Dated 1 December 2004

Exhibit 2.10

 

 

CONFORMED COPY

 

 

DATED 1 DECEMBER 2004

 

 

(1)                                           NTL GROUP LIMITED

 

(2)                                           NTL (CHICHESTER) LIMITED

 

(3)                                           NTL DIGITAL VENTURES LIMITED

 

(4)                                           MACQUARIE UK BROADCAST LIMITED

 

 (5)                                        MACQUARIE UK BROADCAST HOLDINGS LIMITED

 

 

MASTER AGREEMENT
RELATING TO

 

NATIONAL TRANSCOMMUNICATIONS LIMITED
AND NTL DIGITAL LIMITED

 



 

CONTENTS

 

CLAUSE OF AGREEMENT

 

 

1.

DEFINITIONS AND INTERPRETATION

 

2.

OPTIONS FOR SALE OF SHARES

 

3.

CONSIDERATION AND ADJUSTMENT

 

4.

CONDITIONS

 

5.

POST-EXECUTION COVENANTS

 

6.

COMPLETION

 

7.

TERMINATION

 

8.

SEPARATION

 

9.

WARRANTIES

 

10.

PROTECTION OF GOODWILL

 

11.

CONFIDENTIALITY

 

12.

ANNOUNCEMENTS

 

13.

PENSIONS

 

14.

COSTS

 

15.

POST-COMPLETION ARRANGEMENTS

 

16.

USE OF NTL NAME AND LOGO

 

17.

GUARANTEES

 

18.

LIABILITY OF THE SELLERS

 

19.

TERMINATION OF INTRA-GROUP AGREEMENTS

 

20.

TRANSFER TO NEWCO

 

21.

APPLICABLE LAW AND JURISDICTION

 

22.

GENERAL

 

23.

NOTICES

 

 

 

 

SCHEDULES

 

 

 

1.

TARGET COMPANIES

 

2.

CONDITIONS

 

3.

COMPLETION OBLIGATIONS

 

4.

NTL CHICHESTER WARRANTIES

 

5.

DIGITAL WARRANTIES

 

6.

LIMITATIONS ON CLAIMS

 

7.

SEPARATION

 

8.

PENSIONS

 

9.

THE BROADCAST BUSINESS

 

10.

PURCHASE PRICE ADJUSTMENT STATEMENT

 

11.

FORM OF PUT/CALL OPTION EXERCISE NOTICE

 

 



 

DOCUMENTS IN THE APPROVED TERMS

 

 

1.

Separation Agreements

2.

Announcement

3.

Tax Deeds

4.

Data Room Documents

5.

Resignation Letters

6.

Investor Undertaking

7.

MCIG Undertaking

8.

Tax Elections (clause 5.16)

 

 

ANNEXURES

 

 

1.

Broadcast Employees (at today’s date)

2.

Properties:

 

Part I

Broadcast Properties

 

Part II

Broadcast Contractual Properties

 

Part III

Designated Core Properties

 

Part IV

Schedule of rents and licence fees

 

Part V

Shared Properties

3.

Third Party Consents

 



 

THIS AGREEMENT is made on 1 December 2004

 

BETWEEN:

 

(1)                                         NTL GROUP LIMITED, incorporated in England and Wales with registered number 2591237 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“NGL”);

 

(2)                                         NTL (CHICHESTER) LIMITED, incorporated in England and Wales with registered number 3056817 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“ntl Chichester”);

 

(3)                                         NTL DIGITAL VENTURES LIMITED, incorporated in England and Wales with registered number 5223257 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“Digital Holdco”);

 

(4)                                         MACQUARIE UK BROADCAST LIMITED, incorporated in England and Wales, with registered number 5254048, whose registered office is at Level 30, Citypoint, 1 Ropemaker Street, London EC2Y 9HD (“Buyer”); and

 

(5)                                         MACQUARIE UK BROADCAST HOLDINGS LIMITED, incorporated in England and Wales, with registered number 5254001, whose registered office is at Level 30, Citypoint, 1 Ropemaker Street, London EC2Y 9HD (“Buyer Holdco”).

 

INTRODUCTION

 

(A)                                       ntl Chichester has agreed to enter into a call option under which it may be required to sell the NatTrans Shares and Digital Holdco has agreed to enter into a call option under which it may be required to sell the Digital Shares, in each case on the terms and conditions of this Agreement.

 

(B)                                       The Buyer has agreed to enter into a put option under which it may be required to buy the NatTrans Shares and the Digital Shares on the terms and conditions of this Agreement.

 

(C)                                       Buyer Holdco has agreed to guarantee the Buyer’s obligations under this Agreement and NGL has agreed to guarantee ntl Chichester’s obligations under this Agreement.

 



 

IT IS AGREED as follows:

 

1.                                              DEFINITIONS AND INTERPRETATION

 

1.1                                        The following words and expressions where used in this Agreement have the meanings given to them below:

 

ABC

 

a confidential customer identified by the Sellers to the Buyer prior to the date of this Agreement.

 

 

 

ABC Contract

 

the Conditions of Contract between ABC and NatTrans pursuant to a contract identified by the Sellers to the Buyer prior to the date of this Agreement.

 

 

 

ABC Settlement Agreement

 

the settlement agreement dated 26 November 2004 between NatTrans and ABC with respect to the ABC Contract.

 

 

 

Accessible Insurance Policies

 

all ntl Group Policies (including employers liability insurance) written on an occurrence basis and under which any member of the ntl Group is able to make a claim as at the date of this Agreement in respect of the Broadcast Business.

 

 

 

Accounts Date

 

31 December 2003.

 

 

 

Act

 

the Companies Act 1985.

 

 

 

Ancillary Agreements

 

those agreements in the approved terms listed in Section B of Part II of Schedule 7.

 

 

 

Announcement

 

the announcement in the approved terms relating to the Transaction.

 

 

 

Appointment Period

 

has the meaning given in clause 3.9.

 

 

 

ASIC

 

The Australian Securities & Investments Commission.

 

 

 

Asset Sharing Agreement

 

the agreement in the approved terms to be entered into between NatTrans and certain members of the ntl Group as part of Separation.

 

 

 

Asset Usage Agreement

 

the Eastern Asset Usage Agreement dated 22 December 1998 originally between Eastern Electricity plc, NTSL and ntl Incorporated.

 

 

 

Bank Group

 

has the meaning given in the Senior Credit Facility.

 

 

 

British Isles

 

the UK and the Republic of Ireland.

 

 

 

Broadcast Accounts

 

the audited carve out financial statements of the ntl:

 

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broadcast division prepared in accordance with U.S. GAAP for the 12 month period ended on the Accounts Date.

 

 

 

Broadcast Business

 

all of the businesses as will be carried on by the Broadcast Group immediately following Separation comprising the businesses listed in Schedule 9.

 

 

 

Broadcast Business Plan

 

the long term business plan of the Broadcast Business for the period from 2004 to 2014, which is contained in the Data Room Documents.

 

 

 

Broadcast Change of Control

 

means the direct or indirect acquisition by or of a Direct Competitor at any time after the Completion Date, whether by sale, merger, operation of law or otherwise, resulting in such Direct Competitor acquiring control of, being acquired by or coming under common control with (i) the Broadcast Group; or (ii) a portion of the assets of the Broadcast Business which was material to the Broadcast Business taken as a whole immediately prior to Completion.

 

 

 

Broadcast Confidential Information

 

all information (whether oral or recorded in any medium) relating exclusively to the Broadcast Business which is confidential.

 

 

 

Broadcast Contractual Properties

 

all licensed, managed, option or pre-emption properties occupied or used exclusively or predominantly by the Broadcast Business or which any member of the ntl Group has an entitlement to acquire in relation to the Broadcast Business, whether under agreements, options, letters of intent or other arrangements, as set out in Part II of Annexure 2.

 

 

 

Broadcast Covenant Release

 

(i) release of the NatTrans Shares and the shares in each other member of the Broadcast Group and all the assets of the Broadcast Business at Completion, from any security constituted by any Security Document (as such term is defined in the Senior Credit Facility) and release of each member of the Broadcast Group from any guarantee and indemnity constituted by any Finance Document (as such term is defined in the Senior Credit Facility) in each case in accordance with clause 28 of the Senior Credit Facility; and (ii) designation of the Broadcast Group Companies as Unrestricted Subsidiaries (as such term is defined in the

 

 

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Senior Note Indenture) pursuant to Section 4.18 of the Senior Note Indenture.

 

 

 

Broadcast Employees

 

those employees of the ntl Group in the UK and Ireland listed in Annexure 1, being all of the employees allocated to the Broadcast Business at the date of this Agreement pursuant to and in accordance with the Separation Memorandum, subject to any employees who may be added to or removed from the list pursuant to clause 8.8.

 

 

 

Broadcast Group

 

NatTrans and each other company listed in Part I of Schedule 1 and references to “Broadcast Group Company” and to “any member of the Broadcast Group” shall be construed accordingly.

 

 

 

Broadcast Interim Accounts

 

the unaudited carve out financial statements of the ntl: broadcast division prepared in accordance with U.S. GAAP for the 9 month period ended on the Broadcast Interim Accounts Date.

 

 

 

Broadcast Interim Accounts Date

 

30 September 2004.

 

 

 

Broadcast Properties

 

all freehold (or heritable in the case of those properties located in Scotland) or leasehold properties as set out in Part I of Annexure 2.

 

 

 

Business Day

 

any day other than a Saturday, Sunday or English bank or public holiday.

 

 

 

Buyer Completion Deferral Period

 

has the meaning given in clause 6.5.1.

 

 

 

Buyer Deferred Completion Date

 

has the meaning given in clause 6.5.1.

 

 

 

Buyer Financing Documents

 

all agreements entered into by the Buyer in relation to the provision by any person of debt or equity financing in connection with the Transaction.

 

 

 

Buyer Group

 

the Buyer, any parent undertaking of the Buyer (other than MCIG) and any subsidiary undertaking of the Buyer or such parent undertaking from time to time (including with effect from Completion every Broadcast Group Company

 

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and Digital Group Company) and references to “Buyer Group Company” and to “any member of the Buyer Group” shall be construed accordingly.

 

 

 

Buyer’s Solicitors

 

Allen & Overy LLP of One New Change, London EC4M 9QQ.

 

 

 

Call Option

 

the call option set out in clause 2.3.

 

 

 

Channel 5

 

has the meaning given in clause 5.11.

 

 

 

Channel 5 Engineering

 

has the meaning given in clause 5.11.

 

 

 

Competition Act

 

has the meaning given in paragraph 3 of Schedule 2.

 

 

 

Competition Commission

 

the United Kingdom’s Competition Commission.

 

 

 

Competitive Activities

 

has the meaning given in clause 10.1.

 

 

 

Completion

 

completion of the sale and purchase of the Shares under this Agreement following any valid exercise of the Put Option or the Call Option.

 

 

 

Completion Date

 

the date on which Completion occurs.

 

 

 

Completion Date Net Working Capital

 

has the meaning given in clause 3.3.

 

 

 

Completion Deferral Period

 

has the meaning given in clause 6.4.1.

 

 

 

Conditions

 

the conditions referred to in clause 2.5 and set out in Schedule 2.

 

 

 

Confidentiality Agreement

 

the confidentiality agreement entered into between NGL, Macquarie Bank Limited, Macquarie Communications Infrastructure Management Limited and Macquarie Communications Infrastructure Limited dated 24 September 2004 in connection with the Transaction.

 

 

 

control

 

means the power to direct the affairs of any person, directly or indirectly, by reason of ownership of voting shares, by contract or otherwise and “controlled” and “controlling” shall be construed accordingly.

 

9



 

Core Business

 

all of the businesses as carried on by the ntl Group immediately following Separation (other than the Broadcast Business).

 

 

 

Core Group

 

the ntl Group other than the Broadcast Group and the Digital Group.

 

 

 

Core Properties

 

all freehold (or heritable in the case of properties located in Scotland), leasehold, licensed, managed, option or pre-emption properties occupied or used by any member of the ntl Group or which any member of the ntl Group has any entitlement to acquire, other than the Broadcast Properties and the Broadcast Contractual Properties.

 

 

 

Correspondence

 

has the meaning given in clause 4.6.

 

 

 

Current Insurance Policies

 

all in-force insurance policies in the name of any member of the Core Group providing cover in respect of the Broadcast Business (including for the avoidance of doubt, the Designated Broadcast Business) or under which any member of the ntl Group either has any outstanding claims or is able to make a claim as at the date of this Agreement, in respect of the Broadcast Business (and, for the avoidance of doubt, including the Accessible Insurance Policies).

 

 

 

Data Room Documents

 

the documentation relating to the Broadcast Business and the Target Group Companies in the form which has, prior to today’s date, been made available for inspection by the Buyer and which is listed in an index in the approved terms.

 

 

 

Deferred Completion Date

 

has the meaning given in clause 6.4.1.

 

 

 

Designated Broadcast Business

 

has the meaning given in the Designated Broadcast Business Transfer Agreement.

 

 

 

Designated Broadcast Business Transfer Agreement

 

the agreement in the approved terms to be entered into between NGL, ntl Chichester, NatTrans and the Intragroup Transferors (as defined therein) as part of Separation.

 

 

 

Designated Core Assets

 

the assets to be transferred to NNNL under the Designated Core Business Transfer Agreements and the assets to be transferred to NINL under the Irish Business Transfer

 

10



 

 

 

Agreement.

 

 

 

Designated Core Business

 

the business to be transferred to NNNL and NINL under the Designated Core Business Transfer Agreements and the Irish Business Transfer Agreement.

 

 

 

Designated Core Business Transfer Agreements

 

the agreements in the approved terms to be entered into, or entered into prior to the date hereof, between NGL, NNNL and NatTrans as part of Separation.

 

 

 

Designated Core Liabilities

 

has the meaning given in the Designated Core Business Transfer Agreements.

 

 

 

Designated Core Properties

 

all Core Properties owned (whether legally or beneficially) by any member of the Broadcast Group, held on trust for any member of the Broadcast Group or to which any member of the Broadcast Group has a contractual entitlement including, without limitation, those set out in Part III of Annexure 2.

 

 

 

Designated Transfer Agreements

 

the agreements in the approved terms listed in Section A of Part II of Schedule 7.

 

 

 

Digital

 

ntl Digital Limited, a company incorporated in England and Wales with registered number 3538787.

 

 

 

Digital Accounts

 

the audited statutory financial statements of each of Digital and Digital Radio for the period ended on the Accounts Date.

 

 

 

Digital Confidential Information

 

all information (whether oral or recorded in any medium) relating exclusively to the business of the Digital Group or the Digital Joint Venture Companies which is designated by any member of the Digital Group or the relevant Digital Joint Venture Company as confidential (or is marked or is by its nature confidential).

 

 

 

Digital Consideration

 

has the meaning given in clause 3.1.

 

 

 

Digital Disclosure Letter

 

the letter dated the same as this Agreement from Digital Holdco to the Buyer containing disclosures against the Digital Warranties.

 

 

 

Digital Group

 

Digital and Digital Radio, and references to “Digital

 

11



 

 

 

Group Company” and “any member of the Digital Group” shall be construed accordingly.

 

 

 

Digital Group Shares

 

the Digital Shares and the Digital Radio Shares.

 

 

 

Digital Holdco Tax Deed

 

the deed in the approved terms to be entered into by the Buyer and Digital Holdco at Completion, relating to certain Taxation liabilities of the Digital Group.

 

 

 

Digital Joint Venture Companies

 

SDN Limited, Digital One Limited and ntl Radio Services Limited, details of each of which are set out in Part III of Schedule 1 and references to “Digital Joint Venture Company” shall be construed as each and any one of such companies.

 

 

 

Digital Radio

 

ntl Digital Radio Limited, a company incorporated in England and Wales with registered number 3573732.

 

 

 

Digital Radio Shares

 

all of the ordinary shares of Digital Radio in issue at Completion.

 

 

 

Digital Shares

 

all of the ordinary shares of Digital in issue at Completion.

 

 

 

Digital Warranties

 

the warranties to be given by Digital Holdco, set out in Schedule 5.

 

 

 

Direct Competitor

 

means any person that competes with any material part of the Core Business in any jurisdiction in which the ntl Group conducts business as at the date of this Agreement.

 

 

 

Disclosed Matters

 

any fact, matter, event or circumstance which is disclosed in this Agreement or the Disclosure Letters (or which is deemed to be disclosed by the Disclosure Letters), the Vendor Due Diligence Reports and any other fact, matter, event or circumstance which is apparent from the Data Room Documents, or which has been disclosed in writing prior to today’s date in the responses (which are attached to the Disclosure Letters) to any enquiries made by or on behalf of the Buyer.

 

 

 

Disclosure Letters

 

the ntl Chichester Disclosure Letter and the Digital Disclosure Letter.

 

 

 

DTELS

 

DTELS Limited, a company incorporated in England and

 

12



 

 

 

Wales with registered number 2834403.

 

 

 

EC Clearance Condition

 

the Condition set out in paragraph 3 of Schedule 2.

 

 

 

EC Commission

 

the Commission of the European Community.

 

 

 

EEA

 

the European Economic Area.

 

 

 

ECMR

 

Council Regulation (EC) No. 139/2004.

 

 

 

Employee Transfer Agreement

 

the agreement in the approved terms to be entered into between NGL and NatTrans as part of Separation.

 

 

 

Environmental Claim

 

any litigation, decree, judgement, claim, proceeding, notice of violation, demand, action, official warning, abatement, enforcement or remediation notice or order relating to any Environmental Matter.

 

 

 

Environmental Laws

 

all applicable European, national and local laws, regulations, directives, statutes, secondary legislation, common law, the ICNIRP Guidelines and statutory guidance, in each case concerning Environmental Matters and in force at the date of this Agreement.

 

 

 

Environmental Matters

 

all matters relating to health and safety, waste, nuisance, discharges, emissions, deposits, disposals and releases to land, air and water, and the presence, sale, import, export, manufacture, use, generation, treatment, storage, handling, deposit, transport or disposal of chemicals, forms of energy (including, without limitation, non-ionising radiation), wastes, radioactive substances or any other polluting, dangerous, hazardous or toxic substances or materials.

 

 

 

Financial Vendor Due Diligence Report

 

the due diligence report dated 18 October 2004, prepared by KPMG and addressed to (inter alia) the Buyer.

 

 

 

Framework Services Agreement

 

the agreement dated today’s date, between NGL, ntl Chichester, NNNL, NatTrans, NINL and the Buyer relating, inter alia, to the services to be provided between the ntl Group and the Broadcast Group under the terms of the Ancillary Agreements.

 

13



 

FRS 9

 

Financial Reporting Standard No. 9, issued by the U.K. Accounting Standards Board.

 

 

 

Group

 

in relation to a body corporate, any parent undertaking of such body corporate and any subsidiary undertaking of such body corporate and any subsidiary undertaking of any such parent undertaking from time to time.

 

 

 

Holdco Financing Documents

 

all agreements entered into by Buyer Holdco and the other members of its Group (other than the Buyer) in relation to the provision by any person of debt or equity financing to Buyer Holdco or any subsidiary undertaking of Buyer Holdco (other than the Buyer) in connection with the Transaction.

 

 

 

Holdco Investment Agreement

 

the investment agreement dated 1 December 2004 between Macquarie Bank Limited, Industry Fund Management (Nominees) Limited, Challenger Life No.2 Limited, Macquarie Communications Infrastructure (Bermuda 2) Limited, Macquarie Global Infrastructure Funds 2 SA, MTAA Superannuation Fund (NTL Broadcast) Utilities PTY Ltd, Cheyne Special Situations Fund LP, Dian Wijaya SDN.BHD., Macquarie Prism Proprietary Limited and Buyer Holdco in relation to equity investments to be made in Buyer Holdco and any member of its Group in connection with the Transaction, as the same may be amended, varied, assigned and/or novated from time to time.

 

 

 

ICA

 

the Irish Competition Authority.

 

 

 

ICNIRP Guidelines

 

the guidelines and standards issued by the International Commission of Non-Ionising Radiation Protection (ICNIRP) as contained in the Guidelines for limiting exposure to time-varying electric magnetic and electromagnetic fields up to 300GHz Health Phys., 74, No.4, 494-522 (1998).

 

 

 

ICTA 1988

 

the Income and Corporation Taxes Act 1988.

 

 

 

Indebtedness

 

all obligations for borrowed money, including, without limitation, all obligations evidenced by debentures, bonds, loan stock, commercial paper or instruments (whether secured or unsecured), and all capital lease obligations.

 

14



 

Initial Completion Date Net Working Capital

 

has the meaning given in clause 3.3.

 

 

 

Initial Consideration

 

has the meaning given in clause 3.1.

 

 

 

Intellectual Property Rights

 

patents, trade marks, trade names, service marks, domain names, design rights, copyright, rights in databases, Know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any such rights and all rights having equivalent or similar effect anywhere in the world.

 

 

 

Investor Undertaking

 

the undertaking in the approved terms to be given by Buyer Holdco, the Buyer and each of the Investors as contemplated by clause 2.10 of this Agreement.

 

 

 

Investors

 

each of parties to the Holdco Investment Agreement (other than Buyer Holdco).

 

 

 

Irish Business Transfer Agreement

 

the agreement in the approved terms to be entered into, or entered into prior to the date hereof, as part of Separation between NatTrans and NINL in relation to certain Designated Core Assets in Ireland.

 

 

 

Irish Schemes

 

the ntl Broadcast Scheme and the ntl Defined Contribution & Death Benefit Plan or the trustees of each or every such scheme as the context determines.

 

 

 

IT Systems

 

all computer software together with all computer and data processing hardware used by the Broadcast Business, but excluding the Retained IT Systems.

 

 

 

Know-how

 

inventions, discoveries, improvements, processes, formulae, techniques, specifications, technical information, methods, tests, reports component lists, manuals, instructions, drawings and information relating to customers and suppliers (whether written, unwritten or in any other form).

 

 

 

LCIA

 

has the meaning given in clause 21.2.

 

 

 

Legal Vendor Due Diligence Reports

 

the legal due diligence reports on the Broadcast Group commissioned by the Sellers and prepared by the Sellers’

 

15



 

 

 

Solicitors and the Sellers’ Irish Solicitors and addressed to (inter alia) the Buyer.

 

 

 

Long Stop Date

 

30 June 2005 (or such later date as NGL and the Buyer may agree in writing).

 

 

 

Material Customer

 

a customer of the ntl Group in relation to the Broadcast Business in respect of whom invoices raised in relation to the Broadcast Business for the 12 month period ended on 30 June 2004 exceeded £3 million (excluding VAT).

 

 

 

Material Customer Contract

 

a material contract relating to the supply of products or services by the ntl Group in relation to the Broadcast Business to a Material Customer (including, for the avoidance of doubt, any such contract with any member of the ITV plc Group which is contained in the Data Room Documents).

 

 

 

Material Supplier

 

a supplier to the ntl Group in relation to the Broadcast Business in respect of whom expenditure attributable to the Broadcast Business for the 12 month period ended on 30 June 2004 exceeded £1 million.

 

 

 

Material Supplier Contract

 

a material contract relating to the supply of products or services to the ntl Group in relation to the Broadcast Business by a Material Supplier.

 

 

 

MCIG

 

Macquarie Communications Infrastructure Management Limited as responsible entity for the Macquarie Communications Infrastructure Trust.

 

 

 

MCIG Undertaking

 

the undertaking in the approved terms to be given by MCIG and Macquarie Communications Infrastructure Limited as contemplated by clause 2.11 of this Agreement.

 

 

 

Merger Event

 

(a)

any merger, amalgamation or consolidation of any member of the ntl Group with a Merger Partner (or any subsidiary or parent undertaking of a Merger Partner) which results in the ntl Group and the Merger Partner’s Group forming one and the same group of companies;

 

 

 

 

 

 

(b)

the acquisition by any member of the ntl Group of

 

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a majority of the issued share capital of a Merger Partner (or any subsidiary or parent undertaking of a Merger Partner); or

 

 

 

 

 

 

(c)

the acquisition by a Merger Partner (or any subsidiary or parent undertaking of a Merger Partner) of any member of the ntl Group and which results in all or substantially all of the assets and business of the ntl Group being acquired by or forming part of the Merger Partner’s Group.

 

 

 

Merger Partner

 

a person whose operations are based predominantly in the UK and whose principal area of business is the provision of broadband or telecoms services, including without limitation, residential telephones, cable television and Internet services.

 

 

 

Minister

 

the Irish Minister for Enterprise, Trade and Employment.

 

 

 

month

 

a calendar month.

 

 

 

NatTrans

 

National Transcommunications Limited, a company incorporated in England and Wales with registered number 2487597.

 

 

 

NatTrans Accounts

 

the audited financial statements of NatTrans, to be prepared in accordance with the Act, for the accounting reference period ending on 31 December 2004.

 

 

 

NatTrans Consideration

 

has the meaning given in clause 3.1.

 

 

 

NatTrans Shares

 

all of the ordinary shares in NatTrans in issue as at the date of this Agreement together with any shares issued in connection with Separation, together comprising all of the issued share capital of NatTrans at Completion.

 

 

 

Net Working Capital

 

net working capital of the Broadcast Group, as at the relevant date, comprising those items set out in paragraph 1.1 of Part III of Schedule 10.

 

 

 

NGL Hive-Across Agreements

 

the agreements (in the form of the pro-forma in the approved terms) between NGL and certain members of the ntl Group to be entered into as part of Separation in respect of the transfer to NGL of certain Designated Broadcast

 

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Assets (as defined in the Designated Broadcast Business Transfer Agreement) prior to their contribution to NatTrans under the terms of the Designated Broadcast Business Transfer Agreement.

 

 

 

NINL

 

NTL Irish Networks Limited, a company incorporated in the Republic of Ireland with registered number 393660 and which is a wholly owned subsidiary of NatTrans at the date of this Agreement.

 

 

 

NNNL

 

ntl National Networks Limited, a company incorporated in England and Wales with registered number 5174655 which is a wholly owned subsidiary of NatTrans at the date of this Agreement.

 

 

 

Non-compete Period

 

has the meaning given in clause 10.1.

 

 

 

ntl Chichester Disclosure Letter

 

the letter dated the date of this Agreement from ntl Chichester to the Buyer containing disclosures against the ntl Chichester Warranties.

 

 

 

ntl Chichester Tax Deed

 

the deed in the approved terms to be entered into by the Buyer and ntl Chichester at Completion, relating to certain Taxation liabilities of the Broadcast Group.

 

 

 

ntl Chichester Warranties

 

the warranties given by ntl Chichester, set out in Schedule 4.

 

 

 

ntl Group

 

NGL, any parent undertaking of NGL and any subsidiary undertaking of NGL or any such parent undertaking from time to time, (excluding, for the avoidance of doubt, any shareholder in ntl Incorporated and excluding, after Completion only, every Broadcast Group Company, Digital Group Company and Digital Joint Venture Company) and references to “ntl Group Company” and to “any member of the ntl Group” shall be construed accordingly.

 

 

 

ntl Group Policies

 

all in-force insurance policies insuring any member of the ntl Group in respect of the Broadcast Business (including, for the avoidance of doubt, the Designated Broadcast Business).

 

 

 

NTSL

 

NTL Telecom Services Limited, a company incorporated

 

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in England and Wales with registered number 2937788 (and previously named Eastern Group Telecoms Limited).

 

 

 

NTSL Hive-Up Agreement

 

the agreement dated 24 December 1999 between NTSL and NatTrans, pursuant to which the business of NTSL was transferred to NatTrans.

 

 

 

NTSL Hive-Up Reversal Agreement

 

the agreement in the approved terms between NatTrans and NTSL in respect of the transfer of the Asset Usage Agreement (as defined therein) from NatTrans to NTSL, to be entered into as part of Separation.

 

 

 

NTSL Master Lease

 

the master lease dated 22 December 1998 between Eastern Electricity plc and NTSL, together with all supplemental and ancillary documents relating to this lease, as varied, amended, novated or supplemented from time to time.

 

 

 

OFT

 

the United Kingdom’s Office of Fair Trading.

 

 

 

party

 

a party to this Agreement.

 

 

 

PD/BI Policy

 

the Commercial Lines Policy (policy number 3004668) under which NGL is named as the insured party and which is underwritten by Allianz Global Risks UK Insurance Company.

 

 

 

Permitted Security Interests

 

(a)

mechanics’, carriers’, workmen’s, repairmen’s or other similar Security Interests arising or incurred in the ordinary course of the Broadcast Business;

 

 

 

 

 

 

(b)

conditional sales contracts and equipment leases with third parties entered into in the ordinary course of the Broadcast Business;

 

 

 

 

 

 

(c)

Security Interests for Taxation, assessments and other governmental charges that are not due and payable or that may thereafter be paid without penalty or that are being contested in good faith;

 

 

 

 

 

 

(d)

other Security Interests and imperfections of title which do not, or are not reasonably likely to impair in any material respect the continued use

 

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and operation of the assets of the Broadcast Business as currently conducted; and

 

 

 

 

 

 

(e)

Security Interests in respect of any right of set-off, netting arrangement, title transfer or title retention arrangements arising in the ordinary course of the Broadcast Business.

 

 

 

 

Personal Schemes

 

the ntl Group Personal Pension Plan and the Cabletel (UK) Limited Sponsored Personal Pension Plan.

 

 

 

Principal Separation

 

has the meaning given in the Senior Credit Facility.

 

 

 

Purchase Price Adjustment

 

has the meaning given in clause 3.4.

 

 

 

Purchase Price Adjustment Statement

 

has the meaning given in clause 3.5.

 

 

 

Put Option

 

the put option set out in clause 2.1.

 

 

 

Put Option Exercise Period

 

has the meaning given in clause 2.2.

 

 

 

Relevant Amount

 

£75,000,000 (seventy five million pounds Sterling) plus the amount of any dividend paid by NatTrans between the date of this Agreement and Completion (other than any such dividend paid under clause 3.3.1 and any dividend paid in accordance with the Separation Steps).

 

 

 

Relevant Group

 

in relation to any covenants, obligations, undertakings or warranties given by ntl Chichester, the Broadcast Group, and in relation to any covenants, obligations, undertakings or warranties given by Digital Holdco, the Digital Group and references to “Relevant Group Company” and to “any member of the Relevant Group” shall be construed accordingly.

 

 

 

Remedial Action

 

any steps necessary for limiting, removing, remedying, abating, mitigating, containing, preventing, monitoring or investigating any actual or potential harm to the environment, human health, land or buildings.

 

 

 

Representatives

 

means, with respect to any person, such person’s employees, legal advisers, accountants and other representatives and professional advisers.

 

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Resolution Period

 

has the meaning given in clause 3.9.

 

 

 

Retained Confidential Information

 

all information (whether oral or recorded in any medium) relating to the business, future plans, financial or other affairs of any member of the ntl Group (including for these purposes any member of the Broadcast Group) which is confidential other than Target Confidential Information.

 

 

 

Retained IT Systems

 

all computer software used by the Broadcast Business, together with all computer and data processing hardware used by the Broadcast Business, which will be managed and operated by the Core Group and provided to the Broadcast Group under the terms of the Ancillary Agreements.

 

 

 

Review Period

 

has the meaning given in clause 3.7.

 

 

 

Sale and Purchase

 

has the meaning given in paragraph 3 of Schedule 2.

 

 

 

Scanners Companies

 

Scanners (Europe) Limited, a company incorporated in England and Wales with registered number 2833712 and Scanners Television Outside Broadcasts Limited, a company incorporated in England and Wales with registered number 3391685.

 

 

 

Scheduled Completion Date

 

has the meaning given in clause 6.3.

 

 

 

Schemes

 

the UK Schemes and the Irish Schemes.

 

 

 

Secretary of State

 

the United Kingdom’s Secretary of State for Trade and Industry or, where relevant, the OFT acting on her behalf.

 

 

 

Security Interest

 

any mortgage, charge, lien, pledge or other security interest of any kind and any agreement to create any of the foregoing.

 

 

 

Sellers

 

ntl Chichester and Digital Holdco and references to a “Seller” shall be construed accordingly.

 

 

 

Sellers’ Irish Solicitors

 

Mason Hayes & Curran of 6 Fitzwilliam Square, Dublin 2, Ireland.

 

 

 

Sellers’ Solicitors

 

Travers Smith of 10 Snow Hill, London EC1A 2AL.

 

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Senior Credit Facility

 

the £2,425,000,000 Senior Facilities Agreement dated 13 April 2004 between, inter alia, ntl Incorporated, ntl Investment Holdings Limited, the Mandated Lead Arrangers, the Facility Agent and Security Trustee, the Administrative Agent and the Lenders (as each such term is defined therein), as from time to time amended, modified or otherwise varied (excluding any amendments, modifications or variations made after the date of this Agreement which have a material adverse effect on the rights of the Buyer under this Agreement or the ability of the Sellers to proceed to Completion).

 

 

 

Senior Note Indenture

 

the indenture dated 13 April 2004 entered into by ntl Cable PLC, ntl Incorporated, ntl (UK) Group Inc., ntl Communications Limited, ntl Investment Holdings Limited and the Bank of New York (as Trustee) in relation to the 9.75% Senior Notes due 2014, the 8.75% Senior Notes due 2014 and the Floating Rate Senior Notes due 2012, as from time to time amended, modified or otherwise varied (excluding any amendments, modifications or variations made after the date of this Agreement which have a material adverse effect in the rights of the Buyer under this Agreement or the ability of the Sellers to proceed to Completion).

 

 

 

Separation

 

the legal separation of the Broadcast Business from the ntl Group, substantially in accordance with the Separation Steps.

 

 

 

Separation Agreements

 

the agreements and other documents in the approved terms to be executed, or executed prior to the date hereof, as part of Separation, as listed in Part II of Schedule 7 (including, for the avoidance of doubt, the Designated Transfer Agreements and the Ancillary Agreements), subject in each case to any amendments to such documents in accordance with clauses 8.2 and 8.3.

 

 

 

Separation Condition

 

the Condition in paragraph 1 of Schedule 2.

 

 

 

Separation Date

 

the effective date of Principal Separation.

 

 

 

Separation Memorandum

 

the memorandum dated 24 March 2004 setting out the principles of Separation as agreed with the lenders under

 

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the Senior Credit Facility.

 

 

 

Separation Steps

 

the steps for implementation of Separation, as set out in Part I of Schedule 7.

 

 

 

Shared Properties

 

the Broadcast Properties, Broadcast Contractual Properties and Core Properties used by both the Broadcast Business and the Core Business, as set out in Part V of Annexure 2.

 

 

 

Shares

 

the NatTrans Shares and the Digital Shares.

 

 

 

Site Management Contract

 

the site management contract dated 22 December 1998 between NatTrans and Eastern Electricity plc.

 

 

 

Submission

 

has the meaning given in clause 4.5.

 

 

 

Target Confidential Information

 

Broadcast Confidential Information and Digital Confidential Information.

 

 

 

Target Group

 

the Broadcast Group Companies, the Digital Group Companies and the Digital Joint Venture Companies and references to “Target Group Company” shall be construed accordingly.

 

 

 

Target Working Capital

 

if the Completion Date falls: (i) at any time prior to 1 March 2005, £5,000,000; (ii) in March or April 2005, £10,000,000; and (iii) in May or June 2005 (or such later date as the parties may agree), £15,000,000.

 

 

 

Taxation

 

has the meaning given in the Tax Deed.

 

 

 

Tax Deeds

 

the ntl Chichester Tax Deed and the Digital Holdco Tax Deed.

 

 

 

TCGA 1992

 

the Taxation of Chargeable Gains Act 1992.

 

 

 

Transaction

 

the matters contemplated by this Agreement.

 

 

 

Transaction Documents

 

this Agreement and any other document referred to in this Agreement or required to be entered into pursuant to this Agreement (including, without limitation, the Separation Agreements).

 

 

 

UK

 

the United Kingdom of Great Britain and Northern

 

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Ireland.

 

 

 

UK Schemes

 

means the National Transcommunications Limited Pension Plan, the ntl 1999 Pension Scheme, the ntl Group Life Assurance Scheme and the Personal Schemes or the trustees of each or every such scheme as the context determines.

 

 

 

U.S. GAAP

 

United States generally accepted accounting principles.

 

 

 

VAT

 

Value Added Tax.

 

 

 

VATA 1994

 

the Value Added Tax Act 1994.

 

 

 

Vendor Due Diligence Reports

 

the Financial Vendor Due Diligence Report and the Legal Vendor Due Diligence Reports.

 

 

 

Warranties

 

the ntl Chichester Warranties and the Digital Warranties.

 

1.2                                       Unless the context requires otherwise, words and expressions defined in or having a meaning provided by the Act at today’s date, shall have the same meaning in this Agreement.

 

1.3                                       Unless the context requires otherwise, references in this Agreement to:

 

1.3.1                                                any of the masculine, feminine and neuter genders shall include other genders;

 

1.3.2                                                a “person” shall include a reference to any natural person, body corporate (including, without limitation, a limited liability company), unincorporated association, partnership and trust;

 

1.3.3                                                a company shall include reference to any body corporate;

 

1.3.4                                                any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed so as to include a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated or re-enacted except to the extent that any amendment or modification made after the date of this Agreement would increase any liability or impose any additional obligation upon the parties under this Agreement;

 

1.3.5                                                any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall,

 

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in respect of any jurisdiction other than that of England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term;

 

1.3.6                                                any time or date shall be construed as a reference to the time or date prevailing in England; and

 

1.3.7                                                a particular government or statutory authority shall include any entity which is a successor to that authority.

 

1.4                                       The headings in this Agreement are for convenience only and shall not affect its meaning. References to a “clause”, “Schedule” or “paragraph” are (unless otherwise stated) to a clause of and Schedule to this Agreement and to a paragraph of the relevant Schedule.  The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

 

1.5                                       A document expressed to be “in the approved terms” means a document, the terms of which have been approved by the parties and a copy of which has been identified as such and initialled by or on behalf of each of NGL and the Buyer.

 

1.6                                       A document expressed to be an “Annexure” means a document a copy of which has been identified as such and initialled by or on behalf of each of NGL and the Buyer.

 

2.                                              OPTIONS FOR SALE OF SHARES

 

Put Option

 

2.1                                       The Buyer grants to NGL (as agent for the Sellers) a conditional option (the “Put Option”) to require the Buyer to acquire the Shares from the relevant Sellers upon the terms and conditions of this Agreement.

 

2.2                                       The Put Option shall be exercisable by notice in writing (substantially in the form set out in Part I of Schedule 11) from NGL (as agent for the Sellers) to the Buyer at any time during the period commencing on the date on which the last of the Conditions is satisfied (or waived) and ending 10 Business Days after such date (the “Put Option Exercise Period”).

 

Call Option

 

2.3                                       NGL (as agent for the Sellers) grants to the Buyer a conditional option (the “Call Option”) to require the Sellers to sell the Shares to the Buyer upon the terms and conditions of this Agreement.

 

2.4                                       The Call Option shall be exercisable by notice in writing (substantially in the form set out in Part II of Schedule 11) from the Buyer to NGL (as agent for the Sellers) at any time during the 10 Business Days after the expiry of the Put Option Exercise Period provided that the

 

25



 

Put Option has not been exercised by NGL during the Put Option Exercise Period.

 

Conditions to exercise of the Put Option and Call Option

 

2.5                                       The exercise of the Put Option and the exercise of the Call Option are both conditional upon satisfaction (or, to the extent capable of waiver pursuant to clause 4.1, waiver) of all of the Conditions in Schedule 2.

 

Lapse of Put Option and Call Option

 

2.6                                       The Put Option and the Call Option shall lapse if they are not duly exercised by the relevant dates specified in clause 2.2 or 2.4 (as appropriate) or if all of the Conditions have not been satisfied (or, to the extent capable of waiver pursuant to clause 4.1, waived) by the Long Stop Date.

 

2.7                                       If the Put Option or the Call Option is validly exercised, ntl Chichester shall sell the NatTrans Shares and Digital Holdco shall sell the Digital Shares with full title guarantee and the Buyer shall buy the NatTrans Shares and the Digital Shares on the terms and conditions of this Agreement, and ntl Chichester and Digital Holdco shall procure that the Buyer acquires good title to the NatTrans Shares and the Digital Shares respectively, free from all Security Interests except any and all such Security Interests that may have been created by Buyer.

 

2.8                                       The Buyer shall buy the Shares with effect from and including the Completion Date to the intent that as from that date all rights and advantages accruing to the Shares, including any dividends or distributions declared, made or paid on the Shares on or after that date shall belong to the Buyer.

 

2.9                                       The Buyer shall not be obliged to complete the purchase of any of the Shares and neither ntl Chichester nor Digital Holdco shall be obliged to sell any of the Shares unless, in each case, the sale of all the Shares is completed simultaneously.

 

Investor Undertaking

 

2.10                                Upon execution of this Agreement, the Buyer shall procure that the Investor Undertaking is delivered to ntl Chichester duly executed by the parties thereto (other than the Sellers).

 

MCIG Undertaking

 

2.11                                Upon execution of this Agreement, the Buyer shall procure that MCIG and Macquarie Communications Infrastructure Limited shall deliver to ntl Chichester the MCIG Undertaking duly executed by MCIG and Macquarie Communications Infrastructure Limited.

 

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3.                                               CONSIDERATION AND ADJUSTMENT

 

3.1                                        The consideration for the sale of the Shares shall be as follows:

 

3.1.1                                                for the NatTrans Shares: £1,260,000,000 (ONE BILLION TWO HUNDRED AND SIXTY MILLION POUNDS STERLING) (the “NatTrans Consideration”); and

 

3.1.2                                                for the Digital Shares: £10,000,000 (TEN MILLION POUNDS STERLING) (the “Digital Consideration”),

 

(the NatTrans Consideration and the Digital Consideration together being the “Initial Consideration”).

 

Completion

 

3.2                                        At Completion, the Buyer shall pay the Initial Consideration (minus the amount of any adjustment pursuant to clause 3.3.2 below) to such bank accounts as NGL (as agent for the Sellers) shall specify by written notice to the Buyer prior to Completion.

 

3.3                                        Not less than three (3) Business Days prior to the date on which it is estimated that the last unsatisfied Condition will be satisfied (or duly waived), ntl Chichester shall deliver to the Buyer a statement containing a good faith estimate of the Net Working Capital (on the basis of the requirements, accounting policies and methods set out in Parts II and III of Schedule 10) as at 00.01 hours on the Completion Date (the “Completion Date Net Working Capital” and such estimate being the “Initial Completion Date Net Working Capital”).  The estimate shall be prepared on the basis that Completion is to occur on the same date as Principal Separation and shall assume that no Adjustment Dividend (as defined below) is paid, and:

 

3.3.1                                                if the Initial Completion Date Net Working Capital shown in such estimate exceeds the amount of the Target Working Capital, ntl Chichester shall be entitled to receive, by way of dividend from NatTrans (the “Adjustment Dividend”) prior to Completion, an amount equal to the lesser of (1) such excess, and (2) the maximum amount that NatTrans can lawfully pay to ntl Chichester as a dividend; or

 

3.3.2                                                if the Initial Completion Date Net Working Capital shown in such estimate is less than the amount of the Target Working Capital, the NatTrans Consideration shall be reduced by the lesser of (1) the amount of the shortfall and (2) the Relevant Amount.

 

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Purchase Price Adjustment

 

3.4                                        Not later than five (5) Business Days after the Purchase Price Adjustment Statement is agreed or deemed agreed under clauses 3.7.1 or 3.8 or finally determined under clause 3.9:

 

3.4.1                                                if the full amount of any excess as referred to in clause 3.3.1 has been paid by way of dividend pursuant to that clause or the provisions of clause 3.3.2 apply:-

 

(a)                        if the Completion Date Net Working Capital as shown in the Purchase Price Adjustment Statement is greater than the Initial Completion Date Net Working Capital, the Buyer shall pay to ntl Chichester an amount equal to the difference between the Initial Completion Date Net Working Capital and the Completion Date Net Working Capital, subject to a maximum payment of £10 million;

 

(b)                       if the Completion Date Net Working Capital as shown in the Purchase Price Adjustment Statement is less than the Initial Completion Date Net Working Capital, ntl Chichester shall pay to the Buyer an amount equal to the difference between the Initial Completion Date Net Working Capital and the Completion Date Net Working Capital, subject to a maximum payment equal to the Relevant Amount less the amount of any reduction in the NatTrans Consideration pursuant to clause 3.3.2; or

 

3.4.2                                                if the full amount of any excess as referred to in clause 3.3.1 has not been paid by way of dividend pursuant to that clause and the provisions of clause 3.3.2 do not apply:-

 

(a)                        if the Completion Date Net Working Capital as shown in the Purchase Price Adjustment Statement is greater than the Initial Completion Date Net Working Capital, the Buyer shall pay to ntl Chichester an amount equal to the difference between the Initial Completion Date Net Working Capital and the Completion Date Net Working Capital plus an amount equal to the difference between the excess referred to in clause 3.3.1 and the Adjustment Dividend, subject to a maximum payment of £10 million;

 

(b)                       if the Completion Date Net Working Capital as shown in the Purchase Price Adjustment Statement is less than the Initial Completion Date Net Working Capital, ntl Chichester shall pay to the Buyer an amount equal to the difference between the Initial Completion Date Net Working Capital and the Completion Date Net Working Capital, less the amount (if any) by which the excess referred to in clause 3.3.1 exceeds any Adjustment Dividend, subject to a maximum payment equal to the Relevant Amount less the amount of any reduction in the NatTrans Consideration pursuant to clause 3.3.2; or

 

28



 

(c)                        if the Completion Date Net Working Capital as shown in the Purchase Price Adjustment Statement is equal to the Initial Completion Date Net Working Capital, the Buyer shall pay to ntl Chichester an amount equal to the difference between the excess referred to in clause 3.3.1 and the Adjustment Dividend, subject to a maximum payment of £10 million,

 

(any such payment pursuant to sub-clauses 3.4.1 or 3.4.2 being the “Purchase Price Adjustment”).

 

Preparation of Purchase Price Adjustment Statement

 

3.5                                        As soon as practicable following Completion, but (subject to compliance by the Buyer with its obligations under clause 3.10) in any event within forty five (45) Business Days after the Completion Date, ntl Chichester shall prepare a draft statement identifying the Completion Date Net Working Capital for the purpose of calculating the Purchase Price Adjustment (the “Purchase Price Adjustment Statement”). ntl Chichester shall prepare the draft Purchase Price Adjustment Statement on the basis of the requirements, accounting policies and accounting methods set out in Parts II and III of Schedule 10, and in the same (or substantially the same) format as the Pro-Forma Purchase Price Adjustment Statement set out in Part I of Schedule 10.3.5 and 3.6 below are manually inserted

 

3.6                                        The Buyer and ntl Chichester agree that the sole purpose of the Purchase Price Adjustment Statement is to determine the Completion Date Net Working Capital.  Subject to Schedule 10, the Purchase Price Adjustment Statement is not intended to permit the introduction of different judgments, accounting methods, policies, practices, procedures, classifications or estimation methodology for the purposes of determining the asset and liability balances from those used in the preparation by the ntl Group of its accounts.

 

3.7                                        When the draft Purchase Price Adjustment Statement has been prepared, ntl Chichester shall as soon as reasonably practicable thereafter deliver a copy of such statement to the Buyer together with a certificate of the Completion Date Net Working Capital.  The Buyer and its accountants shall then have a period of twenty (20) Business Days after the date on which ntl Chichester delivers the draft Purchase Price Adjustment Statement to the Buyer (the “Review Period”) within which to review the draft Purchase Price Adjustment Statement and to satisfy itself that it has been duly prepared in accordance with this Agreement and that the amount of the Completion Date Net Working Capital as shown in the certificate accompanying the Purchase Price Adjustment Schedule is correct.  The Buyer shall, before the expiry of the Review Period, either:

 

3.7.1                                                confirm in writing to ntl Chichester that it agrees that the draft Purchase Price Adjustment Statement has been duly prepared and that the value of the Completion Date Net Working Capital has been correctly certified; or

 

3.7.2                                                give notice in writing to ntl Chichester explaining, in detail, why it disagrees

 

29



 

that the Purchase Price Adjustment Statement has been duly prepared and that the value of the Completion Date Net Working Capital has been correctly certified and setting out details of its proposed adjustments to the draft Purchase Price Adjustment Statement and to the value of the Completion Date Net Working Capital (if any) provided that the Buyer may only give such notice pursuant to this sub-clause 3.7.2 if the aggregate value of its proposed adjustments to the Completion Date Net Working Capital exceeds £750,000 (seven hundred and fifty thousand pounds Sterling).

 

3.8                                        If the Buyer fails to give the confirmation or notice in accordance with clause 3.7, the draft Purchase Price Adjustment Statement and the certificate of Completion Date Net Working Capital as delivered by ntl Chichester pursuant to clause 3.7 shall, upon expiry of the Review Period, be deemed to have been finally accepted and agreed by the parties.

 

3.9                                        If the Buyer serves a valid notice in accordance with clause 3.7.2

 

3.9.1                                                the parties shall endeavour to resolve all matters in dispute as soon as practicable.  If they fail to resolve such matters within twenty (20) Business Days of the date on which ntl Chichester receives such notice from the Buyer (or such longer period as ntl Chichester and the Buyer shall agree) (the “Resolution Period”), such matters shall be referred to the Chief Executive Officer (or equivalent) of the Buyer and the Chief Executive Officer of ntl Incorporated (on behalf of NTL Chichester) for resolution. If such officers are unable to reach agreement on such matters within ten (10) Business Days of the expiry of the Resolution Period (the “Appointment Period”), the matter shall be referred for final determination to Deloittes (or their successors) with appropriate internal walls to safeguard the independence of the relevant personnel.  If such firm is unable to serve, the Buyer and ntl Chichester shall jointly select an expert from an accounting firm of national standing that is not the independent auditor of either the Buyer or ntl Chichester (or any member of the Buyer Group or the ntl Group).  If ntl Chichester and the Buyer fail to make such appointment within the Appointment Period, the appointment shall be made on behalf of ntl Chichester and the Buyer by the President for the time being of the Institute of Chartered Accountants in England and Wales as soon as practicable after the expiry of the Appointment Period, on the application of either ntl Chichester or the Buyer.  Such accountant shall be instructed to determine the dispute in accordance with the provisions of this clause 3 and to make such determination as soon as practicable and in any event within thirty (30) Business Days of his being instructed.  Such accountant shall only consider those items and amounts set forth in the Purchase Price Adjustment Statement as to which the Buyer and ntl Chichester have disagreed within the time periods and on the terms specified above, and shall select as a resolution the position of either the Buyer or ntl Chichester for each item of disagreement (based solely on presentations and supporting material provided by the parties

 

30



 

and not pursuant to any independent review).  Such accountant shall not impose an alternative resolution.  In making such determination, such accountant shall act as an expert and not as an arbitrator and his decision shall (in the absence of manifest error) be final and binding on the parties.  The costs of such accountant shall be borne by ntl Chichester and the Buyer in such proportions as he may direct, or in the absence of any such direction, as to one half by the Buyer and as to the other half by ntl Chichester; and

 

3.9.2                                                save as provided in clause 3.9.1, the parties shall bear their own costs in connection with the resolution of the matters in dispute.

 

3.10                                 The Buyer and its accountants shall be entitled to examine the working papers relating to the draft Purchase Price Adjustment Statement for the purposes of their review under clause 3.7.  The Buyer agrees that it will promptly provide ntl Chichester and its advisers, and ntl Chichester agrees that it will promptly provide the Buyer and its advisers, with all information relating to the operations of the Broadcast Group in their respective possession or control or in the possession or control of any member of the Buyer Group or the Core Group (as the case may be), and such access to the personnel and records of the Broadcast Group, as may be relevant for the purposes of preparing or reviewing the draft of the Purchase Price Adjustment Statement, or as may reasonably be required to facilitate the determination of any dispute in relation thereto.

 

3.11                                 Any Purchase Price Adjustment shall be paid by the Buyer or ntl Chichester, as applicable, by wire transfer of immediately available funds to an account designated in writing not less than one (1) Business Day before the due date of payment by the party entitled to receive such payment plus interest on the amount of such reduction or increase from the Completion Date to the date of such payment thereof at the per annum rate equal to the 6 month London Interbank Offer Rate on the Completion Date, as published in The Wall Street Journal.

 

4.                                               CONDITIONS

 

Satisfaction and waiver of Conditions

 

4.1                                        The Condition in paragraph 2 of Schedule 2 may be waived, in whole or in part, by the Sellers serving written notice to that effect on the Buyer. The EC Clearance Condition may not be waived.  All other Conditions may only be waived, in whole or in part, by the mutual written agreement of each of the Sellers and the Buyer.

 

Separation

 

4.2                                        NGL shall use its reasonable endeavours to procure that Separation shall, to the extent lawfully possible, be completed in accordance with clause 8 and Part I of Schedule 7.

 

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Third Party Consents

 

4.3                                        The Buyer and the Sellers each agree to use their respective reasonable endeavours (which shall, for these purposes, not extend to making any payments other than in respect of reasonable legal costs) to satisfy the Condition set out in paragraph 2 of Schedule 2 as soon as reasonably practicable following execution of this Agreement and to provide reasonable documentational assistance in this regard.

 

EC Clearance Condition

 

4.4                                        Without prejudice to its obligations under clause 4.9 and subject to clause 4.5, the Buyer undertakes to the Sellers that it shall (with the reasonable co-operation of the Sellers, which each of the Sellers undertakes to give) use its best endeavours to procure, and cause the other members of the Buyer Group to procure, the satisfaction of the EC Clearance Condition as soon as reasonably practicable after today’s date.

 

4.5                                        Without prejudice to the generality of the provisions of clause 4.4, the parties shall co-operate fully in preparing after today’s date a submission to the EC Commission in respect of the Transaction (the “Submission”) in order that such Submission can be made as soon as reasonably practicable after today’s date, subject to such consultation with and approvals of the Submission as may be necessary from the United Kingdom’s Ministry of Defence.

 

4.6                                        The preparation of the Submission shall be co-ordinated by the Buyer and each of the parties shall, and the Buyer shall procure that any member of the Buyer Group shall, promptly provide all such information as may be considered reasonably necessary or desirable for the purposes of a Submission.  The Buyer shall consult with the Sellers as to the form and content of the Submission, keep the Sellers promptly informed as to the progress of such submission, any correspondence with the EC Commission about the Submission (“Correspondence”) and all the Buyer’s contacts and discussions with the EC Commission and promptly provide written summaries of all material oral comments between the Buyer, its employees or advisers and the EC Commission and, before submission, allow the Sellers to review and comment on the Submission and Correspondence and make such amendments to the content of the Submission and Correspondence as the Sellers may reasonably request.  To the extent that the Transaction (or any part of it) is referred to the OFT and/or the ICA in accordance with Article 9 of the ECMR or the United Kingdom and/or Ireland takes appropriate measures to protect its legitimate interests under Article 21(4) of the ECMR in relation to the Transaction (or any part of it), the provisions of this clause 4.6 and clauses 4.7 and 4.8 shall apply to any submissions to or correspondence with the OFT and/or the ICA as if such submissions were the Submission and such correspondence was Correspondence.

 

4.7                                        Each of the parties undertakes with each other that it shall, and the Buyer shall procure that any member of the Buyer Group shall, respond to any further enquiries made by the EC Commission, as expeditiously as possible in connection with the Submission and if responding in writing shall allow the other parties to review and comment on such responses

 

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and make such amendments to the content of such responses as they may reasonably request.

 

4.8                                        The Buyer shall give the Sellers not less than 5 Business Days’ notice of any meetings to discuss any part of the Submission and/or any Correspondence or any issues arising out of any of them and afford the Sellers and their advisers an opportunity to attend any such meetings.

 

Undertakings

 

4.9                                        Each of the Buyer and Buyer Holdco agrees to make, and to procure that the other members of the Buyer Group shall make, such disposals of assets and/or to give, and to procure that the other members of the Buyer Group shall give, such behavioural undertakings, in each case as are required in order to obtain the approval of the EC Commission, OFT, Secretary of State, United Kingdom’s Ministry of Defence or the Minister in order to satisfy any of the Conditions.

 

4.10                                 The Buyer undertakes that it shall not, and that it shall procure that none of the other members of the Buyer Group shall, make any acquisitions of businesses in the European Union, the United Kingdom or the Republic of Ireland which might reasonably be expected to adversely affect the likelihood or timing of satisfying the EC Clearance Condition, or any other merger control/competition clearances necessary in connection with the Transaction.

 

4.11                                 The Buyer warrants that it has no interest either itself or through any member of the Buyer Group which gives it decisive or material influence over any businesses which compete with or overlap vertically (i.e. operate in any market which is upstream or downstream of any of the markets in which any part of the Broadcast Business or Digital Group operates) with any part of the Broadcast Business or any business of the Digital Group.

 

Failure to satisfy Conditions

 

4.12                                 Without prejudice to the accrued rights of any party, if any Condition is not satisfied or waived on or before the Long Stop Date, this Agreement (save for clauses 1 (Definitions and interpretation), 11 (Confidentiality), 12 (Announcements), 14 (Costs), 21 (Applicable law and jurisdiction), 22 (General) and 23 (Notices)) shall be terminable by any party by written notice to the other.

 

4.13                                 If at any time any party becomes aware of a fact or a circumstance that is reasonably likely to prevent a Condition being satisfied, it shall inform the other parties in writing as soon as possible.

 

5.                                               POST-EXECUTION COVENANTS

 

5.1                                        From the date of this Agreement until Completion, each of the Sellers shall, to the extent

 

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permitted under applicable laws (anti-trust or otherwise):

 

5.1.1                                                regularly consult the Buyer about the conduct of the Broadcast Business (in the case of ntl Chichester), the Digital Group (in the case of Digital Holdco) and the Designated Broadcast Business (in the case of NGL);

 

5.1.2                                                procure that its Relevant Group Companies shall provide to the Buyer such information as it may reasonably request for the purpose of monitoring the status of the business (other than the Designated Core Business) in this period; and

 

5.1.3                                                procure that (i) the business of each of its Relevant Group Companies (other than the Designated Core Business) in the case of each Seller and (ii) the Designated Broadcast Business in the case of NGL, is carried on in all material respects in the ordinary and normal course (save to the extent contemplated or required by this Agreement or the Separation, or except with the consent of the Buyer, which shall not be unreasonably withheld or delayed) and in accordance with applicable law.

 

5.2                                        Subject to any restrictions contained in the Senior Credit Facility, NGL undertakes to the Buyer (except with the consent of the Buyer, such consent not to be unreasonably withheld or delayed) to use reasonable efforts to maintain (or renew upon expiry) all of the Current Insurance Policies in full force and effect, without amendment, until Completion (so long as there is no material increase in the premium payable by the ntl Group in respect of such policies).

 

5.3                                        NGL undertakes to the Buyer (for itself and from Completion as agent of the Broadcast Group) to procure that the relevant members of the ntl Group will provide to the Buyer without undue delay all such information reasonably required by the Buyer and its professional advisers to:-

 

5.3.1                                                obtain insurances in respect of the Broadcast Group for the period commencing from the Completion Date and to make claims or pursue outstanding claims under any of the Current Insurance Policies;

 

5.3.2                                                obtain 6 years’ directors and officers’ run-off insurance cover for all directors and officers of the Broadcast Group as at Completion; and

 

5.3.3                                                obtain 6 years’ professional indemnity and employed lawyers professional indemnity run-off insurance cover in respect of the Broadcast Group in respect of circumstances occurring or commencing before Completion.

 

5.4                                        NGL undertakes to the Buyer (for itself and, from Completion, as agent of the Broadcast Group):

 

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5.4.1                                                to the extent any of the Current Insurance Policies do not name (either generically or expressly) all members of the Broadcast Group as insured parties in respect of their own insurable interest, to use reasonable endeavours to obtain an endorsement from the relevant insurers that all relevant members of the Broadcast Group are, effective as of the inception of that policy, a named insured; and

 

5.4.2                                                to notify all insurers of the Current Insurance Policies of Completion in accordance with the terms of the relevant policy and to use reasonable efforts to obtain the insurers’ confirmation that the Completion will not affect the Broadcasts Group’s cover under those policies in respect of the period before Completion.

 

5.5                                        Without prejudice to clause 5.1, from the date of this Agreement until Completion, ntl Chichester shall, subject to clause 5.7, procure that no member of the Broadcast Group shall, except to the extent contemplated or required by this Agreement or necessary in order to implement Separation (or any part of it), take any of the following steps without the prior written consent of the Buyer (such consent not to be unreasonably withheld or delayed):

 

5.5.1                                                resolve to alter its memorandum or articles of association (or comparable constitutive documents), save as required by law;

 

5.5.2                                                admit any person (other than a member of the ntl Group in connection with Separation or pursuant to clause 20) as a member (whether by subscription, transfer or transmission) or grant any rights of any kind over any shares in any member of the Broadcast Group;

 

5.5.3                                                make any increase or reduction or other alteration whatsoever (including by way of redemption, purchase, sub-division, consolidation or redesignation) of its share capital (other than in connection with the allotment of shares to a wholly-owned member of the ntl Group) or grant any option to subscribe for or acquire any of its shares or issue any securities convertible into any of its shares;

 

5.5.4                                                incorporate or liquidate any subsidiary undertaking or effect any hive-up or hive-down of any asset;

 

5.5.5                                                otherwise than in the ordinary course of trading or as contemplated by the Broadcast Business Plan, or to the extent required by the terms of any shareholders agreement in relation to any Digital Joint Venture Company, or as otherwise specifically disclosed in writing to the Buyer prior to today’s date, sell, lease, transfer, license, grant any option or right of pre-emption or otherwise dispose of or purchase, lease, license or otherwise acquire assets,

 

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businesses or undertakings in each case having a value in excess of £5,000,000 (five million pounds Sterling) by a single transaction or by a series of related transactions provided that any Broadcast Group Company may sell, lease, transfer, license or otherwise dispose of any assets, businesses or undertakings comprised in the Designated Core Business or make any election in respect of Taxation which has the effect of deeming any Taxation to have arisen within any other member of the ntl Group;

 

5.5.6                                                save as contemplated by the Broadcast Business Plan, in relation to Project ABC, or as required by any existing contractual commitment, or in relation to the Designated Core Business, (i) terminate prior to its expiry date, or make any material variation to, any Material Customer Contract or Material Supplier Contract or (ii) enter into any agreement or incur any commitment or make any offer capable of acceptance in each case involving any capital expenditure or revenues in excess of, or consideration equivalent to, £3,000,000 (three million pounds Sterling) per item;

 

5.5.7                                                otherwise than in the ordinary course of business (including, without limitation, granting performance bonds) or in relation to the Designated Core Business, incur any principal Indebtedness;

 

5.5.8                                                make any material amendment to the terms and conditions of employment (including remuneration, pension entitlements and other benefits) of any person who is, at the date of this Agreement, a Broadcast Employee having a basic annual salary in excess of £125,000 (one hundred and twenty five thousand pounds Sterling);

 

5.5.9                                                terminate or serve notice to terminate the employment of any Broadcast Employee (except on grounds of gross misconduct) or agree to employ any person who will become a Broadcast Employee after the date of this Agreement, in each case where the basic annual salary payable to such person is in excess of £125,000 (one hundred and twenty five thousand pounds Sterling) or make redundant as part of the same redundancy programme more than 50 Broadcast Employees;

 

5.5.10                                         establish any new scheme or materially amend any existing scheme for providing retirement, death, disability or life assurance benefits for the Broadcast Employees (excluding new life assurance cover for Broadcast Employees in connection with Separation);

 

5.5.11                                         grant, create or allow to arise any charge, security, lien or encumbrance over any of its assets including the Shares (other than any such charge, security, lien or encumbrance over any Designated Core Assets, Permitted Security Interests or charges which are to be the subject of the Broadcast Covenant Release); or

 

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5.5.12                                         initiate any oral or written discussions with Ofcom, OFT or the EC Commission in respect of the Transaction unless required by applicable law or regulation;

 

5.5.13                                         declare any cash dividend other than pursuant to clause 3.3;

 

5.5.14                                         agree to do any of the things referred to in sub-clauses 5.5.1 to 5.5.13.

 

5.6                                        Without prejudice to clause 5.1, from the date of this Agreement until Completion, Digital Holdco shall procure that no member of the Digital Group shall intentionally incur any new liability in excess of £500,000 without the prior written consent of the Buyer (such consent not to be unreasonably withheld or delayed) PROVIDED THAT nothing in this clause 5.6 shall prevent:-

 

5.6.1                                                any member of the Digital Group incurring any liability required or arising by law or regulation or pursuant to any obligation in existence at the date of this Agreement; or

 

5.6.2                                                any member of the Digital Group incurring any liability to meet any funding obligations in existence at the date of this Agreement.

 

5.7                                        Nothing contained in clauses 5.1, 5.5 and 5.6 (other than sub-clause 5.5.13) shall restrict any rights ntl Chichester or Digital Holdco may have to receive dividends from any member of the Target Group or to appoint or remove the directors of any member of the Target Group.  Subject to the restrictions in clauses 5.1, 5.5 and 5.6, ntl Chichester may vote its shares in the Broadcast Group as it sees fit and Digital Holdco may vote its shares in the Digital Group as it sees fit.

 

5.8                                        If either of the Sellers or NGL (in accordance with clause 5.9 below) shall seek the consent of the Buyer to do any of the matters otherwise prohibited by clauses 5.5, 5.6 or 5.9 and the Buyer shall not give its consent within 5 Business Days of a written request from either of the Sellers or NGL (as the case may be), the matter shall be referred immediately to the Chief Executive Officer of ntl Incorporated (on behalf of the Sellers) and the Chief Executive Officer of the Buyer to attempt to resolve such matter.  If they are unable to resolve the matter, such matter shall be dealt with as if it were a dispute in accordance with clause 21 of this Agreement.

 

5.9                                        Subject always to clause 5.7, NGL agrees to procure that each member of the ntl Group shall, to the extent applicable, comply with the provisions of sub-clauses 5.5.5, 5.5.6, 5.5.11 and 5.5.12 in relation to the Designated Broadcast Business or any Designated Broadcast Assets or Designated Broadcast Liabilities comprised therein and sub-clauses 5.5.8 to 5.5.10 in relation to any Broadcast Employees.

 

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SDN Limited

 

5.10                                 Prior to Completion, Digital Holdco shall, and shall procure that Digital shall, use reasonable endeavours (which for the avoidance of doubt shall not extend to making any payments) to obtain the approval in writing of the Qualifying Shareholders (as such term is defined in the articles of association of SDN Limited (the “SDN Articles”)) of SDN Limited to the sale of the Digital Shares and their confirmation that the sale of the Digital Shares shall not constitute a Relevant Transfer (as defined in the SDN Articles) triggering the deemed service of a Transfer Notice pursuant to Article 28.9 of the SDN Articles.  The Buyer agrees that it shall have no right to terminate this Agreement, and neither Seller nor NGL shall have any liability, arising out of or relating to any failure to obtain the consent of the Qualifying Shareholders referred to in this clause 5.10 or any requirement that the shares owned by Digital in the capital of SDN Limited be offered for sale or sold to Qualifying Shareholders pursuant to the SDN Articles.

 

Channel 5 Engineering Limited

 

5.11                                 Prior to Completion, ntl Chichester shall procure that NatTrans shall use reasonable endeavours (which, for the avoidance of doubt, shall not extend to making any payments) to obtain a confirmation in writing from Channel 5 Television Group Limited (“Channel 5”) that it will not exercise its right, pursuant to clause 8 of the shareholders agreement dated 18 April 1997 between NatTrans, Channel 5 and Channel 5 Engineering Limited (“Channel 5 Engineering”), to acquire the shares owned by NatTrans in the capital of Channel 5 Engineering on a change of control of NatTrans.  The Buyer agrees that it shall have no right to terminate this Agreement, and neither Seller nor NGL shall have any liability, arising out of or relating to any failure to obtain the confirmation of Channel 5 referred to in this clause 5.11 or any requirement that the shares owned by NatTrans in the capital of Channel 5 Engineering be offered for sale or sold to Channel 5 in consequence of this Agreement.

 

Buyer Group Financing Documents

 

5.12                                 Buyer Holdco warrants to NGL and the Sellers that it has disclosed to them true and complete copies of all Holdco Financing Documents and undertakes to NGL and the Sellers that at all times prior to and at Completion:

 

5.12.1                                         it shall comply, and shall procure (to the extent applicable) that each member of its Group shall comply, with all of their respective obligations under the terms of the Holdco Financing Documents and shall enforce against any other parties to such Holdco Financing Documents (and shall not waive) all of their respective rights thereunder (including, without limitation, their rights under the Holdco Escrow Deed and the Holdco Letters of Credit);

 

5.12.2                                         it shall not, and it shall procure (to the extent applicable) that no member of its Group shall, without the prior written consent of NGL, agree to any material

 

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variation or amendment to any of the Holdco Financing Documents and shall use its best endeavours to complete the Holdco Financing Documents as soon as reasonably practicable in accordance with their original terms;

 

5.12.3                                         it shall not, and it shall procure (to the extent applicable) that no member of its Group shall, voluntarily agree to the termination of any of the Holdco Financing Documents without the prior written consent of NGL; and

 

5.12.4                                         it shall procure that the other members of the Buyer’s Group and the Buyer shall comply with their respective obligations under the Buyer Financing Documents.

 

5.13                                 Buyer warrants to NGL and the Sellers that it has disclosed to them true and complete copies of all Buyer Financing Documents (from which the details of any fees payable to financing banks may be redacted) and undertakes to NGL and the Sellers that at all times prior to and at Completion:

 

5.13.1                                         it shall comply, and shall procure (to the extent applicable) that each member of its Group shall comply, with all of their respective obligations under the terms of the Buyer Financing Documents and shall enforce against any other parties to such Buyer Financing Documents (and shall not waive) all of their respective rights thereunder;

 

5.13.2                                         it shall not, and it shall procure (to the extent applicable) that no member of its Group shall, without the prior written consent of NGL, agree to any material variation or amendment to any of the Buyer Financing Documents and shall use its best endeavours to complete the Buyer Financing Documents as soon as reasonably practicable in accordance with their original terms; and

 

5.13.3                                         it shall not, and it shall procure (to the extent applicable) that no member of the Buyer Group shall, voluntarily agree to the termination of any of the Buyer Financing Documents without the prior written consent of NGL.

 

5.14                                 The Buyer undertakes that it shall, on or immediately prior to Completion, enter into an agreement with Macquarie Communications Infrastructure Holdings Pty Limited (“MCIL”) on terms substantially similar to those of the Technical Assistance Agreement dated 10 July 2002 between NatTrans, MCIL and Broadcast Australia Holdings Pty Limited as required by clause 2.4(b) of such agreement.

 

ABC Settlement Agreement

 

5.15                                 NGL undertakes that, prior to Completion, it shall not and shall procure that no member of the ntl Group shall, amend, modify, waive or revoke in any respect (or permit any of the

 

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same) any provision of the ABC Settlement Agreement without the prior written consent of the Buyer.

 

S 179 TCGA 1992

 

5.16                                 ntl Chichester hereby agrees to take all reasonable steps to identify any asset that has been transferred to a member of the Broadcast Group prior to Completion and which would lead to a Liability to Taxation (as defined in the ntl Chichester Tax Deed) under section 179 TCGA 1992 or paragraph 58, Schedule 29 Finance Act 2002 in such member of the Broadcast Group as a result of Completion or the exercise of the Put Option or the Call Option (the “Degrouping Charge Assets”).  ntl Chichester shall procure that elections are made in respect of each Degrouping Charge Asset on Completion in the approved terms so that the relevant chargeable gain is deemed to arise in the relevant member of the ntl Group and the Buyer will procure that the relevant member of the Broadcast Group shall pay to the relevant member of the ntl Group any amount specified by ntl Chichester (not exceeding 30 per cent. of the chargeable gain which is to be re-allocated).

 

6.                                               COMPLETION

 

6.1                                        Completion shall take place at the offices of the Sellers’ Solicitors on the Business Day immediately following the day on which the Put Option or the Call Option (as applicable) is exercised (or such other day as NGL and the Buyer may agree in writing).

 

6.2                                        On Completion, the parties shall each perform their respective obligations in relation to the sale and purchase of the Shares in accordance with and as set out in Schedule 3.

 

6.3                                        The date on which Completion is required to take place in accordance with clause 6.1 is referred to in this Agreement as the “Scheduled Completion Date” which expression shall include any later date set for Completion in accordance with clause 6.4.1.

 

6.4                                        Without prejudice to any other remedies or accrued rights which the Sellers may have against the Buyer, if the Buyer shall not have complied with all its obligations under clause 6.2, the Sellers shall be entitled, at their discretion:

 

6.4.1                                                to defer Completion to any subsequent Business Day falling not more than 20 Business Days after the Scheduled Completion Date or any later date set for Completion in accordance with this clause (such date, the “Deferred Completion Date”, and the period between the Scheduled Completion Date and the Deferred Completion Date being referred to in this Agreement as the “Completion Deferral Period”).  In such event this clause 6.4 shall apply to Completion so deferred and, if the Sellers so elect, the Long Stop Date shall be extended by such number of days, not exceeding the number of days equal to the Completion Deferral Period, as the Sellers may determine;

 

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6.4.2                                                to waive the requirement to fulfil those obligations in whole or in part and following such waiver to complete the sale and purchase of the Shares;

 

6.4.3                                                so far as practicable, to complete the sale and purchase of the Shares in accordance with Schedule 3; or

 

6.4.4                                                to terminate this Agreement in accordance with clause 7.

 

6.5                                        Without prejudice to any other remedies or accrued rights which the Buyer may have against the Sellers, if the Sellers shall not have complied with all their obligations under clause 6.2, the Buyer shall be entitled, at its discretion:

 

6.5.1                                                to defer Completion to any subsequent Business Day falling not more than 20 Business Days after the Scheduled Completion Date or any later date set for Completion in accordance with this clause (such date, the “Buyer Deferred Completion Date”, and the period between the Scheduled Completion Date and the Buyer Deferred Completion Date being referred to in this Agreement as the “Buyer Completion Deferral Period”).  In such event this clause 6.5 shall apply to Completion so deferred and, if the Buyer so elects, the Long Stop Date shall be extended by such number of days, not exceeding the number of days equal to the Buyer Completion Deferral Period, as the Buyer may determine;

 

6.5.2                                                to waive the requirement to fulfil those obligations in whole or in part and following such waiver to complete the sale and purchase of the Shares;

 

6.5.3                                                so far as practicable, to complete the sale and purchase of the Shares in accordance with Schedule 3; or

 

6.5.4                                                to terminate this Agreement in accordance with clause 7.

 

7.                                               TERMINATION

 

7.1                                        This Agreement may be terminated at any time before Completion (in relation to sub-clauses 7.1.1 to 7.1.3, 7.1.5 and 7.1.6) or at any time before any exercise of the Put Option or the Call Option (in relation to sub-clauses 7.1.4 and 7.1.7):

 

7.1.1                                                by the mutual written consent of NGL, the Sellers and the Buyer;

 

7.1.2                                                by NGL and the Sellers, if the Buyer or Buyer Holdco is in material breach of any of their respective obligations under this Agreement which breach is not remedied by or at the expense of the Buyer or Buyer Holdco within 30 days of the Buyer being notified in writing of such breach or, if earlier, prior to Completion;

 

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7.1.3                                                by the Buyer, if any of the Sellers or NGL is in material breach of any of their respective obligations under this Agreement which breach is not remedied by or at the expense of the Sellers within 30 days of the Sellers or NGL being notified in writing of such breach or, if earlier, prior to Completion;

 

7.1.4                                                by the Buyer, if there is a material breach of any of the ntl Chichester Warranties when given upon the execution of this Agreement and the Buyer delivers a written notice to the Sellers giving details of such breach and such breach is not remedied by or at the expense of the Sellers prior to the date on which the Put Option first becomes exercisable, in which case the sole remedy of the Buyer in respect of such breach shall be to terminate this Agreement pursuant to this clause 7;

 

7.1.5                                                by the Sellers, if there is a material breach of any of the Buyer’s or Buyer Holdco’s warranties in clauses 5.12, 5.13, 9.9 and 9.10 when given upon the execution of this Agreement;

 

7.1.6                                                by the Buyer, if there is a material breach of any of the warranties of NGL and the Sellers in clause 9.1 when given upon execution of this Agreement; or

 

7.1.7                                                by either the Sellers or the Buyer if at any time the EC Clearance Condition becomes incapable of being satisfied.

 

7.2                                        For the purposes of clause 7.1, the expression “material breach” shall mean a breach which is material in the context of the Transaction or the Broadcast Business taken as a whole.

 

7.3                                        If a party or parties wish to terminate this Agreement pursuant to any of clauses 7.1.2 to 7.1.7 (inclusive), it/they shall do so by serving a written notice to that effect on the other parties.  Such notice shall specify the grounds on which this Agreement is being terminated.

 

7.4                                        ntl Chichester or NGL shall notify the Buyer as soon as reasonably practicable prior to Completion after discovering any matter, event or circumstance which any of the directors or officers of such company knows constitutes a breach of a Warranty.  The Buyer shall likewise notify ntl Chichester or NGL as soon as reasonably practicable prior to Completion after discovering any matter, event or circumstance which any of its directors or officers knows constitutes a breach of a Warranty.  If the Buyer fails to so notify ntl Chichester or NGL or if, having so notified ntl Chichester or NGL of a material breach of an ntl Chichester Warranty and having become entitled to terminate this Agreement in accordance with clause 7.1.4, the Buyer fails to give notice pursuant to clause 7.3 prior to the date on which the Put Option has become exercisable that it wishes to terminate this Agreement, the Buyer shall be automatically deemed, by such failure to notify, to have irrevocably waived any right or claim which it might have had against ntl Chichester or NGL in respect of such

 

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breach of an ntl Chichester Warranty, other than where such breach of an ntl Chichester Warranty relates to any matter or event which the persons referred to in clause 9.5 knew, at the date of this Agreement, constituted a breach of the ntl Chichester Warranties and such persons wilfully chose not to disclose such information to the Buyer, in which event the Buyer shall not be deemed to have irrevocably waived such right or claim.

 

7.5                                        Save as provided in clauses 4.12 and 7.1:

 

7.5.1                                                the Buyer shall not be entitled to rescind or terminate this Agreement, or any part of it, at any time prior to or after the Completion Date, for any reason; and

 

7.5.2                                                the Sellers and NGL shall not be entitled to rescind or terminate this Agreement, or any part of it, at any time prior to or after the Completion Date, for any reason.

 

7.6                                        If this Agreement is terminated in accordance with clause 7.1, then without prejudice to any other remedies or accrued rights of any party, the provisions of this Agreement (other than clauses 1 (Definitions and interpretation) 11 (Confidentiality), 12 (Announcements), 14 (Costs), 21 (Applicable law and jurisdiction), 22 (General) and 23 (Notices)) shall cease to have effect.

 

7.7                                        In the event that this Agreement is terminated as provided in this clause 7:

 

7.7.1                                                the Buyer shall return to the Sellers all documents and other material received from any member of the ntl Group or any of its Representatives in connection with this Transaction relating to any Target Group Company or the transactions contemplated by this Agreement, whether obtained before or after the execution of this Agreement, save that, subject always to clause 7.7.2, the Buyer shall be entitled to retain any such documents or material if and to the extent that, the Buyer would have been entitled to retain Confidential Information (as defined in the Confidentiality Agreement) under the terms of such Confidentiality Agreement; and

 

7.7.2                                                each party agrees that all confidential information received by the Buyer or its Group or any of their respective Representatives with respect to any Target Group Company, this Agreement or the transactions contemplated hereby shall be treated in accordance with clause 11, which shall remain in full force and effect notwithstanding the termination of this Agreement.

 

8.                                               SEPARATION

 

Compliance with Separation Memorandum

 

8.1                                        Subject to the provisions of this clause 8, Separation shall be implemented in accordance

 

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with the Separation Steps, subject to any amendments to the structure as may be reasonably necessary in order to satisfy the Separation Condition PROVIDED THAT no amendments which would be materially adverse to the Buyer or the Broadcast Group shall be made to the methodology of implementing Separation unless they have first been agreed with the Buyer.  NGL shall notify the Buyer in writing of any of the Separation Steps taking place and shall provide to the Buyer certified copies of each of the documents entered into pursuant to such Separation Steps, in each case as soon as reasonably practicable after the relevant Separation Steps have taken place.

 

8.2                                        At any time between the date of this Agreement and Completion, NGL and NatTrans shall be entitled to make amendments to the terms of any of the Separation Agreements or any schedules or annexures to any such Separation Agreements so as:

 

8.2.1                                                to remove any Designated Core Leasehold Properties in respect of which either Proceedings (as defined in the Designated Core Business Transfer Agreements) are not defended following advice from leading counsel as provided in the Designated Core Business Transfer Agreements, or Adverse Judgment (as defined in the Designated Core Business Transfer Agreements) is handed down, and to include any Substitute Property (as is defined in the Designated Core Business Transfer Agreements);

 

8.2.2                                                subject always to clause 5.5, to reflect acquisitions or disposals of assets prior to the Completion Date as contemplated by paragraph 1.2 of Part 2 of the Separation Memorandum;

 

8.2.3                                                to reflect changes to the Broadcast Employees as contemplated by clause 8.8; or

 

8.2.4                                                to reflect any Changes made to any of the Ancillary Agreements as contemplated by Part III of Schedule 7.

 

Any amendments proposed under this clause 8.2 shall, in advance of such amendments being made, be notified in writing to the Buyer accompanied by a copy of the relevant Separation Agreement clearly indicating the amendments or modifications.

 

8.3                                        NGL and NatTrans shall, prior to their execution in accordance with the Separation Steps, prepare the final forms of the NGL Hive-Across Agreements to reflect, inter alia, the parties to, and the Designated Broadcast Assets to be transferred under, each such NGL Hive-Across Agreement, and shall provide copies of each such agreement to the Buyer prior to their execution.

 

8.4                                        When, pursuant to paragraph 4 of Part 1 of Schedule 7, NGL or any member of the ntl Group gives written notice to the Facility Agent (as defined in the Senior Credit Facility) pursuant to clause 28.2 of the Senior Credit Facility of the implementation of Principal

 

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Separation and the proposed Separation Date, NGL shall procure that a copy of such written notice is also sent to the Buyer at the same time.

 

8.5                                        NTL Chichester undertakes to the Buyer that it shall hold harmless NatTrans against any liability which NatTrans may have under the Separation Agreements in respect of any breach of its obligations thereunder prior to Completion.  This provision shall not apply to any new breach or any breach of any obligation which NatTrans continues to breach after Completion.

 

Use of Assets

 

8.6                                        Without prejudice to any contractual arrangements that may be effected in respect of the period following Completion (including pursuant to the Separation Agreements):

 

8.6.1                                                the Buyer agrees that, save to the extent that any such amounts are taken into account in the calculation of Completion Date Net Working Capital, no member of the Broadcast Group is or shall be entitled to raise any invoice or otherwise claim any sums or costs against any member of the ntl Group (including NNNL) or any director, officer or employee of any member of the ntl Group (including NNNL) in respect of any benefit derived by any member of the ntl Group from the use of any of the assets of, or services provided by, any member of the Broadcast Group in the period prior to Completion, and the Buyer shall indemnify and hold harmless NGL and each other member of the ntl Group against any such liability; and

 

8.6.2                                                the Sellers agree that, save to the extent that any such amounts are taken into account in the calculation of Completion Date Net Working Capital, no member of the ntl Group is or shall be entitled to raise any invoice or otherwise claim any sums or costs against any member of the Broadcast Group or any director, officer or employee of any member of the Broadcast Group in respect of any benefit derived by any member of the Broadcast Group from the use of any of the assets of, or services provided by, any member of the ntl Group in the period before Completion, and the relevant Seller and NGL shall pay to the Buyer as a reduction to the consideration payable for the NatTrans Shares an amount equal to any such liability.

 

8.7                                        NGL shall, and shall procure that each member of the ntl Group shall, promptly transfer to NatTrans any asset transferred by NatTrans to NNNL and NINL under the Designated Core Business Transfer Agreements or the Irish Transfer Agreement if such asset is used exclusively by the Broadcast Business at the date of Completion and the use or benefit of such asset following Completion is not in some way provided to NatTrans pursuant to the Ancillary Agreements.  If requested by the relevant member of the ntl Group:

 

8.7.1                                                the Buyer shall procure that NatTrans shall pay in cash to the relevant member

 

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of the ntl Group (or as it may direct) an amount equal to the fair market value of the interest in such asset upon it being transferred (plus VAT if applicable); and

 

8.7.2                                                immediately following any payment by NatTrans pursuant to clause 8.7.1 above, NGL shall pay to the Buyer the amount prescribed by clause 8.7.1 (excluding VAT) by way of adjustment to the NatTrans Consideration.

 

Broadcast Employees

 

8.8                                        NGL and ntl Chichester shall provide to the Buyer no later than 1 (one) Business Day prior to the Separation Date an updated list of the Broadcast Employees as at the Separation Date reflecting: (a) any employees of the ntl Group allocated to the Broadcast Business in accordance with the principles set out in paragraph 7 of Part 2 of the Separation Memorandum; and (b) any Broadcast Employees who have ceased to be employed by the ntl Group after the date of this Agreement.

 

8.9                                        The Buyer irrevocably agrees to indemnify NGL (for itself and/or on behalf of each member of the ntl Group) in respect of any liability suffered by any member of the ntl Group as a result of any failure by the Buyer to inform NGL of any measures which NatTrans may propose to take in relation to any Broadcast Employees.

 

9.                                               WARRANTIES

 

NGL’s and Sellers’ warranties

 

9.1                                        Each of NGL and the Sellers warrants that it is a corporation validly existing under the laws of the place of its incorporation, and it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement, the Tax Deed and the Framework Services Agreement, and the obligations expressed to be assumed by it under this Agreement, the Tax Deed and the Framework Services Agreement are legal, valid and binding and enforceable against it in accordance with their terms, and the execution, delivery and performance by it of this Agreement, the Tax Deed and the Framework Services Agreement will not:

 

9.1.1                                                result in a breach of, or constitute a default under, any agreement or arrangement to which it is a party or under its constitutional documents; or

 

9.1.2                                                result in a breach by it of any law or order, judgment or decree of any court, governmental agency or regulatory body to which it is a party or by which it is bound.

 

9.2                                        ntl Chichester, upon and as of the execution of this Agreement, warrants to the Buyer in the terms of the ntl Chichester Warranties.  Digital Holdco, upon and as of the execution of this

 

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Agreement, warrants to the Buyer in the terms of the Digital Warranties.  Each Warranty is given subject to the Disclosed Matters.

 

9.3                                        Subject to clause 7.1.4, the Warranties shall continue in full force and effect notwithstanding Completion.

 

9.4                                        Each Warranty shall be separate and independent and shall not be limited by reference to any other Warranty provided that (other than the Warranties contained in paragraph 5 of Part I of Schedule 4, paragraph 1 of Part IV of Schedule 4, paragraphs 1, 2 and 6 of Part V of Schedule 4, paragraph 3 of Part VII of Schedule 4 and Part VIII of Schedule 4 which shall apply to all matters, and other than paragraphs 1 to 6 of Part VII which shall apply to all matters except Environmental Matters) the only ntl Chichester Warranties to be given in relation to:

 

9.4.1                                                Intellectual Property are those Warranties contained in Part IX of Schedule 4;

 

9.4.2                                                IT Systems are those Warranties contained in Part X of Schedule 4;

 

9.4.3                                                Pensions are those Warranties contained in Part XII of Schedule 4;

 

9.4.4                                                Properties (including rights to use or occupy Properties) and matters related to Properties are those Warranties contained in Part XIII of Schedule 4;

 

9.4.5                                                Environmental Matters are those Warranties contained in Part XIV of Schedule 4; and

 

9.4.6                                                Taxation are those Warranties contained in Part XV of Schedule 4.

 

9.5                                        Where any statement in the Warranties is qualified by the expression “to the best of the knowledge, information and belief of the Seller” or “so far as the Seller is aware” or any similar expression, the Sellers shall be deemed only to have knowledge of anything of which any of Simon Duffy, Jacques Kerrest, Scott Schubert, Robert Gale, Richard Martin, Jody Shah, Andrew McAleavey, Jeni Sarson or Alex Miller had actual knowledge at the date of this Agreement.

 

9.6                                        Any claim under the Warranties shall be limited in accordance with Schedule 6.

 

9.7                                        For the avoidance of doubt, no warranty, express or implied, is given in relation to any information or expression of opinion, intention or expectation or any forecast or projection contained or referred to in the Data Room Documents.

 

9.8                                        Save in the case of fraud, wilful misrepresentation, wilful misconduct or wilful concealment, each of the Sellers undertakes to the Buyer to waive any rights, remedies or claims which it

 

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may have against any director or officer of any member of the Broadcast Group or any Broadcast Employee or any director, officer or employee of the Digital Group in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by any director or officer of any member of the Broadcast Group or any Broadcast Employee or any director, officer or employee of the Digital Group in connection with this Agreement and all agreements or documents referred to in this Agreement, including without limitation assisting the Sellers in the giving of any Warranty or any indemnity or the preparation of the Disclosure Letters.

 

Buyer’s and Buyer Holdco’s warranties

 

9.9                                        Each of the Buyer and Buyer Holdco warrants to the Sellers that neither it nor any other member of the Buyer Group nor their respective agents or advisers are aware of any claim for a breach of Warranty as at the date of this Agreement.

 

9.10                                 Each of the Buyer and Buyer Holdco warrants to NGL and the Sellers that it is a corporation validly existing under the laws of the place of its incorporation, that it has disclosed to them all Buyer Financing Documents, that it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement and each of the Buyer Financing Documents, that the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement and each of the Buyer Financing Documents are legal, valid and binding and enforceable against it in accordance with their terms and that the execution, delivery and performance by it of this Agreement, the Tax Deed, the Framework Services Agreement and the Buyer Financing Documents will not:

 

9.10.1                                         result in a breach by it of, or constitute a default under, any agreement or arrangement to which it is a party or under its constitutional documents; or

 

9.10.2                                         result in a breach of any law or order, judgment or decree of any court, governmental agency or regulatory body to which it is a party or by which it is bound.

 

9.11                                 The Buyer and Buyer Holdco acknowledge that NGL and the Sellers have entered into this Agreement in reliance upon the warranties in clauses 9.9 and 9.10.

 

10.                                        PROTECTION OF GOODWILL

 

10.1                                 Non-competition

 

Subject to clause 10.2, NGL agrees that for a period of eighteen months commencing on the Completion Date (the “Non-compete Period”), it shall not, and shall procure that each other member of the ntl Group shall not, other than where such activities are engaged in

 

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exclusively for the operation of the network which forms part of the Core Business, engage in any of the following activities (the “Competitive Activities”) within the British Isles:

 

10.1.1                                         providing space and associated services on sites to electronic communications service providers for the installation of their wireless telecommunications equipment and associated wireless equipment; ownership and operation and provision of public, non-residential in-building wireless connectivity for mobile operators, and ownership and operation and provision of shared antenna systems (currently marketed as ‘CityCell’);

 

10.1.2                                         providing space and associated services on mast sites for the transmission and distribution and associated equipment of broadcasters and/or their agents; planning, design and installation of broadcast networks for terrestrial television and terrestrial radio services (on both analogue and digital formats) including encoding, multiplexing, distribution, contribution and transmission (otherwise than as a seller of capacity and connectivity to a fixed line);

 

10.1.3                                         provision of playout, satellite uplinking and downlinking services for video and data, other than where such services form an ancillary part of a wider service; and

 

10.1.4                                         planning, design and operation of analogue and digital radio networks for communication with mobile radio devices for emergency services personnel and such emergency services’ call centres,

 

save insofar as any such types of activity are carried on by the Core Business immediately prior to the date of this Agreement.

 

10.2                                 The Buyer hereby acknowledges and agrees that clause 10.1 shall not be breached:

 

10.2.1                                         as a consequence of any member of the ntl Group acquiring and owning:

 

(a)                                           less than an aggregate of ten per cent. (10%) of any class of shares of any person engaged in Competitive Activities;

 

(b)                                          any Indebtedness of any Merger Partner or less than the greater of (i) fifteen per cent. (15%) or (ii) £25,000,000 (twenty five million pounds Sterling) in value of any class of Indebtedness of any other person or business engaged in Competitive Activities;

 

(c)                                           any person or business engaged in Competitive Activities if the portion of the revenues of such person and its subsidiaries (on a consolidated basis) or business for the financial year ending immediately prior to the time of such acquisition that is attributable to

 

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Competitive Activities accounts for less than the greater of (i) fifteen per cent. (15%) of such person’s or business’ consolidated annual revenues or (ii) £25,000,000 (twenty five million pounds Sterling); or

 

(d)                                          any person or business engaged in Competitive Activities if such Competitive Activities account for at least the greater of (i) fifteen per cent. (15%) of such person’s or business’ consolidated annual revenues for the financial year immediately prior to the time of acquisition of such person or business or (ii) £25,000,000 (twenty five million pounds Sterling) provided that, to the extent that this sub-clause 10.2.1(d) is applicable, the applicable member of the ntl Group uses its reasonable endeavours to sell, transfer or otherwise dispose of a portion of the person or business that conducts Competitive Activities within six months after the date on which the acquisition of such person or business so that, following such sale, transfer or disposition, the relevant member of the ntl Group is in compliance with sub-clause 10.2.1(c) (it being acknowledged and agreed by (x) NGL that, in marketing such business for sale, the ntl Group shall ensure that the Buyer is offered a reasonable opportunity to purchase such business and (y) the Buyer that, if the relevant member of the ntl Group is unable to divest the requisite portion of the acquired person or business within such six month time period, such member of the ntl Group may retain ownership of the person or business conducting the Competitive Activities with no obligation to the Buyer); or

 

10.2.2                                         as a result of any Merger Event (including by way of any continuation of the business of any Merger Partner).

 

10.3                                 Notwithstanding anything in clause 10.1 to the contrary, any member of the ntl Group shall have the right to engage in any Competitive Activities at any time after a Broadcast Change of Control.

 

Non-solicitation

 

10.4                                 NGL undertakes to the Buyer and each other Buyer Group Company that it will not, and it shall procure that each member of the ntl Group will not directly or indirectly, at any time during the period of twelve calendar months from the Completion Date, solicit or entice away, or endeavour to solicit or entice away, from any Buyer Group Company (including, without limitation, any Broadcast Group Company) any person who is at the Completion Date a Broadcast Employee whether or not such person would commit a breach of his employment contract by reason of leaving service, save that this clause shall not apply to:

 

10.4.1                                         any employee employed in a non-managerial or purely administrative role earning less than £80,000 per annum in basic compensation; and

 

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10.4.2              any recruitment of any person through a recruitment agency (other than where such agency is deliberately targeting employees covered by the provisions of this clause 10.4) or in response to a newspaper, web page or similar advertisement not specifically targeted at Broadcast Employees.

 

10.5           The Buyer undertakes to NGL and each other ntl Group Company that it will not, and it shall procure that each member of the Buyer Group will not, directly or indirectly, at any time during the period of twelve months from the Completion Date, solicit or entice away, or endeavour to solicit or entice away, from any member of the ntl Group any person who is immediately following the Completion Date employed by any member of the ntl Group, whether or not such person would commit a breach of his employment contract by reason of leaving service, save that this clause shall not apply to:

 

10.5.1              any employee employed in a non-managerial or purely administrative role earning less than £80,000 per annum in basic compensation; and

 

10.5.2              any recruitment of any person through a recruitment agency (other than where such agency is deliberately targeting employees covered by the provisions of this clause 10.5) or in response to a newspaper, web page or similar advertisement not specifically targeted at Broadcast Employees.

 

10.6           For the purposes of clauses 10.4 and 10.5, “directly or indirectly” shall mean NGL or the Buyer (as appropriate) acting either alone or jointly with or on behalf of any other person whether as principal, partner, manager, employee, contractor, director, consultant, investor or otherwise.

 

10.7           Each of the restrictions in this clause 10 shall be enforceable independently of each of the others and its validity shall not be affected if any of the others is invalid.  If any of those restrictions is void but would be valid if some part of the restrictions were deleted, the restriction in question shall apply with such modification as may be necessary to make it valid.

 

10.8           The Sellers and NGL acknowledge that the above provisions of this clause 10 are no more extensive than is reasonable to protect the Buyer as the purchaser of the Shares.

 

11.             CONFIDENTIALITY

 

11.1           With effect from Completion, NGL shall, and shall procure that each other member of the ntl Group shall, in all respects keep confidential and not at any time disclose or make known in any other way to anyone whomsoever or use for its own or any other person’s benefit any Target Confidential Information, PROVIDED THAT:

 

11.1.1              such obligation shall not apply to information which comes into the public

 

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domain (other than through a breach by NGL of the provisions of this clause 11.1) or any information obtained by it or any other member of the Core Group (excluding any Confidential Information relating exclusively to the Designated Broadcast Business obtained prior to Completion) from a third party not, to NGL’s knowledge, subject to a duty of confidentiality towards the Target Group with respect to such information;

 

11.1.2              any member of the ntl Group shall be entitled at all times to disclose such information as it may deem necessary to comply with any legal or regulatory requirement or inquiry of any competent judicial, governmental or regulatory authority or any Taxation Authority or by any securities exchange on which its shares are listed or traded, or for the preparation of its financial statements, or in connection with any claim, provided, with respect to material information, that such member of the ntl Group shall (to the extent legally permitted to do so and practicable under the circumstances) give the Target Group prior written notice of such requirement and take into account any reasonable comments of the Target Group in relation to the contents of such disclosure; and

 

11.1.3              any member of the ntl Group shall be entitled to disclose to its directors, officers, employees, agents, auditors or advisers such information as may be necessary to enable them to carry out their duties (conditional upon any such person being informed of the confidential nature of such information and NGL procuring that such person keeps such information confidential in accordance with this clause 11.1).

 

11.2           The Buyer shall, and shall procure that each member of the Buyer Group (including, for the avoidance of doubt, following Completion, each Target Company) shall, in all respects keep confidential and not at any time disclose or make known in any other way to anyone whomsoever or use for its own or any other person’s benefit any Retained Confidential Information, PROVIDED THAT:

 

11.2.1              such obligation shall not apply to information which comes into the public domain (other than through a breach by the Buyer of the provisions of this clause 11.2) or any information obtained by it or any other member of the Buyer Group (excluding the Broadcast Group in respect of confidential information relating to the Core Business obtained prior to Completion) from a third party not, to the Buyer’s knowledge, subject to a duty of confidentiality towards NGL or any member of the ntl Group with respect to such information; or

 

11.2.2              any member of the Buyer Group shall be entitled at all times to disclose such information as may be required by law or by any competent judicial or regulatory authority or any Taxation Authority or by any securities exchange on which its shares (or the shares of any person connected with the Buyer) are

 

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listed or traded or for the preparation of its financial statements, provided always that such member of the Buyer Group shall (to the extent legally permitted to do so) give NGL and the Sellers prior written notice of such requirement and take into account any reasonable comments of NGL and the Sellers in relation to the contents of such disclosure; and

 

11.2.3              any member of the Buyer Group shall be entitled to disclose to (i) its directors, officers, employees, agents, auditors or advisers such information as may be necessary to enable them to carry out their duties and (ii) any person who is a party to the Buyer Financing Documents and to any person intending to participate in any direct or indirect syndications of any interest held by any person (or any member of its Group) in the Buyer Group or of any holding company in the Buyer Group at Completion (conditional in each case upon any such person being informed of the confidential nature of such information and the Buyer procuring that such person keeps such information confidential in accordance with this clause 11.2).

 

12.             ANNOUNCEMENTS

 

12.1           At 7:30 a.m. on the Business Day immediately following today’s date NGL (or another member of the ntl Group) and the Buyer shall release the Announcement.

 

12.2           Save as provided in clauses 12.1 and 12.3, no party shall (and NGL shall procure that each other member of the ntl Group shall not, without the consent of the Buyer, and the Buyer shall procure that each other member of the Buyer Group shall not, without the consent of NGL) issue any press release or publish any circular to shareholders or any other document or make any public statement before or after Completion, relating to any part of the Transaction or any ancillary matter.

 

12.3           Nothing in clause 12.2 shall restrict:

 

12.3.1              any ntl Group Company, the Buyer or any Target Group Company after Completion from directly informing customers or suppliers of the acquisition of the Target Group by the Buyer;

 

12.3.2              any party or any member of its Group from making any disclosure to any of its directors, officers, employees, agents, auditors or advisers who are required to receive such disclosure to carry out their duties (conditional upon any such person being informed of the confidential nature of such information and the disclosing party procuring that such person keeps such information confidential for as long as the disclosing party is obliged to do so in accordance with this clause);

 

12.3.3              any announcement or disclosure required by law or by any competent judicial

 

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or regulatory authority or by any Taxation Authority or by any securities exchange provided that it shall (to the extent legally permitted to do so) provide the other parties with prior written notice that it is required or otherwise intends to make such announcement or disclosure;

 

12.3.4              any announcement or disclosure necessary or desirable in order to satisfy any of the Conditions in accordance with the provisions of this Agreement provided that it shall (to the extent legally permitted to do so) provide the other parties with prior written notice that it is required or otherwise intends to make such announcement or disclosure;

 

12.3.5              any disclosure by any member of the ntl Group or the Broadcast Group to the extent necessary or desirable in connection with Separation;

 

12.3.6              any announcement or disclosure disclosing information which has previously been publicly announced or disclosed in accordance with the provisions of this clause 12; or

 

12.3.7              any announcement or disclosure necessary by any person in order to enforce its rights under this Agreement or any other agreement to be entered into pursuant to this Agreement.

 

13.             PENSIONS

 

The provisions of Schedule 8 shall have effect.

 

14.             COSTS

 

Save as otherwise expressly provided in this Agreement or any other agreements to be entered into pursuant to this Agreement, each party shall pay its own costs and expenses incurred in connection with the preparation, negotiation and completion or termination of this Agreement or any other agreement to be entered into pursuant to this Agreement.

 

15.             POST-COMPLETION ARRANGEMENTS

 

Release of intra-group guarantees

 

15.1           Save as otherwise provided in this Agreement and the other agreements to be entered into pursuant to this Agreement, each of the Sellers shall use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs but shall include (to the extent permitted under the terms of the Senior Credit Facility and/or the Senior Note Indenture) the giving of guarantees in respect of the debts, liabilities or obligations of the relevant member of the Core Group) to obtain the release (with effect from no later than Completion) of each member of its Relevant Group from any guarantee,

 

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security, bond, letter of comfort or other similar obligation given or incurred by it (but excluding, for the avoidance of doubt, any authorised guarantee agreements entered into by any member of the Broadcast Group in respect of any Designated Core Properties) which relates, in whole or in part, to debts or other liabilities or obligations (whether actual or contingent) of any member of the Core Group (including any which are to be effectively transferred to it as part of Separation under the Separation Agreements) and, pending such release but following and subject to Completion, such Seller unconditionally and irrevocably agrees, as a continuing obligation, to indemnify each member of its Relevant Group against, and to pay on demand an amount equal to, any payment or losses which such member may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) in connection with any such liability (including any liability incurred by any member of the Broadcast Group under any authorised guarantee agreement given by it in respect of any Designated Core Properties), whether arising on, before or after Completion.

 

15.2           Save as otherwise provided in this Agreement and the other agreements to be entered into pursuant to this Agreement, the Buyer shall use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs but shall include the giving of guarantees in respect of the debts, liabilities or obligations of any Target Group Company) to obtain the release (with effect from Completion) of each member of the ntl Group from any guarantee, security, bond, letter of comfort or other similar obligation given or incurred by it (but excluding, for the avoidance of doubt, any authorised guarantee agreements entered into by any member of the ntl Group in respect of any Designated Broadcast Properties) which relates, in whole or in part, to debts or other liabilities or obligations (whether actual or contingent) of any Target Group Company (including any which are to be effectively transferred to such Target Group Company as part of Separation under the Separation Agreements but excluding any relating to the Designated Core Properties or the Designated Core Business) (the “NGL Liabilities”) and, pending such release but following and subject to Completion, the Buyer unconditionally and irrevocably agrees, as a continuing obligation, to indemnify each Seller (for itself and as trustee of each member of the ntl Group) against, and to pay on demand an amount equal to, any payment or losses which any member of the ntl Group may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) in connection with any NGL Liabilities (including any liability incurred by any member of the ntl Group under any authorised guarantee agreement given by it in respect of any Designated Broadcast Properties), whether arising on, before or after Completion.

 

Records

 

15.3           Following Completion, NGL shall procure as soon as reasonably practicable following Completion, in relation to all records, papers, documents and data (in whatever form they may exist) in the possession, custody or control of, or kept or made by or on behalf of any member of the ntl Group relating to any matters which include the Broadcast Business or the

 

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Target Group Companies (but excluding, for the avoidance of doubt, any matters relating exclusively to the Designated Core Business) that:

 

15.3.1              to the extent that such records, papers, documents and data relate exclusively to the Broadcast Business or the Target Companies (save as provided above), the relevant Broadcast Group Company or the relevant Target Group Company (as the case may be) shall on request be given access by the relevant member of the ntl Group to such records, papers, documents and data to examine and/or remove or copy the same provided that where such records, papers, documents and data are removed, the ntl Group shall be entitled to retain one copy thereof for compliance with applicable law or regulation or, to the extent that such records, papers, documents and data are held by a third party document storage contractor (including Iron Mountain) on behalf of any member of the ntl Group, NGL shall procure that the Target Group Companies shall on request have access to such records, papers, documents and data to examine and/or remove the same in accordance with the terms and conditions of the provision of such storage by such document storage contractor (at the cost of the relevant Target Group Company) and shall notify the Buyer and afford the Buyer and the Target Group Companies a reasonable opportunity to remove any such records, papers, documents and data in the event that any member of the ntl Group terminates any arrangements with a third party document storage contractor which are in effect at the date of this Agreement; and/or

 

15.3.2              to the extent that such records, papers, documents and data do not relate exclusively to the Broadcast Business or the Target Group Companies (save as provided above), such records, papers, documents and data shall be properly maintained and preserved for a period of at least 3 years from Completion or 7 years from Completion if such records, papers, documents and dates relate to Taxation (or such longer period as may be required by statute) and the information in such records, papers, documents and data relating to the Broadcast Business or the relevant Target Group Company shall, subject to clause 15.7, be made available (at reasonable times and on reasonable notice) to the Buyer or any of its officers, employees, agents or advisers PROVIDED THAT the Buyer shall and shall procure that its officers, employees, agents and advisers shall keep such information confidential save to the extent already in the public domain (other than as a result of any breach of any obligations under this Agreement) or required to disclose the same by law, any competent judicial or regulatory authority or any securities exchange.

 

15.4           Following Completion the Buyer shall procure that all records, papers, documents and data (in whatever form they may exist) in the possession, custody or control of, or kept or made by or on behalf of any of the Target Group Companies relating to any matters which include the business of any member of the ntl Group (other than the Designated Broadcast Business) and all rights in such records, papers, documents and data shall:

 

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15.4.1              to the extent that such records papers, documents and data relate exclusively to the Core Business or to any member of the ntl Group (other than the Target Group or the Designated Broadcast Business), be deemed to be the property of, and shall be held on trust for, the relevant member of the ntl Group and any such items shall be delivered or made available to the relevant member of the ntl Group, provided that the Target Group shall be entitled to retain one copy thereof for compliance with applicable law or regulation or internal document retention policy; and/or

 

15.4.2              to the extent that such records, papers, documents and data do not relate exclusively to the Core Business, be properly maintained and preserved for a period of at least 3 years from Completion or 7 years from Completion if such records, papers, documents and dates relate to Taxation (or such longer period as may be required by statute) and the information in such records, papers, documents and data relating to the Core Business shall, subject to clause 15.6, be made available (at reasonable times and on reasonable notice) to NGL, the Sellers and the other members of the ntl Group and their respective officers, employees, agents or advisers PROVIDED THAT the Buyer shall and shall procure that its officers, employees, agents and advisers shall keep such information confidential save to the extent already in the public domain (other than as a result of any breach of any obligations under this Agreement) or required to disclose the same by law, any competent judicial or regulatory authority or any securities exchange.

 

15.5           The Buyer shall procure that for a period of at least 3 years from Completion (or such longer period as may be required by statute) the records, papers, documents and data relating to the Broadcast Business and the Target Group Companies shall be properly maintained and preserved and the information in such records, papers, documents and data shall be made available to the Sellers and NGL and their respective officers, directors, employees, agents, advisers and auditors (at reasonable times and on reasonable notice) for the purpose of dealing with the accounting, taxation, financial or insurance affairs of the ntl Group or (in respect of pre-Completion matters) of the Target Group Companies and such persons shall not use the information for any other purpose, PROVIDED THAT NGL shall or shall procure that such persons shall keep such information confidential save to the extent required to disclose the same by law or any competent judicial or regulatory authority or in order to comply with the rules of any securities exchange.

 

15.6           Clauses 15.3.2 and 15.4.2 shall not require any person to disclose any information if to do so would breach any confidentiality undertaking existing at today’s date or prejudice legal privilege in respect of any matter in dispute or reasonably likely to be in dispute at the time of the proposed disclosure.

 

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Net Trading Account Balance

 

15.7           Following Completion:

 

15.7.1              the Buyer shall procure that any net trading account balance owed by any member of the Broadcast Group to any member of the ntl Group (other than any trading account balance incurred under the terms of any of the Ancillary Agreements or the Framework Services Agreement and which is repayable under the terms thereof) shall be repaid in accordance with the regular timing of such payments adopted prior to Completion or, where any such balance has not historically been regularly settled, at the month end following Completion; and

 

15.7.2              NGL shall procure that any net trading account balance owed by any member of the ntl Group to any member of the Broadcast Group (other than any trading account balance incurred under the terms of any of the Ancillary Agreements or the Framework Services Agreement and which is repayable under the terms thereof) shall be repaid in accordance with the regular timing of such payments adopted prior to Completion or, where any such balance has not historically been regularly settled, at the month end following Completion.

 

Indebtedness of the Broadcast Group

 

15.8           ntl Chichester agrees to pay to the Buyer on demand as an adjustment to the NatTrans Consideration an amount equal to the amount of any Indebtedness of any member of the Broadcast Group which is outstanding at Completion (excluding, for the avoidance of doubt, any Indebtedness owed to any other Target Group Company, any net trading account balances the subject of clause 15.7, any Indebtedness to be assumed by the Core Group pursuant to the Designated Core Business Transfer Agreements or the Irish Transfer Agreement, any amounts taken into account in the preparation of the Completion Date Net Working Capital, any Indebtedness specifically disclosed in the ntl Chichester Disclosure Letter and any Indebtedness incurred by any member of the Broadcast Group on or after Completion in connection with the Transaction or in connection with the Holdco Financing Documents or the Buyer Financing Documents).

 

15.9           Digital Holdco agrees to pay to the Buyer on demand as an adjustment to the Digital Consideration an amount equal to the amount of any Indebtedness of any member of the Digital Group which is outstanding at Completion (excluding, for the avoidance of doubt, any Indebtedness owed to any other Target Group Company, any Indebtedness specifically disclosed in the Digital Disclosure Letter and any Indebtedness incurred by any member of the Digital Group on or after Completion in connection with the Transaction or in connection with the Holdco Financing Documents or the Buyer Financing Documents).

 

15.10         The Buyer shall procure that following Completion each member of the Broadcast Group

 

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shall continue its corporate existence until such time as legal title to all Designated Core Assets vested in such member has been transferred to a member of the ntl Group in accordance with the terms of the Designated Core Business Transfer Agreements and until all other obligations of NatTrans under such agreement or the Asset Sharing Agreement have in all material respects been performed or extinguished or have become redundant.

 

Winding Up of ntl Chichester

 

15.11         If at any time after the date of this Agreement, NGL wishes to procure the winding up of ntl Chichester, all of ntl Chichester’s rights and obligations under this Agreement and any other agreement entered into by ntl Chichester pursuant hereto may be novated to NGL, and the Buyer and the Buyer Holdco hereby agree to such novation and agree to procure that, to the extent necessary, each other member of the Buyer Group shall agree to such novation.

 

Security Interests over the Designated Core Business

 

15.12         Following Completion and pending the transfer to the Core Group of legal title to all of the Designated Core Assets comprised in the Designated Core Business in accordance with the terms of the Designated Core Business Transfer Agreements and/or pending the grant of a sublease in respect of any Designated Broadcast Property the legal title to which is retained by any member of the Core Group on account of a landlord’s refusal to consent to an assignment as contemplated by the Designated Broadcast Business Transfer Agreement, the Buyer shall not, and shall not permit any member of the Buyer Group (including, for the avoidance of doubt, the Broadcast Group), to grant or create any Security Interest over any of the Designated Core Assets or any part of the Designated Core Business or the beneficial interest in any such Designated Broadcast Property.

 

Preparation of NatTrans Accounts

 

15.13         If, upon Completion, the NatTrans Accounts have not been finalised and delivered to the Registrar of Companies pursuant to section 242 of the Act, ntl Chichester shall be entitled following Completion to be consulted in connection with the preparation of the NatTrans Accounts and any comments which it may have on such accounts shall be taken into consideration.

 

15.14         ntl Chichester shall provide to the Buyer details of the net trading balance between the Core Group and the Broadcast Group as at midnight on 31 December 2004 and the Buyer shall, in the absence of manifest error, procure that such net trading balance shall be included in the NatTrans Accounts.

 

ntl Group Financial Statements

 

15.15         Following Completion, the Buyer shall, at the request of NGL, procure that:

 

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15.15.1           the directors of NatTrans and the senior management of the Broadcast Business are made available to assist the ntl Group with the preparation of any consolidated financial statements required to be produced by any member of the ntl Group for the period ending on 31 December 2004 (to the extent that such consolidated financial statements reflect the results of NatTrans and/or the Broadcast Business in such period);

 

15.15.2           the directors of NatTrans and the senior management of the Broadcast Business are made available to the ntl Group to participate (either in person or by telephone) in meetings in relation to the disclosures to be incorporated in the ntl Group’s form 10-K for the period ending on 31 December 2004;

 

15.15.3           without prejudice to clause 15.4, all records and books of account relating to NatTrans and/or the Broadcast Business reasonably required by the ntl Group for the purposes of preparing any consolidated accounts pursuant to sub-clause 15.15.1 or the Form 10-K pursuant to sub-clause 15.15.2 (including, for the avoidance of doubt, all such records and books of account relating to transactions which take place after 31 December 2004 but which have an impact on such consolidated accounts and/or Form 10-K) shall be made available to the ntl Group,

 

PROVIDED THAT any such assistance from the directors of NatTrans and the senior management of the Broadcast Business shall be provided without liability to the Buyer, by NatTrans or any of their respective directors or the senior management of the Broadcast Business.

 

NTSL Master Lease

 

15.16         The parties acknowledge that under clauses 4.13.1, 4.20.2.1, 4.30.3 and 8.1 of the NTSL Master Lease and (ii) clauses 8.2 (which, by virtue of a typographical error, is mistakenly numbered 9.2) and 8.3 of the Site Management Contract, NatTrans is required to comply or procure that third parties comply with the Asset Usage Agreement and the terms of the Asset Usage Agreement are deemed to be incorporated into the NTSL Master Lease and the Site Management Contract.  If, by Completion, NNNL and NatTrans have been unable to reach an accommodation with Eastern Electricity plc to ensure that such deemed incorporation no longer applies and that the NTSL Master Lease and the Site Management Contract can operate without reference to the Asset Usage Agreement and vice versa (as contemplated by clause 10 of the Designated Core Business Transfer Agreement between NGL, NatTrans and NNNL), the Buyer shall procure that NatTrans shall continue to use its reasonable endeavours to agree with Eastern Electricity plc amendments to the terms of the NTSL Master Lease and the Site Management Contract to ensure that such deemed incorporation no longer applies and that the NTSL Master Lease and the Site Management Contract can operate without reference to the Asset Usage Agreement and vice versa and, pending such agreement, that NatTrans and each member of the Broadcast Group shall

 

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comply with the terms of the Asset Usage Agreement where required to do so under the terms of the NTSL Master Lease or the Site Management Contract.

 

Confidential Information

 

15.17         If any member of the Core Group is a party to an agreement with a third party which requires that third party to keep any information relating to any Target Group Company confidential, NGL shall procure that the relevant member of the Core Group shall hold the benefit of that agreement on trust for the relevant Target Group Companies and shall, at the Buyer’s cost, enforce it at the direction of the Buyer (acting as agent for the Target Group Companies).

 

ABC Claims

 

15.18         ntl Chichester undertakes to the Buyer that, subject to clauses 15.19 to 15.26 below, it shall pay to the Buyer, by way of a reduction in the consideration payable by the Buyer in respect of the NatTrans Shares, an amount equal to any damages, penalties, fines, costs, amounts paid in settlement, liabilities and losses suffered by NatTrans after Completion resulting from the ABC Contract (each, an “ABC Claim”) in excess of the amounts lent by members of the Core Group to NatTrans prior to the date of this Agreement in respect of any of the aforesaid (and subsequently waived).

 

15.19         Neither ntl Chichester nor any member of the ntl Group shall be liable for any ABC Claim unless written notice of such ABC Claim has been given to ntl Chichester by or on behalf of the Buyer within 30 days after the ABC Claim has arisen.  To be valid, the written notice of the ABC Claim must give details of the nature of the ABC Claim, the circumstances giving rise to it (so far as are known to the Buyer after having made reasonable enquiries) and the Buyer’s bona fide estimate of any alleged loss.

 

15.20         ntl Chichester shall not be liable for any ABC Claim to the extent that the fact, matter, event or circumstance giving rise to such ABC Claim is remediable and is remedied by or at the expense of ntl Chichester, and the Buyer shall, and shall procure that each member of the Buyer Group shall, co-operate with ntl Chichester where reasonably necessary to enable it to remedy any such fact, matter, event or circumstance.

 

15.21         No member of the Buyer Group shall be entitled to any payment pursuant to clause 15.19 to the extent that any ABC Claim results from the failure of any member of the Buyer Group to comply with its respective obligations under this Agreement.  The Buyer shall, and shall procure that each other member of the Buyer Group shall, take all reasonable action to mitigate any loss suffered by it which could result in an ABC Claim against ntl Chichester and, without limiting the generality of the foregoing shall, in respect of any right of recovery (whether by payment, discount, credit, relief or otherwise) which could be made by it against any third party:

 

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15.21.1           promptly give written notice and reasonable details of such right of recovery to ntl Chichester and allow ntl Chichester and its advisers and agents to investigate such right of recovery;

 

15.21.2           take reasonable steps to maximise the amount recovered in respect of such right of recovery; and

 

15.21.3           not withdraw, settle or compromise such right of recovery without the prior written consent of ntl Chichester.

 

15.22         The Buyer shall pay to ntl Chichester (as an adjustment to the consideration payable for the NatTrans Shares) an amount equal to any damages or other amounts recovered by NatTrans pursuant to any claim (a “Relevant Claim”) which NatTrans may have against any third party in connection with the ABC Contract (including, without limitation, any of NatTrans’ subcontractors). The Buyer shall upon request provide to ntl Chichester such details of any Relevant Claims as ntl Chichester may request and procure that NatTrans shall take reasonable steps to maximise the amount recovered in respect of any Relevant Claims or rights.   The Buyer shall procure that NatTrans shall:

 

15.22.1           not settle or compromise any Relevant Claim without the prior written consent of ntl Chichester (such consent not to be unreasonably withheld or delayed);

 

15.22.2           allow ntl Chichester and its advisers and agents to investigate the Relevant Claim (including whether and to what extent any amount is payable in respect thereof);

 

15.22.3           take such action, at the written request of ntl Chichester, as ntl Chichester may reasonably require to pursue a Relevant Claim, subject to ntl Chichester paying to NatTrans an amount equal to all costs and expenses (including reasonable legal costs) which it may thereby incur;

 

15.22.4           permit ntl Chichester, at its written request and subject to ntl Chichester agreeing to pay to NatTrans all costs and liabilities incurred in connection thereto, to have sole conduct of all proceedings relating to a Relevant Claim in the name of NatTrans and to appoint solicitors or other professional advisers; and

 

15.22.5           make available (and use its best endeavours to procure that any of its auditors, past or present, shall make available) to ntl Chichester and its advisers and agents all such information and assistance (including access to properties, management, records, papers, documents and data) as they may reasonably require in connection with a Relevant Claim.

 

Notwithstanding the provisions of this clause 15.22, there shall be no obligation on

 

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NatTrans to make any claim or take any action against ABC unless ABC initiates any claim against any member of the Core Group in connection with the ABC Contract or the ABC Settlement Agreement.

 

15.23         For the avoidance of doubt, the term “ABC Claim” shall not include any obligation of NatTrans incurred pursuant to (a) Paragraphs 3, 5, 6 and 7 of the ABC Settlement Agreement or any agreements that NatTrans shall enter into in connection therewith; (b) any matter arising from a breach by NatTrans of the ABC Settlement Agreement after Completion; or (c) any amendment to the ABC Settlement Agreement entered into without the prior written consent of ntl Chichester.

 

15.24         The Buyer undertakes that, on and after Completion, it shall not, and shall procure that no member of the Buyer Group shall, amend, modify, waive or revoke in any respect (or permit any of the same) any provision of the ABC Settlement Agreement without the prior written consent of ntl Chichester, and the Buyer and each member of the Buyer’s Group shall comply with the terms thereof.

 

15.25         NGL and the Sellers confirm that they do not have actual knowledge of any outstanding claims between ABC and any member of the ntl Group in relation to the ABC Contract.

 

15.26         The provisions of paragraphs 5, 7, 9, 10, 11, 13 and 14 of Schedule 6 shall apply in relation to any ABC Claim.

 

16.             USE OF NTL NAME AND LOGO

 

16.1           On or prior to Completion, the Sellers shall procure that the name of any Target Group Company which includes the words “NTL” or “National Transcommunications” shall be changed to a name notified to it in writing by the Buyer at least five (5) Business Days prior to Completion which does not include any such words (or any words which are similar or confusingly similar to any such words).

 

16.2           The Buyer shall procure that as soon as reasonably practicable after Completion and in any event within 6 months after such date:

 

16.2.1              the Target Group Companies shall cease in any manner whatsoever to use or display any trade or service marks, trade or service names, registered designs or logos used or owned by any member of the ntl Group (other than any to be transferred to the Broadcast Group pursuant to the Designated Transfer Agreements) including without limitation the “ntl:” and “National Transcommunications” logos (together, the “ntl Marks”) or any confusingly similar mark, design, name or logo; and

 

16.2.2              without prejudice to the generality of sub-clause 16.2.1, the Target Group Companies shall cease in any manner whatsoever to use or display the names

 

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“NTL” or “National Transcommunications” or the ntl Marks or any confusingly similar mark, design, name or logo.

 

16.3           The Buyer shall procure that throughout the period following Completion during which any of the Target Group Companies are using or displaying any of the names “NTL” or “National Transcommunications” or the ntl Marks in any way and for a period of 12 months thereafter the relevant Target Group Companies shall render to NGL such assistance as NGL may reasonably require (at NGL’s expense in respect of any third party costs required by NGL to be incurred) in connection with any actual or threatened actions, claims, demands or proceedings in relation to the use or display of the names “NTL” or “National Transcommunications” or the ntl Marks (including, without limitation, by way of providing oral or written evidence or swearing any affidavits).

 

16.4           From Completion NGL shall not, and shall procure that the ntl Group shall not, use the words “NTL” or “National Transcommunications” in connection with or in conjunction with the word “broadcast” (or any combination of such words which are similar or confusingly similar to “ntl:broadcast”) in relation to any trade or service marks, trade or service names, registered designs or logos PROVIDED THAT nothing in this clause shall prevent any member of the ntl Group using the phrases ntl broadband or ntl broadland.

 

16.5           At its own cost and expense NGL shall, and shall procure that ntl Group shall, set up links on the Broadcast Business’ homepages (jointly the “ntl:broadcast Sites”) which links shall direct any visitors of the ntl:broadcast Sites to such URL as the Buyer may (acting reasonably) specify (the “Broadcast Links”).  The Broadcast Links shall clearly indicate that the Broadcast Business is no longer associated with the ntl Group. The Broadcast Links shall be included in the internet presentation displayed when internet users first access the ntl:broadcast Sites.  NGL shall set up the Broadcast Links no later than on Completion and shall continue to feature the Broadcast Links for a period of 12 months following Completion.

 

17.             GUARANTEES

 

17.1           NGL unconditionally and irrevocably undertakes to the Buyer to procure the full, prompt and complete performance by ntl Chichester of all its obligations under this Agreement (and any other agreement or arrangement to be entered into by it in connection with this Agreement) and the due and punctual payment of all sums now and subsequently payable by ntl Chichester, arising out of or in connection with this Agreement (and any such other agreement or arrangement) when the same shall become due.

 

17.2           Buyer Holdco unconditionally and irrevocably undertakes to each of NGL and the Sellers (for themselves and as trustees for each other member of the ntl Group) to procure the full, prompt and complete performance by the Buyer and each other member of the Buyer Group (including, after Completion, the Broadcast Group) of all their respective obligations under this Agreement and any other agreement or arrangement to be entered into by it in

 

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connection with this Agreement (including, for the avoidance of doubt, the Separation Agreements and the Designated Core Business Transfer Agreements) and the NTSL Hive-Up Agreement and the due and punctual payment of all sums now and subsequently payable by the Buyer and any other member of the Buyer Group arising out of or in connection with this Agreement (and any such other agreement or arrangement) and the NTSL Hive-Up Agreement when the same shall become due.

 

17.3           The Buyer and Buyer Holdco agree that they shall with effect from Completion agree to provide guarantees in respect of the obligations of any member of the Broadcast Group in favour of:

 

17.3.1              any counterparty to a Designated Broadcast Contract, any landlord in respect of a lease of a Designated Broadcast Property or any counterparty to a licence relating to a Designated Broadcast Contractual Property (as such terms are defined in the Designated Broadcast Business Transfer Agreement) where necessary or desirable in order to obtain the transfer or novation of such Designated Broadcast Contract, Designated Broadcast Property or Designated Broadcast Contractual Property to a member of the Broadcast Group; and

 

17.3.2              in favour of any counterparty to a Shared Core Contract (as such term is defined in the Asset Sharing Agreement) in relation to any new agreement to be entered into by the Broadcast Group in respect of such contract as contemplated by the Asset Sharing Agreement.

 

17.4           NGL agrees that it shall with effect from Completion agree to provide, or procure that an appropriate member of the Core Group shall provide, guarantees in respect of the obligations of any member of the Core Group in favour of:

 

17.4.1              any counterparty to a Designated Core Contract, any landlord in respect of a lease of a Designated Core Property or any counterparty to a licence relating to a Designated Core Contractual Property (as such terms are defined in the Designated Core Business Transfer Agreements) where necessary or desirable in order to obtain the transfer or novation of such Designated Core Contract, Designated Core Property or Designated Core Contractual Property to a member of the Core Group; and

 

17.4.2              in favour of any counterparty to a Shared Broadcast Contract (as such term is defined in the Asset Sharing Agreement) in relation to any new agreement to be entered into by the Core Group in respect of such contract as contemplated by the Asset Sharing Agreement.

 

18.             LIABILITY OF THE SELLERS

 

18.1           Notwithstanding any other provision of this Agreement or any other agreement to be entered

 

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into pursuant to or in connection with this Agreement, no Seller shall be liable for or in respect of, or be required to procure the performance of, any obligations of the other Seller, nor shall there be any recourse to either of the Sellers for any representation, warranty, certification or breach made by the other Seller under or in connection with this Agreement or any other agreement to be entered into pursuant to or in connection with this Agreement.

 

18.2           Without prejudice to clause 4.3, the Buyer acknowledges that certain consents and waivers with respect to the Transaction (including, for the avoidance of doubt, Separation) may be required from third parties.  The Buyer agrees that neither NGL nor any Seller shall have any liability whatsoever to the Buyer, and no Warranty or covenant contained herein shall be breached or deemed breached, as a result of (i) any failure to obtain any such consents or waivers that may be required in connection with the Transaction; (ii) the termination of any contract, licence or permit as a result of the Transaction; or (iii) any action, claim or proceeding commenced or threatened by or on behalf of any person arising out of or relating to the failure to obtain any such consent or waiver or as a result of any such termination.  Notwithstanding the aforesaid, nothing in this clause 18.2 shall affect the amount of a claim that the Buyer may be entitled to bring against either of the Sellers for a breach of Warranty resulting from any failure by either Seller to disclose any such consent or waiver requirement or termination right which should have been disclosed against the Warranties.

 

19.             TERMINATION OF INTRA-GROUP AGREEMENTS

 

19.1           Save to the extent provided in or envisaged by this Agreement, any other agreement to be entered into pursuant to or in connection with this Agreement (including, without limitation, the Transaction Documents) or otherwise agreed between NGL and the Buyer, any agreement outside the ordinary course of trading between a member of the ntl Group and any member of the Broadcast Group shall be terminated with effect from Completion without liability to any party thereto, save for the following agreements:

 

19.1.1              the Transfer Agreement relating to the employees of NatTrans dated 30 June 1998 between (1) NatTrans and (2) NGL;

 

19.1.2              the Facilitation Deed of Agreement dated 18 October 2002 between (1) NatTrans and (2) NGL relating to the carriage of the Eurosport channel;

 

19.1.3              the Variation of Agreement for the Provision of Digital Additional Services dated 7 October 2002 between (1) Digital One Limited (2) NGL (3) NatTrans and (4) GWR Group Plc;

 

19.1.4              the Satellite Services Agreement dated 22 December 2003 (as subsequently varied on 22 December 2003) between (1) NatTrans and (2) NGL; and

 

19.1.5              the Letter dated 21 May 2004 relating to the provision of Studio Facilities at Feltham between (1) NatTrans and (2) NGL.

 

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19.2           Without prejudice to the generality of clause 19.1, upon Completion (and save as otherwise contemplated under this Agreement), NGL shall procure (in respect of the ntl Group) and the Buyer shall procure (in respect of the Broadcast Group) that each of:

 

19.2.1              the Agency and Management Agreement dated 24 December 1999 between (1) NatTrans, DTELS, Digital, Digital Radio and others and (2) NGL;

 

19.2.2              the Variation and Termination Agreement dated 13 September 2000 between (1) NatTrans, DTELS, Digital, Digital Radio and others and (2) NGL; and

 

19.2.3              the Sub-Agency Agreement dated 13 September 2000 between (1) NGL and (2) ntl Business Limited (as amended and varied from time to time),

 

shall be amended (in each case without liability) such that NatTrans, Scanners (Europe) Limited, Scanners Television Outside Broadcasts Limited, DTELS Limited, Digital and ntl Digital Radio Limited will cease to be party to either of such Agreements, and the Use of Properties Agreement dated 22 December 2000 between (1) NGL and (2) NatTrans; the Service Level Agreement dated 29 November 2000 between (1) TV Broadcast Group and (2) ntl Technology Limited; and the Deed of Trust dated 1 December 2004 between NGL, ntl Business Limited and NatTrans shall be terminated.

 

19.3           To the extent that parties to the agreements to be terminated as referred to in clause 19.1 are not party to this Agreement, NGL and the Buyer agree to procure that at or after Completion appropriate termination agreements are executed by the appropriate members of the ntl Group and the Buyer Group respectively.

 

20.             TRANSFER TO NEWCO

 

20.1           At any time before the Separation Condition is satisfied, ntl Chichester may elect to transfer some or all of the NatTrans Shares to a wholly owned member of the ntl Group (“Newco”) and, save as provided in this clause 20, nothing in this Agreement shall prevent this or give rise to any liability as a result of such transfer.

 

20.2           If ntl Chichester elects to transfer all of the NatTrans Shares to Newco pursuant to clause 20.1:

 

20.2.1              immediately prior to any such transfer, ntl Chichester shall procure that Newco shall execute a deed of adherence whereby all rights, obligations and liabilities of ntl Chichester under this Agreement outstanding at the time of such transfer shall be transferred to and assumed by Newco, including, without limitation, any liability (actual or contingent) under clause 15.8, the rights and obligations of ntl Chichester under the Put Option and the Call Option and the obligation of ntl Chichester to enter into the ntl Chichester Tax Deed at Completion (and the

 

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parties undertake to sign such documents and do such things as may be reasonably required to give effect to this clause 20.2);

 

20.2.2              upon execution of the deed of adherence referred to in clause 20.2.1, Newco shall be deemed to have given to the Buyer the warranties contained in clause 9.1 and the ntl Chichester Warranties as if the ntl Chichester Warranties had been given by Newco at the date of this Agreement by reference to the facts and circumstances then subsisting;

 

20.2.3              following such transfer, references to ntl Chichester in this Agreement, the ntl Chichester Tax Deed and the ntl Chichester Disclosure Letter shall, unless the context otherwise requires, be deemed to be references to Newco, and Newco shall be treated as a party to this Agreement and a Seller;

 

20.2.4              following such transfer, NGL shall be deemed to have given a guarantee in the terms of clause 17.1 in respect of Newco’s obligations under this Agreement and the ntl Chichester Tax Deed;

 

20.2.5              the ntl Chichester Warranties deemed to have been given by Newco shall be subject to the same disclosures and limitations as those originally given by ntl Chichester (including, without limitation, the disclosures contained in the ntl Chichester Disclosure Letter and the provisions of Schedule 6);

 

20.2.6              the ntl Chichester Tax Deed to be entered into by Newco shall be subject to all the same limitations as those contained in the ntl Chichester Tax Deed;

 

20.2.7              following such transfer, the Notice details contained in clause 23.4.2 shall be deemed to apply also to Newco;

 

20.2.8              the provisions of clause 15.11 shall apply to Newco (as well as ntl Chichester); and

 

20.2.9              the Warranty contained in paragraph 2 of Part I of Schedule 4 shall (in lieu of the existing Warranty) be deemed as at the date of this Agreement to have been given in the following form:-

 

“All of the NatTrans Shares will, at Completion, be legally and beneficially owned by Newco free from all Security Interests and such NatTrans Shares will be fully paid and properly and validly allotted and will represent the entire allotted and issued share capital of NatTrans at Completion”.

 

20.3           If ntl Chichester elects to transfer some (but not all) of the NatTrans Shares to Newco pursuant to clause 20.1:

 

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20.3.1              subject to clauses 20.3.2, 20.3.3 and 20.3.4, immediately prior to any such transfer, ntl Chichester shall procure that Newco shall execute a deed of adherence whereby it will (together with ntl Chichester) become entitled to the same rights as ntl Chichester, and it will assume (jointly and severally with ntl Chichester) the same obligations and liabilities (actual and contingent) of ntl Chichester, outstanding at the time of transfer under this Agreement including, without limitation, any rights and obligations of ntl Chichester under the Put Option and the Call Option and the obligation of ntl Chichester to enter into the ntl Chichester Tax Deed at Completion (and the other parties undertake to sign such documents and do such things as may be reasonably required to give effect to this clause 20.3.1) PROVIDED THAT in relation to any obligation relating to the transfer of the NatTrans Shares, Newco’s obligation shall only be in respect of the NatTrans Shares transferred to it and ntl Chichester’s obligation shall only be in respect of the remaining NatTrans Shares;

 

20.3.2              upon execution of the deed of adherence referred to in clause 20.3.1, Newco shall be deemed to have given to the Buyer the warranties contained in clause 9.1 in relation to Newco and (jointly and severally with ntl Chichester) the ntl Chichester Warranties as if the ntl Chichester Warranties had been given by Newco at the date of this Agreement by reference to the facts and circumstances then subsisting;

 

20.3.3              the NatTrans Consideration (and any adjustment to such consideration pursuant to clause 3 including any obligation to make a payment under clause 3.4) and any obligation to make a payment under clause 15.8 and any entitlement to receive a dividend pursuant to clause 3.3.1 shall be apportioned between Newco and ntl Chichester pro rata to the NatTrans Shares held by each of ntl Chichester and Newco immediately following such transfer;

 

20.3.4              the limitation on the liability of ntl Chichester in paragraph 3 of Schedule 6 shall be amended so that it is apportioned between ntl Chichester and Newco pro rata to the NatTrans Shares held by each of ntl Chichester and Newco immediately following such transfer;

 

20.3.5              the limitation on the liability of ntl Chichester in clause 4.4 of the ntl Chichester Tax Deed shall be amended so that it is apportioned between ntl Chichester and Newco pro rata to the NatTrans Shares held by each of ntl Chichester and Newco immediately following such transfer.

 

20.3.6              the limitation on the liability of the Sellers in paragraph 4.1.1 of Schedule 6 shall be amended such that neither ntl Chichester nor Newco shall be liable for any claim unless the aggregate of such claim, when taken together with the amount of all other claims against either of them, exceeds £10,000,000 (ten million pounds Sterling);

 

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20.3.7              the limitation on the liability of ntl Chichester under Clause 4.5 of the ntl Chichester Tax Deed shall be amended such that neither ntl Chichester nor Newco shall be liable for any Tax Claim (as defined therein) unless the aggregate of such claim when taken together with the amount of all other Tax Claims against either of them, exceeds £2,000,000 (two million pounds Sterling);

 

20.3.8              following such transfer, references to ntl Chichester in this Agreement, the ntl Chichester Tax Deed and the ntl Chichester Disclosure Letter shall, unless the context otherwise requires, be deemed to be references to each of ntl Chichester and Newco, and Newco shall be treated as a party to this Agreement and a Seller;

 

20.3.9              following such transfer, NGL shall be deemed to have given a guarantee in the terms of clause 17.1 in respect of Newco’s obligations under this Agreement and the ntl Chichester Tax Deed;

 

20.3.10           the ntl Chichester Warranties deemed to have been given by Newco shall be subject to the same disclosures and limitations as those originally given by ntl Chichester (including, without limitation, the disclosures contained in the ntl Chichester Disclosure Letter and the provisions of Schedule 6);

 

20.3.11           following any transfer of some (but not all) of the NatTans Shares to Newco, the aggregate liability of ntl Chichester and Newco in respect of the ntl Chichester Warranties and the ntl Chichester Tax Deed shall be no greater than the liability of ntl Chichester in respect thereof prior to any such transfer;

 

20.3.12           following such transfer, the Notice details contained in clause 23.4.2 shall be deemed also to apply to Newco;

 

20.3.13           the provisions of clause 15.11 shall apply to Newco (as well as ntl Chichester); and

 

20.3.14           the Warranty contained in paragraph 2 of Part 1 of Schedule 4 shall (in lieu of the existing Warranty) be deemed as at the date of this Agreement to have been given in the following form:-

 

“All of the NatTrans Shares will, at Completion, be legally and beneficially owned by Newco in respect of the NatTrans Shares transferred to it pursuant to clause 20.1 and by ntl Chichester in respect of the remaining NatTrans Shares free from all Security Interests and such NatTrans Shares will be fully paid and properly and validly allotted and will represent the entire allotted and issued share capital of NatTrans at Completion”.

 

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20.4           NGL and ntl Chichester agree that the transfer of any NatTrans Shares to Newco pursuant to clause 20.1 should not result in the Buyer Group being in a worse position under this Agreement or the ntl Chichester Tax Deed than it would have been in had such transfer not taken place.

 

21.             APPLICABLE LAW AND JURISDICTION

 

Governing Law

 

21.1           This Agreement and the rights and obligations of the parties shall be governed by and construed in accordance with the laws of England and Wales.

 

Dispute Resolution

 

21.2           Any dispute arising out of or in connection with this Agreement, including any question regarding the validity, existence or termination of this Agreement shall be finally resolved by arbitration in England, conducted in English, by three arbitrators pursuant to the rules of the London Court of International Arbitration (the “LCIA”) (the “Rules”) save that the Rules shall be amended in relation to the appointment of arbitrators and the disclosure of documents in any arbitration proceedings as set out below.

 

21.3           One arbitrator shall be nominated by NGL and the Sellers and one arbitrator shall be nominated jointly by the Buyer and the Buyer Holdco.  If the Buyer and the Buyer Holdco are unable to agree on the nomination of an arbitrator within 10 Business Days of notification the nominated arbitrator, the LCIA shall appoint an arbitrator on behalf of the Buyer and the Buyer Holdco.  The third arbitrator shall be selected by the two so chosen within 10 Business Days of the appointment of the second arbitrator, failing which the LCIA shall appoint the third arbitrator, who shall be the chairman of the arbitral tribunal.

 

21.4           Nothing in this clause 21 shall restrict the right which any party may have to seek injunctive relief in respect of a breach of this Agreement, in respect of which action for injunctive relief the parties submit to the exclusive jurisdiction of the English courts.

 

22.             GENERAL

 

Entire agreement

 

22.1           This Agreement (together with the other Transaction Documents) contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement and any such other document other than paragraphs 3.1.1 to 3.1.4, 3.5.5, 3.5.6, 4.8, 4.9, 6, 7 and 8 of the Confidentiality Agreement (insofar as they relate to Confidential Information (as such term is defined therein) in relation to the ntl Group (other than the

 

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Target Group)) which shall continue in force after the date of this Agreement.  Notwithstanding the aforesaid or the provisions of the Confidentiality Agreement, each of NGL and the Sellers hereby agrees that MCIG (acting in its capacity as responsible entity of Macquarie Communications Infrastructure Trust) and Macquarie Communications Infrastructure Limited, may disclose any Confidential Information required by law or any securities exchange (and not prohibited by law or any contract by which any member of the ntl Group or the Broadcast Group is bound) in connection with the publication of any prospectus for the raising of capital in connection with the Transaction (the “Prospectus”) or pre-prospectus publicity consistent with the Prospectus PROVIDED ALWAYS that if, in connection with the publication of the Prospectus or such pre-prospectus publicity, they wish to disclose Confidential Information which is not included in the draft dated 1 December 2004 of the Prospectus, they shall only be permitted to do so with the prior written consent of NGL (such consent not to be unreasonably withheld or delayed)

 

22.2           Each party acknowledges and agrees that:

 

22.2.1              it is not entering into this Agreement on the basis of, and is not relying and has not relied on, any statement or representation (whether negligent or innocent) or warranty or other provision (in any case whether oral, written, express or implied) made, given or agreed to by any person (whether a party to this Agreement or not) except those expressly contained in, repeated or referred to in this Agreement and the Ancillary Agreements and the only remedy or remedies available to the Buyer or the Sellers in respect of any misrepresentation or untrue statement made to it shall be a claim for breach of contract under this Agreement; and

 

22.2.2              this clause 22.2 shall not apply to any statement, representation or warranty made fraudulently or to any provision of this Agreement (including for the avoidance of doubt, the Warranties) and of any Ancillary Agreement which was induced by fraud for which the remedies shall be all those available under the law governing this Agreement regardless of the other terms of this Agreement.

 

22.3           Each of the Buyer and Buyer Holdco acknowledges and agrees that the express terms of this Agreement are in lieu of all warranties, conditions, terms, undertakings and obligations implied by statute, common law or otherwise all of which are hereby excluded to the fullest extent permitted by law.

 

22.4           This Agreement shall not be construed as creating any partnership or agency relationship between the parties.

 

Variations and waivers

 

22.5           No variation of this Agreement shall be effective unless made in writing signed by or on

 

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behalf of all the parties and expressed to be such a variation.

 

22.6           No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

 

Assignment

 

22.7           Save as otherwise expressly provided in this Agreement (including, without limitation, clause 20 hereof) no party shall be entitled to assign, transfer or create any trust in respect of the benefit or burden of any provision of this Agreement (or any other Transaction Document) without the prior written consent of any other party to the relevant document. For the avoidance of doubt, the Sellers shall be entitled to assign the benefit of the Put Option with the prior written consent of the Buyer and the Buyer shall be entitled to assign the benefit of the Call Option with the prior written consent of the Sellers.

 

22.8           The Buyer shall be entitled to assign the benefit of this Agreement to any bank or financial institution (a “Bank”) by way of security for the purpose of or in connection with the financing (whether in whole or in part) by any member of the Buyer’s Group at Completion of the acquisition of the Shares and the financing at Completion of any of the working capital or other requirements of the Buyer Group.  Any administrator or receiver or other person or entity appointed to enforce any of such security, may enter into any other assignments or transfers of any of the rights contained in this Agreement to any person who has acquired any member of the Buyer Group from such person or from the Buyer, Notwithstanding the aforesaid, neither the Bank nor any other person to whom any such rights are assigned or transferred by an administrator or a receiver or other person or entity entitled to enforce any of such security shall have rights under this Agreement which are greater than those which the Buyer would itself have had or be entitled to recover.  Notwithstanding any such assignment, the Sellers may, unless they receive written notice of the enforcement of the relevant security interest, deal with the Buyer in connection with all matters arising under this Agreement.

 

Effect of Completion

 

22.9           The provisions of this Agreement, insofar as the same shall not have been fully performed or expressly waived in writing at Completion, shall remain in full force and effect notwithstanding Completion.

 

Counterparts

 

22.10         This Agreement may be executed as two or more counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Agreement.

 

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Further assurance

 

22.11         Save as otherwise expressly provided in this Agreement and any other Agreement to be entered into pursuant to this Agreement, each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonably be required to give effect to this Agreement.

 

Third party rights

 

22.12         Save as otherwise expressly provided in this Agreement or where any provision is expressed to be for the benefit of any member of the ntl Group or of the Target Group which is not a party to this Agreement, no provisions of this Agreement which confer rights upon any third party shall be enforceable pursuant to the Contracts (Rights of Third Parties) Act 1999 by any such third party.

 

Compromise of claims

 

22.13         Notwithstanding that members of the ntl Group and the Target Group shall be entitled to enforce certain rights under this Agreement which have been given for their benefit, the parties to this Agreement may enter into any agreement or arrangement with the other parties varying or amending any of the terms of this Agreement, or comprising or settling any claim under this Agreement (including in respect of such rights) without reference to the interest of, or the consent of, the other members of the ntl Group or the Target Group not party to this Agreement.

 

No Set off

 

22.14         Except as otherwise expressly provided, all payments to be made by the parties arising out of or in connection with this Agreement (or any other agreement or arrangement required to be entered into by it in connection with this Agreement) shall be made in full, without set-off or counterclaim and without any deduction whatsoever except to the extent required by law.

 

Subsequent transfer of the Broadcast Group or the Digital Group

 

22.15         References in this Agreement (or any other agreement to be entered into pursuant to this Agreement) to the Buyer procuring that members of the Buyer Group take any action shall be deemed to include members of the Broadcast Group and the Digital Group with effect from Completion.  If any member of the Buyer Group shall subsequently sell any member of the Broadcast Group or the Digital Group or any material part of its assets, the Buyer undertakes to procure that, to the extent still applicable, the transferee shall enter into similar procurement obligations in favour of NGL and the other relevant members of the ntl Group but, for the avoidance of doubt, the Buyer shall not be released from any of its obligations

 

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under this Agreement.

 

Exclusivity

 

22.16         NGL and the Sellers confirm to the Buyers that they have terminated discussions with all third parties (other than the Buyer) relating to an acquisition (whether by shares or otherwise) of the Broadcast Business (or any material part of it) and they agree that they shall not, and they shall procure that each other member of the ntl Group and each of their respective directors, officers and employees shall not, solicit or encourage the submission of any proposals, indications of interest or offers for the acquisition (whether by shares or otherwise) of the Broadcast Business or any material part of it, or initiate or enter into any discussions with any person which may lead to any such proposals, indications of interest or offers being made, until the earliest to occur of:

 

22.16.1           Completion;

 

22.16.2           termination of this Agreement;

 

22.16.3           any allegation or any claim being made by the Buyer and/or Buyer Holdco that it has any grounds to terminate this Agreement in accordance with the provisions hereof; or

 

22.16.4           NGL and/or the Sellers reasonably believing that any of the Buyer Financing Documents or the Holdco Financing Documents will be terminated or otherwise become incapable of being completed in accordance with their respective terms.

 

23.             NOTICES

 

Form of notice

 

23.1           Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “Notice” for the purposes of this clause) shall be in English, in writing and signed by or on behalf of the person giving it.

 

Method of service

 

23.2           Service of a Notice must be effected by one of the following methods:

 

23.2.1              by hand to the relevant address set out in clause 23.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time; or

 

23.2.2              by facsimile transmission to the relevant facsimile number set out in clause

 

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23.4 and shall be deemed served on despatch, if despatched during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using the method described in clause 23.2.1 no later than the end of the next Business Day.

 

23.3           In clause 23.2 “during a Business Day” means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located.  References to “the start of a Business Day” and “the end of a Business Day” shall be construed accordingly.

 

Address for service

 

23.4           Notices shall be addressed as follows:

 

23.4.1              If to the Buyer or Buyer Holdco:

 

Level 30

Citypoint

1 Ropemaker Street

London EC2Y 9HD

Fax: +44 20 7065 2061

For the attention of: Company Secretary

 

23.4.2              If to NGL, ntl Chichester or Digital Holdco:

 

NTL House

Bartley Wood Business Park

Hook

Hampshire

RG27 9UP

Fax: +44 (0)1256 752 170

For the attention of: General Counsel

 

And to:

 

Travers Smith

10 Snow Hill

London  EC1A 2AL

Fax: +44 (0)20 7295 3500

For the attention of: Spencer Summerfield/Richard Spedding

 

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Change of details

 

23.5           A party may change its address for service provided that the new address is within the same country and that it gives each other party not less than 28 days’ prior notice in accordance with this clause 23.  Until the end of such notice period, service on either address shall be effective.

 

Right to serve

 

23.6           Nothing in this Agreement shall affect the right to serve process in any other manner permitted by law or the right to bring proceedings in any other jurisdiction for the purposes of the enforcement or execution of any judgment or other settlement in any other courts.

 

THIS AGREEMENT has been duly executed on the date first stated above.

 

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SCHEDULE 1

 

TARGET COMPANIES

 

PART I

 

BROADCAST GROUP

 

 

Name:

 

National Transcommunications Limited

 

 

 

Incorporated:

 

2 April 1990

 

 

 

Registered in England under No.:

 

2487597

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£30,000,200

 

 

comprising 30,000,200 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£30,000,101

 

 

comprising 30,000,101 ordinary shares of £1 each, all of which are held by ntl (Chichester) Limited

 

 

 

Directors:

 

Robert Gale

 

 

Robert Mackenzie

 

 

 

Secretaries:

 

Robert Mackenzie

 

 

Gillian James

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

Security Deposit Deed dated 7 August 2000 in favour of George David Pick, Alison Jeanne Pick, Carol Elizabeth Pick, Ann Louise Pick and John Stephen Richard Pick

 

 

Charge of deposit dated 29 September 2000 in favour of The Royal Bank of Scotland PLC

 

 

Debenture dated 13 April 2004 in favour of Credit Suisse First Boston

 

 

Mortgage dated 13 April 2004 in favour of Credit Suisse First Boston

 

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Standard Security dated 14 April 2004 in favour of Credit Suisse First Boston as security trustee for the secured parties

 

 

Standard Security dated 14 April 2004 in favour of Credit Suisse First Boston as security trustee for the secured parties

 

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Name:

 

Scanners (Europe) Limited

 

 

 

Incorporated:

 

6 July 1993

 

 

 

Registered in England under No.:

 

2833712

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£1,000,000

 

 

comprising 1,000,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£7,500

 

 

comprising 7,500 ordinary shares of £1 each, all of which are held by National Transcommunications Limited

 

 

 

Directors:

 

ntl Directors Limited

 

 

ntl Secretaries Limited

 

 

 

Secretary:

 

ntl Secretaries Limited

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

Debenture dated 13 April 2004 in favour of Credit Suisse First Boston

 

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Name:

 

Scanners Television Outside Broadcasts Limited

 

 

 

Incorporated:

 

25 June 1997

 

 

 

Registered in England under No.:

 

3391685

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£1,000,000

 

 

comprising 1,000,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£5,000

 

 

comprising 5,000 ordinary shares of £1 each, all of which are held by Scanners (Europe) Limited

 

 

 

Directors:

 

ntl Directors Limited

 

 

ntl Secretaries Limited

 

 

 

Secretary:

 

ntl Secretaries Limited

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

Debenture dated 13 April 2004 in favour of Credit Suisse First Boston

 

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PART II

 

DIGITAL GROUP

 

Name:

 

ntl Digital Limited

 

 

 

Incorporated:

 

1 April 1998

 

 

 

Registered in England under No.:

 

3538787

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£1,000

 

 

comprising 1,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£13

 

 

comprising 13 ordinary shares of £1 each, all of which are held by ntl Digital Ventures Limited

 

 

 

Directors:

 

ntl Directors Limited

 

 

ntl Secretaries Limited

 

 

 

Secretary:

 

ntl Secretaries Limited

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

None

 

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Name:

 

ntl Digital Radio Limited

 

 

 

Incorporated:

 

2 June 1998

 

 

 

Registered in England under No.:

 

3573732

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£1,000

 

 

comprising 1,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£2

 

 

comprising 2 ordinary shares of £1 each, all of which are held by ntl Digital Limited

 

 

 

Directors:

 

ntl Directors Limited

 

 

ntl Secretaries Limited

 

 

 

Secretary:

 

ntl Secretaries Limited

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

None

 

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PART III

 

DIGITAL JOINT VENTURE COMPANIES

 

Name:

 

SDN Limited

 

 

 

Incorporated:

 

24 January 1997

 

 

 

Registered in England under No.:

 

3309912

 

 

 

Registered Office:

 

1st Floor, Bedford House, 2-3 Bedford Street, London WC2E 9HD, UK

 

 

 

Authorised Share Capital:

 

£4,336,494.60

 

 

comprising 43,364,946 ordinary shares of 10p each

 

 

 

Issued Share Capital:

 

£4,336,494.60

 

 

comprising 43,364,946 ordinary shares of 10p each which are held as follows:

 

 

 

 

 

ntl Digital Limited -14,516,093

 

 

 

 

 

S4C Digital Media Limited - 14,516,093

 

 

 

 

 

United Media & Information Limited - 14,332,760

 

 

 

Directors:

 

David Jones

 

 

William Innes

 

 

Charles Gregson

 

 

Margaret Carver

 

 

Peter Douglas

 

 

 

Secretary:

 

Tracey Harding

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

Debenture dated 26 March 1999 in favour of The Law Debenture Trust Corporation PLC

 

 

 

 

 

Rent Deposit Deed dated 26 January 2001 in favour of BNY Trust Company Limited (as trustee of the Merrill Lynch

 

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Property Fund)

 

 

 

 

 

Debenture dated 7 July 2003 in favour of the Governor and Company of the Bank of Scotland

 

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Name:

 

Digital One Limited

 

 

 

Incorporated:

 

25 March 1998

 

 

 

Registered in England under No.:

 

3537636

 

 

 

Registered Office:

 

1 Passage Street, Bristol BS2 0JF, UK

 

 

 

Authorised Share Capital:

 

£5,000,000

 

 

comprising 5,000,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£1,350,000

 

 

comprising 1,350,000 ordinary shares of £1 each which are held as follows:

 

 

 

 

 

GWR Digital Limited - 855,009

 

 

 

 

 

ntl Digital Radio Limited - 494,991

 

 

 

Directors:

 

Ralph Bernard

 

 

Stephen Holebrook

 

 

Hugh Howard

 

 

Thomas O’Connor

 

 

Jeremy Thorp

 

 

Simon Ward

 

 

 

 

 

 

Secretary:

 

Gregory Watson

 

 

 

Auditors:

 

KPMG Audit Plc

 

 

 

Accounting Reference Date:

 

31 March

 

 

 

Charges:

 

None

 

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Name:

 

ntl Radio Services Limited

 

 

 

Incorporated:

 

11 August 1999

 

 

 

Registered in England under No.:

 

3823436

 

 

 

Registered Office:

 

NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP, UK

 

 

 

Authorised Share Capital:

 

£1,000

 

 

comprising 1,000 ordinary shares of £1 each

 

 

 

Issued Share Capital:

 

£1,000

 

 

comprising 1,000 ordinary shares of £1 each which are held as follows:

 

 

 

 

 

ntl Digital Radio Limited - 750

 

 

 

 

 

GWR Radio Services Limited - 250

 

 

 

Directors:

 

Dirk Anthony

 

 

Robert Mackenzie

 

 

 

Secretaries:

 

Robert Mackenzie

 

 

Gillian James

 

 

 

Auditors:

 

Ernst & Young LLP

 

 

 

Accounting Reference Date:

 

31 December

 

 

 

Charges:

 

None

 

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SCHEDULE 2

 

THE CONDITIONS

 

Separation

 

1.                                               Separation being implemented in accordance with Clause 8 and Schedule 7, Broadcast Covenant Release being obtained and 24 hours elapsing thereafter.

 

Third Party Consents

 

2.                                               The receipt of written consent from the appropriate contract counterparty or landlord in respect of those contracts or property interests listed in Annexure 3 to the transfer of such contracts or property interests in accordance with Separation.

 

Merger Control

 

3.1                                        To the extent that the Transaction or any matter arising from or in connection with it (any such aspect of the Transaction (both individually and collectively) being referred to in this paragraph 3 as the “Sale and Purchase”) constitutes a “concentration with a Community dimension” within the meaning of the ECMR, the EC Commission declaring, in terms satisfactory to the parties in their reasonable opinion, that such concentration is compatible with the common market pursuant to Article 6(1)(b) of the ECMR (or being deemed to have done so under Article 10(6) of the ECMR) and, in the event that a request has been made by a member state under Article 9(2) of the ECMR:

 

(a)                                           the EC Commission indicating that it does not intend to refer the Sale and Purchase to a competent authority of such member state in accordance with Article 9 of the ECMR; or

 

(b)                                          if a referral is made to a competent authority in the United Kingdom in accordance with Article 9 of the ECMR, the OFT or the Secretary of State, as appropriate, indicating that it/she has decided not to refer the Sale and Purchase to the Competition Commission; or if the OFT or the Secretary of State, as appropriate, indicates that it/she intends to refer the Sale and Purchase to the Competition Commission unless suitable undertakings are provided by the Buyer (or any member of the Buyer Group) or any Seller or any other person of whom such an undertaking may be requested, undertakings acceptable to the parties or such other person (as the case may be) in each case in its reasonable opinion (subject to compliance with its obligations under clause 4 of this Agreement) are given by the parties and any such other person; or

 

(c)                                           if such a referral is made to any other competent authority, such other

 

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competent authority announcing the findings of its examination of the matters referred to it or providing such other indication of its position as may, in the reasonable opinion of the parties (subject to compliance with their obligations under clause 4 of this Agreement) be considered satisfactory.

 

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SCHEDULE 3

 

COMPLETION OBLIGATIONS

 

PART I - OBLIGATIONS OF NTL CHICHESTER

 

1.                                               DELIVERY OBLIGATIONS

 

ntl Chichester shall deliver or procure the delivery of or, in the case of paragraph 1.3, make available to the Buyer:

 

Board Resolution

 

1.1                                        certified copies of board resolutions of each of NGL and ntl Chichester authorising the execution and performance by NGL or ntl Chichester (as the case may be) of its obligations under this Agreement and each of the documents to be executed by NGL or ntl Chichester (as the case may be) pursuant to this Agreement;

 

Share transfers, statutory books etc.

 

1.2                                        a form of transfer of the NatTrans Shares executed by it in favour of the Buyer (or a person nominated by the Buyer), and the share certificates relating to the NatTrans Shares;

 

1.3                                        the certificate of incorporation and all certificates of incorporation on change of name, any common seal, the statutory books and other record books of each Broadcast Group Company;

 

1.4                                        the certificates in respect of all issued shares in the Broadcast Group Companies other than NatTrans and duly executed transfers in respect of such shares which are not at Completion registered in the name of a Broadcast Group Company, in favour of the Buyer (or persons nominated by the Buyer);

 

Resignations

 

1.5                                        resignation letters in the approved terms executed as deeds by the directors and the company secretary of each Broadcast Group Company;

 

1.6                                        a copy of an unqualified letter of resignation (to become effective at Completion) from the auditors of each Broadcast Group Company in the form prescribed by section 394 of the Act (the original of such letter to be deposited by ntl Chichester at the registered office of the relevant company);

 

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Banking arrangements

 

1.7                                        certified copies of releases of guarantees, indemnities and security received from the Facility Agent and the Security Trustee (as such terms are defined in the Senior Credit Facility) under the Senior Credit Facility in so far as necessary to effect Broadcast Covenant Release;

 

Other documents

 

1.8                                        the ntl Chichester Tax Deed executed by ntl Chichester;

 

1.9                                        copies of the final form of the Separation Agreements, duly executed by the parties thereto;

 

Miscellaneous

 

1.10                                 a copy of the Certificate of Incorporation on a Change of Name changing the name of NatTrans in accordance with clause 16.1;

 

1.11                                 certified copies of (i) the memorandum and articles of association of each member of the Broadcast Group; and (ii) the following material licences:

 

1.11.1                       Licence granted to NTL Radio Services Limited by the Radiocommunications Agency on 5 November 1999 under Part II of the Broadcasting Act 1996 to provide national digital sound programme services;

 

1.11.2                       Licence granted to SDN Limited by the Independent Television Commission on 26 May 1998 under Part 1 of the Broadcasting Act 1996 to provide a Multiplex Service (as amended);

 

1.11.3                       Licence granted to Digital One on 11 November under Part II of the Broadcasting Act 1996 to provide a digital multiplex radio service (as amended); and

 

1.11.4                       Licence granted to NatTrans by the Jersey Competition Regulatory Authority on 3 March 2003 under the Telecommunications (Jersey) Law 2002 to establish, operate and maintain a telecommunications system and provide telecommunications services in the Bailwick of Jersey.

 

2.                                               PROCUREMENT OBLIGATIONS

 

ntl Chichester agrees with the Buyer to procure that at Completion:

 

Board resolutions

 

2.1                                        (with the co-operation of the Buyer) board resolutions of each member of the Broadcast Group are passed:

 

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2.1.1                                                sanctioning for registration (subject, where necessary, to due stamping) the transfers in respect of the NatTrans Shares and any shares referred to in paragraph 1.4 above;

 

2.1.2                                                appointing such individuals as are notified to ntl Chichester by the Buyer no less than five (5) Business Days prior to Completion to be the directors and the secretary of each Broadcast Group Company and accepting the resignations of the directors and secretary referred to above; and

 

2.1.3                                                changing the registered office of each Broadcast Group Company to such address as is notified to ntl Chichester by the Buyer no less than five (5) Business Days prior to Completion.

 

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PART II - OBLIGATIONS OF DIGITAL HOLDCO

 

1.                                               DELIVERY OBLIGATIONS

 

Digital Holdco shall deliver or procure the delivery of or, in the case of paragraph 1.3, make available to the Buyer:

 

Board Resolution

 

1.1                                        certified copies of board resolutions of Digital Holdco authorising the execution and performance by it of its obligations under this Agreement and each of the documents to be executed by it pursuant to this Agreement;

 

Share transfers, statutory books etc.

 

1.2                                        a form of transfer of the Digital Shares executed by Digital Holdco in favour of the Buyer (or a person nominated by the Buyer), and the share certificates relating to the Digital Shares;

 

1.3                                        the certificate of incorporation and all certificates of incorporation on change of name, any common seal, the statutory books and other record books of each Digital Group Company;

 

1.4                                        the certificates in respect of all issued shares in ntl Digital Radio Limited and duly executed transfers in respect of such shares not at Completion registered in the name of Digital or another member of the Digital Group in favour of the Buyer (or persons nominated by the Buyer);

 

1.5                                        the certificates in respect of all the shares in the Digital Joint Venture Companies held by the Digital Group;

 

Resignations

 

1.6                                        resignation letters in the approved terms executed as deeds by the directors and the company secretary of each Digital Group Company and those directors of any of the Digital Joint Venture Companies appointed by any member of the ntl Group;

 

1.7                                        a copy of an unqualified letter of resignation (to become effective at Completion) from the auditors of each Digital Group Company in the form prescribed by section 394 of the Act (the original of such letter to be deposited by Digital Holdco at the registered office of the relevant company);

 

Other documents

 

1.8                                        the Digital Holdco Tax Deed executed by Digital Holdco; and

 

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Miscellaneous

 

1.9                                        copies of Certificates of Incorporation on a Change of Name changing the name of each of ntl Digital Limited and ntl Digital Radio Limited in accordance with clause 16.1.

 

2.                                               PROCUREMENT OBLIGATIONS

 

Digital Holdco agrees with the Buyer to procure that at Completion:

 

Board resolutions

 

2.1                                        (with the co-operation of the Buyer) board resolutions of each member of the Digital Group are passed:

 

2.1.1                                                sanctioning for registration (subject, where necessary, to due stamping) of the transfers in respect of the Digital Shares and any shares referred to in paragraph 1.4 above;

 

2.1.2                                                appointing such individuals as are notified to Digital Holdco by the Buyer no less than five (5) Business Days prior to Completion to be the directors and the secretary of each Digital Group Company and accepting the resignations of the directors and secretary referred to above; and

 

2.1.3                                                changing the registered office of each Digital Group Company to such address is as notified to Digital Holdco by the Buyer no less than five (5) Business Days prior to Completion.

 

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PART III - OBLIGATIONS OF THE BUYER

 

1.                                               The Buyer shall:

 

1.1                                        pay, or procure the payment of, the NatTrans Consideration (both as to amount and currency denomination) set out in clause 3.1 and as adjusted pursuant to clause 3.3 in cleared funds to such bank account as ntl Chichester by prior written notice shall specify no less than three (3) Business Days prior to the Completion Date;

 

1.2                                        pay, or procure the payment of, the Digital Consideration (both as to amount and currency denomination) set out in clause 3.1 in cleared funds to such bank account as Digital Holdco by prior written notice shall specify no less than three (3) Business Days prior to the Completion Date;

 

1.3                                        deliver to the Sellers’ Solicitors certified copies of board resolutions of each of the Buyer and Buyer Holdco authorising the execution and performance by the Buyer or Buyer Holdco (as the case may be) of its obligations under this Agreement and each of the documents to be executed by the Buyer or Buyer Holdco (as the case may be) pursuant to this Agreement;

 

1.4                                        deliver to the Sellers’ Solicitors duly signed Forms 288 in respect of the individuals to be appointed at Completion as the directors and the company secretary of each Broadcast Group Company, Digital Group Company and any Digital Joint Venture Company; and

 

1.5                                        deliver to the Sellers’ Solicitors counterparts of the Tax Deeds executed by the Buyer.

 

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SCHEDULE 4

 

NTL CHICHESTER WARRANTIES

 

Part:

 

 

 

 

 

I

 

Capacity and Shares

 

 

 

II

 

Constitution

 

 

 

III

 

Accounts

 

 

 

IV

 

Assets

 

 

 

V

 

Liabilities

 

 

 

VI

 

Trading arrangements

 

 

 

VII

 

Compliance and litigation

 

 

 

VIII

 

Insolvency

 

 

 

IX

 

Intellectual property

 

 

 

X

 

Information technology

 

 

 

XI

 

Employees

 

 

 

XII

 

Pensions

 

 

 

XIII

 

Property

 

 

 

XIV

 

Environment

 

 

 

XV

 

Tax

 

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PART I

 

CAPACITY AND SHARES

 

1.                                      SCHEDULE

 

The facts stated in Part I of Schedule 1 (Broadcast Group) are correct in all material respects.

 

2.                                      OWNERSHIP OF NATTRANS SHARES

 

All of the NatTrans Shares are and will, at Completion, be legally and beneficially owned by ntl Chichester free from all Security Interests and such NatTrans Shares will be fully paid and properly and validly allotted and represent the entire allotted and issued share capital of NatTrans at Completion.

 

3.                                               SUBSIDIARY UNDERTAKINGS

 

The shares of each member of the Broadcast Group (other than NatTrans) will, at Completion, be legally and beneficially owned by NatTrans or another member of the Broadcast Group free from all Security Interests and such shares will be fully paid and properly and validly allotted and represent the entire allotted and issued share capital of such member of the Broadcast Group at Completion.

 

4.                                      RIGHTS IN RELATION TO THE SHARE CAPITAL OF BROADCAST GROUP COMPANIES

 

4.1                               Save as contemplated by this Agreement, no person has or will, at Completion, have the right (whether exercisable now or in the future and whether contingent or not) to call for the allotment, conversion, issue, registration, sale or transfer, amortisation or repayment of any share capital or any other security giving rise to a right over, or an interest in, the share capital of any Broadcast Group Company under any option or other agreement (including conversion rights and rights of pre-emption).

 

4.2                                        No Broadcast Group Company:

 

4.2.1                             has or will, at Completion, have any interest in, or have agreed to acquire, any share capital or other security of the type referred to in paragraph 4.1 of any other company (wherever incorporated) other than as set out in Part I of Schedule 1; or

 

4.2.2                             has or has had in the last three years any associate (being an entity that falls to be treated as such for the purposes of FRS 9).

 

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5.                                      INTRA-GROUP AGREEMENTS

 

Save as contemplated by this Agreement (including, for the avoidance of doubt, Schedule 7), no member of the Broadcast Group will at Completion be a party to any legally binding agreement with any obligations which are material to the Broadcast Group and which have not been fulfilled, with any member of the ntl Group (excluding any other member of the Broadcast Group, any member of the Digital Group or any Digital Joint Venture Company).

 

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PART II

 

CONSTITUTION

 

1.                                      MEMORANDUM AND ARTICLES OF ASSOCIATION

 

The copy of the memorandum and articles of association of each Broadcast Group Company contained in the Data Room Documents is true and complete in all material respects and sets out in full the rights and restrictions attaching to the share capital of such Broadcast Group Company.

 

2.                                      STATUTORY BOOKS

 

The statutory books and minute books of each member of the Broadcast Group will at Completion be up to date and properly kept in all material respects and in its possession or control and, so far as the Seller is aware, no member of the ntl Group has received any written notice (which is current) that any of them is incorrect or incomplete in any material respect or should be rectified.

 

3.                                               FILINGS

 

All resolutions, annual returns and other documents of a similar nature required to be delivered to the Registrar of Companies or to any other governmental or regulatory body or to any local authority by any member of the Broadcast Group have in all material respects been properly prepared and duly filed and are true and complete in all material respects.

 

4.                                      COMPLIANCE

 

Due compliance has been made and will be made up to Completion in all material respects with all the provisions of the Act in connection with:

 

4.1                                        the formation of each member of the Broadcast Group;

 

4.2                                        any allotment, issue, purchase or redemption of shares, debentures or other securities in each member of the Broadcast Group;

 

4.3                                        any reduction of the authorised or issued share capital of any member of the Broadcast Group;

 

4.4                                        any amendment to the memorandum or articles of association of any member of the Broadcast Group;

 

4.5                                        the passing of any resolutions by any member of the Broadcast Group; and

 

4.6                                        the payment of any dividends by any member of the Broadcast Group.

 

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5.                                               POWERS OF ATTORNEY

 

Other than under a contract entered into in the ordinary course of business or pursuant to the Senior Credit Facility, no Broadcast Group Company has given a power of attorney which is still outstanding.

 

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PART III

 

ACCOUNTS

 

1.                                               GENERAL

 

The Broadcast Accounts have been prepared in accordance with US GAAP (in particular Staff Accounting Bulletin No.54 which prescribes the principles of carve-out accounting) and not on a UK statutory basis, have been audited under auditing standards generally accepted in the United States and fairly represent in all material respects the financial position and results of operations of the ntl:Broadcast division as at the date and for the period to which they relate, on the basis of preparation to set out therein.

 

2.                                               BROADCAST INTERIM ACCOUNTS

 

Having regard to the purpose for which they were prepared (it being acknowledged that the Broadcast Interim Accounts were prepared under US GAAP and in particular based on Staff Accounting Bulletin No. 54 which prescribes the principles of carve-out accounting, and not on a UK statutory basis), the Broadcast Interim Accounts are not misleading in any material respect.  The Broadcast Interim Accounts were prepared (so far as reasonably practicable given the nature of management accounts) on a basis consistent with the basis of preparation of the Broadcast Accounts, subject to normal year-end adjustments and their lacking certain footnotes and other presentational items.

 

3.                                               BUSINESS SINCE THE BROADCAST INTERIM ACCOUNTS DATE

 

3.1                                        Since the Broadcast Interim Accounts Date:

 

3.1.1                             there has been no material adverse change in the financial or, so far as the Seller is aware, the trading position of the Broadcast Business (taken as whole);

 

3.1.2                             other than in relation to Separation, the Broadcast Business has in all material respects carried on its trading in the ordinary and usual course;

 

3.1.3                             no ntl Group Company has incurred any liability in connection with the Broadcast Business, in excess of £5 million outside the ordinary course of business;

 

3.1.4                             no ntl Group Company has acquired or agreed to acquire, in connection with the Broadcast Business, any asset having a fair market value in excess of £5 million otherwise than in the ordinary and usual course of trading or in connection with Separation;

 

3.1.5                             no ntl Group Company has disposed of or agreed to dispose of, in connection with the Broadcast Business, any asset having a fair market value in excess of £10 million otherwise than in the ordinary course of business or in connection with Separation;

 

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3.1.6                             no distribution of capital or income has been or agreed to be declared, made or paid by any Broadcast Group Company; and

 

3.2                                        Since 31 December 2002, no Broadcast Group Company has repaid or redeemed any share or loan capital or agreed to do so.

 

4.                                               ACCOUNTING RECORDS

 

Other than books of account which are the subject of clause 15.3, all material books of account of each member of the Broadcast Group will, at Completion, be in its possession or under its control.

 

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PART IV

 

ASSETS

 

1.                                               OWNERSHIP

 

At Completion, the Broadcast Group will either own all of the material assets owned by the ntl Group relating to the Broadcast Business, or have a contractual right to the legal title to such assets under the terms and conditions of the Designated Broadcast Business Transfer Agreement or have a right to use such assets or be provided services in respect of such assets on the terms of the Ancillary Agreements.

 

2.                                               TITLE

 

No Security Interest or option is or will at Completion be outstanding over the whole or any part of the assets then owned by the Broadcast Group (other than Permitted Security Interests, Security Interests listed in Part 1 of Schedule 1 (which, save as expressly set out in the ntl Chichester Disclosure Letter, will be released in accordance with the Broadcast Covenant Release) or any Security Interest outstanding over any unidentified Designated Core Asset as a result of legal title to such asset not having transferred to the Core Group under the terms of the Designated Core Business Transfer Agreements by the Completion Date).

 

3.                                               DEBTS

 

Other than in the ordinary course of business, none of the debts relating to the Broadcast Business has been factored, sold or discounted nor has there been any agreement to do so.

 

4.                                               INSURANCE

 

4.1                                        A list of Current Insurance Policies and their material particulars (including any deductibles and insured parties) is annexed to the ntl Chichester Disclosure Letter.  Such list is complete and accurate in all material respects.  In respect of the Current Insurance Policies:

 

4.1.1                             all premiums and related insurance premium taxes have been duly paid to date;

 

4.1.2                             so far as the Seller is aware, all the policies are in full force and effect and are not voidable; and

 

4.1.3                             so far as the Seller is aware, there are no circumstances which might reasonably be expected to render any of the Current Insurance Policies void or unenforceable for illegality or otherwise or enable any insurer to refuse payment of all or part of any claim under any such policy and for the period of 3 years prior to the date of the Agreement no insurer has declined to accept any claim or circumstance or reserved its right or threatened to do so.

 

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4.2                                        The ntl Chichester Disclosure Letter provides accurate material particulars of:

 

4.2.1                             all insurance claims made in relation to the Broadcast Business having an anticipated value in excess of £500,000 and settled during the past three years; and

 

4.2.2                             all outstanding claims and, so far as the Seller is aware, circumstances which under the Current Insurance Policies are reasonably likely to give rise to any claim having an anticipated value in excess of £500,000 and all such outstanding claims and circumstances have been notified to the insurer in accordance with the terms of the relevant insurance policy.

 

5.                                               PLANT AND MACHINERY ETC.

 

The material items of machinery, broadcasting and transmission equipment and plant owned or used in connection with the Broadcast Business have been adequately serviced and maintained in accordance with normal industry practice taking into account the expected useful life of the same, save where the failure to do so would not have a material adverse effect on the Broadcast Business (taken as a whole).

 

6.                                               VULNERABLE PRIOR TRANSACTIONS

 

So far as the Seller is aware, no Broadcast Group Company nor member of the Core Group has at any relevant time been party to a transaction at an undervalue (within the meaning of section 238 of the Insolvency Act 1986) nor has it given or received any preference (within the meaning of section 239 of the Insolvency Act 1986) in either case during the two years preceding the date of this Agreement, in each case in so far as it relates to the Broadcast Business.

 

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PART V

 

LIABILITIES

 

1.                                               INDEBTEDNESS

 

No member of the Broadcast Group will, at Completion, have outstanding any Indebtedness.

 

2.                                               GUARANTEES

 

There is not outstanding any guarantee given:

 

2.1                                        by any Broadcast Group Company in respect of any material obligation of any other person (other than in respect of the obligations of another Target Group Company); or

 

2.2                                        so far as the Seller is aware by any member of the ntl Group (other than a Target Group Company) in respect of any material obligation of a Broadcast Group Company.

 

3.          &#