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AGREEMENT FOR THE SALE AND PURCHASE OF
THE VISION NETWORKS UK GROUP
This sale and purchase agreement, hereinafter referred to as the "Agreement", is
entered into on this 16th day of June 1998 by and between
VISION NETWORKS III B.V., a private limited liability company incorporated in
accordance with the laws of the Netherlands and having its registered office at
Hoofddorp and its principal place of business at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, for the purposes hereof duly represented by W.
Ackermans (hereinafter referred to as the "Seller")
and
COMTEL UK FINANCE B.V. a private limited liability company incorporated in
accordance with the laws of the Netherlands and having its registered office at
Hoofddorp and its principal place of business at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, for the purposes hereof duly represented by W.
Ackermans (hereinafter referred to as "ComTel")
and
VISION NETWORKS (UK) I LIMITED, a private limited liability company incorporated
in England and having its registered office at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, for the purposes hereof duly represented by W.
Ackermans (hereinafter referred to as "UKI")
and
TELECENTIAL COMMUNICATIONS (CANADA) LTD, a private limited liability company
incorporated in the Province of New Brunswick, Canada and having its registered
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇ ▇▇▇, for the
purposes hereof duly represented by W. Ackermans (hereinafter referred to as
"Canco 1")
and
VISION NETWORKS (UK) II LIMITED, a private limited liability company
incorporated in England and having its registered office at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, for the purposes hereof duly
represented by W. Ackermans (hereinafter referred to as "UKII")
and
TELECENTIAL COMMUNICATIONS (UK) LIMITED, a private limited liability company
incorporated in the Province of New Brunswick, Canada and having its registered
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇ ▇▇▇ aforesaid,
for the purposes hereof duly represented by W. Ackermans (hereinafter referred
to as "Canco 3")
and
VISION NETWORKS UK HOLDING B.V. (IN LIQUIDATION) a private limited liability
company incorporated in accordance with the laws of the Netherlands and having
its registered office at Hoofddorp and its principal place of business at
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ for the purposes hereof
duly represented by its liquidator Vision Networks N.V., for the purposes hereof
duly represented by W. Ackermans (hereinafter referred to as "▇▇▇▇")
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(ComTel, UKI, Canco 1, UKII, Canco 3 and ▇▇▇▇ being hereinafter referred to
jointly as the "Transferors" and individually as a "Transferor")
NTL GROUP LIMITED, a private limited liability company incorporated in England
and having its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, for the purposes hereof duly represented by ▇. ▇▇▇▇▇▇▇▇▇
(hereinafter referred to as the "Purchaser")
and
NTL INC, a company incorporated and existing in accordance with the laws of the
State of Delaware, USA and having its principal place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇, for the purposes hereof duly represented
by ▇. ▇▇▇▇▇ (hereinafter referred to as the "NTL")
The Seller, the Transferors, the Purchaser and NTL are hereinafter jointly
referred to as the "Parties" and individually as a "Party".
WHEREAS
A. The Seller is the legal and beneficial owner of the entire issued and
outstanding share capital of ComTel;
B. Following a number of reorganisation steps, ComTel is the direct legal
and beneficial owner of the ComTel Companies, ComTel is the parent
undertaking of UKI, Canco 1, UKII, Canco 3 and ▇▇▇▇ and UKI, Canco l,
UKII, Canco 3 and ▇▇▇▇ are the direct legal and beneficial owners of the
Telecential Assets;
C. The sale of the Telecential Assets shall be effected through a transfer
of (i) the partnership interests in the Telecential Communications
Partnership by UKI and Canco 1, (ii) the shares in ComTel Limited by
Canco 1, and (iii) the partnership interests in each of Telecential
Communications (Warwickshire) Limited Partnership ("LP6") and Telecential
Communications (Heartland) Limited Partnership ("LP5"), by UKII, Canco 3
and ▇▇▇▇ (as applicable);
D. Koninklijke PTT Nederland NV ("KPN"), the present sole shareholder of the
Seller, is in the process of effecting an internal demerger
("afsplitsing") of the Vision Networks group of companies ("VN"), which
will result in VN becoming an independent unconsolidated group entity,
although owned by KPN (through Vision Networks Holdings B.V., which
company will be created as a result of the internal demerger). Vision
Networks Holdings B.V. will, as soon as it has been incorporated, provide
a guarantee for the performance by the Seller of the Seller's and
Transferors' obligations under this Agreement in the form set out in
Schedule F;
E. In connection with the internal demerger of VN, it is mandatory that
sufficient funds for the release of KPN under existing obligations
assumed by it with respect to VN are available ultimately on 16 June
1998, whether through (i) completion of the sale of the ComTel Shares
pursuant to this Agreement, or (ii) through the issuance of high-yield
bonds to third parties, on such terms and in such manner as the Seller
shall determine (the "Bond Issue"). The Parties acknowledge that the
Purchaser has agreed to pay the sum of pound sterling 275 million for the
ComTel Companies in the context of the transaction taken as a whole and
in particular the subsequent acquisition of the Telecential Assets;
F. The Purchaser desires to take transfer of the ComTel Shares and the
Telecential Assets and the Seller and the Transferors desire to sell or
to procure the sale and transfer of the ComTel Shares and the Telecential
Assets to the Purchaser, all on the terms and conditions set forth below;
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G. NTL is a party to this Agreement for the purposes of guaranteeing the
obligations of the Purchaser hereunder.
IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE 1 DEFINITIONS AND INTERPRETATION
1.1 Capitalised terms used in this Agreement shall have the meanings
ascribed to them in Schedule D, except as the context may
otherwise require.
1.2 Where the words "to the best knowledge" or words to that effect
are used in this Agreement in connection with the Seller or any
Transferor to qualify any of the Warranties given by the Seller or
any Transferor or in connection with Article 7.2, this shall mean
to the best knowledge, after due inquiry, of the management of the
Seller or Transferor concerned. The Parties agree that due inquiry
shall mean that all reasonable efforts on the part of the Seller
or Transferor (as the case may be) shall have been made to obtain
reasonably detailed information with respect to the Warranties
which are qualified by the Seller's or Transferor's best
knowledge, including, without limitation, making enquiry of
appropriate management individuals of the relevant ComTel
Companies, members of the Telecential Group and Transferors. In
respect of due inquiry with regard to Schedule I, the Parties
acknowledge that this shall mean that due inquiry has comprised
reasonable efforts on the part of the Seller to include in the
data rooms and otherwise as set out in the definition of Data Room
Information, (i) information which is true and complete to all
material respects and (ii) the relevant information that the
Seller should expect a reasonable purchaser to require.
ARTICLE 2 SALE, PURCHASE, PURCHASE PRICE
2.1 Subject to the terms of this Agreement, UKI agrees to:
2.1.1. sell and assign to the Purchaser or its nominee absolutely all its
Partnership Interest as a general partner in the Telecential
Communications Partnership as regulated by the Telecential
Communications Partnership partnership agreement (and for these
purposes "Partnership Interest" means, in respect of UKI, the
share of UKI in the Telecential Communications Partnership
including (without limitation) its interests in the assets and
profits of the Telecential Communications Partnership and all
rights and privileges relating to that interest and all amounts
paid to the Telecential Communications Partnership by way of
capital); and
2.1.2. subject to Articles 5.4 to 5.6, sell and transfer any other
Relevant Asset (if any) owned by UKI.
2.2 Subject to the terms of this Agreement, UKII agrees to:
2.2.1 assign to the Purchaser or its nominee absolutely all its
Partnership Interest as a limited partner in LP5 as regulated by
the LP5 partnership agreement (and for these purposes "Partnership
Interest" means, in respect of UKII, the share of UKII in LP5
including (without limitation) its interests in the assets and
profits of LP5 and all rights and privileges relating to that
interest and all amounts paid to LP5 by UKII by way of capital);
and
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2.2.2. subject to Articles 5.4 to 5.6, sell and transfer any other
Relevant Asset (if any) owned by UKII.
2.3 Subject to the terms of this Agreement:-
2.3.1 ComTel agrees to sell and transfer (or procure the sale and
transfer of) the ComTel Shares to the Purchaser or its nominee(s);
2.3.2 subject to Articles 5.4 to 5.6, ComTel agrees to sell and transfer
any other Relevant Asset (if any) owned by ComTel;
2.3.3 ▇▇▇▇ agrees to assign to the Purchaser or its nominee absolutely
all its Partnership Interest as a limited partner in LP6 as
regulated by the LP6 partnership agreement (and for these purposes
"Partnership Interest" means, in respect of ▇▇▇▇, the share of
▇▇▇▇ in LP6 including (without limitation) its interests in the
assets and profits of LP6 and all rights and privileges relating
to that interest and all amounts paid to LP6 by ▇▇▇▇ by way of
capital); and
2.3.4 ▇▇▇▇ agrees to sell and transfer, subject to Articles 5.4 to 5.6,
any other Relevant Asset (if any) owned by ▇▇▇▇.
2.4 Subject to the terms of this Agreement, Canco 1 agrees to:-
2.4.1 sell and procure the transfer of the ComTel Limited Shares to the
Purchaser or its nominee(s);
2.4.2 sell and assign to the Purchaser or its nominee absolutely all its
Partnership Interest as a managing general partner in the
Telecential Communications Partnership as regulated by the
Telecential Communications Partnership partnership agreement (and
for these purposes "Partnership Interest" means in respect of
Canco 1, the share of Canco 1 in the Telecential Communications
Partnership including (without limitation) its interest in the
assets and profits of the Telecential Communications Partnership
and all rights and privileges relating to that interest and all
amounts paid to the Telecential Communications Partnership by
Canco ▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇); and
2.4.3 subject to Articles 5.4 to 5.6, sell and transfer any other
Relevant Asset (if any) owned by Canco 1.
2.5 Subject to the terms of this Agreement, Canco 3 agrees to:
2.5.1 sell and procure the transfer of the Heartland Shares to the
Purchaser or its nominee(s);
2.5.2 sell and assign to the Purchaser or its nominee absolutely all its
Partnership Interest as a managing general partner in LP5 and LP6
as regulated by the LP5 and LP6 partnership agreements
(respectively) (and for these purposes "Partnership Interest"
means, in respect of Canco 3, the share of Canco 3 in LP5 and LP6
including (without limitation) its interest in the assets and
profits of LP5 and LP6 and all rights and privileges relating to
that interest and all amounts paid to LP5 and LP6 by Canco 3 by
way of capital); and
2.5.3 subject to Articles 5.4 to 5.6, sell and transfer any other
Relevant Asset (if any) owned by Canco 3.
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2.6 The Purchaser hereby agrees or agrees to procure that its
nominee(s) shall purchase and take transfer of all the relevant
Assets from each Transferor in accordance with and subject to the
terms of this Agreement.
2.7 The total purchase price for the ComTel Shares and the Telecential
Assets jointly (hereinafter the "Purchase Price") shall be GBP
550.000.000 (in words five hundred and fifty million Pounds
Sterling), subject to adjustment pursuant to Articles 3.3, 4.11,
6.8 and 6.9, consisting of GBP 475.000.000 (in words: four hundred
and seventy five million Pounds Sterling) payable as to GBP
275.000.000 in cash at ComTel Completion and as to GBP 200.000.000
in cash (subject to adjustment pursuant to Articles 3.3, 4.11, 6.8
and 6.9) and as to GBP 75.000.000 (in words: seventy five million
Pounds Sterling) by the issue at par value of the Purchaser
Security with a principal amount in US Dollars equal to the US$
equivalent of GBP 75,000,000 (in words: seventy five million
Pounds Sterling) (as determined in accordance with Article 5.3.5)
at Telecential Completion. The Purchase Price shall be apportioned
between the Assets as set out in Schedule A and payable to the
relevant Transferor or as it shall direct.
2.8 The Purchaser Security shall be subject to the terms and
conditions set out in Schedule S attached hereto.
2.9 The Seller and the relevant Transferor(s) shall procure that the
Purchaser or its nominee(s) acquires good title to the ComTel
Shares and the Telecential Assets free from all liens, charges in
the nature of security interests and encumbrances whatsoever and
together with all rights now or hereafter attaching to them.
2.10 The Seller and the Transferors hereby waive and agree to procure a
waiver of any rights or restrictions conferred on any of them or
any other person which may exist in relation to the Assets.
2.11 The Purchaser shall not be obliged to complete the purchase, and
the Seller shall not be obliged to complete the sale, of any of
the ComTel Shares unless the purchase or sale of all of the ComTel
Shares is completed simultaneously or any of the Telecential
Assets unless the purchase or sale of all of the Telecential
Assets is completed simultaneously. The Seller and the Purchaser
acknowledge that following ComTel Completion the Parties shall be
obliged to effect Telecential Completion in accordance with the
terms of this Agreement.
2.12 It is declared that the Purchase Price is exclusive of any value
added tax.
ARTICLE 3 SIGNING OF THIS AGREEMENT, AND COVENANTS TO COMPLETION
3.1 This Agreement is signed on the date first above written.
3.2 The Seller and the Transferors covenant, to the Purchaser in the
terms of Schedule C, subject to them being capable of so doing in
view of the Purchaser's rights under the Relationship Agreement.
3.3 During the period between the ComTel Completion Date and the
Telecential Completion Date, the Seller undertakes to the
Purchaser to lend or procure that one or more of the Transferors
shall lend to the members of the Telecential Group on the terms
set out below and on an unsecured basis. The Purchaser shall, on
behalf of the members of the Telecential Group, maintain a
separate interest bearing bank account with a bank in the
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United Kingdom to be designated by the Seller (the "Telecential
Account"). The Seller shall provide funds on the basis of cash
calls, during a consecutive period of 6 months from the ComTel
Completion Date, in monthly payments of pound sterling 10 million
to begin promptly following ComTel Completion, and for a further
consecutive period of 12 months in monthly payments of pound
sterling 5 million. For so long as the amount outstanding in
credit on the Telecential Account shall exceed pound sterling 15
million, the Seller shall not be obliged to provide further funds
(although any funds not so provided shall be rolled-up and may at
the Purchaser's option be paid at any time prior to Telecential
Completion). In December 1999 (and each subsequent year in
December) the budget for the coming year will be prepared by the
Purchaser and jointly reviewed and approved by the Purchaser and
the Seller, such approval not to be unreasonably withheld and the
amount of monthly loan instalments may be adjusted downwards if
the approved budget so justifies. It is acknowledged that any
budget would allow the Telecential Group to meet its milestone
requirements under its regulatory licences. The loan shall be
interest free for a period of 3 months from the ComTel Completion,
but shall thereafter carry interest at the rate that KPN charges
its intercompany debtors from time to time, such interest only to
accrue and not to become payable until Telecential Completion. The
Purchaser shall be prohibited from applying funds out of the
Telecential Account for any purposes other than the business of
the members of the Telecential Group. The Purchaser shall provide
such information as to the application of the funds from the
Telecential Account as the Seller may reasonably request from time
to time. Immediately prior to the Telecential Completion Date any
loans made by the Seller or any Transferor pursuant to this
Article 3.3 shall be capitalised in accordance with the general
principles set out in Schedule Ind. and any new shares or capital
contributions or payments to capital account arising on such
capitalisation shall be deemed to be included in the Telecential
Assets. The cash element of the Purchase Price to be paid by the
Purchaser on the Telecential Completion Date shall be increased by
the amount in pound sterling equal to the amount of any loans made
by the Seller or Transferors pursuant hereto (the "Funding
Adjustment"). The Funding Adjustment to be paid by the Purchaser
under this Article 3.3 shall be payable in cash to the Seller
and/or relevant Transferor(s) (as the case may be) and the Seller
and relevant Transferor(s) shall, at the Telecential Completion
Date, deliver the documents of the type referred to in Article
5.3.1(a) in respect of any such new shares allotted pursuant to
this Article 3.3, duly executed by the relevant persons (where
applicable).
3.4 The Seller and the Transferors shall procure that prior to the
Telecential Completion Date (but only to the extent permitted by
law and subject to any obligations with respect to confidentiality
owed to third parties) the Purchaser's agents, representatives,
accountants and solicitors are given promptly on request all such
facilities, documents, papers and information regarding the
business, assets, liabilities, contracts and affairs of each
member of the Telecential Group and the documents of title and
other evidence of ownership of the assets of each member of the
Telecential Group as the Purchaser reasonably requires, subject
however to prevailing confidentiality obligations by which the
Seller and the Transferors, or any of them, may be bound.
ARTICLE 4 COMTEL COMPLETION, PAYMENT, TELECENTIAL COMPLETION, PAYMENT
4.1 Completion of the sale and purchase of the ComTel Shares will take
place on 16th June, 1998 (hereinafter referred to as the "ComTel
Completion Date"). The transfer of the ComTel Shares will take
place at the offices of ▇▇▇▇▇ & Overy in London, UK on the ComTel
Completion Date.
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4.2 The sum of GBP 275.000.000 (two hundred and seventy five million
Pounds Sterling) shall be transferred by the Purchaser on the
ComTel Completion Date prior to 2.30 p.m. London time, by
telegraphic transfer in immediately available funds, to the bank
account number as designated by the Seller in the name of Royal
PTT Nederland N.V. with ABN AMRO Bank where it shall be held in an
interest bearing account to the order of Chase Manhattan
International Ltd until the documents referred to in Article
5.1.1. have been executed and delivered at which time such money
and any interest thereon shall then be held to the order of ComTel
which shall constitute a discharge to the Purchaser of its
obligation to pay such monies to ComTel and so that the Purchaser
shall have no further concern as to the distribution of such
monies. If ComTel Completion has not occurred on the ComTel
Completion Date due to any failure on the part of the Seller or
ComTel to comply with Article 5.1.1 the money and any interest
thereon shall as soon as possible be returned to the Purchaser,
without prejudice to any other rights and remedies available to
the Purchaser.
4.3 Completion of the sale and purchase of the Telecential Assets will
take place at the offices of ▇▇▇▇▇ & ▇▇▇▇▇ in London, UK on the
Telecential Completion Date when the transfer of the Telecential
Assets will take place in accordance with Article 5.3. The
Telecential Completion Date shall be determined in accordance with
Articles 4.6 to 4.8 below.
4.4 The sum of GBP 200.000.000 (two hundred million Pounds Sterling)
(as adjusted pursuant to Articles 3.3, 4.11, 6.8 and 6.9) shall be
transferred by the Purchaser on the Telecential Completion Date
prior to 2.30 p.m. UK time, by telegraphic transfer in immediately
available funds, to the bank account as may be designated by the
Seller where it shall be held to the order of Chase Manhattan
International Ltd (or such other person as the Purchaser may
nominate) until the documents referred to in Articles 5.3.1 to
5.3.4 have been executed and delivered at which time such money
shall then be held in an interest bearing account to the order of
the relevant Transferors which shall constitute a discharge to the
Purchaser of its obligation to pay such monies to the relevant
Transferors and so that the Purchaser shall have no further
concern as to the distribution of such monies. If Telecential
Completion has not occurred on the Telecential Completion Date due
to any failure on the part of the Seller and/or the relevant
Transferors, the money and any interest thereon shall as soon as
possible be returned to Purchaser without prejudice to any other
rights and remedies available to the Purchaser.
4.5 Notwithstanding any other provision of this Agreement, the Seller
and the relevant Transferor(s) undertake to use their best
endeavours to procure the satisfaction of the obligation contained
in Article 5.3.1(e) as soon as reasonably possible hereafter and
in connection therewith shall act reasonably and negotiate in good
faith with third parties to whom relevant Indebtedness is owed for
the prompt and lawful discharge and/or cancellation of such
Indebtedness. For the avoidance of doubt, the satisfaction of the
obligations contained in Article 5.3.1(e)(ii) shall be effected in
accordance with Schedule Ind provided that no member of the
Telecential Group shall fund such satisfaction (including any
termination or prepayment charges and associated costs in respect
of the relevant Indebtedness) except out of the proceeds of
subscription for new shares of such member or a capital
contribution (if a company) or by way of further payment to a
partner's capital account (if a partnership) and in each case such
subscription, capital contribution or payment to capital account
shall be made by a member of the Seller's Group (other than a
member of the Telecential Group). Any new shares or capital
contributions or payments to capital account made pursuant to this
Article 4.5 shall be deemed to be included in the Telecential
Assets sold to the Purchaser (or its nominee(s)) pursuant to this
Agreement at no additional cost to the Purchaser. For the
avoidance of doubt, the Seller and the relevant Transferor(s)
shall at the Telecential Completion Date
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deliver, or procure the delivery of, the documents of the type
referred to in Article 5.3.1(a) in respect of any such new shares
allotted pursuant to this Article 4.5.
4.6 At any time between the date of this Agreement and the Long Stop
Date when the Seller and the Transferors are able to comply (or
have complied) with their obligations contained in Article
5.3.1(e), the Seller shall forthwith serve notice (a "Ready to
Complete Notice") to such effect on the Purchaser and
4.6.1 if the Ready to Complete Notice is served on the
Purchaser not less than ten (10) Business Days prior
to 15 September 1998, the Telecential Completion Date
shall be 15 September 1998 or such earlier date which
is not more than 10 (ten) Business Days following the
date of the service of the Ready to Complete Notice
as the Purchaser may elect; or
4.6.2 if the Ready to Complete Notice is served on the
Purchaser on or after the date which is ten (10)
Business Days prior to 15 September 1998, then the
Telecential Completion Date shall be on the tenth
Business Day after the service of the Ready to
Complete Notice.
4.7 Without prejudice to the obligations of the Seller and the Transferors
under Article 4.5, (i) if the Seller shall not have served a Ready to
Complete Notice on the Purchaser prior to 15th September 1998, or (ii)
the Seller shall have served notice requesting the Purchaser to obtain
such bondholder approval (as hereafter said) after 8 (eight) weeks
following the ComTel Completion Date, then NTL shall, at its own cost,
during the period of 6 (six) months from the date of the request by the
Seller, apply for and use its best endeavours to obtain the consent of
its bondholders to its acquisition of the Telecential Assets
notwithstanding that Indebtedness is owed by any member of the
Telecential Group to any person other than another member of the
Telecential Group (excluding for the avoidance of doubt any member of
the Seller's Group) and in the event of such consent being obtained on
or prior to the expiry of such 6 (six) month period, the Purchaser
shall forthwith serve notice (a "Consent Notice") to such effect on the
Seller and the Telecential Completion Date shall be on the later of the
tenth Business Day after the service of the Consent Notice and 15
September 1998 and the Purchaser shall (without prejudice to Article
13) be deemed to have waived the obligation of the Seller and the
Transferors to comply with Article 5.3.1(e)(ii) (save in respect of
Indebtedness which is owed by any member of the Telecential Group to
any member of the Seller's Group or any of the ComTel Companies). For
the avoidance of doubt nothing contained in this Article 4.7 or Article
4.8 shall require NTL to apply to its bondholders for such consent on
more than one occasion subject to it otherwise complying with this
Article 4.7.
4.8 If at any time prior to the service of a Ready to Complete Notice or a
Consent Notice the Purchaser becomes entitled to purchase the
Telecential Assets notwithstanding that Indebtedness is owed by any
member(s) of the Telecential Group to any other person without
breaching any obligations to which it or NTL or any subsidiary
undertaking of NTL is subject, including without prejudice any
obligations owed to NTL's bondholders under the indentures relating
thereto, then the Purchaser shall forthwith serve a Consent Notice on
the Seller in which event Telecential Completion shall take place on 15
September 1998 or, if earlier, at the election of the Purchaser, on the
tenth Business Day after the service of the Consent Notice, or, if the
Consent Notice is served after 30 August 1998 on the tenth Business Day
after the service of the Consent Notice and the Purchaser shall
(without prejudice to Article 13) be deemed to have waived the
obligation of the Seller and the Transferors to comply with Article
5.3.1(e)(ii) (save in respect of Indebtedness which is
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owed by any member of the Telecential Group to any member of the
Seller's Group or any of the ComTel Companies).
4.9 For the purposes of this Article 4, the Long Stop Date shall be 15th
March 1999 or, if the inability to effect the Telecential Completion is
(i) due to the inability on the part of the Seller to cancel or
extinguish the Indebtedness of the Telecential Group, or (ii) because a
specific judgment prohibiting Telecential Completion is issued against
any of the Parties (a "Restraint"), 31 December 2002.
4.10 For the avoidance of doubt, the Parties acknowledge that, except where
Telecential Completion occurs pursuant to the service of a Consent
Notice, satisfaction of the obligations of the Seller and the
Transferors contained in Article 5.3.1(e) is of the essence to the
Purchaser and that the Purchaser shall not otherwise acquire the
Telecential Assets or any part thereof unless such obligations are
satisfied in full.
4.11 If Telecential Completion takes place following the service of a
Consent Notice, the amount of any Indebtedness in respect of which the
Seller and the relevant Transferor(s) fail to comply with Article
5.3.1(e), (including any known termination or prepayment charges
relating to such Indebtedness) shall, without prejudice to Article 13,
be deducted from that part of the Purchase Price to be paid in cash on
the Telecential Completion Date (the "Indebtedness Adjustment").
4.12. Notwithstanding the provisions of the Relationship Agreement, the
Seller shall continue to have the exclusive conduct of any and all
matters relating to the settlement of the Indebtedness of the
Telecential Group and any other related Restraints which prevent
Telecential Completion from occurring, and the management control of
the Purchaser shall not extend to such issues. The Seller shall keep
the Purchaser informed on a regular basis and on request in connection
with the conduct of the aforementioned issues.
4.13 The Purchaser shall not exercise its rights under the Relationship
Agreement so as to detrimentally affect an expedient settlement of the
issues referred to in Article 4.12.
4.14 Any Indebtedness (actual or contingent) incurred by any of the ComTel
Companies or members of the Telecential Group after the ComTel
Completion Date with the consent, or at the direction of the Purchaser
pursuant to the Relationship Agreement shall not qualify as
Indebtedness for the purposes of Article 5.3.1(e)
ARTICLE 5 ACTIONS AT COMTEL COMPLETION AND ACTIONS AT TELECENTIAL COMPLETION
5.1 At ComTel Completion, once the sum of GBP 275.000.000 (two hundred
and seventy five million Pounds Sterling) shall have been received
in the bank account indicated in Article 4.2, the following
actions shall take place in the sequence set out below, which
actions shall be deemed to take place simultaneously, and each
such action being conditional upon all such actions being
effected:
5.1.1 ComTel shall deliver to the Purchaser:
(a) duly executed transfers of the ComTel Shares by the
registered holders in favour of the Purchaser or nominees of
the Purchaser, the share certificates and any additional
documentation necessary to establish the relevant
transferor's title to the ComTel Shares, to authorise the
executions of such transfers and to allow the transferees
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(subject to due stamping) to be registered in the registers
of members of the ComTel Companies as holders of the ComTel
Shares;
(b) resignation letters substantially in the form of Schedule V
from all of the directors and company secretaries of the
ComTel Companies;
(c) an unqualified letter of resignation from the auditors of
each of the ComTel Companies which shall be in the form
prescribed by ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
(d) all other property, including any Relevant Assets, in the
possession of any member of the Seller's Group which is the
property of any of the ComTel Companies including but not
limited to correspondence and records thereof which
property, for the purposes hereof, is deemed transferred by
execution of this Agreement;
(e) evidence reasonably satisfactory to the Purchaser that:
(i) any guarantees granted or security or indemnities
given by any of the ComTel Companies in respect of
obligations of any member of the Seller's Group or
any member of the Telecential Group have been
released or discharged;
(ii) the Bond Issue has been withdrawn without any
liability accruing to any of the ComTel Companies or
any member of the Telecential Group;
(iii) all Indebtedness of the ComTel Companies (other than
(i) Indebtedness owed to another ComTel Company and
(ii) the lease between ComTel Coventry Limited and
Broadband Ventures Limited) has been cancelled or
extinguished in full;
and a certificate from the Seller to the Purchaser
confirming satisfaction of the foregoing matters based upon
Schedule Ind shall be accepted by the Purchaser, in the
absence of any evidence to the contrary, as prima facie
evidence satisfactory to the Purchaser;
(f) the Relationship Agreement in the form contained in
Schedule M duly executed by the parties (other than the
Purchaser) thereto; and
(g) duly stamped transfers of the ComTel Shares previously held
by ▇▇▇▇ in favour of ComTel.
5.1.2 The Seller shall deliver to the Purchaser the legal opinion from
Stikeman, ▇▇▇▇▇▇▇ in the form contained in Schedule J.
5.1.3 NTL shall deliver to the Seller the legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇
Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP in the form contained in Part 1 of
Schedule K and the Purchaser shall deliver to the Seller the
Relationship Agreement in the form contained in Schedule M duly
executed by the Purchaser.
5.1.4 The Purchaser shall confirm to ComTel that the amounts received
from the Purchaser pursuant to Article 4.2 of this Agreement are
held irrevocably to the order of ComTel and receipt of such
confirmation shall constitute final discharge of payment of such
sum and the Purchaser shall have no further concern as to the
distribution of such monies.
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5.2 Immediately following ComTel Completion, ComTel shall procure the
holding of a meeting of the board of directors of each of the
ComTel Companies at which meetings board resolutions in the form
set out in Schedule B shall be passed.
5.3 At Telecential Completion, once the sum of GBP 200.000.000 (two
hundred million Pounds Sterling) (as adjusted pursuant to Articles
3.3, 4.11, 6.8 and 6.9) shall have been received in the bank
account designated in Article 4.4 of this Agreement, the following
actions shall take place in the sequence set out below, which
actions shall be deemed to take place simultaneously, and each
such action being conditional upon all such actions being
effected:
5.3.1 The relevant Transferors shall deliver to the Purchaser:
(a) duly executed transfers of the ComTel Limited Shares and
the Heartland Shares by the registered holders in favour of
the Purchaser or its nominees, the share certificates and
any additional documentation necessary to establish the
relevant transferor's title to the ComTel Limited Shares
and the Heartland Shares, to authorise the executions of
such transfers and to allow the transferee(s) (subject to
due stamping) to be registered in the registers of members
of ComTel Limited, Heartland Cablevision (UK) Limited and
Heartland Cablevision II (UK) Limited as holders of such
shares;
(b) resignation letters substantially in the form of Schedule V
from all the directors and company secretaries of all the
companies within the Telecential Group (other than those
appointed by Pirunico Trustees (Jersey) Limited);
(c) an unqualified letter of resignation from the auditors of
each of the companies in the Telecential Group and of each
of the Telecential Partnerships which shall be in the form
prescribed by ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
(d) all other property including any Relevant Assets in the
possession of the Transferors or any other member of the
Seller's Group which is the property of any member of the
Telecential Group, including but not limited to
correspondence and records thereof;
(e) evidence reasonably satisfactory to the Purchaser that:
(i) any guarantees granted or security or indemnities
given by any member of the Telecential Group in
respect of obligations of any member of the Seller's
Group have been released or discharged;
(ii) all Indebtedness of the Telecential Group (other
than any Indebtedness of the kind referred to in
Article 4.14) has been repaid in full;
and a certificate from the Seller to the Purchaser
confirming satisfaction of the foregoing matters shall be
accepted by the Purchaser, in the absence of any evidence
to the contrary, as prima facie evidence satisfactory to
the Purchaser. The Purchaser shall be considered to have
accepted the certificate in respect of Indebtedness in
existence at that date without reservation if the Seller
shall have sent a copy of such certificate to the Purchaser
not less than 10 (ten) Business Days prior to the
Telecential Completion Date and the Purchaser has not
notified the Seller to the
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contrary, setting out in detail what Indebtedness remains to
be dealt with within 5 (five) Business Days of the receipt
of such notice or 5 (five) Business Days prior to the
Telecential Completion Date (whichever is the later);
(f) duly signed Forms 53 and Forms 403a in respect of the
charges in favour of The Chase Manhattan Bank N.A., London
Branch, remaining on the Land Registry and the Register of
Companies.
5.3.2 Canco 1 and UKI shall procure that the Purchaser and/or its
nominee(s) are assumed as general partners of the Telecential
Communications Partnership (and by virtue thereof, as general
partners of the Telecential Communications (Herts) Partnership and
the Telecential Communications (Northants) Partnership) in place
of Canco 1 and UKI which shall retire as partners of the same and
for the purposes of effecting the same, Canco 1 and UK1 and the
Purchaser and/or its nominee(s) shall enter into deeds of
retirement and appointment in the forms contained in Schedule O.
5.3.3 Canco 3 and UKII shall procure that the Purchaser and/or its
nominee(s) are assumed as managing general partner and a limited
partner of LP5 in place of Canco 3 and UKII respectively which
shall retire as partners of LP5 and for the purposes of effecting
the same, Canco 3 and UKII and the Purchaser and/or its nominee(s)
shall enter into a deed of retirement and appointment in the form
contained in Schedule P.
5.3.4 Canco 3 and ▇▇▇▇ shall procure that the Purchaser and/or its
nominee(s) are assumed as managing general partner and a limited
partner of LP6 in place of Canco 3 and ▇▇▇▇ which shall retire as
partners of LP6 and for the purposes of effecting the same, Canco
3 and ▇▇▇▇ and the Purchaser and/or its nominee(s) shall enter
into a deed of retirement and appointment in the form contained in
Schedule Q.
5.3.5 The Purchaser shall:
(a) confirm to the Seller and the Transferors in terms
reasonably satisfactory to the Seller that the amounts
received from the Purchaser pursuant to Article 4.4 of this
Agreement are held irrevocably to their order and receipt
of such confirmation shall constitute final discharge of
payment of such sum to the Seller and the relevant
Transferors and the Purchaser shall have no further concern
as to the distribution of such monies;
(b) procure that NTL shall take all such action as shall be
necessary to validly create, constitute and issue to the
Seller, at par the Purchaser Security having a principal
amount due on redemption equal to the US dollar equivalent
of GBP 75,000,000 (and for this purpose, the calculation of
the US dollar equivalent shall be the average of the two
highest and the two lowest figures of the spot rate of
exchange of The Chase Manhattan Bank for the purchase of
pound sterling with US$ on or about 11.00 am. over the ten
Business Days' prior to the Telecential Completion Date;
and
(c) deliver to the Seller the legal opinion of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ and ▇▇▇▇ LLP in the form (or substantially
in the form) set out in Part 2 of Schedule K.
5.3.6 Immediately following Telecential Completion, the Seller shall
procure the holding of a meeting of the Board of Directors of each
of the companies within the Telecential Group at which meetings
Board Resolutions in the form set out in Schedule B shall be
passed.
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5.4 If the consent or agreement of any third party is required to the
transfer of the benefit and all other rights and liabilities in
connection with any Relevant Asset which consent has not been
obtained at or prior to the ComTel Completion Date or the
Telecential Completion Date, as the case may be, the transfer of
the Relevant Asset shall notwithstanding ComTel Completion or
Telecential Completion (as the case may be) be conditional upon
that/those consent(s) or agreement(s), and the Seller and/or the
relevant Transferor and the Purchaser shall use all reasonable
endeavours to obtain it/them as soon as possible but such
conditional transfer shall not delay or prevent the ComTel
Completion or Telecential Completion (as the case may be) taking
place.
5.5 After the ComTel Completion Date or the Telecential Completion
Date, as the case may be, and until such time as that consent or
agreement referred to in Article 5.4 is obtained and the full
benefit of the Relevant Asset transferred to the Purchaser (or its
nominee(s)), the relevant Transferor shall be deemed to hold the
benefit of the Relevant Asset in trust for the Purchaser (or such
nominee(s)).
5.6 As from the ComTel Completion Date or Telecential Completion Date
(as the case may be), the Purchaser shall (or shall procure that
such of its nominee(s) as may be the transferee(s) of the Relevant
Asset) perform any outstanding obligations (if any) of the
relevant Transferor in respect of the Relevant Asset provided that
subject to the provisions of the Relationship Agreement, nothing
contained in this Agreement shall make the Purchaser (or its
nominee(s)) liable for any act, neglect, default or omission of
the relevant Transferor in respect of the Relevant Asset occurring
prior to ComTel Completion or Telecential Completion (as the case
may be).
5.7 The Seller, Canco 1 and Canco 3 agree with the Purchaser as
trustee for and on behalf of, and for the benefit of, ComTel
Limited that the management services agreements dated 30 April
1993 entered into between ComTel Limited (on the one part) and
Canco 1 and Canco 3 respectively (on the other part) shall
terminate without any liability of ComTel Limited to either Canco
1 or Canco 3 thereunder with effect from Telecential Completion.
5.8 Each Party will, at the reasonable request of the other Party,
execute all other documents and take all other actions as may be
reasonably required to give effect to their common intention as
set out in this Agreement. Without prejudice to the foregoing, the
Seller, UKI, UKII, Canco 1 and Canco 3 covenant with the Purchaser
(for itself and as trustee for such of its nominee(s) as may be
assumed as partners of the Telecential Communications Partnership,
LP5 and/or LP6 at Telecential Completion in accordance with this
Agreement) that the Seller, UKI, UKII, Canco 1 and Canco 3 will
from time to time at the reasonable request of the Purchaser or
such nominee(s) execute and do such deeds, acts and things and
join with the Purchaser and/or such nominee(s) in such actions and
proceedings as may be requisite for recovering the book debts of
such partnerships and obtaining possession of the assets of such
partnerships.
ARTICLE 6 COMPLETION BALANCE SHEET
6.1 Immediately following the ComTel Completion Date, the Seller will, at
its own cost, instruct the Seller's Accountant to prepare a draft pro
forma consolidated balance sheet (hereinafter referred to as the
"Completion Balance Sheet") for the ComTel Companies and the members of
the Telecential Group as of the close of business on the ComTel
Completion Date (on a going
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concern basis as though the Parties had not consummated the
transactions contemplated by this Agreement), for the sole purpose of:
(i) establishing whether the amount of the aggregate Net Asset
Value as set forth in the Completion Balance Sheet (as finally
determined pursuant to the provisions of this Article 6) is
lower than the amount of the aggregate Net Asset Value as of
the Balance Sheet Date taking into account Capital
Contributions and budget net loss between the Balance Sheet
Date and the ComTel Completion Date;
(ii) establishing the total amount of Indebtedness outstanding as
of the ComTel Completion Date for the members of the
Telecential Group;
(iii) establishing a list of each of the agreements corresponding to
(ii) with the corresponding amounts outstanding as of the
ComTel Completion Date;
(iv) establishing the total amount of cash and equivalents in hand
or at bank as of the ComTel Completion Date for the ComTel
Companies and the members of the Telecential Group.
6.2 Subject to final determination of the Completion Balance Sheet as set
out in this Article 6, the Purchase Price shall be adjusted by the
amount of the Purchase Price Adjustment ("PPA") to reflect the
difference in the amount of the Net Asset Value according to the
following formula:
NAV (cc) - CC + (NL(b) x AD/365) - NAV (aa)
and whereby the following shall apply:
NAV(aa) is the Net Asset Value as shown in the Net
Asset Statement in the amount of pound
sterling 97,437,000;
CC are the Capital Contributions made by any
member of the Seller's Group to the ComTel
Companies and the members of the Telecential
Group between 1 January 1998 and the ComTel
Completion Date;
AD means the actual number of days from
1 January 1998 to the ComTel Completion
Date (both dates inclusive);
NAV(cc) is the Net Asset Value as shown in the
Completion Balance Sheet; and
NL(b) is the Budget 1998 Net Loss in the amount
of pound sterling 43,414,000.
6.2.1 If the Purchase Price Adjustment as finally determined results in an
amount which is less than zero, the amount equal to the shortfall will
be treated as a claim for a Breach for all purposes and, subject to
Articles 9.6 and 9.7, the Seller shall pay to the Purchaser an amount
equal to the shortfall within 5 (in words : five) Business Days after
the date on which the Completion Balance Sheet has been finally
determined pursuant to the provisions of this Article 6.
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6.2.2 If the Purchase Price Adjustment results in an amount which is more
than zero, no amount shall be payable by the Purchaser to the Seller.
6.2.3 Payments pursuant to the foregoing provisions of this Article 6.2 shall
be made in immediately available funds to such bank account as the
Purchaser may notify to the Seller in accordance with this Agreement.
Any actual reduction in the Purchase Price pursuant to this Article 6
resulting in a payment being made by the Seller shall, in the absence
of any agreement between the Purchaser and the Seller to the contrary,
be deemed to reduce the Purchase Price for each of the Assets as shown
in Schedule A on a pro-rata basis.
6.3 The Seller's Accountant shall prepare the draft Completion Balance
Sheet by preparing a consolidated balance sheet for each of the ComTel
Companies and members of the Telecential Group on the basis of the
generally accepted accounting principles consistently applied by the
ComTel Companies and the Telecential Group in preparing the Annual
Accounts and by combining them in accordance with the same principles
applied to the aggregate Net Asset Value as per the Net Asset
Statement. Provision for Taxes (including the calculation of capital
allowances) shall be made on the basis of a tax accounting period from
1 January 1998 to the ComTel Completion Date. The Purchaser shall
procure that the ComTel Companies shall provide as and when reasonably
requested, full co-operation to the Seller's Accountant including but
not limited to access to the corporate books and records and management
of the ComTel Companies (subject to any confidentiality obligations
owed to third parties).
6.4 The draft Completion Balance Sheet must (and the Seller shall procure
that the same shall) be completed as soon as reasonably possible but in
any event within 70 (in words : seventy) days from the ComTel
Completion Date. The Seller shall procure that the Seller's Accountant
submits the draft Completion Balance Sheet to the Seller and the
Purchaser within 80 (in words : eighty) days from the ComTel Completion
Date (such date of submission being hereinafter the "First Date")
together with a written confirmation from the Seller's Accountant to
the Seller and the Purchaser that the Completion Balance Sheet has been
prepared in accordance with this Article 6.
6.5 The Purchaser shall be entitled to instruct the Purchaser's Accountant
to review the draft Completion Balance Sheet as prepared by the
Seller's Accountant. The Seller shall provide, and shall (so far as it
is reasonably able) procure that the Seller's Accountant and members of
the Telecential Group shall provide as and when reasonably requested,
full co-operation to the Purchaser's Accountant, including but not
limited to the provision of copies of (subject to the consent of the
Seller's Accountant (not to be unreasonably withheld) which the
Purchaser acknowledges may require the execution by it and/or the
Purchaser's Accountant of a "hold harmless" letter in favour of the
Seller's Accountant) the Seller's Accountants' working papers and
corporate books and records and access to the management and the
members of the Telecential Group (subject to any confidentiality
obligations owed to third parties). If there are any objections to the
draft Completion Balance Sheet, the Purchaser must (and the Purchaser
shall procure that the Purchaser's Accountant shall) confirm this in
writing (setting out the objections, if any) to the Seller within 60
(in words: sixty) days from the First Date (such date of written
confirmation of the Purchaser's Accountant hereinafter referred to as
the "Second Date"). The Seller and the Purchaser shall consult with
each other and use their reasonable endeavours to seek agreement in
writing on (the) issue(s) in dispute within 30 (in words: thirty) days
from the Second Date.
If the Purchaser shall have failed to have confirmed any objections to
the draft Completion Balance Sheet by the date following 60 (in words:
sixty) days from the First Date, the Purchaser
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shall be deemed to have agreed the draft Completion Balance Sheet on
such date for the purposes of this Article 6.
6.6 If the Seller and the Purchaser shall not be able to resolve the
issue(s) in full within 30 (in words : thirty) days from the Second
Date, the Seller and the Purchaser will jointly select a large
independent accounting firm of international standing (hereinafter
referred to as the "Independent Accountant") mutually acceptable to
them to determine the issues in dispute. In the event that the Seller
and the Purchaser are unable to agree (if required) in writing on the
choice of the Independent Accountant within 45 (in words : forty-five)
days from the Second Date, the Independent Accountant will be appointed
by the President of the Institute of Chartered Accountants in England
and Wales on the application by either the Purchaser or the Seller.
Such appointment shall be binding on the Parties.
6.7 The Independent Accountant shall act as an expert but not as
arbitrator. The Independent Accountant's final determination of the
Completion Balance Sheet shall be binding on the Parties. The costs of
the Independent Accountant shall be borne by the Party or Parties as
the Independent Accountant shall determine, taking into account which
of the Parties has prevailed in the dispute, but in the absence of such
determination shall be borne equally by the Seller and the Purchaser.
6.8 The total amount of cash and equivalents in hand or at bank as shown in
the Completion Balance Sheet shall be an increase to the cash element
of the Purchase Price to be paid by the Purchaser on the Telecential
Completion Date but there shall be deducted therefrom (and if necessary
from the cash element of the Purchase Price) the cost (net of any
associated credit note) of the acquisition of any relevant asset to the
Purchaser or any subsidiary of the Purchaser in the event that the
Purchaser or such subsidiary acquires such asset from a third party
which was a lessor of such asset to a ComTel Company or member of the
Telecential Group in connection with the prepayment or termination of
any financial lease which constituted Indebtedness (the "Cash
Adjustment").
6.9 To the extent that any member of the Telecential Group makes, at the
Purchaser's election, a payment to the lessor in respect of the
termination and/or cancellation of the lease between British
Telecommunications plc and Swindon Cable Limited, the Purchase Price
payable in cash on the Telecential Completion Date shall be increased
by an amount equal to the book value of the liability of such lease as
per the Completion Balance Sheet (the "Swindon Adjustment"). Unless the
Purchaser notifies the Seller to the contrary within 15 Business Days'
of the date hereof, it shall be deemed to have elected for the
prepayment of such lease.
ARTICLE 7 DUE DILIGENCE, WARRANTIES AND ACKNOWLEDGEMENTS
Due diligence investigation by the Purchaser
7.1 The documents and written information made available to the Purchaser
during the due diligence investigation with respect to the ComTel
Companies and the Telecential Group are listed in the Data Room
Information as attached hereto as Schedule I.
Warranties by the Seller and the Transferors
7.2.1 Subject to the provisions of this Article 7 and in consideration of the
Purchaser agreeing to purchase the ComTel Companies and the Telecential
Assets and except as otherwise disclosed to the Purchaser in the Data
Room Information, (i) the Seller and the Transferors represent and
warrant to the Purchaser that to the best of the Seller's knowledge and
subject as mentioned in
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Article 7.10, the disclosed information relating to the ComTel
Companies and the Telecential Group set out in Schedule I is not
misleading in any material respect at the date of this Agreement and
(ii) the Seller and the Transferors represent and warrant to the
Purchaser that, other than as fairly disclosed in the Data Room
Information referred to in Schedule I, each and every statement set out
in Schedule R to this Agreement is true and correct at the date of this
Agreement.
7.2.2 Subject to the provisions of this Article 7, and in consideration of
the Purchaser agreeing to purchase the Telecential Assets from the
relevant Transferors, the Seller and the Transferors represent and
warrant to the Purchaser that, other than as fairly disclosed in the
Data Room Information referred to in Schedule I, to the extent
applicable to the Telecential Assets, each and every statement set out
in paragraphs A1, A2 (first sentence), ▇▇, ▇▇, ▇▇, ▇▇, ▇▇, ▇▇, ▇▇, ▇▇,
N4 and N5 of Schedule R to this Agreement will be true and correct
immediately prior to Telecential Completion by reference to the facts
and circumstances then subsisting.
7.3 For the purposes of the representation and warranty given by UKI in
Article 7.2:-
7.3.1 references to any member of the Telecential Group which is a
partnership shall be deemed to refer to the Telecential Communications
Partnership, the Telecential Communications (Herts) Partnership and the
Telecential Communications (Northants) Partnership only;
7.3.2 references to any ComTel Company or member of the Telecential Group
which is a company shall be deemed to refer to Maza Limited, Herts
Cable Limited, Northampton Cable Television Limited, Swindon Cable
Limited, Cable Thames Valley Limited, Berkhampstead Properties &
Building Contractors Limited, Cable Television Limited and Bracknell
Cable TV Limited only;
7.3.3 references to any shares shall be deemed to refer to the shares in the
companies referred to in Article 7.3.2; and
7.3.4 UKI shall not give any representation or warranty under Article 7.2 in
respect of any of the other ComTel Companies or members of the
Telecential Group.
7.4 For the purposes of the representation and warranty given by Canco 1 in
Article 7.2:-
7.4.1 references to any member of the Telecential Group which is a
partnership shall be deemed to refer to the Telecential Communications
Partnership, the Telecential Communications (Herts) Partnership and the
Telecential Communications (Northants) Partnership only;
7.4.2 references to any ComTel Company or member of the Telecential Group
which is a company shall be deemed to refer to ComTel Limited, Maza
Limited, Herts Cable Limited, Northampton Cable Television Limited,
Swindon Cable Limited, Cable Thames Valley Limited, Berkhampstead
Properties & Building Contractors Limited, Cable Television Limited and
Bracknell Cable TV Limited only;
7.4.3 references to any shares shall be deemed to refer to the shares in the
companies referred to in Article 7.4.2; and
7.4.4 Canco 1 shall not give any representation or warranty under Article 7.2
in respect of any of the other ComTel Companies or members of the
Telecential Group.
7.5 For the purposes of the representation and warranty given by UKII in
Article 7.2:-
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7.5.1 references to any member of the Telecential Group which is a
partnership shall be deemed to refer to LP5 only;
7.5.2 UKII shall not give any representation or warranty under Article 7.2 in
respect of any of the ComTel Companies or the other members of the
Telecential Group.
7.6 For the purposes of the representation and warranty given by ▇▇▇▇ in
Article 7.2:
7.6.1 references to any member of the Telecential Group which is a
partnership shall be deemed to refer to LP6 only;
7.6.2 references to any ComTel Company or member of the Telecential Group
which is a company shall be deemed to refer to Heartland Cablevision
(UK) Limited and Heartland Cablevision II (UK) Limited;
7.6.3 references to any shares shall be deemed to refer to the shares in the
companies referred to in Article 7.6.2; and
7.6.4 ▇▇▇▇ shall not give any representation or warranty under Article 7.2 in
respect of any of the other ComTel Companies or members of the
Telecential Group.
7.7 For the purposes of the representation and warranty given by Canco 3 in
Article 7.2:-
7.7.1 references to any member of the Telecential Group which is a
partnership shall be deemed to refer to LP5 and LP6 only;
7.7.2 references to any ComTel Company or member of the Telecential Group
which is a company shall be deemed to refer to Heartland Cablevision
(UK) Limited and Heartland Cablevision II (UK) Limited;
7.7.3 references to any shares shall be deemed to refer to the shares in the
companies referred to in Article 7.7.2; and
7.7.4 Canco 3 shall not give any representation or warranty under Article 7.2
in respect of any of the other ComTel Companies or members of the
Telecential Group.
Acknowledgements by the Purchaser
7.8 The Purchaser acknowledges that it has performed a due diligence
investigation with respect to the ComTel Companies and the Telecential
Assets.
7.9 The Purchaser acknowledges that the Warranties given by the Seller and
the Transferors are the only representations, warranties or other
assurances of any kind given by or on behalf of the Seller and the
Transferors on which the Purchaser may rely (and has relied) in
entering into this Agreement. Each of the Parties waives all rights and
remedies which, but for this Article 7.9, might otherwise be available
to him in respect of any other such representation, warranty, or other
assurance, provided that nothing in this Article 7.9 shall limit or
exclude any liability for fraud.
7.10 Save in the case of fraudulent misrepresentation, the Purchaser agrees
that no forward looking statement, estimate, promise or forecast, other
than those specifically referred to in this Agreement or the Schedules
made by or on behalf of the Seller or any of the Transferors, any of
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the ComTel Companies, any member of the Telecential Group or any of its
or their respective directors, officers, agents or professional
advisors shall form the basis of any claim by the Purchaser in
connection with this Agreement. The only warranty whatsoever given in
this Agreement with respect to any such forward looking statement,
estimate, promise or forecast shall be that such statement, promise or
forecast is to the best knowledge of the Seller honestly held and
believed to be true by the person so making it.
7.11 Any claim in respect of a Breach or Non-Fulfilment (as defined in
Article 9.1) shall, except in the case of fraudulent misrepresentation,
be subject to the provisions of Article 9 hereof (save as otherwise
expressly provided herein).
7.12 At the time of entering into this Agreement and after having concluded
the due diligence investigation referred to in this Article 7, the
Purchaser is not aware of any matter or thing which is inconsistent
with the Warranties given by the Seller and the Transferors at the date
of this Agreement.
7.13 Each of the Warranties shall be separate and independent and, save as
expressly provided, shall not be limited by reference to any other
Warranty or any other provision in this Agreement, provided however
that the principle of general disclosure as set out in Article 7.2
shall continue to prevail.
7.14 The Seller and the Transferors shall not and shall subject to the fact
that the Purchaser has management control over the Telecential Assets
with effect from ComTel Completion under the terms of the Relationship
Agreement, exercise best endeavours to ensure that each member of the
Telecential Group shall not do, allow or procure any act or omission on
or before the Telecential Completion Date which would constitute a
Breach of the Warranties being deemed given pursuant to Article 7.2.2
by the Seller and the relevant Transferors at the Telecential
Completion Date by reference to the facts and circumstances then
subsisting.
7.15 The Seller and the Transferors undertake to the Purchaser to disclose
to it in writing, as soon as possible upon becoming aware of the same,
reasonable details of any fact, matter, event or circumstance which:
(a) constitutes a Breach of any of the Warranties given
by the Seller or the relevant Transferors upon the
execution of this Agreement;
(b) will constitute a Breach of any of the Warranties when deemed
given pursuant to Article 7.2.2 by the Seller or the relevant
Transferors at the Telecential Completion Date; or
(c) will give rise to a claim under the provisions contained in
Schedule T.
7.17 The Seller undertakes not to, and to procure that no member of the
Seller's Group shall, exercise any right of counterclaim or set-off or
any other claim or right of recovery against any of the ComTel
Companies or any member of the Telecential Group or any of their
respective officers, employees or, where such auditors or advisers
would be entitled to so counterclaim against any of the ComTel
Companies or members of the Telecential Group or any of their
respective officers or employees, auditors or advisers of the ComTel
Companies or members of the Telecential Group in relation to any claim
which may be made in respect of the Warranties given by the Seller or
the provisions contained in Schedule T.
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ARTICLE 8 WARRANTIES OF THE PURCHASER AND NTL
8.1 Each of the Purchaser and NTL represents and warrants to the Seller
that at the date of this Agreement and on the ComTel Completion Date
each and every statement set out below, is true and correct and will
continue to be true and correct at the ComTel Completion Date:
8.1.1 The Purchaser is a company duly organised and validly existing under
the laws of England and Wales. NTL is a company duly organised and
validly existing under the laws of the State of Delaware, USA. Neither
the Purchaser nor NTL is insolvent nor is any action or request pending
to declare the Purchaser or NTL insolvent and no request has been filed
for a moratorium or suspension of payments by the Purchaser or NTL or
any similar arrangement for the benefit of creditors nor has the same
been granted.
8.1.2 Each of the Purchaser and NTL has the corporate power to enter into
this Agreement and to perform its obligations hereunder. This Agreement
constitutes and the Purchaser Security (in the case of NTL) will upon
issue constitute, the legal, valid and binding obligations of the
Purchaser and of NTL enforceable against the Purchaser or NTL (as the
case may be) in accordance with its terms, subject to laws relating to
constitutional rights generally and general principles of equity.
8.1.3 The execution of and entering into this Agreement and the consummation
of the transactions contemplated hereby (including without limitation
the creation and issue of the Purchaser Security in accordance with
this Agreement) by the Purchaser and NTL has been duly or will be
authorised by all necessary corporate and other action applicable to
the Purchaser and NTL. The individuals executing this Agreement on
behalf of the Purchaser and NTL are duly authorised to do so.
8.1.4 The execution of and entering into this Agreement, and the consummation
of the transactions contemplated hereby, subject to the Seller
complying with its obligations hereunder in connection with the
discharge of all Indebtedness of the ComTel Companies on the ComTel
Completion Date and the Telecential Group on the Telecential Completion
Date, and the Purchaser Security (in the case of NTL) do not and will
not (with or without the passage of time or the giving of notice) in
any material respect violate or conflict with any provision of the
Purchaser's memorandum or articles of association or NTL's by-laws, or
violate or conflict with any law binding upon the Purchaser or NTL or
any of their respective properties or assets or violate or conflict
with, result in a breach of, or constitute a default under any
agreement or other obligation to which the Purchaser or NTL is bound.
8.1.5 Except for the notifications to the DTI, ITC and OFTEL which the
Purchaser has made prior to entering into this Agreement, no consent or
approval of, or registration, notification, filing and/or declaration
with, any court, government or governmental agency, stock exchange or
self regulatory organisation is required to be given or made by the
Purchaser or NTL in connection with the execution of and entering into
this Agreement, and the consummation of the transactions and the other
agreements and instruments contemplated hereby.
8.2 The Seller and the Purchaser mutually undertake to exercise their best
efforts to agree, as soon as possible and no later than 15 (in words:
fifteen) Business Days following the ComTel Completion Date, on the
precise wording of the Purchaser Security, reflecting the main terms
set out in Schedule S and with such corresponding provisions as are
normal for the specific type of security agreed upon and necessary to
make the Purchaser Security valid and enforceable under the laws of the
State of Delaware, USA.
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ARTICLE 9 BREACH AND NON-FULFILMENT
Breach
9.1 In the event of a breach of any of the Warranties given by the Seller,
the Transferors or the Purchaser in this Agreement (hereinafter
referred to as a "Breach") or non-fulfilment by the Seller or the
Transferors or the Purchaser of any other obligation contemplated by
this Agreement (hereinafter, subject to Article 9.2, referred to as a
"Non-Fulfilment"), the Seller, the Transferors or the Purchaser, as the
case may be, shall upon obtaining knowledge of a Breach or
Non-Fulfilment by any other Party, notify that other Party promptly in
writing of such Breach or Non-Fulfilment, setting out in reasonable
detail (so far as is within the actual knowledge (after reasonable
enquiry) of the person making the notification but subject to any
obligations of confidentiality owed to any third party) the events or
facts giving rise to the Breach or Non-Fulfilment, and giving an
estimate (to the extent reasonably possible) of the amount of damages
claimed as a result thereof. Any failure by any Party to notify the
other pursuant to this Article 9.1 and the content of any notification
made pursuant hereto shall not in any way affect the right to bring a
claim for a Breach or Non-Fulfilment.
9.2 The following shall be deemed not to fall within the definition of a
Non-Fulfilment for the purposes of this Agreement (i) the Seller's and
Transferors obligations contained in Article 11 (a "Tax Indemnity
Claim"), (ii) the Seller's and Transferors' confidentiality obligations
contained in Article 10 (a "Confidentiality Claim"), (iii) the Seller's
and the Transferors' completion obligations contained in Articles 2, 5
and 6 (a "Completion Claim"), (iv) the obligations contained in
Articles 4.5 and 13 (an "Indebtedness Claim"), (v) the obligations
contained in Article 15, (a "Minority Claim"), (vi) the obligations
contained in Article 3 (a "Pre-Completion Claim"), such claims jointly
the "Specific Claims". Article 9 shall not apply to Specific Claims
other than where expressly provided for below. The following shall
apply in relation to Specific Claims:
9.2.1 in respect of an Indebtedness Claim or a Completion Claim, the amount
of all awards or damages awarded or agreed against the Seller and
Transferors shall not in the aggregate exceed the equivalent of 100% of
the Purchase Price, whereas for other Specific Claims the equivalent of
50% of the Purchase Price shall apply;
9.2.2 in respect of Tax Indemnity Claims, Articles 9.6.1 and 9.6.2 shall
apply and in respect of all Specific Claims, Article 9.10 shall apply;
9.2.3 in respect of Specific Claims, no party shall be entitled to make any
claim unless notice in writing providing reasonable detail (subject to
any confidentiality obligations owed to third parties) of such claim is
given prior to the sixth anniversary of the ComTel Completion Date
except in the case of a Pre-Completion Claim when such notice must be
given prior to the date six months after the Telecential Completion
Date.
[CLAUSE 9.3 DELIBERATELY DELETED]
9.4 If the notified Party has not taken appropriate measures within 30
(thirty) days of such notification in order to remedy the Breach or
Non-Fulfilment concerned and a dispute arises in this respect between
the Parties or where the Breach is not remediable, the resolution of
the dispute will immediately be brought in writing to the attention of
the respective Chief Executive Officers of the Seller and the Purchaser
in an attempt to resolve the dispute amicably and written reports
concerning such dispute shall be submitted by each of the relevant
Parties to the said officers.
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9.5 In the event that the dispute is not resolved amicably in accordance
with Article 9.4 within 30 (thirty) days of having been brought in
writing to the attention of the respective Chief Executive Officers,
any of the applicable Parties shall be entitled to institute legal
proceedings against the other(s) in respect of such dispute.
9.6 Subject to the other provisions of this Article 9, the maximum
aggregate liability of the Seller and the Transferors for damages in
connection with any Breach or any Non-Fulfilment shall be limited to
the amount required to put the Purchaser and/or the relevant ComTel
Company and/or the relevant member of the Telecential Group (as
appropriate) in the position in which it and/or they would have been if
the relevant Breach or Non-Fulfilment had not occurred.
Threshold
9.6.1 A claim (in the amount as finally determined by virtue of a judgement
of a court of competent jurisdiction or agreed between the relevant
Parties) against the Seller and/or the Transferors for damages and
related costs in connection with a Breach or Non-Fulfilment shall not
be permitted for any individual claim in an amount below the equivalent
in Pounds Sterling at the average of the two highest and two lowest
figures of the spot rate of exchange of Chase Manhattan Bank NA. for
the purchase of pound sterling Sterling with Dutch Guilders at the
ComTel Completion Date of NLG 1,000,000 (one million Dutch Guilders);
and
9.6.2 In any event, the aggregate amount of all claims for Breaches,
Non-Fulfilment, Specific Claims (and/or claims under Article 6 (as
finally determined by virtue of a judgement of a court of competent
jurisdiction or agreed between the Parties in excess of the limit in
Article 9.6.1 above (from time to time)) must exceed the equivalent in
Pounds Sterling at the average of the two highest and two lowest
figures of the spot rate of exchange of Chase Manhattan Bank NA. for
the purchase of pound sterling with Dutch Guilders at the ComTel
Completion Date of NLG 17,500,000 (seventeen million five hundred
thousand Dutch Guilders) before a claim may be lodged in which event
the Purchaser shall be entitled, if successful, (subject to the other
provisions of this Article 9) to the full amount of the aggregate of
all such claims in excess of the limit in this Article 9.6.2 and not
only to such excess.
Warranty Cap
9.7 In any event, the amount of all awards or damages awarded or agreed
against the Seller or any Transferor(s) for any and all Breaches and/or
Non-Fulfilments (subject to Article 9.2; Specific Claims) shall not in
the aggregate exceed the equivalent of fifty percent of the Purchase
Price.
Time Limit
9.8 The Purchaser shall not be entitled to make any claim against the
Seller or any Transferor for any Breach or Non-Fulfilment unless notice
in writing of such claim (giving reasonable details of such claim) is
given to the Seller prior to the first anniversary of the ComTel
Completion Date, or in the case of any Warranties given by the Seller
and the Transferors by reference to the Telecential Completion Date and
any obligations falling to be discharged at Telecential Completion
unless notice in writing of such claim (giving reasonable details of
such claim) is given to the Seller prior to the first anniversary of
the Telecential Completion Date except for a claim for a Breach
relating to Tax or a Tax Indemnity Claim, for which the Purchaser shall
not be entitled to make any claim against the Seller unless notice in
writing providing reasonable detail of such claim is given to the
Seller prior to the sixth anniversary of the ComTel
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Completion Date (to the extent the claim relates to the ComTel Company)
or Telecential Completion Date (to the extent the claim relates to the
Telecential Group).
Other Limitations
9.9 The Purchaser shall notify the Seller of any claim for a Breach or
Non-Fulfilment within 30 (in words: thirty) days of becoming aware
thereof. To the extent that any failure to so notify the Seller causes
loss to the Seller or any Transferor or makes it impossible for the
Seller or any Transferor to limit its damages, any loss suffered shall
be off-set against the relevant claim from the Purchaser.
9.10 No claim by any Party for any Breach or Non-Fulfilment or otherwise
shall arise in respect of any consequential or indirect damages or loss
of profit and all claims shall be limited to damages actually suffered.
9.11 The Purchaser shall not be entitled to make any claim for any Breach or
Non-Fulfilment to the extent that a specific provision for the matter
or liability has been made in the Completion Balance Sheet, or to the
extent that its payment or discharge is taken into account or reflected
in the Completion Balance Sheet.
9.12 No claim by any Party for any Breach or Non-Fulfilment shall arise from
any matter disclosed or otherwise exempted in or pursuant to this
Agreement and the Schedules attached hereto.
9.13 No claim by any Party for any Breach or Non-Fulfilment shall arise to
the extent that the claim arises as a result of (i) any change in the
accounting principles applied by any of the ComTel Companies after
ComTel Completion and/or members of the Telecential Group after
Telecential Completion (as applicable) or (ii) any subsequent changes
in applicable laws or regulations after ComTel Completion or
Telecential Completion (as applicable), or (iii) a new interpretation
of existing laws by a court or other public authority in a judgement or
decision published after ComTel Completion or Telecential Completion
(as applicable) with retrospective effect.
Third Party Claims
9.14 If any claim of the Purchaser in connection with a Breach or
Non-Fulfilment shall arise which would or is reasonably likely to
entitle the Purchaser to receive a payment from the Seller or any
Transferor under the terms of this Agreement (after taking into account
the limitations of the liability of the Seller and the Transferors set
out herein) and such claim is as a result of or in connection with a
liability or alleged liability towards a third party, the Purchaser
shall (i) as soon as reasonably practicable inform the Seller thereof
(and of the relevant facts of the matter at hand so far as then known
by the Purchaser but subject to any obligations of confidentiality owed
to third parties) in writing prior to taking any action, and (ii) to
the extent practicable in all the circumstances, not take any such
action within 10 (in words: ten) Business Days of so informing the
Seller in order to allow the Seller to decide on whether to exercise
its rights under Article 9.16.
9.15 The Purchaser may, notwithstanding the foregoing, be entitled to take
any necessary action before the expiry of the 10 (in words: ten)
Business Day period in urgent cases where immediate action is required,
provided that the Purchaser shall at all times consult (subject to any
obligations of confidentiality owed to third parties) and endeavour to
seek agreement with the Seller with regard to the actions to be taken
to the extent reasonably possible.
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9.16 Provided the Seller shall notify the Purchaser of its intention to
exercise its rights under this Article 9.16 within 10 (ten) Business
Days of receipt of a notification under Article 9.9, without prejudice
to the Seller's liability to the Purchaser and subject to the Purchaser
receiving such security as it may reasonably require in respect of any
potential liability of the Seller under this Article 9.16 and for the
particular Breach or Non-Fulfilment in question:
(a) the Seller shall (subject to complying with its obligations
under (d) below) be entitled, at its own expense, to have the
exclusive conduct of any appeal, dispute, compromise, or
defence of the dispute and of any incidental negotiations with
the third party giving rise to the particular Breach or
Non-Fulfilment, and the Purchaser shall (and shall procure
that the relevant ComTel Companies and members of the
Telecential Group shall), in each case at the expense of the
Seller, subject as aforesaid take such action to avoid,
dispute, resist, appeal, compromise or contest the liability
as may be reasonably requested by the Seller;
(b) the Purchaser shall procure that the Seller is provided, at
the expense of the Seller, with such information and
assistance as the Seller may reasonably require for avoiding,
resisting, appealing, compromising or contesting any such
liability;
(c) where the Seller has notified the Purchaser of its intention
to exercise its rights hereunder in accordance with this
Article 9.16 and is continuing to exercise such rights,
neither the Seller nor the relevant Transferor shall in any
circumstances be liable for any third party claim settled or
otherwise compromised, without its prior written consent (such
consent not to be unreasonably withheld or delayed); and
(d) the Seller shall keep the Purchaser informed of any action
which it takes pursuant to this Article 9.16.
9.17 Notwithstanding Article 9.16:
9.17.1 nothing contained therein shall permit the Seller in exercising its
rights thereunder to do, or require the Purchaser or any of the ComTel
Companies and/or members of the Telecential Group to do, anything which
the Purchaser reasonably considers to be materially adverse to it or to
the business of it or any of its subsidiaries (including the ComTel
Companies and the Telecential Group); and
9.17.2 the Seller shall not be entitled to exercise any right under Article
9.16 where to do so would require the disclosure to the Seller of any
information the subject of confidentiality obligations owed to any
third party.
9.18 If in respect of any matter which would otherwise give rise to a
Breach, the Purchaser or any of the ComTel Companies or members of the
Telecential Group is entitled to claim under any policy of insurance,
the amount of insurance monies which such entity receives shall reduce
pro rata the claim for Breach or Non-Fulfilment.
9.19 If in respect of any matter which would otherwise give rise to a Breach
or Non-Fulfilment, the Purchaser or any of the ComTel Companies or the
members of the Telecential Group is entitled to seek recourse against
any third party, no claim may be made against the Seller or any
Transferor before the Purchaser and/or the relevant ComTel Company
and/or members of the Telecential Group has or have taken such
reasonable action as may be required from it or them in the
circumstances to effect recourse on such third party and the amount of
monies recovered from such third party (less the costs of recovery and
net of any tax payable on such amount)
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shall reduce pro rata the claim for such Breach or Non-Fulfilment
PROVIDED THAT nothing in this Article 9.19 shall prevent the Purchaser
giving notice of the particular Breach or Non-Fulfilment for the
purposes of Article 9.9.
9.20 If the Seller or the Transferor has made a payment for damages in
respect of a claim for Breach or Non-Fulfilment and the Purchaser or
any of the ComTel Companies or members of the Telecential Group
simultaneously therewith or subsequently thereto receives any cash
benefit otherwise than from the Seller or the Transferor which would
not have been received but for the circumstance giving rise to the
claim in respect of which the payment for damages was made by the
Seller or relevant Transferor, the Purchaser shall, once it or the
relevant ComTel Company or member of the Telecential Group has received
such benefit, forthwith repay to the Seller or relevant Transferor(s)
an amount equal to the lesser of the amount of such benefit and the
amount paid by the Seller or relevant Transferor(s) (net of any tax
payable on such amount).
9.21 Any damages payable by the Seller under this Agreement shall take into
consideration the tax effects to the Purchaser and/or the ComTel
Companies and/or the members of the Telecential Group, or any of them,
as applicable, so that damages will be "net after tax effect" only.
9.22 The Seller shall procure that Vision Networks Holdings B.V., promptly
after its incorporation, shall provide a guarantee in writing to the
Purchaser in the form attached as Schedule F.
9.23 The Seller covenants with the Purchaser in the same terms mutatis
mutandis as NTL under Article 12.15, in respect of the obligations of
the Transferors under or pursuant to this Agreement and the
Relationship Agreement and any other agreement entered into by any of
the Transferors and any other party on the date of this Agreement.
ARTICLE 10 SECRECY
10.1 Each of the Seller, the Transferors and the Purchaser mutually covenant
and agree that it shall not (and shall procure that its subsidiaries
and parent undertakings and the respective advisors, officers and
members of its and their respective boards of managing directors and
supervisory directors and directors of it and its subsidiaries and
parent undertakings (each a "Restricted Person") shall not) at any time
divulge, furnish or make accessible to anyone, and treat as strictly
confidential, any confidential or secret knowledge or information with
respect to the provisions of this Agreement and the negotiations
relating to this Agreement or any other Party, provided always that the
foregoing shall not apply (i) to information which is in the public
domain other than as a result of any Party breaching its obligations
hereunder, (ii) in any case where any of the Seller, the Transferors,
the Purchaser or Restricted Person (or any of their advisors or
officers) is required by law to divulge, furnish or make such
information accessible, (iii) in the framework of compliance with
requirements of any relevant Stock Exchange (including NASDAQ and
EASDAQ) or regulatory or government body. The Purchaser shall exercise
its best endeavours to procure that, following ComTel Completion, each
of the ComTel Companies and, following Telecential Completion, each
member of the Telecential Group shall comply with the foregoing
provisions.
10.2 The Seller and the Transferors shall, and shall procure that the
subsidiaries and parent undertakings shall, keep confidential and not
at any time after the date of this Agreement disclose or make known in
any way to anyone (other than the Purchaser) or use for its own or any
other person's benefit any know-how or confidential information
relating to any of the customers, suppliers or affairs of the
businesses (including any prospective businesses) of the ComTel
Companies or the members of the Telecential Group or otherwise relating
to the businesses of the ComTel Companies or the members of the
Telecential Group provided always
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that the foregoing shall not apply to information which is or comes
into the public domain other than as a result of a breach by the Seller
or any Transferor of its obligations hereunder. The obligations of the
Parties under this Article 10.2 shall be subject to confidentiality
obligations owed to third parties.
10.3 All records, papers and documents in the possession, custody or control
of or kept or made by or on behalf of the Seller, the Transferors
and/or any member of the Seller's Group relating to the business or
affairs of any of the ComTel Companies or members of the Telecential
Group or of which any of the ComTel Companies or members of the
Telecential Group does not have a record or copy, shall be prima facie
deemed to be the property of the relevant company or partnership and
all such items shall be delivered to the relevant company or
partnership at or as soon as possible after ComTel Completion (where
they relate to the ComTel Companies) and Telecential Completion (where
they relate to the Telecential Group).
ARTICLE 11 TAX AFFAIRS POST COMPLETION
11.1 To the extent this is reasonably required by the Seller and subject to
the Seller complying with its obligations under Article 10.2 (save
where that would unduly restrict the Seller in the conduct of its Tax
affairs as hereafter said), the Purchaser shall procure that the ComTel
Companies and the members of the Telecential Group shall, without undue
delay, provide to the Seller such information and access to, and copies
of, the corporate books and records of each of the ComTel Companies and
the members of Telecential Group and the Purchaser, and provide such
other assistance, at the expense of the Seller, (e.g. by making
available employees to provide additional information and explanation
of any materials so provided) as may reasonably be requested by the
Seller, as being necessary or desirable to the Seller in properly
fulfilling its obligations pursuant to Tax laws and regulations or
otherwise dealing with tax affairs in respect of the periods prior to
the relevant Completion Date but subject always to obligations of
confidentiality owed to third parties.
11.2 If with respect to the period prior to the ComTel Completion Date in
relation to the ComTel Companies or the Telecential Completion Date in
relation to the Telecential Group, any of the ComTel Companies or any
member of the Telecential Group is notified of a Tax audit, or receives
an assessment or other correspondence (other than of an administrative
nature) from the Tax authorities, the Purchaser shall, (and the
Purchaser shall procure that the ComTel Companies and members of the
Telecential Group shall) promptly inform the Seller, and the Seller and
the Purchaser and the relevant companies and partnerships shall consult
with each other and seek agreement on the appropriate course of action,
taking into account the best interests of the Seller but subject always
to obligations of confidentiality owed to third parties. The provisions
of Article 9 hereof shall apply to the conduct of discussions,
correspondence and negotiations preceding a dispute (if any) with the
Tax authorities, and further as provided for in that Article.
11.3 To the extent this is reasonably required by the Purchaser (but subject
always to obligations of confidentiality owed to third parties) the
Seller shall procure that the members of the Seller's Group shall
without undue delay provide to the Purchaser such information and
access to, and copies of, the books and records of each of the members
of the Seller's Group which has been a partner in any of the
partnerships comprised in the Telecential Group, and provide such other
assistance (e.g. by making available employees to provide additional
information and explanation of any materials so provided), at the
expense of the Purchaser, as may reasonably be requested by the
Purchaser, as being necessary or desirable to the ComTel Companies or
the members of the Telecential Group in fulfilling their obligations
pursuant to Tax laws and
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regulations or otherwise dealing with their tax affairs in respect of
the periods since 31 December 1997.
11.4 The Parties further covenant with each other in relation to certain Tax
matters as more particularly set out in Schedule T.
11.5 The obligations of the Parties under Articles 11.1 to 11.3 and Schedule
T shall, in respect of the ComTel Companies apply with effect from the
ComTel Completion Date and, in respect of the Telecential Group shall
apply with effect from the Telecential Completion Date.
ARTICLE 12 MISCELLANEOUS
12.1 This Agreement represents the entire understanding and agreement
between the Purchaser and the Seller and the Transferors with respect
to the purchase and sale of the Assets and supersedes and replaces in
their totality all previous agreements, both in writing and oral,
including correspondence, between the Purchaser and the Seller and the
Transferors with respect to the purchase and sale of the Assets.
12.2 Headings are for ease of reference only and shall not affect the
interpretation of this Agreement.
12.3 This Agreement and any Schedules and Exhibits hereto all form an
integral part. References to Schedules, Exhibits and Articles are
references to Schedules, Exhibits and Articles of this Agreement.
12.4 Any notice or other communication required or permitted hereunder, must
be given in writing and either personally delivered or sent by
registered mail or by courier or by telefax addressed as follows or to
such other address as the Parties shall have given notice of pursuant
hereto:
If to the Purchaser and/or NTL :
To : NTL Group Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telefax No : + 1252 402 170
Attention : The Company Secretary
and to : NTL Inc
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇
Telefax No : + ▇▇▇ ▇▇▇ ▇▇▇▇
Attention : ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
and to : ▇▇▇▇▇▇▇ ▇▇▇▇ Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇
▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇
Telefax No : + ▇▇▇ ▇▇▇ ▇▇▇▇
Attention : ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
and to : ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telefax no : 171 236 3728
Attention : Mr S.R. Summerfield/S.A. Jay
If to the Seller and/or the Transferors:
To : C/o. Vision Networks III ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telefax No : ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Attention : Managing Director
and to : Loeff ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telefax No : + 31 10 433 0282
Attention : Mr. ▇.▇. Stumphius
Any notice or other document shall be deemed to have been given or
served:
1. if personally delivered:
at the time of delivery, if delivered between the hours of
8.30 a.m. and 4.00 p.m. (local time at the place of receipt)
on a Business Day; or if not, at 8.30 a.m. (local time) on the
next following Business Day;
2. if posted, at 10.00 a.m. (local time) on the day four Business
Days after it was put in the post; or
3. if sent by air courier, 10.00 a.m. (local time) on the day two
Business Days after it was sent; or
4. if sent by telefax:
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at the time sent, if sent between the hours of 8.30 a.m. and
4.00 p.m. (local time at the place of receipt) on a Business
Day; or
if not, at 8.30 a.m. (local time) on the next following
Business Day.
12.5 Each Party will bear its own costs and expenses in relation to the
entry into, execution and performance of this Agreement, including all
negotiations, preparations and investigations. The costs any and all
stamp or registration duties which may be assessed on account of any
act or failure to act of any Party shall be borne by such Party, it
being understood that all registration and stamp duties (and any late
payment of interest or penalties thereon) payable in relation to the
transfer of the ComTel Shares from ComTel to the Purchaser pursuant to
this Agreement shall be for the account of the Purchaser.
12.6 No Party shall make or permit any person connected with him to make any
announcement concerning this sale and purchase or any matter in
connection with this Agreement at any time after the date hereof except
as required by law or any applicable Stock Exchange regulations or with
the prior written approval of the Purchaser and the Seller.
12.7 This Agreement may not be amended, supplemented or changed, nor may any
provision hereof be waived, except by a written instrument making
specific reference to this Agreement signed by each of the Parties and
by Vision Networks Holdings B.V. if it has delivered the guarantee
referred to in Article 9.22.
12.8 If any provision of this Agreement shall be held by any court of
competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon and shall
not impair the enforceability of any other provision of this Agreement.
12.9 The representations, warranties and other covenants and undertakings
made by the Parties in this Agreement shall be deemed to be continuing
and shall survive ComTel Completion and Telecential Completion.
12.10 Save as provided herein, none of the rights or obligations under this
Agreement may be assigned or transferred by a Party without the prior
written consent of the Purchaser and the Seller. Any Party may assign
its rights (but not its obligations) under this Agreement to a
subsidiary or parent undertaking for so long as such company remains a
subsidiary or parent undertaking of such Party without the prior
consent of any other Party, provided that such subsidiary or parent
undertaking shall first, in writing, commit to be bound by the terms of
this Agreement. The Purchaser and/or NTL may assign and transfer all of
its rights and obligations under this Agreement to a parent undertaking
of NTL (of which each of the Purchaser and NTL is and remains for the
period of at least one year from the Telecential Completion Date a
wholly owned subsidiary) provided the common stock of such undertaking
is traded on NASDAQ's National Market. Where NTL and/or the Purchaser
transfer their obligations prior to the issue of the Purchaser Security
or prior to the conversion of such security, the Purchaser Security or
the stock into which it converts shall be issued by the parent
undertaking of NTL and not NTL and, where appropriate, references in
Schedule S to NTL and NTL Common Stock shall be deemed to be references
to the new parent undertaking and the common stock of the new parent
undertaking respectively but shall otherwise be on the same terms and
conditions as set out in Schedule S. Each of the Parties hereby give
such consents as may be necessary to give effect to any such transfer
or assignment. Any assignment and/or transfer in accordance with this
Article 12.10 shall not in any way affect or restrict the guarantee to
be given by Vision Networks
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Holdings B.V. set out in Schedule F. In the event of the Purchaser
and/or NTL (as the case may be) assigning and transferring all of its
rights and obligations in accordance with this Article, references in
this Agreement to the Purchaser or NTL (as the case may be) shall be
deemed to be references to such transferee and this includes,
specifically, the obligations of NTL under Article 12.15.
12.11 The Parties waive their respective rights to rescind, repudiate or
cancel this Agreement.
12.12 This Agreement shall be governed by and construed in accordance with
the laws of England. The Parties hereby irrevocably submit to the
non-exclusion jurisdiction of the Courts of England and Wales in
respect of any claim, dispute or difference arising out of and in
connection with this Agreement.
12.13 The Purchaser hereby explicitly agrees that ▇▇▇▇▇ & ▇▇▇▇▇ and/or Loeff
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall advise and act on behalf of the Seller and the
Transferors with respect to this Agreement, any agreements resulting
from this Agreement and any disputes resulting herefrom.
12.13A The Seller hereby agrees to indemnify and keep indemnified the
Purchaser and Vision Networks Services UK Limited against all
liabilities, costs, and expenses (including Tax and any liability to
Tax) and all actions incurred by either of them as a result of or
arising out of or in connection with the waiver by Vision Networks UK
Holding N.V. of any outstanding loan, together with accrued interest,
owed to it by Vision Networks Services UK Limited. Article 9 shall not
apply to this Article.
12.14 The Purchaser acknowledges that the existing employment relationships
among the ComTel Companies and the Telecential Group and their
respective employees are not affected by the transactions contemplated
by this Agreement.
12.15 NTL GUARANTEE
12.15.1 NTL as primary obligor unconditionally and irrevocably:
(a) undertakes to ensure that the Purchaser will perform when due
all its obligations to the Seller and the Transferors (the
"Obligees") under or pursuant to this Agreement and the
Relationship Agreement;
(b) agrees that if and each time that the Purchaser fails to make
any payment to any Obligee when it is due under or pursuant to
this Agreement or the Relationship Agreement, NTL shall on
demand (without requiring the Obligee first to take steps
against the Purchaser or any other person) pay that amount to
the Obligee concerned, as the case may be.
12.15.2 Each payment to be made by NTL under this Article 12.15 shall be made
in the currency in which the relevant amount is payable by the
Purchaser free and clear of all deductions or withholdings of any kind,
except for those required by law, and if any deduction or withholding
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must be made by law, NTL will pay that additional amount which is
necessary to ensure that the Obligee concerned receives a net amount
equal to the full amount which it would have received if the payment
had been made by the Purchaser to the relevant Obligee in accordance
with this Agreement or the Relationship Agreement (as the case may be).
12.15.3 NTL's obligations under this Article 12.15 shall not be affected by any
matter or thing which but for this provision might operate to affect or
prejudice those obligations, including without limitation:
(a) any time or indulgence granted to, or composition with the
Purchaser or any other person;
(b) the taking, variation, renewal or release of, or neglect to
perfect or enforce this Agreement or the Relationship
Agreement or any right, guarantee, remedy or security from or
against the Purchaser or any other person;
(c) any unenforceability or invalidity on whatever ground of any
obligation of the Purchaser, so that this Article 12.15 shall
be construed as if there were no such enforceability or
invalidity; or
(d) any termination of this Agreement.
12.15.4 NTL warrants that all the obligations expressed to be accepted by it
under this Article 12.15 are legally binding obligations of it,
enforceable in accordance with their respective terms, and that all
necessary shareholder and other consents and authorisations for the
giving of the guarantee and the acceptance of all other obligations by
it under this Article 12.15 have been obtained and are in full force
and effect.
12.15.5 NTL will reimburse the Seller for all reasonable legal and other costs
(including any VAT) incurred by the Seller in connection with the
enforcement of any of the provisions of this Article 12.15.
12.16 Each of the Parties shall use reasonable endeavours to prevent the
entry of any Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
12.17 The Seller and each Transferor hereby irrevocably authorises and
appoints Fleetside Legal Representative Services Ltd., ▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, as its agent for service of proceedings in relation to
any matter arising out of or in connection with this Agreement and
service on such agent shall be deemed to be service on the Seller or
such Transferor.
12.18 NTL hereby irrevocably authorises and appoints NTL Group Limited,
Bristol House, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (for
the attention of The Company Secretary) as its agent for service of
proceedings in relation to any matter arising out of or in connection
with this Agreement and service on such agent shall be deemed to be
service on NTL, as applicable.
12.19 Where used in this Agreement the terms "subsidiary", "subsidiary
undertaking", "parent undertaking", "holding company", "financial
year", and "director" shall have the meanings respectively attributed
to them by the Companies ▇▇▇ ▇▇▇▇ at the date of this Agreement.
12.20 A reference to any statutory provision in this Agreement:
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(a) includes any order, instrument, plan, regulation, permission
and direction made or issued under such statutory provision or
deriving validity from it; and
(b) shall be construed as a reference to such statutory provision
as in force at the date of this Agreement (including, for the
avoidance of doubt, any amendments made to such statutory
provision that are in force at the date of this Agreement);
and
(c) shall also be construed as a reference to any statutory
provision of which such statutory provision is a re-enactment
or consolidation.
12.21 Words importing one gender shall (where appropriate) include any other
gender and words importing the singular shall ( where appropriate)
include the plural and vice versa.
12.22 Any remedy or right conferred by this Agreement on any Party for breach
of this Agreement shall be in addition to and without prejudice to any
other right or remedy available to it.
12.23 No failure or delay by any Party or time or indulgence given by it in
or before exercising any remedy or right under or in relation to this
Agreement shall operate as a waiver of the same nor shall any single or
partial exercise of any remedy or right preclude any further exercise
of the same or the exercise of any other remedy or right.
12.24 No waiver of any particular breach of the provisions of this Agreement
shall operate as a waiver of any repetition of such breach.
12.25 Each of the Seller and the Transferors acknowledges that it is entering
into this Agreement without reliance on any undertaking or
representation given by or on behalf of the Purchaser other than
expressly contained in this Agreement provided that nothing herein
shall exclude the Purchaser from liability for fraudulent
misrepresentation.
12.26 Words and phrases used in relation to activities or entities outside
England shall where necessary be references to corresponding words and
phrases under applicable local law.
12.27 This Agreement may be executed in two or more counterparts and
execution by each of the Parties of any one of such counterparts will
constitute due execution of this Agreement.
ARTICLE 13: REPAYMENT OF INDEBTEDNESS
13.1 The Seller and the Transferors hereby acknowledge that the Purchaser
must acquire the ComTel Companies and the members of the Telecential
Group free of any Indebtedness and that at the ComTel Completion Date
and the Telecential Completion Date there shall be no Indebtedness of
any of the ComTel Companies and the members of the Telecential Group
respectively. The Seller and the Transferors hereby acknowledge and
agree that the costs of cancelling or extinguishing such Indebtedness
(including any prepayment and termination and associated costs) shall
(save as otherwise expressly provided in the Agreement) be for the
account of the Seller and the Transferor and shall not (save as
aforesaid) under any circumstances be the responsibility of any of the
ComTel Companies or members of the Telecential Group. Notwithstanding
the aforesaid, the Seller and the relevant Transferor(s) shall
indemnify and keep indemnified the Purchaser for itself and as trustee
for each of the ComTel Companies and the members of the Telecential
Group and the Purchaser's subsidiaries against any Indebtedness
including any prepayment, termination or associated costs of repaying
such Indebtedness being in existence at ComTel Completion (in relation
to Indebtedness of the ComTel Companies as
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per the Balance Sheet Account) and Telecential Completion (in relation
to Indebtedness of any member of the Telecential Group).
13.2 If there is any Indebtedness which is to be repaid or prepaid between
the date of this Agreement and the Telecential Completion Date and as a
result any member of the Telecential Group acquires any right against
the creditor in respect of such Indebtedness so as to be able to direct
such creditor to sell the asset the subject of the relevant
Indebtedness to a person identified by such member, the Seller and the
Transferors shall procure that the relevant member of the Telecential
Group shall procure the sale of such assets to the Purchaser or its
nominee if the Purchaser so elects within five Business Days of being
asked if it wishes to do so.
ARTICLE 14: ASSIGNMENT OF CONTRACTS
14.1 The Seller and the Transferors to the extent permitted by law hereby
assign (or shall procure that KPN shall assign) to the Purchaser the
benefit of all contracts entered into by any of them or assigned to any
of them in either case relating exclusively to the ComTel Companies or
members of the Telecential Group or any of them and not already vested
(or to the extent not already vested) in any of the ComTel Companies or
any member of the Telecential Group, including, without limitation:
14.1.1 the benefits of any warranties, indemnities, covenants or other
obligations of the vendor and the benefit of the guarantee relating to
the sale and purchase agreement dated 17th October, 1995 and both
between IVS Cable Holdings Limited, Flextech plc and KPN together with
all contracts assigned or novated to KPN under such sale and purchase
agreement;
14.1.2 the master operating and licensing agreement dated 24th April, 1995
between IVS Cable Holdings Limited and Cabledata International Limited;
and
14.1.3 any contract (date not known) created by correspondence between IVS
Cable Holdings Limited on behalf of Wessex Cable Limited and Northern
Telecom Europe Limited.
14.2 The Seller and the Transferors shall (and shall procure that KPN shall)
at the cost of the Purchaser do each thing as may be reasonably
requested by the Purchaser to vest in the Purchaser the contracts or
rights set out in Article 14.1 (together "the Contracts").
14.3 If a Contract cannot be transferred to the Purchaser except by an
assignment made with a third party's consent or by a novation
agreement:
14.3.1 this Agreement does not constitute an assignment or an attempted
assignment of that Contract if the assignment or attempted assignment
would cause a breach of that Contract;
14.3.2 both the Purchaser and the Seller and the relevant Transferor(s) shall
make all reasonable efforts to obtain the third party's consent to the
assignment, or to achieve the novation, of that Contract; and
14.3.3 until the consent is obtained or the novation achieved, the Seller and
the relevant Transferor(s) shall at the Purchaser's cost do each act
and thing reasonably requested of it by the Purchaser to provide the
Purchaser with the benefit of that Contract (including, without
limitation, enforcement of a right of the Seller or relevant
Transferors or KPN against another party to that Contract arising
howsoever).
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14.4 The Seller and ▇▇▇▇ hereby agree to procure that Vision Networks
Services UK Limited ("VNS"), shall terminate, and ▇▇▇▇ hereby agrees to
such termination, the programming agency agreement between VNS and ▇▇▇▇
dated 1st August, 1996 with effect from ComTel Completion.
ARTICLE 15: MINORITY INTEREST PROVISIONS
15.1 The Seller and the Transferors acknowledge that the Purchaser has not
been permitted to review the agreements (the "Minority Interest
Agreements") relating to the minority interests (other than an interest
of another member of the Telecential Group) in Hertfordshire Cable
Limited ("HCL"), Northampton Cable Television Limited ("NCTL") (the
Minority's shares and other interests in NCTL and HCL being together
referred to as the "Minority's Assets"), Telecential Communications
(Herts) Partnership ("P3") and Telecential Communications (Northants)
Partnership ("P4") (such minority interests being together referred to
as the "Minority Interests") or (save for the Articles of Association
of HCL and NCTL as filed with the Registrar of Companies) any other
agreements or arrangements relating to such Minority Interests.
Accordingly, each of the Seller and the Transferors (other than ComTel)
hereby agrees to indemnify and keep indemnified the Purchaser (for
itself and as trustee for each of the members of the Telecential Group)
and NTL against all liabilities, costs and expenses and all actions
incurred by any of them as a result of or arising out of or in
connection with:-
(a) the Minority Interest Agreements prohibiting the sale and
purchase of the Telecential Assets (or any of them) in
accordance with this Agreement or the consummation of any of
the other matters contemplated by and in accordance with this
Agreement (including, without limitation, the matters referred
to in Article 5.3 and Schedule Ind.);
(b) any material breach by any of the Seller, any member of the
Seller's Group, or any member of the Telecential Group of any
of their respective obligations under the Minority Interest
Agreements on or prior to Telecential Completion (save as a
result of or arising out of any action taken by the Purchaser
and/or its nominees and/or NTL);
(c) save as disclosed in the Annual Accounts or the Articles of
Association of any members of the Telecential Group, there
being at or as a result of the Telecential Completion any
material restriction in favour of the Minority Interests in
respect of any normal operating matters affecting the
respective businesses of the Telecential Group (as such
businesses are described in such Annual Accounts) or in
respect of any budgetary, funding of capitalisation (whether
by way of capital or loan)or dividend issues of such entities;
(d) any of the members of the Telecential Group (including without
limitation, HCL, NCTL, P3 and P4) being at or as a result of
the Telecential Completion under any obligation under the
Minority Interest Agreements to make any cash payments to the
Minority Interests and/or P3 and/or P4 (and/or the partners
thereof), other than pursuant to a transfer of such Minority's
Assets to any other member of the Telecential Group; and
(e) any of the Minority Interests having at or as a result of
Telecential Completion any right under the Minority Interest
Agreements to acquire any assets from any member of the
Telecential Group;
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(f) the Minority Interests having in any of the Telecential
Partnerships any rights to receive profits in excess of those
disclosed in the Annual Accounts of HCL and NCTL or any
liability to a proportional share of the losses which is less
than such Minority Interests' share of the profits from time
to time; and
(g) the Minority Interest Agreements materially restricting or
preventing the lawful payment of any profits or non-capital
distributions by any member of the Telecential Group;
(h) any right in favour of or any obligation to any person under
or pursuant to the Minority Interests Agreements or any right
in favour of or any obligation to any person under any
arrangement or agreement relating to P3, P4, HCL or NCTL for
the benefit of or the subject of which is a member of the
Telecential Group arising or being terminated or restricted by
reason of the consummation of the matters contemplated by this
Agreement (including, without limitation, Telecential
Completion other than as may arise as a matter of law);
(i) members of the Telecential Group being required to acquire the
shares in HCL and/or NCTL other than as described in the
Offering Memorandum.
15.2 Each of the Seller and the Transferors hereby agrees that it will, and
the Seller hereby agrees that it will procure that each member of the
Seller's group will, upon it acquiring any of the Minority's Interests,
forthwith transfer, or procure the transfer of, such title to such
assets to the Purchaser (or such other nominee of the Purchaser as the
Purchaser may nominate), as it may obtain from the Minority Interest
free from all liens, charges, encumbrances or other interests of any
other person relating to or over its assets (subject to the Purchaser
complying with its obligations under Article 15.3).
15.3 If the Seller, any Transferor or any other member of the Seller's Group
(the "relevant transferor") transfers the Minority's Assets to the
Purchaser (or its nominee) pursuant to and in accordance with Article
15.1, the Purchaser agrees to procure that, against delivery of duly
executed transfers of the Minority's Assets and the relative share
certificates, the relevant transferor shall at the option of the
Purchaser, (i) be paid the cash sum of pound sterling 7,500,000, or
(ii) be issued, credIted as fully paid, with either common stock of NTL
having a market value (as determined by Article 15.5) equal to the US$
equivalent of pound sterling 7,500,000 or (iii) (but only where
completion is to take place at Telecential Completion or where the
Seller has been issued with and is still holding the Purchaser Security
pursuant to Article 5.3.5 and such security has not been redeemed or
converted in accordance with its terms) be issued with such number of
additional Purchaser Security having a principal amount equal to the
US$ equivalent value (as determined by Article 15.5) of pound sterling
7,500,000. Completion of the sale and purchase of any Minority's Assets
pursuant to this Article 15.3 shall take place on the Telecential
Completion Date or, if later, within 5 Business Days following
completion of the purchase of such Minority's Assets by the Seller,
relevant Transferor or other member of the Seller's Group. The relevant
transferor shall procure that prior to such completion it shall have,
if applicable, been registered as the registered member of the shares
to be transferred.
15.3 The Seller and the Transferors shall procure that no other member of
the Seller's Group shall acquire the Minority's Assets prior to
Telecential Completion. If any of the Seller or the Transferors shall
acquire the Minority's Assets prior to the Telecential Completion Date,
it shall, simultaneously with Telecential Completion transfer such
assets to the Purchaser in accordance with Article 15.2 against
satisfaction by or on behalf of the Purchaser of the purchase price
payable in accordance with Article 15.3. Under no circumstances shall
any of
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the ComTel Companies or members of the Telecential Group make any
payments or agree to make any payments in respect of the Minority's
Assets prior to Telecential Completion.
15.4 For the purposes of determining the number (if any) of shares of common
stock of NTL to be issued pursuant to Article 15.2, the market value of
each share of NTL common stock shall be deemed to be the
volume-weighted average of the average high and low sales prices of NTL
common stock on NASDAQ for each of the ten trading days ending on the
trading day prior to the completion of the purchase by the Purchaser
(or its nominee) of the Minority's Assets.
15.5 The calculation of the dollar equivalent shall be by reference to the
average of the two highest and two lowest figures of the average spot
rates of exchange of Chase Manhattan Bank N.A. for the purchase of
pound sterling sterling with US$ at or about 11.00 a.m. on the ten
Business Days immediately preceding the completion of the purchase by
the Purchaser (or its nominees) of the Minority's Assets.
15.6 The Seller and the Transferors hereby warrant and represent to the
Purchaser that there are no arrangements or agreements between the
Minority Interests and any of the ComTel Companies as at ComTel
Completion Date.
AS WITNESS this Agreement has been executed by the Parties hereto on the date
first above written.
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----------------------------------------------------------
For : Vision Networks III B.V., for the purposes hereof duly represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
------------------------------------------------------
For : NTL Group Limited, for the purposes hereof duly represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Director and Company Secretary
----------------------------------------------
For : NTL INC, for the purposes hereof duly represented
By : ▇▇▇▇ ▇▇▇▇▇
Its : Vice President
------------------------------------------------------------------
For : Vision Networks UK Holding B.V., for the purposes hereof duly
represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
----------------------------------------------------------------
For : Vision Networks (UK) I Limited, for the purposes hereof duly
represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
----------------------------------------------------------------
For : Vision Networks (UK) II Limited, for the purposes hereof duly
represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
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------------------------------------------------------------------------
For : Telecential Communications (Canada) Ltd, for the purposes hereof duly
represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
-----------------------------------------------------------
For : ComTel UK Finance B.V., for the purposes hereof duly represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
------------------------------------------------------------------------
For : Telecential Communications (UK) Limited, for the purposes hereof duly
represented
By : ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its : Concern Treasurer
39
SCHEDULE C
COVENANTS TO TELECENTIAL COMPLETION
The Seller and the Transferors procure, from the date hereof until
Telecential Completion, that none of the members of the Telecential Group
shall, subject to this Schedule C, do any of the matters set out below,
without the prior consent of the Purchaser (such consent not to be
unreasonably withheld or delayed):
1. incur any individual expenditure exceeding GPB 1,000,000 (in words: one
million Pounds Sterling) with the exception only of (i) payments
(consistent with past practice) of wages, social security charges, offices
leases or insurance claims, insurance premium taxes and other operating
costs associated with managing the business as a going concern, (ii)
capital expenditures, provided these are within existing budgets for the
current financial year or committed at the date of this Agreement; or
2. dispose of or grant an option to purchase or right of pre-emption in
respect of any material part of their respective assets (including,
without limitation, in respect of the shares in any of their subsidiaries)
except in the ordinary course of trading; or
3. borrow any money other than from the Seller or any Transferor or another
member of the Telecential Group or make any payments other than payments
mentioned in this Agreement out of or through drawings on their respective
bank accounts (except routine payments, consistent with past practice in
the ordinary course of trading) or grant or permit to exist any lease,
lien, claim or encumbrance or other third party right in respect of any of
their properties or any of their other assets; or
4. make or commit to make any loan other than in the ordinary course of
trading not exceeding GBP 0 ( in words: zero Pounds Sterling) in the
aggregate or to another member of the Telecential Group;
5. modify, amend, alter, revoke, rescind, terminate or act, or omit to act,
in any way which affects, or could affect, in any material manner the
provisions, validity or enforceability of any of its material contracts,
commitments, licences or agreements;
6. vary any class rights attached to any shares, create or issue any shares,
grant any option over any shares or uncalled capital or issue any
securities convertible into shares;
7. capitalise any amount standing to the credit of any reserve or redeem or
purchase any share or otherwise reorganise share capital (except in
accordance with this Agreement and Schedule Ind);
8. admit any person (other than a party of this Agreement), whether by
subscription, transfer or transmission, as a member or shareholder or as a
partner (except in accordance with Schedule Ind);
9. create or grant any mortgage, charge, debenture, lease or other
encumbrance over or affecting any of its assets or undertaking;
10. acquire the shares of any other company or the whole or any part of the
undertaking of any other company or person;
40
11. enter into any joint venture, partnership or European Economic Interest
Grouping;
12. enter into, vary, amend, supplement or in any way modify any agreement
with any member of the Seller's Group (except in accordance with Schedule
Ind);
13. enter into any contract or commitment or any transaction otherwise than at
arm's length and for full value or any unusual or abnormal contract or
commitment;
14. give any guarantee or indemnity other than in the ordinary course of
trading;
15. enter into, vary, amend, supplement or in any way modify any agreement
with any member of the Seller's Group (except in accordance with Schedule
Ind) or pay or agree to pay any management or similar charges or make any
other payment to any member of the Seller's Group;
16. enter into any material agreement, arrangement or understanding with
respect to programming, software, the provisioning of cable modem internet
services, billing, the provisional of digital CATV services and/or the
acquisition of set top boxes, switching equipment or other computer and/or
telecommunications equipment;
17. make any payment in respect of Indebtedness other than in the manner
contemplated by Schedule Ind;
18. enter into, vary, amend, supplement or modify in any material respect any
of the partnerships deeds or arrangements or any of the agreements or
arrangements relating to the interests of any person (other than another
member of the Telecential Group in any member of the Telecential Group);
19. declare, make or pay any dividend or other distribution;
20. authorise or commit or agree to take any of the foregoing action.
Neither the Seller nor the Transferors shall be liable under this Schedule C for
any action taken by or with the approval of the Purchaser pursuant to its rights
under the Relationship Agreement.
The Seller and the Transferors shall procure that from the date hereof until
Telecential Completion, each member of the Telecential Group shall comply with
the provisions of the Relationship Agreement applicable to ComTel as if it were
a party thereto jointly with ComTel and in particular shall, subject to the
Purchaser not preventing any such payment, pay to the relevant ComTel Company
all amounts received by the relevant member of the Telecential Group from any
person (including, without limitation, customers) which relate to the business
of or are otherwise due to a ComTel Company.
41
SCHEDULE D
DEFINED TERMS
"AGREEMENT" means this sale and purchase agreement
entered into between the Seller, the
Transferors, and the Purchaser and NTL for
the acquisition of the Assets.
"ANNUAL ACCOUNTS" means
(a) (to the extent applicable) the
audited consolidated balance sheets
of each of the ComTel Companies and
members of the Telecential Group as
at the Balance Sheet Date and the
audited consolidated profit and
loss accounts of each of the ComTel
Companies and members of the
Telecential Group for the financial
year ended on the Balance Sheet
Date,
(b) the audited balance sheets of each
of the ComTel Companies and members
of the Telecential Group as at the
Balance Sheet Date and the audited
profit and loss accounts of each of
the ComTel Companies and members of
the Telecential Group for the
financial year ended on the Balance
Sheet Date,
together in each case with the related
notes, directors' report and auditor's
report.
"ARTICLE" means any article in this Agreement.
"ASSETS" means the ComTel Companies and the
Telecential Group taken together.
"BALANCE SHEET DATE" means 31 December 1997.
"BOND ISSUE" means the Bond Issue referred to in recital
E to this Agreement
"BREACH" means a breach of the Warranties as
contemplated by Article 9 of this Agreement.
"BUSINESS DAY" means any day on which banks are open for
business in both Amsterdam, the Netherlands
and the City of London.
"CAPITAL CONTRIBUTIONS" means amounts (inpound sterlingsterling)
subscribed for shares in the limited
companies of the ComTel Companies and the
Telecential Group and amounts (inpound
sterlingsterling) contributed to the capital
account of the partnerships within the
Telecential Group (excluding Capital
Contributions from a member of the
Telecential Group to a ComTel Company and
vice versa).
42
"CONFIRMATION" means a certificate substantially in the
form of Schedule Y to be provided by the
Purchaser to the Seller confirming (i) the
truth and correctness of the Purchaser's
Warranties at each of the ComTel Completion
Date and the Telecential Completion Date and
(ii) that, save as disclosed therein, the
Purchaser is not aware any Breach or
Non-Fulfilment, all this at the ComTel
Completion Date and the Telecential
Completion Date.
"COMTEL COMPANIES" means each of the companies referred to in
the definition of ComTel Shares.
"COMTEL COMPLETION" means the performance of the obligations to
complete the transfer of the ComTel Shares
as described in Article 4.
"COMTEL COMPLETION DATE" means the date of ComTel Completion as
referred to in Article 4.1 of this
Agreement.
"COMTEL LIMITED SHARES" means the entire issued and outstanding
share capital of ComTel Limited.
"COMTEL SHARES" means the entire issued and outstanding
share capitals of Andover Cablevision
Limited, Oxford Cable Limited, ▇▇▇▇▇▇▇▇
Communications Limited, Wessex Cable
Limited, ComTel Coventry Limited, ComTel
Cable Services Limited, Lichfield Cable
Communications Limited, Tamworth Cable
Communications Limited and Vision Networks
Services UK Limited.
"DATA ROOM INFORMATION" means (i) the Data Room Rules, (ii) the
indexes prepared by the Seller listing all
documents and written information made
available to the Purchaser in the data rooms
at Amsterdam (Loeff ▇▇▇▇▇▇ ▇▇▇▇▇▇▇) and
London (▇▇▇▇▇ & Overy) and all such
documents and written information as so
listed in Schedule I, (iii) the Offering
Memorandum for the Bond Issue, and (iv) the
Information Memorandum.
"DAY" means a calendar day and is not capitalized
in this Agreement.
"EXHIBIT" means any exhibit attached to this
Agreement.
"FIRST DATE" means the date referred to in Article 6.4.
"HEARTLAND SHARES" means the entire issued share capital of
each of Heartland Cablevision (UK) Limited
and Heartland Cablevision 11 (UK) Limited.
"INDEBTEDNESS" means any indebtedness which would appear on
a balance sheet of any of the ComTel
Companies or a member of the Telecential
Group prepared under generally accepted
principles in the applicable jurisdiction,
but excluding (i) any working capital
liabilities, and (ii) the BT Coventry Lease.
43
"INFORMATION MEMORANDUM" means that certain memorandum prepared by
Credit Suisse First Boston (Europe) Limited
dated April, 1997.
"LONG STOP DATE" has the meaning ascribed thereto in Article
4.9.
"NET ASSET STATEMENT" means a statement showing the consolidated
Net Asset Value of the ComTel Companies and
the Telecential Group as at 31 December
1997, prepared by Deloitte & Touche on
behalf of the Seller and the Transferors
using the accounting bases, policies and
accounting estimation processes consistently
applied as set out in Schedule AA.
"NET ASSET VALUE" means the amount by which the aggregate
value of all the assets of the ComTel
Companies and the members of the Telecential
Group exceeds the aggregate amount of all
their liabilities.
"NON-FULFILMENT" has the meaning given to that term in
Article 9.1 (subject to Article 9.2).
"PARTIES" means the Sellers, the Transferors, the
Purchaser and NTL and "PARTY" means any one
of them.
"PURCHASER'S ACCOUNTANT" means the accountancy firm of international
standing appointed by the Purchaser for the
purpose of this Agreement
"PURCHASE PRICE" has the meaning given to that term in
Article 2.7.
"PURCHASER SECURITY" means the security to be issued by NTL in
partial satisfaction of the Purchase Price
at Telecential Completion in accordance with
article 5.3.5(b) having the terms and
conditions set out in Schedule S.
"RELATIONSHIP AGREEMENT" means the relationship agreement in the form
set out in Schedule M.
"RELEVANT ASSET" means any property or asset (other than the
Assets) (whether tangible or intangible,
comprising the benefit of any contract or
otherwise) exclusively relating to or used
by any ComTel Company or member of the
Telecential Group which is owned by any
member of the Seller's Group.
"SCHEDULE" means any schedule attached to this
Agreement.
"SELLER'S ACCOUNTANT" means the accountancy firm of international
standing appointed by the Seller for the
purpose of this Agreement.
"SELLER'S GROUP" means the Seller, any parent undertaking of
the Seller and the subsidiary undertakings
of the Seller and such parent undertaking
for the time being (other than the ComTel
Companies and the members of the Telecential
Group), but excluding Koninklijke PTT
Nederland NV (KPN) and its legal successors
following the demerger of KPN.
44
"STOCK EXCHANGE" means any regulated securities market.
"TAX" means, but is not limited to all taxes,
duties, charges, levies, imposts or
withholdings whenever and by whatever
authority imposed and whether or not any
such taxes, duties, charges, levies, imposts
or withholdings are directly or primarily
chargeable against or to any of the ComTel
Companies or the members of the Telecential
Group together with in any such case all
interest, fines, penalties, surcharges and
charges incidental or relating to the impos
imposts or withholdings.
"TAX INDEMNITY" means the provisions contained in Schedule
T.
"TELECENTIAL ASSETS" means the ComTel Limited Shares, the
Heartland Shares and all interests in the
Telecential Communications Partnership and
LP5 and LP6.
"TELECENTIAL COMPLETION" means the performance of the obligations to
complete the transfer of the Telecential
Assets as described in Article 5 of this
Agreement.
"TELECENTIAL COMPLETION DATE" means the date determined in accordance with
Articles 4.6 to 4.8 (inclusive).
"TELECENTIAL PARTNERSHIPS" means the Telecential Communications
Partnership, Telecential Communications
Northants Partnership, Telecential
Communications Herts Partnership, LP5 and
LP6.
"TELECENTIAL GROUP" means the Telecential Assets, the
subsidiaries of ComTel Limited and the
companies and partnerships in which the
Telecential Communications Partnership and
LP5 and LP6 have an interest and references
to a "member of the Telecential Group" shall
be construed as a reference to each of such
entities.
"WARRANTIES" means the representations and warranties
given by the Seller and the Transferors to
the Purchaser, and by the Purchaser to the
Seller and the Transferors, pursuant to this
Agreement.
45
SCHEDULE F
GUARANTEE
THIS GUARANTEE IS MADE ON [ ] 1998 IN FAVOUR OF
NTL GROUP LIMITED, a private limited liability company incorporated in England
and having its registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
We refer to an agreement for the sale and purchase of the Vision Networks UK
Group dated June 1998 between Vision Networks III B.V., ComTel UK Finance B.V.,
Vision Networks (UK) limited, Telecential Communications (Canada) Limited,
Vision Networks (UK) II Limited, Telecential Communications (UK) Limited, Vision
Networks UK Holdings B.V., NTL Group Limited and NTL Inc (the "Agreement").
Capitalised terms used in this Guarantee shall have the meanings ascribed to
them in the Agreement, except as the context may otherwise require.
We, as primary obligor unconditionally and irrevocably:
(a) undertakes to ensure that the Seller will perform when due all
its obligations to the Purchaser under or pursuant to the
Agreement;
(b) agrees that if and each time that the Seller fails to make any
payment to the Purchaser when it is due under or pursuant to
the Agreement we shall on demand (without requiring the
Purchaser first to take steps against the Seller or any other
person) pay that amount to the Purchaser concerned, as the
case may be.
Each payment to be made by us under this Guarantee shall be made in the
currency in which the relevant amount is payable by the Seller free and
clear of all deductions or withholdings of any kind, except for those
required by law, and if any deduction or withholding must be made by
law, we will pay that additional amount which is necessary to ensure
that the Purchaser concerned receives a net amount equal to the full
amount which it would have received if the payment had been made by the
Seller to the Purchaser in accordance with the Agreement.
Our obligations under this Guarantee shall not be affected by any
matter or thing which but for this provision might operate to affect or
prejudice those obligations, including without limitation
(a) any time or indulgence granted to, or composition with the
Seller or any other person;
(b) the taking, variation, renewal or release of, or neglect to
perfect or enforce the Agreement or any right, guarantee,
remedy or security from or against the Seller or any other
person;
(c) any unenforceability or invalidity on whatever ground of any
obligation of the Seller, so that this Guarantee shall be
construed as if there were no such enforceability or
invalidity; or
(d) any termination of the Agreement.
We warrant that all the obligations expressed to be accepted by us
under this Guarantee are legally binding obligations of us, enforceable
in accordance with their respective terms, and that
46
all necessary shareholder and other consents and authorisations for the
giving of this guarantee and the acceptance of all other obligations by
us under it have been obtained and are in full force and effect.
We will reimburse the Purchaser for all reasonable legal and other
costs (including any VAT) incurred by the Purchaser in connection with
the enforcement of any of the provisions of this Guarantee.
Vision Networks Holdings B.V. hereby confirms its consent to all
obligations expressly undertaken by it under this Guarantee.
This Guarantee shall be governed by and construed in accordance with
the laws of England and we hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of England and Wales in
respect of any claim, dispute, or difference arising out of and in
connection with the Guarantee. We hereby irrevocably authorise and
appoint (for the attention of ) as our agent for service of proceedings
in relation to any matter arising out of or in connection with this
Guarantee and service on such agent shall be deemed to be service on
us.
For :Vision Networks Holdings B.V., for the purposes hereof duly
represented.
By :
Its :
------------------------------- ----------------------------------------
for and on behalf of Vision Networks UK Holding B.V.
ComTel UK Finance B.V. (in liquidation)
-------------------------------- ----------------------------------------
for and on behalf of Telecential Communications (UK) Limited
Vision Networks (UK) I Limited
-------------------------------- ----------------------------------------
for and on behalf of for and on behalf of NTL Inc.
NTL Group Limited
47
SCHEDULE I
DATA ROOM INFORMATION
48
SCHEDULE J
STIKEMAN, ▇▇▇▇▇▇▇ OPINION LETTER
49
SCHEDULE K
▇▇▇▇▇▇▇ ▇▇▇▇ SLATE ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP OPINION LETTER
50
SCHEDULE O
51
SCHEDULE P
52
SCHEDULE Q
53
SCHEDULE R
REPRESENTATIONS AND WARRANTIES
1. PART OF THE AGREEMENT
This Schedule forms part of the Agreement for the purchase and sale of
the Assets between the Purchaser and the Seller and shall have the same
force and effect as if set out in the body of the Agreement.
2. INTERPRETATION
In this Schedule, words or phrases will have the same meanings as in
the Agreement.
References to a member of the Telecential Group which is a partnership
owning or holding any asset or having any liability or not having done
or omitted to do anything or any similar expressions shall be deemed,
except in relation to corporation tax, to include a reference to the
partners of the relevant partnership in their capacity as partners as
well as to the partnership itself.
3. WARRANTIES
In accordance with, and subject to the provisions of, Article 7, each
of the Seller and Transferors represents and warrants to the Purchaser
that as at the date of this Agreement (and at Telecential Completion by
reference to the facts and circumstances then subsisting), each and
every statement set out below is true and correct.
A. COMTEL GROUP
1. The ComTel Companies and the companies within the Telecential Group are
duly incorporated and validly existing under the laws of England and
Wales.
2. Each of the Telecential Partnerships has been duly constituted and is
validly existing under the laws of England and Wales. Each of the
ComTel Companies and companies and limited partnerships within the
Telecential Group has properly made all returns which it is required to
make to the Registrar of Companies, to any governmental or regulatory
body and to any local authority. No receiver or administrative receiver
has been appointed of the whole or any part of the assets or
undertaking of any of the ComTel Companies or companies in the
Telecential Group. No administration order has been made in relation to
any of the ComTel Companies or companies in the Telecential Group and
no petition for such an order has been presented. No proposal for a
voluntary arrangement between any of the ComTel Companies or companies
in the Telecential Group and its creditors (or any class of them) has
been made to any of the ComTel Companies or companies in the
Telecential Group. No petition has been presented, no order has been
made and no resolution has been passed for the winding-up of any of the
ComTel Companies or companies in the Telecential Group. None of the
ComTel Companies or members of the Telecential Group has stopped
payment generally to its creditors or, to the best knowledge of the
Seller, is unable to pay its debts as and when they fall due. No
unsatisfied judgement is outstanding against any of the ComTel
Companies or members of the Telecential Group.
54
B. THE SHARES
1. The ComTel Shares, the ComTel Limited Shares and the Heartland Shares
together constitute the entire issued and outstanding share capital of
the ComTel Companies, ComTel Limited, Heartland Cablevision (UK)
Limited and Heartland Cablevision (UK) II Limited. Canco 1 and UK 1 are
the only partners of the Telecential Communications Partnership. UKII
and Canco 3 are the only partners of LP5 and ▇▇▇▇ and Canco 3 are the
only partners of LP6.
2. The ComTel Shares, the ComTel Limited Shares and the Heartland Shares
are duly authorised, validly issued and are fully paid up. The ComTel
Shares, the ComTel Limited Shares and the Heartland Shares are free and
clear of any equities, claims or interests in favour of any other
person.
3. There are no outstanding depositary receipts in the capital of any of
the ComTel Companies or the companies in the Telecential Group. There
are no rights (whether exercisable now or in the future and whether
contingent or not) other than rights as disclosed in the Data Room
Information outstanding to subscribe for or call for the issue or
transfer of any shares of any of the ComTel Companies or companies in
the Telecential Group. In particular there are no share options,
warrants or convertible debentures relating to the ComTel Companies or
the companies in the Telecential Group.
4. No resolution has been made and no action has been taken by the ComTel
Companies or the companies in the Telecential Group to distribute
dividends, to repay capital or to make any other distribution of
reserves or capital, except as shown in the Annual Accounts of the
ComTel Companies or companies in the Telecential Group. Except as shown
in the Annual Accounts and the Articles of Association or the ComTel
Companies and companies within the Telecential Group, no ComTel Company
or company in the Telecential Group has issued any profit sharing bonds
or otherwise attributed rights to third parties to share in past,
present or future income or profits, reserves or liquidation surplus of
such company which remain outstanding.
C. SHARES IN THE COMPANIES WITHIN THE TELECENTIAL GROUP (EXCLUDING THE
TELECENTIAL ASSETS) ("THE SUBSIDIARIES")
1. ComTel Limited is the direct or indirect legal and beneficial owner of
the shares in the subsidiaries of it as set out in Part 1 of Schedule Z
which together comprise all the interests of ComTel Limited and
Telecential Communications Partnership is the direct or indirect
beneficial owner of the shares in the companies set out in Part II of
Schedule Z which, together with P3 and P4, comprise all the interests
of the Telecential Communications Partnership.
2. All of the shares in the Subsidiaries are duly authorised, validly
issued and are fully paid up. There are no capital contributions
overdue for payment to any of the partnerships in the Telecential
Group. All of the shares in the Subsidiaries and the participations in
the partnerships in Telecential listed in Schedule Z are free and clear
of any liens or charges of any kind or any encumbrances or interests in
favour of any other person.
3. Telecential Communications Partnership, Maza Limited and Herts Cable
Limited are the only partners in Telecential Communications (Herts)
Partnership. Telecential Communications Partnership, Maza Limited and
Northampton Cable Television Limited are the only partners in
Telecential Communications (Northants) Partnership.
55
4. There are no rights (whether exercisable now or in the future and
whether contingent or not) outstanding to subscribe for or call for the
issue or transfer of any shares of any of the Subsidiaries other than
rights as disclosed in the Data Room Information for existing members
of the ComTel Companies or companies in the Telecential Group to
subscribe further shares of the classes of share they hold. Since the
Balance Sheet Date, no resolution has been made and no action has been
taken to distribute dividends, to repay capital or to make any other
distribution of reserves or capital of any of the Subsidiaries other
than as shown in the Annual Accounts of such company.
D. ANNUAL ACCOUNTS
1. The Annual Accounts (as defined) have been prepared in accordance with
United Kingdom generally accepted accounting principles, comply in all
material respects with the requirements of the laws of England and
Wales and show a true and fair view of the state of affairs and the
financial position and results of the relevant company or partnership
as at and for the financial year ended on 31 December, 1997.
2. To the best knowledge of the Seller the management accounts for the
ComTel Companies and members of the Telecential Group for the period to
30th April, attached hereto as Exhibit 1 show the true understanding of
the management of the ComTel Companies and the Telecential Group of the
combined affairs, assets, liabilities and profits of such companies and
partnerships as at and for the period ended on the date to which they
have been prepared.
E. TAXES
1. To the best of the knowledge of the Seller, each of the ComTel
Companies and members of the Telecential Group have duly and timely
paid all Taxes due, or, to the extent that any Taxes are due but not
yet paid, adequate provision has been made in the Annual Accounts.
2. To the best of the knowledge of the Seller, the ComTel Companies and
members of the Telecential Group have each duly and timely filed all
tax returns and all other documents that are required to have been
filed by them in accordance with applicable laws and regulations. To
the best knowledge of Seller, the ComTel Companies and members of the
Telecential Group have not asked for any extensions of time for the
filing of any tax returns or other documents.
3. To the best of the knowledge of the Seller, with respect to the
assessment or payment of Taxes, no special agreements, rulings or
compromises have been entered into by any of the ComTel Companies and
members of the Telecential Group with the relevant Tax authorities. To
the best of the knowledge of the Seller, the ComTel Companies and
members of the Telecential Group are not subject to a special regime in
respect of the payment of Taxes.
4. To the best knowledge of the Seller, none of the ComTel Companies or
the members of the Telecential Group is liable for Taxes or social
security charges imposed on or due by any third party (including
without limitation any employee, sub-contractor, the Seller, the
Transferors and/or any other member of the Sellers' Group), except to
the extent that adequate provisions have been made in the Annual
Accounts.
5. To the best of the knowledge of the Seller, none of the ComTel
Companies or the members of the Telecential Group are parties to any
Tax dispute or fiscal proceedings initiated by the Inland Revenue, H M
Customs and Excise or Contributions Agency ("Tax Authorities") nor have
the ComTel Companies or members of the Telecential Group received
notice of any intention by any of the Tax Authorities to initiate any
such disputes or proceedings as of the date hereof.
56
F. CONDUCT OF BUSINESS SINCE THE BALANCE SHEET DATE
1. To the best of the knowledge of the Seller, during the period between
the Balance Sheet Date and the date of this Agreement, no material
assets of the ComTel Companies or members of the Telecential Group have
been disposed of other than in the ordinary course of trading and none
of the ComTel Companies or members of the Telecential Group have become
subject to any material commitment other than in the ordinary course of
trading except for anything done by any of the ComTel Companies or
members of the Telecential Group in accordance with Schedule Ind. prior
to the date of this Agreement. To the best knowledge of Seller, during
the period between the Balance Sheet Date and the date of this
Agreement, there has been no material adverse change in the business
position or the financial position of any of the ComTel Companies and
members of the Telecential Group.
2. Since the Balance Sheet Date, none of the ComTel Companies or members
of the Telecential Group have made any investments or disposals
material to the balance sheet in its Annual Accounts other than in the
ordinary course of trading except for anything done by any of the
ComTel Companies or members of the Telecential Group in accordance with
Schedule Ind. prior to the date of this Agreement.
3. Since the Balance Sheet Date, each of the ComTel Companies and members
of the Telecential Group has carried on its business in the ordinary
and usual course without any material interruption or material
alteration in the nature, scope or manner of its business except for
anything done by any of the ComTel Companies or members of the
Telecential Group in accordance with Schedule Ind prior to the date of
this Agreement.
G. PENSIONS
1. To the best of the knowledge of the Seller, all material contributions
of the ComTel Companies and members of the Telecential Group due to the
Schemes defined in paragraph G3 below have been fully paid or provided
for in the Annual Accounts.
2. To the best of the knowledge of the Seller, the Annual Accounts contain
a sufficient provision for all material obligations, including
back-service obligations, of the ComTel Companies and the members of
the Telecential Group under the Schemes defined in paragraph G3.
3. "Schemes" means all and each of the Telecential Communications Limited
Group Personal Pension Scheme, the CUC Group Life Assurance Scheme, the
ComTel Group Personal Pension Scheme and the ComTel Group Life
Assurance Scheme.
"Scheme Documents" means the documents relating to the Schemes set out
in Schedule I. The Scheme Documents comprise all the material documents
governing and relating to the Schemes including a list of the active
members of the Schemes with details of age, sex, salaries and
contributions payable by both the employer and the employee.
Save pursuant to the Schemes, none of the ComTel Companies nor the
members of the Telecential Group have entered into any agreement or
arrangement (under contract or trust) to (i) provide relevant benefits
(as defined in section 612 of the Income and Corporation Taxes Act 1988
but with the omission of the exception in that definition) for any past
and present employee, officer and/or director of any of the ComTel
Companies or members of the Telecential Group or their respective
spouses and dependants, or any person who at the date of
57
this Agreement is a beneficiary (present or contingent) of the Schemes;
(ii) or to make contributions to a personal pension scheme in respect
of any such person.
4. The Scheme Documents correctly describe all the benefits which may
become payable under the Schemes. The Schemes have at all times been
operated, and employees have been eligible to join the Schemes, in
accordance in all material respects with the provisions governing them,
their contracts of employment and all applicable laws, fiscal and
regulatory requirements. The rates of contributions payable by the
ComTel Companies and the members of the Telecential Group have been
disclosed to the Purchaser. The liability for all lump sum death
benefits which may become payable under the Schemes is fully insured
with a reputable insurance company. Each of the CUC Group Life
Assurance Scheme and ComTel Group Life Assurance Scheme is an
exempt-approved scheme as defined in section 592 of the Income and
Corporation Taxes ▇▇▇ ▇▇▇▇.
H. MATERIAL AGREEMENTS
1. To the best of the Seller's knowledge, and save with respect to the
Minority Interest Agreements, the Seller has provided the Purchaser
with (i) the material terms of all agreements material to the conduct
of the business of the ComTel Companies and the members of the
Telecential Group; (ii) all change of control provisions material to
the conduct of the business of the ComTel Companies and members of the
Telecential Group; (iii) all material exclusive sourcing and/or
procurement commitments of the ComTel Companies and the members of the
Telecential Group; (iv) all material construction, network, maintenance
and/or operating agreements in respect of cable networks and
programming contracts; and (v) all agreements which would prohibit or
materially delay the completion of any of the transactions contemplated
by this Agreement (together "the Material Agreements"). To the best of
the Seller's knowledge, there are no material unusual restrictions on
the business of any of the ComTel Companies or the members of
Telecential Group as currently conducted.
2. To the best of the Seller's knowledge, the ComTel Companies and the
members of Telecential Group are not in material default with respect
to the performance of contractual obligations under any Material
Agreement.
3. The signing and performance of this Agreement and all other documents
which are to be signed at ComTel Completion or Telecential Completion
will not (i) result in any of the ComTel Companies or members of the
Telecential Group losing the benefit of any material permit, licence,
asset, right or privilege which it now enjoys, or (ii) result in a
material breach or termination of any Material Agreement to which any
of the ComTel Companies and members of the Telecential Group is a
party.
4. To the best knowledge of the Seller, all Material Agreements to which
any of the ComTel Companies and members of the Telecential Group is a
party are included in the Data Room Information.
5. To the best knowledge of the Seller, none of the ComTel Companies or
members of the Telecential Group is a party to:
5.1 any partnership, joint venture, European Economic Interest
Grouping or consortium arrangement or agreement or any
agreement for sharing commissions or other income (save for
programming and similar joint ventures);
58
5.2 any agreement containing covenants limiting or excluding its
right to do business and/or to compete in any area or in any
field or with any person, firm or company to a material
extent;
5.3 any material agreement or arrangement suffering from any
invalidity or in respect of which there are grounds for
determination, rescission, avoidance or repudiation by any
other party, the determination, rescission, avoidance or
repudiation of which would have a material adverse effect on
the financial or trading position of any ComTel Company or
member of the Telecential Group.
6. To the best knowledge of the Seller, no ComTel Company or member of the
Telecential Group has been or is a party to any material agreement or
concerted practice which infringes Article 85 of the EEC Treaty or
constitutes a breach of a dominant position under the EEC Treaty and is
not in contravention of any regulation or other enactment made under
Article 87 of the EEC Treaty.
7. No Indebtedness (actual or contingent) is or will be outstanding and no
contract exists or will exist immediately following ComTel Completion
between any of the ComTel Companies and any member of the Seller's
Group or the Telecential Group (save for the Relationship Agreement.
8. No contract exists or will exist immediately following Telecential
Completion between any member of the Telecential Group and any member
of the Seller's Group.
9. No member of the Seller's Group is entitled to any claim of any nature
against any of the ComTel Companies or members of the Telecential Group
or any of their respective directors, officers and employees (other
than in connection with the Relationship Agreement).
I. LITIGATION
To the best of the knowledge of the Seller (and except for debt
collection in the ordinary course of trading), none of the ComTel
Companies or members of the Telecential Group is a party to, has
received notice of or is threatened with any disputes or civil, fiscal,
administrative, penal or disciplinary proceedings (including
arbitration and binding advice proceedings) involving an amount
individually or in the aggregate, in excess of pound sterling 150,000,
and to the best of the knowledgE of the Seller, there are no facts or
circumstances which are reasonably likely to give rise to the same. To
the best of the knowledge of the Seller, none of the ComTel Companies
or the members of the Telecential Group are the subject of any
investigation by any governmental, administrative or regulatory body of
the United Kingdom or of the European Commission. To the best of the
knowledge of the Seller, none of the ComTel Companies or members of the
Telecential Group or any of their respective assets is subject to any
outstanding judgement, order or attachment which will or is reasonably
likely to have a material adverse effect on the conduct of the business
of such ComTel Company or member of the Telecential Group.
J. BORROWINGS AND BANK FACILITIES
1. Details of all Indebtedness of the ComTel Companies are contained in
Schedule Ind.
2. To the best of the Seller's knowledge, none of the ComTel Companies or
members of the Telecential Group has given any guarantee, indemnity or
security which is material to its financial position for the
obligations of any person other than another ComTel Company (in
59
the case of any ComTel Company) or another member of the Telecential
Group (in the case of any member of the Telecential Group) or in the
ordinary course of trading.
3. To the best of the knowledge of the Seller, no material grant, subsidy
or payment paid or due to be paid to any ComTel Company or member of
the Telecential Group is liable to be refunded or withheld in whole or
in part in consequence of any action or omission of such ComTel Company
or member of the Telecential Group or as a consequence of ComTel
Completion or Telecential Completion.
K. PERMITS
1. To the best of the knowledge of the Seller, the ComTel Companies and
the members of the Telecential Group have obtained all licences and
permits necessary or desirable for their current operations and
businesses that are material for their results and the continuation
thereof (the "Permits"). To the best knowledge of the Seller, each of
the Permits is in full force and effect. To the best knowledge of the
Seller, the ComTel Companies and the members of the Telecential Group
conduct their respective businesses in accordance with the Permits and
the terms and conditions relating thereto.
2. To the best of the knowledge of the Seller, there are no facts or
circumstances that could give rise to the amendment, cancellation,
non-prolongation or non-renewal of any of the Permits other than as
previously disclosed to the Purchaser to the effect that the licences
for the franchise areas at Daventry, Lichfield and Tamworth may cease
to be exclusive.
3. No objection has been notified to the Seller or any of the ComTel
Companies or members of the Telecential Group by the Department of
Trade and Industry, Independent Television Commission or the Director
General of Telecommunications and no proceedings have been threatened
against the Seller or any of the ComTel Companies or members of the
Telecential Group by any relevant authority (including without
limitation by any relevant local authority) which would, if successful,
have a material adverse effect on the business of any such ComTel
Company or member of the Telecential Group in relation to any
construction program of such company or partnership for the
construction of its prospective cable television and telecommunications
systems.
L. ASSETS
1. Except for assets disposed of in the ordinary course of trading, each
of the ComTel Companies and members of the Telecential Group is the
beneficial owner of all assets included in its Annual Accounts and all
assets which have been acquired by each such company and/or partnership
since the Balance Sheet Date, all of which assets are in such company's
or partnership's possession and under its control and there is not now
outstanding any charge, option, lien, pledge or encumbrance (or
agreement to grant any such) over the whole or any material part of the
undertaking, property or assets of any such company or partnership nor
any right to acquire such, other than retention of title arising in the
ordinary course of its trade.
2. Each of the ComTel Companies and members of the Telecential Group owns
or has a valid licence to use all trademarks, service marks, trade
names, patents and copyrights (including any registrations or
applications for registration of any of the foregoing) (collectively,
the "Intellectual Property") necessary to carry on its business
substantially as currently conducted except for any Intellectual
Property the absence of which would not be capable of having a material
adverse effect on the financial or trading position of the relevant
ComTel Company
60
or member of the Telecential Group. To the best of the knowledge of the
Seller, none of the ComTel Companies or members of the Telecential
Group has received any notice of infringement of or conflict with, and,
to the best of the knowledge of the Seller, there are no infringements
of or conflicts with the rights of others with respect to the use of,
or by others with respect to, any Intellectual Property that
individually or in the aggregate, in either such case, would have a
material adverse effect on the financial or trading position of such
ComTel Company or member of the Telecential Group.
3. To the knowledge of the Seller, all material assets, plant, machinery,
receiving and other equipment and cable infrastructure currently owned
by the ComTel Companies and members of the Telecential Group are in
reasonable working condition for the purpose of their present use and
application (subject to normal wear and tear) and have been reasonably,
regularly and properly maintained in all material respects. The ComTel
Companies own or otherwise have the legal right to use all material
assets, plant, machinery, receiving and other equipment and cable
infrastructure, and are party to all material contracts, necessary for
the ComTel Companies to operate their respective businesses as the same
are being run at the date of this Agreement. The members of the
Telecential Group own or otherwise have the legal right to use all
material assets, plant, machinery, receiving and other equipment and
cable infrastructure, and are party to all material contracts,
necessary for the members of Telecential Group to operate their
respective businesses as the same are being run at the date of this
Agreement.
M. INSURANCE
As of the date of this Agreement, to the best of the Seller's knowledge
there are no material claims outstanding under any insurance policies
of any of the ComTel Companies or members of the Telecential Group. To
the best of the knowledge of the Seller, all policies are in full force
and effect, all premiums have been fully paid or provided for and no
policy is threatened with cancellation or an extraordinary premium
increase.
N. CAPACITY OF SELLER AND TRANSFERORS
1. The Seller and each Transferor is a company duly organised and validly
existing under the laws of the Netherlands or United Kingdom or Canada
(as the case may be). None of the Seller and the Transferors is
insolvent nor is any action or request pending to declare the Seller or
any Transferor insolvent and no request has been filed for a moratorium
or suspension of payments by the Seller or any Transferor or any
similar arrangement for the benefit of creditors nor has the same been
granted.
2. The Seller and each Transferor has the corporate power to enter into
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the legal, valid and binding obligation of each of the
Seller and the Transferor enforceable against the Seller and each
transferors in accordance with its terms, subject to laws relating to
constitutional rights generally and general principles of equity.
3. The execution of and entering into this Agreement and the consummation
of the transactions contemplated hereby by the Seller and each
Transferor has been duly authorised by all necessary corporate and
other action applicable to the Seller and each Transferor. The
individuals executing this Agreement on behalf of the Seller and each
Transferor are duly authorised to do so.
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4. The execution of and entering into this Agreement, and the consummation
of the transactions contemplated hereby, do not and will not (with or
without the passage of time or the giving of notice) violate or
conflict with any provision of any of the Seller's or any Transferor's
articles of incorporation or by-laws or equivalent constitutional
documents in the relevant jurisdiction, violate or conflict with any
law binding upon the Seller or relevant Transferor or any of its
properties or assets or violate or conflict with, result in a breach
of, or constitute a default under any agreement or other obligation to
which the Seller or relevant Transferor is bound.
5. Except for the notification to various regulatory authorities, no
consent or approval of, or registration, notification, filing and/or
declaration with, any court, government or governmental agency, stock
exchange or self regulatory organisation is required to be given or
made by the Seller or any Transferor in connection with the execution
of and entering into this Agreement, and the consummation of the
transactions and the other agreements and instruments contemplated
hereby.
O. EMPLOYEES
1. True and complete particulars relating to the employment of each of the
employees of the ComTel Companies and members of the Telecential Group
whose annual salary is pound sterling 75,000 per annum Or more ("Key
Employees") are contained in the Data Room Information including
entitlement to annual salary, private medical care, permanent health
insurance and company cars and details of any other benefits including
but not limited to profit sharing, bonus, commission or other incentive
arrangements whether provided on a contractual or discretionary basis.
There are no key employees of the ComTel Companies or members of the
Telecential Group other than the Key Employees.
2. Copies of any handbooks or works rules or procedures (including any
disciplinary or grievance procedures) and all collective, procedural,
recognition or other agreements (whether written or oral) with any
trade union, works council or other staff association or representative
and details of any arrangements relating to the election of any person
as such a representative are contained in the Data Room Information.
3. To the best of the Seller's knowledge, each of the ComTel Companies and
members of the Telecential Group has in all material respects complied
with all its obligations to any of the employees of any of the ComTel
Companies or members of the Telecential Group ("the Employees") arising
out of or in connection with: (A) any of their terms and conditions of
employment and/or customs and practices related thereto; (B) any
statutes and regulations relevant to their employment including, but
not limited to, those relating to discrimination by reason of sex, race
or disability, any duties to inform and consult employees and/or their
representatives and any obligation to make payments to the UK Inland
Revenue and to pay National Insurance contributions; and/or (C) any
orders and awards made in relation to them or any of them.
4. There are no arrangements, whether contractual or otherwise, entitling
any of the Employees to any payment or other benefits arising from the
transactions contemplated hereby.
5. There are no agreements or arrangements outside the ordinary course of
trading for the payment of allowances or during any periods of sickness
or disablement for the benefit of any of the Employees or their
dependants.
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6. No trade union is recognised in relation to any of the Employees nor
has any ComTel Company or member of the Telecential Group entered into
any collective agreements relating to any of the Employees and nor is
there any works council or other staff association in existence in
relation to any of the Employees and no person has been elected as a
representative of any of the Employees nor have any arrangements been
made for any such election.
P. WORKING CAPITAL
To the best of the knowledge of the Seller, none of the ComTel
Companies nor the members of the Telecential Group have, in the period
from the Balance Sheet Date until the ComTel Completion Date, deviated
from the ordinary course of business, consistent with the past
practice, with respect to working capital practices of such entities
(working capital being accounts payable, accounts receivable, taxes
payable, accrued liabilities, other current liabilities, inventions,
prepaid expenses, and other current assets).
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SCHEDULE S
PURCHASER SECURITY
TERM SHEET FOR PREFERRED STOCK
Issuer: NTL Incorporated ("NTL")
Securities Offered: US$ equivalent of pound sterling 75 million principal
amount of 9.90% Non-voting Preferred Stock ("Preferred
Stock") (the exchange rate to be determined in
accordance with the Sale and Purchase Agreement)
Issue Price: At par per US$1000 of principal amount at the date of
redemption
Issue Date: The Telecential Completion Date as per the Sale and
Purchase Agreement
Dividends: Dividends will accrue (but not be paid) at a rate of
9.90% per annum from the Issue Date until the date of
redemption or conversion
Ranking/Liquidation: Senior to NTL Common Stock
Maturity Date: 10 years from the Issue Date unless previously redeemed
or converted
Redemption Date: At any time at the Issuer's discretion during the 15
months from the Issue Date
Optional Redemption: The Issuer may, at its option only, redeem this Security
at any time in the period between the Issue Date and the
Redemption Date subject to having provided a Redemption
Notice
Redemption Notice: Not less than 10 days if the Redemption Price is paid in
either cash or through the delivery of NTL Common Stock
and not less than 30 days if through the delivery of
Convertible Preferred Stock, and in each case not more
than 60 days prior to the date of the redemption
Redemption Price: At par for the principal plus any accrued dividends as
of the date of redemption. The Redemption Price will be
paid, in whole or in part, at the option of the Issuer,
either in cash or through the delivery of NTL Common
Stock at the then prevailing Current Market Price or
through the delivery of the Convertible Preferred Stock
at the Issue Price for such stock (as determined by, and
subject to the provisions of, the Term Sheet for
Convertible Preferred Stock)
Conversion: If the Issuer has not exercised its right of redemption
within 15 months of the Issue Date, the Issuer shall
redeem this
64
Security into NTL Common Stock at the then prevailing
Current Market Price or cash unless the Issuer has
satisfied its obligations under the Term Sheet for the
Convertible Preferred Stock and can deliver a
Convertible Preferred Stock which satisfies the
conditions set out in the Term Sheet for the Convertible
Preferred Stock
Current Market Price: The volume-weighted average of the average high and low
sales price of the NTL Common Stock on NASDAQ for each
of the 10 trading days ending on the trading day prior
to the notice of redemption or the conversion date (as
applicable)
Registration Rights: None
Change of Control: Will not result in early redemption or conversion;
provided this Security will be convertible into new
parent common stock or new parent convertible preferred
stock with the same Redemption Price, which in turn will
be convertible into and redeemable by new parent common
stock but otherwise will be on the same terms and
conditions.
Pre-emptive rights: None
Restrictions: Non-transferable
Holdco Option: If NTL is reorganised and as a result there is a new
parent undertaking of the NTL group, all of whose common
stock is traded on NASDAQ or another recognised
securities exchange, NTL shall be entitled and obliged
to transfer the obligations hereunder to such parent
undertaking without the consent of the holder and
references to NTL Common Stock herein shall in such
circumstances be deemed to refer to the common stock of
the new parent undertaking.
65
SCHEDULE S
PURCHASER SECURITY
TERM SHEET FOR CONVERTIBLE PREFERRED STOCK
Issuer: NTL Incorporated ("NTL")
Securities Offered: US$[ ] million principal amount of [ ]%
Convertible Preferred Stock ("Convertible Preferred
Stock")
The coupon and principal will be determined by the
Issuer. The Issuer must, within 1 month prior to the
proposed date of issue of the Convertible Preferred
Stock (in the case of (i) below) or within 1 week prior
to the proposed date of issue of the Convertible
Preferred Stock (in the case of (ii) below) at its
discretion either:-
(i) deliver to the holder a letter from an
independent investment bank to the holder to the
effect that the bank believes on the terms and
conditions set out in the letter that the
Convertible Preferred Stock, when issued, can be
distributed at the Redemption Price of the
Preferred Stock (ignoring commissions); such
letter shall be based on (i) the marketing
efforts that the management of the Issuer is
committed to make (dates, schedules, locations
and team specified) and (ii) the documentation
which the Issuer has committed to make available
(text of indenture, SEC-filings, marketing
materials etc.) and (iii) the gross spread as
reasonably determined by the holder of the
Preferred Stock in accordance with normal market
practice; or
(ii) deliver to the holder a "bought" sale relating to
the sale of the Convertible Preferred Stock which
will entitle the holder to receive an amount
equal to not less than the Redemption Price of
the Preferred Stock.
If the Issuer elects for (i) above, it must procure (a)
that its management team will be available for a period
of not less than 3 business days to make presentations
to potential institutional and other purchasers of the
Convertible Preferred Stock, such presentations to take
place within 3 weeks of the dates specified in the
letter from the independent investment bank and (b) that
the documentation which it committed to make available,
is available.
If the Issuer elects for (ii) above, the Issuer may also
amend the Conversion Rate so that the Conversion Premium
may be the higher of US$60 per share and 30% above the
NTL
66
Common Stock price at the time of setting of the
Conversion Premium.
Issue Price: $[ ] per $1000 of principal amount at the
Redemption Date.
Costs: The Holder will (in case of (i) below) pay for the gross
spread or discount. All other costs will be for the
Issuer.
If the Issuer elects for (i), the Issue Price for the
Convertible Preferred Stock will be the higher of the
Redemption Price of the Preferred Stock and the price at
which the Convertible Preferred Stock can be placed with
institutional investors and the principal amount of the
Convertible Preferred Stock may be reduced accordingly
provided always that the Issue Price is not less than
the Redemption Price of the Preferred Stock. If the
Issuer elects for (ii) above, the Issue Price shall be
at the discretion of the Issuer.
Issue Date: The date when the Preferred Stock is redeemed
Redemption Date: 10 years from the Issue Date
Dividends: Dividends will accrue at a rate of [ ]% per annum from
the Issue Date until the date of redemption or
conversion. For the first two years after the Issue
Date, the dividends will simply accrue. Following that
period dividends will be paid semi-annually, in whole or
in part, at the option of the Issuer, either in cash or
through the delivery of NTL Common Stock at the then
prevailing Current Market Price or this Security.
Ranking/Liquidation: Senior to NTL Common Stock
Conversion: The holder may convert this Security at any time from
the Issue Date until the Redemption Date into NTL Common
Stock. The Conversion Premium will be at 25% above the
NTL Common Stock price at the time of setting of the
coupon and principal (reference price average to be
agreed during tender)
Optional Redemption: The Issuer may redeem this Security at any time in the
period between three years after the Issue Date and the
Redemption Date subject to having provided a Redemption
Notice
Redemption Notice Not less than 30 days nor more than 60 days prior to the
date of redemption
Redemption Price: At par for the principal plus any accrued dividends not
paid. The Redemption Price will be paid, in whole or in
part, at the option of the Issuer, either in cash or
through the delivery of NTL Common Stock at the then
prevailing Current Market Price
67
Current Market Price: The volume-weighted average of the average high and low
sales price of the NTL Common Stock on NASDAQ for each
of the 10 trading days ending on the trading day prior
to the notice of redemption or conversion (as
applicable)
Registration Rights: Yes
Change of Control: Will not result in early redemption or conversion;
provided this Security will convert into new parent
convertible preferred stock, which in turn will be
convertible into and redeemable by, inter alia, new
parent common stock but otherwise will be on the same
terms and conditions.
Pre-emptive rights: None
Anti-dilution provisions: Subject to standard provisions relating to
anti-dilution, providing customary anti-dilution
protection.
Transferable: Yes
Holdco Option: If NTL is reorganised and as a result there is a new
parent undertaking of the NTL group, all of whose common
stock is traded on NASDAQ or another recognised
securities exchange, NTL shall be entitled and obliged
to transfer the obligations hereunder to such parent
undertaking without the consent of the holder and
references to NTL Common Stock herein shall in such
circumstances be deemed to refer to the common stock of
the new parent undertaking.
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SCHEDULE T
TAX INDEMNITY
1. DEFINITIONS AND MEANINGS
1.1 Throughout this Schedule the following words and phrases have the
meanings set out below:
"COMPANY" means any person being a member of the Group;
"COMPLETION" means ComTel Completion so far as it relates to the ComTel
Companies and Telecential Completion so far as it relates to the
Telecential Group;
"COVENTRY COVENANTOR" means Devanha Group plc (registered number SC
1344278), the "Covenantor" in the Coventry Tax Deed;
"COVENTRY TAX DEED" means the Tax Deed dated 2 April, 1996 between
Devanha Group plc, KPN Kabel UK Holding B.V. and Coventry Cable
Limited, a copy of which is annexed to this Agreement as Exhibit 12;
"EVENT" means any transaction, act, event, occurrence or omission of
whatever nature;
"FLEXTECH COVENANTORS" means the "Covenantors" as defined in clause
1.2(e) of the Flextech Tax Deed;
"FLEXTECH TAX DEED" means the Tax Deed dated 17th October 1995 between
IVS Cable Holdings Limited, Koninklijke PTT Nederland NV and Flextech
p.l.c, a copy of which is annexed to this Agreement as Exhibit 9;
"GROUP" means the ComTel Companies and the Telecential Group;
"LETTERS OF CREDIT" means the letters of credit issued and delivered to
or available to be drawn by Koninklijke PTT Nederland NV pursuant to
clause 5 of the Telus 1997 Tax Deed;
"LIABILITY TO TAXATION" means a liability to make a payment of or an
amount in respect of Taxation;
"PROFITS" means income, profits, gains (including capital gains) or the
value of supplies and any other consideration, value or receipts used
or charged for taxation purposes;
"TAXATION" means all taxes, duties, charges, levies, imposts or
withholdings whenever and by whatever authority imposed and whether of
the United Kingdom or elsewhere and whether or not any such taxes,
duties, charges, levies, imposts or withholdings are directly or
primarily chargeable against or to a Company together with in any such
case all interest, fines, penalties, surcharges and charges incidental
or relating to the imposing of any of such taxes, duties, charges,
levies, imposts or withholdings;
"TAX ASSESSMENT" means any notice, demand, assessment, letter, return,
accounts or other document or action taken indicating that a Company is
placed under a liability to make a payment of or in respect of
Taxation;
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"TAXATION AUTHORITY" means any Taxation or other authority (whether
within or outside the United Kingdom) which seeks to impose or
administers Taxation;
"TAXES ACT" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"TELUS 1995 COVENANTORS" means the companies described in the Telus
1995 Tax Deed as the "Covenantors";
"TELUS 1997 COVENANTORS" means the companies described in the Telus
1997 Tax Deed as the "Covenantors";
"TELUS 1995 TAX DEED" means the Deed of Tax Covenant dated 6th
September 1995 between Telus Corporation, 288922 Alberta Ltd and KPN
Kabel BV, a copy of which is annexed to this Agreement as Exhibit 10;
"TELUS 1997 TAX DEED" means the Deed of Tax Covenant dated 27th May
1997 between Telus Corporation, Telus Information Services, Telus Cable
Holdings and Koninklijke PTT Nederland NV, a copy of which is annexed
to this Agreement as Exhibit 11;
"TELUS COMPANY" means a "Company" as defined in clause 1(a) of the
Telus 1997 Tax Deed;
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇.
1.2 References to Profits being earned, accrued or received on or before a
particular date or in respect of a particular period shall include
Profits deemed for taxation purposes otherwise than as a result of
Profits being pro-rated to have been earned, accrued or received on or
before that date or in respect of that period.
1.3 References to any payment, dividend or distribution paid or made on or
before a particular date shall include:
1.3.1 any payment, dividend or distribution which on or before that
date has fallen due to be made; and
1.3.2 any Event which has occurred on or before that date and is
deemed to be a payment, dividend or distribution.
1.4 References to any payment, dividend or distribution shall include
anything which is deemed, for taxation purposes, to be a payment,
dividend or distribution.
1.5 References to something being deemed or treated "for taxation purposes"
in a certain way or at a certain time shall mean that for the purposes
of any applicable legislation or decided case law relating to or having
reference to taxation such things are deemed or treated in the way or
at the time described.
1.6 References to a "person" include references to any persons,
unincorporated association, body of persons, partnership, trust or
company.
1.7 References in this Schedule to any statute or statutory provision shall
be construed first as a reference to such statute or statutory
provision as is in force at the date of this Agreement and as
respectively re-enacted or consolidated except that in the case of
section 767AA Taxes Act
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1988 it means the provision to be enacted with effect in relation to
changes in ownership occurring, on or after 2nd July, 1997 when the Act
to be cited as the Finance ▇▇▇ ▇▇▇▇ enters into force and second as a
reference to any statute or statutory provision of which such statute
or statutory provision is a re-enactment or consolidation.
1.8 Except as are specifically provided references to paragraphs are to the
paragraphs of this Schedule.
2. COVENANT
2.1 Subject to the exclusions and limitations in paragraph 4 the Seller
covenants to pay to the Purchaser an amount equal to any Liability to
Taxation of a Company resulting from:
2.1.1 any Event occurring or deemed, for Taxation purposes, to have
occurred on or before Completion; or
2.1.2 any Profits earned, accrued or received in respect of any
period ending on or before Completion.
2.2 Subject to the exclusions and limitations in paragraph 4 the Seller
hereby agrees with and undertakes to the Purchaser to pay to the
Purchaser an amount equal to the amount of the reasonable costs and
expenses reasonably and properly incurred by a Company in connection
with or in consequence of any Tax Assessment or any claim which results
in a payment being made by the Purchaser under this paragraph 2.
2.3 Any payment under this Schedule shall constitute a reduction in the
consideration payable by the Purchaser to the Seller under this
Agreement.
3. AMOUNTS PAYABLE TO THE PURCHASER
The amount of the Liability to Taxation of a Company resulting from a
Tax Assessment and which is payable to the Purchaser under this
Schedule shall be the amount of the payment made by a Company in
respect of the Liability to Taxation.
4. EXCLUSIONS AND LIMITATIONS
4.1 The Seller shall not have a liability under this Schedule to the extent
that:
4.1.1 provision or reserve in respect of such Liability to Taxation
was made in the Completion Balance Sheet; or
4.1.2 the Liability to Taxation arises or is increased as a result
of the ordinary and usual course of trading of a Company which
is a member of the Telecential Group since the ComTel
Completion Date; or
4.1.3 the Liability to Taxation arises or is increased as a result
of any increase in the rates of Taxation made after the date
of this Agreement with retrospective effect or as a result of
any change in law occurring after the date of this Agreement
with retrospective effect; or
4.1.4 the Liability to Taxation would not have arisen but for a
voluntary act or deliberate or negligent omission of a Company
and/or the Purchaser after Completion otherwise
71
than in the ordinary course of business of a Company and in
circumstances in which a Company or the Purchaser, as the case
may be, was aware or ought reasonably to have been aware that
the act or omission would give rise to the Liability to
Taxation; or
4.1.5 the Liability to Taxation would not have arisen or would have
been reduced or eliminated but for a failure or omission on
the part of a Company after Completion to make any claim,
disclaimer or election the making of which was taken into
account in computing any provision or reserve for Taxation in
the Completion Balance Sheet; or
4.1.6 the Liability to Taxation would not have arisen but for a
change after Completion of the date to which any of the
Companies makes up its accounts; or
4.1.7 the Liability to Taxation would not have arisen or been
increased but for a failure on the part of the Purchaser or a
Company to comply with the provisions of paragraph 6 or of
Article 11.1 or 11.2 of this Agreement.
4.2 For the purposes of paragraph 4.1.2, "normal course of trading"
excludes, without limitation:
4.2.1 the payment of any dividend or the making of any distribution;
or
4.2.2 the disposal or realisation or acquisition of any asset
(including trading stock) in circumstances to the extent that
the consideration (if any) actually received (or due to be
received) or given (or due to be given) for such disposal or
realisation or acquisition is less than (or in the case of an
acquisition is more than) the consideration deemed to be or
have been received or given for taxation purposes; or
4.2.3 the supply or receipt of any service or business facility of
any kind (including the lending of money or the letting,
hiring, licensing or creation of any tangible or intangible
property or rights) in circumstances where consideration
received (or due to be received) is less than (or in the case
of a receipt of a service is more than) that which is deemed
to be received or given for taxation purposes; or
4.2.4 any Event which results in a Company becoming liable to bear a
Liability to Taxation directly or primarily chargeable against
or attributable to another person, firm or company or any
Event which results in a Company becoming liable to pay or
bear a Liability to Taxation under Part VIII of the Taxes
Management ▇▇▇ ▇▇▇▇ (charges on non-residents), or section 118
of Schedule 23 to the Finance ▇▇▇ ▇▇▇▇ (obligations imposed on
UK representatives) or section 48 of the Value Added Tax ▇▇▇
▇▇▇▇ (representative members),
but only where the relevant occurrence occurred or is deemed, for
Taxation purposes, to have occurred after the ComTel Completion Date
but on or before Telecential Completion.
4.3 The provisions of Articles 9.6.1, 9.6.2, 9.7 and 9.8 of the Agreement
(but no other, including, without limitation, Articles 9.12 and 9.14)
shall apply to limit the liability of the Seller under this Schedule.
72
5. WITHHOLDING AND DEDUCTIONS
5.1 All sums payable by the Seller to the Purchaser under this Schedule
other than interest shall be paid free and clear of all deductions or
withholdings whatsoever save only as may be required by law. If any
such deductions or withholdings are required by law the Seller shall be
obliged to pay such sum as will after such deduction or withholding has
been made leave the amount the recipient would have been entitled to
receive in the absence of any such requirement to make a deduction or
withholding.
5.2 In the event that any sum paid to the Purchaser as a result of the
obligations contained in this Schedule or in the Agreement will be
subject to Taxation the Seller shall be obliged to pay such sum as
will, after payment of the Taxation so charged, leave a sum equal to
the amount that would otherwise be payable under any such obligation.
6. CONDUCT OF CLAIMS
6.1 Subject to paragraphs 6.4 and 6.5, if the Purchaser or a Company
becomes aware of a Tax Assessment relevant for the purposes of this
Schedule, the Purchaser shall, or shall procure that a Company shall,
give written notice thereof to the Seller within ten Business Days if
the Tax Assessment is subject to a time limitation of 30 days or less
for an appeal and otherwise within 25 Business Days but so that the
giving of notice under this paragraph shall not be a condition
precedent to the making of a claim under this Schedule unless the
Seller is wholly prevented by the lack of notice from avoiding,
resisting, appealing or compromising the Tax Assessment or from making
a claim under any Tax Deed mentioned in paragraph 6.5. The Purchaser
shall procure that a Company shall (if the Seller shall indemnify the
Company concerned to the reasonable satisfaction of the Purchaser
against all losses, costs, damages and expenses, including, without
limitation, interest on overdue Taxation, which may be incurred
thereby) take such action and give such information and assistance in
connection with the affairs of the Company concerned as the Seller may
reasonably and promptly by written notice request to avoid, resist,
appeal or compromise the Tax Assessment.
6.2 Subject to sub-paragraph 6.3 the actions which the Seller may
reasonably request under sub-paragraph 6.1 shall include (without
limitation) the procuring of the Company concerned to apply to postpone
(so far as legally possible) the payment of any Taxation and/or
allowing the Seller to take on or take over at its own expense the
conduct of all or any proceedings of whatsoever nature arising in
connection with the Tax Assessment in question, and, if the Seller
takes on or takes over the conduct of proceedings, the Purchaser shall
provide and shall procure that the Company concerned shall provide such
information and assistance as the Seller may reasonably require in
connection with the preparation for and conduct of those proceedings.
6.3 If the Seller elects to have conduct of a Tax Assessment in accordance
with the provisions of this paragraph the Purchaser shall be kept
informed of all matters pertaining thereto and all steps proposed to be
taken by the Seller and shall be sent copies of all material
correspondence in connection with the Tax Assessment in question.
6.4 In the case of a Liability to Taxation mentioned in sub-clause 2(2) of
the Telus 1997 Tax Deed arising as a result of a Telus 1997 Covenantor
or a Telus Company failing to perform its obligations under clause 2(1)
of that Deed, the notice mentioned in paragraph 6.1 shall be given
within fourteen days if that is earlier than within ten Business Days
and shall also in accordance with paragraph 6.5 below be given to the
Telus 1997 Covenantors at the same time.
73
6.5 The Purchaser shall, and shall procure that the Companies shall, do all
such things and give the Seller such cooperation and assistance as is
reasonably required to enable it to comply with the provisions of any
of the Telus 1995 Tax Deed, the Telus 1997 Tax Deed (including the
Letters of Credit), the Flextech Tax Deed and the Coventry Tax Deed
(the "Tax Deeds") in order to make and conduct a claim under the
provisions of any of the Tax Deeds in respect of a Liability to
Taxation mentioned in paragraph 2.1 or any costs or expenses mentioned
in paragraph 2.2, obtain payment in respect of the claim and otherwise
comply with its responsibilities under each Tax Deed and in particular
it will procure that any notice required to be given to the Seller
pursuant to paragraph 6.1 shall also at the same time be given to the
Telus 1995 Covenantors, the Telus 1997 Covenantors, the Flextech
Covenantors and the Coventry Covenantor, as the case may be, where a
claim would or might be capable of being made under the provisions of
the relevant Tax Deed.
6.6 Notwithstanding any other provisions of this paragraph 6, the Purchaser
shall not be obliged to comply with this paragraph 6 where to do so
would require the disclosure by the Purchaser of any information the
subject of confidentiality obligations owed to any third party.
7. DUE DATE FOR PAYMENT
7.1 Subject to sub-paragraph 7.2, where a Tax Assessment to which this
Schedule applies requires the Purchaser or a Company to make a payment
in respect of a Liability to Taxation, the Seller shall pay to the
Purchaser or the relevant Taxation Authority (as the case may be) the
amount claimed in respect of that Tax Assessment under this Schedule
and any further amount which the Seller is liable to pay by virtue of
paragraph 5 on or before the date which is the later of the date five
Business Days after formal written demand is made by the Purchaser and
the second Business Day prior to the date on which the Taxation in
question is payable to the Taxation Authority demanding the same.
7.2 If the date for payment of the Taxation is deferred following
application to the appropriate Taxation Authority the date for payment
by the Seller shall be such later date when the amount of Taxation is
finally determined to be due to such Taxation Authority demanding the
same. For this purpose, an amount of Taxation shall be deemed to be
finally determined when, in respect of such amount, an agreement under
Section 54 of the Taxes Management ▇▇▇ ▇▇▇▇ or any legislative
provision corresponding to that section for the purposes of the
relevant tax is made or a decision of a court of tribunal is given from
which either no appeal lies or in respect of which no appeal is made
within the prescribed time limit.
8. REIMBURSEMENT FROM THIRD PARTIES
8.1 This paragraph applies if:
8.1.1 the Seller makes a payment under paragraph 7 in respect of a
payment of Taxation;
8.1.2 subsequently and before the sixth anniversary of ComTel
Completion the Purchaser or a Company receives from any person
(other than the Purchaser or another Company) a payment in
respect of the Taxation in question; and
8.1.3 in the case of a payment to a Company, the Company is at the
time of receipt a 75 per cent. subsidiary of the Purchaser or,
in the case of a Company which is a partnership at the date of
this Agreement, a 75 per cent subsidiary of the Purchaser is,
or 75 per cent subsidiaries of the Purchaser together are,
entitled to 75 per cent of the profits of
74
the Company or of the profits of the trade, (as the case may
be). For the purposes of this paragraph, a 75 per cent
subsidiary is a 75 per cent subsidiary for the purposes of
section 838(1) ▇▇▇▇▇ ▇▇▇ ▇▇▇▇.
8.2 If this clause applies, the Purchaser shall repay to the Seller (or
procure the repayment to it of) the amount received (less any costs of
recovering the amount and any payment of Taxation on such amount) to
the extent that it does not exceed the payment originally made by the
Seller.
9. OVERPROVISIONS
9.1 The Seller may (at its request and expense) require the auditors for
the time being of a Company to certify the existence and amount of any
Overprovision and the Purchaser shall provide, or procure that the
Company provides, any information or assistance required for the
purpose of production by the auditors of a certificate to that effect.
9.2 If the auditors certify the existence of an Overprovision then it shall
be dealt with as follows:-
9.2.1 any Overprovision shall first be set against any payment then
due from the Seller under this Schedule;
9.2.2 to the extent there is an excess, a refund shall be made to
the Seller of any previous payment or payments made by the
Seller under this Schedule (and not previously refunded) up to
the amount of the excess; and
9.2.3 to the extent that the excess referred to in sub-paragraph
9.2.2 is not exhausted under that sub-paragraph, the remainder
of that excess shall be carried forward and set against any
future payment or payments which become due from the Seller
under this Schedule.
9.3 For the purposes of this clause an Overprovision exists if any
Taxation liability has been overstated in the Completion
Balance Sheet, or such Taxation liability has been discharged
or satisfied below the amount attributed thereto in the
Completion Balance Sheet.
10. COUNTER INDEMNITY
10.1 The Purchaser hereby covenants with the Seller to pay to the Seller by
way of adjustment to the consideration payable by the Purchaser to the
Seller under this Agreement, an amount equivalent to:
10.1.1 any Taxation for which the Seller or any other person falling
within section 767A(2) or section 767AA(4) of the Taxes Act
becomes liable by virtue of the operation of section 767A,
767AA and 767B of the Taxes Act in circumstances where the
taxpayer company (as referred to in section 767A(1) of the
Taxes Act) or the transferred company (as referred to in
section 767AA(1) of the Taxes Act) is a Company; and
10.1.2 any other Taxation for which the Seller becomes liable as a
result of the failure by a Company to discharge it.
10.2 The covenant contained in paragraph 10.1 shall:
75
10.2.1 extend to any reasonable costs properly incurred by the Seller
or such other person in connection with such Taxation or claim
under paragraph 10.1 above;
10.2.2 not apply to Taxation to the extent that the Purchaser could
claim payment in respect of it under paragraph 2;
10.2.3 not apply to the extent that the Seller has already made
recovery in respect of the Taxation in question pursuant to
section 767B(2) of the Taxes Act.
10.3 Paragraphs 6 and 7 (conduct of claims and due date for payment) shall
apply to the covenants contained in paragraph 10.1 above as they apply
to the covenants contained in paragraph 2, replacing references to the
Seller by the Purchaser (and vice versa) and making any other necessary
modifications.
11. VAT - COMTEL COMPLETION
11.1 In this clause:
11.1.1 "PRE-SALE GROUP" means the group registration for value added
tax purposes registered under number 541 7002 81; and
11.1.2 "RELEVANT VAT" means VAT (but not related interest or
penalties), attributable to supplies, acquisitions and imports
by the ComTel Companies, less input tax deductible from it on
supplies to and acquisitions and imports by the ComTel
Companies, but excluding any VAT to the extent that it would,
if paid by the Purchaser or by any of the ComTel Companies,
give rise to a claim under this Schedule (and for the purpose
of Articles 9.6.1, 9.6.2 and 9.7 any VAT so excluded shall be
treated as a liability of the Seller under this Schedule
claimed by the Purchaser).
11.1.3 If the Relevant VAT is a positive number, there shall be no
"Seller's VAT" and the amount of the "Purchaser's VAT" shall
be equal to the amount of the Relevant VAT. If the Relevant
VAT is a negative number, there shall be no "Purchaser's VAT"
and the amount of the "Seller's VAT" shall be a positive
number equal to the absolute value of the Relevant VAT.
11.2 In determining for the purposes of paragraph 11.1 by or to whom a
supply, acquisition or import is made, section 43(1)(b) of the Value
Added Tax ▇▇▇ ▇▇▇▇ shall be ignored.
11.3 The Seller and the Purchaser shall co-operate to procure that the
ComTel Companies leave the Pre-Sale Group as of Completion, so far as
they are still members and that ComTel Cable Services Limited is
replaced as representative member of any continuing group of which any
Company which is not a ComTel Company is a member.
11.4 The Purchaser shall procure that the ComTel Companies pay to the
representative member of the Pre-Sale Group, the amount of any
Purchaser's VAT which is to be paid by the Seller or any member of a
Pre-Sale Group (other than a ComTel Company) to any Taxation Authority,
such payment to be made in cleared funds not later than three Business
Days before it is due to the relevant Taxation Authority. The Seller
shall procure that the Telecential Partnerships shall pay to the
relevant ComTel Companies the amount of any Seller's VAT which may be
reclaimed or credited against output tax by the Seller or any member of
the Pre-Sale Group
76
(other than a ComTel Company), such payment to be made in cleared funds
on the date the representative member of the Pre-Sale Group obtains the
benefit of the credit by reducing a payment of VAT otherwise due or one
Business Day after it receives repayment of VAT reclaimed by it (as the
case may be). Where the amount of the Relevant VAT is subsequently
adjusted or discovered to be incorrect (under an end of year adjustment
or otherwise), the Purchaser or Seller shall as soon as is practicable
after such adjustment or discovery procure the appropriate payment is
made to effect the adjustment.
11.5 The Purchaser shall on request provide or procure to be provided to the
Seller (or as it directs) any information and documents in the
possession, custody or power of the Purchaser or any of the ComTel
Companies required by any Company in any Pre-Sale Group in connection
with calculating the VAT liability of the Pre-Sale Group or complying
with any requirement to submit an EC sales list or Intrastat
declarations.
11.6 The provisions of this paragraph 11 shall cease to have effect
immediately following the Telecential Completion.
12. VAT-TELECENTIAL COMPLETION
12.1 The Seller and the Purchaser shall cooperate in obtaining a
determination from HM Customs & Excise as to the manner in which the
sales and assignments mentioned in Articles 2.1, 2.2, 2.3.2, 2.3.3,
2.3.4, 2.4.2, 2.4.3, 2.5.2 and 2.5.3 (the "Partnership Transfers") are
to be treated for value added tax purposes, including, but not limited
to, the extent to which the Partnership Transfers are to be left out of
account for the purposes mentioned in section 45(1) VATA or treated as
the transfer of a business as a going concern for the purposes of
section 49 VATA and article 5(1) of the Value Added Tax (Special
Provisions) Order 1995.
12.2 If HM Customs & Excise shall determine that value added tax is
chargeable in respect of any, or any part of, the Partnership Transfers
and/or any other sale of Assets pursuant to this Agreement, the Seller
shall procure delivery to the Purchaser of an appropriate tax invoice
for value added tax purposes, against which the Purchaser shall pay to
the relevant Transferor the amount of value added tax chargeable in
respect of the Partnership Transfers and/or the sale of Assets.
12.3 The Seller and the Purchaser shall cooperate in ensuring that notice is
given to HM Customs & Excise immediately after Completion of the change
in each of the Telecential Partnerships which is either separately
registered for value added tax purposes or included as a member of a
VAT group pursuant to section 43 VATA or any concessional treatment
available in connection with that section.
12.4 Each of the Seller and the Purchaser agrees that the working papers of
the Purchaser's Accountant used in drawing up the Completion Balance
Sheet and arriving at any provision for liability to VAT contained in
it will represent a proper basis for determining for the purposes of
section 45(5) VATA what proportion of the firm's liability is the VAT
liability of each person who has been a partner in the Telecential
Partnership in the prescribed accounting period in which Completion
occurs for the purposes of section 45(5) VATA and that it will conduct
any correspondence with HM Customs & Excise on that basis.
SCHEDULE V
RESIGNATION FORMAT : DIRECTORS
77
To: The Directors
Limited
[Registered Office]
Date: [ ], 1998
Dear Sir[s],
[ ] Limited(the "Company")
I resign as a director/the secretary of the Company with effect from the end of
the board meeting to be held on [the ComTel Completion Date/the Telecential
Completion Date].
Subject as provided below I confirm that I have no claim whatsoever against the
Company and/or its officers and employees in respect of any cause, matter or
thing (including, but without limitation, for unfair or wrongful dismissal and
redundancy), but to the extent that any such claim exists or may exist, I hereby
irrevocably waive such claim and hereby release the Company from any liability
whatsoever in respect thereof.
Notwithstanding the foregoing, this waiver shall not extent to any indemnity to
which I might be entitled at law or under the articles of association of the
Company in respect of any act, matter or thing done, permitted or suffered by me
in good faith whilst a director/the secretary of the Company and in any capacity
as such or to the payment of my remuneration accrued to date and the
reimbursement of any expenses properly incurred by me in the performance of my
duties to date.
IN WITNESS whereof I have executed this as a deed the day and year first above
written.
SIGNED and DELIVERED )
by [ ] )
in the presence of: )
78
SCHEDULE Y
FORMAT : PURCHASER'S CONFIRMATION
The Purchaser hereby declares to the Seller and confirms:
1. that the representations and warranties set out in Article 8 of the
Sale and Purchase Agreement for the Assets entered into between, inter
alia, Vision Networks III B.V., ComTel UK Finance B.V. and NTL Group
Limited ("the Sale and Purchase Agreement") dated o 1998 are true and
correct as on the date of this Confirmation; and
2. that save as disclosed above, the Purchaser is not aware of any matter
or thing which constitutes a material breach of the representations and
warranties set out in Schedule R of the Sale and Purchase Agreement.
Words and phrases defined in the Sale and Purchase Agreement shall have the same
meanings in this Confirmation.
Signed in (place) on this (day) of (month) 199o.
____________________________________
For : The Purchaser
By : (Print name)
Its : (Print title)
79
SCHEDULE Z
THE COMTEL GROUP
80
CONFORMED COPY
AGREEMENT FOR THE SALE AND PURCHASE OF
THE VISION NETWORKS UK GROUP
by and between
VISION NETWORKS III B.V.
(hereinafter referred to as the "Seller")
COMTEL UK FINANCE B.V.
VISION NETWORKS (UK) I LIMITED
TELECENTIAL COMMUNICATIONS (CANADA) LTD
VISION NETWORKS (UK) II LIMITED
TELECENTIAL COMMUNICATIONS (UK) LIMITED
VISION NETWORKS UK HOLDING B.V. (IN LIQUIDATION)
(HEREINAFTER REFERRED TO AS THE "TRANSFERORS")
and
NTL GROUP LIMITED
(hereinafter referred to as the "Purchaser")
and
NTL INC.
(hereinafter referred to as "NTL")
▇▇▇▇▇ & ▇▇▇▇▇
C2:232559.1
81
INDEX OF ARTICLES
Article 1 : Definitions and Interpretation
Article 2 : Sale, Purchase, Purchase Price
Article 3 : Signing of this Agreement, and
Covenants to Completion
Article 4 : ComTel Completion, Payment, Telecential Completion,
Payment
Article 5 : Actions at ComTel Completion and Actions at Telecential
Completion
Article 6 : Completion Balance Sheet
Article 7 : Due Diligence, Warranties and Acknowledgements
Article 8 : Warranties of the Purchaser and NTL
Article 9 : Breach and Non-Fulfilment
Article 10 : Secrecy
Article 11 : Tax Affairs Post Completion
Article 12 : Miscellaneous
Article 13 : Repayment of Indebtedness
Article 14 : Assignment of contracts
Article 15 : Minority Interests provisions
82
INDEX OF SCHEDULES
Schedule A : Apportionment of Purchase Price
Schedule B : Board Resolution (Article 2, 5.2 and 5.3.5)
Schedule C : Covenants to Telecential Completion
Schedule D : Defined Terms
Schedule F : Guarantee
Schedule I : Data Room Information
Schedule J : Stikeman, ▇▇▇▇▇▇▇ Opinion Letter
Schedule K : ▇▇▇▇▇▇▇ ▇▇▇▇ Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP Opinion Letter
Schedule Ind : Indebtedness (Article 4.5)
Schedule M : Relationship Agreement
Schedule O, P, Q: Deeds of Retirement and Appointment.
Schedule R : Representations and Warranties
Schedule S : Purchaser Security
Schedule T : Tax Indemnity
Schedule V : Resignation of Directors
Schedule Y : Format: Purchaser's Confirmation
Schedule Z : The ComTel Group
Schedule AA : Deloitte & Touche Letter
83
INDEX OF EXHIBITS TO SCHEDULE R:
Exhibit 1 : Management Accounts
