Exhibit 4.26




 




Translation-

For information purposes only




 




 




SUBORDINATED LOAN AGREEMENT




 




In Madrid, on 13 February 2003




 




 




BETWEEN




 




OF THE ONE PART, GRUPO CORPORATIVO ONO, S.A., with registered address at calle Basauri 7-9, edificio Belagua,

urbanización La Florida, in Madrid and holding Fiscal Identification Number

A.82688904 (hereinafter, GRUPO CORPORATIVO ONO), represented by Mr. Eugenio

Galdón in his capacity as representative of MULTITEL HOLDINGS, S.L., President

of the Board of Directors and Mr. Richard D. Alden, in his capacity as Managing

Director.




 




OF THE OTHER PART, CABLEUROPA, S.A.U., with registered address at calle Basauri 7-9, edificio Belagua,

urbanización La Florida, in Madrid and holding Fiscal Identification Number

A.48514343 (hereinafter, CABLEUROPA), represented by Mr. Eugenio Galdón in his

capacity as representative of MULTITEL HOLDINGS, S.L., President of the Board

of Directors and Mr. Richard D. Alden, in his capacity as Managing Director.




 




THEY HEREBY DECLARE




 




I.                                      That Ono Finance, Plc has made the following high-yield bond issues

(hereinafter to be jointly referred to as the “High-Yield Bond Issues”):




 




(i)                                      on 6 May 1999, an issue of 125,000 high-yield bonds denominated in

euros and 275,000 high-yield bonds denominated in U.S. dollars, with a face

value of 1,000 euros and 1,000 U.S. dollars each, respectively;




 




(ii)                                   on 30 June 2000, an issue of 200,000 high-yield bonds denominated in

euros, with a face value of 1,000 euros each; and




 




(iii)                                on 9 February 2001, an issue of 150,000 high-yield bonds denominated

in euros and 200,000 high-yield bonds denominated in U.S. dollars, with a face

value of 1,000 euros and 1,000 U.S. dollars each, respectively




 




(hereinafter, the high-yield bonds issued by virtue of

the High-Yield Bond Issues shall be jointly referred to as the “High-Yield

Bonds”).




 




II.                                    That GRUPO CORPORATIVO ONO, by virtue of a sale and purchase

agreement executed today between it and CABLEUROPA (hereinafter, the “Sale and

Purchase Agreement”), has transferred to CABLEUROPA a number of High-Yield

Bonds which it held (hereinafter, said transfer of High-Yield Bonds shall be

referred to as the “Sale and Purchase of High-Yield  Bonds”).

The price to be paid by CABLEUROPA to GRUPO CORPORATIVO ONO for the purchase of

said High-Yield Bonds is Euro 163,992,600 (hereinafter, the “Price”).




 





























 




III.                                That, in order to partly finance the Sale and Purchase of High-Yield

Bonds, GRUPO CORPORATIVO ONO has agreed to defer collection of part of the

Price, NINETY-EIGHT MILLION FOUR HUNDRED AND SIXTY-FOUR THOUSAND TWO HUNDRED

AND TEN euros (EUR 98,464,210) (the “Payment Deferral”), as provided in the Sale

and Purchase Agreement, and consequently the parties (who declare that their

powers to act herein remain in force) have decided to regulate the conditions

of said Payment Deferral by converting the same into a loan, for which purpose,

they agree to execute the present agreement (hereinafter, the “Agreement”)

which shall be governed by the following




 




CLAUSES




 




ONE.- OBJECT OF THE

AGREEMENT




 




Pursuant to the terms and conditions set

forth in this Agreement, GRUPO CORPORATIVO ONO grants to CABLEUROPA, which

accepts, a loan (hereinafter, the “Loan”) for the amount of NINETY-EIGHT

MILLION FOUR HUNDRED AND SIXTY-FOUR THOUSAND TWO HUNDRED AND TEN euros (EUR

98.464.210) (hereinafter, the “Loan Amount”).




 




The parties declare that CABLEUROPA is

currently in possession of the Loan Amount as a result of  the conversion of the

Payment Deferral agreed with GRUPO CORPORATIVO ONO and referred to in

Declaration III herein, into the Loan regulated by the present Agreement.




 




TWO.- MATURITY




 




2.1                              The Loan shall mature on 1 March 2011 or on any prior date on which:




 




(a)                                   all obligations arising from the following agreements have been

fulfilled and all amounts owed by virtue of such agreements have been paid:




 




(i)                                      the Senior Facility Agreement (hereinafter, as amended from time to time, the “Facility

Agreement”), dated 8 August 2001, executed by, among others,

CABLEUROPA and a syndicate of credit entities and formalised in an agreement

dated 8 August 2001, executed before Mr Fernando Molina Stranz, Public Notary

in Madrid, including the complete cancellation of the Lender’s

Commitments (as such terms are defined in the Facility Agreement);




 




(ii)                                   the foreign exchange risk hedging

agreement executed on 18 May 2000 between Ononet Comunicaciones, S.A. and BANK

OF AMERICA, N.A. (hereinafter, as amended from time to time, “Hedging Agreement A”);




 




(iii)                                the foreign exchange risk hedging

agreement executed on 18 May 2000 between Ononet Comunicaciones, S.A. and THE

TORONTO-DOMINION BANK (hereinafter, as amended from time to time, “Hedging

Agreement B”); and




 




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(iv)                               the foreign exchange risk hedging

agreement executed on 8 July 2002 between CABLEUROPA and DEUTSCHE BANK AG

LONDON (hereinafter,

as amended from time to time, “ Hedging Agreement C”);




 




(v)                                  the Indentures dated 6 May, 1999, 30

June, 2000 and 9 February, 2001, entered into between, inter alia, CABLEUROPA and

Ono Finance, Plc., stating the terms and conditions of the High-Yield Bond

Issues.




 




(hereinafter, the Facility Agreement, Hedging Agreement A,

Hedging Agreement B, and Hedging Agreement  C shall be jointly referred to as the “Financing

Agreements”).




 




(b)                                  The Board of Directors of CABLEUROPA agrees to call a General

Shareholders’ Meeting, which agenda shall include a proposal to increase share

capital by offsetting credits, provided that the credits to be offset are

derived, in whole or in part, from the present Loan.




 




On such date, subject to Clause 4 below, GRUPO

CORPORATIVO ONO shall claim from CABLEUROPA the return of the principal as well

as any interest accrued.




 




2.2                                In the event that, due to reasons not attributable to CABLEUROPA,

the increase in share capital referred to in section (b) above is agreed for an

amount which would be insufficient to repay the entire Loan, CABLEUROPA

undertakes to act as necessary in order for subsequent increases in share

capital for which approval is requested from the General Shareholders’ Meeting

to be carried out by offsetting credits, until the full amount of the Loan is

repaid.




 




GRUPO CORPORATIVO ONO undertakes to vote at the

General Shareholders’ Meeting in favour of any proposal by the Board of

Directors of CABLEUROPA regarding the increase in share capital of the latter

company by offsetting credits derived from the Loan and to create a pledge over

the shares issued as a result of such share capital increase by means of a

Security Document (as such term is defined under the Facility Agreement).




 




THREE.- INTEREST




 




The

Loan Amount pending amortisation shall accrue interest daily in favour of GRUPO

CORPORATIVO ONO, from the date of the present Agreement until such date as the

Loan is fully and definitively amortised. Said interest shall be calculated on

the basis of a year of three hundred and sixty (360) days and according to the

number of calendar days that have actually passed.




 




The

annual interest rate applicable to the Loan Amount pending amortisation shall

be 7.5%. Annual interests accrued shall be settled and paid on the anniversary

of the execution of the present Agreement.




 




No interest whatsoever shall be paid if:

(i) an Event of Default or a Potential Event of Default has occurred (as

defined in the Facility Agreement) within the framework of the Facility




 




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Agreement, or if it is reasonably probable

that the payment of interest agreed will give rise to an Event of Default or a

Potential Event of Default (as defined in the Facility Agreement) within the

frame of the Facility Agreement; or (ii) if the conditions provided for in

Clause 20.2(e) of the Facility Agreement are not met.




 




Should the provisions expressed above be

applicable, unpaid interest accrued would be capitalised periodically and added

to the principal. In no event, default interest will be accrued.




 




FOUR.- SUBORDINATE NATURE

OF THE LOAN




 




4.1                               The present Loan, according to the seniority of credits, shall be

subordinated to the payment in full of any amounts owed by CABLEUROPA or by

companies in its group under the Financing Agreements and the complete

cancellation of the Lender’s Commitments (as such terms are defined in the

Facility Agreement) under the Facility Agreement.




 




Consequently, until such time as all amounts owed

under each of the Financing Agreements have been fully paid:




 




(a)                                  CABLEUROPA may not amortise nor repay in advance any amount under

the present Loan, unless said amortisation or early repayment is made against

an increase in share capital in CABLEUROPA and the shares issued are pledged

pursuant to a Security Document (as defined in the Facility Agreement);




 




(b)                                 GRUPO CORPORATIVO ONO: (i) shall not demand payment or the repayment

of the principal or any other amount; (ii) shall not sue for the principal or

any other amount; (iii) shall not exercise any enforcement rights which may

assist it (whether under any Encumbrance (as defined in the Facility Agreement)

or otherwise) or initiate proceedings to wind up CABLEUROPA; (iv) shall not

exercise any right of set-off or combination of accounts in respect of amounts

owed under the Loan (including the Loan Amount, any cash interests (provided

that, for the avoidance of doubt, interest may accrue and be capitalised),

fees, costs or expenses thereon), except for set-off against a share capital

increase; and (v) shall not prove in respect of this Loan in any liquidation of

CABLEUROPA.




 




4.2                                 GRUPO

CORPORATIVO ONO undertakes, provided that it is not obliged to do so, to vote

against any proposal in a winding up, dissolution, administration or bankruptcy

of CABLEUROPA or any analogous proceedings which may have the effect of causing

or allowing any the amounts owing under the Loan to be fully or partially paid

before the amounts owed under the Financing Agreements, or which result in a failure

to comply with the provisions set forth herein.




 




FIVE.- GUARANTEES AND RAISING TO

PUBLIC DOCUMENT STATUS




 




5.1                                GRUPO CORPORATIVO ONO and CABLEUROPA agree that the granting of the

Loan does not entail the creation of an Encumbrance (as defined in the Facility

Agreement) or any guarantee whatsoever. Consequently, GRUPO CORPORATIVO ONO

undertakes to discharge or release any guarantee, charge or Encumbrance (as




 




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defined in the Facility Agreement) that may be created

or granted in its favour with regard to the Loan.




 




5.2                                GRUPO CORPORATIVO ONO and CABLEUROPA accept the obligation to not

raise the present Loan to public document status unless required to do so by

any applicable law (for example, a law on foreign exchange and foreign

investment), in which case, the parties shall do so, waiving the seniority

attributed to public documents.




 




SIX.- CONVERSION OF THE

LOAN INTO A PARTICIPATION LOAN




 




GRUPO CORPORATIVO ONO and CABLEUROPA may,

at any time during the live of the Loan, modify its terms in order to convert

the same into a participation loan under the terms established in legislation

applicable at the time.




 




Notwithstanding any such conversion into a

participation loan, the other terms, including the subordinated nature of this

Loan, will remain unchanged.




 




SEVEN.- APPLICABLE LAW




 




The present Agreement shall be governed by

Spanish law.




 




EIGHT.- ARBITRATION AND

JURISDICTION




 




Any dispute that may arise regarding the

validity and/or resolution and/or interpretation and/or execution of the

present Agreement shall be resolved by means of arbitration-in-law to be

carried out in the city of Madrid, by a single arbitrator, and in accordance

with the rules of the International Chamber of Commerce, with both parties being

obliged to comply with the award handed down at said proceedings.




 




For any other matters which for legal

reasons cannot be submitted to arbitration, the parties submit themselves to

the Courts and Tribunals of the city of Madrid, waiving any other Judge or

Tribunal which might otherwise correspond thereto.




 




In witness whereof, the parties sign two

copies of the present Agreement for a single purpose, at the place and on the

date indicated ut supra.




 




Por Grupo Corporativo ONO, S.A.




 




 




 




	

  D. Eugenio

  Galdón


  	

  D. Richard D.

  Alden


  





 




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Por Cableuropa, S.A.U.




 




 




 




	

  D. Eugenio

  Galdón


  	

  D. Richard D.

  Alden


  





 




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