower Group of the
proceeds of Third Party Debt:

 

(a)                                  where the proceeds of such Third Party Debt
are received prior to 31st December, 2004:

 

(i)                                     until the Additional Prepayment Cap has
been reached:

 

(A)                              prepay or procure that there is prepaid, an
amount of the Facilities equal to 50 per cent. of the proceeds of such Third
Party Debt.  Such amount shall be applied first pro rata against outstanding
Facility B Advances and outstanding Facility C Advances in order of maturity and
second against outstanding Facility A Advances, in each case in accordance with
Clause 7.8(a)(ii) (Order of Application); and

 

(B)                                prepay or procure that there is prepaid a
further amount of outstanding Facility B Advances equal to 50 per cent. of the
proceeds of such Third Party Debt.  Such amount shall be applied against
outstanding Facility B Advances in order of maturity in accordance with Clause
7.8(a)(iii) (Order of Application); and

 

(ii)                                  after the Additional Prepayment Cap has
been reached, prepay or procure that there is prepaid, an amount of the
Facilities equal to 50 per cent. of the balance of the proceeds of such Third
Party Debt which have not been taken into account when calculating the payments
to be made under sub-paragraph (a)(i) above.  Such amount shall be applied first
pro rata against outstanding Facility B Advances and outstanding Facility C
Advances in order of maturity and second against outstanding Facility A
Advances, in each case in accordance with Clause 7.8(a)(ii) (Order of
Application);

 

(b)                                 where the proceeds of such Third Party Debt
are received on or after 31st December, 2004:

 

(i)                                     until the Additional Prepayment Cap has
been reached:

 

(A)                              prepay or procure that there is prepaid an
amount of the Facilities equal to 50 per cent. of the proceeds of such Third
Party Debt.  Such amount shall be applied first pro rata against outstanding
Facility B Advances and outstanding Facility C Advances in order of maturity and
second against outstanding Facility A Advances, in each case in accordance with
Clause 7.8(a)(ii) (Order of Application); and

 

(B)                                prepay or procure that there is prepaid an
amount of New Facility D equal to 50 per cent. of the proceeds of such Third
Party Debt in accordance with clause 7.6A(a) (Mandatory prepayment from Third
Party Debt proceeds) of the New Facility Agreement.  To the extent that such
amount exceeds the amounts outstanding under the New Facility D at the relevant
time, UPC Distribution shall prepay or procure that there is prepaid:

 

I.                                         until all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding

 

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Facility B Advances in an amount equal to the amount of such excess.  Such
amount shall be applied against outstanding Facility B Advances in order of
maturity in accordance with Clause 7.8(a)(iii) (Order of Application); and

 

II.                                     after all outstanding New Facility D
Advances under the New Facility have been permanently prepaid and cancelled and
there are no undrawn Commitments under New Facility D, outstanding Facility B
Advances or outstanding Facility C Advances in an aggregate amount equal to the
amount of such excess.  Such amount shall be applied against outstanding
Facility B Advances or Facility C Advances, as may be designated by the Borrower
in the Cancellation Notice, in order of maturity in accordance with Clause
7.8(a)(iii) (Order of Application); and

 

(ii)                                  after the Additional Prepayment Cap has
been reached, prepay or procure that there is prepaid, an amount of the
Facilities equal to 50 per cent. of the balance of the proceeds of such Third
Party Debt, which have not been taken into account when calculating the payments
to be made under sub-paragraph (b)(i) above.  Such amount shall be applied first
pro-rata against outstanding Facility B Advances and outstanding Facility C
Advances in order of maturity and second against outstanding Facility A
Advances, in each case in accordance with Clause 7.8(a)(ii) (Order of
Application).

 

7.7                               Date for prepayment

 

Each amount of the Facilities to be prepaid under Clause 7.5 (Mandatory
prepayment from Excess Cash Flow and Net Equity Proceeds), Clause 7.6
(Prepayment from disposal proceeds), Clause 7.6A (Mandatory prepayment from
Third Party Debt proceeds) and Clause 17.4 (Cure provisions) shall be applied in
prepayment of the Facility within the period required by the relevant Clause or
deposited before the end of such period with the Security Agent or as the
Security Agent may reasonably direct in an account (or accounts) (each a Blocked
Account) in the name of any Obligor bearing interest at rates customarily
offered by the Security Agent in such circumstances, secured (if requested by
the Security Agent) by a first ranking security interest in favour of the
Security Agent on behalf of the Beneficiaries, on terms that the principal
amount so deposited may only be released by making the relevant prepayment on
Interest Dates falling immediately thereafter, in accordance with Clause 7.8
(Order of application) (where applicable), until the prepayment obligations
under Clause 7.5 (Mandatory prepayment from Excess Cash Flow and Net Equity
Proceeds), Clause 7.6 (Prepayment from disposal proceeds), Clause 7.6A
(Mandatory prepayment from Third Party Debt proceeds) and Clause 17.4 (Cure
provisions) have been satisfied.

 

7.8                               Order of application

 

(a)                                  Subject to Clause 7.10(c) (Facility C Call
protection):

 

(i)                                     the amount of each prepayment of the
Facilities made under Clause 7.5 (a), Clause 7.5(b), Clause 7.5(c)(i)(A),
7.5(c)(ii)(A) 7.5(d)(i)(A) and 7.5(d)(ii)(A) (Mandatory prepayment from Excess
Cash Flow and Net Equity Proceeds) and Clause 7.6 (Prepayment from disposal
proceeds) shall be applied, unless otherwise stated:

 

(A)                              first, pro rata between outstanding Facility B
Advances and Facility C Advances (and pro rata against the Repayment Instalments
for Facility B and Facility C respectively) with a corresponding permanent
cancellation of the

 

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Total Facility B Commitments and Total Facility C Commitments (pro rata between
the Commitments of the Lenders under the relevant Facility); and

 

(B)                                second, against outstanding Facility A
Advances (pro rata against all Facility A Advances) with a corresponding
permanent cancellation of the Total Facility A Commitments, (pro rata between
the Commitments of the Lenders under that Facility) and a corresponding
reduction of each amount specified in column 2 of Clause 7.1(d) (Automatic
Cancellation of the Commitments) by the amount of each such prepayment;

 

(ii)                                  the amount of each prepayment of the
Facilities made under clause 7.6A(a)(i)(A), 7.6A(a)(ii), 7.6A(b)(i)(A) and
7.6A(b)(ii) (Mandatory prepayment from Third Party Debt proceeds) shall be
applied:

 

(A)                              first, pro rata between outstanding Facility B
Advances and Facility C Advances (and against the Repayment Instalments for
Facility B and Facility C respectively in order of maturity), starting with
amounts due to be paid on the next Facility B Repayment Date or Facility C
Repayment Date (as applicable) with a corresponding permanent cancellation of
the Total Facility B Commitments or Total Facility C Commitments (as applicable)
(pro rata between the Commitments of the Lenders under the relevant Facility);
and

 

(B)                                second, against outstanding Facility A
Advances (pro rata against all Facility A Advances) with a corresponding
permanent cancellation of the Total Facility A Commitments (pro rata between the
Commitments of the Lenders under that Facility) and a corresponding reduction of
each amount specified in column (2) of clause 7.1(d) (Automatic Cancellation of
the Commitments) by the amount of each such prepayment; and

 

(iii)                               the amount of each prepayment of:

 

(A)                              the Facilities made under Clause 7.3 (Voluntary
prepayment), as a result of the application of the proceeds of the Additional
Facility in accordance with Clause 16.12(b)(ii) (Restrictions on Financial
Indebtedness); and

 

(B)                                outstanding Facility B Advances made under
Clause 7.5(c)(i)(B), 7.5(c)(ii)(B), 7.5(d)(i)(C) and 7.5(d)(ii)(C) (Mandatory
prepayment from Excess Cash Flow and Net Equity Proceeds) and Clauses
7.6A(a)(i)(B)  and 7.6A(b)(i)(B) (Mandatory prepayment from Third Party Debt
proceeds),

 

shall be applied (in the case of Facility B or Facility C) against the Repayment
Instalments for the relevant Facility in order of maturity, starting with
amounts due to be paid on the next Facility B Repayment Date or Facility C
Repayment Date (as applicable) with a corresponding permanent cancellation of
the Total Facility B Commitments or Total Facility C Commitments (as applicable)
(pro rata between the Commitments of the Lenders under the relevant Facility).

 

7.9                               Right of prepayment and cancellation in
relation to a single Lender

 

(a)                                  If:

 

(i)                                     any sum payable to any Lender by a
Borrower is required to be increased under of Clause 10.2(c) (Tax gross-up); or

 

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(ii)                                  any Lender claims indemnification from a
Borrower under Clause 10.3 (Tax indemnity) or Clause 12.1 (Increased Costs),

 

UPC Distribution may, whilst the circumstance giving rise to the requirement or
indemnification continues, in respect only of the Facilities made available to
it, give the Facility Agent notice of cancellation of the Facility A Commitment,
Facility B Commitment, Facility C1 Commitment and/or Facility C2 Commitment (as
applicable) of that Lender and its intention to procure the repayment of that
Lender’s participation in all relevant Advances.

 

(b)                                 On receipt of a notice referred to in
paragraph (a) above, the Facility A Commitment, Facility B Commitment, Facility
C1 Commitment and/or Facility C2 Commitment (as applicable) of that Lender shall
each immediately be reduced to zero.

 

(c)                                  On the last day of each Interest Period
which ends after a Borrower has given notice under paragraph (a) above (or, if
earlier, the date specified by the relevant Borrower in that notice), the
relevant Borrower shall repay that Lender’s participation in all relevant
Advances.

 

(d)                                 Prepayments made pursuant to this Clause 7.9
shall be applied against the outstanding Facility A Advances and (in the case of
Facility B Advances and Facility C Advances) the outstanding Repayment
Instalments pro rata.

 

7.10                        Facility C Call protection

 

(a)                                  Upon any prepayment of Facility C Advances
under this Clause 7 made up to and including the Second Anniversary, the
Borrowers shall pay to the Facility Agent for distribution to Facility C
Lenders:

 

(i)                                     during the period commencing on the
Signing Date to and including the first Anniversary, a prepayment fee in respect
of the principal amount of such Advances so prepaid equal to 3 per cent. of such
principal amount; and

 

(ii)                                  during the period following the first
Anniversary up to and including the second Anniversary, a prepayment fee in
respect of the principal amount of such Loans so prepaid equal to 1.5 per cent.
of such principal amount.

 

(b)                                 In the event that:

 

(i)                                     the Lenders, the Majority Lenders or the
Facility C Lenders (as applicable) agree to modify or waive any of the
provisions of this Agreement and, as a result thereof, a prepayment that would
otherwise have been required under this Clause 7 shall not be made; or

 

(ii)                                  on receipt by the Facility Agent of a
notice under Clause 7.4(a)(A) (Change of Control) notifying it of a Change of
Control, the Majority Lenders agree not to require the cancellation of the
Facility and prepayment of all outstanding amounts under the Finance Documents,

 

the Borrowers shall nevertheless pay to all the Facility C Lenders a fee equal
to the amount of prepayment fee that would otherwise have been paid under
paragraph (a) above had such prepayment occurred.  This fee is in addition to
any further prepayment fee under paragraph (a) above that may be payable on any
subsequent prepayment of the relevant amount.

 

(c)                                  Subject to paragraph (b), prior to the
repayment or prepayment in full of all outstanding Facility B Advances, the
Facility C Lenders may elect not to accept prepayments of Facility C

 

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Advances under Clause 7.3 (Voluntary prepayment), 7.5 (Mandatory prepayment from
Excess Cash Flow and Net Equity Proceeds) or 7.6 (Prepayment from disposal
proceeds).  In the event of such election any amounts which would otherwise have
been applied in prepayment of Facility C Advances shall not, unless UPC
Distribution so elects, be applied in prepayment of Facility A Advances or
Facility B Advances but may be retained by the Borrowers for use in the business
of the Borrower Group.

 

7.11                        Miscellaneous provisions

 

(a)                                  Any Cancellation Notice delivered under
this Agreement is irrevocable.  The Facility Agent shall notify the Lenders
promptly of receipt of any such notice.

 

(b)                                 All prepayments under this Agreement shall
be made together with accrued interest on the amount prepaid and any other
amounts due under this Agreement in respect of that prepayment and, subject to
Clause 7.10 (Facility C Call protection) and Clause 23.4 (Break Costs), without
premium or penalty.

 

(c)                                  No prepayment or cancellation is permitted
except in accordance with the express terms of this Agreement.

 

(d)                                 The amount of any Facility A Advance prepaid
by UPC Distribution in accordance with Clause 7.3 (Voluntary prepayment) (other
than any permanent prepayment and cancellation of Facility A out of the proceeds
of a drawing under an Additional Facility pursuant to Clause 16.12(b)(ii)(B)(I)
(Restrictions on Financial Indebtedness)) or Clause 17.4 (Cure provisions) may,
subject to the terms of this Agreement, be re-borrowed.  No other amount prepaid
under this Agreement may subsequently be re-borrowed.

 

(e)                                  No amount of any Commitment cancelled under
this Agreement may subsequently be reinstated.

 

(f)                                    Any prepayment in part of any Advance
shall be applied against the participations of the Lenders in that Advance pro
rata.

 

(g)                                 Any cancellation or prepayment in relation
to Facility C shall be applied pro rata between Facility C1 Commitments and
Facility C2 Commitments or (as the case may be) Facility C1 Advances and
Facility C2 Advances according to their respective Original Euro Amounts.

 

8.                                      INTEREST

 

8.1                               Interest rate

 

The rate of interest on each Advance for its Interest Period is the rate per
annum determined by the Facility Agent to be the aggregate of:

 

(a)                                  the applicable Margin; and

 

(b)                                 (i)                                    
LIBOR (in the case of an Advance denominated in a currency other than euros); or

 

(ii)                                  EURIBOR (in the case of an Advance
denominated in euros); and

 

(c)                                  the Mandatory Costs.

 

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8.2                               Selection of Interest Periods

 

(a)                                  The Interest Period (in the case of each
Facility A Advance) or the first Interest Period (in the case of each Facility B
Advance or Facility C Advance) of each Advance will be the period selected in
the Request for that Advance and (in the case of each Facility B Advance or
Facility C Advance) each subsequent Interest Period will be the period selected
by the relevant Borrower by notice (a Selection Notice) to the Facility Agent
received not later than the third Business Day before the end of the then
current Interest Period.

 

(b)                                 Each Interest Period shall be one month,
two, three or six months or in any case such other period not exceeding six
months as the relevant Borrower and the Facility Agent (acting on the
instructions of all the Lenders) may agree from time to time.  Each Interest
Period for an Advance will commence on its Utilisation Date or (in the case of
each subsequent Interest Period for a Facility B Advance or Facility C Advance)
the expiry of its preceding Interest Period.

 

(c)                                  Each Facility A Advance will have only one
Interest Period.

 

8.3                               Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day,
that Interest Period shall instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).

 

8.4                               Further Adjustments to Interest Periods

 

If an Interest Period:

 

(a)                                  for a Facility A Advance would otherwise
overrun the Facility A Final Maturity Date, it shall be shortened so that it
ends on the Facility A Final Maturity Date;

 

(b)                                 for a Facility B Advance would otherwise
overrun the Facility B Final Repayment Date, it shall be shortened so that it
ends on the Facility B Final Repayment Date; and

 

(c)                                  for a Facility C Advance would otherwise
overrun the Facility C Final Repayment Date, it shall be shortened so that it
ends on the Facility C Final Repayment Date.

 

8.5                               Other adjustments

 

The Facility Agent and the Borrowers may enter into such other arrangements as
they may agree for the adjustment of Interest Periods and the consolidation
and/or splitting of Advances.

 

8.6                               Notification

 

The Facility Agent shall notify the relevant Borrower and the Lenders of the
duration of each Interest Period promptly after ascertaining its duration.

 

8.7                               Due dates

 

Except as otherwise provided in this Agreement, accrued interest on each Advance
is payable by the relevant Borrower on its Interest Date and also, in the case
of:

 

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(a)                                  any Facility A Advance or Facility B
Advance with an Interest Period longer than six months, at six monthly intervals
after the first day of that Interest Period for so long as the Interest Period
continues; and

 

(b)                                 in the case of any Facility C Advance with
an Interest Period longer than three months, at three monthly intervals after
the first day of that Interest Period for so long as the Interest Period
continues.

 

8.8                               Default interest

 

(a)                                  If an Obligor fails to pay any amount
payable by it under the Finance Documents, it shall forthwith on demand by the
Facility Agent pay interest on the overdue amount from the due date up to the
date of actual payment, both before and after judgment, at a rate (the default
rate) determined by the Facility Agent to be two per cent. per annum above the
rate which would have been payable if the Unpaid Sum had, during the period of
non-payment, constituted an Advance at the Margin applicable to a new Facility A
Advance or (if the Unpaid Sum relates to an overdue amount payable under or in
connection with Facility C) a new Facility C Advance if it had been drawn down
at such time in the currency of the Unpaid Sum for such successive Interest
Periods of such duration (not being more than three months) as the Facility
Agent may determine, having regard to the likely duration of the default (a
Designated Term).

 

(b)                                 The default rate will be determined on each
Business Day or the first day of, or two Business Days before the first day of,
the relevant Designated Term, as appropriate.

 

(c)                                  Default interest will be compounded at the
end of each Designated Term.

 

8.9                               Notification of rates of interest

 

The Facility Agent will promptly notify each relevant Party of the determination
of a rate of interest under this Agreement.

 

8.10                        Margin

 

(a)                                  The Margin will be:

 

(i)                                     in the case of a Facility A Advance or
Facility B Advance, 2.75 per cent. per annum until the first Anniversary and
thereafter shall be 4.00 per cent. per annum unless adjusted in accordance with
the following provisions of this Clause 8.10; and

 

(ii)                                  in the case of a Facility C Advance, 5.50
per cent. per annum.

 

(b)                                 Commencing with the first Anniversary (by
reference, in the case of the first Anniversary, to the Relevant Financial
Statements delivered for the most recent financial quarter to end prior to the
first Anniversary) UPC Distribution will deliver to the Facility Agent (by no
later than the date of the first Anniversary or, as the case may be, the date it
delivers to the Facility Agent each subsequent set of Relevant Financial
Statements) a notice referring to this Clause 8.10 (a Margin Notice) and
specifying the ratio of Senior Debt to Annualised EBITDA as calculated in
accordance with Clause 17 (Financial Covenants) as at the date to which the
Relevant Financial Statements were prepared for the purposes of calculating
whether the Margin for Facility A Advances and Facility B Advances is to be
adjusted in accordance with this Clause 8.10.

 

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(c)                                  The Margin for Facility A Advances and
Facility B Advances will be adjusted (upwards or downwards) to the percentage
rates per annum set out in column (1) below set opposite the range set out in
column (2) below into which the ratio of Senior Debt to Annualised EBITDA, as
shown in the Margin Notice, falls:

 

(1)

 

(2)

Margin

 

Senior Debt/
Annualised EBITDA ratio

 

 

 

4.00%

 

> 7.00:1

 

 

 

3.50%

 

> 6.00:1 but < 7.00:1

 

 

 

3.00%

 

> 5.00:1 but < 6.00:1

 

 

 

2.75%

 

> 4.00:1 but < 5.00:1

 

 

 

2.50%

 

> 3.00:1 but < 4.00:1

 

 

 

2.25%

 

< 3.00:1

 

(d)                                 The adjustment (if any) specified in (c)
above will apply to the Margin for all Facility A Advances and Facility B
Advances with effect from the date falling five Business Days after the relevant
Margin Notice (or, if later, the related Relevant Financial Statements) is
delivered to the Facility Agent.

 

(e)                                  If UPC Distribution fails to deliver a
Margin Notice in accordance with paragraph (b) above the Margin with effect from
the last date permitted for delivery of the Relevant Financial Statements will
be as stated in paragraph (a) above provided that if that Margin Notice is
delivered later, the Margin will be adjusted in accordance with this Clause 8.10
with effect from the date falling five Business Days after the Margin Notice
(or, if later, the related Relevant Financial Statements) is delivered.

 

(f)                                    In this Clause 8.10, Relevant Financial
Statements means each set of quarterly financial statements delivered under
Clause 16.2(b) (Financial information).

 

9.                                      PAYMENTS

 

9.1                               Place of Payment

 

All payments by an Obligor or a Lender under this Agreement shall be made to the
Facility Agent to its account at such office or bank in the principal financial
centre of the country of the currency concerned (or, in the case of euros, the
financial centre of such of the Participating Member States or London) as the
Facility Agent may notify to the Obligor or Lender for this purpose.

 

9.2                               Funds

 

Payments under this Agreement to the Facility Agent shall be made for value on
the due date at such times and in such funds as the Facility Agent may specify
to the Party concerned as being customary at the time for the settlement of
transactions in the relevant currency in the place for payment.

 

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9.3                               Distribution

 

(a)                                  Each payment received by the Facility Agent
under this Agreement for another Party shall, subject to paragraphs (b) and (c)
below, be made available by the Facility Agent to that Party by payment (on the
date of value of receipt and in the currency and funds of receipt) to its
account with such bank in the principal financial centre of the country of the
relevant currency (or, in the case of euros, in the principal financial centre
of such of the Participating Member States or London) as it may notify to the
Facility Agent for this purpose by not less than five Business Days’ prior
notice.

 

(b)                                 The Facility Agent may apply any amount
received by it for an Obligor in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from an Obligor under this
Agreement in the same currency on such date or in or towards the purchase of any
amount of any currency to be so applied.

 

(c)                                  Where a sum is to be paid under this
Agreement to the Facility Agent for the account of another Party, the Facility
Agent is not obliged to pay that sum to that Party until it has established that
it has actually received that sum.  The Facility Agent may, however, assume that
the sum has been paid to it in accordance with this Agreement and, in reliance
on that assumption, make available to that Party a corresponding amount.  If the
sum has not been made available but the Facility Agent has paid a corresponding
amount to another Party, that Party shall forthwith on demand refund the
corresponding amount to the Facility Agent together with interest on that amount
from the date of payment to the date of receipt, calculated at a rate reasonably
determined by the Facility Agent to reflect its cost of funds.

 

9.4                               Currency

 

(a)                                  A repayment or prepayment of an Advance is
payable in the currency in which the Advance is denominated.

 

(b)                                 All interest is payable in the currency in
which the relevant amount in respect of which it is payable is denominated.

 

(c)                                  Amounts payable in respect of costs,
expenses, Taxes and the like are payable in the currency in which they are
incurred.

 

(d)                                 Any other amount payable under this
Agreement is, except as otherwise provided in this Agreement, payable in euros
or, to the extent it relates to Facility C2, US Dollars.

 

9.5                               Set-off and counterclaim

 

All payments made by an Obligor under this Agreement shall be made without
set-off or counterclaim.

 

9.6                               Non-Business Days

 

(a)                                  If a payment under this Agreement is due on
a day which is not a Business Day, the due date for that payment shall instead
be the next Business Day in the same calendar month (if there is one) or the
preceding Business Day (if there is not).

 

(b)                                 During any extension of the due date for
payment of any principal under this Agreement interest is payable on the
principal at the rate payable on the original due date.

 

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9.7                               Partial payments

 

(a)                                  Subject to the Security Deed, if the
Facility Agent receives a payment insufficient to discharge all the amounts then
due and payable by an Obligor under this Agreement, the Facility Agent shall
apply that payment towards the obligations of the Obligors under this Agreement
in the following order:

 

(i)                                     first, in or towards payment pro rata of
any unpaid costs, fees and expenses of the Facility Agent under this Agreement;

 

(ii)                                  secondly, in or towards payment pro rata
of any accrued fees (other than any commitment fees payable under Clause 20.1
(Commitment fee)) due but unpaid under Clause 20 (Fees);

 

(iii)                               thirdly, in or towards payment to the
Lenders pro rata of any accrued interest and commitment fees due but unpaid
under this Agreement;

 

(iv)                              fourthly, in or towards payment to the Lenders
pro rata of any principal due but unpaid under this Agreement; and

 

(v)                                 fifthly, in or towards payment pro rata of
any other sum due but unpaid under the Finance Documents.

 

(b)                                 Subject to the Security Deed, the Facility
Agent shall, if so directed by all of the Lenders, vary the order set out in
sub-paragraphs (a)(ii) to (v) above.  The Facility Agent shall notify UPC
Distribution of any such variation.

 

(c)                                  Paragraphs (a) and (b) above shall override
any appropriation made by any Obligor.

 

10.                               TAX GROSS-UP AND INDEMNITIES

 

10.1                        Definitions

 

(a)                                  In this Clause 10:

 

Protected Party means a Finance Party which is or will be, for or on account of
Tax, subject to any liability or required to make any payment in relation to a
sum received or receivable (or any sum deemed for the purposes of Tax to be
received or receivable) under a Finance Document.

 

Tax Credit means a credit against, relief or remission for, or repayment of any
Tax.

 

Tax Deduction means a deduction or withholding for or on account of Tax from a
payment under a Finance Document.

 

Tax Payment means an increased payment made by an Obligor to a Finance Party
under Clause 10.2 (Tax gross-up) or a payment under Clause 10.3 (Tax indemnity).

 

Treaty Lender means a Lender which is (on the date a payment falls due),
entitled to that payment under a double taxation agreement in force on the date
(subject to the completion of any necessary procedural formalities) without a
Tax Deduction.

 

(b)                                 In this Clause 10 a reference to determines
or determined means a determination made in the absolute discretion of the
person making the determination.

 

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10.2                        Tax gross-up

 

(a)                                  Each Obligor shall make all payments to be
made by it without any Tax Deduction, unless a Tax Deduction is required by law.

 

(b)                                 UPC Distribution or a Lender shall promptly
upon becoming aware that an Obligor must make a Tax Deduction (or that there is
any change in the rate or the basis of a Tax Deduction) notify the Facility
Agent accordingly.  If the Facility Agent receives such notification from a
Lender it shall notify UPC Distribution and that Obligor.

 

(c)                                  Subject to Clause 10.5 (U.S. Taxes), if a
Tax Deduction is required by law to be made by an Obligor, the amount of the
payment due from that Obligor shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would have
been due if no Tax Deduction had been required.

 

(d)                                 If an Obligor is required to make a Tax
Deduction, that Obligor shall make that Tax Deduction and any payment required
in connection with that Tax Deduction within the time allowed and in the minimum
amount required by law.

 

(e)                                  Within 30 days of making either a Tax
Deduction or any payment required in connection with that Tax Deduction, the
Obligor making that Tax Deduction shall deliver to the Facility Agent for the
Finance Party entitled to the payment evidence reasonably satisfactory to that
Finance Party that the Tax Deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.

 

(f)                                    A Treaty Lender and each Obligor which
makes a payment to which that Treaty Lender is entitled shall co-operate and use
its reasonable efforts to complete any procedural formalities and provide any
information, in each case on a timely basis, necessary for that Obligor to
obtain authorisation to make that payment without a Tax Deduction (or with a
reduced rate of such Tax Deduction).

 

10.3                        Tax indemnity

 

(a)                                  The Obligors shall (within three Business
Days of demand by the Facility Agent) pay to a Protected Party an amount equal
to the loss, liability or cost which that Protected Party determines will be or
has been (directly or indirectly) suffered for or on account of Tax by that
Protected Party.

 

(b)                                 Paragraph (a) above shall not apply with
respect to any Tax assessed on:

 

(i)                                     a Finance Party:

 

(A)                              under the law of the jurisdiction in which that
Finance Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as resident for tax
purposes; or

 

(B)                                under the law of the jurisdiction in which
that Finance Party’s Facility Office is located in respect of amounts received
or receivable in that jurisdiction,

 

if that Tax is imposed on or calculated by reference to the net income or net
profits received or receivable (but not any sum deemed to be received or
receivable) by that Finance Party; or

 

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(ii)                                  the Facility Agent, as a result of the
failure by a Lender to satisfy on the due date of a payment of interest either
of the conditions set out in Clause 19.16(b)(i)(A) and (B) (Lenders).

 

(c)                                  A Protected Party making or intending to
make a claim pursuant to paragraph (a) above shall promptly notify the Facility
Agent in writing of the event which will give, or has given, rise to the claim,
including details of the nature of the Tax due or paid by that Protected Party,
following which the Facility Agent shall promptly provide such information to
UPC Distribution.

 

(d)                                 A Protected Party shall, on receiving a
payment from an Obligor under this Clause 10.3, notify the Facility Agent.

 

10.4                        Tax Credit

 

(a)                                  If an Obligor makes a Tax Payment and the
relevant Finance Party determines that:

 

(i)                                     a Tax Credit is attributable to that Tax
Payment; and

 

(ii)                                  that Finance Party has obtained, utilised
and retained that Tax Credit,

 

the Finance Party shall pay an amount to the Obligor which that Finance Party
determines will leave it (after that payment) in the same after-Tax position as
it would have been in had the Tax Payment not been made by the Obligor.

 

(b)                                 No provision of this Agreement shall:

 

(i)                                     interfere with the right of any Finance
Party to arrange its tax or any other affairs in whatever manner it thinks fit
or oblige any Finance Party to claim any credit, relief, remission or repayment
in respect of any payment of Tax in priority to any other credit, relief,
remission or repayment available to it, except that the Finance Party’s sole
reason (acting in good faith) for not claiming or for deferring such credit,
relief, remission or repayment shall not be its obligation to make a payment
under this Clause 10.4; or

 

(ii)                                  oblige any Finance Party to disclose any
information relating to its Tax or other affairs or any computations in respect
thereof.

 

10.5                        U.S. Taxes

 

The US Borrower shall not be required to pay any additional amount pursuant to
Clause 10.2 (Tax gross-up) in respect of United States Taxes (including, without
limitation, federal, state, local or other income Taxes), branch profits or
franchise Taxes with respect to a sum payable by it pursuant to this Agreement
to a Lender if on the date such Lender becomes a Party to this Agreement or has
designated a new Facility Office either:

 

(a)                                  in the case of a Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code), such Lender has not provided the Borrower with two accurate and complete
original signed copies of (i) U.S. Internal Revenue Service Form W-8BEN
(relating to such Lender and claiming a complete exemption from withholding
under an income tax treaty) (or successor form) or (ii) U.S. Internal Revenue
Service Form W-8ECI (or successor form) certifying, in each case, to such
Lender’s entitlement as of such date to a complete exemption from United States
withholding with respect to all amounts payable pursuant to the Finance
Documents;

 

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(b)                                 after the date such Lender becomes a Party
to this Agreement, when a lapse in time or change in circumstances renders the
previous certification of such Lender made pursuant to Clause 10.5(a) above
obsolete or inaccurate, such Lender has not delivered to UPC Distribution two
new accurate and complete original signed copies of Internal Revenue Service
Form W-8ECI or Form W-8BEN (with respect to the benefit of any income tax
treaty), as the case may be, and such other forms as may be required in order to
confirm or establish the entitlement of such Lender to a continued exemption
from or reduction in United States withholding tax with respect to amounts
payable pursuant to the Finance Documents; or

 

(c)                                  such Lender is subject to such Tax by
reason of any connection between the jurisdiction imposing such Tax and the
Lender or its Facility Office other than a connection arising solely from this
Agreement or any transaction contemplated hereby.

 

10.6                        Value added tax

 

(a)                                  All consideration payable under a Finance
Document by an Obligor to a Finance Party shall be deemed to be exclusive of any
VAT.  If VAT is chargeable, the Obligor shall, following delivery of a VAT
invoice, pay to the Finance Party (in addition to and at the same time as paying
the consideration) an amount equal to the amount of the VAT.

 

(b)                                 Where a Finance Document requires an Obligor
to reimburse a Finance Party for any costs or expenses, that Obligor shall also
at the same time pay and indemnify that Finance Party against all VAT incurred
by that Finance Party in respect of the costs or expenses save to the extent
that that Finance Party is entitled to repayment or credit in respect of the
VAT.

 

11.                               MARKET DISRUPTION

 

11.1                        Absence of quotations

 

Subject to Clause 11.2 (Market disruption), if LIBOR or, if applicable, EURIBOR
is to be determined by reference to the Reference Banks but a Reference Bank
does not supply a quotation by noon on the Rate Fixing Day, the applicable LIBOR
or EURIBOR shall be determined on the basis of the quotations of the remaining
Reference Banks.

 

11.2                        Market disruption

 

(a)                                  If a Market Disruption Event occurs in
relation to an Advance for any Interest Period, then the rate of interest on
each Lender’s share of that Advance for the Interest Period shall be the rate
per annum which is the sum of:

 

(i)                                     the Margin;

 

(ii)                                  the rate notified to the Facility Agent by
that Lender as soon as practicable and in any event before interest is due to be
paid in respect of that Interest Period, to be that which expresses as a
percentage rate per annum the cost to that Lender of funding its participation
in that Advance from whatever source it may reasonably select; and

 

(iii)                               the Mandatory Cost.

 

(b)                                 In this Agreement Market Disruption Event
means:

 

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(i)                                     at or about noon on the Rate Fixing Day
for the relevant Term or Interest Period the Screen Rate is not available and
none or only one of the Reference Banks supplies a rate to the Facility Agent to
determine LIBOR or, if applicable, EURIBOR for the relevant currency and period;
or

 

(ii)                                  before close of business in London on the
Rate Fixing Day for the relevant Interest Period, the Facility Agent receives
notifications from a Lender or Lenders (whose participations in an Advance
aggregate not less than one-third of that Advance) that the cost to it of
obtaining matching deposits in the London Interbank Market or, as the case may
be, the European Interbank Market would be in excess of LIBOR or, if applicable,
EURIBOR.

 

11.3                        Alternative basis of interest or funding

 

(a)                                  If a Market Disruption Event occurs and the
Facility Agent or UPC Distribution so requires, the Facility Agent and UPC
Distribution shall enter into negotiations (for a period of not more than 30
days) with a view to agreeing a substitute basis for determining the rate of
interest.

 

(b)                                 Any alternative basis agreed pursuant to
paragraph (a) above shall, with the prior consent of all the Lenders and UPC
Distribution, be binding on all Parties.

 

11.4                        Revocation of currency

 

If before 9.30 a.m. on any Rate Fixing Day, the Facility Agent receives notice
from a Lender that:

 

(a)                                  it is impracticable for the Lender to fund
its participation in an Advance in the relevant Optional Currency during that
Interest Period in the ordinary course of business in the London or (in the case
of euro) European Interbank Market; and/or

 

(b)                                 the use of the proposed Optional Currency
might contravene any law or regulation,

 

the Facility Agent shall give notice to UPC Distribution and to the Lenders to
that effect before 11.00 a.m. on that day.  In this event:

 

(i)                                     UPC Distribution and the Lenders may
agree that the drawdown will not be made; or

 

(ii)                                  in the absence of agreement:

 

(A)                              that Lender’s participation in the Advance (or,
if more than one Lender is similarly affected, those Lender’s participations in
the Advance) shall be treated as a separate Advance denominated in euros (in the
case of a Facility A Advance, Facility B Advance or Facility C1 Advance) or
Dollars (in the case of a Facility C2 Advance) during the relevant Interest
Period;

 

(B)                                in the definitions of “LIBOR” or, as
applicable, “EURIBOR”, (insofar as it applies to that Advance) in Clause 1.1
(Definitions):

 

I.                                         there shall be substituted for the
time “11.00 a.m.” the time “1.00 p.m.”; and

 

II.                                     paragraph (c) of the relevant definition
shall apply.

 

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12.                               INCREASED COSTS

 

12.1                        Increased Costs

 

(a)                                  Subject to Clause 12.3 (Exceptions) the
Borrowers shall, within three Business Days of a demand by the Facility Agent,
pay to the Facility Agent for the account of a Finance Party the amount of any
Increased Costs incurred by that Finance Party or any of its Holding Companies
as a result of (i) the introduction of or any change in (or in the
interpretation or application of) any law or regulation after the Signing Date
or (ii) compliance with any law or regulation made after the Signing Date.

 

(b)                                 In this Agreement Increased Costs means:

 

(i)                                     a reduction in the rate of return from
the Facilities or on a Finance Party’s (or any of its Holding Companies’)
overall capital;

 

(ii)                                  an additional or increased cost; or

 

(iii)                               a reduction of any amount due and payable
under any Finance Document,

 

which is incurred or suffered by a Finance Party or any of its Holding Companies
to the extent that it is attributable to that Finance Party having entered into
its Commitment or funding or performing its obligations under any Finance
Document.

 

12.2                        Increased cost claims

 

(a)                                  A Finance Party intending to make a claim
pursuant to Clause 12.1 (Increased Costs) as soon as is reasonably practicable
after that Finance Party becomes aware that circumstances have arisen which
entitle it to make such claim, shall notify the Facility Agent of the event
giving rise to the claim, following which the Facility Agent shall promptly
notify UPC Distribution.

 

(b)                                 Each Finance Party shall, as soon as
practicable after a demand by the Facility Agent, provide a certificate
confirming the amount of its Increased Costs.

 

12.3                        Exceptions

 

(a)                                  Clause 12.1 (Increased Costs) does not
apply to the extent any Increased Cost is:

 

(i)                                     attributable to a Tax Deduction required
by law to be made by an Obligor;

 

(ii)                                  compensated for by Clause 10.3 (Tax
indemnity) (or would have been compensated for under Clause 10.3 (Tax indemnity)
but was not so compensated solely because one of the exclusions in Clause
10.3(b) (Tax indemnity) applied);

 

(iii)                               compensated for by the payment of the
Mandatory Cost; or

 

(iv)                              attributable to the wilful breach by the
relevant Finance Party or any of its Holding Companies of any law or regulation.

 

(b)                                 In this Clause 12.3, a reference to a Tax
Deduction has the same meaning given to the term in Clause 10.1 (Definitions).

 

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13.                               ILLEGALITY AND MITIGATION

 

13.1                        Illegality

 

If it is or will become unlawful in any applicable jurisdiction for a Lender to
give effect to any of its obligations as contemplated by this Agreement or to
fund or allow to remain outstanding all or part of its participation in any
Advance:

 

(a)                                  that Lender shall promptly notify the
Facility Agent upon becoming aware of the same;

 

(b)                                 upon the Facility Agent notifying UPC
Distribution, the Commitment of that Lender will be immediately cancelled; and

 

(c)                                  if the Facility Agent on behalf of such
Lender requires, the relevant Borrower or Borrowers shall repay that Lender’s
participation in any Advance made to that Borrower on the last day of the
Interest Period for each Advance occurring after the Facility Agent has notified
UPC Distribution or, if earlier, the date specified by the Lender in the notice
delivered to the Facility Agent (being no earlier than the last day of any
applicable grace period permitted by law).

 

13.2                        Mitigation

 

(a)                                  Each Finance Party shall, in consultation
with UPC Distribution, take all reasonable steps to mitigate any circumstances
which arise and which would result in any amount (including without limitation,
VAT) becoming payable under, or cancelled pursuant to, any of Clause 10 (Tax
Gross-up and Indemnities), Clause 12 (Increased Costs) or Clause 13.1
(Illegality) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility Office.

 

(b)                                 Paragraph (a) above does not in any way
limit the obligations of any Obligor under the  Finance Documents.

 

13.3                        Limitation of Liability

 

(a)                                  The Borrowers shall indemnify each Finance
Party for all costs and expenses reasonably incurred by that Finance Party as a
result of steps taken by it under Clause 13.2 (Mitigation).

 

(b)                                 A Finance Party is not obliged to take any
steps under Clause 13.2 (Mitigation) if, in the opinion of that Finance Party
(acting reasonably), to do so might be prejudicial to it.

 

14.                               GUARANTEE

 

14.1                        Guarantee and indemnity

 

In consideration of the Finance Parties entering into this Agreement and, where
applicable, the other Finance Documents and performing their obligations
thereunder and the Senior Hedging Banks and the High Yield Hedging Banks from
time to time entering into the Senior Hedging Agreements and the High Yield
Hedging Agreements respectively, each Guarantor irrevocably and unconditionally,
jointly and severally:

 

(a)                                  guarantees to each Finance Party and the
Security Agent on behalf of the Beneficiaries punctual performance by each
Borrower and each Hedging Counterparty of all their respective obligations under
the Guaranteed Documents;

 

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(b)                                 undertakes with each Finance Party and the
Security Agent on behalf of the Beneficiaries that whenever a Borrower or a
Hedging Counterparty does not pay any amount when due under or in connection
with any Guaranteed Document, that Guarantor shall immediately on demand pay
that amount as if it was the principal obligor; and

 

(c)                                  indemnifies each Finance Party and the
Security Agent on behalf of the Beneficiaries immediately on demand against any
cost, loss or liability suffered by that Finance Party or Beneficiary if any
obligation guaranteed by it is or becomes unenforceable, invalid or illegal. 
The amount of the cost, loss or liability shall be equal to the amount which
that Finance Party or Beneficiary would otherwise have been entitled to recover.

 

Any demand issued to a Guarantor under this Clause 14.1 shall be copied to UPC
Distribution at the same time as it is issued to the relevant Guarantor,
provided that failure to do so shall not affect the validity or effectiveness of
the demand or the obligations of the Guarantor under this Clause 14 (Guarantee).

 

14.2                        Continuing guarantee

 

This guarantee is a continuing guarantee and will extend to the ultimate balance
of sums payable by any Obligor or any Hedging Counterparty under the Guaranteed
Documents, regardless of any intermediate payment or discharge in whole or in
part.

 

14.3                        Reinstatement

 

If any payment by an Obligor or a Hedging Counterparty or any discharge given by
a Beneficiary (whether in respect of the obligations of any Obligor or any
Hedging Counterparty or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:

 

(a)                                  the liability of each Obligor shall
continue as if the payment, discharge, avoidance or reduction had not occurred;
and

 

(b)                                 each Beneficiary shall be entitled to
recover the value or amount of that security or payment from each Obligor, as if
the payment, discharge, avoidance or reduction had not occurred.

 

14.4                        Waiver of defences

 

The obligations of each Guarantor under this Clause 14 will not be affected by
any act, omission, matter or thing which, but for this Clause, would reduce,
release or prejudice any of its obligations under this Clause 14 (without
limitation and whether or not known to it or any Beneficiary) including:

 

(a)                                  any time, waiver or consent granted to, or
composition with, any Obligor or any Hedging Counterparty or other person;

 

(b)                                 the release of any other Obligor or any
Hedging Counterparty or any other person under the terms of any composition or
arrangement with any creditor of any member of the Borrower Group or  any
Hedging Counterparty;

 

(c)                                  the taking, variation, compromise,
exchange, renewal or release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of,

 

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any Obligor or any Hedging Counterparty or other person or any non-presentation
or non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

 

(d)                                 any incapacity or lack of power, authority
or legal personality of, or dissolution or change in, the members or status of
an Obligor or a Hedging Counterparty or any other person;

 

(e)                                  any amendment (however fundamental) or
replacement of a Guaranteed Document or any other document or security;

 

(f)                                    any unenforceability, illegality or
invalidity of any obligation of any person under any Guaranteed Document or any
other document or security; or

 

(g)                                 any insolvency or similar proceedings.

 

14.5                        Immediate recourse

 

None of the Beneficiaries shall be obliged to make any claim or demand on the
Borrowers or any Hedging Counterparty or to resort to any security document or
other means of payment now or hereafter held by or available to them or it
before enforcing its rights under this Clause 14 and no action taken or omitted
by any of the Beneficiaries in connection with any such security document or
other means of payment shall discharge, reduce, prejudice or affect the
liability of any Guarantor under this Clause 14 nor shall any of the
Beneficiaries be obliged to apply any money or other property received or
recovered in consequence of any enforcement or realisation of any such Security
Document or other means of payment in reduction of the obligations and
liabilities expressed to be guaranteed by the Guarantors pursuant to this Clause
14.

 

14.6                        Appropriations

 

Until all amounts which may be or become payable by the Obligors and the Hedging
Counterparties under or in connection with the Guaranteed Documents have been
irrevocably paid in full, each Beneficiary (or any trustee or agent on its
behalf) may:

 

(a)                                  refrain from applying or enforcing any
other moneys, security or rights held or received by that Beneficiary (or any
trustee or agent on its behalf) in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether against those
amounts or otherwise) and no Guarantor shall be entitled to the benefit of the
same; and

 

(b)                                 hold in an interest-bearing suspense account
any moneys received from any Guarantor or on account of any Guarantor’s
liability under this Clause 14.

 

14.7                        Deferral of Guarantors’ rights

 

Until all amounts which may be or become payable by the Obligors and the Hedging
Counterparties under or in connection with the Guaranteed Documents have been
irrevocably paid in full (and notwithstanding payment of a dividend in any
liquidation or under any compromise or arrangement) each Guarantor agrees that,
without the prior written consent of the Facility Agent, it will not:

 

(a)                                  exercise its rights of subrogation,
reimbursement and indemnity against any other Obligor or Hedging Counterparty or
any other person liable; or

 

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(b)                                 demand or accept any security to be executed
in respect of any of its obligations under this guarantee or any other
indebtedness now or hereafter due to such Guarantor from any other member of the
Borrower Group or any Hedging Counterparty or from any other person liable; or

 

(c)                                  take any step or enforce any right against
any Obligor or any Hedging Counterparty or any other person liable in respect of
any obligations and liabilities expressed to be guaranteed by the Guarantors
pursuant to this Clause 14; or

 

(d)                                 exercise any right of set-off or
counterclaim against any other Obligor or any Hedging Counterparty or any other
person liable or claim or prove or vote as a creditor in competition with any of
the Beneficiaries in the bankruptcy, liquidation, administration or other
insolvency proceeding of any other Obligor or any Hedging Counterparty or any
other person liable or have the benefit of, or share in, any payment from or
composition with, any other Obligor or any Hedging Counterparty or any other
person liable or any other security document now or hereafter held by any of the
Beneficiaries for the obligations and liabilities expressed to be guaranteed by
the Guarantors pursuant to this Clause 14 or for the obligations or liabilities
of any other person liable, but so that, if so directed by the Facility Agent,
it will prove for the whole or any part of its claim in the liquidation of any
other Obligor or any Hedging Counterparty, as the case may be, on terms that the
benefit of such proof and of all money received by it in respect thereof shall
immediately be transferred to an account to be designated by the Security Agent
for the Beneficiaries and applied in or towards discharge of the obligations and
liabilities expressed to be guaranteed by the Guarantors pursuant to this Clause
14 in accordance with the Security Deed.

 

14.8                        Additional security

 

This guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by any Beneficiary.

 

14.9                        Limitation

 

Notwithstanding any other provision of this Clause 14, the obligations of each
US Guarantor under this Clause 14, shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Bankruptcy Code, any applicable
provisions of comparable state law or any applicable case law (collectively, the
Fraudulent Transfer Laws), in each case after giving effect to all other
liabilities of such US Guarantor, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such US Guarantor pursuant to (i) applicable law or (ii) any
agreement providing for an equitable allocation among such US Guarantors and
other Affiliates of the Borrower Group of the obligations arising under
guarantees by such parties.

 

For the purposes of this Clause 14.9, US Guarantor means each Guarantor
incorporated (or in the case of a non-corporate Guarantor, formed and
subsisting) in the United States of America (or any of its states or territories
or any political or legal subdivision thereof).

 

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15.                               REPRESENTATIONS AND WARRANTIES

 

15.1                        Representations and warranties

 

(a)                                  Subject to paragraph (b), each Obligor
makes the representations and warranties set out in this Clause 15, in respect
of itself and (where applicable) its Subsidiaries which are members of the
Borrower Group, other than:

 

(i)                                     Clauses 15.9 (Accounts), 15.10
(Financial condition), 15.14 (Information), 15.14A (Business Plan) and 15.25
(Dutch Banking Act), which shall only be made by UPC Distribution; and

 

(ii)                                  Clause 15.24 (US Borrower), which shall
only be made by the US Borrower,

 

to each Finance Party.

 

(b)                                 UPC Distribution Holdco does not make the
representations and warranties set out in Clauses 15.6(b) or (c) (Consents),
15.7 (Material Contracts), 15.9 (Accounts), 15.10 (Financial condition), 15.11
(Environmental), 15.13(a) (Litigation and insolvency proceedings), 15.14
(Information), 15.15 (Tax liabilities), 15.16 (Ownership of assets), 15.17
(Intellectual Property Rights), 15.19 (Borrower Group structure) and 15.24 (US
Borrower).

 

15.2                        Status

 

(a)                                  It is a corporation, duly incorporated and
validly existing under the laws of its place of incorporation and, in the case
of the US Borrower only, it is a Delaware general partnership duly formed and
wholly existing under the laws of its place of formation.

 

(b)                                 It has the power to own its assets and carry
on its business as it is being conducted.

 

15.3                        Powers and authority

 

It has the power:

 

(a)                                  to enter into and comply with all
obligations expressed on its part under the Finance Documents; and

 

(b)                                 (in the case of a Borrower) to borrow under
this Agreement; and

 

(c)                                  (in the case of a Guarantor) to give the
guarantee in Clause 14 (Guarantee),

 

and has taken all necessary actions to authorise the execution, delivery and
performance of the Finance Documents to which it is a party.

 

15.4                        Legal validity

 

(a)                                  Each Finance Document to which it is or
will be a party constitutes, or when executed in accordance with its terms will
constitute, its legal, valid and binding obligations enforceable, subject to any
relevant reservations or qualifications as to matters of law contained in any
legal opinion referred to in paragraph 3 of Part 1 of Schedule 2 (Conditions
Precedent Documents) or (as applicable) paragraph 12 of Part 2 of Schedule 2
(Conditions Precedent Documents), in accordance with its terms.

 

(b)                                 The choice of English law as the governing
law of the Finance Documents and its irrevocable submission to the jurisdiction
of the courts of England in respect of any proceedings relating

 

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to the Finance Documents (in each case other than any Finance Document which is
expressly to be governed by a law other than English law) will be recognised and
enforced in its jurisdiction of incorporation, subject to any relevant
reservation or qualification as to matters of law contained in any legal opinion
referred to in paragraph (a) above.

 

(c)                                  Any judgment obtained in England in
relation to a Finance Document (in each case other than any Security Document
which is expressly to be governed by a law other than English law) will be
recognised and enforced in its jurisdiction of incorporation, subject to any
relevant reservation or qualification as to matters of law contained in any
legal opinion referred to in paragraph (a) above.

 

15.5                        Non-violation

 

The execution and delivery by it of, the Finance Documents to which it is a
party, and its performance of the transactions contemplated thereby, will not
violate:

 

(a)                                  in any material respect, any law or
regulation or official judgment or decree applicable to it;

 

(b)                                 in any material respect, its constitutional
documents; or

 

(c)                                  any agreement or instrument to which it is
a party or binding on any of its assets or binding upon any other member of the
Borrower Group or any other member of the Borrower Group’s assets, where such
violation would or is reasonably likely to have a Material Adverse Effect.

 

15.6                        Consents

 

(a)                                  Subject to any relevant reservations or
qualifications contained in any legal opinion referred to in Clause 15.4(a)
(Legal validity) above, all material and necessary authorisations,
registrations, consents, approvals, licences (other than the Licences), and
filings required by it in connection with the execution, validity or
enforceability of the Finance Documents to which it is a party and performance
of the transactions contemplated by the Finance Documents have been obtained
(or, if applicable, will be obtained within the required time period) and are
validly existing.

 

(b)                                 The Licences are in full force and effect
and each member of the Borrower Group is in compliance in all material respects
with all provisions thereof such that the Licences are not the subject of any
pending or, to the best of its knowledge, threatened attack, suspension or
revocation by a competent authority except, in each case, to the extent that any
lack of effect, non-compliance or attack, suspension or revocation of a Licence
would not have or be reasonably likely to have a Material Adverse Effect.

 

(c)                                  All the Necessary Authorisations are in
full force and effect, each member of the Borrower Group is in compliance in all
material respects with all provisions thereof and the Necessary Authorisations
are not the subject of any pending or, to the best of its knowledge, threatened
attack or revocation by any competent authority except, in each case, to the
extent that any lack of effect, non-compliance or attack or revocation of a
Necessary Authorisation would not have or be reasonably likely to have a
Material Adverse Effect.

 

15.7                        Material Contracts

 

(a)                                  Each Material Contract to which any member
of the Borrower Group is a party constitutes, or will when executed constitute,
the legal, valid and binding obligation of such member, subject

 

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to the application of any relevant insolvency, bankruptcy or similar laws or
other laws affecting the interests of creditors generally, enforceable against
it in accordance with its terms.

 

(b)                                 No member of the Borrower Group is in breach
of any of its material obligations under any Material Contract to which such
member is a party, nor (to the best of its knowledge and belief), is any other
party thereto, in each case in such a manner or to such an extent as would or is
reasonably likely to have a Material Adverse Effect.  To the best of its
knowledge and belief there is no material dispute between any member of the
Borrower Group and any other party to a Material Contract and there have been no
amendments to any Material Contract in the form provided to the Facility Agent
prior to the date of this Agreement which would or is reasonably likely to have
a Material Adverse Effect.

 

15.8                        No default

 

(a)                                  No Event of Default has occurred and is
continuing or will result from the making of any Advance.

 

(b)                                 None of it or any other member of the
Borrower Group is in default under any law, regulation or agreement to which it
is subject, except for a default which will not have or be reasonably likely to
have a Material Adverse Effect.

 

15.9                        Accounts

 

The consolidated financial statements of it and the Borrower Group most recently
delivered to the Facility Agent (which, at the date of this Agreement are the
Original Borrower Group Financial Statements):

 

(a)                                  present a true and fair view of (in the
case of audited financial statements) or fairly present (in the case of
unaudited financial statements) its financial position and the consolidated
financial position of the Borrower Group respectively as at the date to which
they were drawn up; and

 

(b)                                 have been prepared in all material respects
in accordance with GAAP (except that such consolidated financial statements do
not include all consolidated Subsidiaries to the extent they are Unrestricted
Subsidiaries).

 

15.10                 Financial condition

 

There has been no material adverse change in the consolidated financial position
of the Borrower Group (taken as a whole) since the date of the Original Borrower
Group Financial Statements which would or is reasonably likely to have a
Material Adverse Effect.

 

15.11                 Environmental

 

(a)                                  It and each other member of the Borrower
Group (i) have obtained all requisite Environmental Licences required for the
carrying on of its business as currently conducted and (ii) have at all times
complied with the terms and conditions of such Environmental Licences and (iii)
have at all times complied with all other applicable Environmental Law, which in
each such case, if not obtained or complied with, would or is reasonably likely
to have a Material Adverse Effect.

 

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(b)                                 There is no Environmental Claim in
existence, pending or, to the best of its knowledge, threatened, against it
which is reasonably likely to be decided against it and which, if so decided,
would or is reasonably likely to have a Material Adverse Effect.

 

(c)                                  So far as it is aware, no Dangerous
Substance has been used, disposed of, generated, stored, transported, dumped,
released, deposited, buried or emitted at, on, from or under any premises
(whether or not owned, leased, occupied or controlled by it or any member of the
Borrower Group and including any offsite waste management or disposal location
utilised by it or any member of the Borrower Group) in circumstances where this
would be reasonably likely to result in a liability on it which would or is
reasonably likely to have a Material Adverse Effect.

 

15.12                 Security Interests

 

Its execution and delivery of this Agreement does not necessitate and will not
result in the creation or imposition of any Security Interest over any of its
material assets or those of any member of the Borrower Group (except for any
Security Interest created pursuant to the Security Documents).

 

15.13                 Litigation and insolvency proceedings

 

(a)                                  No litigation, arbitration or
administrative proceedings of or before any court, arbitral body or agency have
been started against any member of the Borrower Group and, to its knowledge, no
such proceedings are threatened, where in any such case, there is a reasonable
likelihood of an adverse outcome to any member of the Borrower Group where that
outcome is of a nature which would or is reasonably likely to have a Material
Adverse Effect.

 

(b)                                 None of the circumstances referred to in
Clause 18.7 (Insolvency proceedings) are pending or, to its knowledge,
threatened against it or any member of the Borrower Group which is a Material
Subsidiary.

 

15.14                 Information

 

(a)                                  To the best of its knowledge after due
inquiry, as of the date of any Information Memorandum:

 

(i)                                     the factual information relating to the
Borrower Group and UPC contained in that Information Memorandum is accurate in
all material respects;

 

(ii)                                  all UPC Distribution’s projections and
forecasts contained in that Information Memorandum were based on and arrived at
after due and careful consideration and have been prepared by UPC Distribution
on the basis of assumptions that UPC Distribution believed were reasonable as of
the date of the projections;

 

(iii)                               there are no material facts or circumstances
which have not been disclosed to the Lenders in writing prior to the date of
that Information Memorandum and which would make any material factual
information referred to in (i) above untrue, inaccurate or misleading in any
material respect as at the date of that Information Memorandum, or any such
opinions, projections, or assumptions referred to in (ii) above misleading in
any material respect as at the date of that Information Memorandum.

 

(b)                                 To the best of its knowledge after due
inquiry, the factual information furnished by or on behalf of UPC or any member
of the Borrower Group to the Consultant and contained or

 

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referred to in the Consultant’s Report was true in all material respects at the
respective dates as of which that information speaks.

 

(c)                                  Notwithstanding paragraphs (a) and (b)
above, no representation is made in respect of (i) any information, facts,
statements, opinions, projections, forecasts, demographic statistics or
circumstances relating to the cable, media, telecommunications and data services
industry as a whole, (ii) the research reports contained in Book Two of the
Information Memorandum and (iii) any person other than any member of the
Borrower Group.

 

15.14A        Business Plan

 

To the best of its knowledge after due inquiry, as of the date of the Business
Plan:

 

(a)                                  the factual information relating to the
Borrower Group contained in the Business Plan is accurate in all material
respects;

 

(b)                                 all UPC Distribution’s projections and
forecasts contained in the Business Plan were based on and arrived at after due
and careful consideration and have been prepared by UPC Distribution on the
basis of assumptions that UPC Distribution believed were reasonable as of the
date of the projections;

 

(c)                                  there are no material facts or
circumstances which have not been disclosed to the Lenders in writing prior to
the date of the Business Plan and which would make any material factual
information referred to in (a) above untrue, inaccurate or misleading in any
material respect as at the date of the Business Plan, or any such opinions,
projections, or assumptions referred to in (b) above misleading in any material
respect as at the date of the Business Plan.

 

15.15                 Tax liabilities

 

No claims are being asserted against it or any member of the Borrower Group with
respect to Taxes which are reasonably likely to be determined adversely to it or
to such member and which, if so adversely determined, would or is reasonably
likely to have a Material Adverse Effect.  It is not materially overdue in the
filing of any Tax returns required to be filed by it (where such late filing
might result in any material fine or penalty on it) and it has paid within any
period required by law all Taxes shown to be due on any Tax returns required to
be filed by it or on any assessments made against it (other than Tax liabilities
being contested by it in good faith and where it has made adequate reserves for
such liabilities or where such overdue filing, or non-payment, or a claim for
payment, of which in each such case would not have or be reasonably likely to
have a Material Adverse Effect).

 

15.16                 Ownership of assets

 

It and each member of the Borrower Group has good title to or valid leases or
licences of or is otherwise entitled to use all assets necessary to conduct its
business, except where the failure to do so would not have or be reasonably
likely to have a Material Adverse Effect.

 

15.17                 Intellectual Property Rights

 

(a)                                  It (and each member of the Borrower Group)
owns or has the legal right to use all the Intellectual Property Rights which
are required for the conduct of the business of the Borrower Group as a whole
from time to time or are required by it (or such member) in order for it to
carry on such business as it is then being conducted, except where the failure
to do so would not have or be reasonably likely to have a Material Adverse
Effect.  As far as it is

 

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aware it does not (nor does any member of the Borrower Group), in carrying on
its business, infringe any Intellectual Property Rights of any third party in
any way which would or is reasonably likely to have a Material Adverse Effect.

 

(b)                                 None of the Intellectual Property Rights
owned by any member of the Borrower Group is, to its knowledge, being infringed
nor, to its knowledge, is there any threatened infringement of those
Intellectual Property Rights, by any third party which, in either case, would or
is reasonably likely to have a Material Adverse Effect.

 

(c)                                  All registered Intellectual Property Rights
owned by it (or any member of the Borrower Group) are subsisting and all actions
(including payment of all fees) required to maintain the same in full force and
effect have been taken except where the absence of such rights or the failure to
take any such action would not have or be reasonably likely to have a Material
Adverse Effect.

 

15.18                 Works councils

 

All of the requirements of Section 25 of The Netherlands Works Council Act (Wet
op de Ondernemingsraden) in connection with the transactions contemplated by the
Finance Documents which are applicable to an Obligor have been complied with by
that Obligor.

 

15.19                 Borrower Group structure

 

Schedule 10 (Borrower Group Structure) sets out a description which is true and
complete in all material respects as at the Effective Date of the corporate
ownership structure of the Borrower Group and of the ownership of the Borrower
(but does not describe any level of ownership above UGCE Inc.).

 

15.20                 ERISA

 

Neither it nor any member of the Borrower Group or ERISA Affiliate maintains,
contributes to or has any obligation to contribute to or any liability under,
any Plan, or in the past five years has maintained or contributed to or had any
obligation to, or liability under, any Plan.

 

15.21                 United States Regulations

 

Neither it nor any member of the Borrower Group is:

 

(a)                                  a holding company as defined in the United
States Public Utility Holding Company Act of 1935 or subject to regulation
thereunder;

 

(b)                                 a public utility as defined in the United
States Federal Power Act of 1920 or subject to regulation thereunder;

 

(c)                                  required to be registered as an investment
company as defined in the United States Investment Company Act of 1940 or
subject to regulation thereunder; or

 

(d)                                 subject to regulation under any United
States Federal or State law or regulation that limits its ability to incur or
guarantee indebtedness.

 

15.22                 Anti-Terrorism Laws

 

To the best of its knowledge, neither it nor any member of the Borrower Group:

 

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(a)                                  is, or is controlled by, a Designated
Party;

 

(b)                                 has received funds or other property from a
Designated Party; or

 

(c)                                  is in material breach of or is the subject
of any action or investigation under any Anti-Terrorism Law.

 

It and each of its Affiliates have taken commercially reasonable measures to
ensure compliance with the Anti-Terrorism Laws.

 

15.23                 Margin stock

 

(a)                                  (In the case of the Borrowers only) the
proceeds of the Facilities have been and will be used only for the purposes
described in Clause 3 (Purpose).

 

(b)                                 Neither it nor any member of the Borrower
Group is engaged principally in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulations U and
X of the Board of Governors of the United States Federal Reserve System), and no
portion of any Advance has been or will be used, directly or indirectly, to
purchase or carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.

 

15.24                 US Borrower

 

The US Borrower did not trade or carry on any business from the date it was
formed up to and including 26th October, 2000 except for investment in or
proposed investment in other members of the Borrower Group by way of
intercompany loan or subscription of shares.

 

15.25                 Dutch Banking Act

 

(a)                                  On the Effective Date, UPC Distribution is
in compliance with the applicable provisions of the Dutch Banking Act and any
implementing regulations; and

 

(b)                                 On the date falling 30 days after the
Effective Date, UPC Distribution has verified, by obtaining a duly completed and
executed Verification Letter, the status of each Facility A Lender under this
Agreement either as:

 

(i)                                     a Professional Market Party; or

 

(ii)                                  exempted from the requirement to be a
Professional Market Party because it forms part of a closed circle (besloten
kring) with UPC Distribution.

 

15.26                 Investment Company Act

 

Neither it nor any member of the Borrower Group is an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
United States Investment Company Act of 1940, as amended.

 

15.27                 Public Utility Holding Company Act and Federal Power Act

 

Neither it nor any member of the Borrower Group is a “holding company”, or an
“affiliate” of a “holding company” or a “subsidiary company” of a “holding
company”, within the meaning of, or otherwise subject to regulation under, the
United States Public Utility Holding Company Act of 1935, as amended.  Neither
it nor any member of the Borrower Group is a

 

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“public utility” within the meaning of, or otherwise subject to regulation
under, the United States Federal Power Act.

 

15.28                 Times for making representations and warranties

 

(a)                                  The representations and warranties set out
in this Clause 15 (Representations and Warranties) are made by each Obligor on
the Signing Date and (except for Clauses 15.6 (Consents), 15.10 (Financial
condition), 15.12 (Security Interests), 15.13(b) (Litigation and insolvency
proceedings), 15.14 (Information), 15.14A (Business Plan), 15.15 (Tax
liabilities), 15.16 (Ownership of assets), 15.18 (Works councils), 15.19
(Borrower Group structure), 15.20 (ERISA), 15.24 (US Borrower) and 15.25 (Dutch
Banking Act)) are deemed to be made again by each relevant Obligor on the date
of each Request, the first day of each Interest Period and on each Utilisation
Date with reference to the facts and circumstances then existing.

 

(b)                                 The representations and warranties set out
in this Clause 15 (Representations and Warranties) (except Clauses 15.9
(Accounts), 15.10 (Financial condition), 15.14 (Information), 15.14A (Business
Plan), 15.19 (Borrower Group structure) and 15.24 (US Borrower)) are repeated by
each Additional Guarantor with respect to itself on the date of the Guarantor
Accession Agreement relating to that Additional Guarantor, with reference to the
facts and circumstances then subsisting.

 

(c)                                  The representation and warranty made by UPC
Distribution in Clause 15.14 (Information) will be deemed to be repeated on the
date any updated Information Memorandum is delivered to the Facility Agent by
UPC Distribution, but only in respect of that updated Information Memorandum, by
reference to the facts and circumstances existing on the relevant date.

 

(d)                                 The representation and warranty made by UPC
Distribution in Clause 15.14A (Business Plan) will be deemed to be repeated on
the date any updated Business Plan is delivered to the Facility Agent by UPC
Distribution, but only in respect of that updated Business Plan, by reference to
the facts and circumstances existing on the relevant date.

 

16.                               UNDERTAKINGS

 

16.1                        Duration

 

The undertakings in this Clause 16 (Undertakings) will remain in force from the
Signing Date for so long as any amount is or may be outstanding under any
Finance Document or any Commitment is in force.

 

16.2                        Financial information

 

UPC Distribution shall supply to the Facility Agent in sufficient copies for all
the Lenders:

 

(a)                                  as soon as the same are available (and in
any event within 150 days of the end of each of its financial years) its audited
consolidated financial statements for that financial year;

 

(b)                                 as soon as the same are available (and, in
any event, (in the case of its first three financial quarters in any financial
year) within 60 days of the end of each of its financial quarters and (in the
case of its fourth financial quarter in each financial year) within 150 days of
the end of each such financial quarter), its unaudited quarterly consolidated
management accounts for that financial quarter in the agreed form;

 

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(c)                                  by no later than 60 days after the last day
of each of its financial years, an annual budget for the Distribution Business
of the Borrower Group in the agreed form for the immediately following financial
year;

 

(d)                                 together with any financial statements
specified in paragraphs (a) or (b) above, a certificate signed by a director of
UPC Distribution:

 

(i)                                     confirming that no Default is
outstanding or if a Default is outstanding, specifying the Default and the
steps, if any, being taken to remedy it;

 

(ii)                                  setting out in reasonable detail
computations establishing, as at the date of such financial statements, whether
each of the financial ratios set out in Clause 17 (Financial Covenants) were
complied with;

 

(iii)                               (in the case of financial statements
specified in paragraph (a) above, starting with the annual financial statements
for 31st December, 2004) setting out in reasonable detail computations
establishing the Excess Cash Flow (if any) for the financial year to which such
financial statements were delivered for the purposes of Clause 7.5 (Mandatory
prepayment from Excess Cash Flow and Net Equity Proceeds);

 

(iv)                              certifying current compliance with the
Borrowers’ obligations under Clause 7.6(b)(i) (Prepayment from disposal
proceeds); and

 

(v)                                 certifying compliance with Clause 16.11(a)
and (b) (Acquisitions and mergers) and setting out in reasonable detail the
amount of the Acquisition Cost of all Acquisitions made by the Borrower Group
since the Signing Date (excluding, at UPC Distribution’s option, the value of
any consideration referred to in paragraph (a) of the definition of “Acquisition
Cost” in respect of such Acquisition which has yet to be paid or delivered) and
whether any such Acquisition Cost has been directly or indirectly funded by the
proceeds of equity or Subordinated Shareholder Loans as described in paragraph
(c) of the definition of “Permitted Acquisition” and paragraph (b) of the
definition of “Permitted Joint Venture” respectively;

 

(e)                                  as soon as the same is available (and in
any event within 90 days after each of its financial quarters) the consolidated
financial statements of UGCE Inc. for that financial quarter on Form 10Q as
filed with the United States Securities and Exchange Commission (the Commission)
or such other comparable form as UGCE Inc. is required to file with the
Commission under the United States Securities Exchange Act of 1934 (the 1934
Act) or, if UGCE Inc. is no longer subject to the reporting requirements of the
1934 Act, in the form required to be filed with the regulatory body comparable
to the Commission then having jurisdiction over UGCE Inc.;

 

(f)                                    as soon as the same is available (and in
any event within 180 days after each of its financial years) the audited
consolidated financial statements of UGCE Inc. for that financial year on Form
10K as filed with the Commission or such other comparable form as UGCE Inc. is
required to file with the Commission under the 1934 Act or, if UGCE Inc. is no
longer subject to the reporting requirements of the 1934 Act, in the form
required to be filed with the regulatory body comparable to the Commission then
having jurisdiction over UGCE Inc.; and

 

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(g)                                 together with the financial statements and
accounts referred to in paragraphs (a) and (b), a reconciliation demonstrating
the effect of excluding from such financial statements or accounts the results
of any business or activity other than the Distribution Business of the Borrower
Group, provided that non-Distribution Business Assets need not be so excluded
(and the reconciliation need not apply to such assets) unless they are subject
to any Security Interest referred to in paragraph (i) of the definition of
“Permitted Security Interest” or any other form of recourse as contemplated by
Clause 16.12(b)(xii) (Restrictions on Financial Indebtedness).

 

16.3                        Information - Miscellaneous

 

UPC Distribution shall supply promptly (and in any event in the case of
paragraph (d) below within five Business Days of the date on which UPC
Distribution becomes aware of such information) or procure that there shall be
supplied (both in hard copy and in electronic form) promptly to the Facility
Agent:

 

(a)                                  all notices, reports or other documents
despatched by or on behalf of any Obligor to its creditors generally in relation
to it or any of its Subsidiaries;

 

(b)                                 a copy of any material report or other
notice, statement or circular, sent or delivered by any member of the Borrower
Group whose shares are pledged to the Security Agent pursuant to any Security
Document to any person in its capacity as shareholder of such member of the
Borrower Group, which materially adversely affects the interest of the Finance
Parties under such Security Document;

 

(c)                                  such other material information regarding
the Borrower Group and which is in the possession or control of any member of
the Borrower Group as the Facility Agent may from time to time reasonably
request; and

 

(d)                                 written notification of:

 

(i)                                     any or all of the Priority Pledge and/or
the Derby and EPG Share Pledges becoming enforceable;

 

(ii)                                  any breach by UPC, UPC Exploitation II
B.V., UPC Exploitation Holding B.V. or Priority Telecom N.V. of its obligations
set out in the Priority Pledge and/or the Derby and EPG Share Pledges;

 

(iii)                               any breach of the Derby and EPG Agreements;
and

 

(iv)                              any breach of the Sale and Purchase
Agreements.

 

16.3A               Enforcement of and undertakings in relation to certain
agreements

 

(a)                                  UPC Distribution agrees promptly after (and
in any event within five Business Days of) receiving notice from the Facility
Agent to do so, to take all necessary action to:

 

(i)                                     if any or all of the Priority Pledge
and/or the Derby and EPG Share Pledges become enforceable, enforce any or all of
them;

 

(ii)                                  if UPC, UPC Exploitation II B.V., UPC
Exploitation Holding B.V. or Priority Telecom N.V. has breached its obligations
set out in all or any of the Priority Pledge and/or the Derby and EPG Share
Pledges in any material respect or if any party is in breach of either of the
Derby and EPG Agreements in any material respect, enforce

 

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its rights in respect of any such breaches by UPC, UPC Exploitation II B.V., UPC
Exploitation Holding B.V. or Priority Telecom N.V. of their respective
obligations under such agreements; and

 

(iii)                               if any party to the Sale and Purchase
Agreements is in default under any one or more of the Sale and Purchase
Agreements in any material respect, enforce its rights in respect of such
default.

 

(b)                                 UPC Distribution undertakes to keep the
Lenders informed and to take such action in connection with the enforcement of
the Priority Pledge and/or the Derby and EPG Share Pledges or its rights under
the Priority Pledge and/or the Derby and EPG Share Pledges, the Derby and EPG
Agreements or any of the Sale and Purchase Agreements (as the case may be) as
may be requested by the Facility Agent (acting on the instructions of the
Majority Lenders).

 

(c)                                  UPC Distribution undertakes not to:

 

(i)                                     agree to any amendment, variation,
supplement or waiver of the Priority Pledge and/or the Derby and EPG Share
Pledges, the Derby and EPG Agreements or the Sale and Purchase Agreements;

 

(ii)                                  enter into any arrangements with UPC
Exploitation Holding B.V. or UPC Exploitation II B.V. other than the Priority
Pledge and/or the Derby and EPG Share Pledges, the Derby and EPG Agreements or
any of the Sale and Purchase Agreements; or

 

(iii)                               enter into any arrangements with UPC, UPC
Exploitation Holding B.V. or UPC Exploitation II B.V. in relation to the derby
billing system or electronic programming guide software that will prejudice UPC
Distribution’s rights to use and operate the derby billing system and/or the
electronic programming guide software,

 

without the written consent of the Facility Agent (acting on the instructions of
the Majority Lenders) where the same would prejudice in any material respect the
interests of the Lenders under such arrangements.

 

16.4                        Notification of Default and inspection rights

 

(a)                                  Each Obligor shall notify the Facility
Agent of any Default (and the steps, if any, being taken to remedy it) promptly
upon becoming aware of it (unless that Obligor is aware that such a notification
has already been provided by another Obligor).

 

(b)                                 Each Obligor (other than UPC Distribution
Holdco) shall, if required by the Facility Agent (acting on the instructions of
the Majority Lenders), at any time whilst an Event of Default is continuing or
the Facility Agent has reasonable grounds to believe that an Event of Default
may exist and at other times if the Facility Agent has reasonable grounds for
such request, permit representatives of the Facility Agent upon reasonable prior
written notice to UPC Distribution to:

 

(i)                                     visit and inspect the properties of any
member of the Borrower Group during normal business hours;

 

(ii)                                  inspect its books and records other than
records which the relevant member of the Borrower Group is prohibited by law,
regulation or contract from disclosing to the Facility Agent; and

 

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(iii)                               discuss with its principal officers and
Auditors its business, assets, liabilities, financial position, results of
operations and business prospects provided that (A) any such discussion with the
Auditors shall only be on the basis of the audited financial statements of the
Borrower Group and any compliance certificates issued by the Auditors and (B)
representatives of UPC Distribution shall be entitled to be present at any such
discussion with the Auditors.

 

(c)                              Any Obligor must promptly upon becoming aware
of it notify the Facility Agent of:

 

(i)                                 any Reportable Event;

 

(ii)                              the termination of or withdrawal from, or any
circumstances reasonably likely to result in the termination of or withdrawal
from, any Plan subject to Title IV of ERISA; and

 

(iii)                           material non-compliance with any law or
regulation relating to any Plan which would or is reasonably likely to have a
Material Adverse Effect.

 

16.5                        Authorisations

 

Each Obligor (other than UPC Distribution Holdco, in the case of paragraphs (b)
and (c) below) will, and will procure that each of its Subsidiaries which is a
member of the Borrower Group will:

 

(a)                                  obtain or cause to be obtained, maintain
and comply with the terms of:

 

(i)                                     every material consent, authorisation,
licence or approval of, or filing or registration with or declaration to,
governmental or public bodies or authorities or courts; and

 

(ii)                                  every material notarisation, filing,
recording, registration or enrolment in any court or public office,

 

in each case required under any law or regulation to enable it to perform its
obligations under, or for the validity, enforceability or admissibility in
evidence of any Finance Document to which it is a party; and

 

(b)                                 obtain or cause to be obtained every
Necessary Authorisation and the Licences and ensure that (i) none of the
Necessary Authorisations or Licences is revoked, cancelled, suspended,
withdrawn, terminated, expires and is not renewed or otherwise ceases to be in
full force and effect and (ii) no Necessary Authorisation or Licence is modified
and no member of the Borrower Group commits any breach of the terms or
conditions of any Necessary Authorisation or Licence which, in each case, would
or is reasonably likely to have a Material Adverse Effect.

 

16.6                        Pari passu ranking

 

Each Obligor will procure that its payment obligations under the Finance
Documents do and will rank at least pari passu with all the claims of its other
present and future unsecured and unsubordinated creditors (save for those
obligations mandatorily preferred by applicable law applying to companies
generally).

 

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16.7                        Negative pledge

 

(a)                                  Each Obligor (other than UPC Distribution
Holdco) will not permit any Security Interest (other than the Permitted Security
Interests) by any member of the Borrower Group to subsist, arise or be created
or extended over all or any part of their respective present or future
undertakings, assets, rights or revenues to secure or prefer any present or
future indebtedness of any member of the Borrower Group or any other person.

 

(b)                                 UPC Distribution Holdco will not create or
permit to subsist any Security Interest over its assets which are subject to the
Security Documents to which it is a party (other than any Permitted Security
Interest referred to in paragraphs (a), (b), (d), (e) or (g) of the definition
of “Permitted Security Interest”).

 

(c)                                  (i)                                     UPC
Distribution will procure that none of Belmarken, UPC, UGCE Inc. or any other
member of the UGCE Borrower Group (each a Relevant Company) will create or
permit to subsist any Security Interest (other than an Agreed Security Interest)
over all or part of that Relevant Company’s present or future undertakings,
assets, rights or revenues.

 

(ii)                                  For the purposes of sub-paragraph (c)(i)
above:

 

Agreed Security Interest means:

 

(A)                              any liens arising in the ordinary course of
business by way of contract which secure indebtedness under any agreement for
the supply of goods or services in respect of which payment is not deferred for
more than 180 days (or 360 days if such deferral is in accordance with the terms
pursuant to which the relevant goods were acquired or services were provided);

 

(B)                                any Security Interest imposed by any taxation
or governmental authority in respect of amounts which are being contested in
good faith and not yet payable and for which adequate reserves have been set
aside in the accounts of the Relevant Company in respect of the same in
accordance with GAAP;

 

(C)                                any Security Interest in favour of any bank
incurred in relation to any cash management arrangements;

 

(D)                               rights of set-off arising in the ordinary
course of business;

 

(E)                                 any Security Interest granted by a Relevant
Company over its shareholding in any of its Subsidiaries which is not itself a
Relevant Company;

 

(F)                                 any Security Interest granted by a Relevant
Company under any New Security Documents provided that, (other than in the case
of the Security Interests referred to in paragraph (a) of the definition of “New
Security Documents”) at the same time that such Security Interest is granted,
the Relevant Company grants an identical Security Interest over the same assets
to the Beneficiaries and under the terms of the Intercreditor Agreement, such
Security Interest ranks pari passu with the Security Interest(s) arising under
the corresponding Security Document which purports to create a Security

 

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Interest over the same property, assets or rights, provided that any such New
Security Document will be in the same form as the corresponding Security
Document (save for changes directly attributable to the identity of the parties
and the loan amounts);

 

(G)                                any Security Interest granted by a Relevant
Party to secure any Third Party Debt permitted under Clause 16.12(d)
(Restrictions on Financial Indebtedness); and

 

(H)                               any Security Interest not falling within
sub-paragraphs (A) to (G) above securing any indebtedness which, when aggregated
with all other indebtedness secured by that Relevant Company and each other
Relevant Company, does not exceed €15,000,000 (or its equivalent).

 

16.8                        Permitted Business

 

(a)                                  Each Obligor will ensure that it and its
Subsidiaries which are members of the Borrower Group (other than any Relevant
Eastern European Subsidiary) engage:

 

(i)                                     in no material activity outside the
Permitted Business; and/or

 

(ii)                                  in the business of acting as the holder of
shares and/or interests in other members of the Borrower Group (which shall
include the raising of Permitted Financial Indebtedness and the on-lending of
such Financial Indebtedness to its Subsidiaries in accordance with the
provisions of this Agreement and the entry into of hedging arrangements on
behalf of its Subsidiaries).

 

(b)                                 The Borrowers will ensure that the US
Borrower will engage primarily in the business of a finance company for and in
respect of the Borrower Group in connection with the Facilities and the
transactions contemplated by this Agreement.

 

16.9                        Compliance with laws

 

Each Obligor will, and will procure that each of its Subsidiaries which is a
member of the Borrower Group will, comply in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority,
having jurisdiction over it or any of its assets, except where failure to comply
with which would not have or be reasonably likely to have a Material Adverse
Effect.

 

16.10                 Disposals

 

(a)                                  Each Obligor (other than UPC Distribution
Holdco) will not and will procure that no other member of the Borrower Group
(other than a Relevant Eastern European Subsidiary) will, sell, transfer, lend
(subject to Clause 16.14 (Loans and guarantees)) or otherwise dispose of or
cease to exercise direct control over (each a disposal) any part of its present
or future undertaking, assets, rights or revenues whether by one or a series of
transactions related or not (other than Permitted Disposals).

 

(b)                                 As used herein a Permitted Disposal means:

 

(i)                                     disposals (including, for the avoidance
of doubt, the outsourcing of activities that support or are incidental to the
Permitted Business) on arm’s length commercial terms in the ordinary course of
business;

 

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(ii)                                  [intentionally left blank];

 

(iii)                               the disposal of property or other assets on
bona fide arm’s length commercial terms in the ordinary course of business in
consideration for, or to the extent that the net proceeds of disposal are
applied within 120 days after such disposal in the acquisition of, property or
other assets of a similar nature and approximately equal value to be used in the
Permitted Business;

 

(iv)                              disposals of assets on bona fide arm’s length
commercial terms where such assets are obsolete or no longer required for the
purposes of the Permitted Business;

 

(v)                                 the application of cash in payments which
are not otherwise restricted by the terms of this Agreement and the Security
Documents including, for the avoidance of doubt, Permitted Acquisitions and
Permitted Payments;

 

(vi)                              disposals (or the payment of management,
consultancy or similar fees):

 

(A)                              by an Obligor to another Obligor; or

 

(B)                                from a member of the Borrower Group which is
not an Obligor, to any member of the Borrower Group; or

 

(C)                                from an Obligor to another member of the
Borrower Group which is not an Obligor;

 

(vii)                           disposals of any interest in an Unrestricted
Subsidiary;

 

(viii)                        disposals made in connection with Approved Stock
Options;

 

(ix)                                disposals of assets (in addition to those
described in sub-paragraphs (i) to (viii) above), comprising or contributing in
aggregate a percentage value (as determined in accordance with Clause 7.6(c)
(Prepayment from disposal proceeds)) of five per cent. or less (adjusted in
accordance with Clause 7.6(b) (Mandatory prepayment from disposal proceeds)) of
the total assets, revenues and EBITDA of the Borrower Group provided that no
Default has occurred and is continuing or would occur as a result of such
disposal;

 

(x)                                   disposals of undertakings, assets, rights
or revenues comprising interests in the share capital of persons not holding or
engaged in the Distribution Business of the Borrower Group or other
undertakings, assets, rights or revenues not constituting part of the
Distribution Business of the Borrower Group (non-Distribution Business Assets);

 

(xi)                                payment, transfer or other disposal of
consideration for any Acquisition, merger or consolidation permitted by Clause
16.11 (Acquisitions and mergers);

 

(xii)                             disposals of cash or cash equivalents
constituting any distribution, dividend, transfer, loan or other transaction
permitted by Clause 16.13 (Restricted Payments); and

 

(xiii)                          the grant of indefeasible rights of use or
equivalent arrangements with respect to network capacity, communications, fibre
capacity or conduit, in each case on arm’s length commercial terms or on terms
that are fair and reasonable and in the best interests of the Borrower Group.

 

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For the avoidance of doubt and without limiting the generality of sub-paragraph
(x) above, non-Distribution Business Assets shall include:

 

(A)                              undertakings, assets, rights and revenues
comprising interests in the share capital of any person engaged solely in the
competitive local exchange carrier (CLEC) business, including without
limitation, the business of providing traditional voice and data services and
services based on Transmission Control Protocol/Internet Protocol (TCP/IP)
technology and other undertakings, assets, rights or revenues constituting a
part of such businesses; and

 

(B)                                undertakings, assets, rights and revenues
comprising interests in the share capital of any person engaged solely in the
business of television and radio programming, including without limitation, the
business or creating and distributing special interest television channels,
radio programmes, pay per view programmes and near video on demand services and
other undertakings, assets, rights or revenues constituting a part of such
businesses.

 

(c)                                  Except as otherwise expressly permitted in
this Agreement or the relevant Security Document, UPC Distribution Holdco will
not sell, transfer, lease or otherwise dispose of all or any part of its assets
which are subject to a Security Document to which it is a party.

 

16.11                 Acquisitions and mergers

 

(a)                                  No Obligor (other than UPC Distribution
Holdco) will, and each Obligor (other than UPC Distribution Holdco) will procure
that none of its Subsidiaries which is a member of the Borrower Group will, make
any Acquisition, other than:

 

(i)                                     any Acquisition approved in writing by
the Majority Lenders;

 

(ii)                                  any Permitted Acquisition;

 

(iii)                               any Permitted Joint Venture; or

 

(iv)                              any Acquisition from any person which is a
member of the Borrower Group or subscription of an interest in the share capital
(or equivalent) in any person which is a member of the Borrower Group.

 

(b)                                 No Obligor (other than UPC Distribution
Holdco) will, and each Obligor (other than UPC Distribution Holdco) will procure
that none of its Subsidiaries which is a member of the Borrower Group will, pay
or deliver any consideration referred to in paragraph (a) of the definition of
“Acquisition Cost” in connection with a Permitted Acquisition or Permitted Joint
Venture made by it if and to the extent that the aggregate of:

 

(i)                                     such deferred consideration; and

 

(ii)                                  the Acquisition Cost of all other
Acquisitions made by the Borrower Group since the Signing Date,

 

would cause the relevant Acquisition to cease to be a Permitted Acquisition or,
as the case may be, a Permitted Joint Venture.

 

(c)                                  [Intentionally left blank]

 

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(d)                                 Each Obligor (other than UPC Distribution
Holdco) will not merge or consolidate with any other company or person and will
procure that no member of the Borrower Group will merge or consolidate with any
other company or person (other than, in each case, in connection with the
Romania Restructuring) save for:

 

(i)                                     Acquisitions permitted by paragraphs (a)
and (b) above and disposals permitted by Clause 16.10 (Disposals); or

 

(ii)                                  with the prior written consent of the
Facility Agent (acting on the instructions of the Majority Lenders); or

 

(iii)                               mergers between any member of the Borrower
Group with (I) any or all of the other members of the Borrower Group or (II) an
Unrestricted Subsidiary (Original Entities), into one or more entities (each a
Merged Entity) provided that:

 

(A)                              reasonable details of the proposed merger in
order to demonstrate satisfaction with sub-paragraphs (C) to (G) below are
provided to the Facility Agent at least 10 days before the merger is to be
entered into;

 

(B)                                if the proposed merger is between a member of
the Borrower Group and an Unrestricted Subsidiary, UPC Distribution has
delivered to the Facility Agent financial projections based on assumptions which
are no more aggressive than those used in the preparation of the Business Plan
which demonstrate that the Borrower Group will be in compliance with the
undertakings set out in Clause 17.2 (Financial ratios) for the period commencing
on the date of merger and ending on the last Final Repayment Date under this
Agreement;

 

(C)                                such Merged Entity will be a member of the
Borrower Group and will be liable for the obligations of the relevant Original
Entities (including the obligations under this Agreement and the Security
Documents), which obligations remain unaffected by the merger, and entitled to
the benefit of all rights of such Original Entities;

 

(D)                               (if all or any part of the share capital of
any of the relevant Original Entities was charged pursuant to a Security
Document) the equivalent part of the issued share capital of such Merged Entity
is charged pursuant to a Security Document on terms of at least an equivalent
nature and equivalent ranking as any Security Document relating to the shares in
each relevant Original Entity;

 

(E)                                 such Merged Entity has entered into Security
Documents (if applicable) which provide security over the same assets of at
least an equivalent nature and ranking to the security provided by the relevant
Original Entities pursuant to any Security Documents entered into by them;

 

(F)                                 any possibility of the Security Documents
referred to in sub-paragraphs (D) or (E) above being challenged or set aside is
not materially greater than any such possibility in relation to the Security
Documents entered into by, or in respect of the share capital of, any relevant
Original Entity; and

 

(G)                                all the property and other assets of the
relevant Original Entities are vested in the Merged Entity and the Merged Entity
has assumed all the rights and obligations of the relevant Original Entities
under any relevant Material Contracts, material Necessary Authorisations and
Licences and other licences or registrations (to the extent reasonably necessary
for the business of the

 

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relevant Original Entities) granted in favour of the Original Entities under
Telecommunications and Cable Laws and/or all such rights and obligations have
been transferred to the Merged Entity and/or the relevant Material Contracts,
Necessary Authorisations and Licences and other licences or registrations (to
the extent reasonably necessary for the business of the relevant Original
Entities) granted in favour of the Original Entities under Telecommunications
and Cable Laws have been reissued to the Merged Entity.

 

16.12                 Restrictions on Financial Indebtedness

 

(a)                                  Each Obligor (other than UPC Distribution
Holdco) will not, and will procure that no other member of the Borrower Group
(other than a Relevant Eastern European Subsidiary) will, create, incur or
otherwise permit to be outstanding any Financial Indebtedness (other than 
Permitted Financial Indebtedness).

 

(b)                                 As used herein, Permitted Financial
Indebtedness means, without duplication:

 

(i)                                     any Financial Indebtedness arising
hereunder or under the Security Documents;

 

(ii)                                  any Financial Indebtedness arising under
the New Facility Agreement, provided that, in the case of any Financial
Indebtedness arising under the Additional Facility:

 

(A)                              the final maturity date of any such Financial
Indebtedness does not fall prior to the final maturity date of the Facility D;
and

 

(B)                                the proceeds of the Additional Facility are
applied:

 

I.                                         in permanent prepayment and
cancellation of the Facilities in accordance with Clause 7.3 (Voluntary
prepayment) or in permanent prepayment of the Facility D in accordance with
clause 7.3 (Voluntary prepayment) of the New Facility Agreement; or

 

II.                                     to fund an Additional Permitted
Acquisition.

 

(iii)                               any Financial Indebtedness or guarantees
permitted pursuant to Clause 16.14 (Loans and guarantees);

 

(iv)                              any Financial Indebtedness incurred through a
Subordinated Shareholder Loan made to any member of the Borrower Group;

 

(v)                                 any Financial Indebtedness of any member of
the Borrower Group arising as a result of the issue by it or a financial
institution of a surety or performance bond in relation to the performance by
such member of the Borrower Group or its obligations under contracts entered
into in the ordinary course of its business (other than for the purpose of
raising finance);

 

(vi)                              any Financial Indebtedness approved in writing
by the Facility Agent (acting on the instructions of the Majority Lenders);

 

(vii)                           any Financial Indebtedness incurred in
connection with the Senior Hedging Agreements and any other hedging arrangements
permitted by Clause 16.17 (Hedging);

 

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(viii)                        any deposits or prepayments constituting Financial
Indebtedness received by any member of the Borrower Group from a customer or
subscriber for its services;

 

(ix)                                any Financial Indebtedness owing by any
member of the Borrower Group being Management Fees or management, consultancy or
similar fees payable to another member of the Borrower Group in respect of which
payment has been deferred;

 

(x)                                   any Financial Indebtedness being Permitted
Payments in respect of which payment has been deferred;

 

(xi)                                any Financial Indebtedness of a company
which is acquired by a member of the Borrower Group after the date hereof as an
acquisition permitted by Clause 16.11 (Acquisitions and mergers) where such
Financial Indebtedness existed at the date of completion of such Permitted
Acquisition provided that (A) such Financial Indebtedness was not incurred in
contemplation of the acquisition, (B) the amount of such Financial Indebtedness
is not increased beyond the amount in existence at the date of completion of the
acquisition and (C) such Financial Indebtedness is discharged within six months
of the date of completion of the acquisition;

 

(xii)                             any Financial Indebtedness of any member of
the Borrower Group, in respect of which the person or persons to whom such
Financial Indebtedness is or may be owed has or have no recourse whatever to any
member of the Borrower Group for any payment or repayment in respect thereof
other than recourse to such member of the Borrower Group for the purpose only of
enabling amounts to be claimed in respect of such Financial Indebtedness in an
enforcement of any Security Interest given by any member of the Borrower Group
over non-Distribution Business Assets, provided that:

 

(A)                              the extent of such recourse to such member is
limited solely to the amount of any recoveries made on any such enforcement;

 

(B)                                such person or persons are not entitled,
pursuant to the terms of any agreement evidencing any right or claim arising out
of or in connection with such Financial Indebtedness, to commence proceedings
for the winding up, dissolution or administration of any member of the Borrower
Group (or proceedings having an equivalent effect) or to appoint or procure the
appointment of any receiver, trustee or similar person or officer in respect of
any member of the Borrower Group or any of its assets (save only for the
non-Distribution Business Assets the subject of that Security Interest) until
after the Commitments have been reduced to zero and all amounts outstanding
under the Finance Documents have been repaid or paid in full; and

 

(C)                                the aggregate outstanding amount of all such
Financial Indebtedness of all members of the Borrower Group does not exceed
€100,000,000 (or its equivalent in other currencies);

 

(xiii)                          any Financial Indebtedness of any member of the
Borrower Group (other than any Obligor) constituting Financial Indebtedness to
all the holders (or their Associated Companies) of the share capital of any such
member of the Borrower Group on a basis that is substantially proportionate to
their interests in such share capital (with any disproportionately large
interest received by any member of the Borrower Group or any disproportionately
small interest received by any person other than a member of the Borrower Group,
in each case relative to its interests in such share capital, being ignored for
this purpose), provided such Financial Indebtedness does not bear

 

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interest (other than by way of addition to its principal amount on a
proportionate basis as described above) and is made on terms that repayment or
pre-payment of such Financial Indebtedness shall only be made to each such
holder (A) in proportion to their respective interests in such share capital
(ignoring any disproportionately large interest held by any member of the
Borrower Group or any disproportionately small interest received by any person
other than a member of the Borrower Group, in each case relative to its
interests in such share capital, for this purpose) and (B) only on and in
connection with the liquidation or winding up (or equivalent) of such member of
the Borrower Group; and

 

(xiv)                         any other Financial Indebtedness in addition to
the Financial Indebtedness falling within paragraphs (i) to (xiii) above not
exceeding at any time more than €25,000,000 in aggregate (or its equivalent)
provided that such Financial Indebtedness is not indebtedness incurred in
respect of Acquisitions.

 

(c)                                  No Obligor will, and each Obligor will
procure that none of its Subsidiaries which is a member of the Borrower Group
will, incur or have outstanding any Financial Indebtedness due to or for the
benefit of  UPC or any Subsidiary of UPC (not being a member of the Borrower
Group), other than Subordinated Shareholder Loans and any Permitted Financial
Indebtedness referred to in Clause 16.12(b)(vi), (viii), (ix), (x) or (xii).

 

(d)                                 (i)                                    
Subject to sub-paragraph (ii) below, UPC Distribution will ensure that no member
of the UGCE Borrower Group will incur any Third Party Debt (other than any Third
Party Debt subsisting prior to 28th September, 2002) unless:

 

(A)                              UPC Distribution prepays or procures the
prepayment of the Facilities in accordance with Clause 7.6A (Mandatory
prepayment from the Third Party Debt proceeds); and

 

(B)                                such Third Party Debt will not become due and
payable until after the later of the last Final Repayment Date and the Final
Maturity Date (as defined in the New Facility Agreement).

 

(ii)                                  Sub-paragraph (d)(i) above shall not apply
if:

 

(A)                              the most recently delivered financial
statements provided to the Facility Agent under Clause 16.2(b) (Financial
information) show that, for the two most recent Ratio Periods, the applicable
ratio for the purposes of Clause 17.2(a) (Financial ratios) is 3.5:1 or less; or

 

(B)                                the principal amount of such Third Party
Debt, when aggregated with (I) any other Third Party Debt incurred by that
member of the UGCE Borrower Group after 28th September, 2002, and (II) any Third
Party Debt incurred by any other member of the UGCE Borrower Group after 28th
September, 2002, is equal to or less than €15,000,000.

 

16.13                 Restricted Payments

 

(a)                                  Except for any payment or transfer of
consideration for the transfer of shares or receivables to a member of the
Borrower Group pursuant to the Restructuring, each Obligor (other than UPC
Distribution Holdco) will not, and will procure that no member of the Borrower
Group will, make any Restricted Payments other than Permitted Payments or enter
into any transaction with a Restricted Person other than on bona fide arm’s
length commercial terms or on terms which are fair and reasonable and in the
best interests of the Borrower Group.

 

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(b)                                 As used herein, a Restricted Payment means,
in each case whether in cash, securities, property or otherwise:

 

(i)                                     any direct or indirect distribution,
dividend or other payment on account of any class of its share capital or
capital stock or other securities;

 

(ii)                                  any payment of principal of, or interest
on, any loan; or

 

(iii)                               any transfer of assets, loan or other
payment,

 

in the case of each of (i), (ii) and (iii), to a Restricted Person.

 

(c)                                  As used herein, a Permitted Payment means
any distribution, dividend, transfer of assets, loan or other payment:

 

(i)                                     to any Restricted Person in relation to
transactions carried out on bona fide arm’s length commercial terms in the
ordinary course of business or on terms which are fair and reasonable and in the
best interests of the Borrower Group (including, but not limited to, such
transactions under Clause 16.21 (chello and Priority));

 

(ii)                                  by way of payment of Management Fees (A)
which are paid on bona fide arm’s length terms in the ordinary course of
business to a Restricted Person or (B) of up to €15,000,000 in any financial
year provided that, at the time of payment, no Default is subsisting or would
occur as a result of such payment;

 

(iii)                               by way of payment of interest on
Subordinated Shareholder Loans, provided that:

 

(A)                                  such interest is applied ultimately in
payment of (1) all or any interest due in respect of Serviceable Subordinated
Debt where all or part of the proceeds of the corresponding Subordinated
Shareholder Loans have been applied in mandatory permanent prepayment of the
Facilities or the New Facility D; or (2) only the interest due in respect of
that part of the outstanding principal amount of any Serviceable Subordinated
Debt which corresponds to the amount of the proceeds of the corresponding
Subordinated Shareholder Loans which have been applied in permanent prepayment
and cancellation (other than a mandatory prepayment) of the Facilities or the
New Facility D; or

 

(B)                                    the then applicable ratio for the
purposes of Clause 17.2(a) (Financial ratios) is 3.5:1 (or less),

 

and in each case no Default has occurred and is continuing or would occur as a
result of such payment;

 

(iv)                              by way of distributions, dividends or other
payments paid by UPC Distribution in respect of its share capital or by way of
repayment or payment by UPC Distribution or the relevant member of the Borrower
Group (as the case may be) in respect of a Subordinated Shareholder Loan (each a
Relevant Payment) but only to the extent that UPC Distribution or the relevant
member of the Borrower Group (as the case may be) has either (A) received a
corresponding distribution, dividend or other payment from an Unrestricted
Subsidiary or any other person in which UPC Distribution has any interest that
is not a member of the Borrower Group of at least an equal amount to such
Relevant Payment; or (B)the Relevant Payment is made from the proceeds of sale
or a disposal by UPC Distribution or the relevant member

 

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of the Borrower Group (as the case may be) permitted by Clause 16.10(b)(vii)
(Disposals);

 

(v)                                 by way of payment to any person or for any
purpose to the extent that any such payment would be permitted to be made to
UGCE Inc. or the relevant Subordinated Creditor pursuant to sub-paragraph (iii)
above and provided that any such payment shall automatically reduce the
liability to UGCE Inc. or the relevant Subordinated Creditor under the relevant
obligation referred to in sub-paragraph (iii) above to the extent of the amount
paid;

 

(vi)                              by way of the repayment of any Subordinated
Shareholder Loan made, or the redemption of equity share capital in a member of
the Borrower Group subscribed for, to finance a Permitted Acquisition or a
Permitted Joint Venture, provided that (A) the repayment of such Subordinated
Shareholder Loan or the redemption of such equity share capital would not cause
the limits referred to in the definition of “Permitted Acquisition” or
“Permitted Joint Venture” to be exceeded and (B) no Default has occurred and is
continuing or would occur as a result of such payment;

 

(vii)                           by way of payment to any Restricted Person of
consideration for an acquisition, merger or consolidation permitted by Clause
16.11 (Acquisitions and mergers); and

 

(viii)                        by way of transfer to any Restricted Person of any
non-Distribution Business Assets (as defined in Clause 16.10(b)(x) (Disposals))
permitted in accordance with Clause 16.10(b)(x) (Disposals),

 

and provided further that, in the case of (iii), (v) and (vi), prior to making
the relevant payment the Borrower Group is in compliance with the financial
covenants set out in Clause 17.2 (Financial ratios) and would be in compliance
with such covenants if Total Cash Interest had been increased by the amount of
the proposed Permitted Payment and all other Permitted Payments made since the
date to which the most recent financial statements delivered under Clause
16.2(a) or (b) (Financial information) were prepared.

 

(d)                                 The restriction contained in paragraph (a)
on the payment by any member of the Borrower Group of Management Fees shall
cease to apply during such period as the applicable ratio for the purposes of
Clause 17.2(a) (Financial ratios) is 3.50:1 (or less), provided that no
Management Fees may be paid by any member of the Borrower Group at any time
after a Relevant Event has occurred or if a Relevant Event would result from
such payment.

 

16.14                 Loans and guarantees

 

Each Obligor (other than UPC Distribution Holdco) will not, and will procure
that no member of the Borrower Group will make any loans, grant any credit or
give any guarantee, to or for the benefit of, or enter into any transaction
having the effect of lending money to, any person,

 

other than:

 

(a)                                  loans from a member of the Borrower Group
to another member of the Borrower Group, provided that no Obligor shall make a
loan to any other member of the Borrower Group unless:

 

(i)                                     such Obligor has first entered into an
Obligor Pledge of Shareholder Loans which creates an effective pledge in favour
of the Security Agent in relation to such loan and provided the Security Agent
with such evidence as it may reasonably request as the power and authority of
such Obligor to enter into

 

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such Obligor Pledge of Shareholder Loans and that such Obligor Pledge of
Shareholder Loans constitutes valid and legally binding obligations of such
Obligor enforceable in accordance with its terms subject (to the extent
possible) to substantially similar qualifications to those made in the legal
opinions referred to in Schedule 2 (Conditions Precedent Documents); and

 

(ii)                                  the relevant member of the Borrower Group
to whom the shareholder loan is to be made has given a notification of pledge to
the Security Agent in respect of such shareholder loans;

 

(b)                                 as permitted by Clause 16.12 (Restrictions
on Financial Indebtedness);

 

(c)                                  normal trade credit in the ordinary course
of business;

 

(d)                                 guarantees given:

 

(i)                                     by any Obligor in respect of the
liabilities of another Obligor;

 

(ii)                                  by a member of the Borrower Group in
respect of the liabilities of an Obligor; or

 

(iii)                               by a member of the Borrower Group (which is
not an Obligor) in respect of the liabilities of another member of the Borrower
Group (which is not an Obligor); or

 

(iv)                              by an Obligor in respect of the liabilities of
any other member of the Borrower Group to the extent that such liabilities could
have been incurred by such Obligor directly without breaching this Agreement; or

 

(e)                                  to the extent that the same constitute
Permitted Payments or a Permitted Disposal (not being a Permitted Disposal of
cash or cash equivalents);

 

(f)                                    [intentionally left blank];

 

(g)                                 loans, the granting of credit, guarantees
and other transactions having the effect of lending money (each a Lending
Transaction) from a member of the Borrower Group, in connection with an
acquisition by that member which is permitted by Clause 16.11 (Acquisitions and
mergers), to the relevant person being acquired or one or more of its
Subsidiaries, provided that:

 

(i)                                     no Lending Transaction may have a term
longer than 12 months (including any extensions or refinancings of the original
Lending Transaction); and

 

(ii)                                  the aggregate outstanding principal amount
of all Lending Transactions (which principal amount shall be deemed to be no
longer outstanding for this purpose at the time the beneficiary of the relevant
Lending Transaction becomes a member of the Borrower Group upon completion of
the relevant acquisition, provided such Lending Transaction was made to or in
favour of the person acquired or its Subsidiaries) shall not exceed €100,000,000
at any time; and

 

(h)                                 Lending Transactions from a member of the
Borrower Group to any person of the proceeds of equity subscribed by any
Restricted Person in, or Subordinated Shareholder Loans provided to, such member
(other than any such proceeds which:

 

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(i)                                     are taken into account in any
calculation of Acquisition Cost pursuant to sub-paragraph (c)(i)(A), (c)(i)(B)
or (d)(i) of the definition of “Permitted Acquisition” or in the calculation of
the Acquisition basket in accordance with sub-paragraph (c)(i)(1) of the
definition of “Permitted Acquisition” or in the calculation of Acquisition Cost
pursuant to sub-paragraph (b)(i)(A) or (b)(i)(B) of the definition of “Permitted
Joint Venture” or in the calculation of the Acquisition basket in accordance
with the final paragraph of sub-paragraph (b)(i) of the definition of “Permitted
Joint Venture”; or

 

(ii)                                  are subscribed or provided pursuant to
Clause 17.4 (Cure provisions)).

 

16.15                 Environmental matters

 

Each Obligor (other than UPC Distribution Holdco) will and will procure that
each of its Subsidiaries which is a member of the Borrower Group will:

 

(a)                                  (i) obtain all requisite Environmental
Licences, (ii) comply with the terms and conditions of all Environmental
Licences applicable to it and (iii) comply with all other applicable
Environmental Law, in each case where failure to do so would or is reasonably
likely to have a Material Adverse Effect;

 

(b)                                 promptly upon receipt of the same, notify
the Facility Agent and the Security Agent of any claim, notice or other
communication served on it in respect of any alleged breach of, or corrective or
remedial obligation or liability under, any Environmental Law which, if
substantiated, would or is reasonably likely to have a Material Adverse Effect.

 

16.16                 Insurance

 

Each Obligor (other than UPC Distribution Holdco) will, and will procure that
each of its Material Subsidiaries which is a member of the Borrower Group will,
maintain insurance cover of a type and level which a prudent company in the same
business would effect.

 

16.17                 Hedging

 

(a)                                  Each Obligor (other than UPC Distribution
Holdco) will not, and will procure that no member of the Borrower Group will,
enter into any interest rate or currency swaps, other interest rate or currency
derivative transactions or other hedging arrangements other than:

 

(i)                                     transactions and arrangements entered
into with a High Yield Hedging Bank or a Senior Hedging Bank directly relating
to the management of interest rate and/or currency exchange rate risk arising
out of any Financial Indebtedness of any member of the Borrower Group permitted
to subsist by the terms of this Agreement (or transactions and arrangements
relating to interest rate or currency swaps, other interest rate or currency
derivative transitions or other hedging arrangements that themselves relate to
the management of interest rate and/or currency exchange rate risk arising out
of any Financial Indebtedness of any member of the Borrower Group permitted to
subsist by the terms of this Agreement), in each case excluding any such
transactions or arrangements that directly or indirectly relate to Subordinated
Shareholder Loans; and

 

(ii)                                  to the extent they constitute interest
rate or currency swaps or other hedging arrangements, the guarantees granted by
each of the Guarantors pursuant to Clause 14 (Guarantee) or clause 14
(Guarantee) of the New Facility Agreement or (as

 

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applicable) in respect of any High Yield Hedging Agreements or Senior Hedging
Agreements.

 

(b)                                 UPC Distribution will procure that any
member of the Borrower Group that enters into a Senior Hedging Agreement and any
member of the UGCE Borrower Group that enters into a High Yield Hedging
Agreement accedes to the Security Deed and the Intercreditor Agreement as a
Charging Entity by delivering to the Security Agent a Security Provider’s Deed
of Accession duly executed by that company.

 

16.18                 Intellectual Property Rights

 

Except as otherwise permitted by this Agreement, each Obligor (other than UPC
Distribution Holdco) will, and will procure that each of its Subsidiaries which
is a member of the Borrower Group will:

 

(a)                                  make such registrations and pay such fees
and similar amounts as are necessary to keep those registered Intellectual
Property Rights owned by any member of the Borrower Group and which are material
to the conduct of the business of the Borrower Group as a whole from time to
time;

 

(b)                                 take such steps as are necessary and
commercially reasonable (including, without limitation, the institution of legal
proceedings) to prevent third parties infringing those Intellectual Property
Rights referred to in paragraph (a) above and (without prejudice to paragraph
(a) above) take such other steps as are reasonably practicable to maintain and
preserve its interests in those rights, except where failure to do so will not
have or be reasonably likely to have a Material Adverse Effect;

 

(c)                                  ensure that any licence arrangements in
respect of the Intellectual Property Rights referred to in paragraph (a) above
entered into with any third party are entered into on arm’s length terms and in
the ordinary course of business (which shall include, for the avoidance of
doubt, any such licensing arrangements entered into in connection with
outsourcing on normal commercial terms) and will not have or be reasonably
likely to have a Material Adverse Effect;

 

(d)                                 not permit any registration of any of the
Intellectual Property Rights referred to in paragraph (a) above to be abandoned,
cancelled or lapsed or to be liable to any claim of abandonment for non-use or
otherwise to the extent the same would or is reasonably likely to have a
Material Adverse Effect; and

 

(e)                                  pay all fees, and comply with each of its
material obligations under, any licence of Intellectual Property Rights which
are material to the conduct of the business of the Borrower Group as a whole
from time to time.

 

16.19                 Share capital

 

Each Obligor (other than UPC Distribution Holdco) will not, and will procure
that no member of the Borrower Group (other than in respect of such other
members of the Borrower Group in order to permit a solvent reorganisation
permitted under Clause 16.11(d)(iii) (Acquisitions and mergers)) will, reduce
its capital or purchase or redeem any class of its shares or any other ownership
interest in it, except to the extent the same constitutes a Permitted Payment or
in the case of members of the Borrower Group other than the Obligors, is
otherwise permitted by Clause 16.13 (Restricted Payments) or is in connection
with the Romania Restructuring.

 

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16.20                 Inter-connection and chello

 

Each Obligor (other than UPC Distribution Holdco) will ensure that each member
of the Borrower Group which is not a Relevant Eastern European Subsidiary:

 

(a)                                  which offers residential telephony services
in any country, maintains inter-connection arrangements with one or more major
fixed line telephony operators in that country; and

 

(b)                                 which offers internet and/or data services
is provided with such services by chello broadband N.V. or by another provider
on arm’s length commercial terms.

 

16.21                 chello and Priority

 

For as long as chello broadband N.V. or, as the case may be, Priority Telecom
N.V. is a Restricted Person, each Obligor (other than UPC Distribution Holdco)
will not and will not permit any contractual arrangements between chello
broadband N.V. and Priority Telecom N.V. respectively and the Borrower Group to
be entered into other than on bona fide arm’s length commercial terms or on
terms that are fair and reasonable and in the best interests of the Borrower
Group.

 

16.22                 Restructuring

 

[intentionally left blank]

 

16.23                 UPC Distribution Pledged Account

 

(a)                                  Subject to receipt of all necessary legal,
regulatory, shareholder and partner approvals (all of which each Obligor will,
and will ensure that each of its Subsidiaries will, use all reasonable efforts
to obtain as soon as practicable), each Obligor (other than UPC Distribution
Holdco) shall ensure that it and each of its Subsidiaries which is a member of
the Borrower Group, promptly following the last day of each calendar month
transfers an amount equal to its Excess Cash on that date to the UPC
Distribution Pledged Account.

 

(b)                                 For the purposes of this Clause 16.23:

 

(i)                                     Excess Cash means, in relation to any
member of the Borrower Group at any time, the aggregate cash in hand and at bank
(less withdrawals and other transfers of cash that have not cleared at bank) of
that member at that time in excess of €5,000,000 (or its equivalent in other
currencies); and

 

(ii)                                  the UPC Distribution Pledged Account means
one or more accounts in the name of UPC Distribution or any other member of the
Borrower Group, held with a branch of a bank or financial institution, which has
been pledged to the Beneficiaries pursuant to a Security Document in the agreed
form and in respect of which account(s) all notices required by that Security
Document have been served upon the relevant bank or financial institution in the
manner required by that Security Document and the relevant account bank(s) have
waived any lien, right of set-off or other Security Interest, other than in
respect of routine account keeping charges and set offs between UPC Distribution
Pledged Accounts.

 

(c)                                  UPC Distribution may withdraw amounts
standing to the credit of the UPC Distribution Pledged Account at any time
provided that:

 

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(i)                                     any such withdrawn amount is to be
applied to meet expenditure arising in the course of the Business of the
Borrower Group as carried on in accordance with this Agreement or for any other
purpose permitted under this Agreement; and

 

(ii)                                  no Event of Default has occurred which is
continuing.

 

16.24                 Share security

 

Each Obligor (other than UPC Distribution Holdco) will not, and will procure
that no member of the Borrower Group will, issue any shares of any class
provided that:

 

(a)                                  notwithstanding paragraph (b), an Obligor
(other than UPC Distribution, UPC Holding II or UPC Distribution Holdco) may
issue shares to any person other than a member of the Borrower Group and shall
not be required to procure that such shares are charged or pledged in favour of
the Beneficiaries, provided that such share issue does not result in a Change of
Control;

 

(b)                                 any member of the Borrower Group may issue
shares to or otherwise acquire additional rights from any other member of the
Borrower Group so long as (if any of the existing shares in the relevant member
of the Borrower Group are charged or pledged in favour of any Beneficiary) such
shares are charged or pledged in favour of the Beneficiaries pursuant to the
terms of a Security Document and there are delivered at the same time to the
Security Agent the relevant share certificates and blank stock transfer forms
(or equivalent documents) in respect thereof together with such other documents
and evidence and legal opinions as the Security Agent may reasonably require;

 

(c)                                  UPC Distribution and UPC Holding II may
issue shares to UPC Distribution Holdco provided that such shares are charged or
pledged in favour of the Beneficiaries pursuant to the terms of a Security
Document and there are delivered at the same time to the Security Agent the
relevant share certificates and blank stock transfer forms (or equivalent
documents) in respect thereof together with such other documents and evidence
and legal opinions as the Security Agent may reasonably require;

 

(d)                                 any member of the Borrower Group may issue
shares pursuant to the exercise of Approved Stock Options;

 

(e)                                  a member of the Borrower Group may issue
shares as part of an Acquisition or merger or consolidation permitted by Clause
16.11 (Acquisitions and mergers), provided that the issue of such shares does
not cause a Change of Control;

 

(f)                                    a member of the Borrower Group (other
than an Obligor) may issue shares to all the holders of the share capital of
such member pro rata to their interests in such share capital provided that, if
any existing shares in that member of the Borrower Group are charged or pledged
in favour of any Beneficiary under any Security Document, upon issue the shares
that are issued to any other member of the Borrower Group or any Shareholder are
charged or pledged in favour of the Beneficiaries as provided in paragraph (b)
above; and

 

(g)                                 any member of the Borrower Group (other than
UPC Distribution or UPC Holding II) may issue shares to any person pursuant to
any agreement or other legally binding arrangement existing, and disclosed to
the Lead Arrangers in writing, on or before the Signing Date, provided that such
share issue does not result in a Change of Control.

 

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16.25                 Shareholder Loans

 

(a)                                  Each Obligor will procure that prior to any
Restricted Person making any Financial Indebtedness (other than Permitted
Payments) available to any member of the Borrower Group, such Restricted Person
shall enter into a Pledge of Subordinated Shareholder Loans on terms and
conditions satisfactory to the Facility Agent and a Security Provider’s Deed of
Accession and provides (i) the Facility Agent with such documents and evidence
as it may reasonably require as to the power and authority of the Restricted
Person to enter into such Pledge of Subordinated Shareholder Loans and Security
Provider’s Deed of Accession and that the same constitute valid and legally
binding obligations of such Restricted Person enforceable in accordance with
their terms subject (to the extent applicable) to substantially similar
qualifications to those made in the legal opinions referred to in Schedule 2
(Conditions Precedent Documents); and (ii) notification of such pledge to the
relevant member of the Borrower Group.

 

(b)                                 Each Obligor shall ensure that each
Subordinated Shareholder Loan and each shareholder loan entered into between an
Obligor which is a party to an Obligor Pledge of Shareholder Loans as a creditor
and a member of the Borrower Group is governed by the law of The Netherlands.

 

16.26                 Further security over receivables

 

UPC Distribution shall:

 

(a)                                  on each date on which it is required to
deliver the financial statements referred to in Clause 16.2(b) (Financial
information) in respect of its second and fourth financial quarters in each
financial year, notify the Facility Agent of the details of any contracts,
agreements or other arrangements entered into by any member of the Borrower
Group with chello broadband N.V. or Priority Telecom N.V. at any time under
which receivables owing to such member of the Borrower Group aggregating
€10,000,000 (or its equivalent in other currencies) or more are outstanding on
such date, together with details of such receivables; and

 

(b)                                 if the Facility Agent (acting on the
instructions of the Majority Lenders) requires, promptly grant, or procure the
grant by the relevant member of the Borrower Group of (in each case subject to
receipt of all necessary legal, regulatory, shareholder and partner approvals,
other than approvals from chello broadband N.V. or Priority Telecom N.V, all of
which UPC Distribution will and will ensure that each member of the Borrower
Group will use all reasonable efforts to obtain as soon as possible) (i) a
pledge in favour of the Beneficiaries over the receivables referred to in (a)
above in substantially the same form as a receivables pledge already granted to
the Security Agent by a member of the Borrower Group in respect of receivables
located in, or governed by the laws of, or (as the case may be) owed by or to a
person incorporated in, the same jurisdiction as the relevant receivables or (as
the case may be) relevant person by or to whom such receivables are owed or in
such other form as the Security Agent may reasonably request and (ii) a Security
Provider’s Deed of Accession and shall provide the Security Agent with such
evidence as it may reasonably request as to the power and authority of such
member of the Borrower Group to enter into such pledge of receivables and
Security Provider’s Deed of Accession and that the same constitute valid and
legally binding obligations of such member enforceable in accordance with their
terms subject (to the extent possible) to substantially similar qualifications
to those made in the legal opinions referred to in Schedule 2 (Conditions
Precedent Documents), together with all such notices and other

 

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documents as the Security Agent may reasonably require to perfect the
receivables pledge.

 

16.27                 Financial year end

 

Each Obligor (other than UPC Distribution Holdco) will, and will procure that
its Subsidiaries which are members of the Borrower Group will, maintain a
financial year end of 31st December, save with the prior written consent of the
Facility Agent (acting on the instructions of the Majority Lenders in each case
not to be unreasonably withheld).

 

16.28                 Capital expenditure

 

Each Obligor (other than UPC Distribution Holdco) will not, and will procure
that no member of the Borrower Group will, incur any material Capital
Expenditure other than in relation to the Permitted Business.

 

16.29                 Constitutive documents

 

Each Obligor will not, and will procure that no member of the Borrower Group
will, amend its constitutive documents in any way which would or is reasonably
likely to materially adversely affect (in terms of value, enforceability or
otherwise) any charge or pledge over the shares or partnership interest of any
member of the Borrower Group granted to the Beneficiaries pursuant to the
Security Documents.

 

16.30                 ERISA

 

Each Obligor (other than UPC Distribution Holdco) will, and will procure that
its Subsidiaries which are members of the Borrower Group will, give the Facility
Agent prompt notice of the adoption of, participation in or contribution to any
Plan by it or any ERISA Affiliate, or any action by any of these to adopt,
participate in or contribute to any Plan, or the incurrence by any of them of
any liability or obligation to any Plan.

 

16.31                 US Borrower

 

(a)                                  Each Borrower will ensure that the proceeds
of any loan made to the US Borrower by UPC Distribution or UPC Holding II and
the proceeds of any drawing made by the US Borrower under Facility C shall be
invested by way of intercompany loan or equity subscription in one or more other
members of the Borrower Group within five Business Days of receipt of such
proceeds or, as the case may be, the relevant Utilisation Date.

 

(b)                                 Each Obligor (other than UPC Distribution
Holdco) will ensure that, in accordance with the terms of any pledge of
intercompany loans made by the US Borrower, any intercompany loan made by the US
Borrower to any Obligor or any Subsidiary of an Obligor which is a member of the
Borrower Group is made on bona fide arm’s length commercial terms or on terms
which are fair and reasonable and in the best interests of the US Borrower and
entered into in good faith.

 

16.32                 UPC Poland Share Security

 

(a)                                  In the event that a member of the Borrower
Group acquires all or any part of the share capital of an entity which is
incorporated or carrying on business in Poland the Facility Agent (acting on the
instructions of the Majority Lenders) may notify UPC Distribution in writing
that it requires a pledge over the share capital of the entity so acquired (the
Polish Holdco); and

 

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(b)                                 UPC Distribution shall, within 30 Business
Days of receipt of such written notice procure the grant by the relevant member
of the Borrower Group of:

 

(i)                                     a pledge in favour of the Security Agent
over the share capital of the Polish Holdco in substantially the same form as
the share pledges already granted to the Security Agent by a member of the
Borrower Group and listed in Schedule 7 (Security Documents) (save for any
changes required under Polish law); and

 

(ii)                                  a Security Provider’s Deed of Accession,

 

and shall provide the Security Agent with such evidence as it may reasonably
request as to the power and authority of such member of the Borrower Group to
enter into the share pledge and Security Provider’s Deed of Accession and that
the same constitute valid and legally binding obligations of such member
enforceable in accordance with their terms subject (to the extent possible) to
substantially similar qualifications to those usually made in Polish law legal
opinions, together with all such notices and other documents as the Security
Agent may reasonably require to perfect the share pledge.

 

17.                               FINANCIAL COVENANTS

 

17.1                        Financial definitions

 

In this Clause 17:

 

Annualised EBITDA means, in respect of any Ratio Period, two times EBITDA of the
Borrower Group for that Ratio Period.

 

EBITDA means, in respect of any period or person, the Net Income of that person
(plus, in the case of the Borrower Group, any amount attributable to  non-cash
compensation payable to employees or directors of members of the Borrower Group
deducted in calculating Net Income, any depreciation, amortisation, other
non-cash charges (such as deferred Taxes), accrued Management Fees (whether or
not paid), fees accrued (whether or not paid) in respect of Financial
Indebtedness and interest expense and other charges in respect of Financial
Indebtedness) for such period adjusted as follows:

 

(a)                                  minus extraordinary income of the relevant
person for such period;

 

(b)                                 plus any extraordinary expenses (including
one off restructuring costs) of the relevant person for such period;

 

(c)                                  minus any interest income of the relevant
person for such period; and

 

(d)                                 in the case of the Borrower Group, minus any
Management Fees paid during such period,

 

to the extent attributed to the Distribution Business of the Borrower Group and
all as determined in accordance with GAAP and (in the case of the Borrower
Group) as shown in the relevant financial statements prepared and delivered to
the Facility Agent pursuant to Clause 16.2(a) or (b) (Financial information) (as
the case may be).

 

Interest means:

 

(a)                                  interest and amounts in the nature of
interest (including, without limitation, the interest element of finance leases)
accrued;

 

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(b)                                 discount fees and acceptance fees payable or
deducted in respect of any Financial Indebtedness (including all commissions
payable in connection with any letter of credit); and

 

(c)                                  any net payment (or, if appropriate in the
context, receipt) under any interest rate hedging agreement or instrument
(including without limitation under the Senior Hedging Agreements and (as
applicable) High Yield Hedging Agreements), taking into account any premiums
payable.

 

Net Income means, in respect of any period and for any period, the net profit
after Taxes and (in the case of the Borrower Group only) Management Fees, in the
case of the Borrower Group to the extent attributed to the Distribution Business
of the Borrower Group for such period as determined in accordance with GAAP and
(in the case of the Borrower Group) as shown in the financial statements in
respect of such period prepared and delivered to the Facility Agent pursuant to
Clause 16.2(a) or (b) (Financial information).

 

Ratio Period means each period of approximately 6 months covering two quarterly
Accounting Periods of the Borrower Group ending on each date to which each set
of financial statements required to be delivered under Clause 16.2(a) or (b)
(Financial information) are prepared.

 

Senior Debt means at any time, the consolidated Financial Indebtedness of the
Borrower Group, excluding:

 

(a)                                  any Financial Indebtedness which is a
contingent obligation of a member of the Borrower Group; and

 

(b)                                 any Subordinated Shareholder Loans and any
Financial Indebtedness referred to in Clause 16.12(b)(viii), (xi), (xii) and
(xiii) (Restrictions on Financial Indebtedness).

 

Senior Debt Service means, for any Ratio Period, the sum of:

 

(a)                                  all scheduled repayments (including
scheduled reductions of revolving credits to the extent they are drawn) of
Senior Debt which fell due during such Ratio Period; and

 

(b)                                 Total Cash Interest for that Ratio Period.

 

Senior Interest means, in respect of any period, the amount of Total Cash
Interest paid in respect of Senior Debt during that period.

 

Total Cash Interest means, in respect of any period, the total amount of all
Interest paid in cash in respect of Senior Debt and Subordinated Shareholder
Loans during such period (having taken into account the effect of any Senior
Hedging Agreements)

 

except in each case, to the extent that such payments (other than payments in
respect of Senior Debt) are funded by distributions made by Unrestricted
Subsidiaries to UPC Distribution or any other member of the Borrower Group and
excluding, for the avoidance of doubt, capitalisation of Interest accrued in
respect of Subordinated Shareholder Loans.

 

Total Debt means, at any time, the aggregate amount of:

 

(a)                                  Senior Debt; and

 

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(b)                                 Financial Indebtedness of each other member
of the UGCE Borrower Group, but excluding any Financial Indebtedness owing
between members of the UGCE Borrower Group.

 

17.2                        Financial ratios

 

UPC Distribution will procure that:

 

(a)                                  the ratio of Senior Debt to Annualised
EBITDA for each Ratio Period which ends on a date or in a period specified in
column 1 below shall not exceed the ratio specified in column 2 below opposite
such date or period:

 

Test Dates

 

Ratio

 

30th September, 2003

 

7.75:1

 

31st December, 2003

 

6.75:1

 

31st March, 2004

 

6.75:1

 

30th June, 2004

 

6.25:1

 

30th September, 2004

 

6.10:1

 

31st December, 2004

 

5.85:1

 

31st March, 2005

 

5.70:1

 

30th June, 2005

 

5.40:1

 

30th September, 2005

 

5.20:1

 

31st December, 2005

 

4.85:1

 

31st March, 2006

 

4.70:1

 

30th June, 2006

 

4.50:1

 

30th September, 2006

 

4.35:1

 

31st December, 2006

 

4.15:1

 

31st March, 2007

 

4.00:1

 

30th June, 2007

 

3.75:1

 

30th September, 2007

 

3.50:1

 

31st December, 2007

 

3.25:1

 

Thereafter

 

3.00:1

 

 

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(b)                                 the ratio of EBITDA to Total Cash Interest
for each Ratio Period which ends on a date or in a period specified in column 1
below shall not be less than the ratio specified in column 2 below opposite such
date and period:

 

Test Dates

 

Ratio

 

30th September, 2003

 

2.25:1

 

31st December, 2003

 

2.25:1

 

31st March, 2004

 

1.90:1

 

30th June, 2004

 

1.45:1

 

30th September, 2004

 

1.45:1

 

31st December, 2004

 

1.50:1

 

31st March, 2005

 

1.75:1

 

30th June, 2005

 

1.80:1

 

30th September, 2005

 

1.80:1

 

31st December, 2005

 

1.90:1

 

31st March, 2006

 

2.00:1

 

Thereafter

 

2.00:1

 

 

(c)                                  the ratio of EBITDA to Senior Debt Service
for each Ratio Period which ends on a date or in a period specified in column 1
below shall not be less than the ratio specified in column 2 below opposite such
date or period:

 

Test Dates

 

Ratio

 

31st December, 2003

 

1.00:1

 

31st March, 2004

 

1.00:1

 

30th June, 2004

 

0.90:1

 

30th September, 2004

 

0.90:1

 

31st December, 2004

 

1.50:1

 

31st March, 2005

 

1.60:1

 

30th June, 2005

 

1.40:1

 

30th September, 2005

 

1.40:1

 

 

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Test Dates

 

Ratio

 

31st December, 2005

 

1.40:1

 

31st March, 2006

 

1.50:1

 

30th June, 2006

 

1.35:1

 

30th September, 2006

 

1.40:1

 

31st December, 2006

 

1.40:1

 

31st March, 2007

 

1.40:1

 

Thereafter

 

1.50:1

 

 

(d)                                 the ratio of EBITDA to Senior Interest for
each Ratio Period which ends on a date or in a period specified in column 1
below shall not exceed the ratio specified in column 2 below opposite such date
or period:

 

Test Dates

 

Ratio

 

30th September, 2003

 

2.25:1

 

31st December, 2003

 

2.25:1

 

31st March, 2004

 

2.10:1

 

30th June, 2004

 

2.10:1

 

30th September, 2004

 

2.00:1

 

31st December, 2004

 

2.00:1

 

31st March, 2005

 

2.25:1

 

30th June, 2005

 

2.25:1

 

30th September, 2005

 

2.25:1

 

31st December, 2005

 

2.25:1

 

31st March, 2006

 

2.35:1

 

30th June, 2006

 

2.35:1

 

Thereafter

 

2.40:1

 

 

; and

 

(e)                                  the ratio of Total Debt to Annualised
EBITDA for each Ratio Period which ends on a date or in a period specified in
column 1 below shall not be less than the ratio specified in column 2 below
opposite such date and period:

 

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Test Dates

 

Ratio

 

30th September, 2003

 

7.50:1

 

31st December, 2003

 

7.25:1

 

31st March, 2004

 

7.00:1

 

30th June, 2004

 

7.00:1

 

30th September, 2004

 

7.00:1

 

31st December, 2004

 

7.00:1

 

31st March, 2005

 

7.00:1

 

30th June, 2005

 

6.75:1

 

30th September, 2005

 

6.50:1

 

31st December, 2005

 

6.25:1

 

31st March, 2006

 

5.75:1

 

Thereafter

 

5.75:1

 

 

17.3                        Calculations

 

For the purposes of Clause 17.2 (Financial ratios), Senior Debt for any Ratio
Period will be calculated on the basis of Senior Debt outstanding on the last
day of that Ratio Period.

 

17.4                        Cure provisions

 

(a)                                  UPC Distribution may cure a breach of the
financial ratios set out in Clause 17.2(a), (b), (c), (d) and (e) (Financial
ratios) by procuring that additional equity is injected into the Borrower Group
by one or more Restricted Persons and/or additional Subordinated Shareholder
Loans are provided to the Borrower Group in an aggregate amount equal to:

 

(i)                                     in the case of a breach of Clause
17.2(a) or (e) (Financial ratios), the amount which, if it had been deducted
from Senior Debt or Total Debt (as applicable) for the Ratio Period in respect
of which the breach arose, would have avoided the breach; or

 

(ii)                                  in the case of a breach of Clause 17.2(b),
(c) or (d) (Financial ratios), the amount which, if it had been added to EBITDA
for the Ratio Period in respect of which the breach arose, would have avoided
the breach; or

 

(iii)                               in the case of a breach of more than one
paragraph of Clause 17.2 (Financial ratios), the higher of the relevant amount
referred to in (i) or (ii) above.

 

(b)                                 A cure under paragraph (a) above will not be
effective unless:

 

(i)                                     the required amount of additional equity
or the proceeds of Subordinated Shareholder Loans is received by the Borrower
Group before delivery of the financial statements

 

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delivered under Clause 16.2(a) or (b) (Financial information) which show that
Clause 17.2 (Financial ratios) has been breached; and

 

(ii)                                  in the case of a cure of Clause 17.2(a) or
(e) (Financial ratios), the proceeds of the relevant additional equity or
Subordinated Shareholder Loans are applied in full in or towards repayment or
prepayment of Facility A Advances in accordance with Clause 7 (Cancellation and
Prepayment) and, to the extent of any surplus after such repayment or
prepayment, for the purposes of the Permitted Business.

 

(c)                                  No cure may be made under this Clause 17.4:

 

(i)                                     in respect of more than five Ratio
Periods during the life of the Facilities; or

 

(ii)                                  in respect of consecutive Ratio Periods.

 

(d)                                 Where a cure is exercised under this Clause
17.4 in respect of a breach of Clause 17.2(b), (c) or (d) (Financial ratios) and
the next Ratio Period ends approximately three months after the Ratio Period in
respect of which the cure was made, EBITDA in respect of that next Ratio Period
will be deemed, for the purposes of Clause 17.2(b), (c) and (d) (Financial
ratios), to be increased by the amount determined under sub-paragraph (a)(ii)
above in respect of the relevant cure.  This deemed increase will not be treated
as a separate cure.

 

17.5                        Determinations

 

(a)                                  Any amount outstanding in a currency other
than euros is to be taken into account at its euro equivalent calculated at the
rate used in the latest accounts delivered to the Facility Agent.

 

(b)                                 All the terms used above are to be
calculated in accordance with the GAAP on which the preparation of the Original
Borrower Group Financial Statements was based.

 

(c)                                  If there is a dispute as to any
interpretation of or computation for Clause 17.1 (Financial definitions), the
interpretation or computation of the auditors of UPC Distribution shall prevail.

 

(d)                                 If UPC Distribution is obliged or chooses to
prepare its financial statements on a different basis from the basis used in the
preparation of the Original Borrower Group Financial Statements, such financial
statements shall be accompanied by a statement (providing reasonable detail)
from UPC Distribution either:

 

(i)                                     confirming that the change(s) would have
no effect on the operation of the ratios set out in Clause 17.2 (Financial
ratios); or

 

(ii)                                  unless otherwise agreed in writing by the
Facility Agent (acting upon the instructions of the Majority Lenders), if the
change(s) would have such an effect, containing a reconciliation demonstrating
the effect of the change(s) (and, for the purpose of calculating the ratios set
out in Clause 17.2 (Financial ratios), such financial statements will be treated
as though adjusted by that reconciliation so as to exclude the effect of the
changes).

 

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18.                               DEFAULT

 

18.1                        Events of Default

 

Each of the events set out in Clauses 18.2 (Non-payment) to 18.21 (KTA Network
Agreement Enforcement) is an Event of Default (whether or not caused by any
reason whatsoever outside the control of any Obligor or any other person).

 

18.2                        Non-payment

 

An Obligor does not pay on the due date any amount payable by it under the
Finance Documents (other than any amount payable by UPC Distribution under
Clause 7.6(d) (Prepayment from disposal proceeds) of this Agreement) at the
place at, and in the currency in, which it is expressed to be payable, unless
the relevant amount is paid in full within one Business Day (in the case of
principal amounts) or three Business Days (in the case of other amounts) of the
due date.

 

18.3                        Breach of other obligations

 

(a)                                  An Obligor does not comply with any of
Clauses 16.6 (Pari passu ranking), 16.7 (Negative pledge), 16.10 (Disposals),
16.11 (Acquisitions and mergers), 16.13 (Restricted Payments), 16.14 (Loans and
guarantees), 16.19 (Share capital) or 17 (Financial Covenants)

 

(b)                                 An Obligor does not comply with any
provision of the Finance Documents (other than those referred to in paragraph
(a) above or in Clause 18.2 (Non-payment) and other than non-payment by UPC
Distribution of any amount under Clause 7.6(d) (Prepayment from disposal
proceeds) of this Agreement) and such failure (if capable of remedy before the
expiry of such period) continues unremedied for a period of 28 days from the
earlier of the date on which (i) such Obligor has become aware of the failure to
comply or (ii) the Facility Agent gives notice to UPC Distribution requiring the
same to be remedied.

 

18.4                        Misrepresentation

 

A representation or warranty made or repeated by any Obligor in or in connection
with any Finance Document or in any certificate or statement delivered by or on
behalf of any Obligor under or in connection with any Finance Document (other
than the representation in Clause 15.25 (Dutch Banking Act) or Clause 26.2(k)
(Transfers by Lenders)) is incorrect in any material respect when made or deemed
to have been made or repeated and, in the event that any representation or
warranty is capable of remedy, the misrepresentation is not remedied within 28
days of the earlier of the date on which (i) such Obligor has become aware of
the misrepresentation or (ii) the Facility Agent gives notice to UPC
Distribution requiring the same to be remedied.

 

18.5                        Cross default

 

(a)                                  Subject to paragraph (d) below, any
Financial Indebtedness of a member of the Borrower Group or a member of the UGCE
Borrower Group is not paid when due or within any originally applicable grace
period.

 

(b)                                 Subject to paragraph (d) below, any
Financial Indebtedness of a member of the Borrower Group or a member of the UGCE
Borrower Group becomes prematurely due and payable or is placed on demand, in
each case as a result of an event of default (howsoever described) under the
document relating to that Financial Indebtedness.

 

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(c)                                  Subject to paragraph (d) below, any
Financial Indebtedness of a member of the Borrower Group or a member of the UGCE
Borrower Group becomes capable of being declared prematurely due and payable or
placed on demand, in each case as a result of an event of default (howsoever
described) under the document relating to that Financial Indebtedness.

 

(d)                                 It shall not be an Event of Default under:

 

(i)                                     this Clause 18.5 where the aggregate
principal amount of all Financial Indebtedness to which any event specified in
paragraphs (a), (b) or (c) relates is less than €15,000,000 (in the case of the
Borrower Group) or €50,000,000 (in the case of any member of the UGCE Borrower
Group) or, as the case may be, the equivalent in other currencies;

 

(ii)                                  this Clause 18.5 in respect of Financial
Indebtedness owing by a member of the Borrower Group to another member of the
Borrower Group which is permitted under this Agreement; and

 

(iii)                               paragraph (c) above, in the case of the
Acquisition of an entity which results in that entity becoming a member of the
Borrower Group, for a period of 180 days following completion of that
Acquisition, by reason only of an event of default (however described) arising
in relation to the Financial Indebtedness of that acquired entity as a result
only of the Acquisition of that acquired entity, provided that such Financial
Indebtedness is not placed on demand, becomes prematurely due and payable or is
otherwise accelerated during that period.

 

(e)                                  Any Financial Indebtedness of a member of
the Borrower Group under a New Finance Document becomes capable of being due and
payable or placed on demand, in each case as a result of an Event of Default as
defined under the relevant New Finance Document.

 

18.6                        Insolvency

 

(a)                                  The Netherlands:  any Obligor, any Material
Subsidiary or member of the UGCE Borrower Group organised in The Netherlands is
declared bankrupt (in staat van faillissement verklaard) or enters into a
preliminary or definitive moratorium (in voorlopige of definitieve surseance van
betaling gaan) pursuant to the Dutch Bankruptcy Act (Faillissementswet); or

 

(b)                                 General: any of the following occurs in
respect of an Obligor, any Material Subsidiary or any member of the UGCE
Borrower Group:

 

(i)                                     it is, or is deemed for the purposes of
any law to be, unable to pay its debts as they fall due or insolvent;

 

(ii)                                  it admits its inability to pay its debts
as they fall due;

 

(iii)                               it suspends making payments on any of its
debts or announces an intention to do so; or

 

(iv)                              a moratorium is declared in respect of any of
its indebtedness.

 

If a moratorium occurs in respect of any Obligor, any Material Subsidiary or any
member of the UGCE Borrower Group, the ending of the moratorium will not remedy
any Event of Default caused by the moratorium.

 

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(c)                                  United States of America:  any Obligor, any
Material Subsidiary or any member of the UGCE Borrower Group which is a
partnership, or a partner of any partnership, formed under the laws of the
states of Colorado or Delaware, United States or which is incorporated under the
laws of a State of the United States or that resides or has a domicile, a place
of business or property in the United States (each a U.S. Obligor):

 

(i)                                     admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due;

 

(ii)                                  makes a general assignment for the benefit
of creditors;

 

(iii)                               shall have had appointed a receiver, a
custodian, trustee or similar official for, or a receiver, custodian, trustee or
similar official shall have taken possession of, all or substantially all of its
assets, in proceedings brought by or against such Obligor or Material
Subsidiary, and such appointment shall not have been discharged or such
possession shall not have been terminated within 60 days after the effective
date thereof or such Obligor or Material Subsidiary shall have consented to or
acquiesced in such appointment or possession;

 

(iv)                              shall have filed a petition for relief under
the insolvency, bankruptcy or similar laws of the United States of America or
any state thereof, or an involuntary petition for such relief shall have been
filed against any such Obligor or Material Subsidiary under such laws and shall
not have been dismissed or terminated within 60 days after such involuntary
petition is filed; or

 

(v)                                 shall have failed to have discharged or
obtained a stay of any proceeding to enforce, within a period of 45 days after
the commencement thereof, any attachment, sequestration or similar proceeding
asserted against all or substantially all of the assets of such Obligor or
Material Subsidiary; or

 

18.7                        Insolvency proceedings

 

(a)                                  Any formal voluntary step commencing legal
proceedings (including petition or convening a meeting) is taken by any Obligor,
any Material Subsidiary or any member of the UGCE Borrower Group with a view to
a moratorium or a composition, assignment or arrangement with any class of
creditors of any Obligor, any Material Subsidiary or any member of the UGCE
Borrower Group; or

 

(b)                                 a meeting of any Obligor, any Material
Subsidiary or any member of the UGCE Borrower Group is convened by its
shareholders, directors, managing partner (in the case of the US Borrower),
secretary or other officers for the purpose of considering any resolution for,
to petition for or to file documents with a court for its winding-up,
dissolution or for its administration, suspension of payments, composition or
bankruptcy or any such resolution is passed; or

 

(c)                                  any person presents a petition or files
documents , with the appropriate legal authorities, for the winding-up or for
the administration or for the bankruptcy of any Obligor, any Material Subsidiary
or any member of the UGCE Borrower Group and the petition is not discharged or
stayed within 45 days (or, in the case of a US Obligor, 60 days); or

 

(d)                                 an order for the winding-up or
administration of any Obligor, any Material Subsidiary or any member of the UGCE
Borrower Group is made,

 

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in each case other than in connection with a reconstruction or amalgamation on
terms approved by the Facility Agent (acting on the instructions of the Majority
Lenders).

 

18.8                        Appointment of receivers and managers

 

(a)                                  Any liquidator, trustee-in-bankruptcy,
preliminary trustee, composition trustee, judicial custodian, compulsory
manager, receiver, administrative receiver or  administrator is appointed in
respect of any Obligor, any Material Subsidiary or any member of the UGCE
Borrower Group or any part of its assets which is material in the context of the
Borrower Group (taken as a whole) and, only in the case of the appointment of a
judicial custodian, compulsory manager or receiver, is not discharged within 45
days (or, in the case of a US Obligor, 60 days); or

 

(b)                                 the directors, shareholders or other
officers of any Obligor, any Material Subsidiary or any member of the UGCE
Borrower Group request the appointment of, or give notice of their intention to
appoint, a liquidator, trustee in bankruptcy, preliminary trustee, composition
trustee, judicial custodian, compulsory manager, receiver, administrative
receiver or administrator,

 

in each case other than in connection with a reconstruction or amalgamation on
terms approved by the Facility Agent (acting on the instructions of the Majority
Lenders).

 

18.9                        Creditors’ process

 

A distress, execution, attachment or other legal process is levied, enforced or
sued out upon or against all or any part of the assets of any Obligor, any
Material Subsidiary or any member of the UGCE Borrower Group which is material
in the context of the Borrower Group (taken as a whole), except where the same
is being contested in good faith or is removed, discharged or paid within 45
days (or, in the case of a US Obligor, 60 days).

 

18.10                 Similar proceedings

 

Anything which has an equivalent effect to any of the events specified in
Clauses 18.6 (Insolvency) to 18.9 (Creditors’ process) (inclusive) shall occur
under the laws of any applicable jurisdiction in relation to any Obligor, any
Material Subsidiary or any member of the UGCE Borrower Group.

 

18.11                 Unlawfulness

 

It is or becomes unlawful for any Obligor or Subordinated Creditor to perform
any of its payments or other material obligations under the Finance Documents to
which it is a party.

 

18.12                 Repudiation

 

Any Obligor or Subordinated Creditor repudiates, or evidences an intention to
repudiate, any Finance Document to which it is a party.

 

18.13                 Cessation of Distribution Business

 

The Borrower Group (taken as a whole) ceases to carry on all or substantially
all of its Distribution Business.

 

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18.14                 Seizure

 

All or a material part of the undertakings, assets, rights or revenues of, or
shares or other ownership interests in, UGCE Inc., UPC Distribution Holdco or
the Borrower Group (taken as a whole but excluding any undertaking, assets,
rights or revenues which do not form part of the Distribution Business) are
seized, nationalised, expropriated or compulsorily acquired by or under the
authority of any government.

 

18.15                 Environmental Matters

 

As a result of any Environmental Law any of the Finance Parties becomes subject
to a material obligation (actual or contingent and, in the case of any
contingent obligation, being one which, at the relevant time, would be likely to
arise) directly as a result of it entering into any of the Finance Documents
which was not caused by its negligence or wilful default.

 

18.16                 Breach of Security Deed and Intercreditor Agreement

 

(a)                                  A Subordinated Creditor fails to comply
with any of its obligations under the Security Deed or the Pledge of
Subordinated Shareholder Loans to which it is party and such failure (if capable
of remedy before the expiry of such period) continues unremedied for a period of
28 days from the earlier of the date on which (i) UPC or UPC Distribution has
become aware of the failure to comply or (ii) the Facility Agent gives notice to
the relevant Subordinated Creditor and UPC Distribution requiring the same to be
remedied.

 

(b)                                 Any representation or warranty made by a
Subordinated Creditor under the Security Deed or the Pledge of Subordinated
Shareholder Loans is incorrect in any material aspect when made or repeated and,
in the event that any representation or warranty is capable of remedy, the
misrepresentation is not remedied within 28 days of the earlier of the date on
which (i) such Obligor has become aware of the misrepresentation or (ii) the
Facility Agent gives notice to that Subordinated Creditor requiring the same to
be remedied.

 

(c)                                  Any representation or warranty made by a
Finance Party (as defined in the New Facility Agreement) is incorrect in any
material aspect when made or repeated.

 

18.17                 Loss of Licences

 

Any Licence is in whole or part:

 

(a)                                  terminated, suspended or revoked or does
not remain in full force and effect or otherwise expires and is not renewed
prior to its expiry (in each case, without replacement by Licence(s) having
substantially equivalent effect) in any case in a manner which would or is
reasonably likely to have a Material Adverse Effect; or

 

(b)                                 is modified or is breached in a manner which
would or is reasonably likely to have a Material Adverse Effect.

 

18.18                 Material Contracts

 

(a)                                  Except as is required by any term of this
Agreement, any Material Contract to which a member of the Borrower Group is a
party is terminated, suspended, revoked or cancelled or otherwise ceases to be
in full force and effect, unless:

 

(i)                                     in the case of an Interconnect Agreement
only, services of a similar nature to those provided pursuant to such Material
Contract are at all times provided to the Borrower

 

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Group on terms which are not materially more onerous on the relevant member of
the Borrower Group or on the terms imposed by the mandatory requirements of any
regulatory body; or

 

(ii)                                  such termination, suspension, revocation,
cancellation or cessation (in the reasonable opinion of the Facility Agent)
would not or is not reasonably likely to have a Material Adverse Effect.

 

(b)                                 Any alteration or variation is made to any
term of any Material Contract to which a member of the Borrower Group is a party
which individually or cumulatively (in the reasonable opinion of the Facility
Agent) would or is reasonably likely to have a Material Adverse Effect.

 

(c)                                  Any party breaches any term of or
repudiates any of its obligations under any Material Contract to which a member
of the Borrower Group is a party where such breach or repudiation (in the
opinion of the Facility Agent exercised reasonably) would or is reasonably
likely to have a Material Adverse Effect unless, in the case of a breach of a
Material Contract by any person other than any member of the Borrower Group, the
relevant services are at all relevant times provided to the appropriate members
of the Borrower Group on the basis set out in (a) above.

 

18.19                 Material Adverse Change

 

Any event or series of events occurs which would or is reasonably likely to have
a Material Adverse Effect.

 

18.20                 ERISA

 

The occurrence of:

 

(a)                                  any event or condition that presents a
material risk that any member of the Borrower Group or any ERISA Affiliate may
incur a material liability to a Plan or to the United States Internal Revenue
Service or to the United States Pension Benefit Guaranty Corporation; or

 

(b)                                 an “accumulated funding deficiency” (as that
term is defined in section 412 of the United States Internal Revenue Code of
1986, as amended, or section 302 of ERISA), whether or not waived, by reason of
the failure of any member of the Borrower Group or any ERISA Affiliate to make a
contribution to a Plan.

 

18.21                 KTA Network Agreement Enforcement

 

Valid and enforceable KTA Security Agreements (as defined in Clause 7.6(d)
(Prepayment from disposal proceeds)) have not been entered into and:

 

(a)                                  KTA becomes obliged to pay the penalty to
the Municipality of Amsterdam on the basis of section 19 of the network
agreement between KTA and the Municipality of Amsterdam dated 6th July, 1995 and
as amended on 22nd June, 1999 (the Network Agreement); or

 

(b)                                 the Municipality of Amsterdam, as mortgagee
or pledgee, has factually taken steps to enforce, by way of execution, its
pledge or mortgage under the Network Agreement, other than on the basis of the
situation described under (a), except where such

 

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enforcement is being contested in good faith or is removed or discharged within
45 days.

 

18.22                 Acceleration

 

On and at any time after the occurrence of an Event of Default while such event
is continuing the Facility Agent may, and if so directed by the Majority Lenders
will, by notice to UPC Distribution declare that an Event of Default has
occurred and:

 

(a)                                  cancel the Total Commitments; and/or

 

(b)                                 declare that all the Advances be payable on
demand, whereupon they shall immediately become payable on demand by the
Facility Agent on the instructions of the Majority Lenders; and/or

 

(c)                                  demand that all the Advances be immediately
due and payable, whereupon they shall become immediately due and payable
together with all interest accrued on those Advances and all other amounts
payable by the Obligors under the Finance Documents.

 

18.23                 Automatic Acceleration

 

If an Event of Default described in Clause 18.6(c)(ii), (iii) or (iv) (United
States of America) occurs, or upon the entry of an order for relief in a
voluntary or involuntary bankruptcy of the US Borrower, all outstanding Advances
drawn by the US Borrower under this Agreement will be immediately and
automatically due and payable and the Total Commitments (to the extent they
relate to such Advances) will, if not already cancelled under this Agreement, be
immediately and automatically cancelled.

 

19.                               FACILITY AGENT, SECURITY AGENT, LEAD ARRANGERS
AND LENDERS

 

19.1                        Appointment and duties of the Agents

 

(a)                                  Each Lender and Lead Arranger irrevocably
appoints each Agent to act as its agent under and in connection with the Finance
Documents.

 

(b)                                 Each Finance Party appointing each Agent
irrevocably authorises each Agent on its behalf to:

 

(i)                                     perform the duties and to exercise the
rights, powers and discretions that are specifically delegated to it under or in
connection with the Finance Documents, together with any other incidental
rights, powers and discretions; and

 

(ii)                                  execute each Finance Document expressed to
be executed by the Facility Agent on that Finance Party’s behalf.

 

(c)                                  Each Agent shall have only those duties
which are expressly specified in this Agreement.  Those duties are solely of a
mechanical and administrative nature.

 

19.2                        Role of the Lead Arrangers

 

Except as otherwise provided in this Agreement, no Lead Arranger has any
obligations of any kind to any other Party under or in connection with any
Finance Document.

 

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19.3                        Relationship

 

The relationship between each Agent and the other Finance Parties is that of
agent and principal only.  Nothing in this Agreement constitutes either Agent as
trustee or fiduciary for any other Party or any other person and neither Agent
need hold in trust any moneys paid to it for a Party save as provided in the
Finance Documents or be liable to account for interest on those moneys.

 

19.4                        Majority Lenders’ directions

 

(a)                                  Each Agent will be fully protected if it
acts in accordance with the instructions of the Majority Lenders in connection
with the exercise of any right, power or discretion or any matter not expressly
provided for in the Finance Documents.  Any such instructions given by the
Majority Lenders will be binding on all the Lenders.  In the absence of such
instructions each Agent may act as it considers to be in the best interests of
all the Lenders.

 

(b)                                 No Agent is authorised to act on behalf of a
Lender (without first obtaining that Lender’s consent) in any legal or
arbitration proceedings relating to any Finance Document.

 

19.5                        Delegation

 

Each Agent may act under the Finance Documents through its personnel and agents.

 

19.6                        Responsibility for documentation

 

Neither Agent nor any Lead Arranger is responsible to any other Party for:

 

(a)                                  the execution, genuineness, validity,
enforceability or sufficiency of any Finance Document or any other document by
any other Party;

 

(b)                                 the collectability of amounts payable under
any Finance Document;

 

(c)                                  the accuracy of any statements (whether
written or oral) made in or in connection with any Finance Document (including
the Information Memorandum) by any other Party; or

 

(d)                                 the integrity or security of any Finance
Document or other document or information posted or distributed electronically
on any intranet based system (or similar) in connection with the preparation,
negotiation and execution of the Finance Documents or the syndication or
administration of the Facilities.

 

19.7                        Default

 

(a)                                  Neither Agent is obliged to monitor or
enquire as to whether or not a Default has occurred. Neither Agent will be
deemed to have knowledge of the occurrence of a Default.  However, if an Agent
receives notice from a Party referring to this Agreement, describing the Default
and stating that the event is a Default, it shall promptly notify the Lenders of
such notice.

 

(b)                                 Each Agent may require the receipt of
security satisfactory to it whether by way of payment in advance or otherwise,
against any liability or loss which it will or may incur in taking any
proceedings or action arising out of or in connection with any Finance Document
before it commences these proceedings or takes that action.

 

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19.8                        Exoneration

 

(a)                                  Without limiting paragraph (b) below,
neither Agent will be liable for any action taken or not taken by it under or in
connection with any Finance Document, unless directly caused by its gross
negligence or wilful misconduct.

 

(b)                                 No Party may take any proceedings against
any officer, employee or agent of either Agent in respect of any claim it might
have against that Agent or in respect of any act or omission of any kind
(including negligence or wilful misconduct) by that officer, employee or agent
in relation to any Finance Document.

 

(c)                                  Any officer, employee or agent of either
Agent may rely on this Clause 19.8 and enforce its terms under the Contracts
(Rights of Third Parties) Act 1999.

 

19.9                        Reliance

 

Each Agent may:

 

(a)                                  rely on any notice or document believed by
it to be genuine and correct and to have been signed by, or with the authority
of, the proper person;

 

(b)                                 rely on any statement made by a director or
employee of any person regarding any matters which may reasonably be assumed to
be within his knowledge or within his power to verify; and

 

(c)                                  engage, pay for and rely on legal or other
professional advisers selected by it (including those in the Facility Agent’s
employment and those representing a Party other than the Facility Agent).

 

19.10                 Credit approval and appraisal

 

Without affecting the responsibility of any Obligor for information supplied by
it or on its behalf in connection with any Finance Document, each Lender
confirms that it:

 

(a)                                  has made its own independent investigation
and assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by either Agent or the
Lead Arrangers in connection with any Finance Document; and

 

(b)                                 will continue to make its own independent
appraisal of the creditworthiness of each Obligor and its related entities while
any amount is or may be outstanding under the Finance Documents or any
Commitment is in force.

 

19.11                 Information

 

(a)                                  Each Agent shall promptly forward to the
person concerned the original or a copy of any document which is delivered to
that Agent by a Party for that person.

 

(b)                                 Except where this Agreement specifically
provides otherwise, neither Agent is obliged to review or check the accuracy or
completeness of any document it forwards to another Party.

 

(c)                                  Except as provided above, neither Agent has
a duty:

 

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(i)                                     either initially or on a continuing
basis to provide any Lender with any credit or other information concerning the
financial condition or affairs of any Obligor or any related entity of any
Obligor whether coming into its possession or that of any of its related
entities before, on or after the Signing Date; or

 

(ii)                                  unless specifically requested to do so by
a Lender in accordance with this Agreement, to request any certificates or other
documents from any Obligor.

 

19.12                 Each Agent and the Lead Arrangers individually

 

(a)                                  If it is also a Lender, each of the
Facility Agent, the Security Agent and the Lead Arrangers has the same rights
and powers under this Agreement as any other Lender and may exercise those
rights and powers as though it were not the Facility Agent, Security Agent or
(as applicable) a Lead Arranger.

 

(b)                                 Each of the Agents and the Lead Arrangers
may:

 

(i)                                     carry on any business with an Obligor or
its related entities;

 

(ii)                                  act as agent or trustee for, or in
relation to any financing involving, an Obligor or its related entities; and

 

(iii)                               retain any profits or remuneration in
connection with its activities under the Finance Documents, or in relation to
any of the foregoing.

 

19.13                 Indemnities

 

Each Lender shall indemnify each Agent, within three Business Days of demand,
against any cost, loss or liability incurred by the relevant Agent (otherwise
than by reason of the relevant Agent’s gross negligence or wilful misconduct) in
acting as Agent under the Finance Documents (unless the relevant Agent has been
reimbursed by an Obligor pursuant to a Finance Document).  Such indemnification
shall be pro rata to its Commitments (and for the purposes of calculating this
proportion, the amount of the Total Facility C Commitments and each Lender’s
Facility C Commitments shall be converted to euros at the Agent’s Spot Rate of
Exchange on the date of the relevant calculation).

 

19.14                 Compliance

 

(a)                                  Each Agent may refrain from doing anything
which might, in its reasonable opinion, constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person, and may do
anything which, in its reasonable opinion, is necessary or desirable to comply
with any law or regulation of any jurisdiction.

 

(b)                                 Without limiting paragraph (a) above,
neither Agent need disclose any information relating to any Obligor or any of
its related entities if the disclosure might, in the opinion of the relevant
Agent, constitute a breach of any law or regulation or any duty of secrecy or
confidentiality or be otherwise actionable at the suit of any person.

 

19.15                 Resignation of Agents

 

(a)                                  Notwithstanding its irrevocable appointment
(but subject to paragraphs (f) and (g) below), each Agent may resign by giving
notice to the Lenders and UPC Distribution, in which case the relevant Agent
may, following consultation with and with the consent of UPC Distribution (not
to be unreasonably withheld or delayed) forthwith appoint one of its

 

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Affiliates as successor Agent or, failing that, the Majority Lenders may with
the consent of UPC Distribution (not to be unreasonably withheld or delayed)
appoint a reputable and experienced bank as successor Agent. The resignation of
the Security Agent is subject to compliance with clause 9.1 (Retirement of
Security Agent) of the Security Deed.

 

(b)                                 If the appointment of a successor Agent is
to be made by the Majority Lenders but they have not, within 30 days after
notice of resignation, appointed a successor Agent which accepts the
appointment, the retiring Agent may, following consultation with and with the
consent of UPC Distribution (not to be unreasonably withheld or delayed),
appoint a successor Agent.

 

(c)                                  The resignation of the retiring Agent and
the appointment of any successor Agent will both become effective only upon the
successor Agent notifying all the Parties that it accepts the appointment.  On
giving the notification and receiving such approval, the successor Agent will
succeed to the position of the retiring Facility Agent and the term Facility
Agent or Security Agent (as the case may be) will mean the successor Facility
Agent or Security Agent, respectively.

 

(d)                                 The retiring Agent shall, at its own cost,
make available to the successor Agent such documents and records and provide
such assistance as the successor Agent may reasonably request for the purposes
of performing its functions as the Agent under this Agreement.

 

(e)                                  Upon its resignation becoming effective,
this Clause 19 shall continue to benefit the retiring Agent in respect of any
action taken or not taken by it under or in connection with the Finance
Documents while it was the relevant Agent and, subject to paragraph (d) above,
it shall have no further obligation under any Finance Document.

 

(f)                                    The Majority Lenders may by notice to an
Agent require it to resign in accordance with paragraph (a) above.  In this
event, the relevant Agent shall resign in accordance with paragraph (a) above
but it shall not be entitled to appoint one of its Affiliates as successor
Agent.

 

(g)                                 UPC Distribution may, if it is unsatisfied
(acting reasonably) with the performance by an Agent of its role as Agent,
following a period of consultation with the relevant Agent of not less than 14
days, by notice to that Agent require it to resign in accordance with paragraph
(a) above.  Such notice must specify the reasons for which UPC Distribution is
seeking the Agent’s resignation, which must be based on reasonable grounds.  In
this event, the relevant Agent shall resign in accordance with paragraph (a)
above but it shall not be entitled to appoint one of its Affiliates as successor
Agent.

 

19.16                 Lenders

 

(a)                                  Each Agent may treat each Lender as a
Lender, entitled to payments under this Agreement and as acting through its
Facility Office(s) until it has received notice from the Lender to the contrary
by not less than five Business Days prior to the relevant payment.

 

(b)                                 Each Lender, on the date on which it becomes
a party to this Agreement, represents to the Facility Agent that it is:

 

(i)                                     either:

 

(A)                              not resident in the United Kingdom for United
Kingdom Tax purposes; or

 

(B)                                a “bank” as defined in section 840A of the
Income and Corporation Taxes Act 1988 and resident in the United Kingdom; and

 

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(ii)                                  beneficially entitled to the interest
payable by the Facility Agent to it under this Agreement,

 

and shall forthwith notify the Facility Agent if either representation ceases to
be correct.

 

(c)                                  Each Facility A Lender, (if it is a
requirement of Dutch law that such Facility A Lender is a Professional Market
Party) represents to the Finance Parties and UPC Distribution on the Effective
Date that it is a Professional Market Party.  Such Lender acknowledges that the
Finance Parties and UPC Distribution have relied upon such representation.

 

(d)                                 Each Facility A Lender shall provide the
Facility Agent with a duly completed and signed Verification Letter by the date
falling 30 days after the Effective Date.  If such Facility A Lender fails to
provide such Verification Letter it shall, within ten Business Days of demand,
indemnify each Obligor and each Finance Party against any cost, loss or
liability incurred by that Obligor or Finance Party as a result of its
representation in paragraph (c) above being incorrect or its failure to comply
with its undertaking in this paragraph (d).

 

19.17                 Separate divisions

 

In acting as an Agent or Lead Arranger, the agency and syndication’s division of
each of the Agents and the Lead Arrangers shall be treated as a separate entity
from its other divisions and departments.  Any information acquired at any time
by either Agent or any Lead Arranger otherwise than in the capacity of Agent or
Lead Arranger through its agency and syndication’s division (whether as
financial adviser to any member of the Borrower Group or otherwise) may be
treated as confidential by the relevant Agent or Lead Arranger and shall not be
deemed to be information possessed by the relevant Agent or Lead Arranger in its
capacity as such.  Each Finance Party acknowledges that each Agent and the Lead
Arrangers may, now or in the future, be in possession of, or provided with,
information relating to the Obligors which has not or will not be provided to
the other Finance Parties.  Each Finance Party agrees that, except as expressly
provided in this Agreement, neither Agent nor any Lead Arranger will be under
any obligation to provide, or be under any liability for failure to provide, any
such information to the other Finance Parties.

 

20.                               FEES

 

20.1                        Commitment fee

 

(a)                                  Subject to paragraph (b) below UPC
Distribution shall pay to the Facility Agent for distribution to each Lender pro
rata to the proportion that the relevant Lender’s Facility A Commitment,
Facility B Commitment or Facility C Commitment bears to the Total Facility A
Commitment, Total Facility B Commitment or Total Facility C Commitment
respectively from time to time a commitment fee (subject to sub-clause (b)
below) computed at the rate of 0.75 per cent. per annum on any undrawn,
uncancelled amount of the Total Facility A Commitment, Total Facility B
Commitment and Total Facility C Commitment, PROVIDED THAT on any day that the
aggregate outstanding Advances exceed 50 per cent. of the aggregate drawn and
undrawn Total Facility A Commitments, Total Facility B Commitments and Total
Facility C Commitments the commitment fee shall be computed at the rate which is
the lower of:

 

(i)                                     50 per cent. of the then applicable
Margin; and

 

(ii)                                  0.50 per cent. per annum,

 

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on any undrawn, uncancelled amount of the Total Facility A Commitment, Total
Facility B Commitment and Total Facility C Commitment.

 

In calculating aggregate outstanding Facility C2 Advances and Total Facility C
Commitments for the purposes of the proviso to this Clause 20.1(a), outstanding
Facility C2 Advances and Facility C2 Commitments shall be converted to euros on
the date of the relevant calculation on the basis of the Agent’s Spot Rate of
Exchange on that date.

 

(b)                                 Commitment fee is calculated and accrues on
a daily basis on and from the Signing Date and is payable quarterly in arrear
from the Signing Date and (in the case of the Total Facility A Commitment) on
the last day of the Facility A Availability Period, (in the case of the Total
Facility B Commitment) on the last day of the Facility B Availability Period and
(in the case of the Total Facility C Commitment) on the last day of the Facility
C Availability Period.  Accrued commitment fee is also payable to the Facility
Agent for the relevant Lender(s) on the cancelled amount of its (their) Facility
A Commitment, Facility B Commitment or Facility C Commitment, as the case may
be, at the time the cancellation takes effect (but only in respect of the period
up to the date of cancellation).

 

(c)                                  Commitment fee is payable in euros in
respect of Facility A, Facility B and Facility C1 and in Dollars in respect of
Facility C2.

 

20.2                        Agents’ fees

 

UPC Distribution shall pay to the Facility Agent and the Security Agent for
their own account an agency fee in the amounts and on the dates agreed in the
relevant Fee Letter.

 

20.3                        Underwriting Fee

 

UPC Distribution shall pay the arrangement fee and underwriting fees in
accordance with the relevant Fee Letter.

 

20.4                        Amendment Fee

 

UPC Distribution will pay to the Facility Agent for distribution to each Lender
the amendment fees set out in the Amendment Fee Letter on the date set out
therein.

 

20.5                        VAT

 

Any fee referred to in this Clause 20 (Fees) is exclusive of any applicable
value added tax.  If any value added tax is so chargeable and is invoiced, it
shall be paid by UPC Distribution at the same time as it pays the relevant fee.
 Where appropriate, the relevant Finance Party will supply a VAT invoice in
respect of such fees.

 

21.                               EXPENSES

 

21.1                        Transaction Expenses

 

UPC Distribution shall within ten Business Days of demand pay JPMorgan Chase
Bank and TD Bank Europe Limited the amount of all costs and expenses (including
legal fees) reasonably incurred by any of them in connection with the
negotiation, preparation, printing, execution, perfection and syndication of:

 

(a)                                  this Agreement and any other documents
referred to in this Agreement; and

 

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(b)                                 any other Finance Document executed after
the date of this Agreement.

 

21.2                        Amendment Costs

 

If:

 

(a)                                  an Obligor requests an amendment, waiver or
consent under or in connection with any Finance Document;

 

(b)                                 an amendment is required under Clause 25.3
(Change of Currency),

 

UPC Distribution shall, within ten Business Days of demand, reimburse the
Facility Agent or, as the case may be, the Security Agent, for the amount of all
costs and expenses (including legal fees) reasonably incurred by the Facility
Agent or, as the case may be, the Security Agent in responding to, evaluating,
negotiating or complying with that request or requirement.

 

21.3                        Enforcement Costs

 

UPC Distribution shall, within ten Business Days of demand, pay to the Facility
Agent on behalf of each Finance Party the amount of all costs and expenses
(including legal fees) incurred by that Finance Party in connection with the
enforcement of, or the preservation of any rights under, any Finance Document.

 

22.                               STAMP DUTIES

 

UPC Distribution shall pay and, within ten Business Days of demand, indemnify
each Finance Party against any cost, loss or liability which that Finance Party
incurs in relation to all stamp duty, registration and other similar Taxes
payable in respect of any Finance Document (other than those imposed by reason
of any assignment or novation by any Finance Party).

 

23.                               INDEMNITIES

 

23.1                        Currency indemnity

 

(a)                                  If any sum due from an Obligor under the
Finance Documents (a Sum), or any order, judgment or award given or made in
relation to a Sum, has to be converted from the currency (the First Currency) in
which that Sum is payable into another currency (the Second Currency) for the
purpose of:

 

(i)                                     making or filing a claim or proof
against that Obligor;

 

(ii)                                  obtaining or enforcing an order, judgment
or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall as an independent obligation, within ten Business Days of
demand, indemnify each Finance Party to whom that Sum is due against any cost,
loss or liability arising out of or as a result of the conversion including any
discrepancy between (A) the rate of exchange used to convert that Sum from the
First Currency into the Second Currency and (B) the rate or rates of exchange
available to that person at the time of its receipt of that Sum.

 

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(b)                                 Each Obligor waives any right it may have in
any jurisdiction to pay any amount under the Finance Documents in a currency or
currency unit other than that in which it is expressed to be payable.

 

23.2                        Other indemnities

 

UPC Distribution shall (or shall procure that an Obligor will), within ten
Business Days of demand, indemnify each Lender against any cost, loss or
liability incurred by that Lender as a result of:

 

(a)                                  the occurrence of any Event of Default;

 

(b)                                 a failure by an Obligor to pay any amount
due under a Finance Document on its due date, including without limitation, any
cost, loss or liability arising as a result of Clause 29 (Pro Rata Sharing);

 

(c)                                  funding, or making arrangements to fund,
its participation in an Advance requested by a Borrower in a Request but not
made by reason of the operation of any one or more of the provisions of this
Agreement (other than by reason of default or negligence by that Lender alone);

 

(d)                                 an Advance (or part of an Advance) not being
prepaid in accordance with a notice of prepayment given by a Borrower; or

 

(e)                                  any representation made by UPC Distribution
under Clause 15.25 (Dutch Banking Act) or Clause 26.2 (Transfers by Lenders)
being incorrect when made or deemed to be made.  UPC Distribution shall not be
liable under this paragraph (e) to any Lender which makes a representation which
is untrue in relation to its status as a Professional Market Party or its status
as part of a closed circle (besloten kring).

 

23.3                        Indemnity to the Facility Agent

 

UPC Distribution shall, within ten Business Days of demand, indemnify the
Facility Agent against any cost, loss or liability incurred by the Facility
Agent (acting reasonably) as a result of:

 

(a)                                  investigating any event which it reasonably
believes is a Default; or

 

(b)                                 acting or relying on any notice, request or
instruction which it reasonably believes to be genuine, correct and
appropriately authorised.

 

23.4                        Break Costs

 

(a)                                  UPC Distribution shall, within ten Business
Days of demand by a Finance Party, pay to that Finance Party its Break Costs
attributable to all or any part of an Advance or Unpaid Sum being paid by that
Borrower on a day other than the last day of an Interest Period for that Advance
or Unpaid Sum.

 

(b)                                 Each Lender shall, as soon as reasonably
practicable after a demand by the Facility Agent, provide a certificate (which
shall be provided to UPC Distribution) confirming the amount of its Break Costs
for any Interest Period in which they accrue.

 

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24.                               EVIDENCE AND CALCULATIONS

 

24.1                        Accounts

 

Accounts maintained by a Finance Party in connection with this Agreement are
prima facie evidence of the matters to which they relate.

 

24.2                        Certificates and determinations

 

Any certification or determination by a Finance Party of a rate or amount
payable under this Agreement or otherwise expressed to be determined by a
Finance Party is, in the absence of manifest error, prima facie evidence of the
matters to which it relates.

 

24.3                        Calculations

 

The interest and the fees payable under Clause 20.1 (Commitment fee) accrue from
day to day and are calculated on the basis of the actual number of days elapsed
and a year of 360 days or, where practice in the London inter-bank market, in
the case of non-euro amounts, or the European interbank market, in the case of
euro amounts, otherwise dictates, 365 days.

 

25.                               AMENDMENTS AND WAIVERS

 

25.1                        Required consents

 

(a)                                  Subject to Clause 25.2 (Exceptions) any
term of the Finance Documents may be amended or waived only with the consent of
the Majority Lenders and UPC Distribution and any such amendment or waiver will
be binding on all Parties.

 

(b)                                 The Facility Agent may effect, on behalf of
any Finance Party, any amendment or waiver permitted by this Clause 25.

 

25.2                        Exceptions

 

(a)                                  An amendment or waiver that has the effect
of changing or which relates to:

 

(i)                                     the definitions of “Majority Lenders” or
“Majority Facility C Lenders” in Clause 1.1 (Definitions);

 

(ii)                                  an extension to the date of payment of any
amount of principal, interest or commitment fees under this Agreement or the
Security Documents or the extension of the Facility A Availability Period,
Facility B Availability Period or Facility C Availability Period;

 

(iii)                               a reduction in the Margin other than in
accordance with Clause 8.10 (Margin) or the amount of any payment of principal,
interest, fees or commission payable under this Agreement or the Security
Documents;

 

(iv)                              an increase in a Lender’s Facility A
Commitment, Facility B Commitment or Facility C Commitment;

 

(v)                                 an assignment, transfer, novation or other
disposal of any of, or any interest in, an Obligor’s rights and/or obligations
under this Agreement other than in accordance with Clause 26 (Changes to the
Parties);

 

(vi)                              any provision which expressly requires the
consent of all the Lenders;

 

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(vii)                           Clause 2.4 (Nature of a Finance Party’s rights
and obligations), Clause 26.2 (Transfers by Lenders) or this Clause 25;

 

(viii)                        a release of the guarantee under Clause 14
(Guarantee) other than in accordance with Clause 26 (Changes to the Parties);

 

(ix)                                the selection of an Interest Period
exceeding six months; or

 

(x)                                   the release of an asset from a Security
Document (except as otherwise expressly permitted herein or in any such Security
Document and except in furtherance of a disposal or any other transaction which
is permitted by any Finance Document),

 

shall not be made without the prior consent of all the Lenders.

 

(b)                                 An amendment or waiver which relates to the
rights or obligations of the Facility Agent or the Lead Arrangers may not be
effected without the consent of the Facility Agent or, as the case may be, the
Lead Arrangers.

 

(c)                                  An amendment or waiver which has the effect
of changing or relates to Clause 7.10 (Facility C Call protection) may not be
effected without the consent of the Majority Facility C Lenders.

 

(d)                                 The Facility Agent may agree with UPC
Distribution any amendment to or the modification of the provisions of any of
the Finance Documents or any schedule thereto, which is necessary to correct a
manifest error.

 

(e)                                  If authorised by the Majority Lenders, the
Security Agent may, subject to paragraph (a) above, grant any waiver or consent
in relation to, or variation of the material provisions of, any Security
Document.

 

25.3                        Change of Currency

 

(a)                                  If more than one currency or currency unit
are at the same time recognised by the central bank of any country as the lawful
currency of that country, then:

 

(i)                                     any reference in the Finance Documents
to, and any obligations arising under the Finance Documents in, the currency of
that country shall be translated into, or paid in, the currency  or currency
unit of that country designated by the Agent; and

 

(ii)                                  any translation from one currency or
currency unit to another shall be at the official conversion rate recognised by
the central bank for the conversion of that currency or currency unit into the
other, rounded up or down by the Agent acting reasonably.

 

(b)                                 If a change in any currency of a country
occurs, this Agreement will be amended to the extent the Agent specifies to be
necessary to reflect the change in currency and to put the Banks in the same
position, so far as possible, that they would have been in if no change in
currency had occurred.

 

25.4                        Waivers and remedies cumulative

 

The rights of each Party under the Finance Documents:

 

(a)                                  may be exercised as often as necessary,
subject to the terms of the relevant Finance Documents;

 

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(b)                                 are cumulative and not exclusive of its
rights under the general law; and

 

(c)                                  may be waived only in writing and
specifically.

 

Delay in the exercise or non-exercise of any such right is not a waiver of that
right.

 

26.                               CHANGES TO THE PARTIES

 

26.1                        Transfers by Obligors

 

(a)                                  No Obligor may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations under this
Agreement, except:

 

(i)                                     pursuant to a merger in accordance with
Clause 16.11(d) (Acquisitions and mergers); and

 

(ii)                                  that UPC Distribution Holdco (Existing UPC
Distribution Holdco) may at any time assign, transfer, novate or dispose of all
of its rights and obligations under this Agreement and the other Finance
Documents to which it is a party to another person which is the immediate
Holding Company of UPC Distribution (New UPC Distribution Holdco) in accordance
with the terms of this Agreement and the terms of such other Finance Document,
provided that any transfer or novation of obligations by Existing UPC
Distribution Holdco will not be effective until New UPC Distribution Holdco has
become an Additional Guarantor in accordance with Clause 26.4 (Additional
Guarantors) and has delivered or delivers the documents specified in Clause
26.4(a)(iv) (Additional Guarantors).

 

(b)                                 At the time the foregoing conditions for the
transfer or novation of Existing UPC Distribution Holdco’s obligations shall
have been satisfied (or waived, as the case may be) and such transfer or
novation has taken effect:

 

(i)                                     Existing UPC Distribution Holdco will be
released from its obligations under this Agreement and the other Finance
Documents, without prejudice to any such obligations which may have accrued and
shall not have been discharged prior to such time; and

 

(ii)                                  Existing UPC Distribution Holdco will
cease to be an Original Guarantor.

 

26.2                        Transfers by Lenders

 

(a)                                  A Lender (the Existing Lender) may at any
time assign, transfer or novate any of its rights and/or obligations under this
Agreement and the other Finance Documents to another person (the New Lender),
provided that:

 

(i)                                     in the case of a partial assignment,
transfer or novation of rights and/or obligations, such assignment, transfer or
novation shall be in a minimum amount (in relation to Facility A Commitment) of
€5,000,000, or (in relation to Facility B Commitment) of €1,000,000, or (in
relation to Facility C Commitment) of $1,000,000, or its euro equivalent (save
that in the case of a partial assignment, transfer or novation by a Facility C
Lender of its rights and/or obligations under Facility C to an Affiliate or
Related Fund of that Facility C Lender, such assignment, transfer or novation
shall be in a minimum amount (in relation to Facility C Commitment) of $500,000
or its euro equivalent);

 

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(ii)                                     if an Existing Lender is both a
Facility B Lender and holds undrawn commitments under New Facility D and that
Existing Lender assigns, transfers or novates any of its rights and/or
obligations in respect of Facility B to a New Lender that Existing Lender shall
also assign transfer or novate its undrawn commitments under New Facility D, in
accordance with clause 26.3 (Transfers to Lenders) and clause 26.3 (Procedure
for novation) of the New Facility Agreement to the extent necessary to ensure
that it and the New Lender (to the extent it is or becomes a lender under New
Facility D) are and remain in compliance with clause 26.2(a)(ii) of the New
Facility Agreement; and

 

(iii)                                  if immediately prior to the time of the
proposed assignment, transfer or novation becoming effective it is a requirement
of Dutch law, the New Lender (A) is a Professional Market Party or exempted from
the requirement to be a Professional Market Party because it forms part of a
closed circle (besloten kring) with UPC Distribution and makes the
representation in paragraph 2 of the Novation Certificate (as defined below) and
(B) delivers a duly completed and executed Verification Letter to UPC
Distribution.

 

(b)                                 The prior consent of UPC Distribution is
required for any such assignment, transfer or novation (unless to an Affiliate
or to a Lender, but without prejudice to Clause 26.2(a)), provided that:

 

(i)                                     UPC Distribution’s consent must not be
unreasonably withheld or delayed;

 

(ii)                                  the consent of UPC Distribution to an
assignment, transfer or novation must not be withheld solely because the
assignment, novation or transfer may result in an increase to the Mandatory
Cost;

 

(iii)                               the prior consent of UPC Distribution is not
required when (A) the assignment, novation or transfer of a Lender’s rights
and/or obligations is to an Affiliate or Related Fund of that Lender or (B) an
Event of Default is outstanding;

 

(iv)                              nothing in this Clause 26.2 restricts the
ability of any Lender to enter into any sub-participation or other arrangement
with any third party relating to the Finance Documents which does not transfer
to that third party any obligation and/or legal or equitable interest in any of
the rights arising under this Agreement.

 

(c)                                  A transfer of obligations will be effective
only if the obligations are novated in accordance with Clause 26.3 (Procedure
for novations).

 

(d)                                 On each occasion an Existing Lender assigns,
transfers or novates any of its rights and/or obligations under this Agreement
(other than to an Affiliate or Related Fund of that Existing Lender), the New
Lender shall, on the date the assignment, transfer and/or novation takes effect,
pay to the Facility Agent for its own account a fee of €1,500 (in relation to
Facility A, Facility B or Facility C1) or US$3,500 (in relation to Facility C2);
provided that, in the case of contemporaneous assignments by a Lender under
Facility C2 to more than one fund managed by the same investment adviser (which
funds are not then Lenders hereunder), only a single such US$3,500 fee shall be
payable for all such contemporaneous assignments.

 

(e)                                  An Existing Lender is not responsible to a
New Lender for:

 

(i)                                     the execution, genuineness, validity,
enforceability or sufficiency of any Finance Document or any other document;

 

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(ii)                                  the collectability of amounts payable
under any Finance Document; or

 

(iii)                               the accuracy of any statements (whether
written or oral) made in connection with any Finance Document.

 

(f)                                    Each New Lender confirms to the Existing
Lender and the other Finance Parties that it:

 

(i)                                     has made its own independent
investigation and assessment of the financial condition and affairs of each
Obligor and its related entities in connection with its participation in this
Agreement and has not relied exclusively on any information provided to it by
the Existing Lender in connection with any Finance Document; and

 

(ii)                                  will continue to make its own independent
appraisal of the creditworthiness of each Obligor and its related entities while
any amount is or may be outstanding under this Agreement or any Facility A
Commitment, Facility B Commitment or Facility C Commitment is in force.

 

(g)                                 Nothing in any Finance Document obliges an
Existing Lender to:

 

(i)                                     accept a re-transfer from a New Lender
of any of the rights and/or obligations assigned, transferred or novated under
this Clause 26; or

 

(ii)                                  support any losses incurred by the New
Lender by reason of the non-performance by any Obligor of its obligations under
this Agreement or otherwise.

 

(h)                                 Any reference in this Agreement to a Lender
includes a New Lender (to the extent rights have been assigned, transferred or
novated to that New Lender and to the extent that obligations have been assumed
by the New Lender) but excludes a Lender if no amount is or may be owed to or by
it under this Agreement and its Facility A Commitment (if any), Facility B
Commitment (if any), and Facility C Commitment (if any) has been cancelled or
reduced to nil.

 

(i)                                     If any assignment, transfer or novation
results, or will result by reason of circumstances existing at the time of the
assignment, transfer or novation, in additional amounts becoming due under
Clause 10 (Tax Gross-up and Indemnities) or amounts becoming due under Clause 12
(Increased Costs), the New Lender shall be entitled to receive such additional
amounts only to the extent that the Existing Lender would have been so entitled
had there been no such assignment, transfer or novation.

 

(j)                                     Any Facility C Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release a Lender from any
of its obligations under this Agreement or substitute any such pledgee or
assignee for such Facility C Lender as a party hereto.

 

(k)                                  On the date that a New Lender becomes a
party to this Agreement as a Lender UPC Distribution represents and warrants
that on that date it has verified the status of that New Lender either as:

 

(i)                                     a Professional Market Party; or

 

(ii)                                  exempted from the requirement to be a
Professional Market Party because it forms part of a closed circle (besloten
kring) with UPC Distribution,

 

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by obtaining a duly completed and signed Verification Letter.

 

26.3                        Procedure for novations

 

(a)                                  A novation is effected if:

 

(i)                                     the Existing Lender and the New Lender
deliver to the Facility Agent a duly completed certificate (a Novation
Certificate), substantially in the form of Part 1 of Schedule 5 (Novation
Certificate), with, for the purposes of primary syndication of the Facilities or
to facilitate novations of Facility C2 Advances (and Facility C2 Commitments, if
applicable), such amendments as the Facility Agent approves to achieve a
substantially similar effect; and

 

(ii)                                  the Facility Agent executes it (which the
Facility Agent shall promptly do).

 

(b)                                 Each Finance Party (other than the Existing
Lender and the New Lender) irrevocably authorises the Facility Agent to execute
any duly completed Novation Certificate on its behalf if that Novation
Certificate effects a novation permitted by Clause 26.2 (Transfers by Lenders).

 

(c)                                  To the extent that they are expressed to be
the subject of the novation in the Novation Certificate:

 

(i)                                     the Existing Lender and the other
Parties (the existing Parties) will be released from their obligations to each
other (the discharged obligations);

 

(ii)                                  the New Lender and the existing Parties
will assume obligations towards each other which differ from the discharged
obligations only insofar as they are owed to or assumed by the New Lender
instead of the Existing Lender;

 

(iii)                               the rights of the Existing Lender against
the existing Parties and vice versa (the discharged rights) will be cancelled;

 

(iv)                              the New Lender and the existing Parties will
acquire rights against each other which differ from the discharged rights only
insofar as they are exercisable by or against the New Lender instead of the
Existing Lender; and

 

(v)                                 the New Lender shall become, by the
execution by the Facility Agent of such Novation Certificate, bound by the terms
of the Security Deed as if it were an original party thereto as a Senior
Beneficiary and shall acquire the same rights and assume the same obligations
towards the other parties to the Security Deed as would have been acquired and
assumed had the New Lender been an original party to the Security Deed as a
Senior Beneficiary,

 

all on the later of (i) five Business Days after receipt of a Verification
Letter accompanied by a Novation Certificate executed by the Existing Lender and
the New Lender; (ii) the date of execution of such Novation Certificate by the
Facility Agent; and (iii) the date specified in the Novation Certificate.

 

(d)                                 If the effective date of a novation is after
the date a Request is received by the Facility Agent but before the date the
requested Advance is disbursed to the relevant Borrower, the Existing Lender
shall be obliged to participate in that Advance in respect of its discharged
obligations notwithstanding that novation, and the New Lender shall reimburse
the Existing Lender for its participation in that Advance and all interest and
fees thereon up to the date of reimbursement

 

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(in each case to the extent attributable to the discharged obligations) within
three Business Days of the Utilisation Date of that Advance.

 

26.4                        Additional Guarantors

 

(a)                                  (i)                                    
Subject to paragraph (b) below, a Subsidiary of UPC Distribution may become an
Additional Guarantor by delivering to the Facility Agent a Guarantor Accession
Agreement, duly executed by that company.

 

(ii)                                  A person which (a) becomes the immediate
Holding Company of UPC Distribution or (b) becomes an Additional Obligor under
the New Facility Agreement shall, prior to or contemporaneously with becoming
such Holding Company or Additional Obligor (as applicable), become an Additional
Guarantor by delivering to the Facility Agent a Guarantor Accession Agreement,
duly executed by that company.

 

(iii)                               Upon execution and delivery of a Guarantor
Accession Agreement and delivery of the documents specified in sub-paragraph
(iv) below, the relevant Subsidiary or person referred to in sub-paragraph (i)
or (ii) above will become an Additional Guarantor.

 

(iv)                              UPC Distribution shall procure that, at the
same time as a Guarantor Accession Agreement is delivered to the Facility Agent,
there is also delivered to the Facility Agent all those documents listed in Part
2 of Schedule 2 (Conditions Precedent Documents), in each case in form and
substance satisfactory to the Facility Agent (acting reasonably).

 

(v)                                 The Guarantor Accession Agreement referred
to in sub-paragraph (i) above may, with the prior written approval of the
Facility Agent, include a limitation of the obligations or liabilities of the
relevant Additional Guarantor under Clause 14 (Guarantee) where such limitation
is required by any applicable law.

 

(b)                                 UPC Distribution shall:

 

(i)                                     procure that at all times the value of
the aggregate EBITDA, total assets and total revenues of:

 

(A)                              the Guarantors as of the Effective Date (other
than, UPC Distribution, any UPC Distribution Holdco, UPC Holding and UPC Holding
II) and their respective Subsidiaries (as calculated by reference to the
relevant financial statements most recently provided under Clause 16.2(a) or (b)
(Financial information)); and

 

(B)                                any Additional Guarantors which have become
Guarantors since the Effective Date and their respective Subsidiaries (as
calculated by reference to the relevant financial statements most recently
provided under Clause 16.2(a) or (b) (Financial information) or, if no such
financial statements have been provided in respect of such Additional
Guarantors, as calculated by reference to the financial statements referred to
in paragraph 11 of Part 2 of Schedule 2 (Conditions Precedent Documents)
provided under Clause 26.4(a)(iii) (Additional Guarantors) in respect of each
Additional Guarantor),

 

is equal to or greater than 95 per cent. of the Borrower Group’s consolidated
EBITDA, total assets and total revenues (as calculated by reference to the
relevant financial statements most recently provided under Clause 16.2(a) or (b)
(Financial

 

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information)), if necessary by procuring that additional Subsidiaries of UPC
Distribution become Additional Guarantors; and

 

(ii)                                  consult with the Facility Agent prior to
any entity becoming an Additional Guarantor in order to ensure that no material
adverse change would or be reasonably likely to occur, as a result of such
entity becoming an Additional Guarantor, in the consolidated financial position
of the Borrower Group (taken as a whole) which would or be reasonably likely to
have a Material Adverse Effect.

 

(c)                                  UPC Distribution represents and warrants to
the Finance Parties that it is in compliance with paragraph (b) above as of the
Effective Date (all relevant calculations being made by reference to the
financial statements most recently provided under Clause 16.2(a) or (b)
(Financial Information).

 

(d)                                 After the Effective Date, UPC Distribution
shall be in compliance with its obligations under paragraph (b) above if it
procures that any of its Subsidiaries which are required to become Additional
Guarantors do so within 60 days after the delivery to the Facility Agent of any
financial statements delivered under Clause 16.2(a) or (b) (Financial
information) which demonstrate that additional Subsidiaries of UPC Distribution
are required to be become Additional Guarantors under paragraph (b).

 

(e)                                  The execution of a Guarantor Accession
Agreement constitutes confirmation by the relevant Additional Guarantor that the
relevant representations and warranties set out in Clause 15 (Representations
and Warranties) to be made by it on the date of the Guarantor Accession
Agreement are correct, as if made with reference to the facts and circumstances
then existing.

 

26.5                        Reference Banks

 

(a)                                  If a Reference Bank ceases to be a Lender,
the Facility Agent shall (after consulting with UPC Distribution) appoint
another Lender which is not a Reference Bank to replace that Reference Bank.

 

(b)                                 UPC Distribution and the Facility Agent may
agree to add one or more additional Reference Bank(s) from among the Lenders.

 

26.6                        Register

 

The Facility Agent shall maintain at its address referred to in Clause 32.2(b)
(Addresses for notices) a copy of each Novation Certificate delivered to and
accepted by it and a register of the names and addresses all the Parties
including, in the case of Lenders, their Commitments under each Facility, the
principal amount of the Advances owing under each Facility to each Lender from
time to time and the details of their Facility Office notified to the Facility
Agent from time to time, and shall supply any other Party (at that Party’s
expense) with a copy of the register on request.  The entries in such register
shall be conclusive and binding for all purposes, absent manifest error, and the
Obligors, the Facility Agent and the Lenders shall treat each person whose name
is recorded in the register as a Lender hereunder for all purposes of this
Agreement.

 

27.                               DISCLOSURE OF INFORMATION

 

(a)                                  Any Lender may disclose to any of its
Affiliates and any other person:

 

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(i)                                     to (or through) whom that Lender assigns
or transfers (or may potentially assign or transfer) all or any of its rights
and obligations under this Agreement;

 

(ii)                                  with (or through) whom that Lender enters
into (or may potentially enter into) any sub-participation in relation to, or
any other transaction under which payments are to be made by reference to, this
Agreement or any Obligor; or

 

(iii)                               to whom, and to the extent that, information
is required to be disclosed by any applicable law or regulation,

 

any information about any Obligor, the Borrower Group and the Finance Documents
as that Lender shall consider appropriate (acting reasonably) if, in relation to
sub-paragraphs (i) and (ii) above, the person to whom the information is to be
given has entered into a Confidentiality Undertaking.

 

(b)                                 Notwithstanding any other provision of this
Agreement, any Party to this Agreement (and any of its affiliates, officers,
directors, employees, representatives, professional advisers, or other agents)
may (and has since the commencement of discussions with respect to the Facility
been permitted to) disclose to any and all persons, without limitation of any
kind:

 

(i)                                     the U.S. tax treatment and U.S. tax
structure (each as defined below) of the Facility; and

 

(ii)                                  all material of any kind (including
opinions and other tax analyses) that are provided to such party relating to
such U.S. tax treatment or U.S. tax structure,

 

except to the extent reasonably necessary to comply with applicable federal or
state securities laws.

 

For the purposes of this subsection, the U.S. tax treatment of the Facility is
the purported or claimed U.S. federal, state and local income tax treatment of
the Facility, and the U.S. tax structure of the Facility is any fact that may be
relevant to understanding the purported or claimed U.S. federal, state and local
income tax treatment of the Facility.  This authorisation is not intended to
permit disclosure of any information (other than information relating to US tax
treatment or US tax structure of the Facility) including (without limitation)
(i) any portion of any materials to the extent not related to the U.S. tax
treatment or U.S. tax structure of the Facility, (ii) the identities of
participants or potential participants in the Facility (except to the extent
such identities are related to the tax treatment or the U.S. tax structure of
the Facility), (iii) the existence or status of any negotiations, (iv) any
pricing or financial information (except to the extent such pricing or financial
information is related to the U.S. tax treatment or the U.S. tax structure of
the Facility), or (v) any other term or detail not relevant to the U.S. tax
treatment or the U.S. tax structure of the Facility.

 

28.                               SET-OFF

 

28.1                        Contractual set-off

 

A Finance Party may set off any matured obligation owed by an Obligor under the
Finance Documents (to the extent beneficially owned by that Finance Party)
against any matured obligation owed by that Finance Party to that Obligor,
regardless of the place of payment, booking branch or currency of either
obligation.  If the obligations are in different currencies,

 

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the Finance Party may convert either obligation at a market rate of exchange in
its usual course of business for the purpose of the set-off.

 

28.2                        Set-off not mandatory

 

No Finance Party shall be obliged to exercise any right given to it by Clause
28.1 (Contractual set-off).

 

28.3                        Notice of set-off

 

Any Finance Party exercising its rights under Clause 28.1 (Contractual set-off)
shall notify the relevant Obligor promptly after set-off is applied.

 

29.                               PRO RATA SHARING

 

29.1                        Redistribution

 

If any amount owing by an Obligor under any Finance Document to a Finance Party
(the recovering Finance Party) is discharged by payment, set-off or any other
manner other than through the Facility Agent in accordance with Clause 9
(Payments) (a recovery), then:

 

(a)                                  the recovering Finance Party shall, within
three Business Days, notify details of the recovery to the Facility Agent;

 

(b)                                 the Facility Agent shall determine whether
the recovery is in excess of the amount which the recovering Finance Party would
have received had the recovery been received by the Facility Agent and
distributed in accordance with Clause 9 (Payments);

 

(c)                                  subject to Clause 29.3 (Exceptions), the
recovering Finance Party shall, within three Business Days of demand by the
Facility Agent, pay to the Facility Agent an amount (the redistribution) equal
to the excess;

 

(d)                                 the Facility Agent shall treat the
redistribution as if it were a payment by the Obligor concerned under Clause 9
(Payments) and shall pay the redistribution to the Finance Parties (other than
the recovering Finance Party) in accordance with Clause 9.7 (Partial payments);
and

 

(e)                                  after payment of the full redistribution,
the recovering Finance Party will be subrogated to the portion of the claims
paid under paragraph (d) above, and that Obligor will owe the recovering Finance
Party a debt which is equal to the redistribution, immediately payable and of
the type originally discharged.

 

29.2                        Reversal of redistribution

 

If under Clause 29.1 (Redistribution):

 

(a)                                  a recovering Finance Party must
subsequently return a recovery, or an amount measured by reference to a
recovery, to an Obligor; and

 

(b)                                 the recovering Finance Party has paid a
redistribution in relation to that recovery,

 

each Finance Party shall, within three Business Days of demand by the recovering
Finance Party through the Facility Agent, reimburse the recovering Finance Party
all or the

 

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appropriate portion of the redistribution paid to that Finance Party.  Thereupon
the subrogation in Clause 29.1(e) (Redistribution) will operate in reverse to
the extent of the reimbursement.

 

Each Finance Party agrees with the Facility Agent that it will comply with any
notice given to it by the Facility Agent under this Clause 29.2.

 

29.3                        Exceptions

 

(a)                                  A recovering Finance Party need not pay a
redistribution to the extent that it would not, after the payment, have a valid
claim against the Obligor concerned in the amount of the redistribution pursuant
to Clause 29.1(e) (Redistribution).

 

(b)                                 A recovering Finance Party is not obliged to
share with any other Finance Party any amount which the recovering Finance Party
has received or recovered as a result of taking legal proceedings, if the other
Finance Party had an opportunity to participate in those legal proceedings but
did not do so and did not take separate legal proceedings.

 

30.                               SEVERABILITY

 

If a provision of any Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:

 

(a)                                  the legality, validity or enforceability in
that jurisdiction of any other provision of the Finance Documents; or

 

(b)                                 the legality, validity or enforceability in
other jurisdictions of that or any other provision of the Finance Documents.

 

31.                               COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of
this Agreement.

 

32.                               NOTICES

 

32.1                        Giving of notices

 

All notices or other communications under or in connection with this Agreement
shall be given in writing and, unless stated, may be made by letter, telex or
facsimile or (to the extent that (i) the relevant Party has specified such an
address pursuant to Clause 32.2 (Addresses for notices) and (ii) such notice or
communication is not required to be signed by an Authorised Signatory, other
officer or board of the relevant entity and the form of such notice or
communication does not provide for signature by an Authorised Signatory, other
officer or board of the relevant entity) by e-mail.  Any such notice will be
deemed to be given as follows:

 

(a)                                  if by letter, when delivered personally or
on actual receipt; and

 

(b)                                 if by facsimile or e-mail, when received in
legible form.

 

However, a notice given in accordance with the above but received on a
non-working day or after business hours in the place of receipt will only be
deemed to be given on the next working day in that place.

 

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32.2                        Addresses for notices

 

(a)                                  The address and facsimile number and (if so
specified) e-mail address of each Party (other than the Facility Agent and the
Borrowers) for all notices under or in connection with this Agreement are:

 

(i)                                     that notified by that Party for this
purpose to the Facility Agent on or before it becomes a Party; or

 

(ii)                                  any other notified by that Party for this
purpose to the Facility Agent by not less than five Business Days’ notice.

 

(b)                                 The address, facsimile numbers and e-mail
address of the Facility Agent and the Security Agent are:

 

TD Bank Europe Limited

Triton Court

14/18 Finsbury Square

London EC2A 1DB

 

 

 

Contact:

 

Rory McCarthy

 

 

 

Facsimile:

 

+44 20 7638 0006

 

 

 

E-mail:

 

rory.mccarthy@tdsecurities.com

 

 

 

in the case of notices relating to Facility C2 only:

 

 

 

Toronto Dominion (Texas), Inc.,

909 Fannin Street, Suite 1700

Houston, Texas 77010

 

 

 

Attention:

 

Jim Bridwell

 

 

 

Facsimile:

 

+1 713 951 9921

 

 

 

Email:

 

jimmie.bridwell@tdsecurities.com

 

 

 

and in each case with a copy to:

 

 

 

TD Bank Europe Limited

Royal Trust Tower

77 King Street West,

18th Floor

Toronto

Ontario, Canada

M5K 1A2

 

 

 

Contact:

 

Marc Scaeffer/Parin Kanji

 

 

 

Facsimile:

 

+1 416 982 6630

 

or such other as the Facility Agent may notify to the other Parties by not less
than five Business Days’ notice.

 

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(c)                                  The address, facsimile numbers and e-mail
address of each Borrower are:

 

UPC Distribution Holding B.V.
Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam

 

Contact:                                                   Dennis Okhuijsen

 

Facsimile:                                            + 3120 778 9453; and

 

E-mail:                                                            
dokhuijsen@UPCcorp.com

 

UPC Financing Partnership

 

c/o UPC Distribution

 

Contact:                                                   Dennis Okhuijsen

 

Facsimile:                                            + 3120 778 9453

 

E-mail:                                                            
dokhuijsen@UPCcorp.com

 

or such other as the relevant Borrower may notify to the other Parties by not
less than five Business Days’ notice.

 

(d)                                 The Facility Agent shall, promptly upon
request from any Party, give to that Party the address, facsimile number or
e-mail address (if applicable) of any other Party applicable at the time for the
purposes of this Clause 32.

 

33.                               LANGUAGE

 

(a)                                  Any notice given under or in connection
with any Finance Document shall be in English.

 

(b)                                 All other documents provided under or in
connection with any Finance Document shall be:

 

(i)                                     in English; or

 

(ii)                                  if not in English and the Facility Agent
so requests, accompanied by a certified English translation and, in this case,
the English translation shall prevail unless the document is a statutory or
other official document.

 

34.                               JURISDICTION

 

34.1                        Submission

 

For the benefit of each Finance Party, each Obligor agrees that the courts of
England have jurisdiction to settle any disputes in connection with any Finance
Document (other than any Security Document expressed to be governed by laws
other than the laws of England) and accordingly submits to the jurisdiction of
the English courts.

 

34.2                        Service of process

 

Without prejudice to any other mode of service, each Obligor which is not
incorporated in England and Wales:

 

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(a)                                  irrevocably appoints UPC Services Ltd, 4th
Floor, Michelen House, 81 Fulham Road, London, SW3 6RD as its agent for service
of process relating to any proceedings before the English courts in connection
with any Finance Document;

 

(b)                                 agrees to maintain an agent for service of
process in England until all Facility A Commitments, Facility B Commitments and
Facility C Commitments have terminated and the Advances and all other amounts
payable under the Finance Documents have been finally, irrevocably and
indefeasibly repaid in full;

 

(c)                                  agrees that failure by a process agent to
notify the Obligor of the process will not invalidate the proceedings concerned;

 

(d)                                 consents to the service of process relating
to any such proceedings by prepaid posting of a copy of the process to its
address for the time being applying under Clause 32.2 (Addresses for notices);
and

 

(e)                                  agrees that if the appointment of any
person mentioned in paragraph (a) above ceases to be effective, the relevant
Obligor shall immediately appoint a further person in England to accept service
of process on its behalf in England and, failing such appointment within 15
days, the Facility Agent is entitled and authorised to appoint a process agent
for the Obligor by notice to the Obligor.

 

34.3                        Forum convenience and enforcement abroad

 

Each Obligor:

 

(a)                                  waives objection to the English courts on
grounds of inconvenient forum or otherwise as regards proceedings in connection
with a Finance Document; and

 

(b)                                 agrees that a judgment or order of an
English court in connection with a Finance Document is conclusive and binding on
it and may be enforced against it in the courts of any other jurisdiction.

 

34.4                        Non-exclusivity

 

Nothing in this Clause 34 limits the right of a Finance Party to bring
proceedings against an Obligor in connection with any Finance Document:

 

(a)                                  in any other court of competent
jurisdiction; or

 

(b)                                 concurrently in more than one jurisdiction.

 

35.                               WAIVER OR IMMUNITY

 

Each Obligor irrevocably and unconditionally:

 

(a)                                  agrees that if a Finance Party brings
proceedings against it or its assets in relation to a Finance Document, no
immunity from those proceedings (including, without limitation, suit, attachment
prior to judgment, other attachment, the obtaining of judgment, execution or
other enforcement) will be claimed by or on behalf of itself or with respect to
its assets;

 

(b)                                 waives any such right of immunity which it
or its assets now has or may subsequently acquire; and

 

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(c)                                  consents generally in respect of any such
proceedings to the giving of any relief or the issue of any process in
connection with those proceedings, including, without limitation, the making,
enforcement or execution against any assets whatsoever (irrespective of its use
or intended use) of any order or judgment which may be made or given in those
proceedings.

 

36.                               WAIVER OF TRIAL BY JURY

 

EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION IN CONNECTION WITH ANY FINANCE DOCUMENT OR ANY TRANSACTION CONTEMPLATED
BY ANY FINANCE DOCUMENT.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
TRIAL BY THE COURT.

 

37.                               GOVERNING LAW

 

This Agreement is governed by and construed in accordance with English law.

 

This Agreement has been entered into on the date stated at the beginning of this
Agreement.

 

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SCHEDULE 1

 

ORIGINAL PARTIES

 

PART 1

 

ORIGINAL GUARANTORS

 

Name

 

Address

 

 

 

UPC Financing Partnership

 

4643 South Ulster Street
Suite 1300
Denver, Co 80237
United States

 

 

 

UPC Distribution Holding B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

UPC Holding II B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

UPC Holding B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

UPC France Holding B.V

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

UPC Scandinavia Holding B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

Cable Network Austria Holding B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

 

 

Stipdon Investments B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

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UPC Nederland B.V.

 

Boeing Avenue 53
1119 PE Schiphol Rijk
Amsterdam
The Netherlands

 

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PART 2

 

ORIGINAL LENDERS AND COMMITMENTS

 

Lender

 

Facility A Commitments

 

Facility B Commitments

 

Facility C1 Commitments

 

Facility C2 Commitments

 

 

 

(€)

 

(€)

 

(€)

 

(US$)

 

The Chase Manhattan Bank

 

102,857,145

 

377,142,855

 

 

 

 

 

The Toronto-Dominion Bank

 

102,857,145

 

377,142,855

 

 

 

 

 

Toronto Dominion (Texas), Inc.,

 

 

 

 

 

 

 

295,400,000

 

ABN AMRO Bank N.V.

 

37,500,000

 

137,500,000

 

 

 

 

 

BNP Paribas, Belgian Branch

 

37,500,000

 

137,500,000

 

 

 

 

 

CIBC World Markets plc

 

37,500,000

 

137,500,000

 

 

 

 

 

Crédit Lyonnais S.A.

 

37,500,000

 

137,500,000

 

 

 

 

 

Fortis Bank (Nederland) N.V.

 

37,500,000

 

137,500,000

 

 

 

 

 

N.B. International Finance B.V.

 

37,500,000

 

137,500,000

 

 

 

 

 

The Royal Bank of Scotland plc

 

37,500,000

 

137,500,000

 

 

 

 

 

Abbey National Treasury Services plc

 

7,500,000

 

27,500,000

 

5,000,000

 

 

 

Lehman Commercial Paper Inc

 

 

 

 

 

 

 

5,000,000

 

Banca Commerciale Italiana S.p.A.

 

21,428,571

 

78,571,429

 

 

 

 

 

Bear Stearns Corporate Lending Inc.

 

21,428,571

 

78,571,429

 

 

 

 

 

 

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Lender

 

Facility A Commitments

 

Facility B Commitments

 

Facility C1 Commitments

 

Facility C2 Commitments

 

 

 

(€)

 

(€)

 

(€)

 

(US$)

 

Citibank, N.A.

 

21,428,571

 

78,571,429

 

 

 

 

 

Credit Suisse First Boston

 

10,714,286

 

39,285,714

 

50,000,000

 

 

 

Daimler Chrysler Capital Services (Debis)

 

6,428,571

 

23,571,429

 

10,000,000

 

 

 

DLJ Capital Funding, Inc.

 

21,428,571

 

78,571,429

 

 

 

 

 

Dresdner Bank AG, London Branch

 

17,142,857

 

62,857,143

 

 

 

 

 

Goldman Sachs Credit Partners, L.P.

 

21,428,571

 

78,571,429

 

 

 

 

 

Goldman Sachs Credit Partners, L.P.

 

 

 

 

 

 

 

8,000,000

 

The Governor and Company of the Bank of Scotland

 

17,142,857

 

62,857,143

 

 

 

 

 

Harbourmaster Loan Corporation B.V.

 

 

 

 

 

 

 

15,000,000

 

IBM Nederland Financieringen B.V.

 

3,214,286

 

11,785,714

 

 

 

 

 

ING Bank N.V.

 

21,428,571

 

78,571,429

 

 

 

 

 

Eurocredit CDO I, B.V. and Eurocredit CDO II, B.V.

 

 

 

 

 

 

 

15,000,000

 

KBC Bank NV

 

5,357,143

 

19,642,857

 

 

 

 

 

Merrill Lynch Capital Corporation

 

21,428,571

 

78,571,429

 

 

 

 

 

 

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Lender

 

Facility A Commitments

 

Facility B Commitments

 

Facility C1 Commitments

 

Facility C2 Commitments

 

 

 

(€)

 

(€)

 

(€)

 

(US$)

 

Debt Strategies Fund III, Inc.

 

 

 

 

 

 

 

820,000

 

Debt Strategies Fund II, Inc.

 

 

 

 

 

 

 

4,200,000

 

Debt Strategies Fund, Inc.

 

 

 

 

 

 

 

1,800,000

 

Senior High Income Portfolio, Inc.

 

 

 

 

 

 

 

3,180,000

 

Morgan Stanley Senior Funding, Inc.

 

21,428,571

 

78,571,429

 

 

 

 

 

Oppenheimer Senior Floating Rate Fund

 

 

 

 

 

 

 

4,100,000

 

Scotiabank Europe plc

 

21,428,571

 

8,571,429

 

 

 

 

 

Van Kampen Prime Rate Income Trust

 

 

 

 

 

 

 

15,000,000

 

Van Kampen Senior Income Trust

 

 

 

 

 

 

 

10,000,000

 

UBS AG, London Branch

 

21,428,571

 

78,571,429

 

 

 

 

 

Total

 

€

750,000,000

 

€

2,750,000,000

 

€

95,000,000

 

US$347,500,000

 

 

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SCHEDULE 2

 

CONDITIONS PRECEDENT DOCUMENTS

 

PART 1

 

TO BE DELIVERED BEFORE THE FIRST ADVANCE

 

1.                                      Constitutional Documents

 

A copy of the memorandum and articles of association and certificate of
incorporation of each Obligor (other than the US Borrower) and the partnership
agreement  in relation to the US Borrower.

 

2.                                      Authorisations

 

(a)                                  A copy of an extract of a resolution of the
board of directors (or equivalent) of each Obligor:

 

(i)                                     approving the terms of, and the
transactions contemplated by, the Finance Documents to which it is a party
(including, in the case of each Guarantor, the giving of the guarantee under
Clause 14 (Guarantee)) and resolving that it execute and, where applicable,
deliver the Finance Documents;

 

(ii)                                  authorising a specified person or persons
to execute and, where applicable, deliver the Finance Documents to which it is a
party on its behalf; and

 

(iii)                               authorising a specified person or persons,
on its behalf, to sign and/or despatch all documents and notices (including
Requests) to be signed and/or despatched by it under or in connection with the
Finance Documents to which it is a party;

 

(b)                                 a specimen of the signature of each person
authorised by the resolutions referred to in paragraph (a) above;

 

(c)                                  certificate of an authorised signatory of
each of UPC Distribution and the US Borrower respectively certifying that each
copy of the documents specified in Part 1 of this Schedule 2 and supplied by UPC
Distribution or the US Borrower (as the case may be) is a true copy and in full
force and effect as at a date no earlier than the Signing Date; and

 

(d)                                 Evidence that all of the requirements of
Section 25 of the Netherlands Works Council Act (Wet op de Ondernemingsraden) in
connection with the transactions contemplated by the Finance Documents have been
complied with.

 

3.                                      Legal opinions

 

(a)                                  Legal opinions of:

 

(i)                                     Allen & Overy, London, Amsterdam and New
York, legal advisers to the Lead Arrangers;

 

(ii)                                  Loeff Claeys Verbeke, Brussels, legal
advisers to the Lead Arrangers;

 

(iii)                               Vinge KB, Stockholm, legal advisers to the
Lead Arrangers;

 

(iv)                              Wiersholm, Mellbye & Bech, Oslo, legal
advisers to the Lead Arrangers.

 

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(b)                                 Legal opinion of Holme Roberts & Owen LLP,
legal advisers to the Borrowers, addressed to the Finance Parties and confirming
that the Facility will not cause any default under the existing high yield
indentures of UPC or UGC.

 

4.                                      Existing Financial Indebtedness

 

Evidence that:

 

(a)                                  all availability under the facility
agreements or other documentation relating to any Financial Indebtedness
(Relevant Financial Indebtedness) described in Schedule 9 (Relevant Financial
Indebtedness) has irrevocably been cancelled in full or will be irrevocably
cancelled in full as at the first Utilisation Date;

 

(b)                                 all indebtedness under such facility
agreements or other documentation relating to any Relevant Financial
Indebtedness has been repaid in full or will be repaid in full upon the making
of the first Advance;

 

(c)                                  all letters of credit and guarantees and
similar instruments issued under such facility agreements or other documentation
relating to any Relevant Financial Indebtedness have been cancelled and that no
cash collateral is held by the relevant issuing banks in respect of those
instruments (or that the foregoing will be achieved upon the making of the first
Advance); and

 

(d)                                 all Security Interests described in
Schedule 8 (Relevant Security Interests) have been released (or will be released
upon the making of the first Advance) and that all parties with an interest in
such Security Interests have consented to such release.

 

5.                                      Capital and corporate structure

 

(a)                                  A certificate from a director of UPC
Distribution addressed to the Finance Parties confirming that as at the first
Utilisation Date (following the first Utilisation hereunder) there will be no
Subordinated Shareholder Loans outstanding from the Borrower Group to any
Subordinated Creditors other than Subordinated Shareholder Loans owing by UPC
Distribution to UPC Holdco in a principal amount of not less than
€1,400,000,000.

 

(b)                                 Evidence as to the capital and corporate
structure of the Borrower Group as at the first Utilisation Date, such structure
being consistent with the description set out in Schedule 10 (Borrower Group
Structures).

 

6.                                      Finance Documents

 

(a)                                  The Security Documents listed in Schedule 7
(Security Documents) duly executed by all parties thereto.

 

(b)                                 The Security Deed duly executed by all
parties thereto.

 

(c)                                  All relevant notices of security required
to be delivered under any Security Document together with acknowledgements of
such notices, in each case in the form required by the relevant Security
Document.

 

(d)                                 Delivery to the Security Agent of share
certificates and duly completed blank stock transfer forms (or equivalent) in
respect of all shares or partnership interests (as applicable) subject to the
Security Documents listed in Schedule 7 (Security Documents).

 

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(e)                                  UCC-1 Financing Statements duly executed by
each of UPC Holding and UPC Holding II.

 

(f)                                    Completion of all other steps specified
by the Security Agent as being necessary to perfect the Security Interests
intended to be created by the Security Documents listed in Schedule 7 (Security
Documents).

 

(g)                                 Syndication Letter duly executed by all
parties thereto.

 

(h)                                 Guarantor Accession Agreements duly executed
by each of UPC Nederland B.V., Stipdon Investments B.V. and Cable Networks
Austria Holding B.V.

 

7.                                      Financial information

 

(a)                                  Audited consolidated financial statements
for UPC for the financial year ending 31st December, 1999.

 

(b)                                 The Original Borrower Group Financial
Statements, together with the financial statements of the Borrower Group for the
Accounting Period ended 30th June, 2000.

 

(c)                                  The Consultant’s Report.

 

(d)                                 A certificate from a director of UPC
Distribution confirming that as at the first Utilisation Date (following the
first Utilisation) Borrower Group Capitalisation will be equal to the figure
specified in Clause 17.2(d) (Financial ratios).

 

8.                                      Other documents

 

(a)                                  Copies of the Material Contracts listed in
15.7 (Material Contracts).

 

(b)                                 A copy of (and of all applications for) any
and all approvals, consents, licences, exemptions and other requirements of
governmental and other authorities required for the entering into or performance
of the Finance Documents to be entered into on or about the Signing Date by each
party.

 

(c)                                  Restricted Person’s Framework Agreement and
Obligors’ Framework Agreement, in each case duly executed by all parties
thereto.

 

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PART 2

 

TO BE DELIVERED BY AN ADDITIONAL GUARANTOR

 

1.                                       A Guarantor Accession Agreement, duly
executed as a deed (or using any equivalent necessary formality, in the case of
an Additional Guarantor incorporated outside the United Kingdom) by the
Additional Guarantor.

 

2.                                       In the case of an Additional Guarantor
(other than any UPC Distribution Holdco), a pledge over all the issued shares of
the Additional Guarantor owned by any member of the Borrower Group in
substantially the same form as a share pledge already granted to the Security
Agent over shares of another Obligor incorporated in the same jurisdiction as
the Additional Guarantor or in such other form as the Security Agent may
reasonably require, together with a Security Provider’s Deed of Accession
executed by such member of the Borrower Group, such notices and other documents
as the Security Agent may require to perfect such share pledge.

 

3.                                       Details of:

 

(a)                                  (in the case of an Additional Guarantor,
other than any UPC Distribution Holdco) all material receivables (aggregating
€10,000,000 (or its equivalent in other currencies) or more) which are owed to
the Additional Guarantor by chello broadband N.V. or Priority Telecom N.V.;

 

(b)                                 (in the case of an Additional Guarantor,
other than UPC Distribution Holdco) all intercompany loans owed to the
Additional Guarantor by any member of the Borrower Group, together with an
Obligor Pledge of Shareholder Loans executed by the Additional Guarantor in
respect of such intercompany loans and the other documents referred to in Clause
16.14(a) (Loans and guarantees); and

 

(c)                                  where the Additional Guarantor will become
a UPC Distribution Holdco at the same time as, or after, it becomes an
Additional Guarantor, details of all Financial Indebtedness owing to the
Additional Guarantor by any member of the Borrower Group, together with a Pledge
of Subordinated Shareholder Loans executed by the Additional Guarantor in
respect of such Financial Indebtedness and the other documents referred to in
Clause 16.25(a) (Shareholder Loans); and

 

(d)                                 (in the case of an Additional Guarantor,
other than any UPC Distribution Holdco) all Financial Indebtedness owing by the
Additional Guarantor to any Restricted Person, together with a Pledge of
Subordinated Shareholder Loans executed by the relevant Restricted Person(s) (if
any) in respect of such Financial Indebtedness and the other documents referred
to in Clause 16.25(a) (Shareholder Loans).

 

4.                                       A pledge over such of the receivables
referred to in sub-paragraph 3(a) above (in the case of an Additional Guarantor,
other than any UPC Distribution Holdco) as in the opinion of the Security Agent
is necessary to maintain the coverage of the Security Documents over such
receivables owed to the Borrower Group on a basis consistent with Clause 16.26
(Further security over receivables) in substantially the same form as a
receivables pledge already granted to the Security Agent (i) by a member of the
Borrower Group incorporated in the same jurisdiction as the Additional Guarantor
or (ii) in respect of receivables located in the same jurisdiction as the
relevant receivables or (iii) in such other form as the Security Agent may
reasonably request, together with all such notices and other documents as the
Security Agent may require to perfect the receivables pledge.

 

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5.                                       A copy of the memorandum and articles
of association and certificate of incorporation (or other equivalent
constitutional documents) of the Additional Guarantor (and any Subsidiary of the
Additional Guarantor (a Relevant Subsidiary), the issued shares of which are to
be subject to a share pledge referred to in paragraph 6 below).

 

6.                                       (a)                                 
Where the Additional Guarantor will become a UPC Distribution Holdco at the same
time as, or after, it becomes an Additional Guarantor, a pledge over all the
issued shares of UPC Distribution substantially in the same form as a share
pledge already granted to the Security Agent over shares of UPC Distribution or
in such other form as the Security Agent may reasonable require, together with
such notices and other documents as the Security Agent may require to perfect
such share pledge.

 

(b)                                 In the case of an Additional Guarantor
(other than any UPC Distribution Holdco), a pledge over all the issued shares of
any Subsidiary (a Relevant Subsidiary) of the Additional Guarantor (other than
shares not owned by the Additional Guarantor or any Subsidiary of the Additional
Guarantor) if in the opinion of the Security Agent such pledge is necessary to
maintain the coverage of the Security Documents over shares in Obligors (other
than UPC Holding and any other UPC Distribution Holdco) or other key members of
the Borrower Group (being holding companies in respect of one or more members of
the Borrower Group which carry on business in a particular jurisdiction).  Such
share pledge shall be in substantially the same form as a Share Pledge already
granted to the Security Agent over shares in a person incorporated in the same
jurisdiction as the Relevant Subsidiary or in such other form as the Security
Agent may reasonably require, together with such notices and other documents as
the Security Agent may require to perfect such pledge.

 

7.                                       A copy of a resolution of the board of
directors of the Additional Guarantor:

 

(a)                                  approving the terms of, and the
transactions contemplated by, the Guarantor Accession Agreement (and any
relevant Security Document referred to in paragraphs 2, 3, 4 or 6 above (each an
Additional Security Document) resolving that it execute the Guarantor Accession
Agreement (and each Additional Security Document));

 

(b)                                 authorising a specified person or persons to
execute the Guarantor Accession Agreement and each Additional Security Document;
and

 

(c)                                  authorising a specified person or persons,
on its behalf, to sign and/or despatch all documents to be signed and/or
despatched by it under or in connection with the Finance Documents.

 

8.                                       A copy of any other authorisation or
other document, opinion or assurance which the Facility Agent reasonably
considers to be necessary in connection with the entry into and performance of,
and the transactions contemplated by, the Guarantor Accession Agreement or any
Additional Security Document.

 

9.                                       A specimen of the signature of each
person authorised by the resolution referred to in paragraph 7 above.

 

10.                                 A certificate of an authorised signatory of
the Additional Guarantor certifying that each copy of the documents specified in
Part 2 of this Schedule 2 and provided by it is a true copy and in full force
and effect as at a date no earlier than the date of the Guarantor Accession
Agreement (and, in the case of an Additional Guarantor other than any UPC
Distribution Holdco, if required by the Facility Agent, a certificate of each
Relevant Subsidiary in respect

 

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of each copy of the documents provided by it in accordance with the provisions
of Part 2 of this Schedule 2).

 

11.                                 A copy of the latest financial statements
(audited, if available) of the Additional Guarantor.

 

12.                                 A legal opinion of legal advisers to the
Facility Agent, and, if applicable, other lawyers approved by the Facility Agent
in the place of incorporation of the Additional Guarantor (and/or each Relevant
Subsidiary) addressed to the Finance Parties.

 

13.                                 All other notices, documents and other steps
required to perfect the security constituted by each Additional Security
Document (including, without limitation, accession to, or entry into (as the
case may be), by:

 

(a)                                  the relevant Additional Guarantor (and any
member of the Borrower Group which is an intercompany debtor in respect of the
Additional Guarantor) of an Obligors’ Framework Agreement; or

 

(b)                                 as the case may be, the relevant Restricted
Person referred to sub-paragraph 3(d) above (and the Additional Guarantor) of a
Restricted Person’s Framework Agreement.

 

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SCHEDULE 3

 

MANDATORY COST FORMULAE

 

1.                                       The Mandatory Cost is an addition to
the interest rate to compensate Lenders for the cost of compliance with (a) the
requirements of the Bank of England and/or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.

 

2.                                       On the first day of each Interest
Period (or as soon as possible thereafter) the Facility Agent shall calculate,
as a percentage rate, the arithmetic mean (rounded up, if necessary, to four
decimal places) of the respective rates notified by each Reference Bank to the
Facility Agent at its request as the rate resulting from the application of the
formulae set out in paragraphs 3 and 4 below (the Additional Cost Rate).

 

3.                                       The Additional Cost Rate for any Lender
lending from a Facility Office in a Participating Member State will be the
percentage notified by that Lender to the Facility Agent.  This percentage will
be certified by that Lender in its notice to the Facility Agent to be its
reasonable determination of the cost (expressed as a percentage of that Lender’s
participation in all Loans made from that Facility Office) of complying with the
minimum reserve requirements of the European Central Bank in respect of loans
made from that Facility Office.

 

4.                                       The Additional Cost Rate for any Lender
lending from a Facility Office in the United Kingdom will be calculated by the
Facility Agent as follows:

 

(a)                                  in relation to a Sterling Advance:

 

[ex103image004.gif]

per cent. per annum

 

(b)                                 in relation to an Advance in any currency
other than sterling:

 

[ex103image006.gif]

per cent. per annum

 

Where:

 

A                                      is the percentage of Eligible Liabilities
(assuming these to be in excess of any stated minimum) which that Reference Bank
is from time to time required to maintain as an interest-free cash ratio deposit
with the Bank of England to comply with cash ratio requirements;

 

B                                        is the percentage rate of interest
(excluding the Margin and the Mandatory Cost) and, if the Loan is an Unpaid Sum,
the additional rate of interest specified in Clause 8.8(a) (Default interest)
payable for the relevant Interest Period on the Advance;

 

C                                        is the percentage (if any) of Eligible
Liabilities which that Reference Bank is required from time to time to maintain
as interest-bearing Special Deposits with the Bank of England;

 

D                                       is the percentage rate per annum payable
by the Bank of England to the Facility Agent on interest-bearing Special
Deposits;

 

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E                                         is designed to compensate the
Reference Banks for amounts payable under the Fees Rules (but, for this purpose,
ignoring any minimum fee required pursuant to the Fees Rules) and is calculated
by the Facility Agent as being the average for the most recent rates of charge
supplied by the Reference Banks to the Facility Agent pursuant to paragraph 7
below and expressed in pounds per £1,000,000.

 

5.                                       For the purposes of this Schedule:

 

(a)                                  Eligible Liabilities and Special Deposits
have the meanings given to them from time to time under or pursuant to the Bank
of England Act 1998 or (as may be appropriate) by the Bank of England;

 

(b)                                 Fees Rules means the rules on periodic fees
contained in the FSA Supervision Manual or such other law or regulation as may
be in force from time to time in respect of the payment of fees for the
acceptance of deposits;

 

(c)                                  Fee Tariffs means the fee tariffs specified
in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any
minimum fee or zero rated fee required pursuant to the Fees Rules but taking
into account any applicable discount rate; and

 

(d)                                 Tariff Base has the meaning given to it in,
and will be calculated in accordance with, the Fees Rules.

 

6.                                       In application of the above formulae,
A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent.
will be included in the formula as 5 and not as 0.05).  A negative result
obtained by subtracting D from B shall be taken as zero.  The resulting figures
shall be rounded to four decimal places.

 

7.                                       If requested by the Facility Agent,
each Reference Bank shall, as soon as practicable after publication by the
Financial Services Authority, supply to the Facility Agent, the rate of charge
payable by that Reference Bank to the Financial Services Authority pursuant to
the Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated for this purpose by that Reference Bank as being
the average of the Fee Tariffs applicable to that Reference Bank for that
financial year) and expressed in pounds per £1,000,000 of the Tariff Base of
that Reference Bank.

 

8.                                       Each Lender shall supply any
information required by the Facility Agent for the purpose of calculating its
Additional Cost Rate.  In particular, but without limitation, each Lender shall
supply the following information on or prior to the date on which its becomes a
Lender:

 

(a)                                  the jurisdiction of its Facility Office;
and

 

(b)                                 any other information that the Facility
Agent may reasonably require for such purpose.

 

Each Lender shall promptly notify the Facility Agent of any change to the
information provided by it pursuant to this paragraph.

 

9.                                       The percentages of each Lender for the
purpose of A and C above and the rates of charge of each Reference Bank for the
purpose of E above shall be determined by the Facility Agent based upon the
information supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the Facility Agent to the contrary,
each Lender’s obligations in relation to cash ratio deposits and Special
Deposits are the same as those of a

 

152

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typical bank from its jurisdiction of incorporation with a Facility Office in
the same jurisdiction as its Facility Office.

 

10.                                 The Facility Agent shall have no liability
to any person if such determination results in an Additional Cost Rate which
over or under compensates any Lender and shall be entitled to assume that the
information provided by any Reference Bank pursuant to paragraph 3 above is true
and correct in all respects.

 

11.                                 The Facility Agent shall distribute the
additional amounts received as a result of the Mandatory Costs to the Lenders on
the basis of the Additional Cost Rate for each Lender based on the information
provided by each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

 

12.                                 Any determination by the Facility Agent
pursuant to this Schedule in relation to a formula, the Mandatory Cost, an
Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all Parties.

 

13.                                 The Facility Agent may from time to time,
after consultation with UPC Distribution and the Lenders, determine and notify
to all Parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from time
to time imposed by the Bank of England, the Financial Services Authority or the
European Central Bank (or, in any case, any other authority which replaces all
or any of its functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on all Parties.

 

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SCHEDULE 4

 

FORM OF REQUEST AND CANCELLATION NOTICE

 

PART 1

 

FORM OF REQUEST

 

To:

[                            ]

 

 

 

 

Attention:

[              ]

 

 

 

 

From:

[Borrower]

Date: [              ]

 

REQUEST (ADVANCE)

 

UPC Distribution Holding B.V. - €3,500,000,000 and US$347,500,000 and
€95,000,000 Term and
Revolving Credit Agreement dated [              ], 2000

 

Dear Sirs,

 

We hereby give you notice pursuant to Clause 5.1 (Delivery of Request) of the
above Credit Agreement that we require an Advance to be made to that Borrower
under the Credit Agreement, as follows:

 

(a)

 

Facility:

 

[A, B, C1 or C2]

(b)

 

Utilisation Date:

 

[                             ]

(c)

 

Requested Amount:

 

[                             ]

(d)

 

Currency:

 

[                             ]

(e)

 

Interest Period:

 

[                             ]

 

Payment instructions with respect to the proceeds of the Advance to be made in
relation to this Request are as follows:  [              ].

 

We confirm that each condition specified in Clause 4.2 (Further conditions
precedent) is satisfied on the date of this Request.

 

Terms used in this Request and defined in the Credit Agreement have the same
meaning in this Request as in the Credit Agreement.

 

Yours faithfully

 

[Authorised Signatory]

 

[Borrower]

 

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PART 2

 

FORM OF CANCELLATION AND/OR PREPAYMENT NOTICE

 

To:

 

[              ]  as Facility Agent

 

 

 

 

 

 

 

 

 

From:

 

[BORROWER]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:    [              ]

 

UPC Distribution Holding B.V. - €3,500,000,000 and US$347,500,000 and
€95,000,000 Term and
Revolving Credit Agreement dated [              ], 2000

 

1.                                       [We wish to cancel a portion of Total
Facility A Commitments* and/or*/Total Facility B Commitments* and/or* Total
Facility C Commitments* in the following amounts:

 

Cancellation:

 

Total Facility A Commitments:                               [              ]*

 

Total Facility B Commitments:                                 [              ]*

 

Total Facility C1 Commitments:                           [              ]*

 

Total Facility C2 Commitments:                           [              ]*

 

OR

 

[We wish to prepay the whole or part of the following Advances which are to be
applied against the Facilities in the following order:

 

(a)                                  Facilities:

 

Facility A Advance:                                     [              ]*

 

Facility B Advance:                                       [              ]*

 

Facility C1 Advance:                                 [              ]*

 

Facility C2 Advance:                                 [              ]*

 

(b)                                 Application of Advance[s]:

 

Facility A:                                         [              ]*

 

Facility B:                                           [              ]*

 

Facility C1:                                     [              ]*

 

Facility C2:                                     [              ]*

 

2.                                       Terms defined in the above Credit
Agreement have the same meaning in this notice.

 

--------------------------------------------------------------------------------

*                                         Delete as appropriate.

 

155

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By:

 

[BORROWER]

 

Authorised Signatory

 

156

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SCHEDULE 5

 

FORMS OF ACCESSION DOCUMENTS

 

PART 1

 

NOVATION CERTIFICATE

 

 

To:                              [              ] as Facility Agent and UPC
Distribution Holding B.V.

 

From:

[THE EXISTING LENDER] and [THE NEW LENDER]

Date: [              ]

 

UPC Distribution Holding B.V. - €3,500,000,000 and US$347,500,000 and
€95,000,000 Term and
Revolving Credit Agreement dated [              ], 2000

 

We refer to Clause 26.3 (Procedure for novations) of the Credit Agreement and
clause 9.3 (Transfers by the Lenders) of the Security Deed.  Terms defined in
the Credit Agreement have the same meaning in this Novation Certificate.

 

1.                                       We [              ] (the Existing
Lender) and [              ] (the New Lender) agree to the Existing Lender and
the New Lender novating all the Existing Lender’s rights and obligations
referred to in the Schedule in accordance with Clause 26.3 (Procedure for
novations) of the Credit Agreement and clause 9.3 (Transfers by the Lenders) of
the Security Deed.

 

2.                                       On the date on which this novation
becomes effective in accordance with Clause 26.3 (Procedure for novations), the
New Lender represents and warrants to the Existing Lender, the Finance Parties
and UPC Distribution that it is [a Professional Market Party]/[exempted from the
requirement to be a Professional Market Party because it forms part of a closed
circle (besloten kring) with UPC Distribution].

 

3.                                       The Facility Office and address for
notices of the New Lender for the purposes of Clause 32.2 (Addresses for
notices) are set out in the Schedule.

 

4.                                       This Novation Certificate may be
executed in any number of counterparts and this has the same effect as if the
signatures on the counterparts were on a single copy of this Novation
Certificate.

 

5.                                       This Novation Certificate is governed
by English law.

 

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THE SCHEDULE

 

Rights and obligations to be novated

 

[Details of the rights and obligations of the Existing Lender to be novated.]

 

 

[New Lender]

 

 

[Facility Office

Address for notices for administrative purposes

 

 

Address for notices for credit purposes]

 

[Existing Lender]

[New Lender]

[               ]

By:

By:

By:

Date:

Date:

Date:

 

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PART 2

 

GUARANTOR ACCESSION AGREEMENT

 

To:

[     ] as Facility Agent and [        ] as Security Agent

 

 

 

 

From:

[PROPOSED GUARANTOR]

 

 

 

 

 

 

Date: [              ]

 

 

UPC Distribution Holding B.V. - €3,500,000,000 and US$347,500,000 and
€95,000,000 Term and
Revolving Credit Agreement dated [              ], 2000

 

We refer to Clause 26.4 (Additional Guarantors).  Terms defined in the Credit
Agreement have the same meaning in this Deed.

 

We, [name of company] of [Registered Office] (Registered no. [              ])
agree:

 

(a)                                  to become an Additional Guarantor and to be
bound by the terms of the Credit Agreement as an Additional Guarantor in
accordance with Clause 26.4 (Additional Guarantors);

 

(b)                                 to become a party to the Security Deed as a
Charging Entity and to observe, perform and be bound by the terms and provisions
of the Security Deed in the capacity of a Charging Entity in accordance with
clause 9.6 (Charging Entities) of the Security Deed; and

 

(c)                                  to become a party to the Intercreditor
Agreement as a Charging Entity and to observe, perform and be bound by the terms
and provisions of the Intercreditor Agreement in the capacity of a Charging
Entity in accordance with Clause 8.1 of the Intercreditor Agreement.

 

Our address for notices for the purposes of Clause 32.2 (Addresses for notices)
is:

 

[

 

 

 

 

]

 

This Deed is governed by English law.

 

 

Executed as a deed by

)

Director

[PROPOSED GUARANTOR]

)

 

acting by

)

Director/Secretary

and

)

 

 

159

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PART 3

 

FORM OF VERIFICATION LETTER

 

 

To:

 

UPC DISTRIBUTION HOLDING B.V.

 

 

 

 

 

 

 

From:

 

[NEW LENDER] as New Lender

 

 

 

 

 

 

 

 

 

 

 

Date:[                 ]

 

 

 

 

 

 

Dear Sirs

 

UPC Distribution Holding B.V. - €3,500,000,000 and US$347,500,000 and
€95,000,000 Term and
Revolving Credit Agreement dated [              ], 2000 (the Credit Agreement)

 

We refer to the Credit Agreement.  Terms defined in the Credit Agreement have
the same meaning in this letter.

 

[[On the date that we become a Lender in accordance with Clause 26.2 (Transfers
by Lenders) of the Credit Agreement we will be]/[We are currently a Facility A
Lender and we are] a Professional Market Party, because [name of entity] falls
within the category [         ] set out in the schedule to this letter.]

 

or

 

[[On the date on which we become a Lender in accordance with Clause 26.2
(Transfers by Lenders) of the Credit Agreement we will be]/[We are currently a
Facility A Lender and we are] exempted from the requirement to be a Professional
Market Party because we form part of a closed circle (besloten kring) with UPC
Distribution.](1)

 

[We enclose with this letter a copy of the documents which provide evidence of
this status.](2)/[We are incorporated in [   ] and act under the supervision of
[   ].](3)

 

Yours faithfully

 

 

 

[New Lender]

 

 

--------------------------------------------------------------------------------

(1)                                  Delete and complete as applicable.

(2)                                  No evidence is required in the case of
institutions falling within category (c) of the schedule to this letter.

(3)                                  Institutions falling within category (a) of
the schedule to this letter can, rather than providing documentary evidence can
provide this confirmation.

 

160

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THE SCHEDULE

 

THE EXEMPTION REGULATION CATEGORIES

 

 

(a)                                  Banks, insurance companies, securities
firms, investment institutions and pension funds that are (i) supervised or
licensed under Dutch law or (ii) established and acting under supervision in a
European Union member state (other than the Netherlands), Hungary, Monaco,
Poland, Puerto Rico, Saudi Arabia, Slovakia, Czech Republic, Turkey, South
Korea, the United States of America, Japan, Australia, Canada, Mexico, New
Zealand or Switzerland;

 

(b)                                 investment institutions which offer their
participation rights exclusively to professional market parties and are not
required to be supervised or licensed under Dutch law;

 

(c)                                  the State of the Netherlands, the Dutch
Central Bank, a foreign central government body, a foreign central bank, Dutch
regional and local governments and comparable foreign decentralised government
bodies, international treaty organisations and supranational organisations;

 

(d)                                 enterprises or entities with total assets of
at least EUR500,000,000 (or its equivalent in another currency) as per the
balance sheet as of the year end preceding the obtaining of the repayable funds;

 

(e)                                  enterprises, entities or individuals with
net assets (eigen vermogen) of at least EUR10,000,000 (or its equivalent in
another currency) as of the year end preceding the obtaining of the repayable
funds who or which have been active in the financial markets on average twice a
month over a period of at least two consecutive years preceding the obtaining of
the repayable funds;

 

(f)                                    subsidiaries of the entities referred to
under paragraph (a) above if those subsidiaries are subject to supervision; and

 

(g)                                 an enterprise or institution that has a
rating from a rating agency that in the opinion of the Dutch Central Bank is an
expert or that issues securities that have a rating from a rating agency that in
the opinion of the Dutch Central Bank is an expert.

 

161

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SCHEDULE 6

 

FORM OF CONFIDENTIALITY UNDERTAKING

 

PART 1

 

FORM OF LMA CONFIDENTIALITY UNDERTAKING

 

LMA CONFIDENTIALITY LETTER (PURCHASER)

 

[Letterhead of Existing Lender]

 

To:

 

 

[insert name of New Lender]

 

Re:                               The Facility

 

Borrowers:
Amount:
Agent:

 

 

Dear Sirs

 

We understand that you are considering participating in the Facility.  In
consideration of us agreeing to make available to you certain information, by
your signature of a copy of this letter you agree as follows:

 

1.                                      Confidentiality Undertaking

 

You undertake:

 

(a)                                  to keep the Confidential Information
confidential and not to disclose it to anyone except as provided for by
paragraph 2 below and to ensure that the Confidential Information is protected
with security measures and a degree of care that would apply to your own
confidential information;

 

(b)                                 to keep confidential and not disclose to
anyone the fact that the Confidential Information has been made available or
that discussions or negotiations are taking place or have taken place between us
in connection with the Facility;

 

(c)                                  to use the Confidential Information only
for the Permitted Purpose;

 

(d)                                 to use all reasonable endeavours to ensure
that any person to whom we pass any Confidential Information (unless disclosed
under sub-paragraph 2(b) below) acknowledges and complies with the provisions of
this letter as if that person were also a party to it; and

 

162

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(e)                                  not to make enquiries of any member of the
Borrower Group or any of their officers, directors, employees or professional
advisers relating directly or indirectly to the Facility.

 

2.                                      Permitted Disclosure

 

(a)                                  We agree that you may disclose Confidential
Information:

 

(i)                                     to members of the Participant Group and
their officers, directors, employees and professional advisers to the extent
necessary for the Permitted Purpose and to any auditors of members of the
Participant Group;

 

(ii)                                  (A) where requested or required by any
court of competent jurisdiction or any competent judicial, governmental,
supervisory or regulatory body, (B) where required by the rules of any stock
exchange on which the shares or other securities of any member of the
Participant Group are listed or (C) where required by the laws or regulations of
any country with jurisdiction over the affairs of any member of the Participant
Group;

 

(iii)                               with the prior written consent of us and the
Borrower.

 

(b)                                 Notwithstanding any other provision of this
letter, any party to this letter (and any of its affiliates, officers,
directors, employees, representatives, professional advisers, or other agents)
may and has since the commencement of discussions with respect to the Facility
been permitted to disclose to any and all persons, without limitation of any
kind:

 

(i)                                     the U.S. tax treatment and U.S. tax
structure (each as defined below) of the Facility; and

 

(ii)                                  all material of any kind (including
opinions and other tax analyses) that are provided to such party relating to
such U.S. tax treatment or U.S. tax structure,

 

except to the extent reasonably necessary to comply with applicable federal or
state securities laws.

 

For the purposes of this subsection, the U.S. tax treatment of the Facility is
the purported or claimed U.S. federal, state and local income tax treatment of
the Facility, and the U.S. tax structure of the Facility is any fact that may be
relevant to understanding the purported or claimed U.S. federal, state and local
income tax treatment of the Facility.  This authorisation is not intended to
permit disclosure of any information (other than information relating to U.S.
tax treatment or U.S. tax structure of the Facility) including (without
limitation) (i) any portion of any materials to the extent not related to the
U.S. tax treatment or U.S. tax structure of the Facility, (ii) the identities of
participants or potential participants in the Facility (except to the extent
such identities are related to the tax treatment or the U.S. tax structure of
the Facility), (iii) the existence or status of any negotiations, (iv) any
pricing or financial information (except to the extent such pricing or financial
information is related to the U.S. tax treatment or the U.S. tax structure of
the Facility), or (v) any other term or detail not relevant to the U.S. tax
treatment or the U.S. tax structure of the Facility.

 

3.                                      Notification of Required or Unauthorised
Disclosure

 

You agree (to the extent permitted by law) to inform us of the full
circumstances of any disclosure under sub-paragraph 2(b) or upon becoming aware
that Confidential Information has been disclosed in breach of this letter.

 

163

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4.                                      Return of Copies

 

If we so request in writing, you shall return all Confidential Information
supplied to you by us and destroy or permanently erase all copies of
Confidential Information made by you and use all reasonable endeavours to ensure
that anyone to whom you have supplied any Confidential Information destroys or
permanently erases such Confidential Information and any copies made by them, in
each case save to the extent that you or the recipients are required to retain
any such Confidential Information by any applicable law, rule or regulation or
by any competent judicial, governmental, supervisory or regulatory body or in
accordance with internal policy, or where the Confidential Information has been
disclosed under sub-paragraph 2(b) above.

 

5.                                      Continuing Obligations

 

The obligations in this letter are continuing and, in particular, shall survive
the termination of any discussions or negotiations between you and us. 
Notwithstanding the previous sentence, the obligations in this letter shall
cease (a) if you become a party to or otherwise acquire (by assignment or
sub-participation) an interest, direct or indirect, in the Facility or (b) 12
months after we have returned all Confidential Information supplied to you by us
and destroyed or permanently erased all copies of Confidential Information made
by you (other than any such Confidential Information or copies which have been
disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or which,
pursuant to paragraph 4 above, are not required to be returned or destroyed).

 

6.                                      No Representation; Consequences of
Breach, etc

 

You acknowledge and agree that:

 

(a)                                  neither we nor any of our officers,
employees or advisers (each a Relevant Person) (i) make any representation or
warranty, express or implied, as to, or assume any responsibility for, the
accuracy, reliability or completeness of any of the Confidential Information or
any other information supplied by us or any member of the Borrower Group or the
assumptions on which it is based or (ii) shall be under any obligation to update
or correct any inaccuracy in the Confidential Information or any other
information supplied by us or any member of the Borrower Group or be otherwise
liable to you or any other person in respect to the Confidential Information or
any such information; and

 

(b)                                 we or members of the Borrower Group may be
irreparably harmed by the breach of the terms of this letter and damages may not
be an adequate remedy; each Relevant Person or member of the Borrower Group may
be granted an injunction or specific performance for any threatened or actual
breach of the provisions of this letter by you.

 

7.                                      No Waiver; Amendments, etc.

 

This letter sets out the full extent of our obligations of confidentiality owed
to us in relation to the information the subject of this letter.  No failure or
delay in exercising any right, power or privilege under this letter will operate
as a waiver thereof nor will any single or partial exercise of any right, power
or privilege preclude any further exercise thereof or the exercise of any other
right, power or privileges under this letter.  The terms of this letter and your
obligations under this letter may only be amended or modified by written
agreement between us.

 

164

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8.                                      Inside Information

 

We acknowledge that some or all of the Confidential Information is or may be
price-sensitive information and that the use of such information may be
regulated or prohibited by applicable legislation relating to insider dealing
and you undertake not to use any Confidential Information for any unlawful
purpose.

 

9.                                      Nature of Undertakings

 

The undertakings given by you under this letter are given to us and (without
implying any fiduciary obligations on our part) are also given for the benefit
of the Borrower and each other member of the Borrower Group.

 

10.                               Third party rights

 

(a)                                  Subject to paragraph 6 and paragraph 9 the
terms of this letter may be enforced and relied upon only by you and us and the
operation of the Contracts (Rights of Third Parties) Act 1999 is excluded.

 

(b)                                 Notwithstanding any provisions of this
letter, the parties to this letter do not require the consent of any Relevant
Person or any member of the Borrower Group to rescind or vary this letter at any
time.

 

11.                               Governing Law and Jurisdiction

 

This letter (including the agreement constituted by your acknowledgement of its
terms) shall be governed by and construed in accordance with the laws of England
and the parties submit to the non-exclusive jurisdiction of the English courts.

 

12.                               Definitions

 

In this letter (including the acknowledgement set out below):

 

Borrower Group means UPC Distribution and each of its holding companies and
subsidiaries and each subsidiary of each of its holding companies (as each such
term is defined in the Companies Act 1985);

 

Confidential Information means any information relating to a Borrower, the
Borrower Group, the Facility including, without limitation, the information
memorandum provided to you by us or any of our affiliates or advisers, in
whatever form, and includes information given orally and any document,
electronic file or any other way of representing or recording information which
contains or is derived or copied from such information but excludes information
that (a) is or becomes public knowledge other than as a direct or indirect
result of any breach of this letter or (b) is known by you before the date the
information is disclosed to you by us or any of our affiliates or advisers or is
lawfully obtained by you thereafter, other than from a source which is connected
with the Borrower Group and which, in either case, as far as you are aware, has
not been obtained in violation of, and is not otherwise subject to, any
obligation of confidentiality;

 

Participant Group means us, each of your holding companies and subsidiaries and
each subsidiary of each of your holding companies (as each such term is defined
in the Companies Act 1985); and

 

Permitted Purpose means considering and evaluating whether to enter into the
Facility.

 

165

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Please acknowledge your agreement to the above by signing and returning the
enclosed copy.

 

Yours faithfully

 

 

 

 

 

 

 

For and on behalf of

 

[Arranger]

 

 

To:

[Existing Lender]

 

 

 

The Borrower and each other member of the Borrower Group

 

We acknowledge and agree to the above:

 

 

 

 

 

 

For and on behalf of

 

 

 

[New Lender]

 

 

166

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PART 2

 

FORM OF LSTA CONFIDENTIALITY UNDERTAKING

 

Master Confidentiality Agreement dated as of [          ] (this Agreement)
between [Existing Lender] (the Existing Lender) and [New Lender] (the New
Lender).

 

This Agreement sets forth the terms and conditions that will apply, in each
instance, to the treatment of certain non-public information that the Existing
Lender may supply to the New Lender in connection with the consideration by the
New Lender of its participating in any financing or proposed financing (a
Financing) for any borrower or group of borrowers (each a Borrower) specified in
a Schedule described below.

 

As used herein:  (a) Evaluation Material refers to (i) the non-public
information furnished to the Existing Lender, including any Information
Memorandum, in respect of a particular Financing of a Borrower that the Existing
Lender supplies to the New Lender on or after the date of the Schedule in
respect of such Financing, (ii) all memoranda, notes, and other documents and
analyses (collectively, analyses) internally developed by the Existing Lender
that it supplies to the New Lender and (iii) all analyses developed by the New
Lender using any information specified under clauses (i) and (ii) above; (b)
Internal Evaluation Material refers to analyses specified under clause (iii) of
the definition of Evaluation Material; and (c) participation refers to a
transfer of a lender’s interest in a Financing (or a grant of derivative rights
in respect thereof), whether by assignment, participation or otherwise (and
participate and participating shall have correlative meanings thereto).

 

As a condition to the Existing Lender’s furnishing the New Lender with any
Evaluation Material in the Existing Lender’s possession in respect of a
particular Financing, the New Lender shall execute and return to the Existing
Lender a schedule, in substantially the form of Exhibit A attached hereto, that
the Existing Lender may have completed, executed and delivered to it (a
Schedule).  Each Schedule shall identify the Existing Lender and the New Lender
in respect of such Financing and the related Evaluation Material, the name of
each Borrower that the New Lender has under consideration and a description of
the documentation (the Operative Documentation) in respect thereof.

 

The New Lender in respect of a particular Financing agrees that it will use all
Evaluation Material in respect of such Financing solely for the purpose of
evaluating its possible participation, or obtaining the participation of another
eligible person (an Additional Assignee), in such Financing and that the New
Lender will use reasonable precautions in accordance with its established
procedures to keep such information confidential; provided, however, that any
such information may be disclosed to the partners, directors, officers,
employees, agents, counsel, auditors, affiliates, advisors and representatives
(collectively, Representatives) of the New Lender’s institution who need to know
such information for the purpose of evaluating its participation in such
Financing (it being understood that such Representatives shall be informed by
the New Lender of the confidential nature of such information and shall be
directed by it to treat such information in accordance with the terms of this
Agreement) and to any Additional Assignee and its Representatives (provided that
such Additional Assignee shall have previously executed and delivered to the New
Lender an agreement in substantially the same substance as this Agreement in
respect of the Evaluation Material). The New Lender agrees to be responsible for
any breach of this Agreement that results from the actions or omissions of its
Representatives.  Notwithstanding the foregoing, the New Lender will not use
such information to obtain an Additional Assignee if otherwise prohibited by
agreements binding on the New Lender.

 

In addition, the New Lender in respect of a particular Financing agrees that
prior to the settlement of its participation in such Financing, it will not
disclose to any person, other than its Representatives, the identity of the
Existing Lender with which discussions or negotiations are taking place
concerning

 

167

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the New Lender’s possible participation in the related Financing or any of the
terms or conditions of such proposed participation.  The term person as used in
this Agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity and, if the New
Lender’s participation in the Financing would constitute a secondary market
transaction, the Borrower.

 

The New Lender in respect of a particular Financing shall be permitted to
disclose any related Evaluation Material (and the fact that such Evaluation
Material has been made available to it and that discussions or negotiations are
taking place concerning the transaction or any of the terms, conditions or other
facts with respect thereto) in the event that the New Lender is required by law
or regulation or requested by any governmental agency or other regulatory
authority (including any self-regulatory organization having or claiming to have
jurisdiction) or in connection with any legal proceedings. The New Lender agrees
that it will notify the Existing Lender as soon as practical in the event of any
such disclosure (other than as a result of an examination by any regulatory
agency), unless such notification shall be prohibited by applicable law or legal
process.

 

The New Lender in respect of a particular Financing and its Representatives
shall have no obligation hereunder with respect to any information in any
related Evaluation Material to the extent that such information (i) is or
becomes generally available to the public other than as a result of a disclosure
by the New Lender in violation of this Agreement, (ii) was within the New
Lender’s possession prior to its being furnished to it pursuant hereto, provided
that the source of such information was not known by the New Lender to be bound
by a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Borrower or any other party with respect to
such information or (iii) is or becomes available to the New Lender on a
non-confidential basis from a source other than the Borrower or the Existing
Lender, or their respective Representatives, provided that such source is not
known by the New Lender to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Existing
Lender, the Borrower or any other party with respect to such information.

 

Notwithstanding any other provision of this letter, any party to this letter
(and any of its affiliates, officers, directors, employees, representatives,
professional advisers, or other agents) may and has since the commencement of
discussions with respect to the Facility been permitted to disclose to any and
all persons, without limitation of any kind:

 

(a)                                  the U.S. tax treatment and U.S. tax
structure (each as defined below) of the Facility; and

 

(b)                                 all material of any kind (including opinions
and other tax analyses) that are provided to such party relating to such U.S.
tax treatment or U.S. tax structure,

 

except to the extent reasonably necessary to comply with applicable federal or
state securities laws.

 

For the purposes of this subsection, the U.S. tax treatment of the Facility is
the purported or claimed U.S. federal, state and local income tax treatment of
the Facility, and the U.S. tax structure of the Facility is any fact that may be
relevant to understanding the purported or claimed U.S. federal, state and local
income tax treatment of the Facility.  This authorisation is not intended to
permit disclosure of any information (other than information relating to U.S.
tax treatment or U.S. tax structure of the Facility) including (without
limitation) (i) any portion of any materials to the extent not related to the
U.S. tax treatment or U.S. tax structure of the Facility, (ii) the identities of
participants or potential participants in the Facility (except to the extent
such identities are related to the tax treatment or the U.S. tax structure of
the Facility), (iii) the existence or status of any negotiations, (iv) any
pricing or financial information (except to the extent such pricing or financial
information is related to the U.S. tax treatment or the U.S. tax structure of
the Facility), or (v) any other term or detail not relevant to the U.S. tax
treatment or the U.S. tax structure of the Facility.

 

168

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To the extent the Operative Documentation for a particular Financing contains
provisions regarding the use of non-public information which conflict with, are
more restrictive than or are in addition to the provisions of this Agreement,
then (so long as such Operative Documentation shall be effective as to the
Existing Lender) solely with application to any Evaluation Material concerning
the Borrower that is the subject of such Financing (and without application
hereunder to any other Evaluation Material or otherwise), such provisions of the
Operative Documentation shall be incorporated herein by this reference and shall
supersede and control the terms of this Agreement to the extent that such
provisions are in conflict with or more restrictive than the terms hereof or are
in addition to those contained herein.  Upon the New Lender’s request, the
Existing Lender will furnish to the New Lender the provisions of the Operative
Documentation for such Financing regarding the use of non-public information. 
In addition, in the event that the New Lender actually becomes a lender (bound
as a party to the Operative Documentation) with respect to a particular
Financing, the application of this Agreement in respect of all Evaluation
Material in respect of such Financing shall terminate and the applicable
confidentiality provisions, if any, contained in the Operative Documentation
shall govern and control.

 

If the New Lender in respect of a particular Financing chooses not to
participate in such Financing, the New Lender agrees on request of the Existing
Lender to return to the Existing Lender as soon as practical all related
Evaluation Material (other than Internal Evaluation Material) or destroy such
Evaluation Material (other than Internal Evaluation Material) without retaining
any copies thereof unless prohibited from doing so by its internal policies and
procedures.

 

The New Lender in respect of a particular Financing understands and agrees that
the Existing Lender will have received the related Evaluation Material from
third party sources (including the Borrower) and that the Existing Lender bears
no responsibility (and shall not be liable) for the accuracy or completeness (or
lack thereof) of such Evaluation Material or any information contained therein.

 

The New Lender hereby acknowledges that United States securities laws prohibit
any person with material, non-public information about an issuer from purchasing
or selling securities of such issuer or, subject to certain limited exceptions,
from communicating such information to any other person.  The New Lender agrees
to comply with its internal compliance policies and procedures with respect to
material confidential information.

 

The New Lender agrees that money damages would not be a sufficient remedy for
breach of this Agreement, and that in addition to all other remedies available
at law or in equity, the Existing Lender shall be entitled to seek equitable
relief, including injunction and specific performance, without proof of actual
damages.

 

This Agreement (including each Schedule delivered pursuant hereto and the
provisions of any Operative Documentation incorporated herein by reference)
embodies the entire understanding and agreement between the parties with respect
to all Evaluation Material for each Financing and supersedes all prior
understandings and agreements relating thereto.  Unless otherwise agreed in
writing between the parties hereto, the application of this Agreement shall
terminate with respect to all Evaluation Material concerning each Financing on
the date falling one year after the Schedule in respect of such Financing.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of New York, without regard to principles of conflicts of law (except
Section 5-1401 of the New York General Obligation Law to the extent that it
mandates that the law of the State of New York govern).

 

This Agreement may be signed in counterparts, each of which shall be an original
and both of which taken together shall constitute the same instrument.

 

169

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It is understood by the parties that the custom in the loan syndications and
loan trading markets is to execute and deliver any confidentiality agreement,
schedule, confirmation or other transaction documents by telecopy or telefax. 
The parties agree that all telecopied or telefaxed copies of this Agreement, the
Schedules, confirmations and other transaction documents, and signatures hereto
and thereto, shall be duplicate originals.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective authorized officers as of the date
first written above.

 

[Existing Lender]

 

By:

 

 

 

Name:

Title:

 

[New Lender]

 

By:

 

 

 

Name:

Title:

 

170

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EXHIBIT A

 

This Schedule, dated as of [          ], is one of the Schedules referred to in
the Master Confidentiality Agreement dated today between [Existing Lender] and
[New Lender],  Terms used herein, unless defined herein, shall have the
respective meanings given them in said Master Confidentiality Agreement.

 

Name(s) of the Borrower(s): [                                    ]

 

Description of the Operative Documentation:
[                                    ]

 

Existing Lender

 

[                                    ].

 

By: [                                    ]

 

Name:

Title:

 

Received and accepted as of

the date first written above:

 

New Lender

 

[                                    ].

 

By: [                                    ]

 

Name:

 

Title:

 

171

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SCHEDULE 7

 

SECURITY DOCUMENTS

 

1.                                       Each share pledge given in favour of
the Security Agent by:

 

(a)                                  UPC Holding in respect of its interest in
the share capital of UPC Distribution dated 31st October, 2000;

 

(b)                                 UPC Holding in respect of its interest in
the share capital of UPC Holding II dated 31st October, 2000;

 

(c)                                  UPC Distribution in respect of its interest
in the share capital of UPC Scandinavia Holding B.V. dated 31st October, 2000;

 

(d)                                 UPC Distribution in respect of its interest
in the share capital of Cable Networks Austria Holding B.V. dated 31st October,
2000;

 

(e)                                  UPC Distribution in respect of its interest
in the share capital of UPC France Holding B.V. dated 31st October, 2000;

 

(f)                                    UPC Distribution in respect of its
interest in the share capital of UPC Nederland B.V. dated 31st October, 2000;

 

(g)                                 UPC Distribution in respect of its interest
in the share capital of Stipdon Investments B.V. dated 31st October, 2000;

 

(h)                                 UPC Scandinavia Holding B.V. in respect of
its interest in the share capital of UPC Norge AS dated 31st October, 2000;

 

(i)                                     UPC Scandinavia Holding B.V. and Cable
Networks Austria Holding B.V. in respect of their respective interests in the
share capital of UPC Belgium SA dated 31st October, 2000;

 

(j)                                     UPC Scandinavia Holding B.V. in respect
of its interest in the share capital of NBS Nordic Broadband Services AB dated
31st October, 2000;

 

(k)                                  Stipdon Investments B.V. in respect of its
interest in the share capital of UPC Czech Holding B.V. dated 31st October,
2000;

 

(l)                                     Stipdon Investments B.V. in respect of
its interest in the share capital of UPC Slovakia Holding B.V. dated 31st
October, 2000;

 

(m)                               Stipdon Investments B.V. in respect of its
interest in the share capital of UPC Romania Holding B.V. dated 31st October,
2000; and

 

(n)                                 Stipdon Investments B.V. in respect of its
interests in the share capital of Telekabel Hungary N.V. dated 31st October,
2000.

 

2.                                       Pledge by each of UPC Holding and UPC
Holding II of its partnership interest in the US Borrower.

 

172

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3.                                      (a)                                  
Obligor Pledge of Shareholder Loans between UPC Distribution, UPC Scandinavia
Holding B.V., Stipdon Investments B.V., UPC Nederland B.V. and UPC Financing
Partnership and the Security Agent dated 31st October, 2000;

 

(b)                                 Pledge of Subordinated Shareholder Loans
between UPC Holding and the Security Agent dated 31st October, 2000;

 

(c)                                  Obligor Pledge of Shareholder Loans between
UPC Distribution and the Security Agent dated 31st May, 2002;

 

(d)                                 Obligor Pledge of Shareholder Loans between
UPC Distribution and the Security Agent dated 2nd December, 2002;

 

(e)                                  Obligor Pledge of Shareholder Loans between
Stipdon Investments B.V. and the Security Agent dated 2nd December, 2002;

 

(f)                                    Obligor Pledge of Shareholder Loans
between Scandinavia Holding B.V. and the Security Agent dated 2nd December,
2002; and

 

(g)                                 Obligor Pledge of Shareholder Loans between
UPC Distribution and the Security Agent dated 9th April, 2003.

 

4.                                       Deed of pledge of registered shares in
favour of the Security Agent by UPC Distribution over its interest in UPC
Distribution Services B.V. dated 4th July, 2002.

 

5.                                       Bank account pledge between UPC
Distribution, Fortis Bank (Nederland N.V.) and the Security Agent dated 22nd
October, 2001.

 

6.                                       Securities account pledge between UPC
Scandinavia Holding B.V., Fortis Bank (Nederland) N.V. and the Security Agent in
relation to the shares in the capital of NBS Nordic Broadband AB.

 

173

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SCHEDULE 8

 

RELEVANT SECURITY INTERESTS

 

(A)                              Security granted in connection with the loan
agreement between N.V. Telekabel as Borrower, Bank of America International
Limited, Citibank, N.A., Deutsche Bank AG London, Meespierson N.V. and Paribas
as Arrangers and others, dated 10th March, 1999 (the N.V. Telekabel Facility).

 

(B)                                Security granted in connection with credit
facility agreement between Cable Network Brabant Holding B.V. as Borrower and
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. as Agent and Initial
Lender, dated 20th February, 1998, as amended.

 

(C)                                Security granted in connection with bridge
facility agreement between A2000 Holding N.V., Kabeltelevisie Amsterdam B.V. and
A2000 Hilversum B.V. as Borrowers and Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A. as Arranger and Agent, dated 15th December, 1999
(the A2000 Facility).

 

(D)                               Security granted in connection with revolving
loan facility agreement for NLG90,000,000 between GelreVision Holding B.V. as
Borrower, MeesPierson N.V. as Arranger, Facility Agent and Security Agent and
others, dated 17th November, 1999.

 

(E)                                 Security granted in connection with facility
agreement for €250,000,000 between UPC France S.A. and Médiaréseaux S.A. as
Borrowers, Paribas, Crédit Lyonnais S.A and ING Barings as Joint Arrangers,
Videopole S.A., Citéréseau S.A. and InterComm France Holding S.A. as Original
Guarantors and Paribas as Facility Agent and Security Agent, dated 7th April,
2000 (the Médiaréseaux Facility).

 

(F)                                 Security granted in connection with
revolving credit facility agreement for €500,000,000 between UPC Nederland B.V.
as Borrower, Chase Manhattan plc and Toronto Dominion Bank Europe Limited as
Arrangers, The Chase Manhattan Bank and The Toronto-Dominion Bank as Original
Lenders and Toronto Dominion Bank Europe Limited as Agent, dated 9th June, 2000.

 

(G)                                Security granted in connection with loan and
note issuance agreement for up to €1,000,000,000 between UPC Facility BV,
TeleKabel Wien GmbH and Janco Multicom A/S as Borrowers, the banks, guarantors
and arrangers named therein and The Toronto-Dominion Bank as Agent and Security
Agent, dated 27th July, 1999 (the UPCF Facility).

 

(H)                               Security granted in connection with the Loan
agreement and working capital facility for up to KC 510,000,000 between, among
others, Dottelkabel A.S. as Borrower, De Nationale Investerings - bank N.V. as
Facility Agent and Lenders and Creditanstalt A.S. as Working Capital Bank and
Lender, dated 16th June, 1998 and June 1998 respectively.

 

174

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SCHEDULE 9

 

RELEVANT FINANCIAL INDEBTEDNESS

 

1.                                       Loan agreement for up to NLG340,000,000
between N.V. Telekabel as Borrower, Bank of America International Limited,
Citibank, N.A., Deutsche Bank AG London, MeesPierson N.V. and Paribas, as
Arrangers and others, dated 10th March, 1999;

 

2.                                       Credit facility agreement between Cable
Network Brabant Holding B.V. as Borrower and Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A. as Agent and Initial Lender, dated 20th February,
1998, as amended;

 

3.                                       Bridge facility agreement between A2000
Holding N.V., Kabeltelevisie Amsterdam B.V. and A2000 Hilversum B.V. as
Borrowers and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. as Arranger
and Agent, dated 15th December, 1999;

 

4.                                       Revolving loan facility agreement for
NLG90,000,000 between Gelrevision Holding B.V. as Borrower, MeesPierson N.V. as
Arranger, Facility Agent and Security Agent and others, dated 17th November,
1999;

 

5.                                       Facility agreement for €250,000,000
between UPC France S.A. and Mediareseaux S.A. as Borrowers, Paribas, Crédit
Lyonnais S.A. and ING Barings as Joint Arrangers, Videopole S.A., Citéréseau
S.A. and InterComm France Holding S.A. as Original Guarantors and Paribas as
Facility Agent and Security Agent, dated 7th April, 2000;

 

6.                                       Revolving credit facility agreement for
€500,000,000 between UPC Nederland B.V. as Borrower, Chase Manhattan plc and
Toronto Dominion Bank Europe Limited as Arrangers, The Chase Manhattan Bank and
The Toronto-Dominion Bank as Original Lenders and Toronto Dominion Bank Europe
Limited as Agent, dated 9th June, 2000;

 

7.                                       Loan and note issuance agreement for up
to €1,000,000,000 between UPC Facility B.V., TeleKabel Wien GmbH and Janco
Multicom A/S as Borrowers, the banks, guarantors and arrangers named therein and
The Toronto-Dominion Bank as Agent and Security Agent, dated 27th July, 1999;
and

 

8.                                       Loan Agreement and working capital
facility for up to KC510,000,000 between, among others Dattelkabel A.S. as
Borrower, De Nationale Investeringsbank N.V. as Facility Agent and Lender and
Creditanstalt A.S. as Working Capital Bank and Lender, dated 16th June, 1998 and
June 1998 respectively.

 

175

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SCHEDULE 10

 

BORROWER GROUP STRUCTURE

 

[ex103image008.gif]

 

 

--------------------------------------------------------------------------------

*                                         All the asterisked entities are not
part of the Borrower Group at the Effective Date.  These entities figure on the
chart for the sake of clarification. 

(1)                                  One share in UPC Belgium S.A. is held by
Cable Network Austria Holding B.V.

 

176

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SCHEDULE 11

 

SHAREHOLDERS’ AGREEMENTS

 

1.                                      Austria

 

Syndikatsvereinbarung (shareholders agreement) dated 28th June, 1995 among
Osterreichische Philips Industrie GmbH, Cable Networks Austria Holding B.V. and
Kabel-TV-Wien GmbH. (In English and German).

 

2.                                      France

 

Stockholders Agreement dated 29th February, 2000 between Belmarken Holding B.V.,
InterComm France CVOHA, InterComm France II CVOHA and Reflex Participants.

 

3.                                      The Netherlands

 

Shareholders’ Agreement, dated 6th July, 1995, among The Municipality of
Amsterdam, A2000 Holding N.V. and Kabeltelevisie Amsterdam B.V. (in English).

 

4.                                      Romania

 

Partnership Agreement between Comtec 2000, Multicanal Holdings S.R.L. and
Control SA.

 

177

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SIGNATORIES

 

Borrowers

 

 

 

UPC DISTRIBUTION HOLDING B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC FINANCING PARTNERSHIP

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

 

 

Original Guarantors

 

 

 

UPC DISTRIBUTION HOLDING B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC HOLDING II B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC FINANCING PARTNERSHIP

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC HOLDING B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC FRANCE HOLDING B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

 

 

 

UPC SCANDINAVIA HOLDING B.V.

 

 

 

By:

/s/ JEREMY EVANS

 

 

JEREMY EVANS

 

 

178

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Lead Arrangers

 

 

 

CHASE MANHATTAN plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

TD BANK EUROPE LIMITED

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

ABN AMRO BANK N.V.

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

BANK OF AMERICA INTERNATIONAL LIMITED

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

BNP PARIBAS

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

CIBC WORLD MARKETS plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

CRÉDIT LYONNAIS S.A.

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

FORTIS BANK (NEDERLAND) N.V.

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

THE ROYAL BANK OF SCOTLAND plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

179

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Lenders

 

 

 

THE CHASE MANHATTAN BANK

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

THE TORONTO-DOMINION BANK

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

TORONTO DOMINION (TEXAS), INC.,

 

 

 

By:

/s/ JANO MOTT

 

 

JANO MOTT

 

 

 

 

 

ABN AMRO BANK N.V.

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

BNP PARIBAS, BELGIAN BRANCH

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

CIBC WORLD MARKETS plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

CRÉDIT LYONNAIS S.A.

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

FORTIS BANK (NEDERLAND) N.V.

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

N B INTERNATIONAL FINANCE B.V.

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

180

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THE ROYAL BANK OF SCOTLAND plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

ABBEY NATIONAL TREASURY SERVICES PLC

 

 

 

By:

/s/ A J LYNN

 

 

A J LYNN

 

 

 

 

 

LEHMAN COMMERCIAL PAPER Inc.

 

 

 

By:

/s/ JENNIFER O’CALLAGHAN

 

 

JENNIFER O’CALLAGHAN

 

 

 

 

 

BANCA COMMERCIALE ITALIANA S.p.A.

 

 

 

By:

/s/ RICHARD ADAMS

/s/ RICHARD OLIVER

 

RICHARD ADAMS

RICHARD OLIVER

 

 

 

 

BEAR STEARNS CORPORATE LENDING INC.

 

 

 

By:

/s/ KEITH C BARNISH

 

 

KEITH C BARNISH

 

 

 

 

 

CITIBANK, N.A.

 

 

 

By:

/s/ PAUL HOUSE

 

 

PAUL HOUSE

 

 

 

 

 

CREDIT SUISSE FIRST BOSTON

 

 

 

By:

/s/ MATTHEW VYLE

/s/ KAMLESH VARA

 

MATTHEW VYLE

KAMLESH VARA

 

 

 

 

DAIMLER CHRYSLER CAPITAL SERVICES (DEBIS) BELGIUM S.A.

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

DLJ CAPITAL FUNDING, INC.

 

 

 

By:

/s/ THOMAS L NEWBERRY

 

 

THOMAS L NEWBERRY

 

 

181

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DRESDNER BANK AG LONDON BRANCH

 

 

 

By:

/s/ S CLUNIE

/s/ M BURNYEAT

 

S CLUNIE

M BURNYEAT

 

 

 

 

HARBOURMASTER LOAN CORPORATION B.V.

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

GOLDMAN SACHS CREDIT PARTNERS, L.P.

 

 

 

By:

/s/ VIVEK KUMAR

 

 

VIVEK KUMAR

 

 

 

 

 

GOLDMAN SACHS CREDIT PARTNERS, L.P.

 

 

 

 

By:

/s/ VIVEK KUMAR

 

 

VIVEK KUMAR

 

 

 

 

 

 

 

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

 

 

By:

/s/ G MACDONALD

 

 

G MACDONALD

 

 

 

 

 

IBM NEDERLAND FINANCIERINGEN B.V.

 

 

 

By:

/s/ A LUNDQVIST

 

 

A LUNDQVIST

 

 

 

 

 

ING BANK N.V.

 

 

 

By:

/s/ ANN B KERNS

/s/ STEPHEN MCPHERSON

 

ANN B KERNS

STEPHEN MCPHERSON

 

 

 

 

EUROCREDIT CDO I B.V. AND EUROCREDIT CDO II B.V.

 

 

 

By:

/s/ ANDREW D JACKSON

 

 

 ANDREW D JACKSON

 

 

 

 

 

KBC FINANCE IRELAND

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

182

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MERRILL LYNCH CAPITAL CORPORATION

 

 

 

By:

/s/ MARTIN J MCINERNEY

 

 

MARTIN J MCINERNEY

 

 

 

 

 

DEBT STRATEGIES FUND III, Inc

 

 

 

By:

/s/ JOSEPH MATTEO

 

 

JOSEPH MATTEO

 

 

 

 

 

DEBT STRATEGIES FUND II, Inc

 

 

 

By:

/s/ JOSEPH MATTEO

 

 

JOSEPH MATTEO

 

 

 

 

 

DEBT STRATEGIES FUND, Inc

 

 

 

By:

/s/ JOSEPH MATTEO

 

 

JOSEPH MATTEO

 

 

 

 

 

SENIOR HIGH INCOME PORTFOLIO, Inc.

 

 

 

By:

/s/ JOSEPH MATTEO

 

 

JOSEPH MATTEO

 

 

 

 

 

MORGAN STANLEY SENIOR FUNDING Inc.

 

 

 

By:

/s/ MAY F NASRALLAH

 

 

MAY F NASRALLAH

 

 

 

 

 

OPPENHEIMER SENIOR FLOATING RATE FUND

 

 

 

By:

/s/ SCOTT FARRAR

 

 

SCOTT FARRAR

 

 

 

 

 

SCOTIABANK EUROPE plc

 

 

 

By:

/s/ ANN B KERNS

 

 

ANN B KERNS

 

 

 

 

 

VAN KAMPEN PRIME RATE INCOME TRUST

 

 

 

By:

/s/ BRIAN T BUSCHER

 

 

BRIAN T BUSCHER

 

 

183

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VAN KAMPEN SENIOR INCOME TRUST

 

 

 

By:

/s/ BRIAN T BUSCHER

 

 

BRIAN T BUSCHER

 

 

 

 

 

UBS AG, LONDON BRANCH

 

 

 

By:

/s/ J V MCCLOSKEY

/s/ WILLIAM J GALLAGHER

 

J V MCCLOSKEY

WILLIAM J GALLAGHER

 

 

 

 

Facility Agent

 

 

 

TD BANK EUROPE LIMITED

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

 

 

 

TORONTO DOMINION (TEXAS), INC.,

 

 

 

By:

/s/ JANO MOTT

 

 

JANO MOTT

 

 

 

 

 

Security Agent

 

 

 

TD BANK EUROPE LIMITED

 

 

 

By:

/s/ STEPHEN MCPHERSON

 

 

STEPHEN MCPHERSON

 

 

184

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