EXHIBIT 10.6
CREDIT FACILITY AGREEMENT
between
CABLE NETWORK BRABANT HOLDING B.V.
and
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.
as Agent
and
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.
as Initial Lender
dated February 20, 1998, as amended on August 7, 1998
2
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Section 1.01. Definitions 6
Section 1.02. Singular/Plural - Persons -
References - Headings 26
ARTICLE II - REPRESENTATIONS AND WARRANTIES
Section 2.01. Project and Project Cost 26
Section 2.02. Information provided by the Company 27
Section 2.03. Representations as to this Agreement 27
Section 2.04. Acknowledgement and Warranty 28
Section 2.05 Repetition of Representations
and Warranties 28
ARTICLE IIII - LOAN
Section 3.01. Amount and Currency 29
Section 3.02. Disbursements 29
Section 3.03. Interest 30
Section 3.04. Suspension and Cancellation 31
Section 3.05. Commitment Fee and other Fees 32
Section 3.06. Repayment 32
Section 3.07(a). Voluntary Prepayment 33
Section 3.07(b). Mandatory Prepayment 34
Section 3.08. Payments 35
Section 3.09. Insufficient Payments 36
Section 3.10. Default Interest 37
Section 3.11. Tax Gross up 38
3
Section 3.12. Unwinding Costs 39
Section 3.13. Increased Costs 40
ARTICLE IV - CONDITIONS OF DISBURSEMENT
Section 4.01. Conditions of First Disbursement 41
Section 4.02. Conditions for Any Disbursement 47
Section 4.03. Conditions of First Disbursement
under Tranche C 49
ARTICLE V - PARTICULAR COVENANTS
Section 5.01. Affirmative covenants 52
Section 5.02. Negative covenants 58
Section 5.03. Furnishing of Information 63
Section 5.04 Financial covenants 66
ARTICLE VI - EVENTS OF DEFAULT
Section 6.01. Acceleration in Events of Default 68
Section 6.02. Automatic Acceleration 71
ARTICLE VII - SYNDICATION AND AGENT
Section 7.01 Syndication 72
Section 7.02 Agent 75
ARTICLE VIII - MISCELLANEOUS
Section 8.01. Notices 77
Section 8.02. Certificate of Authority 78
Section 8.03. English Language 79
Section 8.04. Financial Calculations 79
Section 8.05. Rights, Remedies and Waivers 79
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Section 8.06. Term of Agreement 81
Section 8.07. Governing law and Jurisdiction 81
Section 8.08. Successors and Assigns 81
Section 8.09. Counterparts 82
Section 8.10. Amendments 82
Section 8.11. Severability 82
Schedule 1 Agreed Base Case
Schedule 2 Excess Cash Flow
Schedule 3 Information Package
Schedule 4 Interest Rate Hedging Policy
Schedule 5 Participation Agreement
Schedule 6 Request for Disbursement
Schedule 7 Repayment Schedule
Schedule 8 Authorisation of Auditors
Schedule 9 Quarterly Management Report
Schedule 10 Municipalities
Schedules 11
and 12 see Schedules 3 and 1
Schedule 13 Letters to Municipalities
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CREDIT FACILITY AGREEMENT
THE UNDERSIGNED:
1. CABLE NETWORK BRABANT HOLDING B.V., a limited liability company organised
and existing under the laws of the Netherlands, with registered seat at
Eindhoven (hereinafter referred to as the "COMPANY");
and
2. COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., a cooperative
association organised and existing under the laws of the Netherlands with
registered seat at Amsterdam (hereinafter referred to as the "AGENT");
and
3. COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., a cooperative
association organised and existing under the laws of the Netherlands with
registered seat at Amsterdam (hereinafter referred to as the "INITIAL
LENDER");
WHEREAS:
(A) the objects of the Company include the development, maintenance and
operation of cable networks and systems for the distribution of radio and
television programs and other communication purposes; and the provision of
6
telecommunication services, including, without limitation, the
distribution of television programs to subscribers; multi-media services,
data transmission and voice services;
(B) the Company intends to carry out the Projects, as contemplated in this
Agreement;
(C) the Initial Lender has offered to finance the Projects up to an amount of
NLG 266,000,000 (two hundred sixty-six million Netherlands Guilders) under
the terms and subject to the conditions of this Agreement;
(D) the Company and the Initial Lender, acting for itself and in its capacity
as agent for the Lenders, now wish to record their agreement regarding the
financing referred to in recital (C) as follows;
HAVE AGREED AS FOLLOWS:
ARTICLE I DEFINITIONS
----------------------
SECTION 1.01. DEFINITIONS
Wherever used in this Agreement or the Schedules hereto, unless the context
otherwise requires, the following terms have the following meanings:
"Affiliate" means of any entity any other person directly or
indirectly, controlling,
7
controlled by, or under common control with, such
person; for the purposes of this definition,
"control" (including, with correlative meanings,
the terms "controlled by" and "under common control
with"), as used with respect to any person, shall
mean the possession, directly or indirectly, of the
power to direct or cause the direction of the
management and policies of such person, whether
through the ownership of voting shares or by
contract or otherwise;
"Agreed Base Case" means the financial projections of the Company,
including the explanatory notes thereto, for the
duration of the Loan, as set forth in SCHEDULE 1,
including any Deviation (as defined in Section
5.01(a), any amendment pursuant to Section
-
5.02(e)(4) and any amendment agreed upon between
the Company and the Agent;
"Agreement" means this Credit Facility Agreement, including the
Schedules thereto, as amended from time to time;
"AIBOR Breakage Costs" means such amounts as shall be sufficient to
compensate each of the
8
Lenders for all losses, costs and expenses
resulting from any repayment or prepayment with
respect to a Disbursement, for any reason
(including, without limitation, the acceleration of
amounts due or outstanding hereunder pursuant to
Section 6.01 or 6.02), on a day before the last day
of an Interest Period of such Disbursement;
"Auditors" means the firm of independent public accountants as
the Company may from time to time, subject to the
provisions of Section 5.01(e), appoint as auditors
of the Company;
"Breakage Costs" means AIBOR Breakage Costs and Interest Hedge
Breakage Costs;
"Bridge Loan" means the NLG 122,012,273 (one hundred and twenty-
two million twelve thousand and two hundred
seventy-three Netherlands Guilders) bridge loan
dated February 3, 1998 provided by the Initial
Lender to the Company;
"Business Day" means a day on which commercial banks and foreign
exchange markets are open for the transaction of
business (of the
9
kind contemplated in this Agreement) in the
interbank market in Amsterdam, the Netherlands;
"Cash Interest Cover
Ratio" or "CICR" means in respect of a certain period the result
obtained by dividing the sum total of (i) EBITDA,
less (ii) taxes paid and (iii) any increase in Net
Working Capital, plus (iv) any decrease in Net
Working Capital, by all Net Interest Expense under
Financial Debt due and payable in such period;
"Charter" means, in respect of the Company, or any other
company, corporation, partnership or governmental
agency, its founding act and articles of
association (statuten), as amended from time to
time;
"Combivisie" means the foundation Stichting Combivisie Regio,
established at Helmond, and the limited liability
company Setelco B.V., established at Helmond,
jointly;
"Combivisie Assets" means the Combivisie assets sold by Combivisie to
UPC, transferred by
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Combivisie to UPC's (indirect) Subsidiary Cable
Network Netherlands Holding B.V., as permitted
under the agreement dated December 17, 1997 between
Combivisie as seller and UPC as purchaser, and
contributed by Cable Network Netherlands Holding
B.V. to the Company pursuant to the notarial deed
of contribution executed by civil law notary Mr
Johan F.L. ▇▇▇▇▇▇ in Amsterdam on February 3, 1998;
"Current Assets" means the aggregate (as of the date of calculation)
of the Company's trade and other receivables
realizable within one year, inventories and prepaid
expenses which are to be charged to income within
one year;
"Current Liabilities" means the aggregate (as of the date of calculation)
of all liabilities of the Company falling due on
demand or within one year, excluding the portion of
long-term debt falling due within one year;
"Debt Service Coverage
Ratio" or "DSCR" means in relation to any period the result obtained
by dividing the sum
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total of (i) EBITDA, less (ii) taxes paid, less
(iii) any increase in Net Working Capital and less
(iv) capital expenditures, plus (v) any decrease in
Net Working Capital, by all interest and scheduled
repayment amounts due under the Financial Debt in a
given period;
"Default Interest Period" means, with respect to any amount overdue under
this Agreement, a period commencing on the Business
Day on which such payment becomes overdue and
ending on the date of actual payment of the overdue
amount;
"Default Interest Rate" means the interest rate applicable to amounts
overdue under this Agreement, as determined in
accordance with Section 3.10(c);
"Disbursement" means any amount of the Loan which is disbursed
from time to time pursuant to Section 3.02;
"EBITDA" means in relation to any calendar quarter Earnings
Before Interest, Taxes, Depreciation and
Amortization and is (for the period of calculation)
the sum of:
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(1) the income (or deficit) of the Company before
provision for income taxes for such period,
plus
(2) Net Interest Expense for such period, plus
(3) all amounts in respect of depreciation and
amortization for such period, plus
(4) all management fees paid or payable by the
Company pursuant to Section 5.04(g) but only
to the extent such fees have been taken into
account in the calculation of income under
(1) above;
provided that, if the context requires that EBITDA
shall be annualised as follows: EBITDA so
calculated for the first period of calculation
shall be multiplied by 4 (four); for the second
period of calculation EBITDA shall be aggregated
with the EBITDA calculated for the first period of
calculation and
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multiplied by 2 (two); and for each subsequent
calculation period EBITDA shall be aggregated with
the EBITDA calculated for the immediately preceding
period of calculation and multiplied by 2 (two);
"Euro" means the legal tender of the Netherlands from the
date the Netherlands Guilders shall, by operation
of law, have been replaced entirely as legal tender
of the Netherlands as a result of the Netherlands'
participation in the European Monetary Union;
"Event of Default" means any one of the events specified in Section
6.01;
"Excess Cash Flow" means for any Financial Year, the amount calculated
in accordance with SCHEDULE 2;
"Existing KTE Facility" means the existing NLG 65,000,000 loan provided by
the Initial Lender to KTE under a Credit Facility
Agreement of February 7, 1997;
"Financial Debt" means all component parts of (i) the Loan, (ii) the
Working Capital
14
Facility, (iii) the KTE Insti tutional Loans and
(iv) the indebtedness incurred by the Company under
Section 5.02(e)(4) of this Agreement;
"Financial Statements" means the unconsolidated and, to the extent
available, the consolidated financial statements of
the Company prepared in agreement with its books of
account and in accordance with Generally Accepted
Accounting Principles;
"Financial Year" means the accounting year of the Company commencing
each year on 1 January and ending on the following
31 December, or such other accounting period of the
Company as the Company may from time to time
designate as the accounting year of the Company;
"Gearing Ratio" means the result obtained by dividing the
Shareholders' Equity by the Financial Debt;
"General Business
Agreements" means the agreements relating to the business of
the Company, including, without limitation, the
agreements which have been assigned and
15
transferred in favour and for the benefit of the
Company (or any of its Affiliates) under the
acquisition contracts regarding the KTE Assets and
the Combivisie Assets;
"General Services
Agreement" means the General Services Agreement entered into by
the Company and UPC, effective as of January 1,
1998;
"Generally Accepted
Accounting Principles" means accounting principles generally accepted in
the Netherlands consistently applied;
"Increased Costs" has the meaning given to it in Section 3.13;
"Information Package" means the documents and information provided by the
Company and UPC to the Agent, and as described in
detail in SCHEDULE 3;
"Insurance Advisor" means Mees & Zoonen ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ B.V., or any
other reputable internationally recognized
insurance advisor to be appointed by the Agent in
consultation with the Company;
16
"Insurance Advisory
Agreement" means the insurance advisory agreement to be
entered into by the Insurance Advisor, the Company,
the Agent and the Initial Lender;
"Insurance Report" means the insurance report to be provided to the
Agent by the Insurance Advisor pursuant to the
Insurance Advisory Agreement;
"Interbank Rate"
or "AIBOR" means, for each Interest Period, the Amsterdam
InterBank Offered Rate or "AIBOR", as published by
De Nederlandsche Bank N.V. and which appears on the
AIBOR page (domestic) of the screen operated by
Reuters Monitor Money Rate Service (or such other
page as may replace the Netherlands Guilder page
for the purpose of displaying the AIBOR rates of
leading reference banks) as of 12.00 a.m.,
Amsterdam time, on the relevant Interest
Determination Date for the period which is closest
to the duration of such Interest Period (or, if two
periods are equally close to the duration of such
Interest Period, the
17
average of the two relevant rates); provided that
(i) if, for any reason, the Interbank Rate cannot
be determined at such time by reference to
the above publication, the Interbank Rate for
such Interest Period shall be the rate which
the Agent determines to be the arithmetic
mean of the offered rates for deposits in
Netherlands Guilders in an amount comparable
to the principal amount of the Disbursement
scheduled to be outstanding during such
Interest Period for a period equal to such
Interest Period which are advised to the
Agent by three major banks active in the
Amsterdam interbank market selected by the
Agent; and
(ii) in the event of modification affecting the
composition or definition of AIBOR, or in the
event of disappearance of AIBOR and the
substitution of an interbank rate of the same
or an equivalent nature, or in the
18
event of modification affecting the
institution or organisation publishing the
interbank rate pursuant to Article 123(4)
(new numbering -formerly Article 109L(4)) of
the Treaty Establishing the European Economic
Community, as amended by the Treaty on the
European Union (the Maastricht Treaty), the
rate or index resulting from such
modification or substitution shall
automatically apply;
"Interest
Determination Date" means, for any Interest Period, the date 2 (two)
Business Days prior to the first day of such
Interest Period;
"Interest Hedge
Breakage Costs" means the amounts payable by (i) one or more of the
Lenders (the "AFFECTED LENDER") to an interest rate
hedge counterparty in connection with terminating
or unwinding any interest rate hedge transaction
between the Affected Lender and such interest hedge
counterparty or (ii) the Company to one or more of
the Lenders in
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connection with terminating any Interest Rate
Hedging Product between the Company and such
Lender(s) as a result of (a) the prepayment of any
Disbursement (or any part or all of the Loan) or
(b) the termination or unwinding of any Interest
Rate Hedging Product pursuant to the terms and
conditions of the ISDA Agreement;
"Interest Payment Date" means the last day of each Interest Period of a
Disbursement, provided, however, that in case the
Company has selected an Interest Period of 12
(twelve) months with respect to a Disbursement, the
Interest Payment Date shall be the day 6 (six)
months after the commencement of such Interest
Period, in addition to the last day of such
Interest Period;
"Interest Period" means each period of 1 (one), 3 (three), 6 (six)
or, subject to availability to the Lenders, 12
(twelve) months, commencing on the date of a
Disbursement and ending on the last day of such
period, provided that if such a day is not a
Business Day such period shall end on the next
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succeeding Business Day, unless such next
succeeding Business Day falls within the next
calendar month, in which case such period shall end
on the immediately preceding Business Day;
"Interest Rate Hedging
Policy" means a certain policy with respect to the hedging
of interest rates as detailed in SCHEDULE 4 to this
Agreement;
"Interest Rate Hedging
Product" means any of the products referred to in the
Schedule concerning the Interest Rate Hedging
Policy;
"ISDA Agreement" means a certain ISDA Master Agreement entered into
between the Company and a Lender, including the
Schedule attached to such ISDA Master Agreement,
and the confirm ations with respect to the Interest
Rate Hedging Products entered into between the
Company and such Lender under such ISDA Master
Agreement;
"KTE" means the limited liability company Kabeltelevisie
Eindhoven N.V., an
21
(indirect) subsidiary of UPC, established at
Eindhoven;
"KTE Assets" means the assets of KTE contributed by KTE to the
Company pursuant to the notarial deed of
contribution executed by civil law notary, Mr Johan
F.L. ▇▇▇▇▇▇ in Amsterdam on February 3, 1998;
"KTE Institutional Loans" means the following existing loan agreements of
KTE:
(i) a NLG 25,000,000 (twenty-five million
Netherlands Guilders) loan, dated December 2,
1985 from the Algemeen Burgerlijk
Pensioenfonds;
(ii) a NLG 3,000,000 (three million Netherlands
Guilders) loan, dated January 21, 1985 from
the Stichting Pensioenfonds voor
Fysiotherapeuten;
(iii) a NLG 2,000,000 (two million Netherlands
Guilders) loan, dated January 21, 1985 from
the Stichting Pensioenfonds voor beambten in
de Schoenin dustrie en Lederwarenindustrie;
22
(iv) a NLG 7,000,000 (seven million Netherlands
Guilders) loan, dated October 1, 1993 from
the N.V. Bank Nederlandse Gemeenten;
(v) a NLG 5,000,000 (five million Netherlands
Guilders) loan, dated May 15, 1994 from the
Stichting NMS Spaarbank;
"KTSB" means the limited liability company Kabeltelevisie
Son en Breugel B.V., established at Son en Breugel;
"Lenders" means the Initial Lender and each of the financial
institutions which, from time to time, may or shall
accede to this Agreement by way of a Participation
Agreement;
"Leverage Ratio" means in relation to any period the result obtained
by dividing all amounts of principal outstanding as
per the end of such period under the Financial Debt
by annualised EBITDA for such period;
"Loan" means the loan provided for in Section 3.01 or, as
the context may require, the aggregate principal
amount of all
23
Disbursements from time to time outstanding as of
the Tranche B Stop Date;
"Majority of Lenders" means Lenders participating for at least 51%
(fifty-one per cent) in the Loan;
"Margin" means (i) until the Tranche A Stop Date 1.50% per
annum; and (ii) in the period thereafter, from time
to time, the percentage number in the column
opposite the Leverage Ratio achieved by the
Company, as follows:
Leverage Ratio Margin
-------------- ------
7.00 and up 1.60% p.a.
6.00 - 6.99 1.35% p.a.
5.00 - 5.99 1.10% p.a.
4.00 - 4.99 0.90% p.a.
3.00 - 3.99 0.70% p.a.
below 3.00 0.60% p.a.
as such Leverage Ratio is determined by the Agent
on each January 1, April 1, July 1 and October 1
upon receipt by the Agent of a certificate, duly
signed by the Chief Financial Officer of the
Company (and provided to the Agent simultaneously
with the
24
quarterly management report referred to in Section
5.03(a)), setting forth the Leverage Ratio as
calculated by the Company over the calendar quarter
which is the subject of the quarterly management
report;
"Maturity Date" means December 31, 2007;
"Net Interest Expense" means (for the period of calculation) the interest
charges paid or accrued during such period under
the Financial Debt less the interest charges
received by or accrued to the Company;
"Net Working Capital" means the amount calculated as Current Assets
minus Current Liabilities;
"NLG" or
"Netherlands Guilders" means the current legal tender of the Netherlands;
"Participation Agreement" means an agreement among the Agent, an existing
Lender, the Company and any new Lender,
substantially in the form of SCHEDULE 5;
"Percentage Portion" means, save as otherwise provided herein, the
percentage portion with which a Lender is
participating in the
25
Loan or remains participating in the Loan following
execution of a Participation Agreement in
accordance with the provisions of Section 7.01 and
as such Percentage Portion is set forth in the
Schedule to such Participation Agreement;
"Potential Event
of Default" means an event (i) which cannot or will not be
remedied and which, by the giving of notice and/or
the lapse of time, will constitute an Event of
Default, or (ii) which, in the absence of remedial
actions, will constitute an Event of Default by the
giving of notice and/or the lapse of time, except
for events that can and shall be remedied by the
Company in accordance with and within a period of
time that is in accordance with standard business
practice (unless it may not be reasonably expected
from the Agent to allow any such remedial period);
"Project A" means the refinancing of the Bridge Loan;
26
"Project Accounts" means all of the Company's bank accounts,
including, without limitation, the bank account
under number 1010.69.928, and including all monies
and any deposits standing to the credit of the
Company made in or through such accounts;
"Project Agreements" means the agreements referred to in Sections
4.01(a) and 4.03(a) and each agreement or document
designated by the Agent and the Company to
constitute a Project Agreement and, in the
singular, means any one of such agreements;
"Project B" means the development and exploitation of enhanced
cable TV services (including expanded basic TV,
premium TV and interactive pay per view), data and
internet services and telephony services as further
described in the Agreed Base Case;
"Project C" means the refinancing of the Existing KTE Facility;
"Project D" means the acquisition of the cable networks of the
municipalities of Oirschot (including the cable
network
27
in Oost-, West- and Middelbeers), Nuenen and Heeze-
Leende as well as the development and exploitation
of enhanced cable TV services (including expanded
basis TV, premium TV and interactive pay per view),
data and internet services and telephony services
as further described in the Agreed Base Case, as
amended;
"Projects" means Project A, Project B, Project C and project D
jointly;
"Security" means the security created by the Company to secure
all amounts owing by the Company to the Agent and
the Lenders under this Agreement, as detailed in
Sections 4.01(d) and 4.03(c);
"Shareholders' Equity" means (as of the date of calculation) the amount
paid up on the share capital of the Company;
"Subsidiary" means, of an entity, any other entity over fifty
per cent (50%) of whose share capital is owned,
directly or indirectly, by such entity or which is
otherwise effectively controlled by such entity;
28
"Tranche A" means such part of the Loan as is equivalent to NLG
122,012,273 (one hundred and twenty-two million
twelve thousand and two hundred seventy-three
Netherlands Guilders) (for Project A) and NLG
65,000,000 (sixty-five million Netherlands
Guilders) (for Project C) (collectively the
"TRANCHE A AMOUNT") and which is, upon
disbursement, to be applied exclusively by the
Company to the financing of Project A and Project
C;
"Tranche A Stop Date" means April 29, 1998;
"Tranche B" means such part of the Loan as is equivalent to NLG
62,987,727 (sixty-two million nine hundred eighty-
seven thousand and seven hundred twenty-seven
Netherlands Guilders) (the "TRANCHE B AMOUNT") and
which is, upon disbursement, to be applied
exclusively by the Company to the financing of
Project B;
"Tranche B Stop Date" means December 31, 2000;
"Tranche C" means such part of the Loan as is equivalent to NLG
16,000,000 (sixteen million Netherlands Guilders)
(the
29
"TRANCHE C AMOUNT") and which is, upon
disbursement, to be applied exclusively by the
Company to the financing of Project D;
"Tranche C Stop Date" means December 31, 1999;
"UPC" means United Pan-Europe Communications N.V.,
established at Amsterdam, the Netherlands;
"Working Capital Facility" means the working capital facility to be provided
by the Agent as lender to the Company as borrower;
SECTION 1.02. SINGULAR/PLURAL - PERSONS - REFERENCES - HEADINGS
(a) In this Agreement, unless the context otherwise requires, words denoting
the singular include the plural and vice versa, and words denoting persons
include corporations, partnerships, and other legal persons.
(b) In this Agreement, references to a specified Article, Section or Schedule
shall be construed as a reference to that specified Article, Section or
Schedule of this Agreement.
(c) The headings and the Table of Contents are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.
30
ARTICLE II REPRESENTATIONS AND WARRANTIES
SECTION 2.01. PROJECT AND PROJECT COST
The Company represents and warrants that as of the date of this Agreement the
Projects conform in all material respects with the description thereof included
in the Agreed Base Case, taking into account any agreed Deviation (as defined in
Section 5.01(a)) or amendment of the Agreed Base Case as referred to in Section
5.02(e)(4) or as is agreed upon between the Company and the Agent.
31
SECTION 2.02. INFORMATION PROVIDED BY THE COMPANY
The Company represents and warrants, as of the date of this Agreement, that the
Agreed Base Case and the Information Package were prepared after due and careful
inquiry, based upon historical financial information and upon the assumptions
set forth therein, which assumptions were reasonable when made and are
reasonable as of the date of this Agreement and (taken together) represent
projections and forecasts which are not in a material way inconsistent with the
Company's actual range of projections and forecasts of its financial position,
including the financial position of its Subsidiaries, taking into account any
agreed Deviation (as defined in Section 5.01(a)) or amendment of the Agreed Base
Case as referred to in Section 5.02(e)(4) or as is agreed upon between the
Company and the Agent.
SECTION 2.03. REPRESENTATIONS AS TO THIS AGREEMENT
The Company represents and warrants as follows:
(a) it has the corporate power to enter into this Agreement;
(b) this Agreement has been duly authorized and executed by the Company and
constitutes valid and legally binding obligations of the Company,
enforceable in accordance with its terms; and
(c) the entering into this Agreement and the borrowing contemplated thereby
and (when all the consents referred to in Section 4.01(c) have been
obtained) the compliance with
32
its terms will not result in violation of the Company's Charter, nor will
it result, in any material respect, in violation of any provision
contained in any agreement or instrument to which the Company is a party
or by which the Company is bound or in any law, regulation, judgment or
decree applicable to the Company.
SECTION 2.04. ACKNOWLEDGEMENT AND WARRANTY
The Company acknowledges that it has made the representations referred to in
Sections 2.01, 2.02 and 2.03 with the intention of persuading the Agent and
Lenders to enter into this Agreement and that the Agent and Lenders have entered
into this Agreement on the basis of, and in full reliance on, each of such
representations. The Company warrants to the Agent and the Lenders that each of
such representations is true and correct in all material respects as of the date
of this Agreement and that none of them omits any matter the omission of which
makes any of such representations misleading.
SECTION 2.05 REPETITION OF REPRESENTATIONS AND WARRENTIES
In case of an amendment to or modification of this Agreement and/or any of the
Schedules hereto, including but not limited to the Agreed Base Case and the
Information Package, the Company shall be deemed to repeat the representations
and warranties as set forth in the above Sections 2.01 up to and including 2.04
(except with respect to the Information Package and in the case of Sections 2.01
and 2.02 taking into account any agreed Deviation (as defined in
33
Section 5.01(a)) or amendment of the Agreed Base Case as referred to in Section
5.02(e)(4) or as may be agreed upon between the Company and the Agent) on and as
of the date of such amendment or modification, with reference to facts and
circumstances then existing, regardless whether such amendment or modification
will be recorded in an amendment agreement to this Agreement.
ARTICLE III LOAN
SECTION 3.01. AMOUNT AND CURRENCY
Subject to the terms and conditions of this Agreement, the Lenders agree to lend
to the Company and the Company agrees to borrow from the Lenders the aggregate
amount of up to NLG 266,000,000 (two hundred sixty-six million Netherlands
Guilders).
SECTION 3.02. DISBURSEMENTS
(a) The Loan shall be disbursed by the Lenders from time to time upon the
Company's request, in the form of SCHEDULE 6, irrevocable by the Company
and in substance satisfactory to the Agent, an original of which shall be
delivered to the Agent at least five (5) Business Days prior to the
proposed date of the Disbursement.
(b) Disbursements shall be made:
34
(1) in respect of Tranche A: for amounts which are a multiple of NLG
5,000,000 (five million Netherlands Guilders) and with a minimum of
NLG 10,000,000 (ten million Netherlands Guilders);
(2) in respect of Tranche B and Tranche C: for amounts which are a
multiple of NLG 1,000,000 (one million Netherlands Guilders) and with
a minimum of NLG 5,000,000 (five million Netherlands Guilders).
SECTION 3.03. INTEREST
(a) Except as provided in Section 3.10, the Company shall pay interest to the
Agent, for distribution to the Lenders, as the case may be, on the
principal amount of each Disbursement under the Loan from time to time
outstanding during each Interest Period at a rate equal to the sum of the
Margin and the Interbank Rate for such Interest Period.
(b) Interest shall:
(1) accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period;
(2) be calculated on the basis of actual number of days elapsed and a
360-day year; and
35
(3) be due and payable on each Interest Payment Date of a Disbursement.
(c) On each Interest Determination Date, the Agent shall determine the
Interbank Rate and the Margin applicable during the relevant Interest
Period and promptly give notice thereof to the Company and each Lender.
Each determination by the Agent of the Interbank Rate and the Margin
applicable to any Disbursement shall be final and conclusive and shall be
binding upon the Company and each Lender unless shown by the Company to
the satisfaction of the Agent that any such determination is based on
manifest error.
SECTION 3.04. SUSPENSION AND CANCELLATION
(a) From time to time while the Loan is being disbursed, the Agent may, by
notice to the Company, suspend or cancel the right of the Company to
further Disbursements if an Event of Default or a Potential Event of
Default shall have occurred and be continuing.
(b) Upon the giving of such notice, the right of the Company to further
Disbursements shall be suspended or cancelled as indicated in the notice.
The exercise by the Agent of the right of suspension shall not preclude
the Agent from exercising its right of cancellation as provided in this
Section, either for the same or another reason, and shall not limit any
other provision of this Agreement.
36
(c) The rights of the Company to (further) Disbursements shall cease
automatically, without any notice being required, in respect of Tranche A:
at the Tranche A Stop Date and the Tranche A Amount, to the extent not
disbursed hereunder as per the Tranche A Stop Date, shall be cancelled at
the Tranche A Stop Date; in respect of Tranche B: at the Tranche B Stop
Date and the Tranche B Amount, to the extent not disbursed hereunder as
per the Tranche B Stop Date, shall be cancelled at the Tranche B Stop Date
and in respect of Tranche C: at the Tranche C Stop Date and the Tranche C
Amount, to the extent not disbursed hereunder as per the Tranche C Stop
Date, shall be cancelled at the Tranche C Stop Date.
(d) The Company may at any time cancel the undrawn portion of the Tranche A
Amount, the Tranche B Amount or the Tranche C Amount, in whole or in part,
but in any event in multiples of NLG 5,000,000 (five million Netherlands
Guilders) or the remaining balance upon full repayment of the Loan, and
subject to 10 (ten) Business Days irrevocable prior written notice by the
Company to the Agent; amounts so cancelled shall not be available for
subsequent disbursement.
SECTION 3.05. COMMITMENT FEE AND OTHER FEES
(a) The Company shall pay to the Agent for distribution among the Lenders a
commitment fee at the rate of 0.325% per annum on so much of the Loan as
shall not, from time to time, have been cancelled by the Agent or the
Company or disbursed to
37
the Company. The commitment fee shall accrue from day to day as of the
date of execution of this Agreement and shall be prorated on the basis of
a 360-day year for the actual number of days in the relevant period. The
commitment fee shall be payable quarterly in arrears and for the first
time on March 31, 1998.
(b) The Company shall pay to the Agent an arrangement fee in an amount agreed
separately by the Company and the Agent.
(c) The Company shall also pay to the Agent an annual agency fee in an amount
agreed separately by the Company and the Agent.
SECTION 3.06. REPAYMENT
(a) The Loan as outstanding as at the Tranche B Stop Date shall be repaid on
the dates and in the amounts as set forth in SCHEDULE 7.
(b) If any repayment pursuant to Section 3.06(a) would require the prepayment
of a Disbursement in whole or in part before the last day of its Interest
Period, the Company shall reimburse the Lenders for any Breakage Cost,
without prejudice to the provisions in Section 3.07.
SECTION 3.07(A). VOLUNTARY PREPAYMENT
38
(a) The Company shall have the right at any time, on not less than 10 (ten)
Business Days' notice to the Agent to prepay at the end of the relevant
Interest Period all or a part of the principal amount of a Disbursement
then outstanding; provided that, in either case, all accrued interest,
Breakage Costs (if any) and Increased Costs (if any) on the principal
amount of the Disbursement to be prepaid and all other amounts due
hereunder are paid at the same time; and provided further that, in the
case of partial prepayment, such prepayment:
(1) shall be in an amount of NLG 5,000,000 (five million Netherlands
Guilders), or multiples thereof;
(2) shall be applied (to prepay) pro rata the outstanding repayment
instalments of the Loan as referred to in Section 3.06; and
(3) shall be applied to (prepay) each Lender pro rata to its Percentage
Portion.
(b) Upon delivery of the notice described in subsection (a) above, the Company
shall be obligated to effect prepayment in accordance with the terms
thereof; any amount prepaid under this section 3.07(a) shall not be
available for subsequent disbursement.
(c) Any Breakage Costs incurred by the Lenders following a voluntary
prepayment shall be reimbursed by the Company to the Lenders on the date
of such prepayment.
39
SECTION 3.07(B). MANDATORY PREPAYMENT
(a) As from the Tranche B Stop Date, the Company is required to apply 50%
(fifty per cent) of the Excess Cash Flow to the prepayment of the
principal amount of the Loan then outstanding.
(b) Such mandatory prepayment will take place on the maturity date of an
Interest Period of one or more Disbursements, the principal amount of
which is equal to or higher than the amount to be prepaid by the Company
or on March 31, whichever is the earlier following receipt by the Agent of
--
the certificate duly signed by the Chief Financial Officer of the Company
to be provided by the Company pursuant to Section 5.03(a)(6) and setting
forth the Disbursements so to be prepaid by the Company.
(c) Any mandatory prepayments shall be applied (to prepay) in inverse order
the outstanding repayment instalments of the Loan referred to in Section
3.06, and such prepayments shall be applied (to prepay) each Lender pro
rata to its Percentage Portion.
(d) Any amounts prepaid under this Section 3.07(b) shall not be available for
subsequent disbursement.
(e) Any Breakage Costs incurred by the Lenders as a result of a prepayment
under Sub-section (b) above, shall be reimbursed by the Company to the
Lenders on the date of such prepayment.
40
SECTION 3.08. PAYMENTS
(a) Payments of principal, interest, fees, default interest under Section
3.10, Increased Costs and any other payments due to the Agent and/or the
Lenders under this Agreement shall be made in Netherlands Guilders, for
value on the due date, and into such bankaccount(s) as the Agent shall
from time to time designate; provided, however, that as of the date the
Netherlands Guilder shall have been replaced by the Euro and shall no
longer be the lawful currency of the Netherlands, all such payments shall
be made in Euro.
(b) Save as otherwise provided for in this Agreement, each payment received by
the Agent for the account of a Lender, shall be made available by the
Agent to that Lender, for value the same day by transfer of such amount to
such account as shall have been designated by that Lender.
(c) Amounts payable to the Agent, the Lenders or any of them under this
Agreement shall be paid on the day such amounts are due and payable,
provided that if such a day is not a Business Day such payment shall be
made the next succeeding Business Day, unless such next succeeding
Business Day falls within the next calendar month, in which case such
payment shall be made on the immediately preceding Business Day.
(d) Payments made by the Company to the Agent (for the benefit of the Lenders)
hereunder or under any other agreements to which
41
the Lenders and the Agent are a party, shall be allocated and applied
against costs, expenses, fees, default interest, interest and principal,
in that order.
(e) Payment of any and all amounts due under this Agreement shall be made by
the Company without reference to any set-off, suspension or counterclaim
and shall be made without any deduction for any set-off, suspension or
counterclaim.
SECTION 3.09. INSUFFICIENT PAYMENTS
(a) If the Agent shall at any time receive less than the full amount then due
and payable to it or any of the Lenders under this Agreement, the Agent
shall have the right to allocate and apply such payment in any way or
manner and for such purpose or purposes under this Agreement as the Agent
in its sole discretion shall determine, notwithstanding any instruction
that the Company may give to the contrary.
(b) The obligation of the Company to make payments in Netherlands Guilders in
accordance with Section 3.08 shall not be deemed to have been discharged
or satisfied by any tender of (or recovery under judgement expressed in)
any currency other than Netherlands Guilders, except as provided in the
proviso of Section 3.08(a) or to the extent to which such tender (or
recovery) shall result in the effective payment of such aggregate amount
in Netherlands Guilders at the place specified pursuant to this Agreement
and, accordingly, the amount (if any) by which such tender (or recovery)
shall fall
42
short of such aggregate amount shall be and remain due to the Agent or the
Lenders, as the case may be, as a separate obligation, unaffected by
judgement having been obtained (if such is the case) for any other amounts
due under or in respect of this Agreement.
SECTION 3.10. DEFAULT INTEREST
(a) If the Company fails to pay fully and timely any amount payable by it
under this Agreement, for whatever reason, the overdue amount shall bear
interest at the relevant Default Interest Rate, calculated in accordance
with this Section.
(b) Default interest shall
(1) accrue from day to day from the due date to the date of actual
payment, as well after as before judgement,
(2) be prorated on the basis of a 360-day year for the actual number of
days in the relevant Default Interest Period,
(3) be compounded at the end of each Default Interest Period, and
(4) be payable forthwith upon demand.
(c) The Default Interest Rate shall be the sum of:
43
(1) 1 1/2% (one and one half of one per cent) per annum, and
(2) the Margin, and
(3) the rate of interest offered in the Amsterdam InterBank market for a
deposit in Netherlands Guilders of an amount comparable to the
overdue amount for successive periods of such duration (whether days,
weeks or months) as the Agent may determine;
provided, however, that, if the Agent determines that deposits in
Netherlands Guilders are not being offered in the Amsterdam interbank
market in such amounts or for such period, the Default Interest Rate
shall be determined by reference to the cost of funds to the Agent
from whatever sources it selects.
(d) Each determination by the Agent of the Default Interest Period and the
Default Interest Rate shall be final and conclusive and shall be binding
upon the Company and each Lender, except in case of manifest error.
44
SECTION 3.11. TAX GROSS UP
The Company shall pay or cause to be paid all present and future taxes, duties,
fees and other charges of whatsoever nature, if any, now or at any time
hereafter levied or imposed by the Government of the Netherlands or by any
department, agency, political subdivision or taxing or other authority thereof
or therein or by any organization of which the Netherlands are a member, on or
in connection with the payment of any and all amounts due under this Agreement,
and all payments of principal, interest and other amounts due under this
Agreement shall be made without deduction for or on account of any such taxes,
duties, fees or other charges; provided, however, that in the event the Company
is prevented by operation of law or otherwise from paying or causing to be paid
such taxes, duties, fees or other charges, the principal or (as the case may
be), interest or other amounts due under this Agreement shall be increased to
such amount as may be necessary to yield and remit to the Agent or the Lenders,
as the case may be, the full amount such party would have received had such
taxes, duties, fees or other charges not been levied or imposed.
SECTION 3.12. UNWINDING COSTS
(a) The Agent shall notify the Company of any costs (including, without
limitation, Breakage Costs), expenses and losses incurred by the Agent or
(any of) the Lenders as a result of:
(1) any failure by the Company to pay any amount payable under this
Agreement on its due date;
45
(2) any failure by the Company to borrow in accordance with a request for
disbursement made pursuant to Section 3.02;
(3) any prepayment of all or any portion of the Loan or any Disbursement
or any failure by the Company to make any prepayment in accordance
with a notice of prepayment pursuant to Section 3.07(a), or as
required under Section 3.07(b);
(4) any cancellation of all or any portion of the Loan pursuant to
Section 3.04;
(5) any acceleration of all or any portion of the Loan pursuant to
Section 6.01 or 6.02; or
(6) any other circumstance that causes the Agent and/or the Lenders to
unwind its/their funding or hedging arrangements in respect of the
Loan.
Forthwith upon receipt by the Company of such notice, the Company shall
pay to the Agent the net amount of any such costs, expenses, losses.
(b) For purposes of Section 3.12(a) above, "costs, expenses and losses
incurred by the Agent or (any of) the Lenders" shall include, without
limitation, any interest paid or payable by the Agent or (any of) the
Lenders to fund or carry any unpaid amount and any loss, premium, penalty
or expense that may be
46
incurred in liquidating or employing deposits or derivative hedging
transactions with, or borrowings from, third parties in order to make,
maintain or fund a Disbursement or any portion thereof (but in the case of
a late payment, after taking into account any default interest received
under Section 3.10).
SECTION 3.13. INCREASED COSTS
(a) On each Interest Payment Date, the Company shall pay the amount, if any,
which the Agent shall notify to the Company as being the Increased Costs
accrued and unpaid prior to such Interest Payment Date.
(b) For the purposes of subsection (a) above, the term "Increased Costs" means
the net incremental cost (or reduction in rate of return on assets or
equity of a Lender or its holding company) to one or more of the Lenders
of making or maintaining its or their Percentage Portion of the Loan which
results from the introduction of any applicable law or any change in
applicable law or regulation or in the interpretation thereof by any
governmental or regulatory authority charged with the administration
thereof which imposes on such Lender(s) any condition regarding the making
or maintaining of its/their Percentage Portion of the Loan.
(c) A Lender intending to make a claim for Increased Costs shall endeavour to
(i) notify the Company through the Agent as promptly as practicable of the
introduction of any applicable
47
law or any change in applicable law or regulation or in the interpretation
thereof by any governmental authority or regulatory authority charged with
the administration thereof that could result in the Company having to pay
Increased Costs pursuant to Sub-section (a) above and (ii) provide the
Company through the Agent with a certificate reasonably setting out the
details (including the cause) as to such Increased Costs, provided that
nothing herein shall require such Lender to disclose any confidential
information relating to its organisation or its affairs, and provided that
the amount to be reimbursed as "Increased Costs" shall commence to accrue
as of the date of such notice.
ARTICLE IV - CONDITIONS OF DISBURSEMENT
SECTION 4.01. CONDITIONS OF FIRST DISBURSEMENT
The obligation of the Lenders to make the first Disbursement under this
Agreement shall be subject to the performance by the Company of all its
obligations theretofore to be performed under this Agreement and to the
fulfilment, in a manner satisfactory to the Agent (acting reasonably), prior to
or concurrently with the making of such first Disbursement, of the following
further conditions:
(a) the following agreements, each in form and substance satisfactory to the
Agent, shall have been entered into between the respective parties thereto
(if they have not
48
already been entered into), shall have become (or, as the case may be,
shall remain) unconditional and fully effective in accordance with their
respective terms (except for this Agreement having become unconditional
and fully effective, if that is a condition of any of such agreements) and
to the extent the Agent is not a party to any such agreement, it shall
have received a certified copy thereof:
(1) a Project Support Agreement among the Agent, the Initial Lender, the
Company and UPC, whereby UPC shall inter alia undertake the following
(or, where applicable, UPC shall procure the following):
(i) UPC shall irrevocably and in a manner satisfactory to the
Agent either make an equity contribution at par and for
ordinary share capital to the Company of NLG 95,000,000
(ninety-five million Netherlands Guilders) or cause such
equity contribution to be made by any of its Subsidiaries;
(ii) no change will be made to the Company's Charter nor shall
the Company be liquidated, without the prior written consent
of the Agent;
(iii) UPC will not reduce its direct or indirect voting rights
below 51% (fifty-one per cent) or discontinue to be a direct
or indirect shareholder of the Company without the prior
written consent of the Agent, such consent not
49
to be unreasonably withheld, provided that the pledge and
grant of a security interest by Belmarken Holding N.V. in
its shareholding in Cable Networks Netherlands Holding B.V.
(the "INTEREST"), and (in certain circumstances) the
transfer of voting rights attached to the Interest, as a
part of a financing arrangement with The Toronto Dominion
Bank (acting for itself and on behalf of a syndicate of
banks) will be permitted;
(iv) UPC will not require or accept the payment of dividends,
capital distributions or any other distributions by or on
behalf of the Company which are violating Section 5.02;
(v) UPC and/or the company which shall, at any time, be the
direct shareholder of the Company will acknowledge and
accept the subordination referred to in Section 4.01(d)(ix);
(2) the General Services Agreement in form and substance reasonably
satisfactory to the Agent;
(b) the Charter of the Company shall be in form and substance satisfactory to
the Agent;
(c) there shall have been obtained all required and relevant governmental,
corporate, creditors', shareholders' and other licenses, approvals or
consents for:
50
(1) the financing by the Lenders under this Agreement;
(2) the carrying on of the business of the Company as it is presently
carried on and is contemplated to be carried on;
(3) the carrying out of the Projects in accordance with the Agreed Base
Case;
(4) the due execution and delivery of, and performance under, this
Agreement, the Project Agreements, the Security and any documents in
implementation of any thereof; and
(5) the remittance to the Agent and the Lenders or their respective
assigns of all monies payable in respect of this Agreement and the
Security;
(d) the Security, consisting of the following:
(i) mortgage rights over all of the Company's land, buildings and
other immovable properties, including, without limitation, the
real property used by or necessary in connection with the
operation of the cable network of the Company;
(ii) mortgage rights over all the Company's leaseholds ("erfpacht")
and rights of building ("recht van opstal");
51
(iii) a non-possessory pledge on all movable tangible assets of the
Company;
(iv) a non-disclosed pledge on all of the Company's rights and
proceeds under the General Business Agreements and the Project
Agreements;
(v) a non-disclosed pledge on the Company's rights and proceeds under
the insurance policies specified in Section 5.01(c)(1), except
for third party liability insurance;
(vi) a non-disclosed pledge on the Company's receivables;
(vii) a pledge on the Project Accounts;
(viii) a pledge on all shares in the capital of the Company, provided
that the right to vote and receive dividends will be retained by
the Company's shareholder until an Event of Default or Potential
Event of Default has occurred and is continuing;
(ix) subordination of all loans provided to the Company by UPC or any
of its Affiliates and Subsidiaries and subordination of all fees,
costs and other amounts payable to UPC or any of its Affiliates
and Subsidiaries, except that the management fees referred to in
Section 5.04(g) will not be
52
subordinated, subject to the provisions of the Project Support
Agreement;
shall have been created and perfected in a manner satisfactory to the
Agent (acting reasonably).
(e) the Agent shall have received a legal opinion or opinions addressed to the
Agent and the Initial Lender, in form and substance satisfactory to the
Agent (acting reasonably), of counsel acceptable to the Agent (including,
without limitation, opinion statements to the effect that:
(1) the Company is duly incorporated and validly existing under the laws
of The Netherlands;
(2) the Company has the corporate power and authority to enter into this
Agreement, the Project Agreements, the General Business Agreements
and the Security and to exercise its rights and perform its
obligations thereunder;
(3) the Company has taken all required corporate action in connection
with the execution delivery, and performance of its obligations under
the documents referred to in (2);
(4) the Company has validly executed and delivered the documents referred
to in (2);
53
(5) the Company's obligations thereunder are the legal valid and binding
obligations of the Company, enforceable in accordance with their
terms;
(6) the execution, delivery and performance by the Company of the
documents referred to in (2) does not conflict with, or result in a
breach of any provision of its Charter or the laws of the
Netherlands;
(7) no authorization, consent or approval of and no licence or order of
any court, governmental entity or body of the Netherlands is required
in connection with the execution and delivery of and the performance
by the Company of its obligations under the documents referred to in
(2) (except as shall have been obtained);
(8) no filings and registrations are necessary (except as have been
effected);
(9) each of the documents in respect of the Security creates a valid,
binding and enforceable security right as purported in such
documents;
(f) the Agent shall have been provided with the Insurance Report;
(g) the Agent shall have been provided with the certificate referred to in
Section 8.02;
(h) the Company shall have acquired legal or beneficial ownership of the KTE
Assets, the Combivisie Assets and the shares of
54
KTSB, free and clear of any mortgages, pledges, attachments or limited
rights; except that it is acknowledged and accepted by the Agent that the
Company (or KTSB, as the case may be) may not have acquired the ownership
to the cable networks as such;
(i) UPC shall have fully paid up, or caused a Subsidiary to pay up, the share
capital referred to in subsection(a)(1) above;
(j) the Company shall have delivered to the Agent a notice in the form of
SCHEDULE 6, requesting a Disbursement on February 20, 1998, to repay in
full the Existing KTE Facility and the Bridge Loan.
SECTION 4.02. CONDITIONS FOR ANY DISBURSEMENT
(a) The obligation of the Lenders to make any Disbursement (including, for the
avoidance of doubt, the first Disbursement) shall also be subject to the
conditions that, on the date of the Company's request for such
Disbursement and on the date of such Disbursement:
(1) the representations and warranties confirmed or made in Article II
(except with respect to the Information Package) shall be true on and
as of such dates with the same effect as if such representations and
warranties had been made on and as of such dates (but in the case of
Section 2.03(c), without the words in parenthesis and in the case of
Sections 2.01 and 2.02 taking into
55
account any agreed Deviation (as defined in Section 5.01(a)) or
amendment as referred to in Section 5.02(e)(4) or as may be agreed
upon between the Company and the Agent;
(2) no Event of Default and no Potential Event of Default shall have
occurred and be continuing;
(3) as a result of such Disbursement the Company shall not be in
violation of its Charter, nor will it result in any material respect
in violation of any provision contained in any agreement or
instrument to which the Company is a party (including this Agreement)
or by which the Company is bound, or any law, regulation, judgement
or decree applicable to the Company;
(4) nothing shall have occurred which might materially adversely affect
the carrying out of the Projects or the Company's business, its
economic or financial condition, or which is likely to materially
adversely affect the ability of the Company to perform any obligation
under the Financial Debt, or which is likely to adversely affect the
validity or enforceability of the Financial Debt, the Security or any
Project Agreement; nor shall the Company have incurred any material
loss or liability (except such liabilities as may be incurred by the
Company in accordance with the provisions of Section 5.02);
56
(5) no actions, suits or proceedings before any court, tribunal or
governmental authority are pending or threatened against the Company
or any of its assets or revenues which may materially adversely
affect the Company's ability to carry out the Projects or its
business;
(6) the proceeds of such Disbursement shall be needed immediately by the
Company for the purposes of Project A, Project B, Project C or
Project D, as the case may be.
(b) The obligation of the Lenders to make any Disbursement (including, for
the avoidance of doubt, the first Disbursement) shall also be subject to
the condition that the Company shall have delivered to the Agent a
certificate, in the form of SCHEDULE 6 and in substance satisfactory to
the Agent, with respect to the conditions provided in subsection (a)
above, signed by an authorized representative of the Company, together
with such evidence as to the proposed utilization of the proceeds of the
relevant Disbursement and the utilization of the proceeds of any prior
Disbursement as the Agent shall reasonably require.
SECTION 4.03 CONDITIONS OF FIRST DISBURSEMENT UNDER TRANCHE C
The obligation of the Lenders to make the first Disbursement under Tranche C
shall be subject to the performance by the Company of all its obligations
theretofore to be performed under this Agreement
57
and to the fulfilment, in a manner satisfactory to the Agent (acting
reasonably), prior to or concurrently with the making of such first Disbursement
under Tranche C, of the following further conditions:
(a) an amendment agreement to the Project Support Agreement dated February 20,
1998 among the Agent, the Initial Lender, the Company and UPC, in form and
substance satisfactory to the Agent, shall have been entered into between
the respective parties thereto and shall have become (or, as the case may
be, shall remain) unconditional and fully effective in accordance with its
terms (except for this Agreement having become unconditional and fully
effective);
(b) all required and relevant governmental, corporate, creditors',
shareholders' and other licenses, approvals or consents shall have been
obtained for:
(1) the financing by the Lenders under this Agreement;
(2) the carrying on of the business of the Company as it is presently
carried on and is contemplated to be carried on;
(3) the carrying out of Project D in accordance with the Agreed Base
Case;
(4) the due execution and delivery of, and performance under, this
Agreement, the Project Agreements, the
58
Security and any documents in implementation of any thereof; and
(5) the remittance to the Agent and the Lenders or their respective
assigns of all monies payable in respect of this Agreement and the
Security;
(c) the Security, consisting of the rights as specified under Section 4.01(d),
shall have been created and perfected in a manner satisfactory to the
Agent (acting reasonably) with regard to any assets forming part of or
related to the cable networks of Oirschot (including the cable network in
Oost-, West- and Middelbeers), Nuenen and Heeze-Leende;
(d) the Agent shall have received a legal opinion or opinions addressed to
the Agent and Initial Lender, in form and substance and containing
statements as specified under Section 4.01(e);
(e) the Agent shall have been provided with the Insurance Report;
(f) the Company shall have acquired legal or beneficial ownership of the cable
networks of Oirschot (including the cable network in Oost-, West- and
Middelbeers), Nuenen and Heeze-Leende, free and clear of any mortgages,
pledges, attachments or limited rights; except that it is acknowledged and
accepted by the Agent that the Company may not have acquired the ownership
of the cable networks as such;
(g) UPC shall have fully paid up, or caused a Subsidiary to pay up, an
additional share capital of NLG 4,000,000 (four
59
million Netherlands Guilders) in addition to the share capital referred to
in Section 4.01(a)(1);
(h) the Agent shall have been provided with evidence that letters have been
sent to the respective municipalities, as listed in SCHEDULE 10,
concerning the abandonment of any ownership rights of the cable networks
by these municipalities in favour of the Company;
(i) the Agent shall have been provided with evidence that all necessary
permits, governmental approvals and licenses are in full force and effect
and complied with by the Company."
(j) the Company shall have provided evidence that it has used its best effort
to have the municipalities of Oirschot, Nuenen and Heeze-Leende sign the
letters included in SCHEDULE 13 hereto;
ARTICLE V - PARTICULAR COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS
Unless the Agent shall otherwise consent (which consent shall not unreasonably
be withheld), the Company shall:
(a) carry out the Projects materially in accordance with the Agreed Base Case
and cause the financing specified in the Agreed Base Case to be applied
exclusively to the Projects,
60
provided however, that the Company may deviate from the Agreed Base Case
(i) after due and careful review of the assumptions underlying the Agreed
Base Case, and (ii) such deviation has been reflected in a revised
financial model prepared by the Company, provided that the Company will
only be obligated to produce such a revised financial model if the
deviation is likely to result in a material risk that the Company will not
be able to comply with the financial covenants set forth in Section 5.04
or that the Company will not be able to meet its payment obligations under
the Financial Debt, thereby taking into account the interests of the
Lenders in the Projects (a "DEVIATION") and provided always that the
Company will inform the Agent of such Deviation in accordance with Section
5.03(a)(3).
(b) conduct its business with due diligence and efficiency and in accordance
with sound financial and business practices; and maintain such service and
repair equipment and network(s) and other properties as are necessary to
properly conduct the Company's business in accordance with its approved
maintenance programs and standard industry practice, so as to keep such
equipment and other properties and networks duly certified and in good
operating condition, ordinary wear and tear excepted;
(c) keep its equipment, network(s) and other properties insured:
(1) with financially sound and internationally reputable insurers,
acceptable to the Agent, against loss or damage in such manner and to
the same extent as shall
61
be no less than is generally accepted with respect to property and
business of like character in the Netherlands, such insurance to
include:
(a) construction all risk insurance;
(b) material damage insurance;
(c) machinery breakdown insurance;
(d) business interruption insurance;
(e) third party liability insurance;
(f) environmental liability insurance;
(g) employers' liability insurance;
and such other insurance as the Insurance Advisor, after consultation
with the Company and the Agent, may deem necessary or advisable;
(2) with the Agent being named as loss payee and the Agent and the
Lenders being named as additional insured (as the Agent may require)
under such insurance policies, provided, however, that the loss payee
provisions will only be applicable in case of insurance proceeds in
excess of an amount to be agreed upon between the Company and the
Agent ultimately 3 (three) months after the date of this Agreement;
62
(3) under such other conditions as the Agent may require; and
the Agent shall (at its own cost and expense) request advice on the
insurance mentioned in paragraph (1) hereof from the Insurance Advisor and
the Company shall comply or procure compliance with the recommendations
set forth in the Insurance Report;
(d) maintain books of account and other records adequate to reflect truly and
fairly the financial condition of the Company and the results of its
operations (including the progress of the Projects) in conformity with
Generally Accepted Accounting Principles;
(e) maintain as Auditors of the Company an internationally recognized firm of
independent public accountants; authorize, by letter in the form of
SCHEDULE 8, a copy of which shall be provided to the Agent, the Auditors
to communicate directly with the Agent at any time regarding the Company's
accounts and operations should an Event of Default or a Potential Event of
Default have occurred and be continuing;
(f) obtain, comply with and maintain in force (or, where appropriate, renew)
all governmental, corporate, creditors', shareholders' and other necessary
licenses, approvals or consents required for the purposes described in
Sections 4.01(c) and 4.03(b) and perform and observe all the conditions
and restrictions contained in, or imposed on the
63
Company by, such licenses, approvals or consents, to the extent that
failure to do so should reasonably be expected to have a material and
adverse effect on the Company's ability to perform any of its obligations
under this Agreement, any of the Project Agreements or the Security;
(g) create, perfect and maintain (or, where appropriate, renew) the Security
in a manner satisfactory to the Agent and create, perfect and maintain
security rights for the benefit of the Lenders on any and all future
rights, assets or revenues not covered by the Security, to the extent
allowed by applicable law;
(h) pay all taxes (including stamp taxes), duties, fees or other charges
payable on, or in connection with, the execution, issue, delivery,
registration or authorisation of this Agreement, any Project Agreement,
the Security, and any other documents related to this Agreement, and, upon
notice from the Agent, reimburse the Agent and the Lenders or their
assigns for any such taxes, duties, fees or other charges paid by the
Agent and the Lenders or their assigns thereon;
(i) pay to the Initial Lender or as the Initial Lender may direct:
(1) the fees and expenses of the Initial Lender's technical and market
consultants incurred in connection with this Agreement, provided that
the fees and expenses of the market consultant(s) incurred up to and
including December 10, 1997 shall be borne by the Initial Lender;
64
(2) the fees and expenses of the Initial Lender's legal counsel incurred
in connection with:
(A) the preparation of the financing contemplated hereby (except
for the costs of the legal due diligence performed by such
counsel up to and including December 10, 1997);
(B) the preparation, review, execution and, where appropriate,
registration of this Agreement, any Project Agreement, the
Security and any other documents related to this Agreement;
and any amendment or modification thereto including any
additional legal due diligence in relation to such amendment
or modification, or waiver thereunder;
(C) the giving of any legal opinions required by the Agent and
any Lender hereunder;
and
(3) reasonable attorneys' and other fees and expenses incurred by the
Agent and the Lenders in respect of the collection of any amount
owing to the Agent and the Lenders under this Agreement or the
Security through any process of law or with the assistance of
attorneys.
65
(j) maintain the Project Accounts with the Agent and procure that any and all
receipts of and payments by the Company will flow through, and all cash
balances will be held in the Project Accounts;
(k) maintain and, where necessary, amend, replace, substitute or renew the
General Business Agreements, all of the foregoing so as to enable the
Company to comply with the Agreed Base Case (including any agreed
Deviation (as defined in Sub-section 5.01(a));
(l) if so requested by the Agent and if justified in view of a deteriorated
financial position of the Company, procure that in case an Event of
Default or a Potential Event of Default occurs, (i) the counterparties of
the Company under the Project Agreements, (ii) the counterparties of the
Company under any other agreements the Agent and the Company may select
and (iii) any license or permit issuing authorities the Agent and the
Company may select, will be requested to acknowledge and accept the
transfer of the Company's rights and obligations under such agreements,
licenses and/or permits, as the case may be, to the Agent or to a company
or entity designated by the Agent to carry on the Company's business and
to carry out the Projects;
(m) if so requested by the Agent within 45 days following receipt by the Agent
of the report mentioned in Section 5.03(a)(3), (i) discuss with the Agent
the nature and scope of any Deviation (as defined in Section 5.01(a)),
whereby the Agent shall be entitled to retain independent advice on such
Deviation and the assumptions underlying such Deviation from
66
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Inc. (or such other advisor as the Agent and the Company
may mutually agree) and (ii) if the Agent after such consultations
reasonably determines that the Deviation will result in a material risk
that the Company will not be able to comply with the financial covenants
set forth in Section 5.04 or that the Company will not be able to meet its
payment obligations under the Financial Debt, procure repayment of the
Loan in full, including interest accrued thereon (together with any other
amounts accrued or payable under this Agreement), and the Company will be
obligated to procure such repayment within 4 (four) months after the Agent
has made the determination set forth above, in which event the Company
shall also be obligated to reimburse the fees and expenses of the
independent advisor referred to above;
(n) the Company will procure compliance with and implementation of the
Interest Rate Hedging Policy and will, ultimately as per December 29,
2000, to the extent necessary, have entered into Interest Rate Hedging
Products, acceptable to the Agent, that will comply with the Interest Rate
Hedging Policy for such period.
(o) use its best efforts to secure that ultimately October 31, 1998, the
declarations of the municipalities as referred to in Section 4.03(h) will
have been obtained by the Company from the respective municipalities and
that the letters included in Schedule 13 shall have been signed by the
respective municipalities.
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SECTION 5.02. NEGATIVE COVENANTS
Unless the Agent shall otherwise agree, the Company shall not:
(a) declare or pay any dividend or make any distribution on its share capital,
or purchase, redeem or otherwise acquire any shares of capital of the
Company or any option over the same, if an Event of Default or Potential
Event of Default has occurred or is continuing;
(b) declare or pay any dividend or make any distribution on its share capital
(other than dividends or distributions payable in shares of capital of the
Company), or purchase, redeem or otherwise acquire any shares of capital
of the Company or any option over the same prior to the Tranche B Stop
Date; however, in any Financial Year after the Tranche B Stop Date the
Company may take such actions unless any provision of the Project Support
Agreement precludes the taking of such actions, and provided that, after
giving effect to such actions, the Company will not be in breach of any of
the financial covenants referred to in Section 5.04 in such Financial Year
and the subsequent Financial Year;
(c) except with the prior written consent of the Agent, such consent not to be
unreasonably withheld, incur capital expenditures or commitments for
capital expenditures for fixed and other non-current assets, other than
those required for carrying out the Projects and as provided in the Agreed
Base Case, unless such expenditures do not exceed the amount
68
of NLG 2,500,000 (two million five hundred thousand Netherlands Guilders)
in any Financial Year;
(d) except with the prior written consent of the Agent, such consent not to be
unreasonably withheld, enter into any agreement other than this Agreement,
the Project Agreements and the Security, or any agreements entered into in
the normal course of business with a value not exceeding an aggregate
amount of NLG 1,000,000 (one million Netherlands Guilders), and provided
that upon entering into such agreement the Company will provide a
certified copy of such agreement to the Agent;
(e) incur, assume or permit to exist any indebtedness or provide any
guaranties except:
(1) those provided for in the Agreed Base Case, including the Loan, the
KTE Institutional Loans and the Working Capital Facility;
(2) subordinated long-term debt granted to it by UPC, provided that the
terms and conditions thereof shall have been approved by the Agent
which approval shall not unreasonably be withheld;
(3) indebtedness incurred by way of credit from a supplier of capital
goods, or under any instalment purchase or other similar arrangement,
not extending beyond 180 (one hundred and eighty) days or exceeding
at any one time outstanding the equivalent of NLG 2,500,000 (two
69
million five hundred thousand Netherlands Guilders); and
(4) with the consent of the Agent, which consent may be withheld at its
sole discretion if and when the Leverage Ratio including the
additional indebtedness and/or the maximum exposure under any
additional guarantee provided shall not be equal to or lower than
3.00 until and including the Maturity Date and provided (i) the terms
and conditions thereof have been approved by the Agent and (ii) if so
required by the Agent, subject to an adjustment of the Agreed Base
Case acceptable to the Agent including such additional indebtedness;
for the purposes of this subsection, any credit from a supplier of capital
goods, or under any instalment purchase or other similar arrangement shall
be deemed to be indebtedness not incurred in the ordinary course of
business and shall be permitted only to the extent provided in paragraph
(3) above;
(f) create or permit to exist any lien on any property, revenues or other
assets, present or future, of the Company, except:
(1) the Security; and
(2) any tax or other statutory lien, provided that such lien shall be
discharged within thirty (30) days after the date it is created or
arises (unless contested in
70
good faith by the Company and the Company has made proper reserves
whilst contesting such tax or other statutory lien, in which case it
shall be discharged within thirty (30) days after final
adjudication);
for the purposes of this subsection, the term "lien" shall mean any
mortgage, pledge, attachment or limited right of any kind, including,
without limitation, any designation of loss payees or beneficiaries or any
similar arrangement under any insurance policy;
(g) enter into any transaction with UPC or any of its Affiliates and
Subsidiaries, except in the ordinary course of business, on ordinary
commercial terms and on the basis of arm's-length arrangements;
(h) enter into any management contract or similar arrangement whereby its
business or operations are managed by any other person other than the
General Services Agreement;
(i) except with the prior written consent of the Agent, such consent not to be
unreasonably withheld, form or have any Subsidiary, or make or permit to
exist loans or advances to, or deposits with other persons or investments
in any person or enterprise;
(j) make changes, or permit changes to be made, to the nature of its present
and contemplated business or operations or change the nature or scope of
the Projects;
71
(k) make changes, or permit changes to be made, to its capital except in
accordance with the Project Support Agreement;
(l) make changes, or permit changes to be made, to its Charter in any manner
which would be inconsistent with the provisions of this Agreement;
(m) terminate, amend or grant any waiver in respect of any provision of any of
the Project Agreements, provided that the Company may notify the Agent of
any desired or intended termination of or amendment to any of the Project
Agreements and that the Agent's approval to any such proposed termination
or amendment shall be deemed to have been given by the Agent if it has not
responded within thirty (30) days after receipt of such notification;
(n) make any prepayment (whether voluntarily or involuntarily) or repurchase
of any long-term debt (other than the Loan), or make any repayment of any
such debt pursuant to any provision of any agreement or note which
provides directly or indirectly for acceleration of repayment in time or
amount, unless in any such case it shall, if the Agent so requires,
simultaneously make a proportionate prepayment or repayment of the
principal amount of the then outstanding Disbursements in accordance with
the provisions of Section 3.07(a);
(o) sell, transfer, lease or otherwise dispose of all or an essential part of
its assets (whether in a single transaction or in a series of
transactions, related or otherwise);
72
(p) undertake or permit any merger, consolidation, demerger ("splitsing") or
reorganization; or
(q) change its accounting policies and its cost capitalisation policies.
SECTION 5.03. FURNISHING OF INFORMATION
Unless the Agent shall otherwise agree, the Company shall:
(a) as soon as available, but, in any event, within forty-five (45) days after
the end of each quarter of each Financial Year, furnish to the Agent:
(1) two copies of the Financial Statements for such quarter in form
satisfactory to the Agent;
(2) a report on any factors materially and adversely affecting or which
might materially and adversely affect the Company's business and
operations or its financial condition;
(3) a report, in a form satisfactory to the Agent, on the implementation
and progress of the Projects, the implementation of the Agreed Base
Case, a comparison and an analysis of differences between the Agreed
Base Case and the actual business and operations of the Company;
73
(4) a report, in a form satisfactory to the Agent, setting forth the
Company's calculation of and compliance with the financial covenants
referred to in Section 5.04;
(5) a statement of all financial transactions, if any, between the
Company and UPC and/or each of the Company's and UPC's Subsidiaries
and Affiliates to the extent such transactions have an aggregate
value in excess of NLG 2,000,000 (two million Netherlands Guilders);
and
(6) as of the Tranche B Stop Date, a calculation of Excess Cash Flow
provided that such calculation only needs to be delivered to the
Agent with the Financial Statements covering the fourth quarter of a
Financial Year.
All such reports and statements in the form of SCHEDULE 9 will be
certified by the Chief Financial Officer of the Company.
(b) as soon as available but, in any event, within 180 (one hundred and
eighty) days after the end of each Financial Year, furnish to the Agent:
(1) two copies of its Financial Statements for such Financial Year,
together with an unqualified audit report thereon from the Auditors,
all in form satisfactory to the Agent;
74
(2) a management letter from the Auditors commenting, among others, on
the adequacy of the Company's financial control procedures and
accounting systems, together with a copy of any other communication
sent by the Auditors to the Company or to its management in relation
to the Company's financial, accounting and other systems and
accounts;
(3) a report by the Chief Financial Officer of the Company certifying
that the Company was in compliance with the financial covenants
contained in Section 5.04 as of the end of the relevant Financial
Year or, as the case may be, detailing any noncompliance; and
and within 30 (thirty) days after the end of each Financial Year a budget
for the next (then current) Financial Year, with specified monthly or
quarterly budgets;
(c) not later than 30 (thirty) days after the effective date of any new or
renewed insurance policy, submit to the Agent copies of such new insurance
policies or extension letters, as the case may be, and, in case of a new
insurance policy, a certificate from the Company's insurer or insurance
broker, indicating the properties insured, amounts and risks covered,
names of the loss payees, beneficiaries and assignees and additional
insured, the name of the insurer and any special features of the new or
renewed insurance policy, including a statement that such new or renewed
insurance is at least identical to the insurance so renewed and provided
that the Agent shall have the right to request advice as to such new or
renewed insurance from the Insurance Advisor and the
75
advice so given by the Insurance Advisor will be binding on the Company
and the Company will comply or procure compliance with such advice;
(d) furnish promptly to the Agent such information as the Agent may from time
to time reasonably request, and permit representatives of the Agent to
visit any of the premises where the business of the Company is conducted
and to have access to its books of account and records, subject to advance
notice by the Agent of at least 2 (two) Business Days, which notice period
shall not apply if an Event of Default or a Potential Event of Default has
occurred and is continuing;
(e) promptly inform the Agent of any intended change in the nature or scope of
the Projects or the business or operations of the Company and of any event
or condition which should reasonably be expected to materially and
adversely affect the financial position of the Company, the carrying out
of the Projects or the carrying on of the Company's business or
operations;
(f) immediately upon the occurrence of any Event of Default or any Potential
Event of Default, give the Agent notice thereof by telefax specifying the
nature of such Event of Default or such Potential Event of Default and any
steps the Company is taking to remedy the same; and
(g) give to the Agent by telefax notice of the calling of any meeting of its
shareholders indicating the agenda thereof no
76
later than at the time that it gives official notice of any such meeting
to the shareholders or directors, as the case may be and furnish promptly
to the Agent two copies of:
(1) all notices, reports and other communications of the Company to its
shareholders; and
(2) the minutes of all shareholders' meetings.
SECTION 5.04. FINANCIAL COVENANTS
Unless the Agent shall otherwise agree, the Company shall:
(a) maintain a maximum Leverage Ratio detailed in respect of each of the
---------
calculation periods referred to below in the column opposite such
calculation periods:
Calculation Period: Leverage Ratio:
------------------ --------------
Date of this Agreement
until December 31, 1998: 9.00
January 1, 1999 until
December 31, 1999: 9.00
January 1, 2000 until
December 31, 2000: 7.50
January 1, 2001 until
December 31, 2001: 5.50
January 1, 2002 until
December 31, 2002: 4.50
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January 1, 2003 until
December 31, 2003 3.50
January 1, 2004 until the
Maturity Date: 3.00
(b) maintain a Gearing Ratio of at least 35% (thirty-five per cent);
(c) maintain at least a Cash Interest Cover Ratio detailed in respect of each
of the calculation periods referred to below in the column opposite such
calculation periods:
Calculation Period: CICR:
------------------ ----
Date of this Agreement
until December 31, 1998: 1.25
January 1, 1999 until
December 31, 1999: 1.25
January 1, 2000 until
December 31, 2000: 1.75
(d) maintain a Debt Service Coverage Ratio of at least 1.25 as of January 1,
2001;
(e) until the Tranche B Stop Date maintain an EBITDA performance exceeding 90%
(ninety per cent) of the projected EBITDA in the Agreed Base Case for the
2 (two) preceding consecutive calendar quarters;
78
(f) as of the Tranche B Stop Date maintain an EBITDA performance (i) exceeding
90% (ninety per cent) of the projected EBITDA in the Agreed Base Case (for
the same period) and (ii) exceeding 95% (ninety-five per cent) of the
projected EBITDA in the Agreed Base Case as a rolling average for the last
four consecutive calendar quarters;
(g) refrain from paying to UPC or any of UPC's Affiliates or Subsidiaries in
respect of the Financial Years listed below any amounts in fees and
expenses under the General Services Agreement in excess of the amounts
listed opposite each respective Financial Year:
YEAR AMOUNT
---- ------
2001 NLG 2,935,000
2002 NLG 2,949,000
2003 NLG 3,042,000
2004 NLG 3,134,000
2005 NLG 3,274,000
2006 and beyond NLG 3,297,000
ARTICLE VI - EVENTS OF DEFAULT
SECTION 6.01. ACCELERATION IN EVENTS OF DEFAULT
If any one or more of the events specified in this Section shall have occurred
and be continuing, then the Agent, by notice to the
79
Company, may declare the principal of, and all accrued interest on, the Loan
(together with any other amounts accrued or payable under this Agreement) to be,
and the same shall thereupon become, immediately due and payable (anything in
this Agreement to the contrary notwithstanding) without any further notice and
without any presentment, demand or protest of any kind, all of which are hereby
expressly waived by the Company:
(a) the Company shall have failed to pay any principal of, or interest on, the
Loan as required by this Agreement and such failure remains unremedied for
3 (three) Business Days after notice of such failure has been given by the
Agent to the Company;
(b) the Company shall have failed to perform any of its obligations
(1) under this Agreement (other than any obligation for the payment of
principal or interest under this Agreement),
(2) under any other agreement between the Company and the Agent or the
Lenders, or
(3) with respect to the Security,
and any such failure to perform shall have continued for a period of
thirty (30) days after notice thereof shall have been given to the Company
by the Agent (except that the above grace period of 30 (thirty) days shall
not be applicable in
80
case of failure by the Company to perform any of its obligations under
Section 5.01(c);
(c) the Company, UPC or any other party shall have failed to perform any of
its obligations under any Project Agreement, such failure is likely to
adversely affect the Company's ability to perform any of its obligations
thereunder or under this Agreement, and any such failure to perform shall
have continued for a period of thirty (30) days after notice thereof shall
have been given to the Company by the Agent, or such longer period as
shall be consented to by the Agent;
(d) any representation or warranty confirmed or made in Article II or in
connection with the execution and delivery of this Agreement, or in
connection with any disbursement application under this Agreement, shall
be incorrect and such incorrectness, if capable of remedy, remains
unremedied for a period of 30 (thirty) Business Days after notice thereof
shall have been given to the Company by the Agent;
(e) all or any substantial part of the property or other assets of the Company
or of its share capital shall have been seized, attached in aid of
execution ("executoriaal beslag") or expropriated, or shall have been
placed under custody or control, which seizure, attachment, et cetera, has
not been discharged within 15 (fifteen) Business Days, or the Company is
dissolved or all or a substantial part of the Company's assets shall have
become lost or unfit for normal use;
81
(f) the Company, UPC or any of the Company's Subsidiaries (i) submits a
request to be declared bankrupt or to be granted a suspension of payments
or (ii) is declared bankrupt and such bankruptcy has not been lifted
within 2 (two) months, or the Company, UPC or any of the Company's
Subsidiaries, as the case may be, has failed to lodge as soon as possible
with the competent court an appeal against the court decision to declare
it bankrupt;
(g) a default shall have occurred with respect to any indebtedness of the
Company in excess of NLG 1,000,000 (one million Netherlands Guilders)
(other than the Loan) or under any agreement pursuant to which there is
outstanding any indebtedness of the Company, and such default shall have
continued for more than any applicable period of grace;
(h) if any major damage and/or interruption of operations of the Company
occurs which is not covered or remedied in full by the proceeds of any
insurance and such damage or interruption should reasonably be expected to
have a material adverse effect on the ability of the Company to perform
any of its obligations under this Agreement or any other Project Agreement
and the Company has not prepaid, or secured in a manner satisfactory to
the Agent the prepayment of the Loan within 15 (fifteen) Business Days
following the occurrence of such major damage or interruption (and
provided that the Company shall have immediately notified the Agent of the
occurrence of such damage or interruption of operations);
82
(i) if any material adverse event or change shall have occurred in the
economic or financial situation of the Company as a result of which the
ability of the Company to fulfil any of its obligations under this
Agreement, the Security or any Project Agreement is likely to be
materially impaired;
(j) this Agreement, the Security, or any Project Agreement, or any provision
thereof which is material in the context of this Agreement, is or becomes,
for any reason, invalid or unenforceable or at any time it is unlawful or
impossible for the Company to perform any of its material obligations
under this Agreement, the Security, or any Project Agreement or it is
unlawful or impossible for the Agent or the Lenders or any of them to
exercise any of their rights under this Agreement or the Security.
SECTION 6.02. AUTOMATIC ACCELERATION
83
If the Company, UPC and/or any of UPC's Subsidiaries, which is also a direct or
indirect shareholder of the Company (the latter only to the extent this is
likely to have an adverse impact on the performance of the Company and UPC under
this Agreement and the Project Agreements) shall have become voluntarily or
involuntarily dissolved, or become bankrupt or shall have been granted a
suspension of payments, the principal of, and all accrued interest on, the Loan
(together with any other amounts accrued or payable under this Agreement) shall
thereupon become immediately due and payable (anything in this Agreement to the
contrary notwithstanding) without any presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Company.
ARTICLE VII- SYNDICATION AND AGENT
SECTION 7.01 SYNDICATION
(a) As long as, other than the Company, the Initial Lender is the sole other
party to this Agreement, any reference to the Agent, the Lenders, the
other Lenders, or any of them, shall be a reference to the Initial Lender
and this Agreement shall be construed accordingly.
(b) Each Lender shall have the right to request other lenders to become a
lending party to this Agreement with the effect that each such other
lender shall participate for a certain
84
Percentage Portion in the Loan and the Disbursements (to be) made
thereunder, provided that:
(i) each such other lender shall be approved by the Company, such
approval not to be unreasonably withheld;
(ii) the minimum participation amount shall be 5% (five per cent) of the
Loan amount referred to in Section 3.01.
(c) Such other lender shall become a party to this Agreement by execution and
delivery by such party and the Initial Lender and the Lenders, as the case
may be, of a Participation Agreement specifying inter alia the percentage
for which such lender shall participate in the Disbursements made or to be
made under this Agreement, and countersigning thereof by the Company,
whereupon such lender shall be a party to this Agreement, with rights and
obligations vis-a-vis the other parties to this Agreement as set forth in
such Participation Agreement and, with respect to any Lender as referred
to in this Agreement, in this Agreement where applicable and relevant in
proportion to its Percentage Portion.
(d) Each of the Lenders shall participate in each Disbursement (to be) made
under this Agreement in the proportion of its Percentage Portion and each
(re)payment by the Company of principal, interest, fee and of any other
amount due by the Company to the Lenders under this Agreement shall be in
satisfaction to the obligations of the Lenders in proportion to such
participations, unless clearly stated otherwise.
85
(e) Upon any such lender having become a lender party to this Agreement, any
reference to the Agent, the Lenders, and any of them, shall be a reference
to the Agent, the Lenders, and any of them.
(f) If a future lender requests that non-material changes be made to this
Agreement or to any of the agreements and documents listed in Sections
4.01 and 4.03 (or to any other document), as a condition to be fulfilled
upon becoming a party to this Agreement, the Company shall fully cooperate
in causing such changes to be made, with a view to facilitate syndication
and/or sub-participations.
(g) Each Lender will notify the Company, through the Agent, of any tax gross
up (as set forth in Section 3.11), unwinding costs (as set forth in
Section 3.12) or Increased Costs (as set forth in Section 3.13) and as to
the notification with respect to Increased Costs in accordance with
Section 3.13(c), if and when applicable and each Lender will designate a
different lending office or an Affiliate to hold its participation in the
Loan if such designation will avoid the need for, or reduce the amount of
compensation payable by the Company pursuant to this Agreement with
respect to such tax gross up, unwinding costs and Increased Costs,
provided that such designation will not, in the sole opinion of such
Lender, be disadvantageous to such Lender. The Company shall reimburse
such Lender for such tax gross up, unwinding costs and Increased Costs (as
to Increased Costs to the extent such reimbursement obligation exists
under Section 3.13(c)), as the case may be, provided that upon the Agent
and such Lender
86
having received 20 (twenty) Business Days prior notice to that effect, the
Company may prepay to such Lender such Lender's Percentage Portion of all
Disbursements outstanding and may cancel such Lender's Percentage Portion
of the Loan not disbursed hereunder, such prepayment to include, for the
avoidance of doubt, accrued interest and all other amounts then due
pursuant to this Agreement.
(h) If by reason of the introduction of, or a change in any applicable law or
in the interpretation or application thereof by any governmental or other
authority charged with the administration thereof or by a court of
competent jurisdiction, it has or will become unlawful for any Lender to
maintain or give effect to its obligations hereunder (which shall include
the funding of its Percentage Portion), such Lender may notify the Company
through the Agent accordingly, in which event (i) the Company shall
immediately, or at such later date to be designated by the Company as is
permitted by the relevant law or regulation , repay all sums outstanding
under that Lender's Percentage Portion together with accrued interest
thereon and all other sums payable to that Lender, including without
limitation, any Breakage Cost resulting from such repayment, and (ii) the
Company shall hold such Lender harmless from liability with respect to any
penalty accrued against it as a result of the Company's failure to duly
and timely make the payments referred to under (i) above and shall
reimburse such Lender upon demand for any such penalty paid by it in
connection herewith together with any interest and expenses asserted in
connection therewith.
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SECTION 7.02 AGENT
(a) By becoming a party to this Agreement, each of such Lenders irrevocably
appoints the Agent to act as its agent under and in connection with this
Agreement and authorizes and directs the Agent to take such action as
agent in the name of each of the Lenders as specified in this Agreement,
together with all such actions and powers as are reasonably incidental
thereto.
(b) The Agent shall without delay forward any notice received from the Company
under this Agreement in its capacity as Agent to each of the other Lenders
and the Agent shall act as directed by and in accordance with the
resolutions adopted by the Majority of Lenders.
(c) As between the Agent and the Lenders, the Agent may consult with any
experts or counsel selected by it and shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the
advice of such expert or counsel, or otherwise taken in good faith in a
manner not inconsistent with such advice.
(d) As between the Agent and the Lenders, the Agent excludes any liability for
any action taken or not taken by the Agent under or in connection with
this Agreement (i) with the consent or at the request of the Majority of
Lenders or (ii) in the absence of gross negligence of wilful misconduct of
the Agent. The Lenders shall, ratably in accordance with
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their respective Percentage Portions, indemnify the Agent against any
costs, expense (including counsel fees and disbursements), claim, demand,
action, loss or liability (except such as a result from the Agent's gross
negligence or wilful misconduct) that the Agent may suffer or incur under
or in connection with this Agreement or any action taken or omitted by the
Agent thereunder.
(e) The Agent may resign, subject to prior consultation with the Company, at
any time by given written notice thereof to the other Lenders and to the
Company. Upon any such notice of resignation, the Majority of Lenders may
with the consent of the Company, which shall not be unreasonably withheld,
appoint a successor Agent. If the Majority of Lenders fails to appoint a
successor Agent within 30 (thirty) days of the notice of resignation, the
Agent may, with the consent of the Company, which consent shall not be
unreasonably withheld, appoint a successor Agent itself. The resignation
of the Agent and the appointment of any successor Agent will both become
effective only upon the successor Agent notifying all parties that it
accepts its appointment. On giving the notification, the successor Agent
will succeed to the position of the Agent and the term "Agent" will mean
the successor Agent. Upon its resignation becoming effective, the retiring
Agent shall have no rights and obligations as Agent herunder, except to
the extent incurred prior to the date of appointment of a successor Agent.
The successor Agent and the Company and each of the Lenders shall have the
same rights and obligations amongst themselves as they would have if such
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successor Agent had been a party hereto as from the date hereof.
(f) The obligations and liabilities of each of the Lenders under this
Agreement are several and not joint and, accordingly, no Lender shall be
responsible for the obligations and liabilities under this Agreement of
any other Lender.
ARTICLE VIII - MISCELLANEOUS
SECTION 8.01. NOTICES
Any notice, application or other communication to be given or made under this
Agreement to the Agent or to the Company shall be in writing. Subject to the
provisions of Sections 3.02(a) and (c), 5.03(f) and (g), such notice,
application or other communication shall be deemed to have been duly given or
made when it shall be delivered by hand, airmail or telefax to the party to
which it is required or permitted to be given or made at such party's address
specified below or at such other address as such party shall have designated by
notice to the party giving or making such notice, application or other
communication.
For the Company:
CABLE NETWORK BRABANT HOLDING B.V.
Attn.: the Managing Director
90
Professor Dr ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
The Netherlands
Alternative address for communications by telefax: [ ]
with a copy to:
UNITED PAN-EUROPE COMMUNICATIONS N.V.
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President & Treasurer
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Alternative address for communications by telefax: 00.31.20.578.9861
For the Bank:
RABOBANK INTERNATIONAL
Attn. Head of Project Finance
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
The Netherlands
Alternative address for communications by telefax:
00.31.30.216.1949]
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SECTION 8.02. CERTIFICATE OF AUTHORITY
The Company shall furnish or cause to be furnished to the Agent evidence, in
form and substance satisfactory to the Agent, of the authority of the person or
persons who will, on behalf of the Company, sign the applications and
certifications provided for in this Agreement, or take any other action or
execute any other document required or permitted to be taken or executed by the
Company under this Agreement, and the authenticated specimen signature of each
such person.
SECTION 8.03. ENGLISH LANGUAGE
All documents to be furnished or communications to be given or made under this
Agreement shall be in the English language or, if in another language, shall be
accompanied by a translation into English certified by a representative of the
Company, which translation shall be the governing version between the Company
and the Agent.
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SECTION 8.04. FINANCIAL CALCULATIONS
All financial calculations to be made under, or for the purposes of, this
Agreement shall be determined in accordance with Generally Accepted Accounting
Principles and, except as otherwise required to conform to the provisions of
this Agreement, shall be calculated from the then most recently issued quarterly
Financial Statements which the Company is obligated to furnish to the Agent from
time to time, as provided in Section 5.03(a); provided, however, that if there
should occur any material adverse change in the financial condition of the
Company after the end of the period covered by the relevant Financial
Statements, then such material adverse change shall also be taken into account
in calculating the relevant figures and (c) the Agent is entitled to correct or
amend any calculations in case of manifest error.
SECTION 8.05. RIGHTS, REMEDIES AND WAIVERS
(a) The rights and remedies of the Agent or the Lenders in relation to any
misrepresentations or breach of warranty on the part of the Company shall
not be prejudiced by any investigation which may be made after the date of
this Agreement by or on behalf of the Agent or the Lenders into the
affairs of the Company, by the execution or the performance of this
Agreement or by any other act or thing which may be done by or on behalf
of the Agent or the Lenders in connection with this Agreement and which
might, apart from this Section, prejudice such rights or remedies.
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(b) No course of dealing or waiver by the Agent or the Lenders in connection
with any condition of Disbursement under this Agreement shall impair any
right, power or remedy of the Agent or the Lenders with respect to any
other condition of Disbursement, or be construed to be a waiver thereof;
nor shall the action of the Agent or the Lenders in respect of any
Disbursement affect or impair any right, power or remedy of the Agent or
the Lenders in respect of any other Disbursement.
(c) Unless otherwise notified to the Company by the Agent or the Lenders and
without prejudice to the generality of subsection (b) above, the right of
the Agent to require compliance with any condition under this Agreement
which may be waived by the Agent or the Lenders in respect of any
Disbursement is expressly preserved for the purposes of any subsequent
Disbursement.
(d) No course of dealing and no delay in exercising, or omission to exercise,
any right, power or remedy accruing to the Agent or the Lenders upon any
default under this Agreement or any other agreement shall impair any such
right, power or remedy or be construed to be a waiver thereof or an
acquiescence therein; nor shall the action of the Agent or the Lenders in
respect of any such default, or any acquiescence by it therein, affect or
impair any right, power or remedy of the Agent or the Lenders in respect
of any other default.
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SECTION 8.06. TERM OF AGREEMENT
This Agreement shall continue in force until all monies payable hereunder shall
have been fully paid in accordance with the provisions hereof.
SECTION 8.07. GOVERNING LAW AND JURISDICTION
(a) This Agreement shall be governed by the laws of the Netherlands.
(b) Any suit, action or proceeding against the Company with respect to this
Agreement may be brought in the court of Amsterdam and the Company, the
Agent and the Lenders hereby submit to the exclusive jurisdiction of the
court of Amsterdam for the purpose of any such suit, action or proceeding.
SECTION 8.08. SUCCESSORS AND ASSIGNS
This Agreement shall bind and inure to the benefit of the respective successors
and assigns of the parties hereto, except that the Company may not assign or
otherwise transfer all or any part of its rights or obligations under this
Agreement without the prior consent of the Agent.
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SECTION 8.09. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
SECTION 8.10. AMENDMENTS
This Agreement may be amended only by an instrument in writing signed by the
Company, the Agent and the Initial Lender or, as the case may be, the Lenders.
8.11. SEVERABILITY
In the event that one or more provisions of this Agreement would appear to be
non-binding, the other provisions of this Agreement will continue to be
effective. The Company and the Agent are obliged to replace the non-binding
provisions in such a manner that the new provisions differ as little as possible
from the non-binding clauses, taking into account the object and the purpose of
this agreement.
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IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
__________________________
Cable Network Brabant Holding B.V.
represented by:
/s/ ▇.▇. de Goaijen
__________________________
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
(Agent)
represented by:
/s/ ▇.▇. de Goaijen
____________________________
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
(Initial Lender)
represented by:
