UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON,
DC 20549  
  FORM  8-K  CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934  Date of report (Date of earliest event
reported):  July 28, 2003  UPC POLSKA, INC. (Exact Name of Registrant as Specified in its
Charter)  Delaware
  
  000-22877
  
  06-1487156(State or Other Jurisdiction
  of Incorporation)
  
  (Commission File Number)
  
  (IRS Employer
  Identification No.)4643 Ulster Street, Suite 1300, Denver,
  Colorado  80237
  (303)770-4001(Address, including Zip Code and Telephone
  Number, including
  Area Code, of Principal Executive Offices)
 
  
   Item 5. Other Events and Required FD
Disclosure  In furtherance
of the announcement by UPC Polska, Inc. (the Company) on July 8, 2003
that it filed a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code on July 7, 2003, and filed a pre-negotiated plan of
reorganization on July 8, 2003, with the United States Bankruptcy Court
for the Southern District of New York (the U.S. Bankruptcy Court) (Case No.
03-14358), a copy of the proposed disclosure statement (Disclosure Statement)
filed with the U.S. Bankruptcy Court on July 28, 2003 is attached hereto
as Exhibit 99.1.  Item
7. Financial Statements, Pro FormaFinancial Information and
Exhibits  (a)  Not applicable.  (b)  Not applicable.  (c)  Exhibits  Exhibit Number
  
  Description99.1
  
  Disclosure
  Statement jointly proposed by the Company and UPC Polska Finance, Inc., dated
  July 28, 2003.  2 
   SIGNATURES  Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.  Date: July 28,
2003  UPC POLSKA, INC.By:
  /s/ SIMON BOYDName:
  Simon BoydTitle:
  Chief Executive Officer  3 
   Exhibit
99.1  THIS IS NOT A
SOLICITATION OF ACCEPTANCES OR REJECTION OF THE CHAPTER 11 PLAN JOINTLY
PROPOSED BY UPC POLSKA, INC. AND UPC POLSKA FINANCE, INC. IN THIS CHAPTER 11
CASE.  ACCEPTANCES OR REJECTIONS OF THE
PLAN MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE
BANKRUPTCY COURT. THIS DISCLOSURE 
STATEMENT IS BEING SUBMITTED FOR APPROVAL, BUT HAS NOT YET BEEN APPROVED
BY THE BANKRUPTCY COURT AND IS SUBJECT TO AMENDMENT PRIOR TO SUCH APPROVAL
BEING GRANTED.  THIS DISCLOSURE
STATEMENT IN DRAFT FORM DOES NOT CONSTITUTE AN OFFER OF SECURITIES UPON ISSUE
IN OR FROM THE UNITED STATES.   UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK xIn re
  :
  
  Chapter 11:UPC Polska, Inc.,
  :
  
  Case No. 03-14358 (BRL):Debtor.
  ::x   DISCLOSURE
STATEMENT WITH RESPECT
TO CHAPTER 11 PLAN OF REORGANIZATION JOINTLY PROPOSED BYUPC POLSKA, INC. AND UPC POLSKA FINANCE, INC.   Dated:
  New York, New YorkJuly 28, 2003  
   This
Disclosure Statement (theDisclosure Statement) relates to the proposed financial
restructuring of UPC Polska, Inc., a corporation incorporated under the laws of
the State of Delaware (UPC Polska, the Company or theDebtor), and the issuance of a combination of common
stock (New UPC Polska Stock)
and notes (New UPC Polska Notes)
and the distribution of cash in connection with the proposed restructuring of
the Companys capital structure and other obligations (the Restructuring), as
described in this Disclosure Statement. 
The Company, together with UPC Polska Finance, Inc., a newly-formed
company incorporated under the laws of the State of Delaware (Polska Finance),
jointly propose the Restructuring. 
Pursuant to this Restructuring, the Company intends to effectuate an
overall compromise and settlement and to co-issue with Polska Finance the New
UPC Polska Notes, and to issue the New UPC Polska Stock and distribute cash, in
consideration for the surrender and transfer to UPC Polska of:  (i)all
of the Claims including, but not limited to, any accrued and unpaid interest
under:  the $252,000,000 141⁄2%
Senior Discount Notes due 2008, the $256,800,000 141⁄2%
Senior Discount Notes due 2009 and the $36,001,321
Series C Senior Discount Notes due 2008;  issued by the
Company (collectively, the UPC Polska Notes);  (ii)all
of the Claims under the $14,942,000 in aggregate principal amount (including
capitalized interest through June 30, 2003) of promissory notes evidencing
indebtedness of UPC Polska to Belmarken Holding B.V. (Belmarken) (together with accrued and unpaid
interest thereon in the amount of $826,000, as of June 30, 2003, the Belmarken Notes);  (iii)all of
the Claims including, but not limited to, any accrued and unpaid interest held
by UPC Telecom B.V. (UPCTelecom) under:  the UPC Polska
Notes with an aggregate principal amount at maturity of $83,435,000 owned by
UPC Telecom as of July 8, 2003 (the Telecom Owned UPC Polska Notes),  $243,926,000 in
aggregate principal amount (including capitalized interest through June 30,
2003)of
promissory notes evidencing other indebtedness of UPC Polska to UPC Telecom
which notes rank pari passu with the UPC Polska Notes (together with accrued
and unpaid interest thereon in the amount of $13,490,000, as of June 30, 2003,
the Telecom Pari Passu Notes),  $150,000,000 in
aggregate principal amount of promissory notes evidencing other indebtedness of
UPC Polska ranking junior to the Belmarken Notes and the UPC Polska Notes
(together with approximately $57,802,000 of accrued and unpaid interest
thereon, as of June 30, 2003, the Telecom Junior Notes and, collectively with the Telecom
Owned UPC Polska Notes and the Telecom Pari Passu Notes, the UPC Telecom Notes);  (iv)all
of the General Unsecured Claims against the Company (General Unsecured Claims); and  (v)all
of the Equity Interests of holders of all outstanding shares of UPC Polska
authorized common stock (the UPC Polska Stock) and the holders of all rights,
options and warrants to acquire shares of UPC Polska Stock (collectively with
the shares of UPC Polska Stock, the UPC Polska Equity).  The
Company has determined that it is in the best interests of the Company and the
Companys stakeholders to effectuate an overall compromise and settlement and
effect a restructuring of the capital structure of the Company as contemplated
by the Plan (as defined herein) in order to (i) maximize the value of the
Company as a going concern for the benefit of the Company and its stakeholders,
(ii) reduce the Companys current and future financial obligations and (iii)
provide for the working capital needs and stability of the business of the
Company.  For additional information
regarding the Restructuring, see the section herein entitled The
Restructuring.  i 
   In order to effectuate the Restructuring described in
this Disclosure Statement, on July 7, 2003 (the Petition Date), the Company filed a petition
for relief under Chapter 11 (the Chapter 11 Case) of the United States Bankruptcy Code
(the Bankruptcy Code)
with the United States Bankruptcy Court for the Southern District of New York
(the Bankruptcy Court)
and filed the pre-negotiated Chapter 11 Plan of Reorganization Jointly Proposed
by UPC Polska, Inc. and UPC Polska Finance, Inc., dated July 8, 2003, (the Plan) described in
this Disclosure Statement.  The terms of the Restructuring have
been developed in the course of discussions and negotiations with (i)
representatives of holders of approximately 75% of the aggregate principal
amount of the outstanding UPC Polska Notes (excluding the Telecom Owned UPC
Polska Notes) (the Participating Noteholders) and (ii) UPC
Telecom and Belmarken (the UPC Entities), which
together hold all of the Telecom Pari Passu Notes,  the Telecom Junior Notes and the Belmarken Notes (collectively
with the Telecom Pari Passu Notes and the Telecom Junior Notes, the Other UPC
Polska Notes), all of the outstanding Telecom Owned UPC Polska
Notes, and all of the UPC Polska Equity, and
such parties have agreed in writing, prior to the Petition Date and subject to
the terms and conditions of the Restructuring Agreement (as defined herein), to
vote in favor of the Plan.  ii 
   DISCLAIMERS  This
Disclosure Statement has been prepared pursuant to, and in accordance with,
Section 1125 of the Bankruptcy Code and Rule 3016(b) of the Federal Rules of
Bankruptcy Procedure (Bankruptcy Rules) in order to provide adequate
information to enable holders of Claims (as defined in the Plan) against the
Company who are entitled to vote on the Plan to make a reasonably informed
decision with respect to their vote on the Plan.  To that end, this Disclosure Statement describes the terms and
provisions of the Plan, as well as the methods by which the Company will
implement the Restructuring.  Persons or
entities holding or trading in, or otherwise purchasing, selling or
transferring, Claims against, or Equity Interests (as defined in the Plan) in,
the Company should evaluate this Disclosure Statement in light of the purpose
for which it was prepared.  [This
Disclosure Statement has been approved by order of the Bankruptcy Court as
containing adequate information of a kind and in sufficient detail to enable
holders of Claims to make an informed judgment with respect to voting to accept
or reject the Plan.  However, the
Bankruptcy Courts approval of this Disclosure Statement does not constitute a
recommendation or determination by the Bankruptcy Court with respect to the
merits of the Plan or the Restructuring.]  The
information included in the sections entitled Summary - The Company,The
Company and Outstanding Securities of the Company of this Disclosure
Statement has been provided by the Company. 
The information included in the sections entitled Summary  Polska
Finance,Description of the New UPC Polska Notes - General and Description
of the New UPC Polska Notes  Management of Polska Finance of this Disclosure
Statement has been provided by Polska Finance. The Company and Polska Finance
have jointly provided the information included in the other sections and pages
of this Disclosure Statement. The Company and Polska Finance are responsible
for the accuracy of the information they have provided, each with respect to
such information it has provided, and together with respect to the information
provided jointly in this Disclosure Statement. 
The Company and Polska Finance confirm, each with respect to such
information it has provided, that on the date of this Disclosure Statement such
information is, to the best of its knowledge, true and accurate in all material
respects, and that there are no other facts the omission of which would make
any statement in this Disclosure Statement misleading in any material respect.  This
Disclosure Statement will be made available in print and on the internet at the
Companys website at www.upc-polska.com. 
The Company does not accept any liability for the non-availability of
the Disclosure Statement on the internet or the possible consequences from
reliance on, or action taken in consequence of, other information available on
the internet.  The
information contained on the Companys website address mentioned in this
Disclosure Statement, other than the Disclosure Statement itself, is not
information intended to be incorporated herein by reference or otherwise.  No reliance should be placed on any such
information and neither the Company nor Polska Finance accepts any liability
(in contract or tort, in negligence or otherwise, except in the case of its own
fraud) for any loss suffered as a result of any reliance placed on, or use made
of, any such information in connection with the issuance of New UPC Polska
Stock or New UPC Polska Notes or the consummation of the Plan as set out in
this Disclosure Statement.  This Disclosure Statement was
prepared by, and under the responsibility of, the Company and Polska Finance in
good faith, based upon information available to them, including the Companys
books and records, and is designed to provide adequate information to enable
holders of Impaired Claims to make an informed judgment on whether to accept or
reject the Plan.  All holders of
Impaired Claims are hereby advised and encouraged to read and carefully
consider this Disclosure Statement and the Plan in their entirety before voting
to accept or reject the Plan.  This Disclosure Statement may not be
relied on for any purpose other than to determine how to vote on the Plan.  Nothing contained herein shall constitute an
admission of any fact or liability by any party, or be admissible in any
proceeding involving the Company or any other party.  iii 
   In making a decision to accept or
reject the Plan, each holder of an Impaired Claim must rely on its own
examination of the Company and Polska Finance as described in this Disclosure
Statement and the terms of the Plan.  As
such, all holders of Impaired Claims should read and consider carefully the
matters described in this Disclosure Statement as a whole, including the
section entitled Risk Factors, prior to voting on the Plan.  The Company and Polska Finance are
not (and shall not be construed to be) offering legal, business, financial or
tax advice to any holder of any Claim or Equity Interest, and this Disclosure
Statement should not be considered to contain any specific advice or
instruction considering such matters with respect to any Claim or Equity
Interest.   You should consult with your
legal, business, financial and tax advisors as to any matters concerning this
Disclosure Statement and the Plan.  The description of the Plan contained
herein is intended as a summary only and is qualified in its entirety by
reference to the Plan itself, the exhibits and schedules to the Plan and the
annexes to this Disclosure Statement (collectively, the Plan Documents).  A copy of the Plan is attached to this Disclosure
Statement as Annex A.  If any
inconsistency exists between the Plan and the Plan Documents, on the one hand,
and this Disclosure Statement, on the other hand, the terms of the Plan and the
Plan Documents shall govern.  This
Disclosure Statement contains information supplementary to the Plan and the
Plan Documents and is not intended to supplant or substitute for the Plan or
the Plan Documents themselves.  No party is authorized by the Company
or Polska Finance to give any information or make any representations with
respect to the Company, Polska Finance, the Companys assets, the Plan, the New
UPC Polska Notes or the New UPC Polska Stock to be issued under the Plan or the
Restructuring in general other than that which is contained in this Disclosure Statement,
and no representations or information concerning the Company, Polska Finance,
the Companys future business operations, the nature of the Companys
liabilities, the Companys creditors claims or the value of its properties
have been authorized by the Company or Polska Finance other than as set forth
herein.  As such, you should not rely
upon any such representations or information other than as explicitly set forth
in this Disclosure Statement (including the annexes and exhibits attached
hereto and information incorporated herein by reference).  Unless another time is expressly
specified herein, the statements contained in this Disclosure Statement are
made as of the date hereof, and neither the delivery of this Disclosure
Statement nor any exchange, redemption, restructuring, modification, or
cancellation of any of the UPC Polska Notes, the Other UPC Polska Notes, the
General Unsecured Claims and the UPC Polska Equity made pursuant to the Plan
will, under any circumstances, create any implication that there has been no
change in the information contained herein at any time subsequent to the date
hereof or that the information contained herein is correct at any time
subsequent to the date hereof.  There
can be no assurance that the information and representations contained herein
will continue to be accurate subsequent to the date hereof.  Except as stated herein, all financial
statements contained, or incorporated by reference, in this Disclosure
Statement have been provided by the Company. 
Certain of the financial statements contained herein, or incorporated by
reference, are unaudited.  This Disclosure Statement and certain
of the Annexes hereto contain projections of, among other things, future
results of operations.  The Company does
not as a matter of course publicly disclose projections, but the Company has
prepared such information in connection with the Plan solely for purposes of
demonstrating that, as required by Section 1129(a)(11) of the Bankruptcy Code,
confirmation of the Plan is not likely to be followed by the liquidation, or
the need for further financial reorganization, of the Company.  This information was prepared by the Company
and was not prepared with a view toward compliance with  iv 
   published
guidelines of the U.S. Securities and Exchange Commission (the SEC), the
American Institute of Certified Public Accountants or any other regulatory or
professional agency or body, generally accepted accounting principles or
consistency with our audited financial statements.  In addition, KPMG Polska Sp. z o.o. (KPMG), the
Companys independent auditor, has not compiled or examined the estimates and
projections, and accordingly, KPMG expresses no opinion or any other form of
assurance with respect to, assumes no responsibility for, and disclaims any
association with, these estimates and projections.  Furthermore, the projections contained herein are based upon a
number of assumptions and estimates presented with numerical specificity and considered
reasonable by the Company when taken as a whole.  These assumptions and estimates, however, are subject to inherent
uncertainties and to a wide variety of significant known and unknown business,
economic and competitive risks, including, among others, those risks summarized
herein, that may cause the Companys actual results or performance to be
materially different from those projected. 
Consequently, this Disclosure Statement should not be regarded as a representation
by the Company or any other person of results that will actually be
achieved.  These estimates and
projections should be read together with the information contained under the
heading Risk Factors of this Disclosure Statement and the information and
financial statements and related notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2002 and the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003,
attached hereto as Annexes B and C, respectively.  Certain of the information and
statements contained in this Disclosure Statement are forward-looking
statements and contain estimates, assumptions and projections.  Such information and statements are subject
to inherent uncertainties and to a wide variety of significant known and
unknown restructuring, business, economic and competitive risks, including,
among others, the following:  the
ability of the Company to restructure its outstanding indebtedness on a
satisfactory and timely basis;  the
ability of the Company and Polska Finance to confirm and consummate the Plan
under the Bankruptcy Code;  the
ramifications of the restructuring;  risks
associated with not completing the Restructuring consistent with the Companys
and Polska Finances timetable;  risks
associated with third parties taking actions inconsistent with, or detrimental
to, the consummation of the Plan;  the
ability to fund, develop and execute the business plan of the Company and its
subsidiaries (the UPC Polska Group);  potential
adverse developments with respect to the UPC Polska Groups liquidity or
results of operations;  competitive
pressures from other companies in the same or similar lines of business as the
UPC Polska Group;  economic
conditions in Poland generally, as well as in the pay television business in
Poland, including decreasing levels of disposable income per household and
increasing rates of unemployment;  risks
associated with an amendment to copyright law in Poland which took effect on
January 1, 2003;  ongoing
process of copyright law development in Poland;  v 
   changes in
laws and regulations affecting the UPC Polska Group, including those related to
taxation;  business
changes, including pay television programming changes;  foreign
exchange rate fluctuations;  future
financial performance of the UPC Polska Group, including availability, terms
and deployment of capital;  the UPC
Polska Groups ability to comply with government regulations;  the overall
market acceptance of the UPC Polska Groups products and services, including
acceptance of the pricing of those products and services;  the failure
of Telewizyjna Korporacja Partycypacyjna S.A. (TKP) to satisfy contractual
obligations owed to or on behalf of the UPC Polska Group arising out of the
Companys transaction with Canal+ S.A. (Canal+) and the UPC Polska Groups
limited ability to liquidate its investment in TKP; and                potential adverse publicity
regarding the Restructuring and the Chapter 11 case.  For
further information on these risk factors and assumptions, see the section
herein entitled Risk Factors.  To the
extent that actual results vary from such assumptions, recoveries to holders of
Claims against the Company may vary from those projected herein and in the
Plan.  When used in this Disclosure
Statement, the words
believe,anticipate,should,intend,plan,will,expects,estimates,projects
and similar expressions identify such forward-looking statements.  All forward-looking statements
attributable to the Company, Polska Finance or persons acting on their behalf
are expressly qualified in their entirety by the cautionary statements
contained herein.  Except as required by
applicable law, neither the Company nor Polska Finance undertakes any
obligation to update any such statements, whether as a result of new
information, future events or otherwise. 
Forward-looking statements are provided in this Disclosure Statement
pursuant to the safe harbor established under Section 1125(e) of the Bankruptcy
Code and should be evaluated in the context of the estimates, assumptions,
uncertainties and risks described in this Disclosure Statement.  Consummation of the Plan is subject
to conditions precedent that could lead to delays in consummation of the
Plan.  There can be no assurance that
these conditions will be satisfied or waived, or that the Plan will be
consummated.  Even after the Effective
Date (as defined in the Plan), distributions under the Plan may be subject to
substantial delays for holders whose Claims are disputed.  See Risk Factors below.  During the Chapter 11 proceeding, the
Company intends to operate its business in the ordinary course and to pay its
critical creditors, if any, in full and without interruption.  The Company does not intend that any of its
wholly-owned subsidiaries will commence cases under the Bankruptcy Code.  This Disclosure Statement has not
been filed with, or reviewed by, the SEC or by any state securities commission
or similar public, governmental or regulatory authority, and no such entity has
passed upon the accuracy or adequacy of the statements contained herein.  The New UPC Polska Stock and the New UPC
Polska Notes to be issued pursuant to the Plan will not have been the subject
of a registration statement filed with the SEC or any state securities
commission.  This Disclosure Statement
is not an offer to sell the New  vi 
   UPC
Polska Stock or the New UPC Polska Notes or an offer to buy UPC Polska Notes,
the Other UPC Polska Notes or the UPC Polska Equity in any jurisdiction where
such offer or sale is not permitted. 
This Disclosure Statement seeks only the consent to the Plan of persons
entitled to vote thereon.  The exchange
of the UPC Polska Notes, the Other UPC Polska Notes, and the General Unsecured
Claims pursuant to the Plan will occur only upon consummation of the Plan.  vii 
   Table of Contents   SummaryThe CompanyPolska FinanceThe
  RestructuringChapter 11 Case and the
  PlanRisk FactorsRisks that the
  Restructuring is Not Successfully CompletedRisks
  Related to the Restructuring ProcessRisks Related to
  the Chapter 11 CaseRisks
  Related to the UPC Polska Groups BusinessRisks Related to Ownership
  of the New UPC Polska Stock and the New UPC Polska NotesThe RestructuringPurpose of the
  RestructuringBackground of the
  RestructuringDescription of the
  RestructuringConditions to the
  RestructuringOperations after
  the RestructuringChapter
  11 Case and the Plan of ReorganizationBrief
  Explanation of Chapter 11 ReorganizationDetermination to
  File Chapter 11 CaseCommencement of
  the Chapter 11 CaseSignificant
  Events during the Chapter 11 CaseThe PlanVoting on, and Confirmation of, the PlanThe CompanyBusinessRegional
  ClustersCable
  TelevisionThe Canal+ MergerBusiness
  StrategyInternet
  ServicesTechnology and
  InfrastructureRelationships with
  Housing CooperativesDiscontinued
  SegmentsCompetitionPiracyAffiliate
  TransactionsEmployeesRegulationInvestmentsLitigation
  and ClaimsSelected
  Historical Consolidated Financial InformationManagements
  Discussion and Analysis of Financial Condition and Results of OperationCurrent Management of
  the CompanyOutstanding
  Securities of the CompanyThe UPC
  Polska NotesThe
  Telecom Pari Passu Notes, the Telecom Junior Notes and the Belmarken Notes  viii 
   The RCI NotesCapital
  Stock of the Company Prior to the RestructuringCapital
  Stock of the Company After the RestructuringDescription Of
  The New UPC Polska NotesGeneralManagement of Polska
  FinanceThe
  New UPC Polska NotesThe Restructuring AgreementThe Agreed
  Restructuring ProcessDistribution
  of Cash, New UPC Polska Notes and New UPC Polska Stock under the PlanTreatment
  of Other Creditors of the CompanyOther Terms
  of the Restructuring AgreementReorganization
  Valuation Analysis and Projected Financial InformationValuation
  AnalysisValuation
  MethodologiesProjected Financial
  InformationLiquidation
  AnalysisBest Interests of
  Creditors TestLiquidation
  AnalysisSecurities Law
  ConsiderationsTax AnalysisWhere You Can Find
  More InformationIncorporation by ReferenceAuditorsAuditors
  Statement Regarding Financial Statements and ConsentVoting AgentConclusion and
  RecommendationCross References for
  Defined Terms  Annex ListAnnex A
  
  Chapter
  11 Plan of ReorganizationAnnex B
  
  Annual
  Report on Form 10-K for the Fiscal Year Ended December 31, 2002Annex C
  
  Quarterly
  Report on Form 10-Q for the Fiscal Quarter Ended March 31, 2003Annex D
  
  Form
  8-K Filed by the Company announcing the transactionAnnex E
  
  Projected
  Financial InformationAnnex F
  
  Liquidation
  Analysis  ix 
   Summary  The following summary is intended
only to highlight certain information contained elsewhere in this Disclosure
Statement.  This summary is qualified in
its entirety by the more detailed information, the financial statements,
including the notes thereto, appearing elsewhere in this Disclosure Statement,
the Annexes hereto and the other documents referenced herein.  You should carefully read the entire
Disclosure Statement (including, in particular, the sections of this Disclosure
Statement entitled Risk Factors,Liquidation Analysis,The Restructuring
and The Restructuring Agreement), the Annexes hereto and the other documents
referred to herein  before deciding
whether to vote in favor of the Plan. The date of this Disclosure Statement is
set forth on the cover page of this document.  Unless otherwise defined herein, all
capitalized terms used in this Disclosure Statement shall have the meanings
ascribed to such terms in the Plan. Unless the context clearly requires
otherwise, references in this Disclosure Statement to the Companyrefer to
UPC Polska, Inc., references in this Disclosure Statement to the Reorganized
Debtorrefer to UPC Polska, Inc. on and after the Effective
Date and references in this Disclosure Statement to Polska Finance refer to UPC
Polska Finance, Inc., a newly formed company incorporated under the laws of the
State of Delaware and a wholly-owned subsidiary of UPC Telecom and which will
be a co-issuer of the New UPC Polska Notes upon consummation of the
Restructuring. Business Daymeans any day which is not a Saturday, Sunday or a
day on which banking institutions located in New York, New York, United States
of America, London, England or Warsaw, Poland, are authorized or obligated by
law to be closed.  The symbol$refers to
United States Dollars.  Unless otherwise
indicated, all currency amounts used or referred to in this Disclosure
Statement are in United States Dollars.  The Company  UPC
Polska (formerly known as @Entertainment, Inc., and prior to that as Polstar
Holdings, Inc.) is a Delaware corporation which was established in May 1997.
From August 1999 until the fourth fiscal quarter of 2002, UPC Polska was wholly
owned by United Pan-Europe Communications N.V. (UPC). 
In the fourth fiscal quarter of 2002, UPC transferred all issued shares
of Company common stock to UPC Telecom, which is a wholly-owned subsidiary of
UPC. UPC also assigned to UPC Telecom all of the UPC Polska Notes then owned by
UPC, and all rights and obligations arising from loan agreements between the
Company and UPC.  The
UPC Polska Group operates one of the largest cable television systems in
Poland.  Since December 2001, the UPC
Polska Group has engaged in only one business segment  cable television
services.  Prior to December 2001, the
UPC Polska Groups business consisted of three components:  cable
television services,  digital
satellite direct-to-home, or D-DTH, services, and  programming.  During
2001, the Company reviewed its long-term business strategy and decided to focus
on its core competency, the provision of cable television services, and on
providing internet services to existing customers.  As a part of this re-focus, the UPC Polska Group decided to
streamline its operations by restructuring its D-DTH and programming
businesses.  In December 2001, the UPC
Polska Group consummated a joint venture transaction with an affiliate of
Canal+ to combine the Companys existing D-DTH platform with Canal+s Polish
D-DTH and premium pay television business to distribute D-DTH services and
programming to subscribers in Poland through TKP. The UPC Polska Group has a
25% equity interest in TKP.  TKP is
controlled and operated by Canal+.  This
transaction resulted in the discontinuation of the UPC Polska Groups D-DTH and
programming businesses.  
   Polska Finance  Polska
Finance is a newly formed company incorporated in the State of Delaware and is
a wholly-owned subsidiary of UPC Telecom and a sister company of the Company.
Polska Finance was formed as an integral component of the Plan to effectuate
the Restructuring through the co-issuance with the Company of the New UPC
Polska Notes. Polska Finance has not conducted any operations to date and is
not anticipated to conduct any business, other than acting as a co-issuer of
the New UPC Polska Notes.  The Restructuring  The
Company has over time incurred substantial debt, significant operating losses
and negative cash flow, which were driven by the large capital investment
required for the construction and acquisition of cable networks, acquisition of
programming rights and the costs associated with commencing D-DTH and
programming operations. During 2001, the Company reviewed
its long-term business strategy for its various business segments and commenced
an internal reorganization.  In the
fourth fiscal quarter of 2002, certain of the Companys main creditors,
including UPC and its affiliates, UPC Telecom and Belmarken, and certain other
holders of the UPC Polska Notes, engaged in discussions about the restructuring
of the Companys indebtedness. In early 2003, the Company directly and through
its advisors started discussions with representatives of, among others, the UPC
Entities and a group of holders of the UPC Polska Notes regarding the terms of
a restructuring.  During the fourth
fiscal quarter of 2002 and the first quarter of 2003, the UPC Entities and
certain of the Participating Noteholders undertook due diligence regarding the
Company and its assets and liabilities, and advisors for the Company, the UPC
Entities and the Participating Noteholders held periodic informal meetings to
discuss the economic terms of the proposed restructuring of the Companys
capital structure, as well as the process for implementing such a
restructuring.  Continuing into the second fiscal quarter of 2003, the
Company held further discussions with representatives of the UPC Entities and
the Participating Noteholders about the process for, and the terms of, a
restructuring of the UPC Polska Notes and the Other UPC Polska Notes. These
discussions culminated in the execution, on June 19, 2003, of the Restructuring
Agreement (the Restructuring
Agreement).  In general,
the Restructuring Agreement sets forth the proposed distribution under the Plan
of New UPC Polska Notes to be co-issued by the Company and Polska Finance, New
UPC Polska Stock and cash to the holders of the Claims against, and Equity
Interests in, the Company, as well as the means by which the Company intends to
effectuate an overall compromise and settlement and implement the
Restructuring.  In order to implement the Restructuring, on the
Petition Date the Company commenced the Chapter 11 Case and shortly thereafter
filed the Plan and this Disclosure Statement with the Bankruptcy Court.
Pursuant to the Plan, the Company provides varying treatments to the holders of
the Claims against, and Equity Interests in, the Company.  See Chapter 11 Case and the Plan of
Reorganization for a detailed description of the Chapter 11 Case and Plan.  Chapter 11 Case
and the Plan  Chapter
11 Case  Chapter
11 of the Bankruptcy Code is the principal business reorganization chapter of
the Bankruptcy Code.  Under Chapter 11,
a debtor is authorized to reorganize its business.  In addition to permitting rehabilitation of the debtor, Chapter
11 promotes equality of treatment of holders of claims and equity interests of
equal rank with respect to the distribution of a debtors assets. The
formulation, confirmation by a bankruptcy court, and consummation of a plan of
reorganization is the principal objective of a Chapter 11 case.  2 
   On the
Petition Date, the Company filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code with the Bankruptcy Court, thereby commencing the
Chapter 11 Case.  Simultaneously
therewith, the Company filed several motions seeking authorization to continue
to conduct its business in the ordinary course as well as to undertake certain
activities which require approval of the Bankruptcy Court.  These motions include, among others, motions
seeking authorization for the Company to (a) continue to utilize pre-petition
bank accounts, business forms and investment practices and (b) retain various
professionals.  See Chapter 11 Case and
the Plan of Reorganization  Significant Events During the Chapter 11 Case for
a more detailed description of these motions. 
The following day the Company filed the Chapter 11 Plan of
Reorganization Jointly Proposed by UPC Polska, Inc. and UPC Polska Finance,
Inc. with the Bankruptcy Court. 
Shortly thereafter, the Company also filed this Disclosure Statement
with the Bankruptcy Court.  The
Plan  The
Plan divides holders of known Claims against, and  known Equity Interests in, the Company into seven Classes, as
follows:  Class
  1
  
  
  
  Priority
  ClaimsClass
  2
  
  
  
  Critical
  Creditor ClaimsClass
  3
  
  
  
  UPC
  Polska Note Claims (excluding Telecom Owned UPC Polska Note Claims)Class
  4
  
  
  
  Telecom
  Owned UPC Polska Note Claims, Belmarken Note
  Claims, Telecom Pari Passu Note Claims and Affiliate Indebtedness
  ClaimsClass
  5
  
  
  
  General
  Unsecured ClaimsClass
  6
  
  
  
  Telecom
  Junior Note ClaimsClass
  7
  
  
  
  UPC
  Polska Equity Interests
  In accordance with the Bankruptcy Code, Administrative
Claims and Priority Tax Claims are not classified into Classes.  To the extent that the terms of this Disclosure
Statement vary from the terms of the Plan, the terms of the Plan control.  See Chapter 11 Case and the Plan of
Reorganization - The Plan - Summary of Distribution Under the Plan, for more
detailed descriptions of the classification and treatment of Claims and Equity
Interests under the Plan as well as for a description of the other terms of the
Plan.  3 
   Risk Factors  Holders of Claims should carefully consider the
factors set forth below, as well as the other information set forth in this
Disclosure Statement, the Annexes hereto and the other information incorporated
herein by reference, prior to determining whether to vote to accept the Plan.
The risks and uncertainties described below include all of the risks and
uncertainties which the Company believes to be material to the Restructuring
and its business after completion of the Restructuring.  They are not, however, the only risks and
uncertainties facing the Company and the UPC Polska Group. Additional risks and
uncertainties that may arise in the future or that the Company currently deems
immaterial may also impair its or Polska Finances ability to successfully
consummate the Restructuring, and/or its business, operations, and financial
condition after the Restructuring period. If any of the following risks occur,
they could materially adversely affect the Companys business, operating
results, financial condition and/or its or Polska Finances ability to
successfully consummate the Restructuring.  Risks that the
Restructuring is Not Successfully Completed  The Company may be
unsuccessful in completing the Restructuring.  There
are various events which must take place in order for the Restructuring, and,
in particular, the Plan, to be consummated. 
These events include, among other things, confirmation of the Plan and
satisfaction of the various conditions to consummation of the Plan.  See Chapter 11 Case and the Plan of
ReorganizationThe PlanConditions Precedent to Confirmation and Chapter 11
Case and the Plan of ReorganizationThe PlanConditions Precedent to
Consummationfor a description of the conditions to consummation of the
Plan.  Although the Company believes
that each of these events will occur, there can be no assurance that they will.
 If not, the Restructuring, including
the Plan, could not be implemented and it is unclear what holders of Claims and
Equity Interests would ultimately receive with respect to their Claims and
Equity Interests.  The alternatives
include, among other things, postponement of the Restructuring, implementation
of an alternative restructuring plan and liquidation of the Company.  The Company, however, believes that the
Restructuring, including the Plan, as set forth herein is significantly more
attractive than these alternatives because it could, among other things,
significantly shorten the time required to accomplish the Restructuring,
minimize the disruption to the Companys business and ultimately result in a
larger distribution to holders of Claims against the Company than would other
alternatives.  Risks Related to the
Restructuring Process  The
Restructuring may result in a disruption of the UPC Polska Groups business.  It is
possible that the Companys filing of the Chapter 11 Case and its solicitation
of acceptances for the Plan could adversely affect the Companys and its
subsidiaries relationships with their respective suppliers, customers,
partners and employees.  If such
relationships are adversely affected, the Companys working capital on a
consolidated basis could materially deteriorate.  This deterioration could adversely affect the Companys ability
to consummate the Restructuring, including soliciting acceptances of, and
receiving confirmation of, the Plan. 
Any disruption in relationships with customers could reduce the UPC
Polska Groups subscriber base which could result in a loss of earnings and, if
the disruption were prolonged, in a material adverse effect on the financial
condition, results of operations and prospects of the UPC Polska Group and the
Company.  Risks Related to
the Chapter 11 Case  The
Bankruptcy Court may sustain an objection to the classification and/or
treatment of the Claims and Equity Interests.  Section
1122 of the Bankruptcy Code provides that a plan may place a claim or an
interest in a particular class only if such claim or interest is substantially
similar to the other claims or equity interests of such class.  The Company believes that the classification
of the Claims and Equity Interests under the Plan complies with the
requirements set forth in the Bankruptcy Code. 
However, there can be no assurance that the Bankruptcy Court will reach
the same conclusion.  To the extent that
the Bankruptcy Court disagrees with the classification and/or  4 
   treatment scheme
in the Plan, the Company intends to modify the Plan to reclassify and/or amend
the treatment of the Claims and Equity Interests as necessary for
confirmation.  However, there can be no
assurance that any such reclassification and/or modification would not
adversely affect one or more classes under the Plan.  Accordingly, there can be no assurance that the Bankruptcy Court
would confirm the Plan, as modified, without a resolicitation of votes of any
such adversely affected holders of Claims or Equity Interests.  If the Bankruptcy Court were to require such
a resolicitation, such resolicitation would delay consummation of the
Restructuring which, as discussed above, could disrupt and adversely affect the
business, financial condition and prospects of the UPC Polska Group and the
Company.  See Chapter 11 Case and the
Plan of ReorganizationThe PlanClassification of Claims and Equity Interests
Under the Plan.  The holders of
Claims may not approve the Plan.  In
order for the Plan to be confirmed, under Section 1129(a)(8) of the Bankruptcy
Code, each Impaired Class of Claims and Equity Interests must approve the Plan
by the applicable requisite percentages, absent a cramdown pursuant to
Section 1129(b) of the Bankruptcy Code. 
In addition, under Section 1129(a)(10) of the Bankruptcy Code, since the
Plan contains an Impaired Class of Claims, the Plan cannot be confirmed unless
at least one such Impaired Class of Claims has voted to accept the Plan
(without counting any acceptance of the Plan by any insiders in such
Class).  Because Class 3 (UPC Polska
Note Claims other than Telecom Owned UPC Polska Note Claims), Class 4 (Telecom
Owned UPC Polska Note Claims, Belmarken Note Claims, Telecom Pari Passu Note
Claims and Affiliate Indebtedness Claims) and Class 5 (General Unsecured
Claims) are the only Impaired Classes of Claims under the Plan entitled to
vote, the affirmative vote of the holders of at least one such Class of Claims
(without counting any acceptances of the Plan by any insiders in such Class) is
necessary for confirmation of the Plan. 
However, because the UPC Entities, insiders of the Company, are the only
members of Class 4, approval of the Plan by this Class cannot count towards the
satisfaction of this requirement.  Thus,
the affirmative vote of either Class 3 (UPC Polska Note Claims other than
Telecom Owned UPC Polska Note Claims) or Class 5 (General Unsecured Claims) (in
either case, without counting any acceptances of the Plan by any insiders in
such Class) is required for confirmation of the Plan.  Although the Plan has been substantially pre-negotiated with the
UPC Entities and the Participating Noteholders pursuant to the Restructuring
Agreement, their Claims may be insufficient, without more, to approve the Plan,
especially since any acceptances of the Plan by members of the UPC Entities do
not count for purposes of satisfying Section 1129(a)(10) as the UPC Entities
are insiders of the Company.  Thus,
there can be no assurance that sufficient holders of Claims will vote to accept
the Plan.  The
Bankruptcy Court may not confirm the Plan.  The
Company believes that the Plan meets all of the requirements for confirmation
under the Bankruptcy Code, including, in particular, that if the Plan is
confirmed it will not be followed by the need for further financial
reorganization of the Company and that the holders of the General Unsecured
Claims, the UPC Polska Notes, the Telecom Owned UPC Polska Notes, the Telecom
Pari Passu Notes, the Belmarken Notes, the Affiliate Indebtedness, and the
holders of the Telecom Junior Notes and the Equity Interests who will be deemed
to reject the Plan, will receive value under the Plan that is greater than the
value they would receive if the Company were liquidated under Chapter 7 of the
Bankruptcy Code. However, there can be no assurance that the Bankruptcy Court
will conclude that these tests and the other requirements of Section 1129 of
the Bankruptcy Code have been met with respect to the Plan, that modifications
of the Plan would not be required for confirmation, or that such modifications
would not require a resolicitation of the Plan.  Failure of the Bankruptcy Court to confirm the Plan would likely
result in a protracted bankruptcy proceeding, which could exacerbate certain of
the factors described in Risk Factors  Risks Related to the Restructuring
Process.  Thus, if the Company is
unable to confirm the Plan, there is a significant likelihood that all holders
of Claims entitled to receive a distribution under the Plan would ultimately
receive less than what they would receive under the terms of the Restructuring.  The Plan may not be
consummated or there may be a delay in the consummation of the Plan.  The
Plan sets forth conditions to consummation of the Plan.  There can be no assurance that the  conditions will be satisfied or waived or
that any necessary consent will be obtained. 
See Chapter 11 Case and the Plan of ReorganizationThe PlanConditions
Precedent to Confirmation and Chapter 11 Case and the Plan of ReorganizationThe
Plan Conditions Precedent to Consummation. 
Thus, even if the Plan is confirmed by the Bankruptcy Court, the Plan
may not be consummated.  Similarly,
there can be no guarantee as to when such  5 
   conditions will be
satisfied or waived.  Thus, although the
Company intends for the Plan to be consummated as soon as practicable after
confirmation, no assurance can be given that this will occur.  Risks Related to the UPC Polska
Groups Business  The
Company expects to continue to incur net losses for at least the next three
years, if the Restructuring is not consummated.  As of
December 31, 2002 the UPC Polska Group had on a consolidated basis negative
working capital of $392.5 million and a stockholders deficit of $708.2
million.  The UPC Polska Group
experienced net losses on a consolidated basis of $492.2 million, $749.5
million and $248.8 million for the years ended December 31, 2002, 2001 and 2000
respectively. The Company expects to continue to incur net losses if the
Restructuring is not consummated.  Even
if the Restructuring is consummated, the Company projects that it will have a
net operating loss in 2003.  Even if the
Company achieves profitability, the Company may not be able to sustain its
profitability.  The
Company may need to obtain additional capital in order to repay its
indebtedness or to expand its operations to take advantage of business
opportunities and to compete effectively.  There
is uncertainty whether the Companys sources of capital, working capital and
projected operating cash flow will be sufficient to fund the Companys
expenditures and service the Companys indebtedness over coming years, if the
Restructuring is not consummated.  If the Restructuring
is consummated, the Company expects that its remaining cash balances, together
with anticipated cash flow from operations or any improvement in its working
capital position, will provide it with sufficient capital to fund its existing
operations for the foreseeable future. 
Nevertheless, the Company may not generate sufficient cash flows to
repay the New UPC Polska Notes.  If the
Company is unable to generate sufficient cash flow or otherwise obtain funds
necessary to make the required payments on the New UPC Polska Notes, then the
Company may be required to refinance such indebtedness.  In addition, if the Company wishes to expand
its services to take advantage of business opportunities, it will require
additional capital. A failure to acquire additional capital on acceptable terms
may seriously and adversely affect the growth of its business.  The Company does not know whether or when
the additional financing will be available to it or available on favorable
terms.  The Polish
national telephone company could cancel the conduit agreements entered into
with the UPC Polska Group, which would be costly to the UPC Polska Group.  The
UPC Polska Group has been able to avoid the costly construction of its own
underground conduits in certain areas by entering into a series of agreements
with regional and local branches of the Polish national telephone company
(referred to as TPSA)
which permit the UPC Polska Group to use TPSAs conduit infrastructure for an
indefinite period of time or for fixed periods of up to 20 years. These agreements
represent a major advantage to the Company since they permit the Company to
minimize the costly and time-consuming process of building new conduit
infrastructure where TPSA conduit infrastructure exists.  As of December 31, 2002, approximately 74%
of the UPC Polska Groups cable television plant had been constructed utilizing
pre-existing conduits of TPSA.  Some
conduit agreements with TPSA provide that cables can be installed in the
conduit only for the use of cable television. 
If the UPC Polska Group uses the cables for a purpose other than cable
television, such as data transmission, telephone, or internet access, such use
could be considered a violation of the terms of certain conduit agreements,
unless this use is expressly authorized by TPSA.  There is no guarantee that TPSA would give its approval to permit
other uses of the conduits.  Since the
fourth quarter of 2000, the UPC Polska Group has been providing internet
services to its cable customers and renegotiating certain conduit agreements
with TPSA.  A
substantial portion of the UPC Polska Groups contracts with TPSA allow for
termination by TPSA without penalty at any time either immediately upon the
occurrence of certain conditions (some of which may have  already occurred) or upon provision of three
to six months notice without cause. Any termination by TPSA of such contracts
could result in the UPC Polska Group losing its permits, the termination of
agreements with housing entities and programmers, and/or an inability to
service customers in areas where its networks utilize the conduits  6 
   that were the
subject of such TPSA contracts.  In
addition, the Company would incur significant costs if it were forced to build
its own conduits.  In
the latter part of 2002, TPSA began seeking to raise rates significantly upon
renewal of expiring conduit contracts.  In addition, TPSA sought to
include language specifically restricting use of the conduits, which would in
effect prevent the use of conduits for the provision by the UPC Polska Group of
internet services.  The UPC Polska Group has declined to sign such
contract extensions.  The UPC Polska
Group as part of the Polish Cable Association is in negotiations with TPSA in
an effort to conclude a general framework agreement which would include a
unified country-wide payment rate and an open provision of providing
telecommunication services.  As a result of
the amendment of the Polish Copyright Law, the UPC Polska Group must negotiate
new agreements with broadcasters and copyright associations.  On January 1,
2003, an amendment to the Polish Copyright Law came into force, which removed a
statutory license for cable operators to use the content of various
providers.  Until that date, the
statutory license was used by all cable operators in Poland to retransmit
domestic and foreign free-to-air (FTA) channels without formal agreements with the
broadcasters, primarily Polish channels (e.g., TVP, Polsat, TVN) and a number
of foreign FTAs (e.g., German channels). The removal of the statutory license
required cable operators to enter into formal agreements with all broadcasters
and copyright associations by January 1, 2003. Given the very short timeframe
within which the statutory license was removed, the UPC Polska Group remains in
the process of negotiating and signing contracts with broadcasters.  Anticipating the amendment to the Polish
Copyright Law, in December 2002, the UPC Polska Group approached the
predominantly German and French FTAs, seeking their consent for the cable
distribution, free of charge, of their channels in Poland. A significant number
of the broadcastersresponded that no authorization in the
future would be granted without payment of license fees. Some of the
broadcasters have reserved the right to claim remuneration for past
distribution of their channels. 
Temporary permission for transmission from key Polish FTAs was granted
to Cable Association members, including a subsidiary of the Company, just
before the January 1, 2003 effective date. 
After January 1, 2003, when the provisions removing the statutory
license came into effect, approximately 28 channels were removed from the UPC
Polska Groups channel line-ups.  On
July 25, 2003, the Lower Chamber of the Polish Parliament voted in favor of a
further amendment to the Polish Copyright Law, which if enacted into law would
restore a statutory license for cable operators to use the content of various
providers.  Should this amendment be
adopted by the Upper Chamber of the Polish Parliament and approved by the
President, cable operators in Poland would regain the authorization to
retransmit domestic and foreign FTA channels without formal agreements with the
broadcasters, though they would still be obliged to pay license fees to such
FTAs in an unspecified amount.  This
authorization if enacted into law would be valid until Poland joins the EU in
May 2004.  Requiring the
payment of licensing fees to Polish and/or foreign FTAs and to copyright
associations would result in higher costs to the UPC Polska Group in providing
programming to its subscribers.  In
addition, the number and/or quality of channels offered by the UPC Polska Group
may decrease if it is unable to obtain permanent licenses from existing
broadcasters, which might result in fewer subscribers if the replacement
channels that the UPC Polska Group may be able to obtain do not gain broad
acceptance with its subscriber base.  Extensive
government regulation of the cable television industry could restrict the way
the UPC Polska Group operates its business.  The UPC Polska
Group is subject to extensive regulatory controls and may have to comply with
amended or additional regulations in the future in each of the locations in
which it operates its business. Currently the 
UPC Polska Group is required to comply with applicable regulations in
Poland, which address, but are not limited to, the following activities and
subjects:  securing of and
compliance with required permits and licenses related to the operation of cable
networks;  the construction
and operation of cable networks;  7 
   copyright and
other intellectual property laws pertaining to programming which is broadcast
over its cable networks;  restrictions on
anti-competitive behavior regarding pricing, contracting practices and
acquisitions;  protection
against unfair competition and anti-monopoly practices; and  content
requirements and restrictions for programming which is broadcast over its
Polish cable networks.  The UPC Polska
Group has taken steps to structure the operation of its cable networks so as to
attempt to comply with all applicable regulations.  However, each of the relevant governmental authorities may
conclude that the UPC Polska Groups operations do not comply with all
applicable regulations. Any determination by one or more of the relevant
governmental authorities which regulate its business and operations that its
operations do not comply could have a material adverse effect on the way the
UPC Polska Group conducts its business or its ability to conduct it at all, and
any fines or penalties which may be imposed could have a material adverse
effect on its business, financial condition and results of operations.  From
time to time, the UPC Polska Group may have violated, may be violating and may
violate in the future the requirements of certain Polish laws, including
provisions of labor, foreign exchange, customs, tax, antitrust and corporate
laws and requirements to obtain regulatory approvals. This may be due to the
many formalities required for compliance with the laws in Polands highly
regulated economy, the rapid changes that Polish laws and regulations have
undergone, and numerous uncertainties regarding the interpretation of these
laws and regulations. These types of violations could also restrict the UPC
Polska Groups operations.  When Poland joins
the European Union (EU), the UPC Polska Group may incur costs in connection
with ensuring that its operations comply with EU laws.  Poland
will become an EU member on May 1, 2004. 
When Poland joins the EU, Poland will be required to implement and obey
all of the laws and regulations emanating from the European Commission (EC), including the
Television Without Frontiers Directive and the EC competition law in their then
current versions.  The UPC Polska Group
may be required to incur additional costs in order to comply with the resulting
changes in Polish law.  Regulation may increase the cost of offering internet/data
services and slow demand.  The
internet access business has, to date, not been materially restricted by
regulation in the UPC Polska Groups markets. The legal and regulatory
environment of internet access and electronic commerce is uncertain, however,
and may change.  New laws and regulations
may be adopted for internet service offerings. 
Existing laws may be applied to the new forms of electronic
commerce.  Uncertainty and new
regulation could increase the UPC Polska Groups operating costs.  It could also slow the growth of electronic
commerce on the internet significantly. 
Slowed electronic commerce growth could delay growth in demand for the
UPC Polska Groups internet/data services and limit the growth of its revenues.  New and existing laws may cover issues such
as:  user privacy;  sales and other taxation;  consumer protection;  characteristics and quality of products
and services;  cross-border commerce;  libel and defamation;  copyright and trademark infringement;  8 
   pornography and indecency; and  other claims based on the nature and
content of internet materials.  The UPC Polska
Groups growth may suffer from competition in the cable television industry.  The cable
television industry in many of the UPC Polska Groups markets is competitive
and changing rapidly. Competition could result in the loss of the UPC Polska
Groups customers and a decrease in its revenues. The UPC Polska Groups cable
operations face competitive threats from Polands many small cable operators,
which incur lower capital expenditures and operating costs and therefore have
the ability to charge lower fees to subscribers. If the UPC Polska Group does
not continue to compete effectively, its future business may be materially
compromised.  The success of the
UPC Polska Groups services depends on continued achievement and implementation
of technological advances.  Technology in
the cable and telecommunications industry changes rapidly. These changes
influence the demand for the UPC Polska Groups products and services. The UPC
Polska Groups ability to anticipate these changes and to develop successful
new and enhanced products quickly enough for the changing market may affect its
revenues, number of subscribers and competitiveness.  The UPC Polska
Group expects that new products and technologies will continue to emerge and
that existing products and technologies will further develop. These new
products and technologies may reduce the prices of its services or they may be
superior to, and thus render obsolete, the products and services it offers and
the technologies it uses. It may be very costly for the UPC Polska Group to
upgrade its products and technology in order to continue to compete
effectively. The UPC Polska Groups future success depends, in part, on its
ability to anticipate and adapt in a timely manner to technological changes.  The
inability to obtain the necessary content could reduce demand for the UPC
Polska Groups services.  In 2001, as part of its revised business strategy, the UPC Polska Group
decided to discontinue its programming business.  In particular, the UPC Polska Group discontinued the development
of its proprietary programming, such as Wizja Jeden, which was terminated in
April 2001, Wizja Sport, which was terminated in December 2001, and Wizja
Pogoda which was terminated in February 2002. See the section herein entitled
The CompanyDiscontinued Segments for additional information regarding
programming. Also, as a result of the Polish Copyright Law amendment that took
effect on January 1, 2003, the UPC Polska Group removed certain channels from
its programming line-ups and must negotiate new agreements with broadcasters.  As a result, the UPC Polska Group has renegotiated or is in the process
of renegotiating contracts with certain third party channel providers.  The UPC Polska Group is seeking to
strengthen its cable programming offerings by terminating certain agreements
for poorly performing channels and entering into other agreements for popular
channels based on consumer demand and preferences.  The
UPC Polska Groups success depends on obtaining affordable and popular
programming for its subscribers.  It may
not be able to obtain enough competitive content to meet its needs.  This would reduce demand for the UPC Polska
Groups programming and decrease its subscriber base and the amount it can
charge its remaining subscribers, thereby limiting revenues.  The UPC Polska Group relies on other
programming suppliers for most of its content although it has committed and
will continue to commit substantial resources to obtaining new content.  Where appropriate, the UPC Polska Group has
found partners for obtaining new content, and, as necessary, it will continue
to seek new partners. The UPC Polska Group may not, however, find appropriate
partners, or successfully implement its content plans.  9 
   The
competitiveness of the internet access industry may make it difficult for the
UPC Polska Group to expand its existing service and add additional
internet/data services.  In the
provision of its internet access services, the UPC Polska Groupfaces
competition from incumbent telecommunications operators and other new entrants
to these markets. In the provision of internet services the UPC Polska Group
competes with companies that provide such services using traditional, low-speed
telephone lines, and the UPC Polska Group expects to face growing competition
from internet service providers that, like itself, use higher-speed,
higher-capacity cable modems and providers that use other broadband
technologies, such as fiber, microwave, satellite and digital subscriber lines
as well as much cheaper narrowband services. 
Some of the UPC Polska Groups competitors have more experience in
providing internet services than the UPC Polska Group has and others may be
able to devote more capital to these services than the UPC Polska Groupcan.  Internet/electronic
commerce and other bandwidth intensive applications may not be as highly valued
by the UPC Polska Groups customers as the Company expects.  Internet/electronic
commerce and other bandwidth intensive applications may not be as highly valued
by the UPC Polska Groups customers as the Company expects.  If that is the case, subscriptions to Chello broadbandand other services involving managed bandwidth could be materially
lower than the Company currently anticipates. This would have a negative effect
on the revenues and financial condition of the UPC Polska Group and the
Company.  The
UPC Polska Groupmay incur
financial costs as a result of exchange rate fluctuations.  The principal market risk (i.e., the risk of loss arising from adverse
changes in market rates and prices) to which the UPC Polska Groupis
exposed is foreign exchange risk from fluctuations in the Polish zloty currency
exchange rate. The UPC Polska Groups revenues from subscribers are in Polish
zloty, while some major cost components are denominated in foreign currencies.
In particular, the UPC Polska Groups programming commitments are denominated
in Euros or U.S. dollars. Also, the Companys loans payable to UPC and its
affiliates as well as the UPC Polska Notes and the New UPC Polska Notes are
expressed in U.S. dollars. The Companys debt will be primarily subject to a
fixed rate, and therefore the Company is neither materially benefited nor
materially disadvantaged by variations in interest rates.  International operations constitute one hundred percent of the UPC
Polska Groups 2002 consolidated operating loss. Some of the UPC Polska Groups
operating expenses and capital expenditures are expected to continue to be
denominated in or indexed in U.S. dollars and Euros. By contrast, substantially
all of the UPC Polska Groups revenues are denominated in zloty. Therefore, any
devaluation of the zloty against the U.S. dollar or Euro that the UPC Polska
Group is unable to offset through price adjustments will require it to use a
larger portion of its revenue to service its U.S. dollar or Euro denominated
obligations and contractual commitments.  The Company estimates that a further ten percent change in foreign
exchange rates would impact its reported operating loss by approximately $1.0
million for the six-month period ended June 30, 2003.  In other terms, a ten percent depreciation of the Polish zloty
against the U.S. dollar and Euro, would result in a $1.0 million increase in
the reported operating loss for the six-month period ended June 30, 2003. This
calculation was estimated using ten percent of the UPC Polska Groups operating
losses adjusted for unusual impairment and other items, including U.S. dollar
and Euro denominated or indexed expenses. The Company believes that this
quantitative measure has inherent limitations because it does not take into
account any governmental actions or changes in either customer purchasing
patterns or the Companys financing or operating strategies.  For additional discussion relating to foreign exchange and other
international market risk, see Item 7A  Quantitative and Qualitative
Disclosure About Market Risk in the Companys Annual Report on Form 10-K for
the fiscal year ended December 31, 2002 and Item 3  Quantitative and
Qualitative Disclosure About Market Risk in the Companys Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 2003, copies of which are
attached to this Disclosure Statement as Annex B and Annex C, respectively, and
incorporated herein by reference.  10 
   The Company is
dependent on its executive officers.  If any of the
Companys executive officers leave the Company, the Companys business could
suffer.  The Company is particularly
dependent upon the skills and contributions of the following individuals:  Simon Boyd,
President and Chief Executive Officer of the Company; and  Joanna Nieckarz,
Chief Financial Officer of the Company.  These
individuals have significant experience in the Companys and the UPC Polska
Groups business and would be difficult to replace. In addition, the Companys
success will depend in part on the UPC Polska Groups ability to hire, train,
and retain high-quality personnel.  The
UPC Polska Group has no property insurance on underground portions of its cable
television networks.  Any
catastrophe affecting a significant portion of the UPC Polska Groups cable
television networks could result in substantial uninsured losses and could
disrupt the UPC Polska Groups business operations. While the UPC Polska Group
carries general liability insurance on its properties, it does not carry property
insurance on the underground portion of its cable television networks.  The
Companys growth may suffer if it cannot make strategic acquisitions.  The Company
may not be able to identify and acquire cable television networks that either
are located in reasonable proximity to the UPC Polska Groups existing regional
cluster networks or are large enough to serve as the basis for new regional
cluster networks.  In addition, if the
Company is able to identify and enter into acquisition agreements with such cable
networks, it may not be able to obtain the required approvals from the Polish
Anti-Monopoly Office for these acquisitions. 
The Company also may face competition for the acquisition of cable
networks from existing cable television operators and also from financial
investors.  Piracy of
satellite and cable services causes the UPC Polska Group to lose revenues.  Like
other Central European cable and satellite operators, the UPC Polska Group
views piracy of satellite and cable services as one of its main problems. While
there has historically been little enforcement of penalties against commercial
exploitation of piracy, the issue is now receiving more attention from the
Polish government. In addition, the UPC Polska Group, Canal+ and HBO agreed to
intensify their efforts to reduce the piracy of cable and satellite signals, as
well as to combine their lobbying efforts in this regard. The Polish Cable
Association and its members have offered to support the joint effort.  The Companys
business and financial condition could suffer if TKP fails to satisfy
contractual obligations owed to or on behalf of the UPC Polska Group arising
out of the Companys transaction with Canal+ and the UPC Polska Groups limited
ability to liquidate its investment in TKP.  On December 7,
2001, the UPC Polska Groupclosed the transactions contemplated by a
contribution and subscription agreement (the Contribution and Subscription Agreement)
among the Company, UPC, the Companys subsidiary, Polska Telewizja Cyfrowa
Wizja TV Sp. z o.o (PTC), Canal+ and TKP. Under the Contribution and
Subscription Agreement, the Company caused PTC to contribute to TKP all of the
equity of two subsidiaries, Wizja TV Sp. z o.o. and UPC Broadcast Centre Ltd.  As a result of
the Contribution and Subscription Agreement, the UPC Polska Group incurred
certain risks which could have a material adverse effect on the business and
financial condition of the Company. 
First, PTC does not control TKP and has only limited rights to approve
material transactions undertaken by TKP. 
Second, under a shareholder agreement relating to TKP, PTCs interest in
TKP could be diluted or redeemed by TKP. 
Under the agreement, if PTC ceases at any time to be a Polish person
under Polish broadcasting law, other TKP shareholders may convert loans made by
them to TKP into TKP equity, thereby diluting PTCs interest, or TKP may redeem
the shares of TKP owned by PTC at their fair market value.  Third, PTCs right to sell its shares in TKP
is limited to  11 
   particular circumstances, such
as the sale of TKP shares by other TKP shareholders or the lapse of time until
December 2006, making PTCs investment in TKP very illiquid.  The UPC Polska
Groups right to connect its cable system to dwellings may be terminated on
relatively short notice from individual housing entities.  In Poland, the
right to build a cable system is typically secured by reaching an agreement
with individual housing entities, such as cooperatives, resident associations,
municipal authorities and developers, not by the issuance of a franchise for a
particular region by a governmental authority. 
Upon reaching an agreement with a particular housing entity, the cable
operator obtains the right to connect its system to dwellings within that
housing entitys jurisdiction.  Most of the
UPC Polska Groups agreements with housing entities have terms ranging from 10
to 20 years with optional renewal periods of five years.  However, some of the contracts may be
terminated by either party on relatively short notice. There are also some
contracts with unspecified terms and each party has the right to terminate the
agreement upon notice. Thus, the UPC Polska Groups right to connect its cable
system to dwellings is sometimes subject to termination at the discretion of
the housing entities.  Risks Related to
Ownership of the New UPC Polska Stock and the New UPC
Polska Notes  Holders ability to
sell the New UPC Polska Notes may be limited if it is deemed to be an
underwriter.  The New UPC
Polska Notes will not be listed on any U.S. national or regional stock exchange
or included on the NASDAQ National Market or the NASDAQ Small Cap Market.  The Company and Polska Finance expect that
the New UPC Polska Notes will trade on an extremely limited basis on the NASDAQ
PORTAL market. Although the Company and Polska Finance believe that most
holders of Claims will be able to resell the New UPC Polska Notes without
registration under the Securities Act of 1933, as amended, (U.S. Securities Act)
or other federal securities laws, their ability to sell may be diminished if
they are deemed to be an underwriter with respect to such securities within
the meaning of Section 1145(b) of the Bankruptcy Code.  Section 1145(b) of the Bankruptcy Code
defines an underwriter for purposes of the U.S. Securities Act as including a
person who is a control person of the issuer of the securities.  The Company
cannot assure any holder of the New UPC Polska Notes that such holder will not
be deemed to be a statutory underwriter, and each holder is advised to consult
with its own counsel as to the availability of exemptions under the U.S.
Securities Act.  As
a result of the Companys holding company structure, it is dependent on the
receipt of monies from its subsidiaries to pay dividends and the right of
creditors to participate in the assets of the Companys subsidiaries may be
subject to claims of the Companys subsidiaries creditors.  The Company
may not be able to pay interest, and principal when due, on the New UPC Polska
Notes if the cash flows and earnings of its subsidiaries and their payment of
funds to the Company in the form of repayment of loans, interest payments,
dividends or otherwise are not sufficient, or if the Company cannot otherwise
realize economic benefits from equity interests in its subsidiaries.  In the event
of liquidation or bankruptcy of any of the Companys subsidiaries, the New UPC
Polska Notes will rank behind the holders of any indebtedness for money
borrowed by those subsidiaries, trade creditors of those subsidiaries, and
other persons granted priority claim rights under the laws applicable to those
subsidiaries.  The Companys
subsidiaries have no obligation to pay dividends to it and may not be able to
make payments to it if funds are not available. Further, the Company currently
does not own a majority interest in certain subsidiaries, and may not have
operating control of other entities in which it currently has or may in the
future acquire direct or indirect interests. In such cases, the Company may be
unable, without the consent of the relevant partners, to cause such entities to
pay dividends or to implement business strategies that the Company may favor.
The Companys ability to pay dividends will be further restricted by regulatory
and contractual obligations, including  12 
   restrictions arising under the
Delaware General Corporation Law, and the laws of the jurisdictions in which
the Companys direct and indirect subsidiaries are organized, including but not
limited to Poland and the Netherlands.  Creditors
may not be able to enforce U.S. court judgments against the Companys assets,
most of which are held outside the U.S.  Creditors may
not be able to enforce judgments of U.S. courts against the Companys
assets.  Holders of the New UPC Polska
Notes will be able to effect service of process in the U.S. upon the Company if
it continues as a Delaware corporate entity and may be able to effect service
of process upon the Companys directors. However, the Company is primarily a
holding company which holds stock in various entities in Poland and the
Netherlands, and all or a substantial portion of its assets are located outside
the U.S. As a result, investors may not be able to enforce judgments of U.S.
courts if those judgments are based on the civil liability provisions of U.S.
laws.  Awards of
punitive damages in actions brought in the U.S. or elsewhere may be
unenforceable in Poland. Polish courts may not give judgment in your favor in
cases based solely on U.S. laws.  The Company may
reincorporate in a jurisdiction outside of the U.S. which may limit the ability
of security holders to protect their interests.  If the
Company reincorporates in a jurisdiction outside the U.S., then holders of New
UPC Polska Stock, and holders of New UPC Polska Notes, may have fewer
protections and/or more difficulty protecting their interests than would
holders of securities of a corporation incorporated within the U.S.  A
substantial number of the Companys managers may be residents of countries
outside the U.S.  As a result, it may be
difficult to serve legal process on the Company or members of its management to
force them to appear in a court of the U.S. 
It may also be difficult to enforce a judgment of a U.S. court against
any of these parties, or to enforce a judgment of a foreign court against any
of these parties in the U.S.  Finally, a
court in the jurisdiction in which the Company may reincorporate may refuse to
allow an original action based upon U.S. laws.  The
jurisdiction in which the Company may reincorporate may not have a treaty in
place that provides for reciprocal recognition and enforcement of judgments or
arbitration awards.  As a result, a
civil judgment by a U.S. court or an arbitration award may not necessarily be
enforceable in the jurisdiction in which the Company reincorporates.  The
duties of directors of entities incorporated in the jurisdiction in which the
Company may reincorporate may differ substantially from the duties imposed by
the laws of the Companys current jurisdiction of incorporation.  For example, the directors may owe fiduciary
duties only to the Company and not to its stakeholders; the stakeholders may
not have a personal right of action against the directors; and the Company may
indemnify its directors for personal liability related to the exercise of their
functions.  This listing of potential
issues does not constitute, and shall not be construed to constitute, an opinion
regarding the treatment of such issues under the laws of the Companys current
jurisdiction of incorporation or of any jurisdiction in which the Company may
reincorporate.  The
insolvency laws of the jurisdiction in which the Company may reincorporate may
also provide fewer protections to the Companys security holders than those
provided by U.S. bankruptcy law.  The
Companys principal stockholders can control or influence certain major
corporate actions.  After the
Restructuring, UPC Telecom, Belmarken and/or the holders of the Affiliate Indebtedness
Claims will own 100% of the outstanding share capital of the Company.  The concentration of ownership of the
Companys common stock in one to three shareholders may delay or prevent
transactions involving an actual or potential change in control of the Company.
This concentration of ownership in one to three entities could limit the price
that certain investors might be willing to pay in the future for the Companys
common stock and other equity interests.  13 
   The Restructuring  Purpose of the
Restructuring  The
Company has over time incurred substantial debt, significant operating losses
and negative cash flow, which were driven by the large capital investment
required for the construction and acquisition of cable networks, acquisition of
programming rights and the costs associated with commencing D-DTH and
programming operations.  Background of the
Restructuring  During
2001, the Company reviewed its long-term business strategy for its various
business segments and commenced an internal reorganization. At this time, the
Company decided to focus on its core competency, the provision of cable
television services, and on providing internet services to existing customers.  As a part of this re-focus, the UPC Polska
Group decided to streamline its operations by restructuring its D-DTH and
programming businesses.  Negotiations with the UPC Entities and the Participating
Noteholders  In the
fourth fiscal quarter of 2002, certain of the Companys main creditors,
including UPC and its affiliates, UPC Telecom and Belmarken, and certain other
holders of the UPC Polska Notes, engaged in discussions about the restructuring
of the Companys indebtedness.  In early
2003, the Company directly and through its advisors started discussions with
representatives of, among others, the UPC Entities and a group of holders of
the UPC Polska Notes regarding the terms of the Restructuring.  The composition of this group changed over
time, but ultimately included all of the Participating Noteholders.  SISU Capital Limited (SISU), a holder of UPC Polska Notes, had
initially been a part of the group of noteholders engaged in these
discussions.  Despite the Companys
invitations to SISU to continue its involvement in the group of Participating
Noteholders, SISU decided to withdraw from that group and has subsequently
indicated its objections to the economic and other terms of the Restructuring
Agreement.  The
Participating Noteholders hold, in the aggregate, approximately 75% of the outstanding
principal amount of the UPC Polska Notes that are held by non-affiliated third
parties. The Participating Noteholders are: GoldenTree Asset Management LLC;
funds under the management of Strong Capital Management, Inc.; MacKay Shields
LLC; Deutsche Bank; Goldman Sachs & Co.; Goldman Sachs International;
Morgan Stanley Investment Management; and The Royal Bank of Scotland PLC (RBS).  The Participating Noteholders retained
Cahill Gordon & Reindel LLP as their counsel.  During
the fourth fiscal quarter of 2002 and the first fiscal quarter of 2003, the UPC
Entities and certain of the Participating Noteholders undertook due diligence
regarding the Company and its assets and liabilities.  In addition, advisors for the Company, the UPC Entities and the
Participating Noteholders held periodic informal meetings to discuss the
economic terms of the proposed restructuring of the Companys capital
structure, as well as the process for implementing such a restructuring.  Negotiation of the Restructuring Agreement  Continuing into the second fiscal quarter of 2003, the
Company held further discussions with representatives of  the UPC Entities and the Participating
Noteholders about the process for, and the terms of, a recapitalization of the
Company and a restructuring of the UPC Polska Notes and the Other UPC Polska
Notes.  These discussions culminated in
the execution, on June 19, 2003, of the Restructuring Agreement.  On July 2, 2003, the Company entered into a
Joinder Agreement with UPC Telecom, Belmarken, the Participating Noteholders
(excluding RBS) and RBS whereby RBS joined the Participating Noteholders in the
Restructuring Agreement.  Execution of the Restructuring Agreement  In general, the Restructuring Agreement sets forth the
proposed distribution under the Plan of New UPC Polska Notes to be co-issued by
the Company and Polska Finance, New UPC Polska Stock and cash to the holders of  14 
   the Claims
against, and Equity Interests in, the Company, as well as the means by which
the Company intends to effectuate an overall compromise and settlement and
implement the Restructuring.  The
Restructuring Agreement provides for the exchange of New UPC Polska Notes, New
UPC Polska Stock and cash for Claims against, and Equity Interests in, the
Company as follows:  an
aggregate amount of cash equal to $80,000,000 (the Cash Consideration) and New UPC Polska Notes
in an aggregate principal amount of $60,000,000, which will be issued pursuant
to a new indenture (the New Indenture), shall be distributed by the Company in
consideration for the outstanding UPC Polska Notes (other than the Telecom
Owned UPC Polska Notes);  an
aggregate amount of cash equal to $15,000,000 (the Other Cash Consideration) and 100% of the
New UPC Polska Stock shall be distributed by the Company in consideration for
the Telecom Owned UPC Polska Notes, the Telecom Pari Passu Notes, the Belmarken
Notes and the Affiliate Indebtedness; and  holders
of all Allowed General Unsecured Claims shall receive the amount of cash and
New UPC Polska Notes issued under the New Indenture per $1,000 of claim amount
of each Allowed General Unsecured Claim of the Company as set forth in the
Restructuring Agreement which is equal to the amount of cash and New UPC Polska
Notes issued under the New Indenture per $1,000 claim amount payable to holders
of UPC Polska Notes (other than the Telecom Owned UPC Polska Notes) pursuant to
the Restructuring Agreement.  In
addition to the issuance of the New UPC Polska Notes, the New UPC Polska Stock
and cash under the Plan, the Restructuring Agreement also provides, among other
things,  that
the holders of the Telecom Junior Notes shall receive no consideration from the
Company in exchange for the Telecom Junior Notes, which shall be cancelled on
the Effective Date by operation of the Plan and shall thereafter be of no
further force and effect; and  that
the holders of all outstanding shares of UPC Polska Equity shall receive no
consideration from the Company in exchange for such UPC Polska Equity and such
UPC Polska Equity shall be cancelled on the Effective Date by operation of the
Plan and shall thereafter be of no further force and effect.  Finally,
in general, in consideration for the New UPC Polska Notes, the New UPC Polska
Stock and cash, the UPC Entities and the Participating Noteholders agreed,
prior to the Petition Date and subject to the terms and conditions of the
Restructuring Agreement, to, inter alia, vote their Claims in favor of
the Plan.  For a detailed description of
the Restructuring Agreement, see The Restructuring Agreement below.  Description of the
Restructuring  Structure  In
order to implement the Restructuring, Polska Finance was formed as a Delaware
corporation, and the Company commenced the Chapter 11 Case on the Petition
Date, filed the Plan one day after the Petition Date, and filed this Disclosure
Statement on July 28, 2003 with the Bankruptcy Court. Pursuant to the Plan, the
Company provides varying treatments to the holders of the Claims against, and
Equity Interests in, the Company.  In
general, the holders of Allowed Impaired Claims or Allowed Impaired Equity
Interests will be treated under the Plan as follows:  Allowed UPC Polska Notes Claims
(other than Allowed Telecom Owned UPC Polska Note Claims)  In the
aggregate, the holders of all Allowed UPC Polska Note Claims (other than
Allowed Telecom Owned UPC Polska Note Claims) shall receive (i) the Cash
Consideration and (ii) New UPC Polska Notes in the aggregate principal amount
of $60,000,000, which will be subject to the New Indenture, in consideration
for the cancellation of  15 
   the UPC Polska
Notes (other than the Telecom Owned UPC Polska Notes), and the cancellation of
obligations of all other parties thereunder and under the indentures dated as
of July 14, 1998 in the case of the 2008 Notes, as defined herein, January 20,
1999 in the case of the Series C Notes, as defined herein, and January 27, 1999
in the case of the 2009 Notes, as defined herein (collectively the Indentures).  For information about a particular series of
UPC Polska Notes, see Outstanding Securities of the Company  The UPC Polska
Notes.  Allowed Telecom Owned UPC Polska
Note Claims, Allowed Telecom Pari Passu Note Claims, Allowed Belmarken Note
Claims and Allowed Affiliate Indebtedness Claims  In the
aggregate, the holders of the Allowed Telecom Owned UPC Polska Note Claims,
Allowed Telecom Pari Passu Note Claims, Allowed Belmarken Note Claims and
Allowed Affiliate Indebtedness Claims will receive (i) the Other Cash
Consideration and (ii) 100% of the New UPC Polska Stock in consideration for
the cancellation of the Telecom Owned UPC PolskaNotes, the Telecom Pari
Passu Notes, the Belmarken Notes, and the Affiliate Indebtedness, and the
cancellation of the obligations of all other parties thereunder and under the
Indentures, the Master Loan Agreement, dated May 24, 2001, between UPC and the
Company and the Qualified Loan Agreement, dated July 31, 2001, between Belmarken
and the Company.  See
Chapter 11 Case and the Plan of ReorganizationThe PlanSummary of
Distributions Under the Plan below for more detailed descriptions of the
classification and treatment of Claims and Equity Interests under the Plan.  Use of Proceeds  The
Company will not receive any cash proceeds from the issuance of the New UPC
Polska Notes or the New UPC Polska Stock in consideration for the cancellation
of the Claims and Equity Interests.  Other Aspects of the Restructuring  Treatment of General Unsecured
Claims  General Unsecured
Creditors will receive the amount of cash and New UPC Polska Notes issued under
the New Indenture per $1,000 of claim amount of each Allowed General Unsecured
Claim of UPC Polska which is equal to the amount of cash and New UPC Polska
Notes issued under the New Indenture per $1,000 of claim amount payable to the
holders of the UPC Polska Notes (other than the Telecom Owned UPC Polska
Notes).  Treatment of Telecom Junior Notes
Claims  Holders of the Telecom Junior Notes shall receive no
consideration in exchange for the Telecom Junior Notes, which shall be
cancelled on the Effective Date by operation of the Plan and shall thereafter
be of no further force and effect.  Treatment of Equity Interests  Holders
of the UPC Polska Equity shall receive no consideration in exchange for such
shares of UPC Polska Equity and such UPC Polska Equity shall be cancelled on
the Effective Date by operation of the Plan and shall thereafter be of no
further force and effect.  Advisors to the Company, UPC Telecom and the Participating
Noteholders  In
connection with the Restructuring, the Company has retained Baker &
McKenzie as its counsel, FTI Consulting, Inc. (FTI) as its financial advisor and KPMG as
its auditor. The UPC Entities have retained White & Case LLP as their
counsel and JP Morgan and Credit Suisse First Boston as their financial
advisors.  The Participating Noteholders
retained Cahill Gordon & Reindel LLP as their counsel.  Cahill Gordon & Reindel LLP ceased
representing the Participating Noteholders upon having been retained as counsel
of the Creditors Committee as discussed in the section entitled Chapter 11
Case and the Plan of ReorganizationSignificant Events during the Chapter 11
CaseAppointment of Creditors Committee. Pursuant to the terms of the
Restructuring Agreement, the Company has agreed to pay the fees and expenses of
the legal and financial advisors to the UPC Entities and the  16 
   Participating
Noteholders in connection with the Restructuring.  The aggregate amount of compensation to be paid post-petition by
the Company to the advisors to the Company, the UPC Entities and the
Participating Noteholders under their respective engagement letters or expense
reimbursement agreements, as the case may be, is expected to be in the range of
$[            ].  Conditions to the
Restructuring  In
order for the Restructuring to be implemented, the Plan must be consummated and
the Effective Date must occur.  For a
more detailed description of the conditions precedent to confirmation and
consummation of the Plan, see Chapter 11 Case and the Plan of
ReorganizationThe PlanConditions Precedent to Confirmation and Chapter 11
Case and Plan of Reorganization  the Plan Conditions Precedent to
Consummation below.  The Plan shall be
consummated and the Effective Date shall occur if and only if the following
conditions shall have occurred or shall have been duly waived (if waivable):  the Confirmation Order
shall not have been vacated, reversed, stayed, modified, amended, enjoined or
restrained by order of a court of competent jurisdiction and shall have become
a Final Order (as that term is defined in the Plan);  all documents and
agreements required to be executed or delivered under the Plan or the
Restructuring Agreement on or prior to the Effective Date shall have been
executed and delivered by the parties thereto;  the Bankruptcy Court shall
have entered an order (contemplated to be part of the Confirmation Order)
authorizing and directing the Debtor and the Reorganized Debtor to take all
actions necessary or appropriate to enter into, implement and consummate the
contracts, instruments, releases, indentures and other agreements or documents
created, amended, supplemented, modified or adopted in connection with the
Plan;  the Amended and Restated
Certificate of Incorporation of the Reorganized Debtor shall have been filed
with the applicable authority of the jurisdiction of incorporation or
organization in accordance with such jurisdictions applicable law;  all authorizations,
consents and regulatory approvals required, if any, in order to consummate the
Plan shall have been obtained;  no order of a court shall
have been entered and shall remain in effect restraining the Company from
consummating the Plan;  the New UPC Polska Notes
shall have been accepted for listing on The PORTAL Market; and  the New UPC Polska Notes
shall have obtained a rating by either Standard and Poors Ratings Group or
Moodys Investors Service, Inc.  Operations after
the Restructuring  The
Company expects that the Restructuring, if consummated reasonably promptly,
will not adversely affect its operating subsidiaries and that after the
Restructuring its operating subsidiaries will continue to operate their
businesses in the same manner as they did prior to the Restructuring. The
Company does not expect the Restructuring, if consummated reasonably promptly,
to adversely affect the relationships of the Companys operating subsidiaries
with their suppliers, customers and employees. In addition, the Company expects
that, except as otherwise discussed in this Disclosure Statement, the assets
and liabilities of its operating subsidiaries will not be adversely affected by
the Restructuring.  17 
   CHAPTER 11 CASE AND THE PLAN OF
REORGANIZATION  Brief Explanation
of Chapter 11 Reorganization  Chapter
11 of the Bankruptcy Code is the principal business reorganization chapter of
the Bankruptcy Code.  Under Chapter 11,
a debtor is authorized to reorganize its business.  In addition to permitting rehabilitation of the debtor, Chapter
11 promotes equality of treatment of holders of claims and equity interests of
equal rank with respect to the distribution of a debtors assets.  The formulation, confirmation by a
bankruptcy court and consummation of a plan of reorganization is the principal
objective of a Chapter 11 case.  In
general, a Chapter 11 plan of reorganization  (i)divides
claims and equity interests into separate classes,  (ii)specifies
the property that each class is to receive under the plan, and  (iii)contains
other provisions necessary or desirable for the reorganization of the debtor.  In
general, there are two forms of treatment that may be provided to a holder of a
claim or equity interest under a Chapter 11 plan of reorganization
unimpaired treatment and impaired treatment. Unimpaired treatment means
that the legal, equitable and contractual rights of a holder of a claim or
equity interest are unchanged under the plan. Impaired treatment means that the
legal, equitable or contractual rights of a holder of a claim or equity
interest are somehow changed under the plan, including situations where a
holder of a claim or equity interest does not receive or retain any property
under a plan.  Among other things, a
plan of reorganization must be accepted by votes of at least one class of
claims that is impaired without considering the votes of insiders within the
meaning of the Bankruptcy Code.  Determination to
File Chapter 11 Case  The
Company is a Delaware corporation which was established in May 1997.  From August 1999 until the fourth fiscal
quarter of 2002, the Company was wholly owned by UPC.  In the fourth fiscal quarter of 2002, UPC transferred all issued
shares of Company common stock to UPC Telecom, which is a wholly-owned
subsidiary of UPC.  UPC also assigned to
UPC Telecom all of the UPC Polska Notes then owned by UPC, and all rights and
obligations arising from loan agreements between the Company and UPC.  As of the date of this Disclosure Statement,
the Companys direct subsidiaries include:  Poland
Communications, LLC (PC LLC),  Wizja
TV B.V. (previously Sereke Holding B.V.) (Wizja TV B.V.),  Atomic
TV Sp. z o.o. (previously Ground Zero Media Sp. z o.o.) (Atomic TV),  At
Media Sp. z o.o. (At Media),
and  @Entertainment
Programming, LLC (@EP LLC).  A full listing of all of the Companys direct and
indirect subsidiaries can be found in the section entitled The CompanyBusiness.  As
with many other cable operators, the Company and the UPC Polska Group have
incurred significant operating losses and negative operating cash flows. As a
result, the Company spent part of the first two quarters of 2003 negotiating a
capital restructuring with the Participating Noteholders and with the UPC
Entities.  These discussions were in
regard to exchanging the UPC Polska Notes, the UPC Telecom Notes and the
Belmarken Notes for new shares of the Reorganized Debtor, new notes and cash,
as applicable. These negotiations culminated in the execution of the
Restructuring Agreement, which contemplated the commencement of this Chapter 11
proceeding in order to effectuate the Restructuring.  18 
   Commencement of
the Chapter 11 Case  On the
Petition Date, the Company filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code with the Bankruptcy Court, thereby commencing the
Chapter 11 Case.  Simultaneously
therewith, the Company filed several motions, including those described below,
seeking authorization to continue to conduct its business in the ordinary
course as well as to undertake certain activities which require approval of the
Bankruptcy Court.  One day after the
Petition Date, the Company filed the Chapter 11 Plan of Reorganization Jointly
Proposed by UPC Polska Inc. and UPC Polska Finance, Inc.  Shortly thereafter, the Company filed this
Disclosure Statement with the Bankruptcy Court. Since the Petition Date, the
Company has continued to operate its business and manage its properties as a
debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code
and subject to the supervision of the Bankruptcy Court.  An
immediate effect of the filing of the bankruptcy petition was the imposition of
the automatic stay under the Bankruptcy Code, which, with limited exceptions,
enjoins the commencement or continuation of all (i) collection efforts by
holders of claims, (ii) enforcement of liens and (iii) litigation against the Company.  This injunction remains in effect, unless
modified or lifted by the Bankruptcy Code or order of the Bankruptcy Court,
until consummation of a plan of reorganization.  Significant Events
during the Chapter 11 Case  First Day Motions  As
mentioned above, on the Petition Date, the Company filed numerous so-called
first day motions, along with corresponding affidavits and proposed orders,
to the Bankruptcy Court.  These motions
included, among others:  (i) a motion
seeking authorization for the Company to continue to use its pre-petition bank
accounts, business forms and investment practices, (ii) a motion for an
extension of the period within which the Company is required to file its  bankruptcy schedules and statement of
financial affairs, (iii) a motion to establish procedures for the interim
compensation and reimbursement of expenses for professionals retained in the
Chapter 11 Case, (iv) a motion seeking to establish a deadline for the filing
of claims against the Company; (v) a motion authorizing a specified arbitration
proceeding to proceed to judgment and granting related stay relief; (vi) a
motion for an extension of the period within which the Company may file notices
of removal of civil actions to the Bankruptcy Court; and (vii) a motion seeking
to schedule a hearing to approve this Disclosure Statement.  All of
the first day motions filed by the Company were granted by the Bankruptcy
Court on July 8, 2003 either in whole or on an interim basis, with the
exception of the motion to establish interim compensation procedures for
professionals, which the Bankruptcy Court ordered noticed and set for hearing
and the motion to maintain pre-petition bank accounts in Europe which was
informally objected to by the U.S. Trustee. 
The Company and the U.S. Trustee subsequently resolved the issues
relating to bank accounts, and an agreement was reached whereby the Company
transferred all but $500,000 of its funds to a U.S. Trustee approved bank in
the Southern District of New York.  Retention of Professionals  On the
Petition Date, the Company also requested that the Bankruptcy Court approve the
retention of, among others, the following professionals:  Baker
& McKenzie, as general counsel for the Company;  FTI
Consulting, Inc., as financial advisor for the Company;  Bankruptcy
Services LLC, as claims and solicitation agent; and  Certain
professionals utilized by the Company in the ordinary course of business
including KPMG.  On
July 8, 2003, the Bankruptcy Court entered orders authorizing the foregoing
retentions on an interim basis, pending notice and a hearing on the retention
of such professionals on a final basis (if any objections to such  19 
   retentions were
filed on or before 4:00 p.m. (New York City Time) on July 23, 2003).   No objections were filed and the orders
authorizing such retentions have become final.  Copies
of these documents and any other pleadings filed by the Company and other
parties in the Chapter 11 Case on or after the Petition Date may be obtained
either (a) over the internet at the Bankruptcy Courts website at http://www.nysb.uscourts.gov
(registration and a password are required) or (b) for review at the office of
the Clerk of the Bankruptcy Court, One Bowling Green, New York, New York 10004.  Appointment of Creditors Committee  On
July 15, 2003, the United States Trustee appointed an official committee of
unsecured creditors (the Creditors Committee) in the Chapter 11 Case.  The seven members of the Creditors Committee
are: Deutsche Bank Trust Company Americas, in its capacity as Indenture
Trustee; Deutsche Bank, in its capacity as a holder of UPC Polska Notes;
GoldenTree Asset Management LLC; Strong High Yield Bond Fund; Morgan Stanley
Investment Management; SISU; and HBO Communications (UK) Ltd. On July 23, 2003,
the Creditors Committee filed an application with the Bankruptcy Court for an
order authorizing the employment of Cahill Gordon & Reindel LLP as counsel
to the Creditors Committee.  [On
[           ], 2003, the
Creditors Committee also filed an application with the Bankruptcy Court for an
order authorizing the employment of
                
as financial advisor to the Creditors Committee.]  Rule 2004 Motion by SISU  On
July 9, 2003, SISU filed a motion for relief pursuant to Bankrupty Rule 2004 (2004 Motion)
requiring the Company, among others, to produce documents and submit to
depositions.  SISUs 2004 Motion raised
issues relating to SISUs proposed recharacterization and proposed equitable
subordination of the indebtedness owed by the Company to UPC Telecom, which
issues the Company disputes. On July 14, 2003, the Company filed an opposition
to the 2004 Motion.  Following a
contested hearing on July 23, 2003, the Bankruptcy Court denied SISUs request.  The Plan  The following is a summary of the material
provisions of the Plan and is qualified in its entirety by reference to the
Plan itself.  A copy of the Plan is
attached to this Disclosure Statement as Annex A and is incorporated herein by
reference.  Holders of Claims and Equity
Interests should carefully read the Plan in its entirety for a full
understanding of its terms.  Classification of Claims and Equity Interests Under the Plan  Section
1123 of the Bankruptcy Code provides that a plan of reorganization must
classify claims against and equity interests in a debtor.  Under Section 1122 of the Bankruptcy Code, a
plan must classify each right to payment against the debtor and each right to
an equitable remedy for breach of performance which gives rise to a right to
payment, as well as any interest in the debtor represented by an equity
security, into a category or class that contains substantially similar claims
or equity interests.  The Bankruptcy
Code also requires that a plan of reorganization provide the same treatment for
each claim or equity interest of a particular class, unless the holder of a
particular claim or equity interest agrees to a less favorable treatment of its
claim or equity interest.  The
Plan divides holders of known Claims against, and known Equity Interests in,
the Company into Classes and sets forth the treatment offered each Class.  See Chapter 11 Case and the Plan of
Reorganization  the Plan  Summary of Distributions Under the Plan below.  The Company believes it has classified all
Claims and Equity Interests in compliance with the provisions of Section 1122,
but it is possible that a holder of a Claim or Equity Interest may challenge
the classification of Claims and Equity Interests and that the Bankruptcy Court
may find that a different classification is required for the Plan to be
confirmed.  In such event, it is the
Companys intention, to the extent permitted by the Bankruptcy Code and the
provisions of the Plan, to make modifications to the classification scheme set
forth in the Plan as required by the Bankruptcy Court for confirmation.  Except
as otherwise provided in the Plan, a Claim and Equity Interest will be deemed
classified in a particular Class only to the extent that such Claim or Equity
Interest qualifies within the description of that Class and will be  20 
   deemed classified
in a different Class to the extent that any remainder of such Claim or Equity
Interest qualifies within the description of such different Class.  Further, a Claim or Equity Interest will not
be classified in any Class for distribution purposes until such Claim or Equity
Interest becomes an Allowed Claim or Allowed Equity Interest and then only to
the extent that such Allowed Claim or Allowed Equity Interest has not been
paid, released or otherwise satisfied prior to the Effective Date.  Except to the extent that a
modification of classification adversely affects the treatment of a holder of a
Claim and requires resolicitation, acceptance of the Plan by any holder of a
Claim pursuant to this solicitation will be deemed to be a consent to the
Plans treatment of such holder of a Claim regardless of the Class as to which
such holder of a Claim is ultimately deemed to be a member.  The
Plan categorizes the Claims against, and Equity Interests in, the Company into
seven Classes, as follows:  Class
  1
  
  
  
  Priority
  ClaimsClass
  2
  
  
  
  Critical
  Creditor ClaimsClass
  3
  
  
  
  UPC
  Polska Note Claims (excluding Telecom Owned UPC Polska Note Claims)Class
  4
  
  
  
  Telecom
  Owned UPC Polska Note Claims, Belmarken Note
  Claims, Telecom Pari Passu Note Claims and Affiliate Indebtedness ClaimsClass
  5
  
  
  
  General
  Unsecured ClaimsClass
  6
  
  
  
  Telecom
  Junior Note ClaimsClass
  7
  
  
  
  UPC
  Polska Equity Interests  However,
pursuant to the Plan, any Class that does not contain, as of the date of the
commencement of the Confirmation Hearing, any Allowed Claims or Allowed Equity
Interests or any Claims or Equity Interests temporarily allowed for voting
purposes under Bankruptcy Rule 3018 shall be deemed to have been deleted from
the Plan for purposes of (i) voting to accept or reject the Plan and (ii)
determining whether it has accepted or rejected the Plan under Section
1129(a)(8) of the Bankruptcy Code.  In
accordance with the Bankruptcy Code, Administrative Claims and Priority Tax
Claims are not classified into Classes.  Summary of Distributions Under the Plan  Only
Claims  (i)as
to which the Companys liability and the amount thereof are agreed to by the
Company and the holder of such Claim (but only to the extent so agreed),  (ii)as
to which the Companys liability and the amount thereof are determined by Final
Order of a court of competent jurisdiction,  (iii)which
have been expressly allowed in a liquidated amount under the provisions of the
Plan (but only to the extent so allowed),  (iv)which
is a Professional Claim for which a fee award amount has been approved by Final
Order of the Bankruptcy Court,  (v)which
is set forth in the Companys schedules as liquidated in amount and not
disputed or contingent, or  (vi)proof
of which was filed within the applicable period of limitation fixed by the
Bankruptcy Court in accordance with Bankruptcy Rule 3003(c) as to which no
objection to the allowance thereof has  21 
   been interposed
within the applicable period of limitation fixed by the Plan, the Bankruptcy
Code, the Bankruptcy Rules or a Final Order,  (Allowed Claims) are
entitled to receive distributions under the Plan.  If the
Plan is confirmed by the Bankruptcy Court, each holder of an Allowed Claim or
an Allowed Equity Interest in a particular Class will receive the same
treatment as the other holders of Allowed Claims or Allowed Equity Interests in
such Class, whether or not such holder voted to accept the Plan.  Such treatment will be in full satisfaction,
settlement, release, extinguishment and discharge of such holders respective
Claim or Equity Interest, except as otherwise provided in the Plan or the order
confirming the Plan.  Upon confirmation
of the Plan, Claims and Equity Interests will be modified as, and to the
extent, set forth in the Plan.  Upon
confirmation, the Plan will be binding on all holders of the Companys Claims
and Equity Interests regardless of whether such holders voted to accept the
Plan.  The
following describes the Plans classification of Claims against and Equity
Interests in the Company, and the treatment that holders of Allowed Claims and
Allowed Equity Interests will receive under the Plan, unless they agree to
accept less favorable treatment by settlement or otherwise.  The
following summary of the proposed distributions under the Plan does not purport
to be complete and is subject to, and qualified in its entirety by, the Plan.  Administrative Claims  Administrative
Claims are Claims constituting a cost or expense of administration of the
Chapter 11 Case under Sections 503, 507(a)(1), 507(b) or 1114(e)(2) of the
Bankruptcy Code.  Administrative Claims
include, without limitation, (i) any actual and necessary post-petition cost or
expense of preserving the Estate or operating the businesses of the Company,
(ii) any payment to be made under the Plan to cure a default on an assumed
executory contract or unexpired lease, (iii) any post-petition cost,
indebtedness or contractual obligation duly and validly incurred or assumed by
the Company in the ordinary course of its businesses, (iv) compensation or
reimbursement of expenses of Professionals to the extent Allowed by the
Bankruptcy Court under Sections 327, 328, 330, 331, 503, or 1103 of the
Bankruptcy Code, (v) any claim of a governmental unit against the Company
either for taxes or for related interest or penalties for any period of time
that falls within any period from and including the Petition Date through and
including the Effective Date, (vi) all Allowed Claims that are entitled to be
treated as Administrative Claims pursuant to a Final Order of the Bankruptcy
Court under Section 546(c)(2)(A) of the Bankruptcy Code; and (vii) any fees or
charges assessed against the Estate under Section 1930 of title 28 of the
United States Code.  In accordance with
Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims are not
classified and are excluded from the Classes designated in the Plan.  The Indenture Trustees reasonable fees and
expenses incurred in connection with the Chapter 11 Case through the Effective
Date (which includes the fees and expenses of any professionals retained by the
Indenture Trustee), shall be paid (unless otherwise ordered by the Bankruptcy
Court), without application by or on behalf of the Indenture Trustee or any
professionals retained by the Indenture Trustee to the Bankruptcy Court and
without notice and a hearing by the Reorganized Debtor as an Allowed
Administrative Claim under the Plan.  Unless
otherwise provided for in the Plan, each holder of an Allowed Administrative
Claim shall receive in full satisfaction, settlement, release, extinguishment
and discharge of such Claim: (A) the amount of such unpaid Allowed Claim in
cash on or before the latest of (i) as soon as reasonably practicable on or
after the Effective Date, (ii) 30 days after the date on which such
Administrative Claim becomes Allowed, (iii) the date on which the Allowed
Administrative Claim becomes due and payable or (iv) a date agreed to in
writing by the Company or the Reorganized Debtor, as the case may be, and the
holder of such Administrative Claim; or (B) such other treatment on such other
terms and conditions as may be agreed upon in writing by the holder of such
Claim and the Company or the Reorganized Debtor, as the case may be, or as the
Bankruptcy Court may order.  Other
than as provided in an order of the Bankruptcy Court, payments to professionals
retained in the Chapter 11 Case by the Company or the Creditors Committee in
the Chapter 11 Case for compensation and reimbursement of expenses, and all
payments to reimburse expenses of members of the Creditors Committee, will be
made in accordance with the procedures established by the Bankruptcy Code and
the Bankruptcy Rules relating to  22 
   the payment of
interim and final compensation and expenses, as such procedures may be modified
by any order of the Bankruptcy Court. 
Other than as provided in an order of the Bankruptcy Court, the
Bankruptcy Court will review and determine all such requests for compensation
and reimbursement of expenses.  Assuming
that neither significant litigation nor objections are filed with respect to
the Plan and assuming the Plan is timely confirmed, the Company estimates that
unpaid Administrative Claims as of the Effective Date will be in the range of
$[_____].  Priority Tax Claims  Certain
Claims for unpaid taxes are entitled to priority in right of payment under
Section 507(a)(8) of the Bankruptcy Code. 
In accordance with Section 1123(a)(1) of the Bankruptcy Code, Priority
Tax Claims are not classified and are excluded from the Classes designated in
the Plan.  Each
holder of an Allowed Priority Tax Claim shall receive, at the option of the
Company or the Reorganized Debtor, as the case may be, in full satisfaction,
settlement, release, extinguishment and discharge of such Claim:  (A)the amount of such unpaid
Allowed Priority Tax Claim in cash, on or before the latest of (i) as soon as
reasonably practicable after the Effective Date, (ii) 30 days after the date on
which such Claim becomes Allowed, (iii) the date on which such Claim becomes
due and payable or (iv) a date agreed to in writing by the Company or the Reorganized
Debtor, as the case may be, and the holder of such Claim; or  (B)
over a period not exceeding six years from the date on which the underlying tax
was assessed, deferred cash payments in an aggregate amount equal to the amount
of the Allowed Priority Tax Claim, plus simple interest from the Effective Date
on the unpaid balance of the Allowed Priority Tax Claim at the federal judgment
rate; or  (C)as otherwise agreed upon in
writing by the holder of such Claim and the Company or the Reorganized Debtor, as
the case may be.  The Reorganized Debtor
will make these payments in equal semi-annual installments. The first
installment will be due on the latest of (i) 30 days after the Effective Date
and (ii) 30 days after the date on which such Priority Tax Claim becomes
Allowed.  Each installment will include
simple interest from the Effective Date, in arrears, on the unpaid balance of
the Allowed Priority Tax Claim at the federal judgment rate but will include no
penalty of any kind.  The Reorganized
Debtor will have the right to pay any unpaid balance on an Allowed Priority Tax
Claim in full at any time on or after the Effective Date without premium or
penalty of any kind.  Priority ClaimsClass 1  Class
1 consists of all Priority Claims against the Company other than Priority Tax
Claims.  Under the Plan, each holder of
an Allowed Priority Claim shall receive in full satisfaction, settlement,
release, extinguishment and discharge of such Claim:  (A)
the amount of such unpaid Allowed Claim in cash, with simple interest, if any,
on or before the latest of (i) as soon as reasonably practicable after the
Effective Date, (ii) 30 days after the date on which such Claim becomes
Allowed, (iii) the date on which such Claim becomes due and payable or (iv) a
date agreed to in writing by the Company or the Reorganized Debtor, as the case
may be, and the holder of such Claim; or  (B)
such other treatment on such other terms and conditions as may be agreed upon
in writing by the holder of such Claim and the Company or Reorganized Debtor,
as the case may be, or as the Bankruptcy Court may order.  Currently,
the Company believes that there are Classified Priority Claims in the
approximate amount of
$[           ].  23 
   Class
1 is Unimpaired and the holders of Priority Claims are conclusively presumed to
have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code and
are not entitled to vote to accept or reject the Plan.  Critical Creditor ClaimsClass 2  Class
2 consists of all Allowed Claims of Critical Creditors against the
Company.  Under the Plan, each holder of
an Allowed Critical Creditor Claim shall receive in full satisfaction,
settlement, release, extinguishment and discharge of such Claim:  (A)
payment in full in cash with interest, if any, on the later of (i) the
Effective Date and (ii) the date such Claim becomes Allowed;  (B)
treatment such that such Claim is Reinstated; or  (C)
such other treatment on such other terms and conditions as may be agreed upon
in writing by the holder of such Claim and the Company or the Reorganized
Debtor, as the case may be, or as the Bankruptcy Court may order.  Currently,
the Company believes that there are Critical Creditor Claims in the approximate
amount of $[         ].  Class
2 is Unimpaired and the holders of Critical Creditor Claims are conclusively
presumed to have accepted the Plan pursuant to Section 1126(f) of the
Bankruptcy Code and are not entitled to vote to accept or reject the Plan.  UPC Polska Note Claims (other than
Telecom Owned UPC Polska Note Claims)Class 3  Class 3 consists of the
Allowed Claims of the holder(s) of the UPC Polska Notes (other than Telecom
Owned UPC Polska Note Claims).  Under
the Plan, each holder of an Allowed UPC Polska Note Claim other than UPC
Telecom (Third Party
Holders) shall receive, in consideration for the UPC Polska
Notes (other than the Telecom Owned UPC Polska Notes) on or as soon as
practicable after the Effective Date ratably on account of its Claim (i) the
Cash Considerationand
(ii) New UPC Polska Notes in an aggregate amount of $60,000,000 of the
Reorganized Debtor and Polska Finance, as co-issuers of the New UPC Polska
Notes (together with the Cash Consideration, the Third Party Noteholder Consideration);provided, however,
in the event that, on or prior to the Effective Date, UPC or any of its direct
or indirect Affiliates purchases, redeems or otherwise acquires for value any
UPC Polska Notes for a consideration that is different than the Third Party
Noteholder Consideration, then each of the Third Party Holders shall have the
right to elect to receive such alternate consideration in respect of their UPC
Polska Notes upon consummation of the Restructuring, on the same terms and
conditions as those pursuant to which such other UPC Polska Notes were
purchased, redeemed or otherwise acquired for value, in lieu of receiving the
Third Party Noteholder Consideration for their UPC Polska Notes.  The Debtor shall promptly notify each Third
Party Holder of each such purchase including the amount(s) and type(s) of
consideration paid in connection therewith.  The
Allowed Claims of the holders of the UPC Polska Notes (other than Telecom Owned
UPC Polska Note Claims) shall be deemed Allowed in the aggregate amount of
$412.3 million and shall not be subject to defense, setoff or counterclaim.  Class
3 is Impaired, and the holders of the UPC Polska Notes (other than Telecom
Owned UPC Polska Notes) are entitled to vote to accept or reject the Plan.  Telecom Owned UPC Polska Note
Claims, Belmarken Note Claims, Telecom Pari Passu Note Claims and Affiliate
Indebtedness ClaimsClass 4  Class
4 consists of the Telecom Owned UPC Polska Note Claims, the Belmarken Note
Claims, the Telecom Pari Passu Note Claims and the Affiliate Indebtedness
Claims.  24 
   Under
the Plan, on or as soon as practicable after the Effective Date, each holder of
an Allowed Class 4 Claim shall receive ratably in consideration for its Claim
(i) the Other Cash Consideration and (ii) 100% of the New UPC Polska Stock.  Class
4 is Impaired and each holder of an Allowed Class 4 Claim is entitled to vote
to accept or reject the Plan.  General Unsecured ClaimsClass 5  Class
5 consists of all pre-petition Allowed Claims against the Company, other than
Administrative Claims, Priority Tax Claims, Priority Claims, UPC Polska Note
Claims, Belmarken Note Claims, Telecom Pari Passu Note Claims, Affiliate
Indebtedness Claims, Telecom Junior Note Claims and Critical Creditor Claims,
including, without limitation, any claims of the holder of the RCI Note, as
defined herein.  Under
the Plan, on or as soon as practicable after the Effective Date, each holder of
an Allowed Class 5 Claim shall receive in consideration for its Claim the
amount of cash and New UPC Polska Notes issued under the New Indenture per
$1,000 of claim amount of each Allowed General Unsecured Claim of the Company
which is equal to the amount of Cash Consideration and New UPC Polska Notes
issued under the New Indenture per $1,000 of claim amount payable to the
holders of the UPC Polska Notes (other than the Telecom Owned UPC Polska
Notes).  Class
5 is Impaired and the holders of the General Unsecured Claims are entitled to
vote to accept or reject the Plan.  Telecom Junior Note ClaimsClass 6  Class
6 consists of all Telecom Junior Note Claims. Under the Plan, holders of the
Telecom Junior Note Claims shall not be entitled to, and shall not, receive or
retain any property under the Plan on account of such Claims, and, such Telecom
Junior Notes shall be cancelled on the Effective Date and will be of no further
force or effect.  Class
6 is Impaired, and the holders of Telecom Junior Note Claims are deemed to have
rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code and are
not entitled to vote to accept or reject the Plan.  Equity InterestsClass 7  Class
7 consists of all Equity Interests in UPC Polska. Under the Plan, holders of
Equity Interests shall not be entitled to, and shall not, receive or retain any
property under the Plan on account of such Equity Interests, and such Equity
Interests shall be cancelled on the Effective Date and will be of no further
force or effect.  Class
7 is Impaired, and the holders of Equity Interests are deemed to have rejected
the Plan pursuant to Section 1126(g) of the Bankruptcy Code and are not
entitled to vote to accept or reject the Plan.  Means for Implementation of the Plan  Continued Corporate Existence  The
Company shall, as the Reorganized Debtor, continue to exist after the Effective
Date in accordance with applicable law of the jurisdiction in which it is
organized, under its organizational documents in effect before the Effective
Date, except as such documents are amended in connection with the Plan.  Cancellation of Claims and Equity
Interests  As of consummation of the Plan, all Claims against,
and Equity Interests in, the Company shall be cancelled and all agreements,
notes, instruments, depositary shares, depositary receipts, indentures,
certificates, guarantees and any other documents evidencing or relating to such
Claims and Equity Interests shall be cancelled and deemed terminated, as
permitted by Section 1123(a)(5)(F) of the Bankruptcy Code, and the holders
thereof shall have no  25 
   rights and such notes, instruments, depositary shares, depositary
receipts, indentures, certificates, guarantees and other documents shall
evidence no rights, except the right to receive the Distributions, if any, to
be made to holders of such Claims under the Plan.  Cancellation of Indentures  Subject
to Section IV.D.2 of the Plan, the rights and obligations of UPC Polska and any
affiliate, if any, under the Indentures shall be deemed cancelled on the
Effective Date. The Indenture Trustee will serve as the Third Party Disbursing
Agent in connection with distributions in respect of UPC Polska Note Claims
(other than Telecom Owned UPC Polska Note Claims), in accordance with the Plan.  Without
limiting the generality of the foregoing, in accordance with the cancellation
of the Indentures on the Effective Date as specified above, on the Effective
Date, any and all rights of or conferred upon holders of or with respect to the
UPC Polska Notes and the Company (whether such indebtedness is on account of
principal, pre-petition or post-petition interest, fees, charges or otherwise),
as defined in the Indentures, including any rights of subordination, priority,
seniority or otherwise under the Indentures, including with respect to the
property to be distributed to Persons holding UPC Polska Note Claims under the
Plan, shall be similarly nullified and extinguished.  The preceding sentence applies, without limitation, to all
Persons holding Allowed Claims under the Plan, including the Third Party
Holders.  Notwithstanding
the cancellation of the Indentures, the right of the Indenture Trustee to
assert a lien against distributions to holders of the UPC Polska Notes shall
survive cancellation of the Indentures, subject to the allowed fees and
expenses of the Indenture Trustee.  Cancellation
of the Indentures pursuant to the Plan shall not affect the rights of the Third
Party Holders to receive distributions of Third Party Noteholder Consideration
in accordance with the Plan.  Amendment of Organizational Documents  A
substantially final form of the Amended and Restated Certificate of
Incorporation of the Reorganized Debtor is attached as Exhibit D to the Plan
and includes such provisions as are necessary to satisfy the provisions of the
Plan and the Bankruptcy Code.  Similarly,
the Certificate of Incorporation of Polska Finance has been filed with the
Delaware Secretary of Stateand includes such provisions as are
necessary to satisfy the provisions of the Plan and the Bankruptcy Code.  Corporate Action  On the
Effective Date, the Reorganized Debtor shall execute and deliver, and is
authorized, without any further corporate action, to execute and deliver all
agreements, documents and instruments (and all exhibits, schedules and annexes
thereto) contemplated by the Plan or the exhibits thereto and to take such
other action as is necessary or appropriate to effectuate the transactions
provided for in the Plan.  Operations Between the Confirmation
Date and the Effective Date  The
Company shall continue to operate as debtor in possession, subject to the
supervision of the Bankruptcy Court, during the period from the Confirmation
Date through and until the Effective Date.  Revesting of Assets  Except
as otherwise provided in the Plan or in any agreements contemplated under the
Plan, on the Effective Date all property of the Estate shall vest in the
Reorganized Debtor, free and clear of all Claims, liens, encumbrances, and
Equity Interests with all such Claims, liens, encumbrances and Equity Interests
being extinguished except as otherwise provided in the Plan.  From and after the Effective Date, the
Reorganized Debtor may operate its business and use, acquire and dispose of
property and settle and compromise Claims or Equity Interests without
supervision by the Bankruptcy Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan and the Confirmation Order.  26 
   Approval of Agreements and Compromises  Confirmation
shall constitute approval of all other agreements, transactions and compromises
contemplated by the Plan and the Confirmation Order shall so provide.  Rights of Action  Except
as otherwise provided in the Plan, all Causes of Action shall automatically be
retained and preserved and will revest in the Reorganized Debtor or its
successors or assigns. Pursuant to Section 1123(b)(3) of the Bankruptcy Code,
the Reorganized Debtor (as a representative of the Estate) or its successors or
assigns shall retain and have the exclusive right to enforce and prosecute such
Causes of Action against any Person, that arose before the Effective Date,
other than those expressly released or compromised as part of or pursuant to
the Plan.  Operation and Management of the Reorganized Debtor  Post-Effective Date Operation of
Business  From and after the Effective Date, the Reorganized
Debtor will continue to exist and engage in business, in accordance with the
applicable law in the jurisdiction in which it is incorporated and pursuant to
its organizational documents as amended pursuant to the Plan.  Post-Effective Date Directors and
Officers of the Company  As of
the Effective Date, UPC Polskas then-current Board will remain in place.  The List of Maintained Board Members,
including their respective background and qualifications, is attached as
Exhibit [C] to the Plan.  The
membership of the Board shall be subject to an election at the annual meeting
of the Reorganized Debtor in the year 200 [  ].  Provisions Governing Distributions Under the Plan  General  The
Company, through the Disbursing Agent, shall make all Distributions required by
the Plan.  Furthermore, the Company and
the Disbursing Agent are authorized to make distributions required in
connection with consummation of the Restructuring.  Distributions may be made from time to time in the reasonable
discretion of the Disbursing Agent. 
Notwithstanding any other provision in the Plan, no Distributions shall
be made to a holder of a Claim unless and until such Claim is an Allowed Claim.  Delivery of Distributions  Subject
to U.S. Bankruptcy Rule 9010, Distributions to holders of Allowed Claims shall
be made by the Disbursing Agent (a) at the address set forth on the respective
proofs of Claim filed by such holders of Allowed Claims; (b) at the address set
forth in any written notices of address changes delivered to the Disbursing
Agent after the date of any related proof of Claim; (c) at the address
reflected in the Schedules if no proof of Claim is filed and the Disbursing
Agent has not received a written notice of a change of address; and (d) with
respect to holders of UPC Polska Note Claims at the last known address of
record holders of such UPC Polska Note Claims as of the Distribution
Notification Date, as determined by the Indenture Trustee.  If any holders Distribution is returned as
undeliverable, no further Distributions to such holder shall be made unless and
until the Disbursing Agent is notified of such holders then current
address.  All Distributions pursuant to
the Plan shall be at the Reorganized Debtors expense.  Disbursing Agent  The Reorganized
Debtor or any entity or entities employed by the Reorganized Debtor in its sole
discretion to act as Disbursing Agent (Third Party Disbursing Agent) shall act as Disbursing
Agent under the Plan and, unless otherwise specified, shall make all
distributions required under the Plan. The Indenture Trustee will serve as  27 
   the
Third Party Disbursing Agent in connection with distributions in respect of UPC
Polska Note Claims (other than Telecom Owned UPC Polska Note Claims), in
accordance with the Plan.  The
Disbursing Agent (including the Indenture Trustee when it is authorized to act
as Third Party Disbursing Agent) may employ or contract with other entities to
assist in or perform the distribution of property under the Plan. Unless
otherwise determined by the Reorganized Debtor in its sole discretion, the
Disbursing Agent shall serve without bond. The Third Party Disbursing Agent, if
any, shall receive from the Reorganized Debtor, without further Bankruptcy
Court approval, reasonable compensation for distribution services rendered
pursuant to the Plan and reimbursement of reasonable out-of-pocket expenses incurred
in connection with such services on terms agreed to by the Reorganized Debtor.  Distribution Notification Date  As of
the close of business on the Distribution Notification Date, all transfer
ledgers, transfer books, registers and any other records maintained by the
designated transfer agents with respect to ownership of the Telecom Notes, the
Belmarken Notes, the UPC Polska Notes and the Equity Interests will be closed
and, for purposes of the Plan, there shall be no further changes in the record
holders of the UPC Telecom Notes, the Belmarken Notes, the UPC Polska Notes or
the Equity Interests.  The Disbursing
Agent shall have no obligation to recognize the transfer of any Belmarken
Notes, UPC Polska Notes, or UPC Telecom Notes occurring after the Distribution
Notification Date, and will be entitled for all purposes to recognize and deal
only with those holders of the UPC Telecom Notes, Belmarken Notes, or UPC
Polska Notes as of the close of business on the Distribution Notification Date,
as reflected on such ledgers, books, registers or records.  Disputed Distributions  If any
dispute arises as to the identity of any holder of an Allowed Claim who is to
receive a Distribution, the Disbursing Agent shall, in lieu of making such
Distribution to such holder, delay such Distribution until the disposition
thereof shall be determined by Final Order of the Bankruptcy Court or by
written agreement among the interested parties to such dispute.  Distributions of Cash  Cash
payments made pursuant to the Plan shall be in U.S. dollars on checks drawn on
a domestic bank selected by the Reorganized Debtor or, at the option of the
Reorganized Debtor, by wire transfer from a domestic bank; provided, however,
that payments made to foreign creditors holding Allowed Claims may be paid, at
the option of the Reorganized Debtor, in such funds and by such means as are
necessary or customary in a particular foreign jurisdiction.  Unclaimed Distributions  Any
holder of an Allowed Claim which does not assert a claim in writing for an
undeliverable distribution held by the Disbursing Agent or the Third Party
Disbursing Agent within one year after the Effective Date shall no longer have
any claim to or interest in such undeliverable distribution, and shall be
forever barred from receiving any distributions under the Plan, or from the
Company, Polska Finance, the Reorganized Debtor, the Estate or their respective
property. In such case, any property held for distribution on account of such
Claims shall be retained by the Reorganized Debtor or returned to the
Reorganized Debtor if in possession of the Third Party Disbursing Agent and
shall be the property of the Reorganized Debtor, free from any restrictions
thereon. Nothing contained in the Plan shall require the Company, the Reorganized
Debtor, Polska Finance or the Disbursing Agent or the Third Party Disbursing
Agent to attempt to locate any holder of an Allowed Claim.  Therefore,
any holder of an Allowed Claim which does not assert a claim for an
undeliverable distribution within one year after the Effective Date will have
any claim for such undeliverable distribution discharged with respect thereto
and forever will be barred from asserting any such Allowed Claim against the
Company, the Estate, the Reorganized Debtor, Polska Finance or their respective
property.  28 
   Compliance with Tax Requirements  The
Disbursing Agent shall comply with all withholding and reporting requirements
imposed on it by governmental units, and all distributions pursuant to the Plan
shall be subject to such withholding and reporting requirements, if any.  Setoffs  Notwithstanding
anything to the contrary contained in the Plan (except as provided in Sections
VI.B and VI.C of the Plan), to the extent permitted under applicable law with
respect to an Allowed Claim or Allowed Equity Interest, the Reorganized Debtor
may, but shall not be required to, set off, recoup, assert counterclaims or
withhold against any Allowed Claim or Allowed Equity Interest and the distributions
to be made pursuant to the Plan on account of such Allowed Claim or Allowed
Equity Interest of any nature that the Company, the Estate, or the Reorganized
Debtor may have against the holder of such Allowed Claim or Allowed Equity
Interest; provided, however, that neither the failure to effect such a setoff
or recoupment, nor the allowance of any Claim against or Equity Interest in the
Company or the Reorganized Debtor, nor any partial or full payment during the
Chapter 11 Case or after the Effective Date in respect of any Allowed Claim or
Allowed Equity Interest, shall constitute a waiver or release by the Company,
the Estate or the Reorganized Debtor of any claim that they may possess against
such holder.  Treatment of Executory Contracts and Unexpired Leases;
Indemnification Obligations; Benefit Programs  General  On the
Effective Date, all of the executory contracts and unexpired leases that exist
between the Company and any Person which (a) have not expired or terminated
pursuant to their own terms, (b) have not previously been assumed, assumed and
assigned, or rejected pursuant to an order of the Bankruptcy Court on or prior
to the Confirmation Date or (c) are not the subject of pending motions to
assume,  assume and assign, or reject as
of the Confirmation Date, will be (i) deemed assumed if listed on the Schedule
of Assumed Contracts or (ii) deemed rejected if listed on the Schedule of
Rejected Contracts; provided, however,that any executory
contracts or unexpired leases which are omitted from both the Schedule of
Assumed Contracts and the Schedule of Rejected Contracts are assumed as of the
Effective Date, all in accordance with the provisions and requirements of
Section 365 of the Bankruptcy Code; provided, however,that the Company shall
have the right, at any time prior to the Confirmation Date, to amend the
Schedule of Assumed Contracts and the Schedule of Rejected Contracts upon
notice to the counterparty to a contract or lease to delete any executory
contract or unexpired lease listed therein or to add any executory contract or
unexpired lease thereto.  The
Confirmation Order (except as otherwise provided therein) shall constitute an
order of the Bankruptcy Court pursuant to Section 365 of the Bankruptcy Code,
effective as of the Effective Date, approving such assumptions and rejections,
as applicable.  Each contract and lease
assumed or rejected, as the case may be, pursuant to Section III.F. of the Plan
shall be assumed or rejected, as the case may be, only to the extent that any
such contract or lease constitutes an executory contract or unexpired
lease.  Assumption or rejection, as the
case may be, of a contract or lease pursuant to Section III.F. of the Plan
shall not constitute an admission by the Company or the Reorganized Debtor that
such contract or lease is an executory contract or unexpired lease or that the
Company or the Reorganized Debtor has any liability thereunder. All executory
contracts and unexpired leases that are assumed will be assumed under their
present terms or upon such terms as are agreed to between the Company and the
other party to the executory contract or unexpired lease.  Cure of Defaults for Assumed
Contracts and Leases  Other
than the General Services Agreement (the indebtedness under which is being
satisfied under Class 4 treatment), the Company does not believe that it
presently is in default under any of the executory contracts or unexpired
leases set forth on the Schedule of Assumed Agreements. Accordingly, the
Schedule of Assumed Agreements does not identify any amounts that the
Reorganized Debtor believes sections 365(b)(1)(A) or (B) of the Bankruptcy Code
require that the Reorganized Debtor pay in order to cure defaults under the
executory contracts and  29 
   unexpired
leases to be assumed under the Plan. The Company will file an amended Schedule
of Assumed Agreements not later than 21 days before the Confirmation Date,
setting forth any cure amounts under the executory contracts and unexpired
leases to be assumed under Section III.F.1.a of the Plan. The Plan reserves the
right of the Company to further amend the Schedule of Assumed Agreements,
including to modify the cure amounts.  As
required by Bankruptcy Code section 365(b)(1), any and all monetary defaults under
each executory contract and unexpired lease to be assumed under the Plan will
be satisfied in one of the following two ways: (a) the Disbursing Agent will
pay to the non-debtor party to the executory contract or unexpired lease the
default amount, as set forth on the Schedule of Assumed Agreements, in cash as
soon as reasonably practicable on or after the Effective Date; or (b) the
Disbursing Agent will satisfy any other terms that are agreed to by both the
Debtor and the non-debtor party to an executory contract or unexpired lease
that will be assumed.  If,
however, a dispute arises regarding: (a) the amount of any proposed cure
payments; (b) whether the Company has provided adequate assurance of future
performance under an executory contract or unexpired lease to be assumed; or
(c) any other matter pertaining to a proposed assumption, the proposed cure
payments will be made (i) on the later of 30 days after entry of a Final Order
resolving the dispute and approving the assumption or sixty (60) days after the
Effective Date or (ii) as otherwise agreed between the parties to such
executory contract or unexpired lease.  Resolution of Objections to
Assumption of Executory Contracts and Unexpired Leases; Cure Payments  Any
Person who is a party to an executory contract or unexpired lease that will be
assumed under the Plan and who either contends that the proposed cure payment
specified on the Schedule of Assumed Agreements is incorrect or otherwise
objects to the contemplated assumption must file with the Court and serve upon
the Company and its counsel a written statement and supporting declaration
stating the basis for its objection. This statement and declaration must be
filed and served by the later of: (a) 21 days before the Confirmation Hearing
Date; or (b) five days after the Company files and serves the Schedule of
Assumed Agreements or any amendments to the Schedule of Assumed Agreements
(only with respect to an executory contract or unexpired lease affected by such
an amendment). Any Person who fails to timely file and serve such a statement
and declaration will be deemed to waive any and all objections to both the
proposed assumption and the proposed cure amount.  To the extent that any objections to the assumption of a contract
or lease are timely filed and served and such objections are not resolved
between the Debtor and the objecting party, the Bankruptcy Court shall resolve
such disputes at a hearing to be held on a date to be determined. To the extent
the dispute only relates to the proposed cure amount, the resolution of such
dispute shall not affect the Debtors assumption of the contracts or leases
that are the subject of such a dispute, but rather shall affect only the cure
amount the Debtor must pay in order to assume such contract or lease.  Notwithstanding the foregoing, if the Debtor
in its discretion determines that the amount asserted to be the necessary
cure amount would, if ordered by the Bankruptcy Court, make the assumption of
the contract or lease imprudent, then the Debtor may elect to (i) reject the
contract or lease pursuant to Section III.F.2 of the Plan or (ii) request
an expedited hearing on the resolution of the cure dispute, exclude
assumption or rejection of the contract or lease from the scope of the
Confirmation Order, and retain the right to reject the contract or lease
pursuant to Section III.F.2 of the Plan pending the outcome of such
dispute.  Claims for Rejection Damages  Any
Rejection Damage Claim or other Claim for damages arising from the rejection
under the Plan of an executory contract or unexpired lease must be filed with
the Court and served upon the Reorganized Debtor and the Reorganized Debtors
counsel within 30 days after the earlier of the mailing of notice of
confirmation or the service of other notice that the executory contract or
unexpired lease has been rejected. Any such damage Claims that are not timely
filed and served will be forever barred and unenforceable against the Estate,
the Reorganized Debtor and their respective property, and Persons holding these
Claims will be barred from receiving any distributions under the Plan on
account of their Rejection Damage Claims or other Claims.  30 
   Contracts and Unexpired Leases
Entered Into and Other Obligations Incurred After the Petition Date  Except
as expressly provided in the Plan or the Confirmation Order or any Final Order
of the Bankruptcy Court, all contracts, leases and other agreements that the
Company enters into after the Petition Date which agreements have not been
terminated in accordance with their terms or been otherwise terminated on or
before the Confirmation Date will remain in full force and effect after the
Confirmation Date and the Effective Date.  Indemnification Obligations  To the
extent not inconsistent with the Plan, on the Effective Date, the Reorganized
Debtor will be deemed to assume all indemnification obligations under
applicable certificates of incorporation, bylaws, written agreements, and
statutes with respect to all present and future actions, suits, and proceedings
against the Companys directors and officers based upon any act or omission
related to service with, for, or on behalf of the Company whether that act or
omission occurred before or after the Petition Date or while the Chapter 11
Case was pending before the Bankruptcy Court. These obligations will not be
discharged or impaired by the Plans confirmation or consummation, and they
will survive confirmation unaffected by the contemplated reorganization except
to the extent any such obligation has been released, discharged or modified
pursuant to the Plan.  Benefit Programs  Notwithstanding
anything to the contrary contained in the Plan, nothing in the Plan shall
adversely affect the payment of any retiree benefits (as such term is defined
in Section 1114(a) of the Bankruptcy Code) to the extent required by Section
1129(a)(13) of the Bankruptcy Code.  Resolution of Disputed Claims  Objections to and Resolution of
Claims, Administrative Claims and Equity Interests  Unless
otherwise ordered by the Bankruptcy Court, the Company or the Reorganized
Debtor shall file all objections to Claims (including Administrative Claims)
that are the subject of proofs of claim or requests for payment filed with the
Bankruptcy Court (other than applications for allowance of compensation and
reimbursement of expenses under Sections 330 and 503 of the Bankruptcy Code) or
Equity Interests and serve such objections upon the holder as to which the
objection is made as soon as is practicable, but, with respect to Claims (other
than Administrative Claims) and Equity Interests, in no event later than the
date that is the later of (i) six (6) months 
after the Effective Date or (ii) six (6) months after the date on which
the proof of Claim or Equity Interest has been filed, or, in either case, such
later date as may be approved by the Bankruptcy Court upon request made before
or after expiration of such applicable objection period.  All objections shall be litigated to Final
Order; provided,
however,that commencing on the Effective Date the Reorganized
Debtor shall have the authority to compromise, settle or otherwise resolve any
objections without any requirement of approval by the Bankruptcy Court.  Estimation of Claims  The
Company or the Reorganized Debtor, as applicable, may, at any time, request
that the Bankruptcy Court estimate any contingent or unliquidated Claim
pursuant to Section 502(c) of the Bankruptcy Code regardless of whether or not
the Company or the Reorganized Debtor has previously objected to such Claim or
the Bankruptcy Court has previously ruled on any such objection.  Claims may be estimated and subsequently
compromised, settled, withdrawn or resolved by any mechanism approved by the
Bankruptcy Court; provided, however,that commencing on the Effective Date the
Reorganized Debtor may compromise, settle or resolve any such Claims without
further approval of the Bankruptcy Court.  Distributions Withheld for Disputed
Unsecured Claims  Notwithstanding
any other provision of the Plan, no payments or Distributions shall be made
with respect to all or any portion of a Disputed Claim unless and until some
portion thereof has become an Allowed Claim.  31 
   On
each applicable Distribution Date, the Disbursing Agent shall reserve for the
benefit of holders of Disputed Claims (the Reserve) the distributions to which the
holders of Disputed Claims as of such Distribution Date would be entitled under
the Plan if such Disputed Claims were Allowed Claims in the amounts of their
Disputed Claims, as if the holders thereof had received such distributions on
the Initial Distribution Date.  Such
amounts shall be determined by reference to the aggregate Face Amount of all
Disputed Claims as of such date.  The
Disbursing Agent shall maintain a register of all Disputed Claims, the amounts
upon which to base reserves for such Disputed Claims and, where the property to
be reserved is New UPC Polska Stock and/or New UPC Polska Notes, the number of
shares of New UPC Polska Stock and/or the amount of cash and/or the number of
New UPC Polska Notes to which the holders of the Disputed Claims would be
entitled if such Disputed Claims were Allowed Claims.  The
holder of a Disputed Claim that becomes an Allowed Claim subsequent to the
Initial Distribution Date shall receive Distributions previously reserved on
account of such Claim in the Reserve as soon as reasonably practicable
following the allowance of any such Claim. Notwithstanding the preceding
sentence, none of the Company, the Reorganized Debtor, Polska Finance, and the
Disbursing Agent will be required to make a Distribution to any holder of a
Disputed Claim upon resolution of such holders Disputed Claim until the
aggregate Distribution to be made is equal to or greater than $250,000 or
$250,000 in principal amount of New UPC Polska Notes, as applicable.  However, if the aggregate Distribution that
would be required to be made to the holders of all remaining Disputed Claims if
all of those remaining Disputed Claims were to become Allowed Claims, as the
case may be, could not exceed either $250,000 or $250,000 in principal amount
of New UPC Polska Notes, the Company, the Reorganized Debtor, Polska Finance,
or the Disbursing Agent will make such Distributions to the holders of Disputed
Claims as soon as reasonably practicable after each Disputed Claim is
Allowed.  Such Distributions shall be
made in accordance with the Plan based upon the Distributions that would have
been made to such holder under the Plan if the Disputed Claim had been an
Allowed Claim, on or prior to the Effective Date.  Upon
any Disputed Claim becoming a Disallowed Claim, in whole or in part, the
Property, if any, reserved for the payment of or distribution on the Disallowed
portion of such Disputed Claim (i) if in the form of cash, shall revest in the
Reorganized Debtor and no longer be subject to distribution to Creditors or
(ii) if in the form of New UPC Polska Stock or New UPC Polska Notes, shall be
cancelled.  Conditions Precedent to Confirmation.  Confirmation
is subject to the following condition precedent:  a.The Confirmation Order shall be in form and substance reasonably
acceptable to the Company, the UPC Entities and the Majority-in-Interest of the
Holders; provided that none of the UPC Entities or the Majority-in-Interest of
the Holders may request that the Confirmation Order contain a provision that is
inconsistent with any of the provisions of the Restructuring Agreement.  Conditions Precedent to Consummation.  The
Plan shall be consummated and the Effective Date shall occur if and only if the
following conditions shall have occurred or shall have been duly waived (if
waivable) pursuant to Section IV.V. of the Plan:  a.the
Confirmation Order shall not have been vacated, reversed, stayed, modified,
amended, enjoined or restrained by order of a court of competent jurisdiction
and shall have become a Final Order;  b.all
documents and agreements required to be executed or delivered under the Plan or
the Restructuring Agreement on or prior to the Effective Date shall have been
executed and delivered by the parties thereto;  c.the
Bankruptcy Court shall have entered an order (contemplated to be part of the
Confirmation Order) authorizing and directing the Debtor and the Reorganized
Debtor to take all actions necessary or appropriate to enter into, implement,
and consummate the contracts, instruments,  32 
   releases,
indentures and other agreements or documents created, amended, supplemented, modified
or adopted in connection with the Plan;  d.the
Amended and Restated Certificate of Incorporation of the Reorganized Debtor
shall have been filed with the applicable authority of the jurisdiction of
incorporation or organization in accordance with such jurisdictions applicable
law;  e.all
authorizations, consents and regulatory approvals required, if any, in order to
consummate the Plan shall have been obtained;  f.no
order of a court shall have been entered and shall remain in effect restraining
the Debtor from consummating the Plan;  g.the
New UPC Polska Notes shall have been accepted for listing on The PORTAL Market;
and  h.the
New UPC Polska Notes shall have obtained a rating by either Standard and Poors
Ratings Group or Moodys Investors Service, Inc.  Waiver of Conditions to Consummation  The
requirement that the conditions to the occurrence of the Effective Date, as
specified in Section IV.U of the Plan, be satisfied may be waived in whole or
in part, and the time within which any such conditions must be satisfied may be
extended, by the written consent of UPC Polska and the UPC Entities and, to the
extent required by the Restructuring Agreement, the written consent of the
Majority-in-Interest of the Holders. To be effective, such written waiver or
extension must be filed with the Court. 
The failure to satisfy or waive any of such conditions may be asserted
by the Company regardless of the circumstances giving rise to the failure of
such condition to be satisfied, including any action or inaction by the
Company. The failure of the Company to exercise any of the foregoing rights
shall not be deemed a waiver of such rights or any other rights and each such
right shall be deemed ongoing and assertable at any time.  Legal Effect of Confirmation of the Plan  Discharge  The rights
afforded in the Plan and the treatment of all Claims and Equity Interests
therein shall be in exchange for and in complete satisfaction, discharge, and
release of all Claims and Equity Interests of any nature whatsoever, including
any interest accrued on such Claims from and after the Petition Date, against
the Company, the Reorganized Debtor, the Estate, or any of their property.
Except as otherwise provided in the Plan or the Confirmation Order: (a) on the
Effective Date, the Company, the Reorganized Debtor, the Estate, and their
property shall be deemed discharged and released to the fullest extent
permitted by section 1141 of the Bankruptcy Code from all Claims and Equity
Interests, including, but not limited to, demands, liabilities, Claims, and
Equity Interests that arose before the Confirmation Date and all debts of the
kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code,
regardless of whether or not (i) a proof of Claim or proof of Equity Interest
based on such debt or Equity Interest is filed or deemed filed, (ii) a Claim or
Equity Interest based on such debt or Equity Interest is Allowed pursuant to
section 502 of the Bankruptcy Code, or (iii) the holder of a Claim or Equity
Interest based on such debt or Equity Interest has or has not accepted the
Plan; and (b) all Persons shall be precluded from asserting against the
Company, the Reorganized Debtor, the Estate, and their property any other or
further Claims or Equity Interests based upon any act or omission, transaction,
or other activity of any kind or nature that occurred prior to the Confirmation
Date.  Except as
otherwise provided in the Plan or the Confirmation Order, the Confirmation
Order shall act as a discharge of any and all Claims against and all debts and
liabilities of the Company and termination of all Equity Interests, as provided
in sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void
any judgment against the Company obtained at any time to the extent that it
relates to a discharged or terminated Claim or Equity Interest.  33 
   Injunction  Except
as otherwise provided in the Plan or the Confirmation Order, on and after the
Effective Date, all Persons who have held, currently hold, or may hold a debt,
Claim, or Equity Interest discharged pursuant to the terms of the Plan are
permanently enjoined from taking any of the following actions on account of any
such discharged debt, Claim, or Equity Interest: (a) commencing or continuing
in any manner any action or other proceeding against the Company, the
Reorganized Debtor, the Estate, or their property; (b) enforcing, attaching,
collecting, or recovering in any manner any judgment, award, decree, or order
against the Company, the Reorganized Debtor, the Estate, or their property; (c)
creating, perfecting, or enforcing any lien or encumbrance against the Company,
the Reorganized Debtor, the Estate, or their property; (d) asserting any
setoff, right of subrogation, or recoupment of any kind against any obligation
due to the Company, the Reorganized Debtor, the Estate, or their property; and
(e) commencing or continuing any action, in any manner, in any place that does
not comply with or is inconsistent with the provisions of the Plan or the
Confirmation Order. Any Person injured by any willful violation of such
injunction shall recover actual damages, including costs and attorneys fees,
and, in appropriate circumstances, may recover punitive damages, from the
willful violator.  Exculpation  None
of the UPC Entities, New UPC, UPC, UPC Polska, Polska Finance, UGC, the
Indenture Trustee, the members of the Creditors Committee for actions taken in
their capacity as members of the Creditors Committee, any Participating Noteholder,
any holder of UPC Polska Notes, Belmarken Notes, UPC Telecom Notes, Affiliate
Indebtedness, UPC Polska Equity, or any of the foregoings respective officers,
directors, Subsidiaries, Affiliates, members, managers, stockholders, partners,
representatives, employees, attorneys, financial advisors, accountants and
agents, or any of their respective successors and assigns, or any of their
respective property, shall have or incur any liability to any holder of a Claim
or an Equity Interest, or any other party in interest, or any of their
respective officers, directors, Subsidiaries, Affiliates, members, managers,
stockholders, partners, representatives, employees, attorneys, financial
advisors, accountants and agents, or any of their respective successors and
assigns, and their respective property, for any act or omission in connection
with, relating to, or arising out of, the Restructuring, the Chapter 11 Case,
the solicitation of acceptances of the Plan, the pursuit of confirmation of the
Plan, the consummation of the Plan, or the administration of the Plan or the
property to be distributed under the Plan, except for (i) their gross
negligence or willful misconduct, (ii) solely in the case of attorneys, to the
extent that such exculpation would violate any applicable professional
disciplinary rules, including Disciplinary Rule 6-102 of the New York Code of
Professional Conduct and (iii) solely in the case of UPC Polska, the UPC
Entities, or any Participating Noteholder, any liability for failure to comply
with, or breach of such Persons obligations under, the Plan or the
Restructuring Agreement, and in all respects UPC Polska, the UPC Entities and
the Participating Noteholders shall be entitled to reasonably rely upon the
advice of counsel with respect to their duties and responsibilities under the
Plan and the Restructuring Agreement.  Notwithstanding
any other provision of the Plan, no holder of a claim or interest, no other
party in interest, none of their respective officers, directors, Subsidiaries,
Affiliates, members, managers, stockholders, partners, representatives,
employees, attorneys, financial advisors, accountants and agents, or any of
their respective successors and assigns, and their respective property, shall
have any right of action, demand, suit or proceeding against, the UPC Entities,
Polska Finance, UPC Polska, UGC, New UPC, UPC, the Indenture Trustee, the
members of the Creditors Committee for actions taken in their capacity as
members of the Creditors Committee, each Participating Noteholder, each holder
of UPC Polska Notes, Belmarken Notes, Affiliate Indebtedness, UPC Polska
Equity, UPC Telecom Notes, or any of the foregoings respective officers,
directors, Subsidiaries, Affiliates, members, managers, stockholders, partners,
representatives, employees, attorneys, financial advisors, accountants and
agents, or any of their respective successors and assigns, and their respective
property, for any act or omission in connection with, relating to or arising
out of, the Restructuring, the Chapter 11 Case, the solicitation of acceptances
of the Plan, the pursuit of confirmation of the Plan, the consummation of the
Plan or the administration of the Plan, or the property to be distributed under
the Plan, except (i) for their gross negligence or willful misconduct, (ii)
solely in the case of attorneys, to the extent that such exculpation would
violate any applicable professional disciplinary rules, including Disciplinary
Rule 6-102 of the New York Code of Professional Conduct and (iii) solely in the
case of the UPC Entities, UPC Polska, Polska Finance, or any Participating
Noteholder, for failure to comply with, or breach of such Persons obligations
under, the Plan or the Restructuring Agreement, provided, however, that no  34 
   Participating
Noteholder shall be liable to any person other than the UPC Entities, UPC
Polska, and/or Polska Finance for any such failure or breach, and in all
respects UPC Polska, the UPC Entities and the Participating Noteholders shall
be entitled to reasonably rely upon the advice of counsel with respect to their
duties and responsibilities under the Plan and the Restructuring Agreement.  Releases  Effective
on the Confirmation Date, but subject to the occurrence of the Effective Date,
the UPC Entities, UPC Polska, Polska Finance, UPC, New UPC, UGC, the Indenture
Trustee, the members of the Creditors Committee for actions taken in their
capacity as members of the Creditors Committee, each Participating Noteholder,
each holder of  UPC Polska Notes, UPC
Telecom Notes, Belmarken Notes, UPC Polska Equity, Affiliate Indebtedness and
each of the foregoings respective officers, directors, Affiliates,
Subsidiaries, stockholders, partners, members, managers, representatives,
employees, attorneys, financial advisors, accountants and agents, and any of
their respective successors and assigns, and their respective property, shall
be released from any and all claims, obligations, rights, causes of action,
choses in action, demands, suits, proceedings and liabilities which UPC Polska
or any holder of a Claim against, or Equity Interest in, UPC Polska or its
bankruptcy estate may be entitled to assert, whether for fraud, tort, contract,
violations of applicable securities laws, or otherwise, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, contingent or
non-contingent, based in whole or in part upon any act, omission, transaction,
state of facts, circumstances or other occurrence or failure of an event to
occur, taking place before the Confirmation Date and in any way relating to the
UPC Entities, UPC, UGC, New UPC, Polska Finance, each Participating Noteholder,
UPC Polska, the issuance, purchase or sale of the Belmarken Notes, UPC Polska
Notes, UPC Telecom Notes, Affiliate Indebtedness, UPC Polska Equity, the
Restructuring, the Chapter 11 Case, the solicitation of acceptances of the
Plan, the pursuit of confirmation of the Plan, the consummation of the Plan or
administration of the Plan or the property to be distributed under the Plan; provided,
however, that nothing herein shall release any Person from any claims,
obligations, rights, causes of action, choses in action, demands, suits,
proceedings or liabilities based upon any act or omission arising out of such Persons
gross negligence or willful misconduct; provided further, that nothing
herein shall release UPC Polska, Polska Finance, the UPC Entities or any
Participating Noteholder from any claims, obligations, rights, causes of
action, choses in action, demands, suits, proceedings or liabilities based upon
such Persons failure to comply, in all respects, with, or breach of such
Persons obligations under, the Plan or the Restructuring Agreement.  Effective as of the Confirmation Date, but
subject to the occurrence of the Effective Date, all holders of Belmarken
Notes, UPC Polska Notes, UPC Telecom Notes, Affiliate Indebtedness and UPC
Polska Equity, shall be deemed to release, and shall be permanently enjoined
from bringing, maintaining, facilitating or assisting any action, demand, suit
or proceeding against, UGC, the UPC Entities, New UPC, UPC, UPC Polska, Polska
Finance, the members of the Creditors Committee for actions taken in their
capacity as members of the Creditors Committee, the Indenture Trustee, and
their respective officers, directors, Subsidiaries, Affiliates, members,
managers, representatives, employees, attorneys, stockholders, partners,
accountants, financial advisors and agents, or any of their respective
successors and assigns, and their respective property, in respect of any
claims, obligations, rights, causes of action, demands, suits, proceedings and
liabilities related to, or arising from, any and all claims or interests
arising under, in connection with, or related to the Belmarken Notes, the UPC
Polska Notes, the UPC Telecom Notes, Affiliate Indebtedness, or the UPC Polska
Equity, or the issuance, purchase, or sale of any thereof, the Restructuring,
the Chapter 11 Case, the solicitation of acceptances of the Plan, the pursuit
of confirmation of the Plan, the consummation of the Plan or administration of
the Plan or the property to be distributed under the Plan.  Nothing
in the Plan shall effect a release in favor of any released party from any
liability arising under (i) the Internal Revenue Code, or any state, city or
municipal tax code, (ii) the environmental laws of the United States, any
state, city or municipality, or (iii) any criminal laws of the United States,
any state, city or municipality; nor shall anything in the Plan enjoin the
United States government or any state, city or municipality, as applicable,
from bringing any claim, suit, action or other proceeding against any released
party for any liability arising under (i) the Internal Revenue Code, or any
state, city or municipal tax code, (ii) the environmental laws of the United
States, any state, city or municipality, or (iii) any criminal laws of the
United States, any state, city or municipality; provided, however,
that this paragraph shall in no way affect or limit the discharge granted to
UPC Polska under Chapter 11 of the Bankruptcy Code and pursuant to the Plan.  35 
   Solely
in the case of attorneys, nothing in the Plan shall effect a release from any
liability arising under any applicable professional disciplinary rule,
including Disciplinary Rule 6-102 of the New York Code of Professional Conduct.  Binding Effect of Plan  The
provisions of the Plan shall be binding upon and inure to the benefit of the
Company, the Estate, the Reorganized Debtor, any holder of any Claim or Equity
Interest treated herein or any Person named or referred to in the Plan, the
Indenture Trustee and each of their respective heirs, executors,
administrators, representatives, predecessors, successors, assigns, agents,
officers and directors, and, to the fullest extent permitted under the
Bankruptcy Code and other applicable law, each other Person affected by the
Plan.  Term of Injunctions or Stays  Unless
otherwise provided herein or in the Confirmation Order, all injunctions or
stays provided for in the Chapter 11 Case under Sections 105(a) or 362 of the
Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall
remain in full force and effect until the Effective Date.  Preservation of Insurance  Except
as necessary to be consistent with the Plan, the Plan and the discharge
provided in the Plan shall not diminish or impair (A) the enforceability of
insurance policies that may cover Claims against the Company or any other
Person or (B) the continuation of any workers compensation programs in effect,
including any self-insurance programs.  Waiver of Subordination Rights  Any
distributions under the Plan shall be received and retained free of and from
any obligations to hold or transfer the same to any other creditor, and shall
not be subject to levy, garnishment, attachment or other legal process by any
holder by reason of claimed contractual subordination rights, and the
Confirmation Order shall constitute an injunction enjoining any Person from
enforcing or attempting to enforce any contractual, legal or equitable
subordination rights to Property distributed under the Plan, in each case other
than as provided under the Plan.  No Successor Liability  Except
as otherwise expressly provided in the Plan, the Company and the Reorganized
Debtor do not, pursuant to the Plan or otherwise, assume, agree to perform,
pay, or indemnify Creditors or otherwise have any responsibilities for any
liabilities or obligations of the Company relating to or arising out of the
operations or assets of the Company, whether arising prior to, on, or after the
Confirmation Date. The Reorganized Debtor is not, and shall not be, a successor
to the Company by reason of any theory of law or equity, and shall not have any
successor or transferee liability of any kind or character, except that the
Reorganized Debtor shall assume the obligations specified therefor in the Plan
and the Confirmation Order.  Retention of Jurisdiction  Continuing Jurisdiction of
Bankruptcy Court  Notwithstanding
confirmation and the occurrence of the Effective Date, the Bankruptcy Court
shall retain after the Effective Date jurisdiction of all matters arising out
of, arising in or related to, the Chapter 11 Case to the fullest extent
permitted by applicable law, including, without limitation, jurisdiction to:  1.             Allow, disallow, determine,
liquidate, classify, establish the priority or secured or unsecured status of,
estimate, or limit any Claim, Equity Interest, or Administrative Claim;  2.             Grant or deny any and all
applications for allowance of compensation or reimbursement of expenses
authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on
or before the Effective Date;  36 
   3.             Resolve any motions pending on the
Effective Date to assume, assume and assign, or reject any executory contract
or unexpired lease to which the Company is a party or with respect to which the
Company may be liable and to hear, determine and, if necessary, liquidate, any
and all Claims arising therefrom;  4.             Ensure that Distributions to
holders of Allowed Claims and Allowed Equity Interests, including but not
limited to Administrative Claims, are accomplished pursuant to the provisions
of the Plan and resolve any issues relating to distributions;  5.             Resolve any and all applications,
motions, adversary proceedings, and other matters involving the Company that
may be pending on the Effective Date;  6.             Enter such orders as may be
necessary or appropriate to implement or consummate the provisions of the Plan
and all contracts, instruments, releases, and other agreements or documents
entered into in connection with the Plan;  7.             Resolve any and all controversies,
suits, or issues that may arise in connection with the consummation,
interpretation, or enforcement of the Plan or the Confirmation Order or any
Persons rights or obligations in connection with the Plan, including disputes
arising under documents or agreements executed in connection with the Plan;  8.             Modify the Plan before or after the
Effective Date pursuant to Section 1127 of the Bankruptcy Code, or modify the
Disclosure Statement or any contract, instrument, release, or other agreement
or document created in connection with the Plan or Disclosure Statement; or
remedy any defect or omission or reconcile any inconsistency in any order of
the Court, the Plan, the Disclosure Statement, or any contract, instrument,
release, or other agreement or document created in connection with the Plan or
Disclosure Statement, in such manner as may be necessary or appropriate to
consummate the Plan, to the extent authorized by the Bankruptcy Code;  9.             Issue injunctions, enter and
implement other orders, or take such other actions as may be necessary or
appropriate to restrain interference by any entity with consummation or
enforcement of the Plan;  10.           Enter and implement such orders as
are necessary or appropriate if the Confirmation Order is for any reason
modified, stayed, reversed, revoked, or vacated;  11.           Determine any other matters that may
arise in connection with or relate to the Plan, the Disclosure Statement, the
Confirmation Order, or any contract, instrument, release, indenture or other
agreement or document created in connection with the Plan, the Confirmation
Order or the Disclosure Statement;  12.           Enter an order closing the Chapter 11
Case; and  13.           Hear and  determine any motions, applications, adversary proceedings,
contested matters and other 
litigated  matters  pending on, filed or commenced after the
Effective Date, including proceedings with respect to the rights of the Debtor
to recover Property under Sections  542,
543, 544, 545, 547, 548, 549, 550 or 553 of the Bankruptcy Code or to otherwise
collect to recover on account of any claim or cause of action that the Debtor
may have.  If the Court
abstains from exercising jurisdiction or is otherwise without jurisdiction over
any matter, the applicable section of the Plan shall have no effect upon and
shall not control, prohibit, or limit the exercise of jurisdiction by any other
court having competent jurisdiction with respect to such matter.  Other Provisions  Modification of the Plan  Subject
to the terms of Sections 3.2, 3.3 and 4.2(b) of the Restructuring Agreement,
the Company may, with the written consent of the UPC Entities and, to the
extent required by the Restructuring Agreement, the written consent of the
Majority-in-Interest of the Holders, make such changes and modifications to the
Plan as the Company, in its reasonable discretion deems necessary and
appropriate and to the extent permissible under the Bankruptcy Code in order to
have the Plan confirmed by the Bankruptcy Court.  37 
   Severability of Plan Provisions  If,
prior to confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be unenforceable, the Bankruptcy Court shall have the power
to alter and interpret such term or provision to make it valid or enforceable
to the maximum extent practicable, consistent with the original purpose of the
term or provision held to be invalid, void, or unenforceable, and such term or
provision shall then be applicable as altered or interpreted. Notwithstanding
any such holding, alteration, or interpretation, the remainder of the terms and
provisions of the Plan will remain in full force and effect and will in no way
be affected, impaired, or invalidated by such holding, alteration or
interpretation.  Provided, however,
that the two preceding sentences shall not be applicable if the absence of any
such invalid, void or unenforceable provision would cause any Participating
Noteholder to receive less than the Third Party Noteholder Consideration in
exchange for its Allowed UPC Polska Note Claims. The Confirmation Order shall
constitute a judicial determination and shall provide that each term and
provision of the Plan, as it may or may not have been altered or interpreted in
accordance with the foregoing, is valid and enforceable pursuant to its terms.  The Company reserves the right not to
proceed with confirmation or consummation of the Plan if any such ruling
occurs.  Payment of Statutory Fees  All
U.S. Trustees Fee Claims, as determined, if necessary, by the Bankruptcy
Court, shall be paid on or before the Effective Date.  All such fees that arise after the Effective Date, but before the
closing of the Chapter 11 Case, shall be paid by the Reorganized Debtor.  Dissolution of Committees  On the
Effective Date, any Committee shall be automatically dissolved and all members,
Professionals and agents of such Committee shall be deemed released of their
duties, responsibilities and obligations, and shall be without further duties,
responsibilities and authority in connection with the Company, the Chapter 11
Case, the Plan or its implementation.  Entire Agreement  Upon
consummation of the Plan, the Plan and the documents executed and delivered on
the Effective Date and in consummation of the Plan and the Confirmation Order,
shall be deemed to set forth the entire agreement and undertakings relating to
the subject matter thereof and shall supersede all prior discussions and
documents related thereto, including the Restructuring Agreement.  The Company shall not be bound thereafter by
any terms, conditions, definitions, warranties, understandings, or
representations with respect to the subject matter of the Restructuring
Agreement, other than as expressly provided for therein or as may hereafter be
agreed to by the parties to the Restructuring Agreement in writing.  Application  for Professional Fee  Claims  Final
applications for compensation for services rendered and reimbursement of
expenses incurred by Professionals (a) from the later of the Petition Date or
the date on which retention was approved through the Effective Date or (b)
pursuant to Section 503(b)(4) of the Bankruptcy Code, shall be filed no later
than sixty (60) days after the Effective Date or such later date as the
Bankruptcy Court approves, and shall be served on (i) counsel to the Company at
the address set forth in Section VIII.E of the Plan, (ii) the Participating
Noteholders at the address set forth in Section VIII.E of the Plan, (iii)
counsel to the UPC Entities at the address set forth in Section VIII.E of the
Plan, (iv) counsel to Polska Finance at the address set forth in Section VIII.E
of the Plan and (v) the Office of the United States Trustee at the address set
forth in Section VIII.E of the Plan. Any objections to an application for the
payment of Professional Claims must be filed and served on the Reorganized Debtor
and the requesting Professional no later than twenty-five (25) days (or such
longer period as may be granted by order of the Bankruptcy Court) after the
date on which such application was served. 
Applications that are not timely filed will not be considered by the
Bankruptcy Court. The Reorganized Debtor may pay any Professional fees and
expenses incurred after the Effective Date without any application to the
Bankruptcy Court.  38 
   Payment of Advisors Fees  The Company has paid or upon the Effective Date will pay the reasonable
fees and expenses for legal services of Cahill Gordon & Reindel LLP,
counsel to the Participating Noteholders in connection with the preparation,
negotiation and execution of the Restructuring and the Plan until they ceased
representing the Participating Noteholders. The Company shall pay the
reasonable fees and expenses for services of financial advisors and legal
services of attorneys for the UPC Entities in connection with the preparation,
negotiation, execution and performance of the Restructuring and any of the
transactions contemplated by the Restructuring Agreement or the Plan.  All such fees that arise after the Effective
Date shall be paid by the Reorganized Debtor.  Voting on, and Confirmation of,
the Plan  Overview of Voting in Chapter 11  In
Chapter 11, the right to vote on a plan of reorganization is determined by the
treatment that a particular holder of a claim or equity interest receives under
the plan.  If the holder of a claim or
equity interest is unimpaired under a plan, the holder is deemed to accept the
plan and it is therefore unnecessary to solicit such holders vote on the
plan.  Similarly, it is not necessary to
solicit a vote from a holder of a claim or equity interest who is not entitled
to receive or retain any property under a plan because such holder is deemed to
reject the plan under the Bankruptcy Code. 
However, if an impaired holder of a claim or equity interest is entitled
to receive property under the plan, then such holder is not deemed to
automatically accept or reject the plan and is entitled to vote thereon.  Chapter
11 of the Bankruptcy Code, however, does not require each holder of a claim or
equity interest in a voting class to vote in favor of a plan of reorganization
in order for a bankruptcy court to confirm the plan.  Instead, acceptance or rejection of a plan is determined based on
whether classes of claims or equity interests vote to accept or reject the
plan.  In order for a plan to be confirmed
(a) absent a cramdown (as discussed below), each class of claims or interests
must either (i) be unimpaired under the plan or (ii) vote to accept the plan
and (b) at least one class of claims that is impaired must vote to accept the
plan, determined without including any acceptance of the plan by any insider in
such class of impaired claims.  In turn,
in order for a particular class to accept a plan, acceptances must be received:  if such class is a class of claims against a debtor,
from the holders of claims constituting at least two-thirds (2/3)
in dollar amount of the allowed claims actually voted in such class and more
than one-half (1/2  ) in number of the allowed claims actually voted in
such class, or  if such class is a class of equity interests in a
debtor, from the holders of at least two-thirds (2/3) in
amount of the allowed equity interests actually voted in such class.  Parties Entitled to Vote on the Plan  Unimpaired Classes  Class
1 (Priority Claims) and Class 2 (Critical Creditor Claims) are not impaired
under the Plan and, pursuant to Section 1126(f) of the Bankruptcy Code, are
conclusively deemed to have accepted the Plan without the necessity of a
solicitation of the members of such Class.  Non-Voting Impaired Classes  Class
6 (Telecom Junior Note Claims) and Class 7 (UPC Polska Equity Interests) are
deemed to reject the Plan without the necessity of a solicitation of the
members of such Classes pursuant to Section 1126(g) of the Bankruptcy Code
because the holders in such Classes will not receive or retain any property
under the Plan.  Voting Impaired Classes  Class
3 (UPC Polska Note Claims other than Telecom Owned UPC Polska Note Claims),
Class 4 (Telecom Owned UPC Polska Note Claims, Belmarken Note Claims, Telecom
Pari Passu Note Claims and Affiliate Indebtedness Claims) and Class 5 (General
Unsecured Claims) are the only Impaired Classes under the Plan from  39 
   whom the Company
believes the solicitation of acceptances is required. As discussed above,
Section 1129(a)(10) of the Bankruptcy Code provides that if any classes of
claims are impaired under a plan, the plan cannot be confirmed unless at least
one such impaired class of claims has voted to accept the plan (without counting
any acceptances of the plan by any Insiders in such class). Because Class 3
(UPC Polska Note Claims other than Telecom Owned UPC Polska Note Claims), Class
4 (Telecom Owned UPC Polska Note Claims, Belmarken Note Claims, Telecom Pari
Passu Note Claims and Affiliate Indebtedness Claims) and Class 5 (General
Unsecured Claims) are the only Impaired Classes of Claims under the Plan, the
affirmative vote of the holders of at least one such Class of Claims (without
counting any acceptances of the Plan by any Insiders in such Class) is
necessary for confirmation of the Plan. However, because Class 4  (Telecom Owned UPC Polska Note Claims,
Belmarken Note Claims, Telecom Pari Passu Note Claims and Affiliate
Indebtedness Claims) is comprised solely of Insiders (as that term is defined
in the Bankruptcy Code), approval of the Plan by this Class cannot count
towards the satisfaction of this requirement. Thus, the affirmative vote of
either Class 3 (UPC Polska Note Claims other than Telecom Owned UPC Polska Note
Claims) or Class 5 (General Unsecured Claims) (in either case, without counting
any acceptances of the Plan by any Insiders in such Class) is required for
confirmation of the Plan.  Voting Procedures  Each
Voting Party has received with this Disclosure Statement a Ballot for the
purpose of voting to accept or reject the Plan.  After carefully reviewing this Disclosure Statement, including
the Annexes hereto, each such Voting Party which wishes to vote on the Plan
should complete and execute its Ballot, check the box indicating whether it
accepts or rejects the Plan and, except as set forth below, return such Ballot
in the pre-addressed envelope.  Ballots
[(and Master Ballots cast on behalf of beneficial holders of UPC Polska Notes)]
must be submitted so that they are actuallyreceivedby the Voting Agent on or
before the Voting Deadline
(         , 2003 at 5:00 p.m. (New
York City Time) (unless extended by the Company) (subject to court approval, as
necessary)) at the following addresses:  Voting
Agent  Bankruptcy
Services LLC  By regular mail:  UPC
Polska Ballot Processing P.O.
Box FDR
Station New
York, NY 
10150-  By messenger or
overnight courier:  UPC
Polska Ballot Processing c/o
Bankruptcy Services LLC 70
East 55th Street New
York, NY  10022-3222 Telephone:  1-888-498-7765  The
Company will make a public announcement of any extension of the Voting Deadline
by release to the Dow Jones News Service prior to 9:00 a.m., New York City
Time, on the next Business Day following the previously scheduled Voting
Deadline.  The Company will notify the
Voting Agent of any extension by oral or written notice.  Any Voting Party, other than those which
have signed the Restructuring Agreement (unless in accordance with the terms
thereof), may change its vote on the Plan at any time prior to the Voting
Deadline.  Thereafter, votes may not be
changed except to the extent authorized by the Bankruptcy Court.  40 
   To the extent that any
such holder holds Claims in more than one Class, such holder will receive a
separate Ballot for each such Claim.  The Company does not
intend to solicit votes on the Plan from holders of Priority Claims, holders of
Telecom Junior Notes Claims, holders of Critical Creditor Claims and holders of
UPC Polska Equity Interests because the holders thereof either are unimpaired
or are deemed to reject the Plan. 
Therefore, Ballots are not being transmitted to such holders.  If the Voting Party is a
beneficial holder, but not a registered record holder, and received his or her
Ballot from an Intermediary who holds UPC Polska Notes on his or her behalf, he
or she should return his or her Ballot to his or her Intermediary in accordance
with the instructions received with his or her Ballot.  The Intermediaries will, in turn, submit
summary Master Ballots to the Voting Agent which reflect the votes of the
beneficial holders on whose behalf such Intermediaries hold UPC Polska
Notes.  Any Ballot returned by a
beneficial holder to an Intermediary will not be counted for purposes of voting
on the Plan until such Intermediary properly completes and delivers a Master
Ballot to the Voting Agent that reflects the vote of such beneficial
holder.  Master Ballots also must be returned
so that they are actually  receivedby the Voting Agent at the above
address on or before the Voting Deadline.  If any beneficial holder
owns UPC Polska Notes through more than one Intermediary, such beneficial
holder may receive multiple mailings containing Ballots.  The beneficial holder should execute a
separate Ballot for each block of UPC Polska Notes that it holds through any
particular Intermediary and return each Ballot to the respective Intermediary
in the return envelope provided. 
Beneficial holders who execute multiple Ballots with respect to UPC
Polska Notes through more than one Intermediary must indicate on each Ballot
the names of ALLsuch
other Intermediaries and the additional amounts of UPC Polska Notes held and
voted by such beneficial holder.  If a
beneficial holder owns a portion of its UPC Polska Notes through an
Intermediary and another portion as a record holder, the beneficial holder
should, with respect to the portion held as a record holder, complete the
appropriate Ballot and return it to the Voting Agent and, with respect to the
portion held through an Intermediary, complete the appropriate Ballot and
return it to the Intermediary.  Subject to any applicable
order of the Bankruptcy Court, the Company will decide any and all questions
affecting the validity of any Ballot or Master Ballot submitted, which decision
will be final and binding.  To that end,
the Company may reject any Ballots or Master Ballots that are not in proper
form or that the Companys counsel believes would be unlawful or were submitted
in bad faith.  Any Ballot which is
executed by a holder of Claims but does not indicate an acceptance or rejection
of the Plan or indicates both an acceptance and rejection of the Plan shall not
be counted as a vote on the Plan.  Any
Master Ballot which, with respect to a particular Claim, indicates neither an
acceptance nor a rejection of the Plan or that indicates both an acceptance and
rejection of the Plan shall not be counted as to such Claim.  Only originally signed Ballots or
Master Ballots will be counted.  Neither
copies of nor facsimile Ballots or Master Ballots will be accepted.  If a Ballot or Master Ballot, as applicable,
is not actually received by the Voting Agent on or before the Voting Deadline,
such Ballot or Master Ballot will not be counted.  Please follow the directions contained on the enclosed Ballot or
Master Ballot carefully.  If a holder or an
Intermediary has any questions about the Disclosure Statement, the Plan or the
procedure for voting, did not receive a Ballot or Master Ballot, as applicable,
received a damaged Ballot or Master Ballot, as applicable, lost his or her
Ballot or Master Ballot, as applicable, or, in the case of an Intermediary,
requires additional copies of the Disclosure Statement and/or Ballots for
distribution to beneficial holders, he or she should contact, as applicable,
(i) the Voting Agent  Bankruptcy Services LLC by regular mail, by messenger or
overnight courier at tel. 1-888-498-7765 or (ii) his or her Intermediary.  If a registered holder
does not hold for its own account, then it is required to provide promptly
copies of this Disclosure Statement and appropriate Ballots to its customers
and beneficial owners.  Any beneficial
owner who has not received a Ballot should contact his or her Intermediary.  41 
   Any Voting Party, other
than those which have signed the Restructuring Agreement (unless in accordance
with the terms thereof), may change its vote on the Plan at any time prior to
the Voting Deadline.  Thereafter, votes
may not be changed except to the extent authorized by the Bankruptcy Court.  It is important that all
Voting Parties vote because, under the Bankruptcy Code, for purposes of
determining whether the requisite acceptances of a particular class have been
received, only holders in such class who actually vote will be counted.  Accordingly, failure by a Voting Party to
submit a duly completed and signed Ballot will be deemed to constitute an
abstention by such Voting Party with respect to the vote on the Plan.  Abstentions, either as a result of
submitting a Ballot that has not been properly completed or signed or by not
submitting a Ballot on a timely basis, shall not count as a vote on the Plan.  Confirmation of the Plan  In addition to a finding
as to the receipt of the necessary acceptances of the Plan, for the Plan to be
confirmed, Section 1129 of the Bankruptcy Code requires that the Bankruptcy
Court make a series of determinations concerning the Plan, including, without
limitation, that:  (i)the
Plan has classified Claims and Equity Interests in a permissible manner;  (ii)the
contents of the Plan comply with the requirements of the Bankruptcy Code;  (iii)the
Company has proposed the Plan in good faith; and  (iv)the
Company has made disclosures concerning the Plan which are adequate and include
information concerning all payments made or promised in connection with the
Plan and the Chapter 11 Case.  The Company believes that
all of these conditions have been or will be met.  In addition, the Bankruptcy
Court must find, among other things, that the Plan is feasible and is in the
best interest of all dissenting holders of Claims and Equity Interests in
Impaired Classes.  Thus, even if the
Plan is duly accepted by the Voting Parties, the Bankruptcy Court will be
required to make an independent finding respecting, among other things, the
Plans feasibility and whether the Plan is in the best interests of certain
holders of Claims and Equity Interests before it can confirm the Plan.  Feasibility  The Bankruptcy Code also
requires that, to confirm a plan of reorganization, the Bankruptcy Court must
find that confirmation of such plan is feasible, meaning that it is not likely
to be followed by the liquidation, or the need for further financial reorganization,
of the debtor (the Feasibility Test).  For the Plan to meet the Feasibility Test,
the Bankruptcy Court must find that the Company will possess the resources and
working capital necessary to provide the treatment specified in the Plan and to
continue to operate its business upon and after the consummation of the
Plan.  The Company believes the Plan
satisfies the Feasibility Test.  The Best 
Interests Test  The Best Interests Test
(as defined in Liquidation AnalysisBest Interests of Creditors Test below)
requires that each holder of a claim or equity interest in an impaired class
either accept the plan or receive or retain under the plan property of a value,
as of the effective date of the plan, that is not less than the value such
holder would receive or retain if the debtor were liquidated under Chapter 7 of
the Bankruptcy Code.  For the reasons
set forth below in Liquidation Analysis, the Company believes that the Plan
satisfies the Best Interests Test.  Non-Acceptance and Cramdown  Pursuant to Section
1129(b) of the Bankruptcy Code, a bankruptcy court may, upon the request of the
proponent of a plan, confirm a plan notwithstanding the lack of acceptance by
one or more impaired classes if the 
bankruptcy court finds that  42 
   (i)the
plan does not discriminate unfairly with respect to each non-accepting impaired
class,  (ii)the
plan is fair and equitable with respect to each non-accepting impaired class,  (iii)at
least one impaired class has accepted the plan (without counting acceptances by
insiders), and  (iv)the
plan satisfies the requirements set forth in Section 1129(a) of the Bankruptcy
Code other than Section 1129(a)(8).  This procedure is
commonly referred to as a cramdown. 
The Company intends to request confirmation of the Plan pursuant to
Section 1129(b) of the Bankruptcy Code.  The Plan is Fair and Equitable  The Bankruptcy Code
establishes different fair and equitable tests for holders of secured claims,
unsecured claims and equity interests.  Secured Claims  The
Company has no secured claims and therefore, this aspect of the test is
inapplicable.  Unsecured Claims  With respect to a class
of unsecured claims that does not accept a plan of reorganization, the plan
proponent must demonstrate to the bankruptcy court, among other things, that
either (i) each holder of an unsecured claim in the dissenting class will
receive or retain under the plan property of a value, as of the effective date,
equal to the allowed amount of its unsecured claim or (ii) no holder of a claim
or equity interest that is junior to the claims of the holders of the
dissenting class will receive or retain any property under the plan on account
of such junior claim or equity interest.  Equity Interests  With respect to a class
of equity interests that does not accept a plan of reorganization, the plan
proponent must demonstrate to the bankruptcy court that either (i) each holder
of an equity interest in the dissenting class will receive or retain on account
of such equity interest property of a value equal to the greatest of the
allowed amount of any fixed liquidation preference to which such holder is
entitled, any fixed redemption price to which such holder is entitled or the
value of such interest or (ii) no holder of any equity interest that is junior
to the equity interests of the holders of the dissenting class of equity
interests will receive or retain any property under the plan on account of such
junior equity interest.  The Company believes that
the Plan is fair and equitable with respect to each Class.  The Plan Does Not Discriminate Unfairly  The Bankruptcy Code
requires that a plan not discriminate unfairly with respect to each
non-accepting impaired class. 
Essentially, this requirement means that each non-accepting impaired
class must receive treatment reasonably consistent with the treatment afforded
to other classes with similar legal claims or rights against the debtor.  The Company believes that the Plan does not
unfairly discriminate against any Class.  Confirmation Hearing  Section 1128(a) of the
Bankruptcy Code requires that the bankruptcy court, after notice, hold a
hearing to confirm Chapter 11 plan. 
Section 1128(b) of the Bankruptcy Code provides that any party in
interest may object to confirmation of a Chapter 11 plan.  The Bankruptcy Court has
scheduled the Confirmation Hearing for
            , 2003,
at 10:00 a.m. (New York City Time), before the Honorable Burton R. Lifland,
United States Bankruptcy Judge, United States Bankruptcy  43 
   Court, Alexander
Hamilton Custom House, One Bowling Green, Courtroom 623, New York, New
York 10004.  The Confirmation Hearing
may be adjourned from time to time by the Bankruptcy Court without further
notice except for an announcement of an adjournment made at the Confirmation
Hearing or any adjournment thereof.  The
Confirmation Datemeans
the date on which the Clerk of the Bankruptcy Court enters the Confirmation
Order on the docket of the Bankruptcy Court with respect to the Chapter 11
Case.  Any objections to
confirmation of the Plan must be made in writing, specifying in detail the name
and address of the person or entity objecting, the grounds for the objection
and the nature and amount of the Claim or Equity Interest held by the objector,
and must be served and filed as ordered by the Bankruptcy Court on or before
5:00 p.m. (New York City Time) on
                     ,
2003.  If an objection to confirmation is not
timely served and filed, it will not be considered by the Bankruptcy Court.  If the Plan is confirmed,
even if a holder of a Claim or Equity Interest did not vote, or voted against
the Plan, the terms of the Plan will be binding on such holder as if such
holder had voted in favor of the Plan.  Pursuant to the Plan, the
documents to be executed in connection with consummation of the Plan, shall be
filed on or before the Document Filing Date
(          , 2003).  Copies of all such documents will be made
available to all holders of Claims entitled to vote on the Plan.  Notice of the date and
time of the Confirmation Hearing, as well as the procedures for filing
objections thereto, is included with this Disclosure Statement.  Consequences of Failure to Confirm the Plan  Although the Company
believes that the Plan meets all of the statutory requirements for confirmation
thereof, there is no guarantee that the Bankruptcy Court will agree.  Failure of the Bankruptcy Court to confirm
the Plan would likely result in a more protracted bankruptcy proceeding, which
could have adverse consequences on the Company.  Thus, if the Plan is not confirmed, there is a significant
likelihood that holders of Claims would ultimately receive less than what they
would receive under the terms of the Restructuring as reflected in the
Plan.  See Risk FactorsRisks Related
to the Chapter 11 Case and Liquidation Analysis.  Alternatives to Confirmation and
Consummation of the Plan  If the Plan is not
confirmed and consummated, the alternatives to the Plan include (i) the proposal
of an alternative plan under Chapter 11 of the Bankruptcy Code or (ii) the
liquidation of the Company under Chapter 7 or Chapter 11 of the Bankruptcy
Code.  Alternative Plan of Reorganization  If the Plan is not
confirmed, the Company, or if its exclusive period in which to file a plan of
reorganization has expired, any other party in interest, could attempt to
formulate a different plan under Chapter 11 of the Bankruptcy Code.  Such a plan might involve either a
reorganization and continuation of the business or a sale or orderly
liquidation of the business.  With
respect to an alternative plan, the Company has explored various other
alternatives in connection with the extensive process involved in the formulation
and development of the Plan.  The Company
believes that the Plan, as described herein, enables holders of Claims to
realize the most value and certainty under the circumstances and, as compared
to any alternative plan of reorganization, the Plan has the greatest chance to
be confirmed and consummated.  Liquidation  If
no plan of reorganization can be confirmed, the Chapter 11 Case may be
converted to a case under Chapter 7 of the Bankruptcy Code, pursuant to which a
trustee would be elected or appointed to liquidate the Companys ownership interests
in its subsidiaries and other assets for distribution to creditors in
accordance with the priorities established by the Bankruptcy Code.  It
is impossible to predict exactly how the proceeds of any such liquidation would
be distributed to the holders of Claims against and Equity Interests in the
Company.  However, the Company believes
that, before any  44 
   holders
of Claims against and Equity Interests in the Company would receive any
distribution in a liquidation under Chapter 7, additional expenses and Claims
arising out of the liquidation, including, without limitation, from the
appointment of a trustee and its advisors, would reduce the amount of property
remaining for distribution to holders of Claims against and Equity Interests in
the Company. Furthermore, the sale of the Companys subsidiaries in the forced
sale atmosphere that often prevails in a Chapter 7 case would likely cause
substantial erosion in the value of these assets. Finally, a Chapter 7
liquidation is likely to result in substantial litigation and delays in
ultimate distributions to creditors. 
Thus, the Company believes that holders of Impaired Claims would realize
a greater recovery under the Restructuring, including, without limitation, the
Plan, than would be realized in a Chapter 7 liquidation.  In addition, holders of Equity Interests
would receive nothing in a Chapter 7 liquidation.  A
discussion of the effects that a Chapter 7 liquidation would have on the
recoveries of holders of Claims and Equity Interests is set forth under
Liquidation Analysis below.  It
is also possible, if the Plan is not confirmed, that the Company could be
liquidated under Chapter 11 of the Bankruptcy Code.  In such a proceeding, the Companys ownership interests in its
subsidiaries and other assets could be sold in a more orderly fashion than
under Chapter 7. Although this scenario could potentially lead to greater
recoveries than in a Chapter 7 liquidation, the Company believes that the
recoveries in a Chapter 11 liquidation still would not equal the recoveries to
holders of Claims under the Plan and, therefore, that such alternative is less
attractive than the Plan.  Board Recommendation  The Companys Board of
Directors has unanimously approved the terms of the Plan and believes that it
is in the Companys best interests.  The
Companys Board of Directors strongly urges each holder of a Claim against  the Company to vote in favor of the
Plan.  However, each holder of a Claim
against the Company must make its own decision as to whether to vote in favor
of the Plan.  45 
   THE
COMPANY  Business  The Company is a Delaware
corporation which was established in May 1997. From August 6, 1999 until
December 2, 2002, the Company was wholly owned by UPC.  On December 2, 2002, UPC transferred all
issued shares in the capital of the Company and the UPC Polska Notes held by it
to a wholly-owned subsidiary, UPC Telecom. 
UPC also assigned to UPC Telecom all of the UPC Polska Notes then owned
by UPC, and all rights and obligations arising from loan agreements between the
Company and UPC.  As of the date of this
Disclosure Statement, the Companys direct and indirect subsidiaries and other
entities in which it owns a material interest consist of:  PC LLC  Wizja TV B.V.  Atomic TV (in
liquidation process)  At Media  @EP LLC  Poltelkab Sp. z o.o.  TV Kabel Sp. z o.o.  TV-SAT Ursus Sp.
z o.o. (in liquidation process)  TK GOSAT Sp. z o.o.  Poland
Cablevision (Netherlands) B.V.  Polska Telewizja Kablowa S.A.  Polski Broker Sp. z o.o. (in process of
court dissolution)  Synergy
Investment Sp. z o.o.  UPC Telewizja Kablowa Sp. z o.o.  Media Investment S.A.  Medialne Towarzystwo Akcyjne S.A.  Polska Telewizja Cyfrowa Wizja TV Sp. z
o.o.  Fox Kids Poland  Telewizyjna Korporacja Partycypacyjna S.A.  Wizja TV II B.V.   Until July 3, 2003, the
Companys consolidated subsidiaries also included Poland Communications, Inc.
(PCI) and @Entertainment Programming,
Inc. (@EP). 
On July 3, 2003, PCI converted into a Delaware limited liability company
via merger with PC LLC and @EP converted into a Delaware limited liability
company via merger with @EP LLC. Until December 7, 2001, the Companys
consolidated subsidiaries also included UPC Broadcast Centre Limited
(previously @Entertainment Limited, then Wizja TV Limited) and Wizja TV Sp. z
o.o.  On December 7, 2001, UPC Broadcast
Centre Ltd. and Wizja TV Sp. z o.o. were contributed to and merged into TKP, an
entity controlled by Canal+.  The UPC Polska Group
operates one of the largest cable television systems in Poland with
approximately 1,870,000 homes passed and approximately 995,000 total
subscribers as of March 31, 2003. The UPC Polska Groups cable subscribers are
located in regional clusters encompassing eight of the ten largest cities in
Poland, including those cities which the Company believes provide the most
favorable demographics for cable television in Poland.  The UPC Polska Groups cable television
networks have been constructed with the flexibility and capacity to be
cost-effectively reconfigured to offer an array of interactive and integrated
entertainment, telecommunications and information services.  Over the last three years, the UPC Polska
Group has been upgrading its networks so that it can provide two-way
telecommunication services, such as internet access.  Regional Clusters  The UPC Polska
Grouphas
established eight regional clusters for its cable television business
encompassing eight of the ten largest cities in Poland, which the UPC Polska
Groupbelieves
are among those with  46 
   the strongest economies and
most favorable demographics for cable television in Poland. The following table
illustrates certain operating data of each of the UPC Polska Groups existing
regional clusters.  OVERVIEW OF
THE UPC POLSKA GROUPS EXISTING CABLE SYSTEMS(1)  Region
  
  Total Homes
  
  Homes
  Passed
  
  Total
  Subscribers
  
  Basic and
  Intermediate
  Subscribers
  
  Basic and
  Intermediate
  Penetration
  
  Average
  Monthly
  Subscription
  Revenue Per
  Basic and
  Intermediate
  Subscriber(2)Warszawa
  
  800,000
  
  345,669
  
  164,133
  
  115,328
  
  33.36
  %
  8.07Lublin
  
  120,000
  
  119,219
  
  93,665
  
  33,847
  
  28.39
  %
  8.13Wroclaw
  
  624,000
  
  255,759
  
  120,043
  
  95,977
  
  37.53
  %
  7.59Bydgoszcz
  
  134,000
  
  101,529
  
  60,435
  
  40,520
  
  39.91
  %
  8.01Gdansk
  
  280,000
  
  252,846
  
  151,894
  
  112,651
  
  44.55
  %
  7.74Szczecin
  
  160,000
  
  91,769
  
  72,821
  
  54,071
  
  58.92
  %
  5.69Katowice
  
  1,200,000
  
  477,725
  
  240,105
  
  149,717
  
  31.34
  %
  8.67Krakow
  
  400,000
  
  224,488
  
  91,794
  
  64,937
  
  28.93
  %
  8.64TOTAL
  
  3,718,000
  
  1,869,004
  
  994,890
  
  667,048
  
  35.69
  %
  7.93  
 (1)All
data is at or for the year ended December 31, 2002.  (2)Represents
a weighted average based on the total number of basic and intermediate
subscribers at December 31, 2002 stated in US dollars, net of 22% VAT.  Cable Television  Since December 2001, the
UPC Polska Group has engaged in only one business segment  cable television
services. Prior to December 2001, the UPC Polska Groups business consisted of
three components:  cable television
services,  D-DTH services,
and  programming.  During 2001, the Company
reviewed its long-term business strategy and decided to focus on its core
competency, the provision of cable television services, and focus on providing
internet services to existing customers. 
As a part of this re-focus, the UPC Polska Group decided to streamline
its operations by restructuring its D-DTH and programming businesses.  In December 2001, the UPC Polska Groupconsummated
a joint venture transaction with Canal+ to combine the UPC Polska Groups
existing D-DTH platform with TKPs D-DTH and premium pay television business to
distribute D-DTH services and programming to subscribers in Poland through TKP.
PTC has a 25% equity interest in TKP. 
TKP is controlled and operated by Canal+.  This transaction resulted in the discontinuance of the UPC Polska
Groups D-DTH and programming businesses.  The Canal+
Merger  Under the Contribution
and Subscription Agreement, the Company caused PTC to contribute all of the
equity of two subsidiaries, Wizja TV Sp. z o.o. and UPC Broadcast Centre Ltd.,
to TKP. In connection with this contribution:  PTC received 25%
of the outstanding equity of TKP (with Canal+ owning the remaining 75%); and  47 
   the Company
assigned to Canal+ a note made by Wizja TV Sp. z o.o. (the Assigned Loan) in
the amount of 150 million Euros plus accrued interest in exchange for cash in
the amount of 150 million Euros (approximately $133.4 million as of December 7,
2001) (together, the Canal+ Proceeds).  In 2001, Wizja
TV B.V. assigned to Wizja TV Sp. z o.o. and Cyfra+, a Canal+ affiliate, certain
programming rights relating to the UPC Polska Groups D-DTH business, and TKP
agreed to continue to provide to UPCs Central European D-DTH business certain
uplink facilities and services. On January 2, 2002, the Company forgave, or
caused its subsidiaries to forgive, certain debt owed by the contributed
companies in the amount of 152.7 million Polish zloty (approximately $38.3
million as of December 31, 2001). Such loss has been included in the loss on
disposition recorded in 2001.  As a result of
entering into the Contribution and Subscription Agreement, the UPC Polska Group
incurred certain risks as of December 7, 2001, which could have a material
adverse effect on the business and financial condition of the UPC Polska Group
and the Company:  PTC does not
control TKP and has only certain limited rights to approve material
transactions undertaken by TKP;  under a
shareholders agreement relating to TKP, PTCs interest in TKP could be diluted
or redeemed by TKP. Under the agreement, if PTC ceases at any time to be a
Polish person under Polish broadcasting law, other TKP shareholders may convert
loans made by them to TKP into TKP equity, thereby diluting PTCs interest, or
TKP may redeem the shares of TKP owned by PTC at their fair market value; and  PTCs investment
in TKP is very illiquid. Under the shareholders agreement, PTCs right to sell
its shares in TKP is limited to particular circumstances, such as the sale of
TKP shares by other TKP shareholders or the lapse of time until December 2006.  Under the Contribution
and Subscription Agreement, on February 1, 2002, PTC loaned TKP 30 million
Euros from the Canal+ Proceeds (the JV Loan). On February 12, 2003, PTC and Canal+ agreed
to certain changes to their agreements governing TKP, including a change to
TKPs capitalization and the manner in which proceeds from any sale of TKP
would be distributed among its shareholders, in order to obtain the original
economic structure of the shareholders investments following the change in
capitalization.  On February 27, 2003,
the JV loan was repaid to PTC in the principal amount of 30 million Euros and
that amount was subsequently contributed by PTC to TKPs paid-in capital,
following the shareholders resolution to increase share capital of TKP.  PTC subscribed for 60,000 registered C
series shares at the issue price of 500 Euros each. Canal+ and PolCom Invest
S.A., an affiliate of Canal+, together contributed 90 million Euros to paid-in
capital on the same date.  After
registration of the share capital increase by the commercial court, PTC will
continue to hold 25% of TKPs shares. 
As the loan granted to TKP of 30 million Euros was included in the fair
market value of the investment in TKP as of December 7, 2001, the above
transactions (repayment of the loan to PTC by TKP and further capital
contribution of 30 million Euros) have no influence on the net book value of
the investment in TKP.  In June 2003,
TKP paid interest to PTC in the amount of $2.2 million.  Business Strategy  The Companys principal
objective under its revised business strategy has been that the UPC Polska
Groups cable business becomes operationally cash flow positive. The UPC Polska
Groups objective in the future is to grow its earnings at the EBITDA level
with limited well-focused additional investment so as to continually increase
the operational cash flow from the business. 
It will also focus on enhancing its position as a leading provider of
cable television in Poland.  Management
of the UPC Polska Groupbelieves that significant opportunities
exist for cable television providers capable of delivering high quality, Polish
language programming on a multi-channel basis and other services on cable
(i.e., data and voice transmission).  As
such, the UPC Polska Groups current focus is on its cable television
market.  The UPC Polska Groups business
strategy is designed to increase its average revenue per subscriber, and also,
although to a lesser extent, to increase its subscriber base.  48 
   The UPC Polska Groupintends to achieve these
goals by:  increasing
penetration of new service products within existing upgraded homes;  investing
limited funds in high return projects for internet upgrade and new plant;  providing
additional revenue-generating services to existing customers, including
internet services;  refining the
channel line up available on its cable network;  improving the
effectiveness of the UPC Polska Groups sales and marketing efforts;  reducing churn
(customer disconnects); and  increasing rates
aggressively on the UPC Polska Groups broadcast package.  The UPC Polska
Groupalso
intends to continue to increase the effectiveness of its operations and reduce
its expenses by further:  enhancing
internal controls;  improving debt
collection activities;  improving
corporate decision-making processes;  reorganizing the
UPC Polska Groupso as to simplify its legal and operational structure; and  using more local
rather than expatriate employees in management, thereby reducing general and
administrative costs.  Furthermore,
in the future, the Company may continue to explore possibilities for strategic
partnerships, mergers and acquisitions in the Polish cable market.  Internet Services  During the fourth quarter
of 2000, the UPC Polska Groupbegan providing internet services to its
cable television customers. The UPC Polska Groupis currently expanding its
internet ready network in Warsaw and Krakow, and it began providing internet
services in Gdansk and Katowice in the second quarter of 2003.  The Companys internet service, provided by
the UPC Polska Groupunder the brand chello, was awarded the
prize for ISP Product of the Year 2002 by a prestigious local computer
magazine. Revenue from internet services amounted to $4.1 million for fiscal
year 2002 compared to $1.6 million for fiscal year 2001.  Internet
subscribers are charged a monthly subscription fee of $38.81 and $46.60,
respectively, for internet and combined cable TV and internet services (rates
are as of December 31, 2002, including 7% VAT on the internet service
component). The standard installation fee is approximately $63.80 for existing
cable customers and approximately $77.90 for new cable customers (rates as of
December 31, 2002, including 22% VAT). However, the promotional price for the
installation fee which is offered regularly is $12.80 (rate as of December 31,
2002, including 22% VAT). On December 31, 2002, approximately 13,900, or 2.2%,
of the UPC Polska Groups basic subscribers received internet services. The
maximum transfer speed is 512 Kbit download and 128 Kbit upload.  Technology and
Infrastructure  The Company believes the
fiber-optic cable television networks that the UPC Polska Group has
constructed, which serve approximately 887,700, or 89%, of its subscribers, are
among the most technologically advanced in Poland and are comparable to cable
television networks in the United States. All of the UPC Polska Groups
networks that have been constructed by the Company have bandwidths of at least
550 MHz. New portions of the networks, which have more recently been
constructed, are being designed to have minimum bandwidths of 860  49 
   MHz. The Company
continues to upgrade any portions of its cable television networks that have
bandwidths below 550 MHz (which generally are those acquired from other
entities) to at least 860 MHz in an effort to prepare the networks for
additional channels and services and to reduce the number of satellite receivers
and inventory parts required in the networks.  The UPC Polska
Group has entered into conduit leases with TPSA (the Polish national telephone
company) and, in certain cases, with other entities. The UPC Polska Group also
has agreements to undertake joint construction with another company for new
conduits in certain areas. The majority of the TPSA leases require the UPC
Polska Group to bear the costs of the maintenance of the cable. The UPC Polska
Group may not sublease the conduit or allow a third party to use the conduits
free of charge without TPSAs consent. The rental charge for the conduit is
usually determined on each 100 meters of conduit occupied. The agreements also
contain indexation clauses for rent adjustment purposes (based on the change of
U.S. dollar exchange rates or on the increase of real maintenance costs). A
substantial portion of the UPC Polska Groups contracts with TPSA for the use
of such conduits are concluded for an undefined term and may be terminated
without penalty upon three or six months notice without cause.  Immediate termination is allowed only in
case of breach of contract (e.g., lack of telecommunication permit,
lack of contract with housing owner, or overdue payments of monthly rent
(exceeding two or three months rent)).  Any termination by TPSA of such contracts could result in the UPC
Polska Group losing its permits, the termination of agreements with housing
entities and programmers, and an inability to service customers in areas where
its networks utilize the conduits that were the subject of such TPSA contracts.Some conduit agreements with TPSA
provide that cables can be installed in the conduit only for the use of cable
television (or for transmission of radio and television signals). If the UPC
Polska Group uses the cables for a purpose other than cable television, such as
data transmission, telephone, or internet access, such use may be considered a
violation of the terms of certain conduit agreements, unless it is expressly
authorized by TPSA. There is no guarantee that TPSA would give its approval to
permit other uses of the conduits. Since the fourth quarter of 2000, the UPC
Polska Group has been providing Internet services to its cable customers and
renegotiating certain conduits agreements with TPSA. The UPC Polska Group
believes that it is not in material violation of any of its conduit agreements
with TPSA.  In the latter
part of 2002, TPSA began seeking to raise rates significantly upon renewal of
expiring conduit contracts.  In addition, they sought to include language
specifically restricting use of the conduits, which would in effect prevent the
use of conduits for the provision by the UPC Polska Group of Internet
services.  The UPC Polska Group has declined to sign such contract
extensions.  The UPC Polska Group as
part of the Polish Cable Association is in negotiations with TPSA in an effort
to conclude a general framework agreement which would include a unified
country-wide payment rate and an open provision for providing telecommunication
services.  For a description of the
telecommunications infrastructure of the Company, see Item 1Business of the
Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2002, attached to this Disclosure Statement as Annex B and incorporated herein
by reference. See also Risk FactorsRisks Related to the UPC Polska Groups
Business.  Relationships
with Housing Entities  The right of
the UPC Polska Group to access buildings in order  to provide telecommunication and/or cable television services to
tenants of private or public landlords is based on the civil contracts
concluded with the owners  and on
relevant provisions of the Telecommunications Law (article 97).  There are different types of housing
entities, e.g.,
cooperatives, resident associations (condominiums), municipal authorities, and
developers.  Cooperatives are a unique
entity created under a separate law which resemble corporations. Cooperatives
are run by management boards which are appointed pursuant to their statutes, by
either the cooperatives supervisory board or general assembly of members
(tenants).  UPC Polska
Group uses a standard framework contract with respect to all types of housing
entities.  UPC Polska Group also uses so
called short form agreements which is a simplified form of agreement intended
to facilitate the process of concluding the agreements with a significant
number of resident associations.  Both types of
contracts contain substantial provisions to secure UPC Polska Groups interest,
e.g.,
free of charge use of the landlords property (grounds and buildings) for the
telecommunication services in general (without  50 
   limitation to cable television
only), UPC Polska Groups ownership of all telecommunication equipment
installed, its right to carry out sales and marketing services of cable
television and other telecommunication services, and UPC Polska Groups right
to assign the agreement to an entity appointed by it or to its legal successor.  The provisions of some contracts differ from
the standard framework contract.  Most of the
UPC Polska Groups agreements with housing entities have terms ranging from 10
to 20 years with optional renewal periods of five years.  However, some of the contracts may be
terminated by either party on relatively short notice.  There are also some contracts with
unspecified terms and each party has the right to terminate the agreement upon
notice.  The Telecommunications
Law does not prohibit competitors from overbuilding the UPC Polska Groups
network subject to the owners consent.  Discontinued
Segments  Until December 7, 2001,
the UPC Polska Groupoperated three segments  cable
television, D-DTH and programming. The D-DTH and programming segments were
discontinued in 2001. For a discussion of the discontinued segments, see Item
1Business of the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, attached to this Disclosure Statement as Annex B and
incorporated herein by reference.  Competition  The cable
television industry in Poland has been and is expected to remain highly
competitive. The UPC Polska Groupcompetes with other cable television
operators, as well as with companies employing numerous other methods of
delivering television signals to subscribers, such as by terrestrial broadcast
television signals, D-DTH services and multi-channel multipoint distribution
systems. The extent to which the UPC Polska Groups services are competitive
with alternative delivery systems depends, in part, upon the UPC Polska Groups
ability to provide a greater variety of Polish-language programming at a more
reasonable price than the programming and prices available through alternative
delivery systems.  Pay television services
also face competition from a variety of other sources of news, information and
entertainment such as newspapers, cinemas, live sporting events, interactive
computer programs and home video products such as videocassette recorders and
DVD players. The extent of this type of competition depends upon, among other
things, the price, variety and quality of programming offered by pay television
services and the popularity of television itself.  In the cable television industry, the UPC Polska Groupbelieves
that competition for subscribers is primarily based on price, program
offerings, customer service, ability to provide additional services such as
internet, and quality and reliability of cable networks.  Operators of
small cable networks, which are active throughout Poland, pose a competitive
threat to the UPC Polska Groupbecause they often incur lower capital
expenditures and operating costs and therefore have the ability to charge lower
fees to subscribers than does the UPC Polska Group.  While these operators often do not meet the technical standards
for cable systems under Polish law, enforcement of regulations governing
technical standards has historically been poor. Regardless of the enforcement
of these laws and regulations, the UPC Polska Groupexpects that operators of
small cable networks will continue to remain a competitive force in Poland. In
addition, due to certain loopholes in VAT regulations, some competitors of the
UPC Polska Groupdo not charge 22% VAT on their services. This adversely
affects the competitive position of the UPC Polska Group. The UPC Polska Groupbelieves
that after the accession of Poland to the European Union in May 2004, many such
loopholes will be removed.  During the
fourth quarter of 2000, the UPC Polska Groupbegan to provide internet
services to its customers. The UPC Polska Groups main competitors in this area
are telephony operators, such as TPSA, and other cable television operators.
The UPC Polska Groups competitors or their affiliates have significant
resources, both financial and technological.  In the spring
of 2003, a consortium of three investment funds (Hicks Muse Tate & Furst,
Emerging Markets Partnership and Argus Capital Partners) purchased the cable
television assets of Elektrim Telekomunikacja. The cable television systems of
Elektrim Telekomunikacja in Warszawa, Krakow and Zielona Gora serve
approximately 370,000 cable television subscribers and 27,000 internet
subscribers.  51 
   Multimedia and
Vectra, two Polish cable television operators, continued their expansion in
2002, mostly through acquisitions of smaller networks. Each company claimed to
have close to 400,000 cable television subscribers at the end of 2002.  Piracy  The UPC Polska
Groupviews
piracy of cable television services as one of its main problems in Poland, not
unlike other Central European cable operators. While there has historically
been little enforcement of penalties against commercial exploitation of piracy,
the issue is now receiving more attention from the Polish government. In July
2002, theLaw
on Protection of Certain Services Provided by Electronic Method Based on or
Consisting in Conditional Access was adopted by the Polish Parliament and it
came into force on November 10, 2002. Services covered by the scope of this law
are radio and television broadcasting services and other services provided upon
demand to individual customers using electronic transmissions. The aim is to
provide appropriate legal protection against the placing on the market, for
direct or indirect financial gain, of an illicit device which enables or
facilitates, without authority, the circumvention of any technological measures
designed to protect the remuneration of a legally provided service. The
viability of those services often depend on the use of conditional access in
order to obtain the remuneration of the service provider. Accordingly, the
legal protection of service providers against illicit devices, which allow
access to these services free of charge, seems necessary in order to ensure the
economic viability of the services.  In
addition, the UPC Polska Group, Canal+ and HBO agreed to intensify their
efforts to reduce the piracy of cable and satellite signals as well as to
combine their lobbying efforts in this regard. The Cable Association and its
members have offered to support the joint effort.  Affiliate
Transactions  As a result of
the Company being a part of the UPC group, the Company and its subsidiaries
have entered into various agreements with affiliated companies including:  License
arrangement with UPC whereby the Company can use the UPC trademark without
paying any licensing fee. Internet
services arrangements with Chello Broadband N.V. (Chello). Chello licenses its brand to the
UPC Polska Group and provides it with marketing support and drives product
development.  For this, the UPC Polska
Group pays to Chello 20% of its internet service revenues and 10% of its
internet installation revenues. Internet access
and services arrangement with UPC Distribution Services B.V. pursuant to which
the UPC Polska Group has access to equipment, links, and other internet
protocol elements owned or managed by the UPC group or provided by third
parties on behalf of the UPC group, and receives technical support services.  The UPC Polska Group is currently finalizing
these arrangements with UPC Distribution Services B.V.  The charges are currently based on UPCs
cost for providing for the access and services plus 10%. Several
programming agreements with affiliated companies, including UPC Programming
B.V. General services
arrangements with UPC and UPC Operations B.V. whereby UPC and UPC Operations
B.V. provide the Company with corporate and technical services in return for
which the Company agrees to pay quarterly its portion of the cost related to
the provision of such services plus a surcharge of 10%. Data processing
agreements between UPC Telewizja Kablowa and UPC Ceska Republika AS and UPC
Magyarorszag kft. whereby UPC Telewizja Kablowa receives remuneration based on
actual costs of providing the data processing services plus a 5% surcharge.  The terms of
these arrangements with affiliated companies may change over time, and the cost
to the Company and the UPC Polska Group may increase accordingly.  In addition, there may in the future be
additional arrangements that the Company and its subsidiaries enter into with
affiliated companies.  52 
   Employees  As of March
31, 2003, the UPC Polska Group had approximately 893 full-time employees.  At December 31, 2002, the UPC Polska Grouphad
approximately 914 full-time employees and approximately 13 part-time employees.
At December 31, 2001, the UPC Polska Grouphad approximately 1,262 full-time
employees and approximately 81 part-time employees. In 2002, the UPC Polska
Groupreduced
staffing in a reorganization resulting from the discontinuance of the UPC
Polska Groups D-DTH and programming businesses. In addition, as of March 31,
2003, the UPC Polska Group contracted with approximately 303 salespersons. From
time to time, the UPC Polska Groupemploys additional salespersons on an as
needed, commission only basis. In a division of one of the UPC Polska Groups
subsidiaries, a trade union, which has a small number of members, was formed in
mid-1999. The UPC Polska Groupbelieves that its relations with its
employees are good.  Regulation  The UPC Polska
Groupis
subject to regulations in Poland and the EU. 
Moreover, due to the planned accession of Poland to the EU in May 2004,
many regulatory laws in Poland are being adjusted to EU requirements.  For further discussion, see Risk Factors 
Risks Related to the UPC Polska Groups Business.  General  Poland is
still in the process of revising its telecommunications, broadcasting and
copyright regulation. On July 21, 2000, the Polish Parliament passed the
Telecommunications Law (the TL) which changed the regulatory framework of
telecommunications activities in Poland. The TL replaced the Communications Act
of 1990 (the Communications Act)
and became effective as of January 1, 2001. 
Until the end of the year 2000, the operation of cable television
systems was regulated primarily by the Communications Act.  Since January 1, 2001, the operation of
those television systems has been regulated by the TL.  Operators are also subject to the provisions
of the Polish Radio and Television Act of 1992 (the Television Act).  Currently the
Polish telecommunications and media sector is regulated by:  the Polish
Minister of Infrastructure (who as of July 24, 2001, assumed certain
responsibilities of the Minister of Communications);  the Chairman of
the Telecommunications and Post Regulation Office (URTiP) (which replaced the Polish State
Agency of Radiocommunications (PAR), was established under the TL, and assumed most of
the administrative tasks previously performed by the Minister of
Communications); and  the Polish
National Radio and Television Council (the Council).  Cable
television operators in Poland are required to obtain permits from the Chairman
of the URTiP for utilization of a public network for distribution of radio and
television programming and must register with the Council certain programming
that they transmit over their networks.  Neither the
Minister of Infrastructure nor the Chairman of the URTiP currently has the
authority to regulate the rates charged by operators of cable television
services. However, excessive rates could be challenged by the Polish
Anti-Monopoly Office should they be deemed to constitute monopolistic or other
anti-competitive practices. Cable television operators in Poland are also
subject to the Law on Copyright and Neighboring Rights of 1994 (the Copyright Act) which
provides intellectual property rights protection to authors and producers of
programming. On January 1, 2003, an amendment to the Copyright Law came into
force, based on which the statutory license for broadcasting FTA channels was
removed, though a further amendment has been proposed which if enacted into law
would restore the statutory license. Under the terms of the Television Act,
broadcasters in Poland are regulated by, and must obtain a broadcasting license
from, the Council. Among others, broadcasters must also observe restrictions on
ownership by foreign entities and individuals.  53 
   Telecommunication Law  Until the end of the year
2000, the operation of cable television systems was regulated primarily by the
Communications Act. The Communications Act provided that permits could only be
issued to and held by Polish citizens or companies in which foreign persons
held no more than 49% of the share capital, ownership interests and voting
rights.  Since January 1, 2001, the
operation of those television systems has been regulated by the TL.  For further discussion of foreign ownership
restrictions, see Item 1Business of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 2002, attached to this Disclosure
Statement as Annex B and incorporated herein by reference.  Under the TL, cable
television operators are required to obtain a permit from the Chairman of the
URTiP for utilization of a public network for distribution of radio and
television programming, except utilization of the network within the confines
of a single building.  The Chairman of
the URTiP is required to grant the permit to any interested entity that is
authorized to do business in Poland and that complies with the conditions set
forth in the TL.  Applications for
renewals of permits may be refused only if during the validity of the permit
there have been circumstances justifying the refusal, revocation or limitation
of the scope of the permit.  For further
discussion of the TL, see Item 1Business of the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2002, attached to this
Disclosure Statement as Annex B and incorporated herein by reference.  Television Act  The Polish National Radio and Television
Council.  The
Council, an independent agency of the Polish government, was created under the
Television Act to regulate broadcasting in Poland. The Council has regulatory
authority over both the programming that cable television operators transmit
over their networks and the broadcasting operations of broadcasters.  Registration of Programming.  Under the Television Act, cable television
operators must register with the Chairman of the Council each channel and the
programming which will be aired on that channel, prior to transmission. The
Companys subsidiaries routinely register their programming on a current basis,
and there are no material outstanding issues in this respect.  Required Programming.
Under the Television Act, cable television operators are required to introduce
channels into the cable network in the following order:  1) national
public radio and television channels; 2) local
public radio and television channels available in the given territory; 3) national
social broadcasters channels available in the given territory; 4) other
national broadcasters channels available in the given territory; and 5) other
national and foreign broadcasters channels.  Taking this
into consideration, the Company is in the process of entering into long-term
agreements with the broadcasters of required channels as soon as possible.  Polish Copyright Act  On January 1, 2003, an
amendment to the Copyright Law came into force, which removed a statutory
license for cable operators to use the content of various providers.  Until that date, the statutory license was
used by all cable operators in Poland to retransmit domestic and foreign FTA
channels without formal agreements with the broadcasters, primarily Polish
channels (TVP, Polsat, TVN) and a number of foreign FTAs (e.g., German
channels).  The removal of the statutory
license required cable operators to enter into formal agreements with all
broadcasters and copyright associations by January 1, 2003.  Given the very short timeframe within which
the statutory license was removed, the UPC Polska Group remains in the process
of negotiating and signing contracts with broadcasters.  After January 1, 2003, when the provisions
removing the statutory license came into effect, the following channels were
removed from the UPC Polska Groups channel line-ups: 1ARD, 3Sat, Arte/La
Cinquieme, France 2, ZDF, Rai UNO, Rai DUE, Rai Sport, ERT, Kabel 1, M6, Neun
Live (TM3), n-tv, Onyx, Pro7, RTL, RTL2, Sat1, Super RTL,  54 
   Vox, DSF, Fashion
TV, NBC, RTP, TV4, CTV1, Nova, and ORT1 (Ostankino).  Changes in the program offerings began being communicated to
customers in April 2003.  Temporary
permission for transmission from key Polish FTAs TVP (TVP1, TVP2, TVP3, TV
Polonia), TVN (TVN, TVN7) and Polsat (Polsat, Polsat 2, TV4)  was granted to
Cable Association members, including a subsidiary of the Company, just before
the January 1, 2003 effective date. With respect to TVP1, TVP2, TVP3, TVP
Polonia, TVN and TVN 7, permission was granted until long-term agreements are
concluded. The Binding Heads of Agreement on Retransmission of TVN, TVN 7 and
TVN24 were signed on May 9, 2003 and are binding upon the parties, including a
subsidiary of the Company, until such time as such agreement is superseded by a
long-form agreement. As to TV 4, the new permission is valid until December 31,
2003. The consent regarding Polsat and Polsat 2 has been granted until
long-term agreements are concluded, with the reservation that the agreements
should be signed by June 17, 2003. In spite of the fact that no long-term
agreement was signed by that date, the broadcaster of Polsat and Polsat 2 has
not taken any action to ban further transmission; the Company thus believes
that the permission is still valid.  Anticipating
the amendment to the Polish Copyright Law, in December 2002, the UPC Polska Group
approached the predominantly German and French FTAs, seeking their consent for
the cable distribution, free of charge, of their channels in Poland. A
significant number of the broadcastersresponded that no authorization in the
future would be granted without payment of license fees. Some of the
broadcasters have reserved the right to claim remuneration for past
distribution of their channels.  On July 25,
2003, the Lower Chamber of the Polish Parliament voted in favor of a further
amendment to the Polish Copyright Law, which if enacted into law would restore
a statutory license for cable operators to use the content of various
providers.  Should this amendment be
adopted by the Upper Chamber of the Polish Parliament and approved by the
President, cable operaters in Poland would regain the authorization to
retransmit domestic and foreign FTA channels without formal agreements with the
broadcasters, though they would still be obliged to pay license fees to such
FTAs in an unspecified amount.  This
authorization if enacted into law would be valid until Poland joins the EU in
May 2004.  After January 1, 2003, the UPC Polska Group
terminated its license agreements with copyright collective associations ZAiKS
and ZASP on the basis that under the amended Copyright Law, these associations
are not authorized to collect remuneration fees for cable retransmission. ZASP
and certain other associations are negotiating a general agreement with the
PolishCable Association, whose membership includes a subsidiary
of the Company.The intention of the Polish Cable
Association is that the total royalties due to all copyright collective
associations (including those not participating in the negotiations) should not exceed 1.5% of cable
subscription revenue, and an appropriate portion of this 1.5% should be adopted
by the parties as the maximum rate under a new arrangement with ZASP and
certain other associations. ZAiKS has not participated in these negotiations,
and has demanded that the UPC Polska Group enter into a license agreement and
pay royalties amounting to 3.5% of cable subscription revenue, as was the case
under the terminated agreement. ZAiKS is not legally obligated to enter into
negotiations with the Cable Association and does not have to accept the arrangements
of other associations concerning the maximum rate, and it retains the right to
bring a lawsuit for unpaid royalties.  The UPC Polska Group has brought a claim to
the Copyrights Commission in the Polish Ministry of Culture for the settlement
of the conditions of a new license arrangement with ZAiKS, with a request that
the license fee be set at 0.3% of cable subscription revenue (instead of 3.5%
of cable subscription revenue, as approved by the Minister of Culture in the
remuneration tables for ZAiKS). Should the amendment to the Polish Copyright
Law restoring the statutory license be enacted into law, the proceedings before
the Copyrights Commission might be suspended or discontinued.  The Polish Copyrights Commission is the
administrative body with statutory power to settle disputes concerning the
remuneration tables as well as disputes related to conclusion of license
arrangements between copyright associations and users of copyrights and
neighboring rights.  Additionally, on
July 2, 2003, the Polish Cable Association on behalf of all cable operators in
Poland (including the UPC Polska Group) brought an appeal to the National
Administrative Court against the recent decision of the Minister of Culture
approving the remuneration tables for ZAiKS at 3.5% of cable subscription
revenues.  These proceedings are
independent from one another.  55 
   After January 1, 2003, certain other Polish
copyright associations have also approached the UPC Polska Group demanding the
negotiation of separate license agreements and payment of additional license
fees.  The removal of the
statutory license was only a part of ongoing modifications to Polish law
intended to bring the Polish legal system in line with European Union (EU) standards.  It was not synchronized with a general
overhaul of Polish copyright law, which is expected to occur during 2003.  The new law is expected to resolve some of
the current issues in Polish copyright law (numerous collecting agencies,
unclear authorities, unreasonable demands) and to bring about general agreement
between operators, broadcasters and collecting agencies on copyright license
rates.  For further discussion of the
Polish Copyright Act, see Item 1Business of the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2002, attached to this Disclosure
Statement as Annex B and incorporated herein by reference and Risk Factors 
Risks Related to the UPC Polska Groups Business.  Anti-Monopoly Act  Companies that obtain control
of 40% or more of the relevant market and do not encounter significant
competition may be deemed to have market dominance, and therefore face greater
scrutiny from the Anti-Monopoly Office. 
From time to time, the Company receives inquiries from and is subject to
review by various divisions of the Anti-Monopoly Office. Additionally, other
institutions empowered to protect consumers rights (such as the Federation of
Consumers, spokesmen for consumers rights) scrutinize local cable TV markets.
Such studies are initiated on a temporary basis ex officio or as a result of
complaints being lodged by subscribers.  Polands EU
Membership Application  Poland will become an EU
member on May 1, 2004.  When Poland
joins the EU, it will be required to implement and obey all of the laws and
regulations emanating from the EC including the Television Without Frontiers
Directive and the EC competition law in their then current versions.  The UPC Polska Group may be required to incur
additional costs in order to comply with the resulting changes in Polish
law.  For further discussion of EU
regulation of competition, see Item 1  Business  EU  Regulation of
Competition of the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, attached to this Disclosure Statement as Annex B and
incorporated by reference herein.  Investments  For a
discussion of the main investments of the UPC Polska Group, including equity
and debt securities acquired by the Company since January 1, 1999 and
information regarding the financing for, and location of, such investments, see
Item 1Business, Item 2Properties, Item 7Managements Discussion and
Analysis of Financial Condition and Results of Operations and the notes to the
annual audited consolidated financial statements of the Company contained in
the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2002 attached to this Disclosure Statement as Annex B and incorporated herein
by reference, and Item 2Managements Discussion and Analysis of Financial
Condition and Results of Operations and the notes to the quarterly unaudited
consolidated financial statements of the Company contained in the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003 attached
to this Disclosure Statement as Annex C and incorporated herein by reference.  Litigation and
Claims  From
time to time, the UPC Polska Group is subject to various claims and suits
arising out of the ordinary course of business. While the ultimate result of
all such matters is not presently determinable, based upon current knowledge
and facts, management does not expect that the resolution of such matters will
have a material adverse effect on the UPC Polska Groups consolidated financial
position or results of operations.  56 
   HBO Arbitration  The
Company, PCI, Wizja TV B.V. and Poltelkab Sp. z o.o. (the Arbitration Parties)are involved in a dispute with HBO
Communications (UK) Ltd., Polska Programming B.V. and HBO Poland Partners (HBO) concerning the
UPC Polska Groups cable carriage agreement (Cable Agreement) and its D-DTH carriage
agreement (D-DTH Agreement)
for the HBO premium movie channel. With respect to the Cable Agreement, on
April 25, 2002, the Arbitration Parties commenced an arbitration proceeding
before the International Chamber of Commerce, claiming that HBO was in breach
of the most favored nations clause thereunder (MFN) by providing programming to other cable
operators in the relevant territory on terms that are more favorable than those
offered to the Arbitration Parties. Specifically, the Arbitration Parties
contend that the Service Fee under the Cable Agreement should not include any
minimum guarantees because such minimum guarantees are not required of other
cable operators in the relevant territory.  In
its answer in the arbitration, HBO asserted counterclaims against the
Arbitration Parties, alleging that the Arbitration Parties were liable for
minimum guarantees under the Cable Agreement, and also that the Arbitration
Parties were liable for an increase in minimum guarantees under the D-DTH
Agreement, based on the fact that the Arbitration Parties merged their D-DTH
business with Cyfra+ in December 2001. The Arbitration Parties responded to the
counterclaims by (i) denying that they owe any sums for minimum guarantees
under the Cable Agreement, in light of the MFN clause, and (ii) by denying that
they owe any sums for an increase in minimum guarantees under the D-DTH Agreement,
because they have not purchased an equity interest in HBO, a condition on which
the Arbitration Parties contend the increase in minimum guarantees is
predicated under the D-DTH Agreement.  The
Arbitration Parties intend to vigorously prosecute their claims and defend
against HBOs counterclaims.  The case
is currently in arbitration. The parties have prepared the terms of reference,
which include a mapping out of discovery needs, a timing/briefing schedule for future
motions, and hearing dates. On April 15, 2003, the Arbitration Panel confirmed
a schedule for the Arbitration Parties request to have the matter decided on
summary judgment. The oral argument occurred on May 29, 2003. The summary
judgment motion was denied and the arbitration is proceeding to the discovery
phase.  On July 8, 2003, the Bankruptcy
Court granted relief from the automatic stay imposed under section 362 of the
Bankruptcy Code to allow the HBO Arbitration to continue in the ordinary course,
up to and including entry of an adverse judgment.  The Company need not seek any stay relief to enforce any
favorable judgment.  However, HBO may
not enforce any judgment in its favor against the Company and any such judgment
remains subject to the automatic stay. 
The Arbitration Parties are unable to predict the outcome of the
arbitration process.  ZASP (Copyrights Collective Association)  The
claim was made in the Warsaw District Court on April 9, 2002 by ZASP. ZASP
claims payments of copyright and neighboring rights for using artistic performances
in cable TV transmission.  UPC Telewizja
Kablowa Sp. z o.o. (Telewizja) responded to the court claiming that
artistic performances are not entitled to any remuneration and therefore the
claim is meritless. Additionally, based on a request from ZASP, the court
ordered Telewizja to disclose information concerning gross revenues accruing to
it as of June 1, 1998. The District Court Decision was appealed by Telewizja on
July 2, 2002, based on the same argument as the response to the claim.  On
January 17, 2003 the Appeals Court rejected Telewizjas appeal and supported
the order of the District Court. 
Telewizja submitted to the Court information concerning gross revenues
accruing to it as of June 1, 1998.  On
January 23, 2003, Telewizja brought an additional letter to the Court
requesting it to reject the ZASP claim as inadmissible in the civil court
jurisdiction in which it was filed.  On
July 2, 2003, the first hearing took place during which ZASP increased the
value of its claim (to a total of approximately $750,000).  The next hearing date has not been scheduled
by the Court.  The case is pending.  Telewizja is unable to predict the outcome
of the case.  57 
   RCI Claim  On
January 15, 2003, Reece Communications, Inc. (RCI) filed a complaint in the Superior Court
in New Castle County, Delaware against the Company regarding the Companys
default on a promissory note due August 28, 2003 in the original principal
amount of $10 million, payable by the Company to RCI (the RCI Note). The demand was made for immediate
payment in full of the unpaid $6 million principal amount of the RCI Note
together with all accrued and unpaid interest on this note at the default rate.
The litigation was formally served on the Company on January 29, 2003. On
February 25, 2003, a default judgment was entered against the Company in the
amount of $6,110,465.60 (representing the outstanding principal and accrued
interest from January 1, 2003 through February 25, 2003) plus an unidentified
amount for all other costs of this action. The Company has not paid any
amounts demanded by RCI or filed responsive pleadings in the litigation.  Selected
Historical Consolidated Financial Information  The following
selected consolidated financial data for the years ended December 31, 2002,
2001, 2000, 1999 and 1998 have been derived from the Companys audited
consolidated financial statements. For the year ended December 31, 1998 and the
period from January 1, 1999 through August 5, 1999, prior to the acquisition by
UPC (the acquisition is described in the notes to the consolidated financial
statements contained in the Companys Annual Report on Form 10-K for the fiscal
year ended December 31, 2002, attached to this Disclosure Statement as Annex B
and incorporated herein by reference) the Company operated under the name
@Entertainment, Inc.  On December 7,
2001, PTC transferred its D-DTH and programming business to TKP, a subsidiary
of Canal+ in which PTC retained a minority interest. The consolidated financial
data presented below have been derived from the consolidated financial
statements of the Company and the notes prepared in conformity with generally
accepted accounting principles as applied in the U.S. The selected consolidated
financial data should be read in conjunction with Item 7 - Managements
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Companys Annual Report on 10-K for the fiscal year ended
December 31, 2002 and Item 2  Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003,
copies of which are attached to this Disclosure Statement as Annex B and C, respectively,
and incorporated herein by reference.  58 
   SELECTED CONSOLIDATED FINANCIAL DATA  SUCCESSOR
  
  PREDECESSORYear Ended
  December 31,2002
  
  2001
  
  2000
  
  1999
  
  1998(Stated in
  Thousands of U.S. Dollars)Selected  Balance Sheet Data:Cash and cash equivalents
  
  $
  105,646
  
  $
  114,936
  
  $
  8,879
  
  $
  35,520
  
  $
  13,055Restricted cash
  
  
  
  26,811
  
  
  
  
  
  Trade accounts receivable, net ofallowance for
  doubtful debts
  
  7,742
  
  7,360
  
  18,627
  
  12,808
  
  7,408Programming and broadcast rights
  
  
  
  
  
  10,317
  
  7,200
  
  9,030Due from the Companys affiliates
  
  4,013
  
  13,783
  
  12,469
  
  
  
  Other current assets
  
  2,089
  
  1,208
  
  8,409
  
  12,668
  
  21,063Property, plant and equipment, net
  
  120,748
  
  143,206
  
  291,512
  
  218,784
  
  213,054Inventories
  
  3,355
  
  4,035
  
  6,596
  
  5,511
  
  8,869Intangible assets, net
  
  1,608
  
  370,062
  
  862,116
  
  906,987
  
  43,652Investment in affiliated companies
  
  3,277
  
  24,530
  
  16,229
  
  19,393
  
  19,956Other assets
  
  
  
  
  
  
  
  
  
  12,287TOTAL ASSETS:
  
  248,478
  
  705,931
  
  1,235,154
  
  1,218,871
  
  348,374Short-term debt and current portion 
  of long term debt
  
  478,883
  
  461,886
  
  
  
  
  
  6,500Other current liabilities
  
  33,057
  
  84,472
  
  109,021
  
  77,215
  
  50,764Long-term debt
  
  444,767
  
  403,710
  
  721,442
  
  534,696
  
  257,454Other non-current liabilities
  
  
  
  
  
  1,469
  
  
  
  TOTAL LIABILITIES
  
  956,707
  
  950,068
  
  831,932
  
  611,911
  
  314,718TOTAL SHAREHOLDERS(DEFICIT)/EQUITY
  
  $
  (708,229
  )
  $
  (244,137
  )
  $
  403,222
  
  $
  606,960
  
  $
  33,656  SUCCESSOR
  
  PREDECESSORYear Ended
  December 31,2002
  
  2001
  
  2000
  
  Period from
  August 6, 1999
  Through December
  31, 1999
  
  Period from
  January 1, 1999
  Through August
  5, 1999
  
  Year Ended
  December 31,
  1998(Stated In
  Thousands of U.S. Dollars, Except Per Share Data)Revenue
  
  $
  79,675
  
  $
  138,722
  
  $
  133,583
  
  $
  38,018
  
  $
  46,940
  
  $
  61,859Operating expenses:Direct operating expenses
  
  40,985
  
  111,270
  
  132,154
  
  69,351
  
  70,778
  
  61,874Selling, general and administrative expenses
  
  27,325
  
  64,301
  
  63,156
  
  46,874
  
  51,034
  
  74,494Depreciation and amortization
  
  28,361
  
  126,042
  
  109,503
  
  40,189
  
  23,927
  
  26,304Impairment of long-lived assets
  
  1,868
  
  22,322
  
  7,734
  
  1,091
  
  
  
  Total operating expenses
  
  98,539
  
  323,935
  
  312,547
  
  157,505
  
  145,739
  
  162,672Operating loss
  
  (18,864
  )
  (185,213
  )
  (178,964
  )
  (119,487
  )
  (98,799
  )
  (100,813
  )Loss on disposal of D-DTH business
  
  
  
  (428,104
  )
  
  
  
  
  
  
  Interest and investment income, third party
  
  3,086
  
  1,560
  
  1,329
  
  731
  
  2,823
  
  3,355Interest expense
  
  (99,846
  )
  (95,538
  )
  (73,984
  )
  (24,459
  )
  (28,818
  )
  (21,957
  )Share in results of affiliated companies
  
  (21,253
  )
  (14,548
  )
  (895
  )
  (291
  )
  (1,004
  )
  (6,310
  )Foreign exchange gain / (loss), net
  
  14,133
  
  (27,511
  )
  3,397
  
  (2,637
  )
  (2,188
  )
  (130
  )Non-operating income/ (expense), net
  
  1,561
  
  
  
  591
  
  1,977
  
  
  
  Loss before income taxes
  
  (121,183
  )
  (749,354
  )
  (248,526
  )
  (144,166
  )
  (127,986
  )
  (125,855
  )Income tax expense
  
  (94
  )
  (124
  )
  (285
  )
  (11
  )
  (30
  )
  (210
  )Net loss before accretion of redeemable preferred stock
  
  (121,277
  )
  (749,478
  )
  (248,811
  )
  (144,177
  )
  (128,016
  )
  (126,065
  )Accretion of redeemable preferred stock
  
  
  
  
  
  
  
  
  
  (2,436
  )
  Net loss before cumulative effect of accounting change
  
  (121,277
  )
  (749,478
  )
  (248,811
  )
  (144,177
  )
  (130,452
  )
  (126,065
  )Cumulative effect of accounting change
  
  (370,966
  )
  
  
  
  
  
  
  
  
  Net loss applicable to holders of common stock
  
  (492,243
  )
  (749,478
  )
  (248,811
  )
  (144,177
  )
  (130,452
  )
  (126,065
  )Basic and diluted net loss per common share
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  $
  (3.90
  )
  $
  (3.78
  )  59 
   Managements
Discussion and Analysis of Financial Condition and Results of Operation  For the managements
discussion and analysis of the financial condition and results of the
operations of the Company, see Item 7Managements Discussion and Analysis of
Financial Condition and Results of Operations of the Companys Annual Report
on Form 10-K for the year ended December 31, 2002 and the section entitled
Item 2  Managements Discussion and Analysis of Financial Condition and
Results of Operations of the Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 2003, copies of which are attached hereto as Annex B
and Annex C, respectively, and incorporated herein by reference.  Current Management
of the Company  Directors and Executive Officers  The following are the
members of the Companys Board of Directors as of the date of this Disclosure
Statement:  Simon Boyd
  
  President,
  Chief Executive Officer and Director (Principal Executive Officer)Anton
  Tuijten
  
  General
  Counsel and DirectorWalter
  Eugene Musselman
  
  DirectorRobert Dunn
  
  DirectorNimrod
  Kovacs
  
  Director  For more information
regarding the directors and executive officers of the Company, see Item
10Directors and Executive Officers of the Registrant of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, a copy of
which is attached hereto as Annex B and incorporated herein by reference.  60 
   OUTSTANDING SECURITIES OF THE COMPANY  The UPC Polska
Notes  The UPC Polska Notes were
issued in July 1998 and January 1999 in the transactions described below:  July 1998 Offering  On July 14, 1998, the
Company sold 252,000 units to two initial purchasers pursuant to a purchase
agreement, each unit consisting of $1,000 principal amount at maturity of 14
1/2% Senior Discount Notes due July 15, 2008 (the 2008 Notes) and four warrants (the 2008 Warrants), each
initially entitling the holder thereof to purchase 1.81 shares of common stock,
par value $0.01 per share at an exercise price of $13.20 per share, subject to
adjustment.  The 2008 Notes
were issued at a discount to their aggregate principal amount at maturity and,
together with the 2008 Warrants, generated gross proceeds to the Company of
approximately $125,100,000.  Any
unexercised 2008 Warrants were redeemed in connection with the Agreement and
Plan of Merger, dated June 2, 1999, between the Company and UPC.  The 2008 Notes
are unsubordinated and unsecured obligations of the Company.  Under the terms of the indenture governing
the 2008 Notes, Cash interest on the 2008 Notes began to accrue on July 15,
2003 at a rate of 14.5% per annum and will be payable semi-annually in arrears
on January 15 and July 15 of each year, commencing on January 15, 2004.  January 1999 Offerings  On January 20, 1999, the
Company sold $36,001,321 aggregate principal amount at maturity of Series C
Senior Discount Notes due July 15, 2008 (the Series C Notes).  The Series C Notes are unsubordinated and unsecured obligations
of the Company.  The Series C Notes were
issued at a discount to their aggregate principal amount at maturity and
generated gross proceeds to the Company of approximately $9,815,000. Cash
interest on the Series C Notes will not accrue prior to January 15, 2004.  Thereafter cash interest will accrue at a
rate of 7.0% per annum on the principal amount at maturity, and will be payable
semi-annually in arrears on July 15 and January 15 of each year commencing July
15, 2004.  On January 27,
1999, the Company sold 256,800 units to two initial purchasers pursuant to a
purchase agreement, each unit consisting of $1,000 principal amount at maturity
of 14 1/2% Senior Discount Notes due February 1, 2009 (the 2009 Notes and,
collectively with the 2008 Notes and the Series C Notes, the UPC Polska Notes)
and four warrants (the 2009 Warrants,), each initially entitling the holder
thereof to purchase 1.7656 shares of common stock, par value $0.01 per share at
an exercise price of $9.125 per share, subject to adjustment. The 2009 Notes
were issued at a discount to their aggregate principal amount at maturity and,
together with the 2009 Warrants generated gross proceeds to the Company of
approximately $100,003,000.  Any unexercised
2009 Warrants were redeemed in connection with the Agreement and Plan of
Merger, dated June 2, 1999, between the Company and UPC.  The 2009 Notes
are unsubordinated and unsecured obligations of the Company. Under the terms of
the indenture governing the 2009 Notes, cash interest on the 2009 Notes would
not accrue prior to February 1, 2004. Thereafter cash interest would accrue at
a rate of 14.5% per annum on the principal amount and will be payable
semi-annually in arrears on August 1 and February 1 of each year, commencing
August 1, 2004.  The Company
will be required to commence cash interest payments under the UPC Polska Notes
aggregating approximately $50.8 million per annum in 2004 and approximately
$69.2 million per annum in 2005 and thereafter.  61 
   Partial Redemption
of the UPC Polska Notes  As a result of the August 6, 1999 acquisition by UPC of the Company,
which constituted a Change of Control under the Indentures (as that term is
defined under the Indentures), the Company purchased $49,139,000 aggregate
principal amount at stated maturity of the UPC Polska Notes for an aggregate
price of $26,455,014.  Market for the UPC Polska Notes  The UPC Polska Notes are
not listed on any U.S. national or regional stock exchange or included on NASDAQ.  The UPC Polska Notes trade on a limited
basis in the over-the-counter market. 
For the year ended December 31, 2002, the UPC Polska Notes traded at
between 15% and 26% of their face value. 
Trading in the UPC Polska Notes, however, is extremely limited and each
holder of UPC Polska Notes is encouraged to obtain current information on the
market price of any UPC Polska Notes that such holder holds.  Terms of the UPC Polska Notes  The UPC Polska Notes were
issued pursuant to the Indentures by and among the Company and Deutsche Bank
Trust Company Americas, formerly Bankers Trust Company, as trustee (the Indenture  Trustee).  The following summaries
of certain provisions of the Indentures are summaries only, do not purport to
be complete and are qualified in their entirety by reference to all of the
provisions of the Indentures.  The
Company urges each holder of UPC Polska Notes to read the Indentures because
the Indentures, and not this description, define the rights of the holders of
the UPC Polska Notes.  Copies of the
Indentures are available from the Company upon request.  Ranking of the UPC Polska Notes  The UPC Polska Notes (i)
are unsecured, general obligations of the Company, (ii) rank equally in right
of payment with all of the Companys existing and future unsubordinated and
unsecured Indebtedness (as defined in the relevant Indenture); and (iii) rank
senior in right of payment to all of the Companys existing and future
Subordinated Indebtedness (as defined in the relevant Indenture).  The Companys operations are conducted
through its subsidiaries and, therefore, the Company depends on the cash flow
of its subsidiaries to meet its obligations, including its obligations under
the UPC Polska Notes.  The UPC Polska
Notes are effectively subordinated in right of payment to all indebtedness and
other liabilities and commitments (including trade payables and lease
obligations) and preferred stock of the Companys subsidiaries.  Any right the Company has to receive assets
of any of its subsidiaries upon the subsidiarys liquidation or reorganization
(and the consequent right of the holders of the UPC Polska Notes to participate
in those assets) are effectively subordinated to the claims of that
subsidiarys creditors and preferred interest holders, except to the extent
that the Company is recognized as a creditor of the subsidiary, in which case
the Companys claims would still be subordinate in right of payment to any
security in the assets of the subsidiary and any indebtedness of the subsidiary
senior to that held by the Company.  62 
   Principal and Maturity  The following chart shows
the aggregate principal amount and scheduled maturity date of each of the
series of UPC Polska Notes:  Series of UPC Polska Notes
  
  Aggregate Principal
  Amount
  (At Maturity)
  Issued
  
  Aggregate
  Principal Amount
  (At Maturity)
  Outstanding as of
  June 30, 2003
  
  Scheduled
  Maturity Date2008 Notes
  
  $
  252,000,000
  
  $
  224,165,000
  
  July 15, 2008Series C Notes
  
  $
  36,001,321
  
  $
  36,001,321
  
  July 15, 20082009 Notes
  
  $
  256,800,000
  
  $
  235,496,000
  
  February 1, 2009  Covenants  The UPC Polska
Notes contain covenants requiring the Company to repurchase the UPC Polska
Notes at the option of the holders of the UPC Polska Notes in the event of a
Change in Control (as defined in the Indentures) of the Company.  The Indentures also contain covenants
restricting or limiting the ability of the Company to:  (i)incur
additional indebtedness;  (ii)make
restricted payments;  (iii)enter
into transactions with affiliates;  (iv)incur
liens;  (v)effect
sales of assets;  (vi)make
investments in unrestricted subsidiaries; and  (vii)establish
new lines of business.  The Indentures covenants
also:  (i)limit
issuances and sales of capital stock of restricted subsidiaries;  (ii)limit
guarantees of indebtedness by restricted subsidiaries;  (iii)limit
the ability to restrict the payment of dividends by restricted subsidiaries;
and  (iv)require
the Company to provide financial statements and reports.  The Indentures provide
for events of default under the UPC Polska Notes in the event the Company fails
to pay interest (subject to a 30-day grace period) or principal on the UPC
Polska Notes, the Companys failure to observe or perform any covenant or
agreement under the UPC Polska Notes or in the Indentures (subject to a 30-day
cure period), the bankruptcy, insolvency or reorganization of the Company or a
default under other indebtedness of the Company or any of its subsidiaries in excess
of $15 million.  63 
   As a result of the
Company commencing the Chapter 11 Case on the Petition Date, an event of
default under the Indentures has occurred. 
Consequently, amounts owed under the UPC Polska Notes will need to be
reflected as current liabilities in the Companys financial statements unless
and until the Restructuring is consummated.  The Telecom Pari
Passu Notes, the Telecom Junior Notes and the Belmarken Notes  UPC Telecom is
the holder of the Telecom Pari Passu Notes and the Telecom Junior Notes.  Belmarken is the holder of the Belmarken
Notes.  On December 2, 2002, UPC
assigned to UPC Telecom all rights and obligations arising from loan agreements
between the Company and UPC.  As of June
30, 2003, the Company had loans payable to UPC Telecom and Belmarken of
approximately $393,926,000 and $14,942,000, respectively. The two amounts
exclude accrued but unpaid interest of $72,118,000 as of June 30, 2003.  The loans bear interest at a rate of 11.0%
per annum and mature in 2007 and 2009, respectively.  Loans originally from UPC with an aggregate principal amount of
$150,000,000 have been subordinated to the UPC Polska Notes and the Belmarken
Notes (together with $57,802,000 of accrued and unpaid interest thereon, as of
June 30, 2003).  All of the debts owed
to UPC Telecom and Belmarken have been reflected as current liabilities of the
Company.  The RCI Notes  In
settlement of legal claims against the Company, on August 28, 2001, the Company
and one of its subsidiaries issued the RCI Note to RCI, a former minority
stockholder of Poland Cablevision (Netherlands) B.V.  UPC is the guarantor of the RCI Note.  As of December 31, 2002, the Company had $6 million payable to
RCI pursuant to the RCI Note issued by the Company. On January 15, 2003, RCI
filed a complaint in Superior Court in New Castle County, Delaware against the
Company regarding the Companys default on the outstanding RCI Note. The demand
was made for immediate payment in full of the unpaid $6 million principal
amount, together with all accrued and unpaid interest at the default rate.  For more information on the RCI claim,
please refer to the section entitled The Company  Litigation and Claims  RCI
Claim.  Capital
Stock of the Company Prior to the Restructuring  All
of the Companys outstanding common stock is owned by UPC Telecom and is not
traded on any public trading market. The current authorized capital stock of
the Company amounts to 1,000 shares of common stock, par value $0.01 per share.
The Companys executive officers and directors do not possess any voting
securities of the Company and/or its subsidiaries.  As of the Effective Date,
the outstanding shares of the Company common stock and any rights, options and
warrants to acquire shares of the UPC Polska Stock will be cancelled and will
be of no further force or effect.  Capital
Stock of the Company After the Restructuring  After the
Effective Date, the authorized capital stock of the Company shall consist of
2,000 shares of common stock, par value $0.005 per share, which shall be owned
100% by UPC Telecom, Belmarken, and the holders of the Affiliate Indebtedness
Claims.  64 
   DESCRIPTION OF THE NEW UPC POLSKA NOTES  General  Polska Finance was
incorporated by UPC Telecom in the State of Delaware on July 2, 2003 as a
corporation with limited liability. Polska Finance is a wholly-owned subsidiary
of UPC Telecom and a sister company of the Company. Polska Finance was formed
as an integral component of the Plan to effectuate the Restructuring through
the co-issuance with the Company of the New UPC Polska Notes.  The statutory purpose of
Polska Finance is to engage in any lawful act or activity for which a
corporation may be organized under the General Corporation Law of the State of
Delaware as set forth in Title 8 of the Delaware Code. Polska Finance has not
conducted any operations to date and is not anticipated to conduct any
business, other than acting as a co-issuer of the New UPC Polska Notes.  The address of the registered office of
Polska Finance in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle.  The
name of its registered agent at that address is The Corporation Trust Company.  Management of
Polska Finance  Polska Finances Board of
Directors consists of the following two members as of the date of this
Disclosure Statement:  Name:
  
  Title:Dennis
  Okhuijsen
  
  DirectorJeremy Evans
  
  Director  Polska Finances business
and affairs are managed by Polska Finances officers, under the direction of
the Board of Directors.  Polska
Finances officers currently consist of:  Name:
  
  Title:Dennis
  Okhuijsen
  
  President
  and TreasurerJeremy Evans
  
  Vice
  President and Secretary  The New UPC Polska
Notes  The New UPC Polska Notes
will be issued after confirmation of the Plan.  Market for the New UPC Polska Notes  The New UPC Polska Notes
will not be listed on any U.S. national or regional stock exchange or included
on the NASDAQ National Market or the NASDAQ Small Cap Market.  The Company expects that the New UPC Polska
Notes will trade on an extremely limited basis on the NASDAQ PORTAL market.  The following is a summary of material provisions of the New
Indenture and is qualified in its entirety by reference to the New Indenture
itself.  A copy of the New Indenture is
attached to this Disclosure Statement as an exhibit to Annex A and is
incorporated herein by reference.  The
Company urges each holder of New UPC Polska Notes to read the New Indenture
because the New Indenture, and not this description, will define the rights of
the holders of the New UPC Polska Notes.  Terms of the New UPC Polska Notes  The New UPC Polska Notes
will be issued pursuant to the New Indenture by and among the Company, Polska
Finance (together with the Company, the Issuers) and Wilmington Trust Company, as
trustee (the New Indenture Trustee),
dated as of the confirmation of the Plan.  65 
   Ranking of the New UPC Polska Notes  The New UPC Polska Notes
will (i) be unsecured, general obligations of the Issuers, (ii) rank equally in
right of payment with all of the Issuers existing (as of the Effective Date)
and future unsubordinated and unsecured Indebtedness (as defined in the New
Indenture); and (iii) rank senior in right of payment to all of the Issuers
existing (as of the Effective Date) and future Subordinated Indebtedness (as
defined in the New Indenture).  The
Companys operations are conducted through its subsidiaries and, therefore, the
Company depends on the cash flow of its subsidiaries to meet its obligations,
including its obligations under the New UPC Polska Notes.  The New UPC Polska Notes will be effectively
subordinated in right of payment to all indebtedness and other liabilities and
commitments (including trade payables and lease obligations) and preferred
stock of the Companys subsidiaries. 
Any right the Company has to receive assets of any of its subsidiaries
upon the subsidiarys liquidation or reorganization (and the consequent right
of the holders of the New UPC Polska Notes to participate in those assets) are
effectively subordinated to the claims of that subsidiarys creditors and
preferred interest holders, except to the extent that the Company is recognized
as a creditor of the subsidiary, in which case the Companys claims would still
be subordinate in right of payment to any security in the assets of the
subsidiary and any indebtedness of the subsidiary senior to that held by the
Company.  Principal and Maturity  The aggregate principal
amount of the New UPC Polska Notes will be determined as of the confirmation of
the Plan and will be based on the amount of claims proffered in the bankruptcy
court proceedings, but the Company expects the aggregate principal amount of
the New UPC Polska Notes to approximate $61 million.  The scheduled maturity date of the New UPC Polska Notes will be
the third anniversary of their date of issue.  Optional Redemption  The New UPC Polska Notes
will be redeemable, in whole or in part, at par, at any time after their
issuance, at the option of the Issuers.  Covenants  The New UPC Polska Notes
will contain covenants requiring the Issuers to repurchase at par the New UPC
Polska Notes at the option of the holders of the New UPC Polska Notes in the
event of a Change in Control (as defined in the New Indenture) of the
Company.  The New UPC Polska Notes will
also contain covenants restricting or limiting the ability of the Company and
any of its restricted subsidiaries (subject, in each case, to certain
exceptions) to:  (i)incur
indebtedness and issue disqualified capital stock of a restricted subsidiary;  (ii)purchase or
redeem for value any capital stock of the Company or any of its affiliates, pay
dividends or make other distributions on the capital stock of the Company;  (iii)impose
restrictions on the ability of the Companys restricted subsidiaries to pay
dividends, make other distributions of cash or other property or make loans or
guarantees to or for the benefit of the Company;  (iv)make any
principal payment on, repurchase, redeem or defease for value, prior to any
scheduled principal payment, any subordinated indebtedness of the Company;  (v)guarantee
indebtedness of the Company or any of its affiliates;  (vi)engage in
certain transactions between or among the Company and its affiliates;  (vii)create, incur,
assume or suffer to exist any lien on its assets or properties;  (viii)convey, sell,
transfer, assign or otherwise dispose of its property, business or assets;  66 
   (ix)consolidate
with or merge with or into another person or sell, lease, convey or transfer
all or substantially all of its assets; and  (x)engage in
any business other than the Cable/Telecommunications Business (as defined in
the New Indenture), the Entertainment/Programming Business (as defined in the
New Indenture) or the D-DTH Business (as defined in the New Indenture) or any
business or activity reasonably related thereto.  The New Indenture will
also require the Company to (i) maintain its corporate existence; provided
that the Company may convert into a limited liability company organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia or a limited liability company or similar
entity organized under the laws of a member state of the European Union; and
(ii) file with the SEC annual reports, quarterly reports and other documents
which are required to be filed with the SEC pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (U.S. Exchange Act) at or prior to the time the
document is required to be filed regardless whether the Company is then
required by Section 13(a) or 15(d) to file the document.  Default  The New Indenture will
provide for events of default under the New UPC Polska Notes in the event of an
Issuers failure to pay interest (subject to a 30-day grace period) or
principal on the New UPC Polska Notes, an Issuers failure to observe or
perform any covenant or agreement under the New UPC Polska Notes or in the New
Indenture (subject to a 30-day cure period), the bankruptcy, insolvency or
reorganization of an Issuer or any Significant Subsidiary (as defined in the
New Indenture) or a default under other indebtedness of the Company or any of
its Significant Subsidiaries (as defined in the New Indenture) in excess of $5
million.  Necessity for a Co-Issuer  The New UPC Polska Notes will be
issued jointly by the Company and Polska Finance because the Company
anticipates that it may convert the form of its legal entity from a C
corporation to a pass-through limited liability company.  This structure is designed to accommodate
certain institutional investors, principally insurance companies, which are restricted
in their investments in disregarded entities. 
If the Company elects to convert its form of legal entity to one which
is disregarded for U.S. tax purposes, the co-issuance by Polska Finance of the
New UPC Polska Notes is designed to permit these institutional investors to
continue to hold the New UPC Polska Notes after conversion of the Company from
a C-corporation to a limited liability company.  If the Company elects to convert
itself a limited liability company, the Company may, if possible, elect to do
so during the pendency of its Chapter 11 bankruptcy.  If so, the Company would be required to obtain the consent of the
U.S. bankruptcy trustee to the conversion. 
In addition, there are various securities law, indenture, and other
issues that may prevent the Company from converting into an LLC until on or
after the date the Plan is consummated.  To effect the conversion, the
Company anticipates that its sole shareholder, UPC Telecom, would organize a
limited liability company (UPC Polska LLC),
and UPC Telecom would own 100% of the equity interests of UPC Polska LLC if the
conversion occurs during the pendency of the bankruptcy proceedings.  If the conversion occurs after the
consummation of the Plan, then UPC Telecom and Belmarken (and possibly UPC
Operations B.V.) would collectively own 100% of the equity interests of UPC
Polska LLC.  In either case, it is
anticipated that UPC Polska LLC would be a disregarded entity for U.S. tax
purposes.  The Company would merge into
UPC Polska LLC pursuant to applicable state law.  Consequently, all of the assets and all of the liabilities of the
Company would vest in UPC Polska LLC as a matter of law.  67 
   THE
RESTRUCTURING AGREEMENT  The following
is a summary of the significant terms of the Restructuring Agreement.  The summary set forth below does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the detailed provisions of the Restructuring Agreement. The  Restructuring Agreement was attached as
Exhibit 10.1 to a Current Report on Form 8-K filed by the Company with the
SEC on June 20, 2003.  Upon
consummation of the Plan, the Plan and the documents executed and delivered on
the Effective Date and in consummation of the Plan shall be deemed to set forth
the entire agreement and undertakings relating to the subject matter thereof
and shall supersede all prior discussions and documents related thereto,
including the Restructuring Agreement.  The Agreed
Restructuring Process  Under the
Restructuring Agreement, in order to effectuate an overall compromise and
settlement, the Company, the UPC Entities and the Participating Noteholders
agreed that (i) the Belmarken Notes, (ii) the UPC Polska Notes (other than the
Telecom Owned UPC Polska Notes), (iii) the Telecom Owned UPC Polska Notes, (iv)
the Telecom Pari Passu Notes; (v) the Affiliate Indebtedness (vi) the UPC
Polska Equity; (vii) the Telecom Junior Notes and (viii) the General Unsecured
Claims would be cancelled or exchanged for New UPC Polska Stock, New UPC Polska
Notes and cash on the terms set forth in the Restructuring Agreement.  Under the Restructuring Agreement, the
Company agreed to file a voluntary case under Chapter 11 of the Bankruptcy Code
and a plan of reorganization and disclosure statement with the Bankruptcy
Court.  Distribution of
Cash, New UPC Polska Notes and New UPC Polska Stock under the Plan  Consistent
with the terms of the Restructuring Agreement, the Plan sets forth the New UPC
Polska Notes, New UPC Polska Stock and cash to be distributed to:  (i)            the holders of the
UPC Polska Notes (other than the Telecom Owned UPC Polska Notes);  (ii)           the holders of the
Telecom Owned UPC Polska Notes, the Telecom Pari Passu Notes, the Belmarken
Notes and the Affiliate Indebtedness;and  (iii)the
holders of General Unsecured Claims.  Under the Restructuring
Agreement, holders of UPC Polska Notes (other than the Telecom Owned UPC Polska
Notes)  shall receive, on or as soon as
practicable after the Effective Date, (i) the Cash Consideration and (ii)
New UPC Polska Notes in the aggregate principal amount of $60,000,000.00.  The holders of the UPC Polska Notes (other
than the Telecom Owned UPC Polska Notes) shall each receive a pro rata
amount of the Cash Consideration and New UPC Polska Notes based on the amount
of their claims in respect of the UPC Polska Notes (other than the Telecom
Owned UPC Polska Notes).  Under the
Restructuring Agreement, holders of the Telecom Owned UPC Polska Notes, the
Telecom Pari Passu Notes, the Belmarken Notes and Affiliate Indebtedness shall
receive (i) the Other Cash Consideration and (ii) 100% of the New UPC Polska
Stock for the Telecom Owned UPC Polska Notes, the Telecom Pari Passu Notes, the
Belmarken Notes and the Affiliate Indebtedness.  The holders of the Telecom Owned UPC Polska Notes, Telecom Pari
Passu Notes, Belmarken Notes and Affiliate Indebtedness, shall each receive a pro rata
amount of such consideration based on the amount of their claims in respect of
the Telecom Owned UPC Polska Notes, Telecom Pari Passu Notes, Belmarken Notes
and Affiliate Indebtedness.  Under the
Restructuring Agreement, all general unsecured creditors of the Company, other
than holders of the UPC Polska Notes (excluding UPC Telecom), the Belmarken
Notes, the Telecom Owned UPC Polska Notes, the Telecom Pari Passu Notes,
Affiliate Indebtedness and the Telecom Junior Notes (General Unsecured Creditors), shall receive
the amount and type of consideration per $1,000.00 of claim amount of each
undisputed General  68 
   Unsecured Claim of the Company
as set forth in the Restructuring Agreement, which is equal to the amount and
type of consideration per $1,000.00 of claim amount payable to the holders of
UPC Polska Notes (other than the Telecom Owned UPC Polska Notes) pursuant to
the terms of the Restructuring Agreement.  Under the
Restructuring Agreement, holders of the Telecom Junior Notes shall receive no
consideration from the Company in exchange for the Telecom Junior Notes, which
shall be cancelled on the Effective Date by operation of the Plan and shall
thereafter be of no further force and effect. 
Holders of the UPC Polska Equity shall receive no consideration from the
Company in exchange for the UPC Polska Equity, which shall be cancelled on the
Effective Date by operation of the Plan and shall thereafter be of no further
force and effect.  Under the
Restructuring Agreement, the UPC Entities and the Participating Noteholders
agreed to vote in favor of the Plan as part of the Chapter 11 bankruptcy caseand
to take other actions necessary to effectuate the terms of the Restructuring
Agreement.  As of the date
of this Disclosure Statement, the Participating Noteholders represented
approximately 75%of all outstanding UPC Polska Notes held by third parties
that are not affiliates of the Company (approximately 17% of all outstanding
UPC Polska Notes are held by UPC Telecom).  Treatment
of Other Creditors of the Company  Treatment of
Critical Creditors  Under the terms
of the Restructuring Agreement, the Company, the UPC Entities and the
Participating Noteholders acknowledged that certain creditors of the Company
are critical to the operation of the business of the Company as a going concern
(Critical Creditors).  Accordingly, the parties to the
Restructuring Agreement agreed that the Company will use its commercially
reasonable efforts to pay certain of its Critical Creditors in full prior to
the filing date of its Chapter 11 bankruptcy case and to take other actions to
ensure that the obligations of the Company to its Critical Creditors which
remain unpaid on the Effective Date are unimpaired, assumed and reinstated
under the Plan and paid in full in cash on or as soon as practicable after the
Effective Date.  The Company shall,
subject to the approval of the Bankruptcy Court, pay the outstanding claims of
Critical Creditors in full in cash on or as soon as practicable after the
Filing Date.  Treatment of Holders
of Administrative and Other Priority Claims  Under the
Restructuring Agreement, the Plan provides that, on or as soon as practicable
after the Effective Date, each holder of allowed administrative or other
priority claims under the Bankruptcy Code shall receive cash equal to the full
amount of its allowed claim or will otherwise be left unimpaired and reinstated
or shall be accorded such other treatment as the Company and such holder agree
to in writing.  Other
Terms of the Restructuring Agreement  Modifications and Amendments  Under the terms of the
Restructuring Agreement, the Company, may with the written consent of the UPC
Entities and a Majority-in-Interest of the Participating Noteholders, make such
changes and modifications to the Plan and/or the Disclosure Statement as the
Company in its reasonable discretion deems necessary and appropriate, subject
to certain limitations as set forth in the Restructuring Agreement, and to the
extent permissible under the US Bankruptcy Code, in order to have the
Disclosure Statement approved by the US Bankruptcy Court and the Plan confirmed
by the US Bankruptcy Court.  Further,
the Restructuring Agreement may not be amended except by an instrument in
writing signed by each of the Company, the UPC Entities and a
Majority-in-Interest of the Participating Noteholders.  69 
   REORGANIZATION VALUATION ANALYSIS AND
PROJECTED FINANCIAL INFORMATION  Valuation Analysis  A bankruptcy court is
often requested, as part of confirmation of a plan of reorganization, to
determine the enterprise value of a reorganized debtor after giving effect to
the contemplated restructuring as this information is often used to evaluate
the consideration being provided to holders of claims and equity interests
under a plan of reorganization. 
Accordingly, the Company requested that FTI, its financial advisor,
prepare a valuation of the Reorganized Debtor as of May 31, 2003.  The Company has been
advised by FTI with respect to the value of the Reorganized Debtor on a going
concern basis.  The estimated range of
going concern enterprise values of the Company is approximately US$222.6
million to approximately US$246.0 million (with a midpoint value of
approximately $234.3 million) as of May 31, 2003.  The foregoing estimate of
the range of reorganization enterprise values of the Reorganized Debtor relies
on a number of assumptions with respect to economic, market, foreign exchange,
regulatory, industry and general business conditions, the successful
implementation of the Reorganized Debtors restructuring and business plans,
market conditions as of May 31, 2003 continuing through the assumed Effective
Date and the Plan becoming effective in accordance with the estimates and other
assumptions discussed herein.  This valuation analysis
reflects work performed by FTI on the basis of information in respect of the
businesses and assets made available to FTI by the Companys management in June
and July 2003.  In preparing this
valuation analysis, FTI had access to the Companys projected financial
information contained in Annex E of this Disclosure Statement and relied upon
such projected financial information, in part, to formulate the enterprise
value of the Reorganized Debtor presented herein.  In particular, FTI utilized the Companys projected financial
information contained in Annex E of this Disclosure Statement in developing its
discounted cash flow analysis and in deriving appropriate base numbers to which
the selected multiples were applied when it performed the comparable public
company analysis described below.  In
conducting this analysis, FTI: (i) reviewed certain historical financial
information of the Company for recent fiscal years and interim periods; (ii)
reviewed certain internal financial and operating data of the Company,
including financial projections prepared and provided by management relating to
the Companys business and its prospects; (iii) discussed the Companys
operations and future prospects with certain members of senior management of
the Company; (iv) reviewed publicly available financial data and considered the
market value of public companies which FTI deemed generally comparable to the
operating business of the Company; (v) considered certain economic and industry
information relevant to the operating business; and (vi) conducted such other
studies, analyses, inquiries and investigations as it deemed appropriate.  Although FTI conducted a review and analysis
of the Companys business, operating assets and liabilities and business plan,
it assumed and relied on the accuracy and completeness of all financial and
other information furnished to it by the Company, and of publicly available
information.  In addition, FTI did not
independently verify managements projections in connection with FTIs estimates
of the enterprise value, and no independent valuations or appraisals of the
Companys underlying assets were sought or obtained in connection herewith.  Estimates comprising the
range of enterprise values do not purport to be appraisals or necessarily
reflect the values which may be realized if assets of the Company are sold as a
going concern, in liquidation or otherwise.  The estimated range of
enterprise values prepared by FTI represents the range of enterprise values of
the Reorganized Debtor on May 31, 2003. 
These estimates were developed solely for purposes of the formulation of
a plan of reorganization and to estimate the implied recoveries to creditors
thereunder.  These estimates do not
purport to reflect or constitute an appraisal, liquidation value or estimate of
the actual market value that may be realized through the sale of any securities
to be issued pursuant to the Plan, which may be significantly different than
the amounts set forth herein.  The enterprise value of
any operating business is subject to numerous uncertainties and contingencies
which are difficult to predict, and will fluctuate with changes in factors
affecting the financial condition and prospects of the business, the industry
in which the business operates and the economy in general.  As a result, the estimated range of
enterprise values of the Reorganized Debtor set forth herein is not necessarily
indicative of actual outcomes,  70 
   which may be
significantly different from those set forth herein, and none of the Company,
the Reorganized Debtor, FTI or any other person assumes responsibility for
their accuracy.  In addition, the value
of newly-issued securities is subject to uncertainties and contingencies, all
of which are difficult to predict. 
Actual market prices of such securities at issuance will depend upon,
among other things, prevailing conditions in the financial markets, interest
rates, the initial securities holding of prepetition creditors, some of which
may prefer to liquidate their investment rather than hold it on a long-term
basis, and other factors which generally influence the prices of securities.  Valuation
Methodologies  FTI performed a variety
of analyses and considered a variety of factors in preparing the valuation of
the Reorganized Debtor.  In performing
its valuation analysis, FTI considered the valuation of each of UPC Polskas
subsidiaries and combined these valuations to arrive at the valuation for the
Company.  FTI primarily relied on three
generally accepted methodologies: discounted cash flow analysis, comparable
public company analysis, and the asset approach.  FTI made judgments as to the relative significance of each
analysis and the indicated value range reflects the combined conclusions of each
analysis.  Discounted Cash Flow Analysis  The discounted cash flow
(DCF) valuation
methodology is a forward-looking approach that relates the value of an asset
or business to the present value of expected unlevered after-tax cash flows
accruing to the providers of interest-bearing debt and equity.  The expected future cash flows are
discounted to May 31, 2003 at an estimated rate of return which represents the
risk-adjusted, weighted average cost of capital of the business.  This approach relies on
the Companys ability to project future cash flows with some degree of
accuracy.  The Companys projections
reflect assumptions made by the Companys management concerning anticipated
results, and the assumptions and judgments used in the projections may or may
not ultimately prove correct; therefore, no assurance can be provided that the
projections are attainable or correct. 
FTI does not and cannot make any representations or warranties as to the
accuracy or completeness of the Companys projections.  Comparable Public Company Analysis  The comparable public
company analysis estimates the value of a business based on a comparison with
the financial statistics of public companies in a similar line of
business.  It establishes valuation
benchmarks by calculating the enterprise values of comparable companies, as
determined by the traded value of their securities, as multiples of common
operating statistics such as revenues and earnings before interest, taxes,
depreciation and amortization (EBITDA), and then applying those multiples to the
operating statistics of the subject company. 
The analysis involves a detailed multi-year comparison of each companys
income statements, balance sheets and cash flow statements.  In addition, each companys performance,
profitability, margins, leverage and business trends are also examined.  A key factor to this
approach is the selection of companies with similar operational and financial
characteristics to the target company. 
Relevant criteria for selecting comparable companies include, among
other things, similarity of lines of business, business risks, strategy and
growth prospects, maturity of business, cost structure, market presence, size
and scale of operations. The selection of truly comparable companies is often
difficult and subject to numerous judgments.  Asset Approach  The asset approach
estimates the value of a business based on the value of its underlying
assets.  It is often used when the
business being valued is not an operating business or where discounted cash
flow or comparable public company analyses may not readily determine its value.  The asset approach
depends upon the estimated values of the businesss underlying assets, which
are often based upon certain assumptions and subject to a significant amount of
judgment.  To the extent that the businesss
assets are, in whole or in part, comprised of equity interests in subsidiaries,
the value of such interests are often  71 
   subject to the
same uncertainties described for the discounted cash flow and comparable public
company analyses in the preceding paragraphs.  THE RANGE OF ENTERPRISE
VALUES DETERMINED BY FTI REPRESENTS ESTIMATED VALUES OF THE REORGANIZED DEBTOR
ONLY FOR PURPOSES OF CALCULATING RECOVERY TO CREDITORS UNDER THE PLAN, AND DO
NOT NECESSARILY REFLECT VALUES THAT COULD BE ATTAINED IN A PUBLIC OR PRIVATE
SALE.  Projected
Financial Information  As described in Chapter
11 Case and the Plan of Reorganization  Voting on, and Confirmation of, The
PlanFeasibility, in order for the Plan to be confirmed, the Bankruptcy Court
must find that the Plan is feasible as set forth in Section 1129(a)(11) of
the Bankruptcy Code.  Accordingly, in
order to demonstrate that the Plan is feasible, to assist in the preparation of
a valuation analysis and to assist each Holder of a Claim against, or Equity
Interest in, the Company in determining whether to accept or reject the Plan,
the Companys management has prepared the prospective financial information and
other financial projections set forth in Annex E of this Disclosure Statement
(the Projections).  The Projections are based
upon the Companys business plan and should be read in conjunction with (i) the
assumptions, qualifications and footnotes to the tables containing the
Projections, (ii) the historical consolidated financial information (including
the notes and schedules thereto) and the other information set forth in the
Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2002, attached hereto as Annex B, and the Companys Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 2003, attached hereto as Annex C
and (iii) the information contained under the heading Risk Factors of this
Disclosure Statement.  The management of the
Company believes that the Projections were prepared in good faith using
assumptions that are reasonable and applied in a manner consistent with past
practice.  Most of the assumptions used
in the Projections about the operations of the Reorganized Debtor after the
assumed Effective Date of December 31, 2003 are based, in part, on economic,
competitive, and general business conditions prevailing at the time the
Projections were prepared.  While, as of
the date hereof, such conditions have not materially changed, any future
changes in these conditions may materially impact the Companys ability to
achieve the Projections.  The Projections, while
presented with numerical specificity, are necessarily based on a variety of
estimates and assumptions which, though considered reasonable by the Companys
management when taken as a whole, may not be realized, and are inherently
subject to significant known and unknown business, economic and competitive
uncertainties and contingencies, including, among others, those summarized
herein, many of which are beyond the Companys control and which may cause the
Companys actual financial condition, results or performance to be materially
different from those projected. 
Consequently, this Disclosure Statement and the Projections contained
herein should not be regarded as a representation by the Company or any other
person as to the accuracy of the Projections or to the Companys ability to
achieve the projected results or performance. 
In addition, there can be no assurance that the assumptions made by the Companys
management in preparing the Projections will prove accurate.  Some assumptions inevitably will not
materialize.  Further, events and
circumstances occurring subsequent to the date on which the Projections were
prepared may be different from those assumed or, alternatively, may have been
unanticipated, and the occurrence of these events may affect the Companys
financial results in a material and possibly adverse manner.  The Projections, therefore, are not fact and
should not be relied upon as a guaranty or other assurance of the actual
results that will occur.  The inclusion
of the Projections in this Disclosure Statement should not be regarded as an
indication that the Company or any of its affiliates, representatives or
advisors consider the Projections to be a reliable prediction of future events,
and the Projections should not be relied upon as such.  Readers of this Disclosure Statement are
cautioned not to place undue reliance on the Projections.  The Companys management
has prepared the Projections solely for purposes of complying with the
requirements of the Bankruptcy Code. 
The Projections were not prepared with a view toward compliance with the
published guidelines of the SEC, the American Institute of Certified Public
Accountants, or any other regulatory or professional agency or body, generally
accepted accounting principles or consistency with the Companys historical
consolidated financial statements. 
Neither Arthur Andersen, the Companys predecessor independent auditors,
nor KPMG, the Companys current independent auditors, has compiled or examined
the Projections or performed any  72 
   procedures with
respect to the Projections, nor have they expressed any opinion or any other
form of assurance on the Projections or the achievability of the results or
performance indicated by the Projections, and assume no responsibility for, and
disclaim any association with, the Projections.  FTI, the Companys financial advisors, has not compiled or
expressed any opinion or any other form of assurance on the Projections or the
achievability of the results or performance indicated by the Projections, and
assume no responsibility for, and disclaim any association with, the
Projections.  The Companys management
does not, as a matter of course, publicly disclose financial projections of the
Companys expected future financial condition, results of operations or cash
flows.  Accordingly, the Company does
not intend, and disclaims any obligation, to (i) furnish updated or revised
projections to reflect circumstances existing after the date of this Disclosure
Statement or to reflect the occurrence of future events (even in the event that
any or all of the assumptions underlying the Projections are shown to be in
error) to Holders of the Claims against, and Equity Interests in, the Company
prior to the Effective Date or to holders of the shares of New UPC Polska Stock
or New UPC Polska Notes or any other party after such Effective Date, (ii)
include such updated or revised information in any documents that may be
required to be filed with the SEC or (iii) otherwise make such updated or
revised information publicly available.  73 
   LIQUIDATION
ANALYSIS  Best Interests of
Creditors Test  As described in Chapter
11 Case and the Plan of Reorganization  Voting on, and Confirmation of, The
Plan The Best Interests Test, above, in order to confirm a Chapter 11 plan of
reorganization, the Bankruptcy Code requires that, among other things, each
holder of a claim or equity interest in an impaired class either:  accept
the plan; or  receive
or retain under the plan cash or property of a value, as of the effective date
of the plan, that is not less than the value such holder would receive or
retain if the debtor were liquidated under Chapter 7 of the Bankruptcy Code
(the Best Interests Test).  To calculate what holders
of each impaired class of claims and equity interests would receive in a
Chapter 7 liquidation, the Bankruptcy Court must determine the liquidation
value of the debtor, which would consist primarily of the net proceeds from a
forced sale of the debtors assets by a Chapter 7 trustee.  The proceeds from a Chapter 7 liquidation
that would be available to all unsecured claims would be reduced or diluted by:  secured
claims to the extent of the value of the collateral securing such claims;  the
costs and expenses of liquidation, including the costs incurred to sell the
assets;  the
administrative expenses of the Chapter 7 case, including the fees of a trustee,
counsel, financial advisors, accountants and other professionals;  additional
contingent claims and losses arising during the operation of the debtors
business in Chapter 7, including potential breaches of contracts;  priority
claims arising in the Chapter 7 and the prior Chapter 11 case; and  administrative
expenses and claims in the prior Chapter 11 case, including the fees of
counsel, financial advisors, accountants and other professionals.  In applying the Best
Interests Test, the Company believes that the most likely outcome of a
liquidation proceeding under Chapter 7 would be the application of the rule of
absolute priority of distributions under Bankruptcy Code Section 726.  Under that rule, no junior creditor receives
any distribution until all senior creditors are paid in full, and no equity
holder receives any distribution until all creditors are paid in full with
interest.  To determine if the Plan
satisfies the Best Interests Test as to each Holder of an Impaired Claim or
Impaired Equity Interest, the present value of such Holders pro rata share of
the net liquidation proceeds available for distribution to unsecured creditors
must be compared with the value of the property offered to such Holder under
the Plan.  If present values offered to
each such Holder under the Plan are found by the Bankruptcy Court to equal or
exceed what each such Holder would realize in a Chapter 7 liquidation, the Plan
will be deemed to satisfy the Best Interests test.  Liquidation Analysis  The Company believes that
the confirmation of the Plan will provide each Holder of an Impaired Claim or
Impaired Equity Interest with as least as much recovery as it would receive if
the Company were liquidated under Chapter 7. 
In addition, in the Companys view, a Chapter 7 liquidation involves
additional uncertainty not fully reflected in the Liquidation Analysis with
respect both to the timing and amount of payments to each Holder of an Impaired
Claim or Impaired Equity Interest.  The
Company believes that the Plan provides as much certainty as is possible
regarding these matters.  74 
   The Liquidation Analysis,
as set forth in Annex F, is based upon an orderly Chapter 7 liquidation of the
Company.  This analysis projects a low
and high recovery range based upon the Companys May 31, 2003 balance sheet.  The Liquidation Analysis
is provided solely to disclose to Holders of Claims and Equity Interests the
effects of a hypothetical Chapter 7 liquidation, subject to the assumptions set
forth therein.  There can be no
assurance that those assumptions would prove accurate if a Chapter 7
liquidation were to occur or that the analysis will be accepted by the
Bankruptcy Court.  75 
   SECURITIES
LAW CONSIDERATIONS  The
Company and Polska Finance are relying on Section 1145 of the Bankruptcy Code
to exempt the issuance of the New UPC Polska Notes and New UPC Polska Stock
from the registration requirements of the U.S. Securities Act (and of any state
securities or blue sky laws). Section 1145 exempts from registration the sale
of the securities of a debtor, a successor to a debtor or an affiliate of a
debtor (such as a plan co-proponent) under a Chapter 11 plan if such securities
are offered or sold in exchange for a claim against, an equity interest in, or
a claim for an administrative expense in a case concerning, such debtor. In
reliance upon this exemption, the New UPC Polska Notes and the New UPC Polska
Stock generally will be exempt from the registration requirements of the U.S.
Securities Act. Accordingly, recipients will be able to resell the New UPC
Polska Notes and New UPC Polska Stock without registration under the U.S.
Securities Act or other federal securities laws, unless the recipient is an
underwriter with respect to such securities, within the meaning of Section
1145(b) of the Bankruptcy Code.  Section
1145(b) of the Bankruptcy Code defines an underwriter for purposes of the
U.S. Securities Act as one who  (i)purchases a
claim, equity interest or administrative expense claim with a view todistribution
ofany security
to be received in exchange for the claim or equityinterest,  (ii)offers to
sell securities issued under a plan for the holders of such securities,  (iii)offers to
buy securities issued under a plan from persons receiving such securities, if
the offer to buy is made with a view to distribution, or  (iv)is a control
person of the issuer of the securities.  Notwithstanding
the foregoing, statutory underwriters may be able to sell securities without
registration pursuant to the resale limitations of Rule 144 under the U.S.
Securities Act, which, in effect, permits the resale of securities received by
statutory underwriters pursuant to a Chapter 11 plan, subject to applicable
volume limitations, notice and manner of sale requirements, and certain other
conditions. Parties who believe they may be statutory underwriters as defined
in Section 1145 of the Bankruptcy Code are advised to consult with their own
counsel as to the availability of the exemption provided by Rule 144 under the
U.S. Securities Act.  Because
of the complex, subjective nature of the question of whether a particular
holder may be an underwriter, the Company does not make any representation
concerning the ability of any person to dispose of the New UPC Polska Notes and
New UPC Polska Stock to be distributed under the Plan.  TAX
ANALYSIS  Certain U.S. Federal Income Tax Consequences of the
Plan  The following discussion summarizes
certain U.S. federal income tax consequences of implementation of the
Restructuring and the Plan to UPC Polska and to the holders of Allowed UPC
Polska Note Claims (other than Allowed Telecom Owned UPC Polska Note Claims).  This summary is based on the Internal Revenue
Code of 1986, as amended (the Tax Code), Treasury Regulations promulgated
thereunder, judicial decisions, and published administrative rules and
pronouncements of the Internal Revenue Service (IRS) as in effect and available on the
date hereof.  Changes in such rules or
new interpretations thereof may have retroactive effect and could significantly
affect the federal income tax consequences described below.  The federal income tax consequences of the Restructuring
and the Plan (hereinafter in this Tax Analysis section the Restructuring and
the Plan are referred to collectively as the Plan) are complex and are
subject to significant uncertainties. 
UPC Polska has not requested a ruling from the IRS or an opinion of
counsel with respect  76 
   to any of the tax aspects of the Plan. 
Thus, no assurance can be given as to the interpretation that the IRS
will adopt.  In addition, this summary
does not address foreign, state, or local tax consequences of the Plan; nor,
except as otherwise noted, does it purport to address the U.S. federal income
tax consequences of the Plan to special classes of taxpayers (such as foreign
taxpayers, broker dealers, banks, mutual funds, insurance companies, financial
institutions, small business investment companies, regulated investment
companies, tax exempt organizations, and investors in pass-through entities).  Accordingly, the following summary of certain U.S. federal income tax
consequences is for informational purposes only.  In particular, it is not a substitute for careful tax planning
and advice based upon the individual circumstances pertaining to a holder of an
Allowed UPC Polska Note Claim.  All
holders of Allowed UPC Polska Note Claims are urged to consult their own tax
advisors for the federal, state, local and other tax consequences applicable
under the Plan.  Consequences to UPC Polska  Effect of Expected Indirect Change of Ownership  UPC Polska files a consolidated U.S. federal
income tax return, which takes into account the operations of both UPC Polska
and its U.S. subsidiaries.  UPC Polska
expects to report consolidated net operating loss (NOL) carryforwards for federal income tax
purposes of approximately $130 million as of December 31, 2002.  UPC Polska expects to utilize a portion of
these losses to offset any taxable income during the taxable year ended
December 31, 2003.  UPC Polskas NOLs and anticipated losses
could normally be offset against any other taxable income that UPC Polska might
realize in connection with the transactions contemplated in, or related to, the
Plan.  It is expected, however, that the
ownership of UPC will change for U.S. federal income tax purposes as a result
of the pending bankruptcy reorganization of UPC.  This ownership change, which is expected to occur during 2003,
will indirectly change the ownership of UPC Polska for U.S. federal income tax
purposes.  The indirect change of
ownership of UPC Polska (UPC Polska will not itself undergo a direct ownership
change under the Plan), when it occurs, will likely have the effect under
section 382 of the Tax Code of severely limiting or denying the use of the NOL
carryforwards of UPC Polska.  If UPC
Polska is insolvent as of the date of the ownership change, this limitation
would effectively prevent UPC Polska from carrying forward any of its
NOLs.  In addition, if, immediately
before the ownership change occurs, UPC Polska has a net unrealized built-in
loss (i.e., if its aggregate tax basis in its assets exceeds the fair market
value of its assets by more than a threshold amount), UPC Polska will also be
subject to the ownership change rules with respect to such built-in loss, and
UPC Polska will effectively be unable to utilize recognized built-in losses,
attributable to UPC Polskas subsequent disposition of any of its assets held
immediately before the ownership change of UPC that had built-in losses on the
date of such ownership change, against any future taxable income it might have
to the extent such losses are recognized during the five-year period beginning
on the date of the ownership change. 
However, (i) any NOLs incurred by, or allocable to, UPC Polska after the
date of the ownership change, and (ii) any recognized built-in loss attributable
to the disposition by UPC Polska of any asset held by it immediately before the
UPC ownership change, where such loss exceeds the excess of the adjusted tax
basis of such asset on the date of the ownership change over the fawir market
value of such asset on such date, would be available without such limitation.  Effect of Conversions to Limited Liability Companies  On July 3, 2003, UPC Polskas wholly-owned
U.S. subsidiaries, @Entertainment and PCI, were each merged into new Delaware
limited liability companies (LLCs) formed and owned by UPC Polska.  As both such subsidiaries were solvent at
the time of their conversions, the conversions should be treated as tax-free
subsidiary liquidations into UPC Polska for federal income tax purposes.  Because UPC Polska is deemed to have no U.S.
subsidiaries following the liquidations, the UPC Polska consolidated return
group will cease to exist for tax purposes at the end of UPCs taxable year in
which such conversions occurred, although UPC Polskas taxable year did not end
on July 3, 2003.  77 
   The Plan also contemplates a conversion of
UPC Polska into a disregarded entity for U.S. federal income tax purposes, to
be referred to herein as UPC Polska LLC.  Such
conversion is planned to occur either during the pendency of UPC Polskas
Chapter 11 bankruptcy or soon thereafter (but in any event during 2003, if
possible).  It is intended that this
conversion, as with the conversion of the aforementioned subsidiaries, will be
accomplished by merging UPC Polska into a new Delaware LLC, to be formed and
owned by UPC Telecom if effected during the pendency of the Chapter 11
bankruptcy, or to be owned by UPC Telecom and Belmarken (and possibly UPC
Operations B.V.) collectively if effected thereafter.  Although UPC Polska will continue its existence as a Delaware LLC
following the conversion, for U.S. federal income tax purposes the conversion
will be treated as if UPC Polska had distributed all of its assets, subject to
all of its liabilities, to its sole shareholder or shareholders, as the case
may be, and dissolved, and UPC Polskas taxable year will end on the date of
the conversion and deemed dissolution. 
As UPC Telecom, Belmarken, and UPC Operations B.V. are disregarded
entities for U.S. federal income tax purposes, UPC is deemed to be UPC Polskas
sole shareholder for these purposes, and UPC Polska will therefore be deemed to
be liquidated into UPC.  To the extent that, subsequent to the
conversion and deemed liquidation of UPC Polska, neither UPC Polska LLC nor UPC
(including disregarded entities owned by UPC) has income from the conduct of a
U.S. trade or business or other U.S.-source income, there should be no U.S.
federal income tax liability to UPC Polska LLC for periods subsequent to the
taxable year ending on the date of UPC Polskas deemed liquidation.  Effect of Debt Cancellation  The Tax Code provides that a debtor in a
bankruptcy case must reduce certain of its tax attributes  such as NOL
carryforwards, current year NOLs, tax credits and tax basis in assets  on a
dollar-for-dollar basis on account of any cancellation of debt income (COD) in connection
with the bankruptcy that would otherwise have given rise to gross income.  For UPC Polska, if the Plan is consummated,
in connection with the discharge of all Allowed UPC Polska Note Claims
(excluding Telecom Owned UPC Polska Note Claims, which as discussed below
should not give rise to COD income), COD income realized will be the amount by
which (i) the sum of the adjusted issue prices of those Allowed Claims that are
subject to the original issue discount (OID) rules of the Tax Code, and, in general, the
outstanding amount of those Allowed Claims that are not subject to the OID
rules, exceeds (ii) the sum of (a) the amount of Cash paid by the Company in
satisfaction of Allowed Claims, (b) the issue price of the New UPC Polska
Notes, and (c) the fair market value of the New UPC Polska Stock and other
consideration, if any, issued by the Company in satisfaction of Allowed Claims
given in exchange therefor, subject to certain statutory or judicial exceptions
that can apply to limit the amount of COD (such as where the payment of the
cancelled debt would have given rise to a tax deduction).  Nothwithstanding the preceding sentence,
there may be no COD income realized in connection with the discharge of the UPC
Telecom Note Claims and any Claims held by UPC Telecom, since the discharge of
such Claims, to the extent not satisfied by the receipt of New UPC Polska Stock
or other consideration, may be treated as tax-free shareholder contributions to
UPC Polskas capital, although such treatment is not entirely free from
doubt.  To the extent that the amount of
COD exceeds the tax attributes available for reduction, the remaining COD
should result neither in U.S. federal income tax nor in any other U.S. federal
tax consequences for UPC Polska.  Any reduction in tax attributes does not
occur until the end of the taxable year or, in the case of asset basis
reduction, the first day of the taxable year following the taxable year in
which the COD is incurred.  The
reduction is generally carried out in a priority sequence spelled out in the
Tax Code, beginning with the debtors NOLs, and eventually possibly leading to
a reduction in the debtors tax basis in its property.  However, if advantageous, a corporate
taxpayer may elect to reduce the basis of depreciable property prior to any
reduction in its NOLs or other tax attributes. 
Implementation of the Plan will result in COD adjustments to UPC
Polskas tax attributes under the rules described above.  In the absence of an event that causes the
taxable year to end sooner, certain specified tax attributes, including NOLs
and NOL carryforwards, would be adjusted at the end of 2003 (after their
application in determining tax liability for the 2003 taxable year), and UPC
Polskas basis in its assets would be adjusted at the beginning of 2004.  As noted above, these adjustments would
generally have continuing U.S. federal income tax relevance with respect to the
future utilization of the NOLs only if UPC Polska exists as a taxable U.S.
entity on and subsequent to those dates. 
Because it is anticipated that the conversion of UPC Polska to an LLC
will occur during 2003, none of  78 
   the adjustments should adversely affect UPC Polska during the period in
which it is a U.S. taxable entity.  If,
however, UPC Polska is not converted to an LLC by December 31, 2003, the
attribute reduction rules described above would likely cause UPC Polska to
recognize substantial taxable gains upon conversion to an LLC.  Such gain would be equal to the excess of
the fair market value of the assets of UPC Polska on the date the LLC
conversion occurs over UPC Polskas adjusted tax basis in its assets (after
application of the attribute reduction rules described above).  Effect of Sequence of Events  The tax consequences of UPC Polskas deemed
liquidation (when it converts to an LLC) and the restructuring of UPC Polskas
debt will depend on whether UPC Polskas conversion to an LLC is considered,
for U.S. federal income tax purposes, to occur prior to, or after, the
Restructuring of the debt, and also on the date, in relation to those two
events, that the change of ownership of UPC occurs.  The sequence of the events could result in important differences
in terms of UPC Polskas ability to use its NOLs and any built-in losses
against any other income it might realize subsequent to the ownership change
that is otherwise subject to U.S. federal income tax.  These sequences are discussed below.  However, as a general conclusion, so long as the conversion to an
LLC occurs before December 31, 2003, there should be no adverse U.S. federal
income tax consequences to UPC Polska.  1.Tax Consequences to UPC Polska if
the Conversion to an LLC is Considered to Occur Prior to the Debt Restructuring  The Plan includes the
restructuring of the debt held by UPC Telecom. 
As discussed above, UPC Polska may convert to an LLC during the pendency
of the Chapter 11 bankruptcy while it is still wholly owned by UPC
Telecom.  This conversion may occur
prior to the restructuring of the debt, which will occur on or as soon as
practicable after the Effective Date pursuant to the Plan.  As a result, if UPC Polska is deemed to be
insolvent at the time of the LLC conversion, the liquidation would be taxable
rather than tax-free to UPC Polska in the following manner.  In such a taxable liquidation, UPC Polska
would be deemed to transfer its assets to its deemed shareholder (i.e., UPC,
since UPC Telecom is a disregarded entity for U.S. federal income tax purposes)
in exchange for the debt obligations held by UPC Telecom.  UPC Polska would recognize losses if the
fair market value of the assets transferred in the deemed liquidation were less
than UPC Polskas basis in such assets. 
Conversely, UPC Polska would recognize gains if the fair market value of
the assets transferred in the deemed liquidation were to exceed UPC Polskas
basis in such assets.  Similarly, UPC
Polska may have interest expense for any accrued but unpaid interest expense on
the debt owed to UPC Telecom that UPC Polska is deemed to have paid.  If the conversion occurs during 2003, UPC
Polska believes that it should realize losses, not gains, on the deemed
liquidation.  Additionally, based upon prior
rulings in which the IRS disregards parent companies transactions with
subsidiaries immediately prior to the liquidation (or sale) of the
subsidiaries, even if the debt restructuring occurs prior to the conversion
transaction, the IRS may apply the step transaction doctrine (which allows the
IRS to disregard certain steps or to step together certain transactions that
are in substance part of a single transaction) and treat the restructuring of
the debt not as a separate prior event but as an integrated transaction with
the liquidation.  However, even if the
IRS were successful in applying the step transaction doctrine to integrate the
LLC conversion with the debt restructuring, the consequences to UPC Polska
would be the same as in the case where the conversion occurred sequentially in
time before the debt restructuring, if, in either case, UPC Polska is deemed to
be insolvent at the time of the deemed liquidation.  If the IRS were successful in applying the step transaction
doctrine in this context, the LLC conversion would remain a taxable event.  However, as noted above, if the
stepped-together conversion and debt restructuring take place in 2003, UPC
Polska believes that it should not recognize gain.  Although NOLs can generally be
used to offset liquidation gains of the type described, if the indirect change
of ownership of UPC Polska occurs, or is deemed to occur (pursuant to a
sequence reordering by the IRS in connection with a successful application of
the step transaction doctrine), before the liquidation, UPC Polska might not be
able to use its pre-change NOLs to offset any net gains that it realizes on the
liquidation (as noted, UPC Polska believes there would be no net gains if the
liquidation occurs during 2003), because such NOLs would have been effectively
eliminated or severely reduced as a result of the ownership change rules
described above (although such NOLs could be used to offset any liquidation
gain allocated to the pre-change portion of UPC Polskas current tax
year).  Similarly, although UPC Polska
may normally be allowed to claim an interest deduction for property  79 
   distributed in exchange for accrued interest
expense, such accrued interest expense is considered to be a built-in loss
recognized at the time of the deemed liquidation, and thus an interest expense
(to the extent it relates to interest that accrued on or before the date of the
ownership change of UPC) could not be claimed by UPC Polska if the ownership
change were to precede the liquidation and UPC Polska has a net unrealized
built-in loss in excess of a threshold amount.  If the fair market value of the
assets distributed in the deemed liquidation were less than the adjusted issue
price of the debt surrendered by UPC Telecom, UPC Polska generally would not
realize COD income.  Instead, the
difference may be treated as a tax-free shareholder contribution to capital, although
such treatment is not free from doubt. 
However, even if such exchange results in additional COD realized by UPC
Polska, if UPC Polska is still in bankruptcy at the time of the deemed
liquidation, it should be eligible for the exception to COD income recognition
discussed above and thus should have no recognized COD income.  2.Tax Consequences to UPC Polska if
the Conversion to an LLC Is Considered to Occur Subsequent to the Debt
Restructuring  If the restructuring of the UPC
Telecom debt occurs prior to the time UPC Polska converts to an LLC, and the
IRS does not restructure the transaction under the step transaction doctrine in
the manner described in section 1, above, as a result of the restructuring UPC
Polska would likely be considered solvent at the time of the deemed
liquidation.  If a solvent subsidiary
liquidates into its parent company, generally neither the liquidating company
nor the parent company recognizes gains or losses, provided that the parent
owns at least 80 percent of the stock (by vote and value) of such subsidiary.  However, these general rules do not apply
with respect to outbound liquidations in which a U.S. company liquidates into
a foreign parent company.  As discussed
above, UPC Polska is wholly owned by UPC Telecom, which, in turn, is wholly
owned by UPC.  As a result of the
consummation of the Plan, UPC Polska will be owned by UPC Telecom and Belmarken
(and possibly UPC Operations B.V.) collectively.  Since UPC Telecom, Belmarken, and UPC Operations B.V. are
disregarded entities for U.S. federal income tax purposes, the conversion of
UPC Polska into an LLC will be treated as a liquidation directly into UPC,
regardless of whether the conversion is effected during or subsequent to the
pendency of UPC Polskas Chapter 11 bankruptcy proceedings.  UPC is a foreign company.  Accordingly, UPC Polska would be required to
recognize any gains on any assets on which fair market value exceeds UPC
Polskas basis.  Generally, losses may
be recognized to the extent that the basis of assets of the liquidating U.S.
subsidiary of a foreign parent exceeds the fair market value of the assets, but
any aggregate ordinary and capital loss recognized on liquidation cannot exceed
the amount of aggregate ordinary and capital gain (respectively) recognized in
the liquidation.  If the conversion to
an LLC is considered to occur subsequent to the debt restructuring and during
2003 (i.e., before the COD basis adjustment becomes effective), UPC Polska
believes that it should not realize taxable gains on the deemed liquidation.  Moreover, even if there were any outbound
liquidation gains, if the conversion to an LLC occurs before the expected UPC
ownership change, UPC Polska may be able to use its NOL carryforwards to offset
such gains, and if the LLC conversion were to occur in 2003 but after the UPC
ownership change, UPC Polska may still be able to use a portion of such NOLs to
offset such gains.  Note again that because any
downward basis adjustments would not take effect until 2004, it is important
that the liquidation take place during 2003, and, if possible, before the
change of ownership of UPC, since managements assumptions as to the likely
gains and losses are based upon the basis of the assets before the COD
adjustments become effective.  Consequences toHolders of
Certain Claims  Restructuring of the Debt  The U.S. federal
income tax consequences of the Plan to holders of Allowed UPC Polska Note
Claims (other than Allowed Telecom Owned UPC Polska Note Claims) will generally
depend, in part, on whether such holders Claims, and whether the New UPC
Polska Notes, constitute securities for U.S. federal income tax
purposes.  Note, in this regard, that
even if both the UPC Polska Note Claims and the New UPC Polska Notes were to
constitute securities, if the UPC Polska conversion to an LLC is treated by
the IRS as integrated with the exchange of debt, the exchange would be taxable
in the manner described in the section  80 
   below entitled
Tax Consequences if Either the Allowed UPC Polska Note Claims or the New UPC
Polska Notes Are Not Securities.  The term security is not defined in the Tax
Code or in the Treasury Regulations issued thereunder and has not been clearly
defined by judicial decisions.  The
determination of whether a particular debt instrument constitutes a security
depends upon a facts and circumstances analysis of the instrument.  One of the most significant factors
considered in determining whether a particular debt instrument is a security is
its original term.  In general, debt
instruments issued with a weighted average maturity at issuance of five years
or less (e.g., revolving credit
obligations) do not constitute securities, whereas debt instruments with a
weighted average maturity of ten years or more constitute securities.  UPC Polska believes that the UPC Polska Note
Claims (each having an original ten-year maturity) may be classified as
securities of UPC Polska for federal income tax purposes.  Conversely, UPC Polska believes the New UPC
Polska Notes - which will have a maturity of three years  probably will not constitute securities for such
purposes.  However, as this is a facts
and circumstances determination, and as other factors besides maturity are
relevant to the analysis, each holder is urged to consult its tax advisor
regarding classification of such holders New UPC Polska Notes as securities
or non-securities for federal income tax purposes.  1.Tax Consequences if Either the Allowed UPC Polska Note
Claims or the New UPC Polska Notes Are Not Securities  The receipt of New UPC Polska Notes and cash in satisfaction of Allowed UPC
Polska Note Claims (other than Allowed Telecom Owned UPC Polska Note Claims)
will be a fully taxable transaction if either
such Claims or
the New UPC Polska Notes do notconstitute securities.  In
general, holders of such Allowed UPC Polska Note Claims (other than Allowed
Telecom Owned UPC Polska Note Claims) in  such circumstances will recognize gain or loss in an amount equal to the
difference between (i) the sum of (x)
the issue price of any New UPC Polska Notes (as discussed below) and (y) the amount of cash received in
satisfaction of its Claim, and (ii) such holders adjusted tax basis in its
Claim other than, in each case, but subject to the succeeding sentence, any
amount attributable to any Claim for accrued OID not previously included in
income.For a discussion of
the tax consequences of any Claims for accrued OID, see the discussion titled
Distributions in Discharge of Accrued OID, below.  Any gain as described above on the exchange
of the UPC Polska Note Claims for the New UPC Polska Notes may be subject to
the installment sale rules, which may result in the deferral of gain, if any,
recognized by holders on the exchange. 
However, installment treatment of the gain would be available only if
both the UPC Polska Note Claims and the New UPC Polska Notes exchanged therefor
are not securities and are not publicly traded in an established securities
market (as defined and discussed below).  Where gain or loss is recognized by a holder,
the character of such gain or loss as long-term or short-term capital gain or
loss or as ordinary income or loss will be determined by a number of factors,
including the tax status of the holder; whether the Claim constitutes a capital
asset in the hands of the holder and how long it has been held; whether the
Claim was acquired at a market discount; and whether and to what extent the
holder had previously claimed a bad debt deduction.  A holder of a Claim which purchased its Claim from a prior holder
at a market discount may be subject to the market discount rules of the Tax
Code.  Under those rules, assuming that
the holder has made no election to amortize the market discount into income on
a current basis with respect to any market discount instrument, any gain
recognized on the exchange of its Claim (subject to a de minimis rule)
generally would be characterized as ordinary income to the extent of the
accrued market discount on such Claim as of the date of the exchange.  A holders tax basis in New UPC Polska Notes
received will equal the issue price of such notes.  The holding period for New UPC Polska Notes generally will begin
the day following the issuance of such stock or notes.  Note that, if either the UPC Polska Note Claims
or the New UPC Polska Notes are not securities, a holders tax basis in the New
UPC Polska Notes will be the issue price rather than its basis in its UPC
Polska Note Claims, and its holding period for the New UPC Polska Notes will
start after the issuance of the New UPC Polska Notes and will not include its
holding period for its UPC Polska Note Claims.  81 
   For a discussion of certain of the U.S.
federal income tax consequences of the ownership and disposition of the New UPC
Polska Notes, see the relevant sections below.  2.Tax Consequences if Both Allowed UPC Polska Note Claims and
the New UPC Polska Notes Are Securities  In general, if both the UPC Polska Note
Claims and the New UPC Polska Notes constitute securities for U.S. federal
income tax purposes, then the exchange of notes will constitute a
recapitalization, and holders of Allowed UPC Polska Note Claims (other than
Allowed Telecom Owned UPC Polska Note Claims) may recognize any gain realized,
but not any loss realized, upon the receipt of New UPC Polska Notes and
cash.  In general, each holder may
realize gain as a result of the exchange in an amount equal to the excess, if
any, of (i) the sum of (x) the issue price of any New UPC Polska Notes received
and (y) the amount of cash received in satisfaction of its Claim, over (ii)
such holders adjusted tax basis in its Claim other than, in each case, any
amount attributable to any Claim for accrued but unpaid OID, subject to the
discussion entitled Distributions in Discharge of Accrued OID, below.  Ordinarily, if any gain is realized, the
amount of gain that would be recognized for U.S. federal income tax purposes
would not exceed (i) the fair market value of the excess, if any, of (x)the principal amount of New UPC Polska
Notes received over (y)the
principal amount of the UPC Polska Notes surrendered, and (ii) the amount of
cash received in satisfaction of its Claim other than, in each case, any Claim
for accrued but unpaid OID, subject to the discussion entitled Distributions
in Discharge of Accrued OID, below. 
However, since for each holder the principal amount of the New UPC
Polska Notes received will be less than the principal amount of the UPC Polska
Note Claims surrendered, the amount of any gain recognized should not exceed
the cash received.  See the discussion
in the section titled Distributions in Discharge of Accrued OID, below, for
the treatment of accrued but unpaid interest.  As noted above in subsection 1, where gain is
recognized by a holder, the character of such gain as long-term or short-term
capital gain or as ordinary income will be determined by a number of factors.  If the exchange of UPC Polska Note Claims for
(among other consideration) New UPC Polska Notes constitutes a recapitalization
for federal income tax purposes, a holders aggregate tax basis in the New UPC
Polska Notes (received as securities, but excluding any New UPC Polska Notes
received which are attributable to any Claim for accrued but unpaid OID) will
equal such holders adjusted tax basis in its Claim (excluding any Claim for
accrued but unpaid OID) decreased by the amount of cash received, and increased
by the amount of any gain recognized on the exchange.  In general, the holders holding period for the New UPC Polska
Notes (received as securities) will include the holders holding period for
the Claim except to the extent issued in respect of a Claim for accrued but
unpaid OID.  Distributions in Discharge of Accrued OID  In general, to the extent that any
distribution to a holder of an Allowed UPC Polska Note Claim (other than
Allowed Telecom Owned UPC Polska Note Claims) is received in satisfaction of
accrued OID, such amount will be taxable to the holder as interest income (if
not previously included in the holders gross income).  The IRS appears to be of the view that a
holder of a debt instrument with OID must report the OID as ordinary income as
it accrues even if the issuer is in bankruptcy and the ultimate ability of the
issuer to pay the OID is uncertain. 
Each holder should discuss this issue with the holders own tax advisor.  A holder generally recognizes a deductible
loss to the extent any amortized OID was previously included in its gross
income and is not paid in full.  There is
a position that such loss constitutes an ordinary loss rather than a capital
loss.  However, because of the lack of
direct authority in this matter, the IRS may challenge ordinary loss
characterization.  Additionally, if the
exchange of notes will constitute a recapitalization for U.S. federal income
tax purposes, there is no assurance that any deductible loss taken by a holder
(whether ordinary or capital) on account of accrued OID would be respected by
the IRS for U.S. federal income tax purposes.  Pursuant to the Plan, all distributions in
respect of any Allowed UPC Polska Note Claim (other than Allowed Telecom Owned
UPC Polska Note Claims) will be allocated first to the principal amount of such
Claim, as determined for U.S. federal income tax purposes, and thereafter to
the remaining portion of such Claim, if any.  82 
   However, Treasury Regulations under sections 446 and 1272 of the Tax
Code suggest that, for U.S. federal income tax purposes, such allocation will
not be respected and all distributions in respect of any Allowed UPC Polska
Note Claims (other than Allowed Telecom Owned UPC Polska Note Claims) will be
allocated first to accrued OID.  If any
portion of any distribution were required to be allocated to accrued OID, such
portion would be taxable to the holder as interest income rather than as gain
or loss (as described above), except to the extent that such holder previously
reported such OID as interest income.  Each holder of a Claim is urged to consult
its tax advisor regarding the allocation of consideration and the deductibility
of unpaid interest for tax purposes.  Ownership and Disposition of the New UPC Polska Notes  1.Determination of Issue Price of New UPC Polska Notes  Holders
of Claims who receive New UPC Polska Notes are urged to consult their tax
advisors regarding the treatment of such New UPC Polska Notes under the OID
rules of the Tax Code and whether such holders will be required to include
certain amounts in income prior to the receipt of any cash payments
attributable to such amounts.  As
discussed above, the amount of gain realized by holders of Allowed UPC Polska
Note Claims will depend in part on the issue price of the New UPC Polska
Notes, regardless of whether the exchange of debt constitutes a
recapitalization for U.S. federal income tax purposes.The issue price of the New UPC Polska Notes will depend upon
whether they are traded on an established securities market during the
sixty-day period ending thirty days after the Effective Date, or whether a
substantial portion of the Claims exchanged for such notes is so traded.  Pursuant to Treasury Regulations, an
established securities market need not be a formal market.  It is sufficient that the notes appear on a
system of general circulation (including a computer listing disseminated to
subscribing brokers, dealer or traders) that provides a reasonable basis to
determine fair market value by disseminating either recent price quotations or
actual prices of recent sales transactions, or, in certain instances which do
not seem applicable in this case, that price quotations for such notes are
readily available from brokers, dealers or traders.  If the UPC Polska Note Claims are considered
traded on an established securities market, the issue price of such New UPC
Polska Notes will be their fair market value on their date of issuance.  If the New UPC Polska Notes are not
considered traded on an established securities market but a Claim exchanged
therefor is considered traded on an established securities market, the issue
price of the New UPC Polska Notes will be the fair market value of such traded
Claims on the date the New UPC Polska Notes are issued.  If neither the New UPC Polska Notes nor a
substantial portion of the Claims exchanged for such notes are traded on an
established securities market, the issue price of the New UPC Polska Notes
generally will be their stated principal amount if, as is also expected, the
stated interest rate is greater than the applicable federal rate for
obligations of similar maturity in effect on the Effective Date.  While not free from doubt, UPC Polska
believes that neither the New UPC Polska Notes nor any of the Claims exchanged
thereunder will be considered traded on an established securities market
during the relevant 60-day period, and thus the issue price of the New UPC
Polska Notes should be their stated principal amount.  2.Interest and Original Issue Discount on the New UPC Polska
Notes  The principal terms of the New UPC Polska
Notes have been generally established, but must be confirmed as part the
confirmation of the Plan.  It is anticipated, and this discussion
assumes, that the New UPC Polska Notes will bear a market rate of interest and
provide for at least the annual payment of all stated interest.  Such stated interest generally will be
includable as ordinary interest income by a holder in accordance with the
holders regular method of accounting.  In addition, if (as discussed above) either
the New UPC Polska Notes or any of the Claims exchanged therefor are considered
traded on an established securities market, the New UPC Polska Notes may be
treated as  83 
   issued with OID.  In general, a
debt instrument is treated as having OID to the extent its stated redemption
price at maturity exceeds its issue price by more than a statutorily defined
de minimis amount.  The stated
redemption price at maturity of a debt instrument is the sum of its principal
amount and all other payments required thereunder, other than payments of
qualified stated interest (defined generally as interest that is
unconditionally payable in cash or in property (other than debt instruments of
the issuer) at least annually at a single fixed rate that appropriately takes
into account the length of intervals between payment).  If the New UPC Polska Notes are issued with
OID, each holder generally will be required to accrue the OID in respect of the
New UPC Polska Notes received and include such amount in gross income as
interest over the term of such notes based on the yield-to-maturity
method.  The amounts of the OID
includible in income is the sum of the daily accruals of the OID for the New
UPC Polska Notes for each day during the taxable year (or portion of the
taxable year) in which a holder held such note.  The daily portion is determined by allocating the OID for each
day of the accrual period.  An accrual
period may be of any length and the accrual periods may even vary in length
over the term of the New UPC Polska Notes, provided that each accrual period is
not longer than one year and each scheduled payment of principal or interest
occurs either on the first day of an accrual period or on the final day of an
accrual period.  The amount of OID
allocable to an accrual period is equal to the difference between (1) the
product of the adjusted issue price of the New UPC Polska Notes at the
beginning of the accrual period and its yield to maturity (computed generally
on a constant yield method and compounded at the end of each accrual period,
taking into account the length of the particular accrual period) and (2) the
amount of any qualified stated interest allocable to the accrual period.  The adjusted issue price of a New UPC
Polska Note at the beginning of any accrual period is the sum of the issue
price of the New UPC Polska Note plus the amount of OID allocable to all prior
accrual periods reduced by any payments the holder received on such New UPC
Polska Note that were not qualified stated interest.  Accordingly, each holder generally will be required to include
amounts in gross income in advance of the payment of cash in respect of such
income, regardless of the holders accounting method for U.S. federal income
tax purposes.  A holders tax basis in a
New UPC Polska Note will be increased by the amount of any OID included in
income and reduced by any cash received (other than payments of stated
interest) with respect to such note.  3.Acquisition and Bond Premium  If the New UPC Polska Notes are issued with
OID, and a holder of a Claim has a tax basis in any of the New UPC Polska Notes
received that exceeds the issue price of such note, but is less than or equal
to the sum of all amounts payable on such notes other than payments of qualified
stated interest (i.e., an acquisition premium), the amount of OID includable
in the holders gross income generally is reduced in each period in proportion
to the percentage of the OID represented by the excess basis.   Alternatively, if a holder is willing to
treat all stated interest as OID, such holder may elect to recompute the OID
accruals by treating its acquisition as a purchase at original issue and
applying the constant yield method. 
Such an election may not be revoked without the consent of the IRS.  If the New UPC Polska Notes are issued with
OID, and a holder has a tax basis in any of the New UPC Polska Notes received
that exceeds the sum of all amounts payable on such notes other than payments
of qualified stated interest (i.e.,
a bond premium), the holder will not include any of the OID in income.  Moreover, whether or not the UPC Polska
Notes are issued with OID, a holder may elect to deduct any bond premium over
the period from its acquisition of such note to the maturity date of such note
(or, if it results in a smaller amount of amortizable bond premium, until an
earlier call date), but not in excess of the stated interest.  If such bond premium is amortized, the
amount of qualified stated interest on any New UPC Polska Note that must be
included in the holders gross income for each period ending on an interest
payment date or at the maturity date, as the case may be, will (except as
Treasury Regulations may otherwise provide) be reduced by the portion of bond
premium allocable to such period based on the notes yield to maturity.  The holders tax basis in its New UPC Polska
Note will be reduced by a like amount. 
If such an election to amortize bond premium is not made, a holder will
receive a tax benefit from the premium only in computing such holders gain or
loss upon the sale or other taxable disposition of the New UPC Polska Note, or
upon the full or partial payment of principal.  An election to amortize bond premium will
apply to amortizable bond premium on all notes and other bonds the interest on
which is includable in the holders gross income and that are held at, or
acquired after, the  84 
   beginning of the holders taxable year as to which the election is
made.  The election may be revoked only
with the consent of the IRS.  4.Market Discount  Any holder of an Allowed UPC Polska Note
Claim (other than Allowed Telecom Owned UPC Polska Note Claims) that has a tax
basis in any New UPC Polska Notes received that is less than the issue price of
such notes generally will be subject to the market discount rules of the Tax
Code (unless such difference is less than a statutorily defined de minimis
amount).  In addition, as discussed
below, a holder that acquired its Claim at a market discount and that receives
its New UPC Polska Notes as part of a tax-free exchange may be required to
carry over to such Notes any accrued market discount with respect to its Claim
to the extent not previously included in income.  Under the market discount rules, a holder
generally is required to treat any principal payment on, or any gain recognized
on the sale, exchange, retirement or other disposition of, a New UPC Polska
Note as ordinary income to the extent of the market discount that has not previously
been included in income and is treated as having accrued on such note at the
time of such payment or disposition.  A
holder could be required to defer the deduction of a portion of the interest
expense on any indebtedness incurred or maintained to purchase or to carry a
market discount note, unless an election is made to include all market discount
in income as it accrues.  Such an
election would apply to all bonds acquired by the holder on or after the first
day of the first taxable year to which such election applies, and may not be
revoked without the consent of the IRS.  Any market discount will be considered to
accrue on a straight-line basis during the period from the date of acquisition
of such New UPC Polska Notes to the maturity date of the notes, unless the
holder irrevocably elects to compute the accrual on a constant yield
basis.  This election can be made on a
note-by-note basis.  Information Reporting and Withholding  All distributions to holders of Allowed
Claims under the Plan are subject to any applicable information reporting and
withholding for U.S. federal income tax purposes.  Under U.S. federal income tax law, interest, dividends, and other
reportable payments made within the United States to domestic and foreign
persons may, under certain circumstances, be subject to backup withholding at
the then applicable rate (currently 28%). 
Backup withholding generally applies if the holder (i) fails to furnish
its social security number or other taxpayer identification number (TIN), (ii) furnishes
an incorrect TIN, (iii) fails to properly report on the payees income tax
return interest or dividends, or (iv) under certain circumstances, fails to
provide a certified statement, signed under penalty of perjury, that the TIN
provided is its correct number or that it is not subject to backup
withholding.  Backup withholding is not
an additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. 
Certain persons are exempt from backup withholding, including, in
certain circumstances, corporations and financial institutions.  Additionally, under current U.S. Treasury
Regulations, payments of principal and interest on any notes to a holder that
is not a United States person will not be subject to any backup withholding tax
requirements if the beneficial owner of the note or a financial institution
holding the note on behalf of the beneficial owner in the ordinary course of
its trade or business provides an appropriate certification to the payor and
the payor does not have actual knowledge or a reason to know that the
certification is incorrect.  Any person
that is not generally exempt from backup withholding, and that does not want
its payment subject to such withholding, must furnish the relevant documents to
UPC Polska.  Recently effective Treasury Regulations
generally require disclosure by a taxpayer on its federal income tax return of
certain types of transactions in which the taxpayer participated after January
1, 2003, including, among other types of transactions, the following: (1) a
transaction offered under conditions of confidentiality; (2) a transaction
where the taxpayer was provided contractual protection for a refund of fees if
the intended tax consequences of the transaction are not sustained; (3) certain
transactions that result in the taxpayer claiming a loss in excess of specified
thresholds; and (4) certain transactions in which the taxpayers federal income
tax treatment differs by more than a specified threshold in any tax year from
its treatment for financial reporting purposes.  These categories are very broad; however, there are numerous
exceptions.  Holders are urged to
consult their tax advisors regarding these regulations and whether the
transactions contemplated by the Plan would be subject to these regulations and
require disclosure on the holders tax returns.  85 
   The foregoing summary has been provided for informational purposes
only.  All holders of Claims are urged to
consult their tax advisors concerning the federal, state, local and other tax
consequences applicable under the Plan.  86 
   WHERE
YOU CAN FIND MORE INFORMATION  The Company files annual,
quarterly and other information with the SEC. 
You may read and copy any document the Company files with the SEC at the
SECs Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549.  You may obtain further
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.  The Companys SEC
filings are also available to the public over the internet at the SECs
internet website at http://www.sec.gov.  INCORPORATION
BY REFERENCE  The Company has attached
as Annexes B and C hereto, and is incorporating by reference into this
Disclosure Statement, its Annual Report on Form 10-K for the year ended
December 31, 2002 (including the audited consolidated financial statements of
the Company for the fiscal years ended December 31, 2000, 2001 and 2002) and
its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2003.  The Company also is incorporating
by reference into this Disclosure Statement its Current Report on Form 8-K
filed with the SEC on June 20, 2003 and all of its filings with the SEC under
Sections 13(a), 13(c), 14 and 15(d) of the U.S. Exchange Act from the date
hereof until the Effective Date.  Any statement contained
in this Disclosure Statement or in any of the documents incorporated by
reference in, and forming part of, this Disclosure Statement shall be deemed to
be modified or superseded for the purpose of this Disclosure Statement to the
extent that a statement contained in any document subsequently incorporated by
reference modifies or supersedes such statement.  You may obtain a copy of
any of the documents incorporated by reference into this Disclosure Statement,
at no cost, by writing or telephoning the Company at:  UPC Polska, Inc.
c/o UPC Telewizja Kablowa
ul. Szturmowa 2A, 02-678 
Warszawa, Poland
Attn: Agnieszka Marzec
Telephone:  48 22 701 0861  Information is also
available on the Companys website at http://www.upc-polska.com.  The Company will respond
to requests for information incorporated by reference into this Disclosure
Statement within three business days after receipt of such request and will
send the incorporated documents by first-class mail or other equally prompt
means.  This includes information
contained in documents filed subsequent to the date of this Disclosure
Statement through the date of responding to the request.  AUDITORS  Auditors
Statement Regarding Financial Statements and Consent  The consolidated
financial statements of the Company at December 31, 2001 and 2002, and for each
of the years in the three-year period ended December 31, 2002 incorporated into
this Disclosure Statement by reference to the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2002 have been audited by KPMG
Polska Sp. z o.o., independent auditors, and by Arthur Andersen Sp. z o.o.,
Warsaw, Poland (Arthur Andersen),
the Companys former independent auditor, as set forth in their reports thereon
(which contain an explanatory paragraph regarding the ability of the Company to
continue as a going concern).  On
July 10, 2002, the Company appointed KPMG to replace Arthur Andersen as its
independent public accountants. Prior to the date of this Disclosure Statement,
Arthur Andersen ceased its operations. 
The audit report to the Companys annual consolidated financial
statements for the years ended December 31, 2000 and 2001 (as incorporated by
reference into this Disclosure Statement) is Arthur Andersens audit report
issued on March 31,  87 
   2002.  Readers of this Disclosure Statement are
advised that the audit report on the annual consolidated financial statements
of the Company for the years ended December 31, 2000 and 2001 is included in
this Disclosure Statement by reference to the copy of the previously issued
audit report of Arthur Andersen which has not been reissued or updated by
Arthur Andersen.  88 
   VOTING
AGENT  Any holder of Claims who
wishes to accept or reject the Plan should complete the Ballot and forward it
pursuant to the instructions contained therein.  If any holder of Claims has any additional questions, or needs
additional copies of this Disclosure Statement, the Ballot or any other
Restructuring materials, such holder of Claims should contact the Voting Agent
at the address or telephone number as listed below:  Voting
Agent  Bankruptcy
Services LLC  By regular mail:  UPC
Polska Ballot Processing P.O.
Box            
FDR Station New
York, NY 
10150-  By messenger or
overnight courier:  UPC
Polska Ballot Processing c/o
Bankruptcy Services LLC 70
East 55th Street New
York, NY  10022-3222 Telephone:  1-888-498-7765  89 
   CONCLUSION
AND RECOMMENDATION  The Company and Polska Finance believe that
confirmation of the Plan is desirable and in the best interest of the holders
of Claims as the Plan provides for an equitable distribution to the Companys
creditors.  Any alternative to
confirmation of the Plan, such as conversion to a Chapter 7 liquidation or
dismissal of the case, or attempts by another party in interest to file a plan,
could result in significant delays, litigation and costs, and likely would
result in significantly lower recoveries by the holders of Claims against the
Company.  In light of the significant benefits to be attained by
the holders of Claims pursuant to consummation of the transactions contemplated
by the Plan, the Company and Polska Finance recommend that the holders of
Claims vote to accept the Plan.  The Company
and Polska Finance have reached this decision after considering the
alternatives to the Plan that are available to the Company and their likely
effect on the Companys business operations and creditors.  These alternatives include liquidation of
the company under Chapter 7 of the Bankruptcy Code or an alternative plan of
reorganization or liquidation under Chapter 11 of the Bankruptcy Code.  The Company and Polska Finance determined,
after consulting with financial and legal advisors, that the Plan would result
in greater recovery for holders of Claims than would any other Chapter 11
reorganization or liquidation under Chapter 7. 
For a comparison of estimated distributions under Chapter 7 of the
Bankruptcy Code and under the Plan, see Annex F Liquidation Analysis.  For all of these reasons, the Company and
Polska Finance urge all holders of Claims entitled to vote on the Plan to
accept and support the Plan.  UPC POLSKA, INC.By:
  /s/
  Simon BoydName:
  Simon BoydTitle:
  Chief
  Executive OfficerUPC POLSKA
  FINANCE, INC.By:
  /s/ Jeremy EvansName:
  Jeremy EvansTitle:
  Vice
  President and Secretary  90 
   CROSS
REFERENCES FOR DEFINED TERMS  The following table sets forth the page
number on which each capitalized term used in this Disclosure Statement is
defined.  Capitalized terms not
contained in the cross reference table below are defined in Section I.A.
(Definitions) of the Plan.  $
  
  1@EP
  
  46@EP LLC
  
  182004 Motion
  
  202008 Notes
  
  612008 Warrants
  
  612009 Notes
  
  612009 Warrants
  
  61Allowed Claims
  
  22Arbitration Parties
  
  57Arthur Andersen
  
  87Assigned Loan
  
  48At Media
  
  18Atomic TV
  
  18Bankruptcy Code
  
  iiBankruptcy Court
  
  iiBankruptcy Rules
  
  iiiBelmarken
  
  iBelmarken Notes
  
  iBest Interests Test
  
  74Business Day
  
  1Cable Agreement
  
  57Canal+
  
  viCanal+ Proceeds
  
  48Cash Consideration
  
  15Chapter 11 Case
  
  iiCOD
  
  78Communications Act
  
  53Company
  
  iConfirmation Date
  
  44Contribution and
  Subscription Agreement
  
  11Copyright Act
  
  53Council
  
  53Creditors Committee
  
  20Critical Creditors
  
  69DCF
  
  71D-DTH
  
  1D-DTH Agreement
  
  57Debtor
  
  iDisclosure Statement
  
  iEBITDA
  
  71EC
  
  8EU
  
  8Feasibility Test
  
  42  91 
   FTA
  
  7FTI
  
  16General Unsecured Claims
  
  iGeneral Unsecured
  Creditors
  
  68HBO
  
  57Indenture Trustee
  
  62Indentures
  
  16IRS
  
  76Issuers
  
  65JV Loan
  
  48KPMG
  
  vLiquidation Analysis
  
  2LLCs
  
  77MFN
  
  57New Indenture
  
  15New Indenture Trustee
  
  65New UPC Polska Notes
  
  iNew UPC Polska Stock
  
  iNOL
  
  77OID
  
  78Other Cash
  Consideration
  
  15Other UPC Polska Notes
  
  iiPAR
  
  53Participating
  Noteholders
  
  iiPC LLC
  
  18PCI
  
  46Petition Date
  
  iiPlan
  
  iiPlan Documents
  
  ivPolska Finance
  
  iProjections
  
  72PTC
  
  11RBS
  
  14RCI
  
  58RCI Notes
  
  58Reorganized Debtor
  
  1Reserve
  
  32Restructuring
  
  iRestructuring Agreement
  
  2SEC
  
  vSeries C Notes
  
  61SISU
  
  14Tax Code
  
  76Telecom Junior Notes
  
  iTelecom Owned UPC
  Polska Notes
  
  iTelecom Pari Passu
  Notes
  
  iTelevision Act
  
  53Telewizja
  
  57Third Party Disbursing
  Agent
  
  27Third Party Holders
  
  24  92 
   Third Party Noteholder Consideration
  
  24TIN
  
  85TKP
  
  viTL
  
  53TPSA
  
  6U.S. Exchange Act
  
  67U.S. Securities Act
  
  12UPC
  
  1UPC Entities
  
  iiUPC Polska
  
  iUPC Polska Equity
  
  iUPC Polska Group
  
  vUPC Polska LLC
  
  78UPC Polska Notes
  
  iUPC Polska Stock
  
  iUPC Telecom
  
  iUPC Telecom Notes
  
  iURTiP
  
  53Wizja TV B.V.
  
  18  93 
   Annex A  CHAPTER
11 PLAN OF REORGANIZATION   [Distributed
separately]  A-1 
   Annex B  ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002  [To Be
Inserted]   B-1 
   Annex C  QUARTERLY
REPORT ON FORM 10-Q FOR THE FISCAL QUARTER ENDED MARCH 31, 2003  [To Be
Inserted]  C-1 
   Annex D  FORM
8-K FILED BY THE COMPANY ANNOUNCING THE TRANSACTION  [To Be
Inserted]  D-1 
   Annex E  PROJECTED
FINANCIAL INFORMATION  The Company does not, as a matter of course, make public any
forecasts as to its future financial performance. However, as described under
the section of the Disclosure Statement entitled Reorganization Valuation
Analysis and Projected Financial InformationProjected Financial Information,
in connection with the filing of its Chapter 11 Case with the Bankruptcy Court,
the Company has prepared certain projected financial information. The
information set forth below contains a summary of this projected financial
information.  The projections set forth
below should be read together with (i) the assumptions and qualifications set
forth below and the footnotes in the table below, (ii) the audited consolidated
financial statements of the Company for the three years ended December 31, 2002
contained in the Companys Annual Report on Form 10-K for the year ended
December 31, 2002 and the unaudited consolidated financial statements of the
Company for the fiscal quarter ended March 31, 2003 contained in the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003,
which have been included in this Disclosure Statement as Annex B and Annex C,
respectively, and (iii) the information contained under the heading Risk
Factors of the Disclosure Statement.  The Companys financial forecasts (upon which the projections
provided below are based in part) are, in general, prepared solely for internal
use and capital budgeting and other management decisions and are subjective in
many respects and, thus, susceptible to multiple interpretations and periodic
revisions based on actual experience and business developments. The projections
disclosed below also reflect numerous assumptions made by management of the
Company with respect to industry performance, general business, economic,
market and financial conditions and other matters. Such assumptions regarding
future events, including, in particular, subscriber growth in new or
relatively new business lines, the outcome of negotiations relating to
copyrights and factors related to the Restructuring,are difficult to predict, and many
are beyond the Companys control. Accordingly, there can be no assurance that
the assumptions made by the Company in preparing the projections will prove
accurate. It is expected that there will be differences between actual and
projected results, and actual results may be materially greater or less than
those contained in the projections. The inclusion of the projections below
should not be regarded as an indication that the Company or its respective
affiliates, representatives or advisors consider the projections to be a
reliable prediction of future events, and the projections should not be relied
upon as such.  Neither the Company nor
any of its respective affiliates, representatives or advisors makes any
representation to any person regarding the projections, and none of them has or
intends to update or otherwise revise the projections to reflect circumstances
existing after the date of this Disclosure Statement or to reflect the
occurrence of future events even in the event that any or all of the
assumptions underlying the projections are shown to be in error.  The Companys management has prepared the projections below solely
for purposes of complying with the requirements of the Bankruptcy Code. The
projections were not prepared with a view toward compliance with published
guidelines of the SEC, the American Institute of Certified Public Accountants
or any other regulatory or professional agency or body, generally accepted
accounting principles or consistency with the Companys historical consolidated
financial statements.  Neither Arthur
Andersen, the Companys predecessor independent auditors, nor KPMG, the
Companys current independent auditors, has examined, compiled or performed any
procedures with respect to the projections presented below, nor have any of
them expressed any opinion or provided any other form of assurance regarding
such information or its achievability, and, accordingly, assume no
responsibility for them.  FTI, the
Companys financial advisors, has not compiled or expressed any opinion or any
other form of assurance on the Projections or the achievability of the results
or performance indicated by the Projections, and assume no responsibility for,
and disclaim any association with the Projections.  For more information regarding the projections set forth below,
see the section of the Disclosure Statement entitled Reorganization Valuation
Analysis and Projected Financial InformationProjected Financial Information.  The forecasts and targets in the table below for the fiscal years
indicated for the Company were prepared on a pro
forma consolidated basis. 
These forecasts and targets do not take into account any future material
dispositions or acquisitions.  E-1 
   UPC Polska, Inc.  Year ended December 31,2003(1)
  
  2004(1)
  
  2005(1)(in millions of
  Dollars, except for basic subscribers and revenue generating units)Pro
  FormaConsolidated Statement of Operations Data:Total revenues
  
  86
  
  96
  
  110Total Adjusted EBITDA(2)
  
  25
  
  32
  
  38Direct costs
  
  (22
  )
  (24
  )
  (27
  )Selling, general and administrative
  expense
  
  (39
  )
  (41
  )
  (45
  )Depreciation and amortization
  
  (28
  )
  (28
  )
  (26
  )Net operating income (loss)
  
  (4
  )
  4
  
  12Reorganization items (3)
  
  804
  
  
  
  Financial income/(expense) (4)
  
  (54
  )
  (5
  )
  (4
  )Net income (loss) before income taxes
  and other items
  
  738
  
  3
  
  7Net income (loss)
  
  738
  
  3
  
  7Pro
  FormaConsolidated Statement of Cash Flow Data:Free cash flow before financing(5)
  
  13
  
  17
  
  1Net cash flow from operating activities (6)
  
  28
  
  23
  
  39Net cash flows used in investing activities(7)
  
  (12
  )
  (15
  )
  (37
  )Net cash flow after operating and investing activities (6) (7)
  
  17
  
  8
  
  2Net cash flows from (used in) financing activities(8)
  
  (112
  )
  
  
  Net increase (decrease) in cash and cash equivalents
  
  (95
  )
  8
  
  2Pro FormaBalance Sheet
  Data (year-end):Total net debt(9)
  
  50
  
  42
  
  40Total assets
  
  130
  
  124
  
  138Cash and cash equivalents
  
  11
  
  19
  
  21Restricted cash
  
  
  
  
  
  Property, plant and equipment
  
  104
  
  92
  
  103Goodwill and intangible assets
  
  1
  
  
  
  Total liabilities and shareholders equity
  
  130
  
  124
  
  138Short-term debt (including current portion of long-term debt)
  
  
  
  
  
  61Long-term debt(10)
  
  61
  
  61
  
  Total shareholders equity
  
  34
  
  37
  
  44Pro FormaOperating Data
  (year-end):Total cable subscribers (in thousands)
  
  998
  
  998
  
  1003Total revenue generating units (in thousands)(11)
  
  1030
  
  1045
  
  1080  E-2 
   
 (1)The projections assume that the Restructuring is completed on
December 31, 2003.  The U.S. Dollar/Euro
and Euro/PLN exchange rates used in the calculations were assumed to be 1.00 =
US$1.05 and 1.00 = PLN4.2 for all periods forecasted. (2)Adjusted EBITDA is not a generally accepted accounting principle
(GAAP)
measure.  Adjusted EBITDA represents net
operating income (loss) before depreciation, amortization and impairment and
restructuring charges.  Adjusted EBITDA
is one of the primary measures used by the Companys chief operating and
decision-making officers to measure the Companys operating results and to
measure segment profitability and performance. 
The Companys management believes that (i) Adjusted EBITDA is meaningful
to stakeholders because it provides an analysis of operating results using the
same measures used by the Companys chief operating and decision-making
officers, (ii) Adjusted EBITDA provides stakeholders with the means to evaluate
the financial results of the Company compared to other companies within the
same industry, and (iii) it is common practice for institutional stakeholders
and investment bankers to use various multiples of current or projected
Adjusted EBITDA for purposes of estimating current or prospective enterprise
value.  The Companys calculation of
Adjusted EBITDA may or may not be consistent with the calculation of this
measure by other companies in the same industry.  Stakeholders should not view Adjusted EBITDA as an alternative to
GAAP income as a measure of performance, or to cash flows from operating,
investing and financing activities as a measure of liquidity.  In addition, Adjusted EBITDA does not take
into account changes in certain assets and liabilities, as well as interest and
income taxes, that can affect cash flows. (3)The projections assume that the Restructuring is completed on
December 31, 2003.  Included in the
reorganization items line is an $808 million extraordinary gain on cancellation
of debt resulting from the Restructuring. (4)The interest rate used in calculations of interest income was
assumed to be 3% for all periods forecasted. 
The interest expense on the New UPC Polska Notes is calculated at 9%. (5)Free cash flow before financing represents Adjusted EBITDA less
capital expenditures before debt servicing costs. (6)Net cash flow from operating activities is net income plus non-cash
operational income statement items and changes in working capital. (7)Net cash used in investing activities generally consists of
capital expenditures. (8)Net cash used in financing activities generally reflects cash
payments to holders of the UPC Polska Notes and the RCI notes, as required by
the Restructuring Agreement, and to repay the outstanding bonds owed by PCI to
unaffiliated third parties. (9)Net debt represents consolidated gross debt less consolidated
cash and cash equivalents. (10)Long-term debt includes the 9% New UPC Polska Notes due 2006. (11)Total revenue generating units represent illustrative revenue
generating units for the Company and its Subsidiaries on a consolidated basis
which the Company may target in its efforts to achieve its total revenue
targets.  Assuming that the
Restructuring is successfully implemented, the Company anticipates that the
primary sources of capital used by the Reorganized Debtor and its subsidiaries
through 2005 will be cash on hand, cash flows from operations and improvements
in their working capital positions. The Company does not anticipate access to
the capital markets as a source of funding unless required by launch of new
services and/or the repayment of New UPC Polska Notes.  The Company believes that its existing cash
balances, working capital and operating cash flow will be sufficient to allow
for successful implementation and confirmation of the Plan.  Should the Reorganized Debtors operating
results fall behind the Companys current business plan, there is uncertainty
as to whether the Reorganized Debtor will have sufficientfunds to meet its planned capital expenditures
and/or any future debt commitments.  E-3 
   Annex F  LIQUIDATION ANALYSIS  Liquidation Analysis($
  in thousands)
  
  Adjusted Book
  Value as of May 31,
  2003
  
  Hypothetical
  Recovery (% of
  Book Value)
  
  Estimated
  Liquidation
  Value
  
  Note
  Reference(Unaudited) (Note A)STATEMENT
  OF ASSETSCurrent AssetsCash & cash equivalents
  
  $
  35,078
  
  100.0
  %
  $
  35,078
  
  BIntercompany Receivables
  
  658,835
  
  11.4
  %
  74,918
  
  COther Current Assets
  
  79
  
  100.0
  %
  79
  
  DInvestments
  
  37,400
  
  230.7
  %
  86,286
  
  ETOTAL ASSETS
  
  $
  731,392
  
  26.8
  %
  196,361DISTRIBUTION
  ANALYSIS SUMMARYNet Liquidation Proceeds
  Available for Distribution
  
  
  
  
  
  196,361Less: Administrative,
  Priority and Critical Vendor Claims
  
  
  
  
  
  (2,400
  )
  FNet Liquidation Proceeds
  Available for Unsecured Creditors
  
  
  
  
  
  193,961Low
  
  HighRange of
  Liquidation Proceeds
  
  
  
  184,263
  
  203,659Less: Unsecured ClaimsClass 3
  
  
  
  (377,800
  )
  (377,800
  )Class 4
  
  
  
  (355,343
  )
  (355,343
  )Class 5
  
  
  
  (6,357
  )
  (6,357
  )Total Unsecured Claims
  
  
  
  (739,500
  )
  (739,500
  )
  GNet Deficiency to Unsecured
  Creditors
  
  
  
  $
  (555,237
  )
  $
  (535,841
  )Hypothetical
  Recovery of Unsecured Creditors (%) under Chapter 7 Liquidation
  
  
  
  24.9
  %
  27.5
  %Hypothetical
  Recovery of Equity Interests (%) under Chapter 7 Liquidation
  
  
  
  0
  %
  0
  %  Analysis of Recovery to Unsecured
  Claims, Telecom Junior
  Notes and Equity - Plan vs. LiquidationClass
  
  Plan
  Midpoint
  
  Liquidation
  Midpoint3
  
  37.1
  %
  29.5
  %4
  
  25.9
  %
  22.9
  %5
  
  37.1
  %
  20.5
  %6
  
  0.0
  %
  0.0
  %7
  
  0.0
  %
  0.0
  %  Description
of Classes Class 3
  -
  UPC Polska Note Claims
  (excluding Telecom Owned UPC Polska Note Claims)Class 4
  -
  Telecom Owned UPC Polska Note Claims, Belmarken Note Claims, Telecom
  Pari Passu Note Claims and Affiliate Indebtedness ClaimsClass 5
  -
  General Unsecured Creditors ClaimsClass 6
  -
  Telecom Junior Note ClaimsClass 7
  -
  UPC Polska Equity Interests  Notes: -Recoveries are shown as a percentage of
estimated allowed claims. -Recoveries under the Plan are based on an
estimated equity value of the reorganized Company of between approximately
$222.6 million and approximately $246.0 million in the low and high scenarios,
respectively (a midpoint value of approximately $234.3 million).  F-1 
   NOTES TO
LIQUIDATION ANALYSIS  This
liquidation analysis (the Liquidation Analysis) reflects the Companys and FTIs
estimate of the proceeds that may be realized in a liquidation of the Companys
assets in accordance with Chapter 7 of the Bankruptcy Code.  These values have not been subject to any
review, compilation or audit by any independent accounting firm.  Underlying this Liquidation Analysis are a
number of estimates and assumptions that, although developed and considered
reasonable by the management of the Company and by FTI, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies beyond the control of the Company and its management, and are
thereby subject to change.  ACCORDINGLY,
THERE CAN BE NO ASSURANCE THAT THE VALUES REFLECTED IN THIS LIQUIDATION
ANALYSIS WOULD BE REALIZED IF THE COMPANY WERE TO UNDERGO SUCH A LIQUIDATION,
AND ACTUAL RESULTS IN A LIQUIDATION COULD VARY MATERIALLY FROM THOSE SHOWN
HERE.  1.  Assumptions  Since the
Company is a holding company whose assets consist largely of direct and
indirect investments in its operating subsidiaries in the form of shareholder
loans and share capital, this Liquidation Analysis assumes the liquidation of
these investments and not the liquidation of the operating companies
themselves.  In certain cases, these
investments are structurally subordinated to other claims against the operating
assets and businesses and would likely receive little or no recovery.  This Liquidation Analysis considers both the
possibility of a sale of the assets on a piecemeal basis and as a combined
package, and assumes that the net proceeds would be similar in both cases.  This Liquidation Analysis also considers
recent trends in the market conditions and environment in which these
businesses operate.  This
Liquidation Analysis contemplates certain negative effects associated with a
Chapter 7 liquidation (as opposed to a Chapter 11 reorganization) on the
ultimate recovery to unsecured creditors. 
These include:  (a) substantial
erosion in the value of assets in the context of the forced sale atmosphere
that would prevail in a Chapter 7 case, (b) increased costs and expenses
arising from fees payable to the Chapter 7 trustee and professional advisors to
such trustee, and (c) the adverse impact of negative publicity on the operating
companies and on the saleability of the Companys assets.  The Chapter 7 liquidation would also result
in the rejection of all or substantially all of the Companys contracts which
could increase the amount of the General Unsecured Claims against the Companys
estate as contemplated in the Plan.  It
is also possible that, on average, disputed claims and litigation claims would
be settled for higher amounts and proceeds from the disposal of assets would be
collected at lower rates because the Chapter 7 trustee would lack the
institutional knowledge of the facts and circumstances surrounding such claims
and assets under disposal, and current management might not be available to
assist the Chapter 7 trustee in obtaining such knowledge.  Aside from
cash, the Companys assets primarily consist of receivables from and
investments in subsidiaries.  Recoveries
from these assets reflect a 20% discount to their estimated recoveries under a
going concern scenario to account for reduced values resulting from the forced
sale atmosphere of a Chapter 7 process and estimated liquidation costs
(including trustee and professional fees, sales, asset disposal, marketing and
case administration costs).  A 5% range
was then applied to the estimated liquidation proceeds available to unsecured
creditors.  This
Liquidation Analysis assumes a period of six months during which the
liquidation would occur.  It is possible
that proceeds from the sale of certain assets would not be distributed
immediately following the sale of the asset but only after resolution of claims
and a period of preparation for the distributions.  In the event litigation is necessary to resolve claims asserted
in the Chapter 7 case, the delay could be prolonged and administrative costs
further increased.  The effect of these
delays and costs have not been included in this analysis.  It is assumed that the Company incurs no
capital gains taxes as a result of the disposal of its assets.  The following
notes describe other significant assumptions used in this Liquidation Analysis:  F-2 
   Note A 
Adjusted Book Values as of May 31, 2003  The adjusted
book values used in this Liquidation Analysis are unaudited pro forma book
values as of May 31, 2003, adjusted for anticipated cash burn to the Effective
Date (which is the assumed liquidation start date) and for a $940 million
write-down of investments in subsidiaries as a result of a goodwill impairment
charge at the subsidiary level, which has not been reflected in the Companys
stand-alone financial statements.  Such
balances are assumed to be representative of the Companys unconsolidated
assets as of the Effective Date.  Values
are exchanged from Euros into U.S. Dollars at a rate of US$1.05 per 1.0000 and
from PLN into U.S. Dollars at a rate of PLN3.867 per US$1.00.  Note B  Cash
and Cash Equivalents  Cash includes
projected cash and cash equivalent balances as of the Effective Date.  This Liquidation Analysis assumes no
upstreaming of cash from the Companys operating subsidiaries during the
liquidation period.  Note C 
Intercompany Receivables  Intercompany
receivables consist primarily of shareholder loans which were made to
subsidiaries of the Company to fund operations and for other corporate
purposes.  In the case of many
receivables, the obligor is an affiliated company with obligations to parties
other than the Company.  Recovery rates for
each intercompany receivable are based on a case-by-case valuation of the
underlying business or asset, on the relative priority of payment of the
intercompany receivable at each entity, and on the likelihood and difficulty of
completing the disposals of the underlying assets.  Recoveries on intercompany receivables in the Liquidation
Analysis are net of all liquidation costs (including trustee and professional
fees, sales, asset disposal, marketing and case administration costs).  Such proceeds reflect a 20% discount to
estimated recoveries under a going concern scenario to account for reduced
recoveries on the underlying assets resulting from the forced sale atmosphere
of a Chapter 7 process and the aforementioned liquidation costs.  Note D  Other
Current Assets  Other current
assets consist of miscellaneous assets that are considered to be immaterial.  Note E 
Investments  Investments
consist of shares of various subsidiaries and affiliates of the Company.  Liquidation values for each investment are
shown net of liquidation costs and are determined based on a case-by-case going
concern valuation of each company reduced by 20% to account for reduced
marketability and the costs of liquidation. 
In certain cases where the Company advanced loans to a particular
subsidiary or affiliate company in addition to making an equity investment,
recoveries on the equity investment, if any, only occur after the intercompany
loan has been repaid in full.  Note F 
Administrative, Priority and Critical Vendor Claims  Since the
Company does not have operations and its transactions prior to the Effective
Date are expected to relate primarily to payments to professionals, it is
assumed that Chapter 11 administrative expenses in a Chapter 7 conversion would
consist entirely of outstanding Chapter 11 professional fees, which have been
estimated as four months of fees at an anticipated run rate of $600 thousand
per month.  As a result of the Companys
current tax position and lack of operations, it is further assumed that there
would be no Priority Claims (Class 1) or Critical Vendor Claims (Class 2).  Note G  Unsecured Claims  Unsecured
claims include estimates of Allowed Claims relating to the UPC Polska Note
Claims (excluding Telecom Owned UPC Polska Note Claims) (Class 3); the Telecom
Owned UPC Polska Note Claims, Telecom Pari Passu Note Claims, Belmarken Note
Claims and Affiliated Indebtedness Claims (Class 4); and the General Unsecured
Claims (Class 5). The estimates of the UPC Polska Notes Claims are assumed to
be Allowed at the accreted value of those notes as of the Petition Date.  All other indebtedness claims are assumed to
be Allowed at their principal amount plus any capitalized and/or accrued
interest as of the Petition Date.  The
maximum amount of  F-3 
   the allowed uunsecured claims
is assumed to be approximately $740 million (excluding the Telecom Junior Note
Claims); however, the actual amount may be substantially different depending on
the amount of General Unsecured Claims ultimately Allowed by the Court.  The estimated
recoveries to each of the aforementioned classes of creditors gives effect to
the subordination provisions of the Companys debt, including those provisions
relating to the Telecom Junior Notes.  2.  Conclusion  The
Liquidation Analysis indicates that the holders of unsecured claims (classes 3
through 5) would obtain an aggregate recovery of no more than approximately
27.5% of their Allowed Claims in a Chapter 7 liquidation.  Moreover, recoveries to each of these
classes of creditors is greater under the Plan than in a Chapter 7
liquidation.  Finally, the Company and
FTI also believe that holders in classes 6 and 7 would receive no distribution
in either a Chapter 7 liquidation or under the Plan and that Class 1 and Class
2 Claims, if any, would be unimpaired under the Plan.  Based on the
foregoing, the Company and FTI believe that the Plan meets the requirements of
Section 1129(a)(7) of the Bankruptcy Code and that each Holder of an Impaired
Claim or Interest will recover at least as much under the Plan as in a Chapter
7 liquidation.  F-4