Exhibit 10.12
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GENERAL AGREEMENT
THIS GENERAL AGREEMENT, dated as of June 16, 1999 (the "Agreement"), is by
and between UNITED INTERNATIONAL HOLDINGS, INC., a Delaware corporation ("UIH"),
and AUSTAR UNITED COMMUNICATIONS LIMITED, a Delaware corporation (the
"Company").
RECITALS
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A. UIH indirectly owns interests in multi-channel television, programming
and telecommunications operating companies throughout the world. The Company is
acquiring from certain subsidiaries of UIH ownership interests in certain
operating companies that are engaged in such activities in Australia and New
Zealand.
B. The Company is an indirect, wholly, owned, subsidiary of UIH. As a
result UIH will consolidate the financial results of the Company and its
subsidiaries in UIH's financial statements. As a subsidiary of UIH, the Company
is subject to the covenants and restrictions of indentures governing UIH's and
its subsidiaries' debt securities. UIH may also be subject to certain legal
obligations as a result of its ownership of an interests in the Company.
C. It is anticipated that the Company will be domesticated to Australia in
the near future and will then commence an initial public offering of its
ordinary shares on the Australian Stock Exchange, as well as a Rule 144A
offering outside Australia (collectively, the "Offering").
D. UIH Asia/Pacific Communications, Inc. ("UAP"), a subsidiary of UIH and
indirect parent of the Company has agreed to make or have a third party make
capital contributions to certain subsidiaries of the Company in certain
circumstances. UIH and the Company have agreed that the Company will make such
contributions if requested by UIH or that the Company will assume such
obligations.
E. In connection with this shareholder relationship, UIH and the Company
have agreed to take certain actions and restrict certain activities with respect
to one another, all as more particularly set forth in this Agreement.
AGREEMENT
1. COVENANT NOT TO COMPETE. For so long as UIH holds, directly or
indirectly, 50% or more of the outstanding ordinary shares of the Company on a
fully diluted basis:
(a) UIH shall not, and shall not permit its majority-owned affiliates
to, pursue any multi-channel television or video services or telephone or
Interact access opportunities specifically directed to the Australia or New
Zealand markets unless: (i) UIH has first presented such opportunity in writing
to the Board of Directors of the Company; and (ii) the members of the Board of
Directors of the Company who are not directors or officers of UIH or officers of
the Company have decided not to pursue such opportunity and the Company has
given notice of such decision in writing to UIH. The Company will respond with
reasonable promptness after the opportunity is presented to the Company by UIH.
(b) The Company shall not, and shall not permit to its controlled
affiliates to, pursue any multi-channel television or video services or
telephone or Internet access opportunities in markets outside of Australia or
New Zealand unless: (i) the Company has first presented such opportunity in
writing to the Board of Directors of UIH and (ii) the members of the Board of
Directors of UIH who are not directors or officers of the Company have decided
not to pursue such opportunity and UIH has given notice of such decision in
writing to the Company. UIH will respond with reasonable promptness after the
opportunity is presented to UIH by the Company.
2. COMPLIANCE WITH FINANCIAL REPORTING AND OTHER LEGAL REQUIREMENTS.
(a) In order to assist UIH-and its subsidiaries compliance with their
respective reporting obligations under the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and all other United States
federal and state securities laws (collectively, the "U.S. Securities Laws"),
and to avoid potential liability by UIH thereunder, and to enable UIH to prepare
its consolidated financial statements in accordance with United States generally
accepted accounting principles ("GAAP"), as in effect from time to time, and to
comply otherwise with it reporting obligations under the U.S. Securities Laws,
the Company shall (i) timely provide UIH with audited financial statements of
the Company in compliance with United States GAAP (or in such other accounting
principles as UIH may reasonably request) in such form and with respect to such
periods as UIH shall reasonably request, and (ii) provide such financial and
other information as UIH may reasonably require to comply with its reporting
obligations under the U.S. Securities Laws and with the reporting obligations of
any exchange or market on which UIH's securities are listed for trading and as
may be necessary or appropriate for UIH to limit or avoid liability under the
securities laws of any jurisdiction in connection with any action being taken by
UIH. The Company shall supply UIH with, and hereby consents to the disclosure by
UIH of, all such financial and other information to the extent deemed necessary
or appropriate by UIH in its sole discretion in order to comply with or satisfy
the public disclosure obligations of UIH or any affiliate of UIH under the U.S.
Securities Laws and with the reporting obligations of any exchange or market on
which UIH's or such affiliate's securities are listed for trading and as may be
necessary or appropriate for UIH to limit or avoid liability under the
securities laws of any jurisdiction in connection with any action being taken by
UIH.
(b) The Company shall take all actions reasonably required to assist
UIH and its subsidiaries comply with any and all requirements imposed by law as
a result of UIH's ownership of a direct or indirect interest in the Company. The
Company shall advise UIH of any obligations imposed on UIH by the laws of
Australia or New Zealand as a result of its ownership of an interest in the
Company.
3. INDEMNIFICATION BY THE COMPANY.
(a) If UIH is requested to execute any underwriting or similar
agreement in connection with the Offering or any other offering or sale of
ordinary shares by the Company (the "Underwriting Agreement"), the Company shall
defend, indemnify and hold UIH harmless from and against any and all losses,
claims, damages, obligations, liens, assessments, judgments, fines, liabilities,
and other costs and expenses (including without limitation interest, penalties
and any investigation, legal and other expenses incurred in connection with, and
any amount paid in settlement of, any action, suit or proceeding or any claim
asserted, as the same are incurred (collectively, "Liabilities")) that UIH may
sustain or suffer based upon, arising out of, by reason of or otherwise in
respect of or in connection with the Underwriting Agreement; provided, however,
that the Company will not be liable to UIH (i) to the extent that it is finally
judicially determined that such Liabilities resulted from the willful misconduct
or gross negligence of UIH; or (ii) to the extent that it is finally judicially
determined that such Liabilities resulted solely, from the material breach by
UIH of any representation, warranty, covenant or other agreement of UIH
contained in the Underwriting Agreement relating to UIH or its subsidiaries
other than the Company and its subsidiaries; and provided, further, however,
that if and to the extent that such indemnification is unenforceable for any
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reason, the Company shall make the maximum contribution to the payment and
satisfaction of such indemnified liability which shall be permissible under
applicable laws. The indemnification and contribution provided for in this
Section 3 will remain in full force and effect regardless of any investigation
made by or on behalf of UIH.
(b) INDEMNIFICATION PROCEDURE; NOTICE; DEFENSE. Promptly after
becoming aware of any Liabilities or the making of any claim or demand by any
third party that may result in the incurrence of any Liabilities, UIH shall
notify the Company of such incurrence, claim or demand; provided, that the
failure of UIH to so notify the Company shall not relieve the Company of any
liability under Section 3(a) hereof, except if the Company has been materially
prejudiced by such failure to be so notified. In case of any notice to the
Company, the Company shall be entitled to participate in, and if it wishes, to
assume, the defense of any such claim or demand and, after notice of its intent
to assume such defense, the Company will not be liable for any attorney's fees
or other expenses subsequently incurred by UIH in connection with such claim;
provided, that UIH shall have the right to employ counsel to represent it if, in
the reasonable judgment of UIH's counsel, there is reasonably likely to be a
conflict of interest such that representation of UIH and the Company by the same
counsel, in which event the reasonable fees and expenses of appropriate separate
counsel shall be borne by the Company. If the Company does not elect within a
reasonable time after receipt of notice to assume the defense of any suit
brought to enforce a claim or demand referred to above, UIH shall be entitled to
assume the control of such defense, in which case the reasonable fees and
expenses incurred by UIH in the conduct of such defense, including the
reasonable fees and expenses of counsel, shall be reimbursed by the Company as
the same are incurred from time to time by UIH (in addition to local counsel) in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
The Company shall not, without the prior written consent of UIH, effect any
settlement of any pending or threatened claim or action in respect of which UIH
is or could have been a party and indemnity could have been sought hereunder by
UIH unless such settlement includes an unconditional release of UIH from all
liability on any claims that are the subject matter of such action.
4. COMPLIANCE BY THE COMPANY WITH UIH INDENTURES.
(a) The Company shall take no action or inaction that will or
reasonably could result in a breach of (i) the Indenture, dated as of February
5, 1998, by and between UIH and Firstar Bank of Minnesota, N.A. ("Firstar"), as
trustee, as the same may be amended or supplemented (the "UIH Indenture"), (ii)
the Indenture, dated as of April 29, 1999, by and between UIH and Firstar, as
trustee, as the same may be amended or supplemented (the "1999 UIHo Indenture"),
(iii) the Indenture, dated as of May 14, 1996, by and between UIH
Australia/Pacific, Inc., a Colorado corporation ("UIH A/P"), and Firstar, as
trustee, as the same may be amended or supplemented (the "1996 UIH A/P
Indenture"), or (iv) the Indenture, dated as of September 23, 1997, by and
between UIH A/P and Firstar, as trustee, as the same may be amended or
supplemented (the "1997 UIH A/P, Indenture" and, together with the UIH
Indenture, 1999 UIH Indenture and the 1996 UIH A/Po Indenture, the "Indentures")
or any other indenture, or agreement to which UIH or any of its subsidiaries is
party, including UIH A/P, governing indebtedness of UIH or such subsidiaries, as
the case may be, that replaces or refinances any indebtedness governed by an
Indenture or otherwise provides funding to UIH or its subsidiaries. UIH shall
use, and shall cause it subsidiaries to use, reasonable efforts to assure that
any such replacement, refinancing or supplemental indentures or agreements do
not contain covenants that are materially more restrictive on actions of the
Company by reason of this paragraph, taken as a whole, than the Indentures.
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(b) The Company shall take no action or inaction that will or
reasonably could result in UIH or a subsidiary being required, pursuant to the
terms of an Indenture or of any such replacement, refinancing or supplemental
indenture or agreement, to take any action materially adverse to UIH or such
subsidiary as a result of action taken or omitted to be taken by the Company or
any of its controlled affiliates. The Company agrees that it and its controlled
affiliates shall apply the proceeds of the Offering in such a manner that none
of UIH, UIH A/P or any other subsidiary of UIH shall be required to repay,
repurchase or reacquire or offer to pay, purchase or acquire, pursuant to the
terms of an Indenture or any replacement, refinancing or supplemental indenture
or agreement, or to repay repurchase or reacquire any outstanding notes or other
obligations. The Company shall assure that its subsidiaries and controlled
affiliates comply with this paragraph 4.
5. OBLIGATIONS OF UAP. Upon the request of UIH or UAP, the Company shall
make capital contribution to its subsidiaries Saturn Communications Limited or
Austar Entertainment Pty Limited in satisfaction of obligations of UAP or any
other subsidiary of UIH undertaken in connection with financing obtained by such
subsidiaries.
6. TERM; TERMINATION. This Agreement shall remain in effect from the date
first set forth above except to the extent this Agreement is terminated pursuant
to this Section 5. This Agreement shall terminate, except with respect to any
claims for breach of this Agreement arising before such termination, (i) for
purposes of Section 1, when UIH ceases to hold, directly or indirectly, 50% or
more of the outstanding ordinary shares of the Company on a fully diluted basis,
and (ii) for purposes of Section 5, when UAP or any other UIH subsidiary no
longer has any capital contribution obligations undertaken in connection with
financing obtained by subsidiaries of the Company, but shall otherwise remain in
effect.
7. ASSIGNMENT SUCCESSORS. Except as otherwise provided herein, neither
party hereto may assign or transfer any of its interests, or delegate any of its
obligations, hereunder without the prior written consent of the other party.
UIH, upon written notice to the Company, may assign its interests in this
Agreement to any affiliate of UIH, in which event references to UIH in this
Agreement shall refer to such affiliate to the extent appropriate. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successor and assigns.
8. MISCELLANEOUS.
(a) AMENDMENT; WAIVER. The Agreement may not be amended nor may any
rights hereunder be waived except by an instrument in writing signed by the
parties hereto. The waiver of any breach of any term or condition hereof shall
not be deemed a waiver of any other or subsequent breach. No failure to exercise
and no delay in exercising, on the part of either party hereto, any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies at law.
(b) FURTHER ASSURANCES. Each party hereto shall execute, acknowledge,
deliver, file and record such further certificates, amendments, instruments,
agreements and documents, and do all such other acts and things, as may be
required by law or as, in the reasonable opinion of either party hereto, may be
necessary or advisable to carry out the intents and purposes hereof.
(c) HEADINGS. Titles and headings of the sections, of this Agreement
are for convenience of reference only and do not form a part of this Agreement
and shall not in any way affect the interpretation of this Agreement.
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(d) ENTIRE AGREEMENT. This Agreement is the entire agreement and
understanding between the parties hereto concerning the subject matter hereof
and supersedes and replaces all prior agreements and understandings between the
parties hereto with respect thereto.
(e) SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provisions to such persons or
circumstances other than those to which it has been invalid or unenforceable,
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby.
(f) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado, other than its rules of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
(g) NOTICES. All notices, demands or other communications to be given
under or by reason of this Agreement shall be in writing and shall be deemed to
have been received when delivered personally, by facsimile or mailed by
certified or registered mail, return receipt requested and postage prepaid, as
follows:
(i) If to UIH, to it at:
United International Holdings, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000, X.X.X.
Facsimile: (000) 000-0000
Attention: President
Copy to: Legal Department
(ii) If to the Company, to it at:
AUSTAR United Communications Limited 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000 Xxxxxx,
Xxxxxxxx 00000, X.X.X.
: Facsimile: (000) 000-0000:
Attention: President
Copy to: Legal Department
Either party hereto may change its address for notices, demands and other
communications hereunder by giving notice of such change to the other party in
accordance with this Section 7(g).
(h) NO THIRD-PARTY BENEFICIARIES. Notwithstanding anything to the
contrary herein, no person shall be a third-party beneficiary to this Agreement.
(i) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which, when executed, shall constitute an original of this
Agreement, and all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement to
be effective as of the date first set forth above.
UNITED INTERNATIONAL HOLDINGS, INC., a
Delaware corporation
By: /S/Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President
AUSTAR UNITED COMMUNICATIONS LIMITED, a
Delaware corporation
By: /S/Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President
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