[ON THE HEADED PAPER OF TD BANK EUROPE LIMITED]
To: UPC Distribution Holding B.V. ("UPCD")
From: TD Bank Europe Limited
(acting with the approval of the Majority Lenders) as Facility Agent
1st March, 2002
Dear Sirs,
Senior secured credit facility dated 26th October, 2000 made between, inter
alia, UPCD, TD Bank Europe Limited and Toronto Dominion (Texas), Inc. as
Facility Agents and the banks and financial institutions listed therein (the
"Facility Agreement")
We refer to the Facility Agreement. Terms defined in the Facility Agreement
shall have the same meaning when used in this letter, save where expressly
defined otherwise.
1. Temporary waiver of certain rights
UPCD has requested the Lenders to temporarily waive certain of their rights
under the Finance Documents arising as a result of a failure by United
Pan-Europe Communications N.V. ("UPC") to pay the interest due on any of the
senior notes issued under the indentures listed in the schedule to this letter
(the "Indentures") on the dates specified in the schedule (any such failure to
pay being a "Specified Event").
We confirm that the Majority Lenders agree, subject to the terms and conditions
outlined below, not to exercise their rights during the Relevant Period (defined
below) under the Relevant Clauses (defined below) of the Facility Agreement
which would otherwise arise as a result of any Default under:
(a) Clause 18.5(a) of the Facility Agreement which is constituted by a
Specified Event; or
(b) Clause 18.5(c) of the Facility Agreement which is constituted by an event
described in Clause 18.5(c) under the document relating to any Financial
Indebtedness of UPC, UPCD or any of their Subsidiaries which event itself
is constituted by a Specified Event.
At the end of the Relevant Period, the rights of the Finance Parties in respect
of the Relevant Clauses and any Specified Event will revive and will be
exercisable in full by the Finance Parties.
"Co-ordinating Committee" means The Toronto Dominion Bank, JPMorgan Chase Bank,
The Royal Bank of Scotland plc, Fortis Bank (Nederland) N.V. and Bank of
America, N.A. acting as co-ordinating committee pursuant to the letter of
request from UPCD dated 1st March, 2002.
"Deloitte & Touche Engagement Letter" means the letter of engagement between the
Co-ordinating Committee and Deloitte & Touche dated 1st March, 2002.
"Relevant Clauses" means the following clauses of the Facility Agreement:
(a) Clause 18.21 (Acceleration);
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(b) Clauses 4.2 (Further conditions precedent) (in respect of Rollover Advances
and, subject to paragraph 2(d)(ii), (iii) and (iv) below, certain new money
Advances);
(c) Clause 16.23(c) (UPC Distribution Pledged Account), subject to paragraph
2(c) below; and
(d) Clause 26.2(b)(iii) (Transfers by Lenders).
"Relevant Period" means the period commencing on the Effective Date (as defined
below) and ending on the earlier of:
(a) 3rd June, 2002;
(b) the date five Business Days after the date on which the Facility Agent
(acting on the instructions of the Majority Lenders) notifies UPCD in
writing of a breach by UPCD of its obligations hereunder which is
continuing unremedied, unless the breach (if capable of remedy) is remedied
within such 5 Business Day period; or
(c) the occurrence of any Event of Default under the Facility Agreement (other
than an Event of Default in respect of which the Majority Lenders have
agreed in this letter to temporarily waive certain of their rights).
2. Conditions
The above agreement by the Majority Lenders is subject to the following terms
and conditions. UPCD acknowledges and agrees to these terms and conditions and
undertakes to perform its obligations as set out below.
(a) The Finance Parties and the Beneficiaries reserve all their rights in
respect of any Default (whether in existence at the date hereof or arising
thereafter and whether or not known to any Finance Party or Beneficiary),
except to the extent such rights are expressly varied by this letter.
(b) UPCD shall ensure that by no later than 1st March, 2002, Eur 100,000,000 in
cash is injected into the Borrower Group by way of subscription by persons
outside the Borrower Group for shares in UPCD and/or Subordinated
Shareholder Loans and is deposited into the UPC Distribution Pledged
Account (as defined in clause 16.23 of the Facility Agreement).
(c) Subject to Clause 16.23 of the Facility Agreement, withdrawals may be made
by UPCD from the UPC Distribution Pledged Account and amounts withdrawn
shall be applied to meet expenditures arising in the ordinary course of the
Business of the Borrower Group as carried on in accordance with the
Facility Agreement (including the payment of interest and commitment fees
payable under the Facility Agreement).
(d) Subject to the terms of the Facility Agreement and (during the Relevant
Period) notwithstanding the occurrence of any Specified Event, Advances may
be drawn under the Facility Agreement after the date of this Agreement only
as follows:
(i) Rollover Advances may continue to be drawn; and
(ii) following:
(A) the Effective Date;
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(B) written confirmation by the Co-ordinating Committee to the
Facility Agent that Deloitte & Touche have prepared a report to
Lenders (which has been delivered to the Co-ordinating Committee
on or before 1st March, 2002) which states that, on the basis of
Deloitte & Touche's limited scope procedures as set out in
Appendix 1(E) of the Deloitte & Touche Engagement Letter, (1)
the Year 1 Liquidity Analysis is reasonable as to quantum;
however, in relation to timing, UPCD has had more success in
delaying the unwinding of its opening working capital than was
envisaged in the Year 1 Liquidity Analysis and UPCD has a
materially higher cash balance as at 31st January, 2002, a
position that Deloitte & Touche expect to unwind progressively
throughout the period to 3rd June, 2002. Accordingly, it is
reasonable for UPCD to say it requires to draw Eur100,000,000
under the Facility by 3rd June, 2002; and (2) the cash position
as at 1st January, 2002 of the UPCD Group and the Parent Group
is accurate in all material respects (where the defined terms
bear the same meaning as in the Deloitte & Touche Engagement
Letter); and
(C) written confirmation by the Co-ordinating Committee to the
Facility Agent that the Co-ordinating Committee has received, not
less than three weeks prior to the first proposed Utilisation
Date which falls during the Relevant Period, a business plan for
the Borrower Group for a period of not less than three years
(such period ending no earlier than 31st December, 2004) and that
such plan contains financial projections (and supporting
materials) which on their face show full compliance by the
Borrower Group during the term of the plan with all financial and
payment covenants and availability tests under the Facility
Agreement,
Advances (not being Rollover Advances) may be drawn under Facility A
for the purpose of being applied in the ordinary course of the
Business of the Borrower Group as carried on in accordance with the
Facility Agreement (including the payment of interest and commitment
fees payable under the Facility Agreement), subject to there being not
more than Eur25,000,000 standing to the credit of the UPC Distribution
Pledged Account on the proposed Utilisation Date (deducting from the
balance of that account for this purpose the amount of all
disbursements to be made from such account on such date) and further
provided that the amount of such new money Advance shall not exceed
the projected cash requirements of the Borrower Group at the relevant
time as set out in the liquidity analysis supplied to the
Co-ordinating Committee for the financial year ending 31st December,
2002 and for the thirteen week or 3 month period commencing on 1st
January, 2002 and in any event shall not exceed Eur 100,000,000 in
aggregate for all such Advances;
(iii) each Interest Period selected after the date of this letter until the
end of the Relevant Period shall be one month, or such other period as
the Facility Agent (or if required by the Facility Agreement, all the
Lenders) may agree; and
(iv) for the avoidance of doubt, the availability of Advances under
paragraphs (i) and (ii) above will be subject to no Default or, in the
case of Rollover Advances, Event of Default (other than a Default or,
in the case of Rollover Advances, Event of Default in respect of which
the Majority Lenders have agreed in this letter to temporarily waive
certain of their rights) being outstanding on the date of the Request
for such Advance or on its Utilisation Date or resulting from the
making of the Advance.
The Co-ordinating Committee will give the written confirmations
referred to in sub-paragraphs (ii)(B) and (C) above as soon as
practicable after these conditions are satisfied. It
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is not a condition to any drawing under Facility A that the contents
of the business plan referred to in (ii)(C) above are verified by the
Co-ordinating Committee or its financial advisers.
(e) [Deliberately left blank]
(f) UPCD shall ensure that the Co-ordinating Committee (and, in the case of
sub-paragraphs (ii) to (v) (inclusive) below, Deloitte & Touche) receives
the following documentation, by the dates specified below:
(i) [Deliberately left blank];
(ii) [Deliberately left blank];
(iii) [Deliberately left blank];
(iv) [Deliberately left blank]; and
(v) any business plan for the Borrower Group that is delivered to UPC's
high yield bondholders, by no later than the date such plan is
delivered to such bondholders and in any event a three year business
plan for the Borrower Group for the period ending on 31st December,
2004 by no later than three weeks before the first Utilisation under
paragraph 2(d)(ii) above which is made during the Relevant Period
and in any event by 26th April, 2002.
(g) UPCD shall ensure that:
(i) professional advisers are appointed by 15th April, 2002 to represent
the bondholders of UPC in respect of the notes issued under the
Indentures in relation to the prospective restructuring of these
notes;
(ii) during the Relevant Period, neither UnitedGlobalCom, Inc ("UGC") nor
UPC will sell or cause to be sold any such Securities held by or on
behalf of UGC or UPC respectively (other than to an Affiliate or
pursuant to any exchange offer made in respect of all Securities
issued by UPC under the Indentures); and
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(iii) details of any formal tender offer proposals to be made by UPC or
associated parties to the bondholders are provided to the
Co-ordinating Committee not less than one Business Day prior to such
proposals being publicly announced.
(h) UPCD acknowledges and agrees that Deloitte & Touche is to be appointed by
the Co-ordinating Committee to undertake the reviews and prepare the
reports described in the Deloitte & Touche Engagement Letter. UPCD shall,
and shall ensure that UPC does, provide all assistance reasonably required
by Deloitte & Touche in undertaking its reviews and preparing its reports
to the Lenders. UPCD shall ensure that following the delivery of the
initial 13 week liquidity analysis referred to in paragraph 2(d)(ii) above,
the Co-ordinating Committee and Deloitte & Touche thereafter receive a
rolling 13 week or three month liquidity analysis for the Borrower Group
(prepared on the same basis). UPCD shall ensure that the report by Deloitte
& Touche referred to in paragraph 2(d)(ii)(B) and Deloitte & Touche's
report (the "Deloitte & Touche Business Plan Report") in respect of the
business plan referred to in paragraph 2(f)(v) above is each promptly
reviewed by UPCD and UPC and that UPC and UPCD promptly comment on and
confirm the factual correctness of such reports so as to allow, in the case
of the Deloitte & Touche Business Plan Report, such report to be delivered
to the Co-ordinating Committee by no later than 17th May, 2002.
(i) UPCD shall provide the Co-ordinating Committee with weekly progress reports
(by way of conference calls or meetings), which shall include without
limitation updates as to progress on the restructuring of UPC's high yield
bonds. In addition, UPCD shall ensure that senior officers of UPC and UPCD
(including without limitation the senior financial officers) attend monthly
bank meetings with all the Lenders.
(j) UPCD shall pay upon presentation of the relevant invoice all of the costs
and expenses (including without limitation the fees properly incurred of
the advisers referred to in paragraphs 2(h) (to the extent referred to in
the Deloitte & Touche Letter) and 2(i)) incurred by the Facility Agent, the
Security Agent or the Co-ordinating Committee in connection with the
temporary waiver of rights referred to above and in connection with any
restructuring of the Facility Agreement (or any discussions or other work
undertaken with a view to such restructuring). UPCD shall also pay to the
Co-ordinating Committee all fees and other amounts referred to in the fee
letter entered into between UPCD and the Co-ordinating Committee on 1st
March, 2002.
3. Effective date
The Relevant Period shall commence on the date on which the Facility Agent
notifies UPCD and the Lenders that it has received the documents and evidence
specified below in form and substance satisfactory to it (acting reasonably)
(the "Effective Date"):
(a) evidence that UPCD has complied with paragraph 2(b);
(b) [Deliberately left blank];
(c) [Deliberately left blank]; and
(d) evidence of the due authorisation and execution of this letter by
UPCD.
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The Facility Agent will give this notice as soon as practicable after these
conditions are satisfied. If the Effective Date has not occurred by 3rd March,
2002 (or such later date as the Majority Lenders may agree in writing), the
Majority Lender's agreement under paragraph 1 (Temporary waiver of certain
rights) will be automatically cancelled, notwithstanding any subsequent
satisfaction of these conditions.
4. Amendments to the Facility Agreement
With effect on the Effective Date until the end of the Relevant Period (subject
to the last sentence of this paragraph 4):
(a) any Event of Default in respect of which the Majority Lenders have agreed
in this letter to temporarily waive their rights shall be disregarded for
the purpose of Clause 15.8 of the Facility Agreement;
(b) Clause 15.14(a) of the Facility Agreement shall be amended as follows:
(i) by changing each reference to "Information Memorandum" to "Material
Information";
(ii) by changing the reference in Clause 15.14(a)(i) from "UPC" to "UPC
and/or any of its Subsidiaries (other than any member of the
Borrower Group)";
(iii) by replacing "material facts and circumstances" on line one and
"material factual information" on line three in each case with
"material financial information"; and
(iv) by inserting a definition of "Material Information" as follows:
""Material Information" means any information delivered by or on
behalf of UPC or the Borrower Group to any Finance Party or its or
their advisers pursuant to the terms of the waiver letter dated 1st
March, 2002 between the Facility Agent and UPC Distribution.";
(c) Clause 15.25 of the Facility Agreement shall be amended by deleting "15.14
(Information)," on line 4 and inserting a new Clause 15.25(d) as follows:
"(d) Without limiting paragraph (a) above, the representation and
warranty set out in Clause 15.14 (Information) shall be made
by UPC Distribution on the date any Material Information is
delivered to any Finance Party by or on behalf of UPC or the
Borrower Group.";
(d) Clause 16.23(a) of the Facility Agreement shall be amended to provide for
monthly cash sweeps into the UPC Distribution Account, by replacing the
words "each financial quarter of UPC Distribution ending after 1st January,
2001 (or any earlier financial quarter, if practicable), . . . " with the
words "each calendar month"; and
(e) Clause 18.5(a),(b) and (d) of the Facility Agreement shall be amended by
changing each reference to "UPC" to "UPC and/or any of its Subsidiaries
(other than any member of the Borrower Group, UPC Distribution Holdco, UPC
Polska Inc. or UPC Germany GmbH or any of their Subsidiaries)".
If the Relevant Period ends because of an Event of Default, the above amendments
shall continue to apply until such Event of Default is remedied or waived by the
Majority Lenders (or, if required, all the Lenders).
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5. Miscellaneous
UPCD enters into this letter on its own behalf and on behalf of each Obligor
pursuant to the authority under Clause 2.6 of the Facility Agreement.
UPCD hereby makes the representations and warranties in Clauses 15.2, 15.3, 15.4
and 15.5 of the Facility Agreement (on the basis that for this purpose
references in those Clauses to the Facility Agreement or the Finance Documents
shall be construed as references to this letter).
Save as expressly provided for in this letter, this letter is not a waiver or
amendment of any term of the Finance Documents and the Finance Documents remain
in full force and effect.
This letter is designated a Finance Document and may be signed in any number of
counterparts.
This letter is governed by English law.
Please confirm your acceptance of the terms of this letter, by countersigning it
and returning it to Xxxxxxx XxXxxxxxx at TD Bank Europe Limited (fax number: +
00 00 0000 0000) with a copy to Xxxxxx Xxxxxx at Xxxxx & Xxxxx London (fax
number: x00 00 0000 0000).
Yours faithfully,
..............................................
for and on behalf of
TD Bank Europe Limited
in its capacity as Facility Agent (acting with the approval of the Majority
Lenders)
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SCHEDULE
UPC high yield indentures
USD 800,000,000 10.875% senior notes due 2009 and Euro 300,000,000 10.875%
senior notes due 2009 issued under an indenture dated as of 30th July, 1999
under which interest is due semi-annually with the next interest payment date
falling on 1st February, 2002.
USD 200,000,000 10.875% senior notes due 2007 and Euro 100,000,000 10.875%
senior notes due 2007 issued under an indenture dated as of 29th October, 1999
under which interest is due semi-annually with the next interest payment date
falling on 1st May, 2002.
USD 252,000,000 11.250% senior notes due 2009 and Euro 101,000,000 11.250%
senior notes due 2009 issued under an indenture dated as of 29th October, 1999
under which interest is due semi-annually with the next interest payment date
falling on 1st May, 2002.
USD 600,000,000 11.250% senior notes due 2010 and Euro 200,000,000 11.250%
senior notes due 2010 issued under an indenture dated as of 20th January, 2000
under which interest is due semi-annually with the next interest payment date
falling on 1st February, 2002.
USD 300,000,000 11.500% senior notes due 2010 issued under an indenture dated as
of 20th January, 2000 under which interest is due semi-annually with the next
interest payment date falling on 1st February, 2002.
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We agree to the above terms and conditions:
...............................................
For and on behalf of UPC Distribution Holding B.V.
We hereby confirm our acknowledgement and agreement to the above terms and
conditions and consent to the entry into by UPC Distribution Holding B.V. of
this letter. We hereby confirm that each of the Facility Agreement and the other
Finance Documents (as amended from time to time including pursuant to the above
terms and conditions) and our obligations thereunder remain in full force and
effect.
...............................................
For and on behalf of Cable Network Austria Holding B.V.
...............................................
For and on behalf of
Stipdon Investments B.V.
...............................................
For and on behalf of UPC Distribution Holding B.V.
...............................................
For and on behalf of
UPC Financing Partnership
...............................................
For and on behalf of
UPC France Holding B.V.
9
..............................................
For and on behalf of
UPC Holding B.V.
...............................................
For and on behalf of
UPC Holding II B.V.
...............................................
For and on behalf of
UPC Nederland N.V.
...............................................
For and on behalf of UPC Scandinavia Holding B.V.
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