Exhibit 10.3


 


SHAREHOLDERS AGREEMENT


 


 


This Shareholders Agreement (the “Agreement”) is entered into as of July 1,
2004, by and among:


 


UnitedGlobalCom,
Inc., duly represented by Mr. Jeremy Evans, duly empowered to this effect
(“UGC”);


 


UPC France
Holding BV, a Netherlands private limited liability company, duly represented
by Mr. Ray Collins, duly empowered to this effect (“UPC”); and


 


SUEZ SA, a société anonyme organized under the laws
of France, duly represented by Mr. Michel Sirat, duly empowered to this
effect  (“Suez”).


 


(UPC and Suez
are referred to individually as a “Shareholder”
or “Party” and collectively as the
“Shareholders” or “Parties”)


 


W I T N E S S E T H:


 


WHEREAS, MédiaRéseaux SAS is a société par actions simplifiée with a
capital of 427,135,071 Euros, organized under the laws of France having its
registered office at 10, rue Albert Einstein, 77420 Champs-sur-Marne,
registered at the Registry of Commerce and Companies of Meaux under the number
404 453 615 (“MédiaRéseaux”).  MédiaRéseaux is a holding company the
principal assets of which are (1) the share capital of Suez-Lyonnaise Télécom
SA (“Noos”); (2) the Noos
Intercompany Loan; and (3) the share capital of UPC France SA.  Noos and UPC France SA each owns in turn all
the share capital of various operating companies that operate cable networks
and provide services over those networks in France.


 


WHEREAS, pursuant to the extraordinary
shareholders’ meeting of MédiaRéseaux dated the date hereof: (i) MédiaRéseaux
issued to Suez, in consideration for partial set-off of a debt owed by
MédiaRéseaux to Suez in connection with MédiaRéseaux’s purchase of the Noos
Intercompany Loan, 85,000,000 shares of Class B Common Stock of MédiaRéseaux,
par value one Euro per share (the “Class B
Shares”); and (ii) the articles of incorporation (statuts) of MédiaRéseaux were modified to
appear as in Exhibit 5.6.


 


WHEREAS, the Class B Shares held by Suez
represent 19.9% of the outstanding share capital of MédiaRéseaux.  The remaining 80.1% of the share capital is
made up of 342,135,071 shares of Class A Common Stock, par value one Euro per
share (the “Class A Shares”), all
of which are owned, as of today, by UPC.


 


WHEREAS, except as expressly provided herein,
the Class A Shares and the Class B Shares shall carry with them the same
rights.


 

















 


WHEREAS, the Parties hereto desire to set
forth their respective rights and obligations with respect to their
shareholdings in MédiaRéseaux.


 


NOW, THEREFORE, in consideration of the
premises, covenants and mutual agreements set forth below, the Parties hereto
agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


As used in
this Agreement, the following terms shall have the following respective
meanings:


 


	
  “Affiliate”

  	
   

  	
  shall mean an entity Controlling, Controlled by or under common
  Control with another entity;

  
	
   

  	
   

  	
   

  
	
  “Board”

  	
   

  	
  shall mean the board of directors of MédiaRéseaux;

  
	
   

  	
   

  	
   

  
	
  “Control”

  	
   

  	
  shall have the meaning given to it in article L 233-3 of the French
  Commercial Code;

  
	
   

  	
   

  	
   

  
	
  “Call Option Agreement”

  	
   

  	
  shall have the meaning given to it in Section 4.1;

  
	
   

  	
   

  	
   

  
	
  “Directors”

  	
   

  	
  shall mean the members of the Board;

  
	
   

  	
   

  	
   

  
	
  “Fair Market Value”

  	
   

  	
  shall mean the fair market value of the Class B Shares or other
  interests provided for herein to be valued in accordance with such procedure,
  in accordance with the procedure set forth in Section 4.4;

  
	
   

  	
   

  	
   

  
	
  “FMV Notice Date”

  	
   

  	
  shall have the meaning given to it in Section 4.4;

  
	
   

  	
   

  	
   

  
	
  “Major Business

  	
   

  	
   

  
	
  Combination”

  	
   

  	
  shall mean (i) the acquisition of, or merger with, NC Numéricâble or
  France Télécom Câble, or (ii) a merger of MédiaRéseaux together with all or
  substantially all its subsidiaries with any entity that is not an Affiliate
  of UPC with an enterprise value of such entity in excess of EUR 200 million
  and where there is no fairness opinion by an independent expert selected by
  the Board;

  
	
   

  	
   

  	
   

  
	
  “Marketable Securities”

  	
   

  	
  shall mean equity securities for which there is a public market and
  for which the average daily volume and free float will exceed the thresholds
  set forth in Exhibit 1;

  
	
   

  	
   

  	
   

  
	
  “MédiaRéseaux Group”

  	
   

  	
  shall mean MédiaRéseaux and the entities MédiaRéseaux from time to
  time Controls;

  



 


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  “Noos Intercompany Loan”

  	
   

  	
  shall mean the shareholder loan owed by Noos to MédiaRéseaux as of
  the date hereof;

  
	
   

  	
   

  	
   

  
	
  “Purchase Information”

  	
   

  	
  shall have the meaning given to it in Section 3.5(b);

  
	
   

  	
   

  	
   

  
	
  “Strategic Interest”

  	
   

  	
  shall mean a direct or indirect interest of either: (i) at least 10%
  of the voting share capital of MédiaRéseaux or (ii) a number of Class B
  Shares equal to or greater than the number of Class B Shares received by Suez
  on the date hereof multiplied by the fraction 65/85, such number of shares
  being adjusted in order to take into account any division of the Class B
  Shares, allotment for free or new Class B Shares, exchange of shares or other
  similar operations affecting the Class B Shares;

  
	
   

  	
   

  	
   

  
	
  “Strategic Partner”

  	
   

  	
  shall mean an industrial or media group headquartered in France, that
  UPC, acting reasonably, agrees to designate as a Strategic Partner and that
  is admitted to MédiaRéseaux as a Shareholder and initially acquires a
  significant shareholding therein;

  
	
   

  	
   

  	
   

  
	
  “Third Party”

  	
   

  	
  means an individual or entity that is not an Affiliate of the
  relevant Shareholder in question;

  
	
   

  	
   

  	
   

  
	
  “transfer”

  	
   

  	
  shall have the meaning given to it in Section 3.1(b); and

  
	
   

  	
   

  	
   

  
	
  “UPC Group”

  	
   

  	
  shall mean UPC and its Affiliates, excluding the MédiaRéseaux Group.

  



 


ARTICLE II


 


MANAGEMENT OF MÉDIARÉSEAUX


 


SECTION
2.1  Composition and Meetings of the
Board.  (a)  MédiaRéseaux shall be managed by a Board
comprised of no less than three and no more than twelve Directors.  For so long as Suez holds a Strategic
Interest, the Shareholders undertake to cause to be elected to the Board such
number of Suez designees as corresponds to Suez’s proportionate ownership in
the voting share capital of MédiaRéseaux. 
In the event this calculation results in a fractional number of
Directors, the fraction shall be rounded up or down to the nearest whole
number, provided, however, that the number of Directors nominated by Suez
shall not be less than one as long as Suez holds a Strategic Interest.  The initial Board will consist of five
Directors, including one Director elected from among Suez designees, and four
elected from among the designees of holders of Class A Shares.  The number of Directors may be increased or
decreased from time to time, by vote of the ordinary general meeting of
shareholders of MédiaRéseaux, without prejudice to Suez’s right to have at
least one designee elected as Director as long as Suez holds a Strategic
Interest.


 


(b)  The active presence on the Board of a
high-level Director nominated by Suez is important to the future development of
MédiaRéseaux, particularly in connection with


 


3

















 


MédiaRéseaux’s relations with the French
government and institutions, and the search for a Strategic Partner.  Consequently, subject to paragraph (c)
below, the nomination by Suez, and the active participation and support, of at least
one duly-qualified Director shall be an obligation of Suez, not just a right.


 


(c)  There shall be at least four meetings of the
Board per calendar year.  All meetings
of the Board shall be held in Paris, upon convocation of the Chairman.  The parties shall cause their designated
Directors to attend meetings of the Board; provided, however,
that for any meeting of the Board held in addition to the four meetings per
calendar year referred to above, any Suez designated Director, if he cannot
attend the meeting in person, may nominate any other Director who is present to
act as his alternate and to vote in his place at the meeting.


 


(d)  Directors shall receive no fees for their
services.


 


(e)  The quorum for any meeting of the Board
called to decide upon any matter referred to in Section 2.2 shall not be
satisfied if at least one Director appointed by Suez does not attend the
meeting and the meeting shall be adjourned for seven (7) days.  If at the adjourned meeting no Director
appointed by Suez attends, the Directors then present shall be deemed to
constitute a quorum for all purposes.


 


(f)  Unless the prior notice requirement is
waived by the Suez designated Director, 
the Chairman shall give at least ten (10) days’ prior written notice of
a Board meeting held to approve one of the matters listed in Section 2.2,
and at least five (5) days’ prior written notice for other meetings.  Any such notice shall contain an agenda
identifying in reasonable detail the matters to be discussed at the meeting and
shall be accompanied by copies of any relevant documents to be discussed at the
meeting.  Business not on the agenda may
be discussed at the meeting but shall not be voted upon except with the consent
of Suez’s designated Directors.


 


(g)  Except for matters listed in Section 2.2,
Board decisions shall be adopted by simple majority vote.


 


SECTION 2.2 
Special Voting Requirements. 
For so long as Suez holds a Strategic Interest, and without prejudice to
Suez’s rights as shareholder under French law, adoption of the decisions set
forth below shall require the unanimous affirmative vote of the Director(s)
nominated by Suez:


 


(a)           A
Major Business Combination.  If any such
Major Business Combination is proposed after the first anniversary of this
Agreement, and if Suez votes against any such proposed Major Business
Combination, then UPC may exercise its call right under Section 4.3
regardless of whether the period in which such option may otherwise be
exercised is then in effect, and Fair Market Value will be determined as if
such transaction does not take place. 
(For the avoidance of doubt, this right is without prejudice to UPC’s
right under Section  4.1 to
exercise a call option any time before the first anniversary of this
Agreement.)


 


(b)           A
fundamental change in the business strategy of MédiaRéseaux such that the
MédiaRéseaux Group’s business is not wholly in telecommunications, data
distribution and/or content, with related goods and services;


 


4

















 


(c)                                  The following
transactions between any member of the MédiaRéseaux Group, on the one hand, and
any Affiliate of UPC that is not a member of the MédiaRéseaux Group, on the
other hand:


 


(1)          In respect of mergers, acquisitions or
dispositions with an enterprise value in excess of EUR 10 million or similar
transactions where there is no fairness opinion by an independent expert
selected by the Board.


 


(2)          In respect of any new commercial contract or
series of interrelated commercial contracts (in either case, to be treated as a
“contract” for purposes hereof) entered into contemporaneously covering the
same service representing more than EUR10 million of revenues or costs per
calendar year to the MédiaRéseaux Group unless the Board determines that the
contract is in the corporate interest of MédiaRéseaux (such corporate interest
to be determined by taking into account, among other things, the preservation
of the interests of MédiaRéseaux shareholders).  For purposes of making this determination, if Suez reasonably
determines that the contract is not in the corporate interest of MédiaRéseaux,
then Suez shall request that the Board appoint an independent expert, in which
case UPC shall cause its designated Directors to vote in favor of the
appointment of an expert selected by the Board.  The Board shall choose the expert in its discretion, provided
only that the expert possesses the requisite qualifications and
independence.  No approval or fairness
opinion under the Shareholders Agreement is required for intra-group
arrangements to which the UPC Group is subject as of March 15, 2004, provided,
however, that (x) any modification or renewal of such existing arrangements
will be treated as a “new commercial contract” for purposes of this Section
2.2(c)(2) if the modification or renewal is on terms significantly less
favorable to the MédiaRéseaux Group than those that applied under such existing
arrangements, and (y) any extension of those existing arrangements to Noos and
its subsidiaries will be treated as a “new commercial contract” for purposes of
this Section 2.2(c)(2).  Exhibit
2.2(c)(2) contains a list of related-party measures and corresponding
material terms that the parties agree are in the corporate interest of
MédiaRéseaux.


 


(3)          In respect of the provision of financing by
UPC and its Affiliates to the MédiaRéseaux Group other than on arm’s length
conditions as compared to conditions that would otherwise be available to
MédiaRéseaux on a stand-alone basis. 
The Parties agree that for the period ending on the earlier of (i) the
fourth anniversary hereof or (ii) the date on which Suez ceases to hold a
Strategic Interest, the acquisition debt of MédiaRéseaux as of the Closing Date
shall bear interest at a rate equal to Euribor plus 5.5% per annum, as
stipulated in


 


5

















 


Section 5(4) of Schedule
2.6 to the Purchase Agreement, or the equivalent fixed swap rate.


 


(d)  The incurrence by MédiaRéseaux or any of its
subsidiaries of external financial debt only if such external financial debt,
when added to all then existing external financial debt of MédiaRéseaux and its
subsidiaries, would, at the time of its issuance, exceed 6 times the budgeted
annual EBITDA for MédiaRéseaux and its subsidiaries for the year in which such
indebtedness is incurred.  “External
financial debt” shall mean financial indebtedness to lenders other than
companies in the MédiaRéseaux Group. 
The restriction contained in this paragraph shall not restrict the
Board’s ability to incur indebtedness in excess of this limitation if the Board
determines that such indebtedness is required in order to support the ongoing
existing business of the MédiaRéseaux Group.


 


SECTION 2.3 
Preservation of Governance Rights.  Suez’s rights under Sections 2.1,  2.2 and 3.6
will end as soon as Suez ceases to hold a Strategic Interest.


 


ARTICLE III


 


TRANSFERS OF CLASS B SHARES


 


SECTION
3.1  Transferability.  (a) The Class B Shares may be transferred
only in accordance with the provisions set forth herein. Any transfer of Class
B Shares in violation of this Agreement shall be void, ab initio.


 


(b) For the
purposes of this Agreement, the term “transfer”
shall mean any sale, exchange, pledge or grant of a security interest or any
other disposition of the Class B Shares, or of any right, title or interest
therein, whether voluntary or by operation of law, that would change the legal
or beneficial ownership of the Class B Shares. 
The term “transfer” includes, without limitation, any transaction that
creates a form of joint ownership in the Class B Shares between the transferor
and one or more persons or any transaction that creates or grants an option,
warrant, or right to obtain an interest in the Class B Shares.


 


(c) The
transfer in shares of an Affiliate that holds, directly or indirectly, shares
in MédiaRéseaux shall be deemed a transfer of the relevant Class A or Class B
Shares held directly or indirectly by that Affiliate, provided that both the
Affiliate’s assets and revenues, on a consolidated basis, consist principally
of the assets and revenues of the MédiaRéseaux Group.  Notwithstanding the foregoing proviso, if a transfer of shares of
an Affiliate is done for the purpose of avoiding the application of this Article
III and not for an independent business purpose, such transfer shall
nevertheless be deemed a transfer of MédiaRéseaux shares for purposes of this
Agreement, even if the Affiliate’s assets and revenues, on a consolidated
basis, do not consist principally of MédiaRéseaux Group assets and revenues.


 


(d)  Class B Shares, if and when acquired by UPC,
shall cease to be Class B Shares, and shall be treated as Class A Shares, for
purposes of this Agreement.


 


SECTION 3.2         No Transfer of Class B Shares Prior
to the Third Anniversary or Entry of Strategic Partner.  (a) Without prejudice to Suez’s rights as
set forth in Sections 3.3


 


6

















 


and 3.4 below, Suez hereby agrees and
covenants, on its own behalf and on behalf of its Affiliates, that no Class B
Share shall be transferred to a person or entity other than an Affiliate of
Suez prior to the earlier of (i) the third anniversary of this Agreement and
(ii) the date on which a Strategic Partner acquires a significant interest in
MédiaRéseaux.


 


(b)  Suez may transfer some or all of its Class B
Shares to an Affiliate, provided that: (i) Suez notifies UPC in writing of such
transfer at least thirty (30) days in advance; (ii) the relevant Affiliate
agrees in writing, in a form satisfactory to UPC, to be bound by the terms of
this Agreement; and (iii) if the relevant transfer occurs before the first
anniversary of this Agreement, the relevant Affiliate signs a separate Call
Option Agreement in favor of UPC, in the form of Exhibit 4.1.  A transfer of Class B Shares to an Affiliate
of Suez shall not release Suez from its obligations hereunder and Suez shall be
liable to UPC for any breach of this Agreement by the relevant Affiliate.


 


SECTION 3.3 
Tag-Along and Drag-Along Rights. 
The following provisions shall apply for so long as Suez is a
Shareholder:


 


(a) Tag-Along for Entirety of Interest.  In the event that one or more holders of
Class A Shares proposes to transfer all or any part of their Class A
Shares to a Third Party (a “Tag-Along
Purchaser”) in a transaction or series of related transactions such
that, following the proposed transfer, the Third Party acquires Control of
MédiaRéseaux (a “Tag-Along Offer”),
UPC shall provide written notice (the “Tag-Along
Offer Notice”) of the Tag-Along Offer to Suez at least thirty (30)
days prior to the proposed consummation of the Tag-Along Offer.  The Tag-Along Notice shall identify the
Tag-Along Purchaser, the number of Class A Shares to be transferred, the
proposed amount and form of consideration per Class A Share (and if such
consideration consists in whole or in part of property other than cash, UPC
will provide such information relating to such consideration, to the extent
reasonably available to it, as Suez may reasonably require in order to evaluate
such non-cash consideration).  During
the thirty (30)-day period following receipt of the Tag-Along Offer Notice,
Suez shall have the right, by sending an irrevocable written notice to UPC
referring to this Section 3.3(a), to have all (but not less than all)  of the Class B Shares included in such
transfer, and such shares shall have priority over the shares of the holders of
Class A Shares with respect to such transfer. The sale of Class B Shares
pursuant to this Section 3.3(a) shall be made upon terms identical to
those proposed by the Third Party to the holders of the Class A Shares, and
shall be made simultaneously with the sale of such Class A Shares; provided,
however, that


 


(i) where the consideration per share payable
by the Third Party consists of non-cash consideration, the Third Party may, at
its option, choose to substitute the cash value of that consideration (in which
case the consideration to be paid to Suez shall be equal to the Fair Market
Value of such non-cash consideration as determined pursuant to Section 4.4);


 


(ii) where the relevant transfer of Control
is part of a larger transaction involving the transfer of other assets
unrelated to MédiaRéseaux, Suez shall be entitled to request a determination of
the Fair Market Value pursuant to Section 4.4, in which case the price
paid to Suez for its shares shall be equal to the Fair Market Value so determined;


 


7

















 


(iii) If Suez invokes the Fair Market Value
procedure in either case (i) and (ii) above, and the procedure confirms that
the Fair Market Value is equal to or lower than the price (or value of non-cash
consideration) proposed in the Tag Along Offer, Suez shall be required to pay
all costs associated with the Fair Market Value procedure.


 


(b) Drag-Along for Entirety of Interest.  If a Third Party (a “Drag-Along Purchaser”) proposes to acquire
Control of MédiaRéseaux through the acquisition of Class A Shares in a
transaction or series of related transactions sufficient to enable the Third
Party to acquire Control, and Suez elects not to exercise its tag along right
under Section 3.3(a), then UPC shall have the option to purchase, or
cause to be purchased by the Third Party, all but not part only of the Class B
Shares by either UPC or the Third Party, by delivering an irrevocable notice of
purchase to Suez (a “Drag-Along Sale Notice”).  The Drag-Along Sale Notice shall identify
the Drag-Along Purchaser, the proposed amount and form of consideration per
Class B Share (and if such consideration consists in whole or in part of
property other than cash, UPC will provide such information relating to such consideration,
to the extent reasonably available to it, as Suez may reasonably require in
order to evaluate such non-cash consideration).  Suez hereby agrees, on its own behalf and on behalf of all other
Class B Share holders, to sell such shares to UPC or its designee upon receipt
of written notice from UPC referring to this Section 3.3(b).  The price per share, and form of
consideration payable for such sale will be identical to the price per share
and form of consideration payable by the Third Party in connection with its
acquisition of Control of MédiaRéseaux. 
Provisos (i), (ii) and (iii) of Section 3.3(a) above shall apply,
mutatis mutandis, to the terms of
such sale.


 


(c) Proportionate Tag-Along.  In the event that one or more holders of
Class A Shares proposes to transfer all or any part of their shares to a Third
Party (a “Tag-Along Purchaser”) in
an amount which does not transfer Control over MédiaRéseaux (a “Tag-Along Offer”), UPC shall provide
written notice (the “Tag-Along Offer
Notice”) of the Tag-Along Offer to Suez at least fifteen (15)
days prior to the proposed consummation of the Tag-Along Offer.  The Tag-Along Notice shall identify the
Tag-Along Purchaser, the number of Class A Shares to be transferred, the
proposed amount and form of consideration per Class A Share (and if such
consideration consists in whole or in part of property other than cash, UPC
will provide such information relating to such consideration, to the extent
reasonably available to it, as Suez may reasonably require in order to evaluate
such non-cash consideration).  During
the fifteen (15)-day period following receipt of the Tag-Along Offer Notice,
Suez shall have the right, upon sending an irrevocable written notice to UPC
referring to this Section 3.3(c), to have a proportionate number of
the Class B Shares included in such transfer.  For example, if the proposed transfer to the Third Party involves
10% of the Class A Shares, then Suez would have the right to sell 10% of its
Class B Shares.  All sales of Class B
Shares by Suez pursuant to this Section 3.3(c) shall be made upon terms
identical to those proposed by the Third Party to the holders of the Class A
Shares and shall be made simultaneously with the sale of such Class A Shares; provided,
however, that where the consideration per share that is payable by the
Third Party consists of non-cash consideration, the Third Party may, at its
option, choose to substitute the cash value of that consideration (in which
case the consideration to be paid to Suez shall be equal to the Fair Market
Value of such non-cash consideration as determined pursuant to Section 4.4).


 


8

















 


(d) Proportionate Drag-Along.  If Suez does not elect to exercise its
proportionate tag along right in the situation described in Section 3.3(c),
then UPC shall have the option to purchase, or cause to be purchased by the
Third Party, by either UPC or the Third Party delivering an irrevocable notice
to purchase to Suez (a “Proportionate
Drag-Along Sale Notice”).  The
Proportionate Drag-Along Sale Notice shall identify the Third Party purchaser,
the proposed amount and form of consideration per Class B Share (and if such
consideration consists in whole or in part of property other than cash, UPC
will provide such information relating to such consideration, to the extent
reasonably available to it, as Suez may reasonably require in order to evaluate
such non-cash consideration).  The
number of Class B Shares included in the Drag-Along shall be the number of
outstanding Class B Shares that would have been included in the proportionate
tag-along right had Suez elected to exercise it.  Suez hereby agrees, on its own behalf and on behalf of all other
Class B Share holders, to sell such shares to UPC or its designee upon receipt
of written notice from UPC referring to this Section 3.3(d).  The price per share, and the form of
consideration payable for such sale will be identical to the price per share
and form of consideration payable by the Third Party in connection with its
purchase of Class A Shares; provided, however, that:


 


(i) where the consideration payable by the
Third Party consists of non-cash consideration, UPC or its designee shall have
the right to substitute the cash value of that consideration (in which case the
consideration to be paid to Suez shall be equal to the Fair Market Value of
such non-cash consideration as determined pursuant to Section 4.4);


 


(ii) Suez shall be entitled to request a
determination of the Fair Market Value pursuant to Section 4.4, in which
case the price paid to Suez for its shares shall be equal to the Fair Market
Value so determined.


 


(iii) If Suez invokes the Fair Market Value
procedure in either case (i) and (ii) above, and the procedure confirms that
the Fair Market Value is equal to or lower than the price (or value of non-cash
consideration) proposed in the Proportionate Drag-Along Sale Notice, Suez shall
be required to pay all costs associated with the Fair Market Value procedure.


 


(e) Representation and Warranties;
Conditions.  Suez, on behalf of
itself and others selling Class B Shares, shall make the same representations,
warranties, covenants, indemnities and agreements (so long as they are made
severally and not jointly) as the Class A Share sellers are making to the Third
Party regarding its ownership of the Class B Shares transferred, its ability to
transfer such Class B Shares free and clear of all encumbrances and its
authority and due authorization to transfer the Class B Shares, to the
exclusion of any other representations, warranties, covenants, indemnities and
agreements.  The sale of the Class B
Shares will be subject to the same terms and the same conditions as the sale of
the Class A Shares (including the Third Party obtaining any required regulatory
or other required approvals), and it is understood that any notice to sell or
purchase pursuant to this Section 3.3 is subject to the satisfaction of
such conditions.


 


(f) Change of Control Due to Subscription
for New Class A Shares.  If a Third
Party intends to acquire Control of MédiaRéseaux through the subscription of
new Class A Shares, or shares having equivalent economic interests and voting
rights to Class A Shares, for


 


9

















 


cash, then the provisions of Section 3.3(a) and Section
3.3(b) shall apply such that Suez and its Affiliates will have the right to
sell to the Third Party and UPC shall cause the Third Party to purchase, all
but not part only of their Class B Shares under the terms and conditions set
forth under Section 3.3(a) above, or, if Suez elects not to exercise its
tag along right under Section 3.3(a), the Third Party will have to right
to acquire from Suez and its Affiliates and Suez and its Affiliate agree to
sell, all but not part only of their Class B Shares under the terms and
conditions set forth under Section 3.3(b) above.


 


SECTION 3.4 
Strategic Partner Exit. 
If during the first three years of this Agreement, a Strategic Partner
is located, Suez shall have the right of first negotiation to sell all (but not
less than all) of its Class B Shares to such Strategic Partner on terms and
conditions agreed between Suez and the relevant Strategic Partner.   If for any reason Suez and the Strategic
Partner are unable to agree on the terms of a sale within thirty (30) days, UPC
undertakes to refrain, during a period of six (6) months as from the end such
thirty (30)-day period, from negotiating, concluding and generally discussing
the terms of any acquisition of an interest in MédiaRéseaux with such Strategic
Partner.  The Strategic Partner shall be
free, at the end of such six (6)-months period,  to negotiate the acquisition of an interest in MédiaRéseaux
directly from MédiaRéseaux and/or UPC; provided however that UPC shall not
conclude any sale of shares in MédiaRéseaux with such Strategic Partner on
terms which are less favourable to the Strategic Partner than those offered by
Suez to the latter.


 


SECTION 3.5 
Right of Last Offer.  (a)
On the earlier of (i) the third anniversary of this Agreement, and (ii) the
date on which a Strategic Partner shall have acquired a significant
shareholding in MédiaRéseaux, Suez shall be free to transfer its Class B Shares
to a Third Party of its choice, subject only to UPC’s right of last offer as
described in this Section 3.5.


 


(b)           Suez hereby undertakes, on its own
behalf and on behalf of all other Class B Shareholders, to notify UPC in
writing of any offer that is made to acquire Class B Shares that the holder is
prepared to accept at least thirty (30) days prior to entering into the
relevant contract of transfer, of the identity of the potential buyer, of the
price, of the payment terms and of the other terms and conditions of such
proposed contract of transfer, by providing a copy of all the relevant
contracts or other documents reflecting the arrangements together with an
unofficial translation into the English language if the same are not in English
(such notice and such information, collectively the “Purchase Information”). 
The Purchase Information shall also contain information as to the
percentage of the Class B Shares subject to the offer.  If the consideration for the proposed sale,
transfer or disposal of shares is not expressed in cash, such consideration
shall be valued in cash equal to the then fair market value of the non-cash
consideration, as certified by Suez in the Purchase Information.


 


(c)           If the proposed transaction involves
only cash consideration, UPC shall have fifteen (15) days after receipt of the
Purchase Information to notify Suez in writing whether the UPC wishes to
exercise its right to make an offer one Euro higher than the offer proposed by
the third party, and thereby acquire in whole (but not in part) the relevant
Class B Shares identified in the Purchase Information.  A failure by UPC to timely provide such
notice shall constitute a waiver of UPC’s right to acquire such shares.


 


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(d)           If the proposed transaction involves
non-cash consideration:


 


(i)            UPC
shall have fifteen (15) days to notify Suez in writing whether it challenges
the Purchase Information valuation of the non-cash consideration.  A failure by UPC to timely provide such
notice shall constitute a waiver of UPC’s right to acquire such shares.


 


(ii)           Promptly
following such notice, the Fair Market Value of such non-cash consideration
shall be finally determined in accordance with the procedure set forth in Section
4.4.


 


(iii)          UPC
shall have fifteen (15) days after final determination of the Fair Market Value
of the non-cash consideration, to notify Suez in writing that UPC wishes to
exercise its right to make a last offer one Euro higher than the offer made by
the third party, and thereby acquire in whole (but not in part) the Class B
Shares described in the Purchase Information. 
A failure by UPC to timely provide such notice shall constitute a waiver
of the UPC’s right to acquire such shares.


 


(e)           If
UPC notifies Suez pursuant to Section 3.5(c) or (d)  that UPC exercises its right of last
offer, UPC or its designee shall acquire and accept the transfer of, and Suez
or its Affiliate shall sell to UPC or its designee, the Class B Shares
specified in the Purchase Information at the purchase price stipulated in UPC’s
last offer, and otherwise upon the terms and conditions as set forth in the Purchase
Information (except with respect to the substitution of cash for non-cash
consideration as contemplated above in which case the Fair Market Value as
determined under Section 3.5(d)  shall
apply), fifteen (15) days after the later of (i) such notice or (ii) receipt of
any required approvals from, or the expiration or earlier termination of any
waiting periods required by, governmental or supragovernmental agencies.


 


(f)            If UPC waives its right of last
offer as described above, then Suez may sell the relevant Class B Shares to the
proposed Third Party transferee at any time within three (3) months after the
effective date of the relevant waiver by UPC. 
Any such sale shall be upon the terms and conditions described in the
Purchase Information and shall be subject to this Agreement.  If such sale is not consummated within such
three (3) month period, or if the terms of the sale change as compared to the
terms described in the Purchase Information, Suez shall have to re-initiate the
right of last offer procedure described in Sections 3.5(b) through (e)
above before transferring any of its Class B Shares.  Any transfer of less than all of the Class B Shares must be made
such that Suez is appointed as agent for purposes of all elections and notices
under this Article III and under Article IV. 
In the case of a transfer of all of the Class B Shares, the assignee
shall expressly assume the obligations imposed on Suez in respect of all Class
B Shareholders under this Agreement.


 


(g)           The procedures described in this
Section shall not apply to transfers of Class B Shares to an Affiliate of Suez,
provided that:  (i) Suez notifies
UPC in writing of such transfer at least thirty (30) days in advance and (ii)
the relevant Affiliate agrees in writing, in a form satisfactory to UPC, to be
bound by the terms of this Agreement.  A
transfer of shares to an


 


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Affiliate of Suez shall not release Suez from
its obligations hereunder.  Suez shall
be liable to UPC for any breach of this Agreement by the relevant Affiliate.


 


SECTION
3.6  Pre-Emptive Rights.  (a) UPC shall be entitled to suppress Suez’s
preferential right of subscription (droit
préférentiel de souscription) only in the following cases:


 


(i)            upon a capital increase of MédiaRéseaux
effected through a contribution in kind;


 


(ii)           the issuance by MédiaRéseaux of
shares for management and employee incentive schemes;


 


(iii)          the issuance of warrants or
convertible securities for high-yield or other financings, except where UPC
subscribes for such warrants or convertible securities in which case Suez would
have a right to subscribe on the same basis as UPC, proportionate to Suez’s
percentage interest holding in MédiaRéseaux compared to that of UPC.


 


(b)           Section 3.3 and Article IV
shall not apply to any securities in MédiaRéseaux subscribed for by Suez
pursuant to its preferential right of subscription (droit préférentiel de souscription).


 


ARTICLE IV


 


PUTS AND CALLS


 


SECTION 4.1 Twelve Month Call Option by
UPC.  Suez hereby promises to sell
to UPC all of the Class B Shares at any time during the first twelve months
following this Agreement, at a price equal to 85,000,000 Euros, increased by
interest at a rate of 8% per annum, applied to the period between the date of
this Agreement and the date of the notice referred to in the next
sentence.  UPC shall have the right (but
not the obligation) to purchase such shares, and may exercise such option by
sending a notice to Suez in the form and manner provided for in the option
agreement (promesse de vente)
attached hereto as Exhibit 4.1 (the “Call
Option Agreement”).  The Call
Option Agreement will be signed by Suez contemporaneously with the signature of
this Agreement.  If UPC exercises the
option, the price for the Class B Shares shall be paid by UPC in cash, in
common class A stock of UGC,  in Series A
common stock of Liberty Media International, Inc. (provided such Series A
common stock satisfies the test for “Marketable Securities” in Exhibit 1), or
any  combination
of these three.


 


 SECTION
4.2  Put Option by Suez.  On or before the date that is not more than
four (4) months and not less than three (3) months prior to the third, fourth
or fifth anniversary of this Agreement, Suez shall have the right to request
that UPC purchase all (but not less than all) of the Class B Shares at Fair
Market Value, by sending UPC a notice in the form attached as Exhibit 4.2-I
hereto.  UPC shall be required to
purchase such shares, or take such other action as provided below, within three
(3) months after determination of Fair Market Value, which determination shall
be made following the third, fourth or fifth anniversary of this Agreement, as
applicable, subject to the following conditions:


 


(a) The price paid by UPC or its designee for
such shares may consist of cash or Marketable Securities, or a combination of
cash and Marketable Securities, at UPC’s option.


 


12

















 


(b) 
If UPC elects not to purchase such shares:


 


(i) UPC shall assist Suez in obtaining a bona
fide third party offer to purchase all of Suez’s shares at a price no lower
than Fair Market Value.  Any offer by a
third party would be subject to UPC’s right of last offer in Section 3.5;


 


(ii) if no such third party offer can be
found three (3) months after determination of Fair Market Value, then Suez
shall then have the right to decide, in its absolute discretion, to require
UPC: (x) to generate a bona fide third party offer to purchase 100% of
MédiaRéseaux at or above the Fair Market Value for 100% of MédiaRéseaux and/or
in parallel (y) to initiate a public offering of common shares in MédiaRéseaux
sufficient to create reasonable liquidity on customary terms (provided that no
lock-up restrictions as may be required by the underwriters shall apply to Suez
Class B Shares).  UPC irrevocably
undertakes to do all things and take all necessary actions that are required to
this effect, and Suez shall have an ongoing right to review and participate in
the process via a special steering committee created for this purpose. Class B
Shares shall have priority over the shares of the holders of Class A Shares
with respect to any secondary offering of shares in connection with an initial
public offering in accordance with clause (y) of this Section 4.2(b)(ii).


 


(iii) If after twelve (12) months following
the third, fourth or fifth anniversary of this Agreement immediately preceding
which the notice in Section 4.2 has been given, UPC has not succeeded
either in securing a third party offer to purchase 100% of MédiaRéseaux at or
above Fair Market Value for 100% of MédiaRéseaux, or in achieving an initial
public offering in accordance with clauses (x) or (y) of Section 4.2(b)(ii),
then Suez shall have the right, during a thirty (30) day period beginning at
the end of such 12-month period, to require that UPC purchase all (but not less
than all) of the Class B Shares at Fair Market Value.  To exercise this right, Suez shall send UPC a second notice in
the form attached as Exhibit 4.2-II, and Fair Market Value shall be determined
as of the date of such notice. UPC shall be required to purchase such shares,
and pay Suez the price thereof in cash or in Marketable Securities, or a
combination thereof, within three (3) months after the determination of Fair
Market Value.


 


(c) Suez shall lose its put option if it has
the opportunity to exercise a tag-along right for the entirety of its interest
under Section 3.3(a), yet declines to do so.


 


(d) Each Party acknowledges and agrees that
in light of, among other things, the restrictions on transferability of the
Class B Shares which are contained in this Agreement, Suez’s right under this Section
4.2 has a peculiar and special value to Suez and if there is a breach by
UPC of any of its obligations under this Section 4.2, Suez would be irreparably
harmed and consequently remedies at law or in damages would be inadequate to
compensate Suez from any such breach. In recognition of these facts, each Party
agrees that, in the event of any such breach, Suez shall be entitled to obtain
specific performance of UPC’s obligation under this Section 4.2 (such
specific performance shall not extend, however, to UPC’s obligation to initiate
a public offering pursuant to clause (b)(ii) above).


 


SECTION 4.3. 
Additional Call Option by UPC.  
During each of the three 30-day periods beginning respectively on the
third, fourth and fifth anniversaries of this Agreement,


 


13

















 


UPC shall have the right to purchase all (but not less than all) of the
Class B Shares at Fair Market Value by sending Suez a notice in the form
attached as Exhibit 4.3.  If it
receives such a notice, Suez shall be required to sell such shares to UPC
within thirty (30) days after determination of Fair Market Value.  The price for such shares may be paid, at
UPC’s option, in cash or Marketable Securities or a combination of cash and
Marketable Securities.


 


SECTION 4.4. 
Determination of Fair Market Value.  (a) Fair Market Value of the Class B Shares shall be equal to the
fair market value of all the Class B Shares at the date of the sending of the
relevant notice referred to in Section 3.3 or 4.3, or as of the
third, fourth or fifth anniversary of this Agreement, whichever immediately
follows the sending by Suez of the notice referred to in Section 4.2,
(the “FMV Notice Date”).  In determining Fair Market Value, no account
shall be taken of minority interest discount or control premium.  No difference shall be made between a Class
A Share and a Class B Share for purposes of determining Fair Market Value.


 


(b) The Parties and their respective
investment banks will attempt to agree on Fair Market Value within thirty (30)
days after the FMV Notice Date.  Failing
agreement within such time, each Party will simultaneously submit to the other,
forty-five (45) days after the FMV Notice Date, their proposed final
calculation of the Fair Market Value. 
If those two calculations are within 10% of one another (10% being
calculated based on the smaller of the two calculations), the Fair Market Value
shall be the average of the two calculations. 
If the difference between the two calculations is greater than 10%, then
the Parties shall choose an independent, internationally recognized investment
bank (the “Bank”) to fix a Fair
Market Value amount that is within the range of the two amounts proposed by the
two Parties.  The amount fixed by the
Bank (which shall render its opinion within thirty (30) days after its
appointment) shall constitute the Fair Market Value of the Class B Shares (or
other interest being valued).


 


(c) If the two Parties are unable to agree on
the appointment of the Bank within seven (7) days after the simultaneous
submission of their respective calculations as mentioned above, each Party will
appoint its own investment bank within a further seven (7) days, and each of
those two banks will appoint, within a further seven (7) days, the Bank from
amongst independent internationally recognized investment banks to render such
opinion.  Within thirty (30) days of its
appointment, the Bank will fix a Fair Market Value amount that is within the
range of the amounts proposed by the two Parties.  Bank’s determination will be final and binding on the parties,
except in the case of manifest error (erreur
grossière).


 


(d) Except as provided elsewhere in this
Agreement, each Party shall pay the fees and expenses of its own investment
bank, and share equally the fees and expenses of any neutral or third
investment bank.


 


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ARTICLE V


 


GENERAL TERMS AND CONDITIONS


 


SECTION 5.1. 
Term and Termination. 
This Agreement shall enter into effect upon its signature by the Parties
hereto and shall remain in effect for so long as any Class B Shares remain
outstanding.


 


SECTION 5.2 
No Waiver.  Any waiver of
a breach of any of the terms of this Agreement shall not operate as a waiver of
any other breach of such terms or conditions or any other terms or conditions,
nor shall any failure to enforce any provision of this Agreement operate as a
waiver of such provision or any other provision.


 


SECTION 5.3. 
Assigns.  The rights,
benefits and obligations of each of the Parties under this Agreement may
neither be assigned nor delegated without the prior written consent of the
other Party hereto, except (1) the rights and obligations of Suez shall be
transferred to a Third Party acquiring in the case of a transfer of all of the
Class B Shares to a Third Party pursuant to Section 3.5(f) and (2) the rights
and obligations of UPC shall be transferred to any person or entity holding the
majority of the Class A Shares.


 


SECTION 5.4 
Entire Agreement.  The
Agreement constitutes the entire agreement among the parties with respect to
the subject matter hereof.


 


SECTION 5.5 
Amendment.  This Agreement
may not be amended or modified, except by a written instrument signed by the
Shareholders.


 


SECTION 5.6         Articles
of Incorporation of MédiaRéseaux. 
Attached as Exhibit 5.6 is a copy of the articles of
incorporation (statuts) of
MédiaRéseaux as of the date hereof.  The
articles of incorporation may be modified from time to time in accordance with
French law by vote of the extraordinary general meeting of shareholders.  In the event of any inconsistency between
the terms of such articles of incorporation and the terms of this Agreement,
the terms of this Agreement shall prevail as between the Parties.


 


SECTION 5.7 
Notice.  All notices,
request, consents and other communications hereunder to any party shall be
deemed sufficient if contained in a written instrument delivered by (i)
personal delivery, (ii) postage prepaid, return receipt requested, registered
or certified mail (airmail if available), (iii) internationally recognized
express courier, such as Federal Express or (iv) facsimile with a
confirmation copy sent simultaneously in the manner contemplated by clauses
(i), (ii) or (iii) of this Section 5.7, in each case addressed to the
Party for whom intended at the address first set forth above or at such other
address as the intended recipient previously shall have designated by written
notice to the other Parties.


 


Notice by registered or certified mail shall
be effective on the date it is first presented for delivery to the intended
recipient by return receipt or equivalent. 
All notices and other communications required or contemplated by this Agreement
to be delivered in person or sent by courier shall be deemed to have been
delivered to and received by the addressee and shall be effective on the date
of delivery; notices delivered by facsimile with simultaneous confirmation copy
by registered or certified mail or by courier, shall be deemed delivered to and
received by the addressee and effective on the date of dispatch of such
confirmation copy.


 


15

















 


SECTION 5.8 
Jurisdiction.  Any
controversy or claim arising out of or relating to this Agreement which cannot
be settled amicably shall be submitted to the exclusive jurisdiction of the
courts in Paris, France.


 


SECTION 5.9 
Governing Law.  The
validity, construction, performance and enforceability of this Agreement shall
be governed by the laws of France.


 


SECTION 5.10 
Signature of UGC.  UGC
agrees to be jointly and severally liable for the obligations of UPC under Articles
III and IV, save that such liability will terminate if Suez has the
opportunity to exercise a tag-along right for the entirety of its interest
under Section 3.3(a), yet declines to do so.


 


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IN WITNESS WHEREOF, the Shareholders have
executed this Agreement as of the date shown below.


 


	
  Dated: 1st July, 2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UPC FRANCE HOLDING BV

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Raymond Collins

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Raymond Collins

  
	
   

  	
   

  	
  Title :

  	
  Director Strategy

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UNITEDGLOBALCOM, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Jeremy Evans

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeremy Evans

  
	
   

  	
   

  	
  Title :

  	
  Attorney-in-fact

  
	
   

  	
   

  
	
   

  	
  SUEZ SA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Michel Sirat

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michel Sirat

  
	
   

  	
   

  	
  Title :

  	
   

  



 


*  * 
*  *


 


List of Exhibits


 


 


	
  Exhibit 1

  	
   

  	
  Trading volume thresholds

  
	
  Exhibit 2.2(c)(2)

  	
   

  	
  Approved synergy measures (exhibit to be completed in good faith
  after signature)

  
	
  Exhibit 4.1 :

  	
   

  	
  12-Month Call Option Agreement

  
	
  Exhibit 4.2-I :

  	
   

  	
  Form of Notice for Suez Initial Put

  
	
  Exhibit 4.2-II :

  	
   

  	
  Form of Notice for Suez Second Put

  
	
  Exhibit 4.3 :

  	
   

  	
  Form of Notice for UPC Call

  
	
  Exhibit 5.6 :

  	
   

  	
  Articles of Incorporation (statuts)
  of MédiaRéseaux

  



 


17