Exhibit 10.11
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Dated January 10, 2003
(1) NTL INCORPORATED
(TO BE RENAMED
NTL EUROPE, INC.)
(2) NTL COMMUNICATIONS CORP.
(TO BE RENAMED
NTL INCORPORATED)
DEMERGER AGREEMENT
THIS AGREEMENT is made on January 10, 2003
BETWEEN:
(1) NTL INCORPORATED, to be renamed NTL Europe, Inc, a corporation
incorporated in the State of Delaware, whose principal office will,
following the Effective Date, be located at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Euroco"); and
(2) NTL COMMUNICATIONS CORP., to be renamed NTL Incorporated, a
corporation incorporated in the State of Delaware, whose principal
office is located at 110 East 59th Street, 26th Floor, New York, New
York 10022, USA ("New NTL").
WHEREAS:
(A) Euroco and certain of its subsidiaries (including New NTL) filed a
joint reorganisation plan under Chapter 11 of the United States
Bankruptcy Code on May 8, 2002 which was amended on May 24, 2002 and
further amended on July 15, 2002, and modified on September 5, 2002
(as further amended, modified, or supplemented, the "Plan").
(B) On September 5, 2002, the United States Bankruptcy Court for the
Southern District of New York entered an order confirming the Plan.
(C) Pursuant to the Plan, it is proposed that Euroco and its subsidiaries
will divide their current businesses and investments into two new
groups, the Euroco Group and the New NTL Group, the holding companies
for which will be Euroco and New NTL, respectively.
(D) During the period prior to the filing of the Plan, the various
members of the Euroco Group entered into various contracts in
relation to the acquisition of Assets which, on the Effective Date,
will be held within the New NTL Group (collectively, but excluding
the contracts listed in the Schedule to this Agreement, the
"Contracts"). The Euroco Group has the benefit of certain warranties
and representations under the Contracts (the "Contract Rights") and
the benefit of covenants to pay or indemnities under the Contracts
(the "Received Covenants") and may be liable under certain other
covenants to pay or indemnities under the Contracts (the "Given
Covenants"), in each case with respect to the Assets held within the
New NTL Group on the Effective Date. The parties intend that the New
NTL Group should have the benefit of the Contract Rights and the
Received Covenants, and the burden of the Given Covenants with effect
from the Effective Date.
IT IS AGREED AS FOLLOWS, with effect from the Effective Date:
1. DEFINITIONS
1.1 In this Agreement, the following terms shall, unless the context
otherwise requires, have the following meanings:
Asset means and includes companies,
limited partnerships, general
partnerships, limited
liability companies, limited
liability partnerships, joint
ventures, associations,
trusts, trust companies,
other entities whether or not
legal entities, businesses,
land, buildings, chattels,
contracts, agreements, stock
and all other assets
whatsoever, and the word
"Assets" shall be construed
accordingly;
Effective Date the meaning ascribed to it in
the Plan;
Euroco Group Euroco and all its subsidiary
undertakings immediately
following the Effective Date;
Group Company a subsidiary undertaking
which will form part of
either the New NTL Group or
the Euroco Group, as the
context requires, and the
phrase "Group Companies"
shall be construed
accordingly;
in relation to Assets in relation to or in connection
with the acquisition and/or
sale of Assets;
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New NTL Group New NTL and all its
subsidiary undertakings
immediately following the
Effective Date;
personnel in respect of either party,
that party's directors and
other officers, employees,
contractors, sub-contractors
or agents and those of that
party's Group Companies;
Plan the meaning given to it in
Recital A.
2. DECLARATION OF TRUST OVER CONTRACT RIGHTS
In consideration for New NTL giving the covenant contained in
clause 3.1 of this Agreement, Euroco hereby declares, and shall
procure that each of its Group Companies declares, with effect
from the Effective Date and in favour of New NTL, a trust of the
benefit of any and all Contract Rights and Received Covenants.
New NTL shall have the right to assign any benefit under this
trust to its Group Companies.
3. UNDERTAKINGS IN RELATION TO GIVEN COVENANTS
3.1 Subject to each of the Indemnified Persons (as defined below)
complying with their obligations under this clause 3 as parties
to, or as if they were parties to, this agreement, New NTL hereby
covenants and agrees to indemnify Euroco and its directors,
officers, employees, and agents and their respective successors
and assigns (together, the "Indemnified Persons") and to hold
them harmless from and against any and all losses, claims,
liabilities, obligations, fines, penalties, damages and expenses,
including reasonable legal fees and any costs of enforcement of
this clause (collectively, "Losses") incurred by any of them
resulting from or arising out of any Given Covenants which Euroco
or any of its Group Companies has given PROVIDED THAT no
Indemnified Person may claim under this clause 3.1 if he, she or
it has done any act (other than in relation to inconsequential
amendments pursuant to clause 3.6) in relation to any Given
Covenant after the Effective Date without the prior written
consent of New NTL.
3.2 Subject to clause 3.1, Euroco shall procure that New NTL shall have
sole conduct of any claim under the Given Covenants.
3.3 Within thirty (30) days after the date on which an Indemnified
Person has actual knowledge of the existence of any claim for
indemnification under this Agreement, such Indemnified Person
shall provide written notice to New NTL pursuant to this
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clause 3 of any such claim. Such notice shall specify the nature
of such claim in reasonable detail and New NTL shall be given
reasonable access to any documents or properties within the
control of the Indemnified Person or Euroco as may be useful or
necessary in the investigation of the basis for such claim. The
failure to so notify New NTL shall not constitute a waiver of such
claim but an Indemnified Person shall not be entitled to receive
any indemnification with respect to any Losses that occurred
directly as a result of the failure of such Indemnified Person to
give such notice. For the avoidance of doubt, New NTL agrees to
reimburse any Indemnified Person for all such Losses, other than
third-party claims for which the procedure is described in clause
3.4, as they are incurred or suffered by such Indemnified Person.
3.4 In the event any Indemnified Person seeks indemnification hereunder
based upon a claim asserted by a third party, New NTL shall (without
prejudice to the right of any Indemnified Person to be represented by
legal advisers of its own choosing) defend or prosecute such claim at
its expense and through legal advisers of its own choosing; provided,
however, that, if the Indemnified Person shall have reasonably
concluded that it requires separate legal advice because a conflict
of interest would otherwise exist, the Indemnified Person shall have
the right to select separate legal advisers reasonably acceptable to
New NTL to participate in the defence of such action on its behalf,
at the expense of New NTL. Notwithstanding the foregoing, if New NTL
does not defend or prosecute any such claim asserted by a third party
for which any Indemnified Person would be entitled to indemnification
hereunder, then the Indemnified Person shall be entitled to recover
from New NTL on a monthly basis all of the reasonable legal fees and
other costs and expenses of litigation of any nature whatsoever
incurred in the defence of such claim. Notwithstanding the assumption
of the defence of any claim by New NTL pursuant to this paragraph,
the Indemnified Person (except if Euroco is the Indemnified Person
and the settlement involves Euroco giving no undertakings) shall have
the right to approve such terms of any settlement of a claim as apply
specifically to the Indemnified Person (which approval shall not be
unreasonably delayed or withheld).
3.5 New NTL and the Indemnified Person shall co-operate in furnishing
evidence and statements and in any other manner which the other may
reasonably request, and shall in all other respects act in good faith
to the other, so as not to unreasonably expose the other to undue
risk of loss.
3.6 Euroco undertakes, and shall procure that the other members of the
Euroco Group shall undertake, to New NTL not to amend or supplement
any of the Contracts in any manner whatsoever (other than to update
details of where notices are to be delivered and inconsequential
amendments which do not immediately or in the
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future create or increase any liability or obligation of any
member of the New NTL Group under the Contracts, this Agreement or
otherwise) and not to make any admission of liability, agreement
or compromise with any person, body or authority in relation to
any claim related to the Contracts and Euroco agrees to make such
amendments and supplements to the Contracts as New NTL may
reasonably request.
3.7 Each of the Indemnified Persons shall not make any admission of
liability, agreement or compromise with any person, body or authority
in relation to any claim related to the Contracts.
4. ACCESS TO INFORMATION
For a period of ten years from the date of this Agreement, each
party shall, and shall procure that its Group Companies shall,
allow the other party and its personnel to have access to (during
normal business hours and following not less than 48 hours'
notice) and (at the expense of the party requesting the
information) take copies of all documents, records or other
materials containing any information which that party or any of
its Group Companies or affiliated joint ventures might reasonably
require to be able to comply with their respective legal,
regulatory, accounting or filing obligations, or to resist,
appeal, dispute, avoid or compromise any tax assessment, provided
that nothing in this clause shall permit either party to copy any
document, record or other material which is subject to legal
privilege. Furthermore, each party shall, and shall procure that
its Group Companies shall, allow reasonable access to such of its
duly authorised personnel, at all reasonable times during business
hours upon prior written notice, as are required to permit the
availability, access or, subject to the above restriction, copying
of such information.
5. COUNTERPARTS
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.
6. FURTHER ASSURANCE
Each party shall, and shall use all reasonable endeavours to
procure that any necessary Group Company or third party shall, do,
execute and perform all such further deeds, documents assurances,
acts and things as may reasonably be required to give effect to
this Agreement.
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7. CONFIDENTIALITY
7.1 The provisions of clauses 9.1 to 9.4 of the Transitional Services
Agreement dated on or about the date of this Agreement between New
NTL and Euroco (the "Transitional Services Agreement"), shall
apply mutatis mutandis to this Agreement and any information
provided hereunder and under the Tax Sharing Agreement as if the
reference in clause 9.3 to "the termination of this Agreement" was
deleted and the words "the termination of the parties rights under
clause 4" were inserted in its place and the reference in clause
9.4 to "this Agreement" was deleted and replaced with "the
disclosure of the Confidential Information".
7.2 Subject to the parties complying with the terms of this clause 7,
the clause shall terminate on the 12th anniversary of the date of
this Agreement.
8. NOTICES
The provisions of clause 15 (Notices) of the Transitional Service
Agreement shall apply mutatis mutandis to this Agreement.
9. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by, and construed in accordance
with, English law and the parties submit to the exclusive
jurisdiction of the English courts.
This Agreement has been duly executed by the parties on the date stated above.
EXECUTED by ▇.▇. ▇▇▇▇▇ )
for and on behalf of )
NTL INCORPORATED )
(to be renamed NTL Europe, Inc.)
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
.............................
Authorised Signatory
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EXECUTED by ▇.▇. ▇▇▇▇▇ )
for and on behalf of )
NTL COMMUNICATIONS CORP. )
(to be renamed NTL Incorporated)
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
.............................
Authorised Signatory
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THE SCHEDULE
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No Date Agreement The Parties
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
1. 26.07.99 Transaction Agreement (1) ▇▇▇▇ Atlantic Corporation
(2) Cable & Wireless Plc
(3) Cable & Wireless Communications Plc
(4) NTL Incorporated
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
2. 09.02.00 Agreement amending and (1) NTL Incorporated
supplementing the Restated (2) ▇▇▇▇ Atlantic Corporation
Transaction Agreement (3) Cable & Wireless Plc
(4) Cable & Wireless Communications Plc
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
3. 09.02.00 Transaction Agreement, Novation (1) NTL Incorporated
Agreement (2) NTL Holdings Incorporated
(3) ▇▇▇▇ Atlantic Corporation
(4) Cable & Wireless Plc
(5) Cable & Wireless Communications Plc
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
4. 02.02.00 Registration Rights Agreement (1) NTL Incorporated
(2) Cable & Wireless Plc
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
5. 17.04.00 Ancillary Agreement (1) ▇▇▇▇ Atlantic Corporation
(2) Cable & Wireless Plc
(3) Cable & Wireless Communications Plc
(4) NTL Incorporated
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
6. 16.05.00 Letter (1) NTL Incorporated
(2) Cable & Wireless Plc
(3) Cable & Wireless Communications Limited
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
7. 26.05.00 Payment Shares Agreement (1) Cable & Wireless Plc
(2) NTL Incorporated
(3) Cable & Wireless Communications Limited
--------- ---------------- ----------------------------------- -------------------------------------------------------------------
8. Tax Deed (1) Cable & Wireless Plc
(2) Cable & Wireless Communications Limited
(3) Cable & Wireless Communications (Holdings) Plc
(4) NTL Holdings
--------- --------------- ------------------------------------ -------------------------------------------------------------------
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--------- --------------- ------------------------------------ -------------------------------------------------------------------
9. 30.05.00 Supplementary Tax Deed (1) Cable & Wireless Plc
(2) Cable & Wireless Communications Limited
(3) Cable & Wireless Communications (Holdings) Plc
(4) Cable & Wireless Communications Telephone Equipment Limited
(5) NTL Incorporated
--------- --------------- ------------------------------------ -------------------------------------------------------------------
10. Undated Further Supplementary Tax Deed (1) Cable & Wireless Plc
(2) Cable & Wireless Communications Limited
(3) Cable & Wireless Communications (V) Holdings Plc
(4) NTL Incorporated
--------- --------------- ------------------------------------ -------------------------------------------------------------------
11. 30.05.00 Third Supplementary Tax Deed (1) Cable & Wireless Plc
(2) Cable & Wireless Communications Limited
(3) Cable & Wireless Communications (Holdings) Plc
(4) NTL Incorporated
--------- --------------- ------------------------------------ -------------------------------------------------------------------
12. 24.05.00 Notice of Exercise of Call Option (1) NTL Incorporated
in respect of CWC Holdings Shares (2) Cable & Wireless Plc
--------- --------------- ------------------------------------ -------------------------------------------------------------------
13. 09.02.00 Letter from NTL to Cable & Wireless
Communications Plc confirming
satisfaction of pre-conditions
--------- --------------- ------------------------------------ -------------------------------------------------------------------
14. 30.05.00 Letter from Cable & Wireless Plc
to Cable & Wireless Communications
Limited, Cable & Wireless
Communications (Holdings) Plc and
NTL Incorporated regarding payment
of VAT
--------- --------------- --------------------------------------- ----------------------------------------------------------------
15. 26.05.00 Letter regarding Supplementary Tax Deed (1) Cable & Wireless Plc Deed
(2) NTL Incorporated
--------- --------------- --------------------------------------- ----------------------------------------------------------------
16. 30.05.00 Consideration Agreement relating (1) Cable & Wireless Plc
to the Four Properties (2) NTL Incorporated
--------- --------------- --------------------------------------- ----------------------------------------------------------------
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--------- --------------- ------------------------------------ ----------------------------------------------------------------
17. 30.05.00 Side Letter in respect of specific (1) Cable & Wireless Plc Telecommunications Service
Telecommunications Service Agreement (2) Cable & Wireless Communications Plc Agreement
(3) NTL Incorporated
--------- --------------- ------------------------------------ ----------------------------------------------------------------
18. 16.04.00 Agreement relating to Two Way TV (1) Cable & Wireless Plc
Limited (2) Cable & Wireless Communications Plc
(3) NTL Incorporated
--------- --------------- ------------------------------------ -------------------------------------------------------------------
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