WAIVER AND THIRD AMENDMENT TO PUT AND CALL
OPTION AGREEMENT
This WAIVER AND THIRD AMENDMENT TO PUT AND CALL OPTION AGREEMENT (this
"Waiver and Amendment"), dated as of December 21, 2001, is made among BNP
Paribas (formerly Banque Nationale de Paris), Credit Agricole Indosuez (acting
individually and as Bank Representative), Deutsche Bank AG (acting through its
Paris branch), Westdeutsche Landesbank Girozentrale (acting through its Paris
branch) (each, a "Bank" and together, the "Banks") and France Telecom ("France
Telecom"). All capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed in the Option Agreement referred to below.
WITNESSETH
WHEREAS, the Banks, the Bank Representative and France Telecom are
parties to a Put and Call Option Agreement dated February 17, 2000, which was
amended by the parties pursuant to a First Amendment to Put and Call Option
Agreement dated as of March 23, 2000 and pursuant to a Second Amendment to Put
and Call Option Agreement dated as of September 12, 2001 (as so amended, the
"Option Agreement");
WHEREAS, France Telecom has informed the Bank Representative that on
September 25, 2001 Standard & Poors downgraded its credit rating of France
Telecom's long-term debt to BBB + and that on September 26, 2001 Xxxxx'x
downgraded its credit rating of France Telecom's long-term debt to Baa1, each
such downgrading constituting a Put Acceleration Event pursuant to the
provisions of clause 10.1.12 of the Option Agreement;
WHEREAS, France Telecom has requested that the Banks and the Bank
Representative enter into an amendment agreement to the Option Agreement in
order to postpone the Termination Date to the third anniversary of the Date of
Issue, i.e., March 28, 2003 and to waive their rights arising out of the
aforesaid downgrading of the credit ratings of France Telecom's long-term debt
under clause 10.1 of the Option Agreement;
WHEREAS, the parties hereto now wish to confirm the waiver by the
Banks of the Put Acceleration Event resulting from the downgrading of France
Telecom's long-term debt credit rating by Standard & Poors and Xxxxx'x and to
amend the Option Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration
acknowledged by the parties, it is hereby agreed:
ARTICLE I - WAIVER
1.1 As of and from the Effective Date (as defined in Article III
below), the Finance Parties agree to waive all of their respective rights
arising out of clause 10.1. of the Option Agreement, including clause 10.1.12 of
the Option Agreement exclusively in connection with the downgrading by Standard
& Poors of its credit rating of France Telecom's long-term debt to BBB + and the
downgrading by Xxxxx'x of its credit rating of France Telecom's long-term debt
to Baa1, as referred in the second recital hereof.
1.2 In consideration of the waiver provided in Article 1.1 above and
the recent downgrading of the credit rating of France Telecom's long-term debt
and the resulting increased credit risk for the Banks, France Telecom shall pay
to each Bank on the date of signature of this Waiver and Amendment a waiver fee
equal to 0.40 per cent of the amount of the Purchase Price of such Bank
(exclusive of VAT).
ARTICLE II - THIRD AMENDMENT TO OPTION AGREEMENT
2.1 As of the Effective Date (as defined in Article III below), the
definitions in clause 1.1 of the Option Agreement are amended:
(a) by deleting the definition of "Premium Period" and
substituting in lieu thereof the following language:
""Premium Period" means the period between each Premium Payment
Date, other than the sixth Premium Period, which will be the period
between the sixth Premium Payment Date and the date three years after the
Date of Issue".
(b) by deleting "8 Business Days" in the definition of "Put
Option Period" and substituting in lieu thereof "5 Business Days".
(c) by deleting the table appearing in the definition of
"Relevant Margin" and substituting in lieu thereof the following table:
-------- ------------------ ------------------- ------------------------------
Premium Premium Last day of the Relevant Margin
Period Payment Dates Premium Period
-------- ------------------ ------------------- ------------------------------
-------- ------------------ ------------------- ------------------------------
First 3 days after the 6 months after the 0.15 per cent per annum
Date of Issue Date of Issue
-------- ------------------ ------------------- ------------------------------
-------- ------------------ ------------------- ------------------------------
Second 6 months after the 1 year after the 0.15 per cent per annum
Date of Issue Date of Issue
-------- ------------------ ------------------- -----------------------------
-------- ------------------ ------------------- ------------------------------
Third 1 year after the 18 months after 0.25 per cent per annum
Date of Issue the Date of Issue
-------- ------------------ ------------------- ------------------------------
-------- ------------------ ------------------- ------------------------------
Fourth 18 months after 2 years after the 0.25 per cent per annum
the Date of Issue Date of Issue
-------- ------------------ ------------------- ------------------------------
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-------- ------------------ ------------------- ------------------------------
Fifth 2 years after 30 months after 0.95 per cent per annum
the Date of Issue the Date of Issue
-------- ------------------ ------------------- ------------------------------
-------- ------------------ ------------------- ------------------------------
Sixth 30 months after 3 years after the 0.95 per cent per annum
the Date of Issue Date of Issue
(the last Premium
Payment Date)
-------- ------------------ ------------------- ------------------------------
(d) by deleting the definition of "Termination Date" and
substituting in lieu thereof the following language:
""Termination Date" means the third anniversary of the Date of Issue".
2.2 As of the Effective Date (as defined in Article III below),
clause 3.3 of the Option Agreement is amended by deleting "8 Business Days" and
substituting in lieu thereof "5 Business Days".
2.3 As of the Effective Date (as defined in Article III below),
clause 6.1 of the Option Agreement is amended by deleting the end of the clause
from "and (iv)" to the end and substituting in lieu thereof the following:
"(iv) on the third Premium Payment Date an option fee
equal to 0.10 per cent of the aggregate amount of the Purchase Prices
and (v) on the second anniversary of the Date of Issue an option fee
equal to 0.35 per cent of the aggregate amount of the Purchase Prices."
2.4 As of the Effective Date (as defined in Article III below),
clause 10.1.6 of the Option Agreement is amended by deleting the existing text
and substituting in lieu thereof the following:
"10.1.6 (i) France Telecom or NTL takes any corporate action
or other steps or commences any legal proceedings, or
(ii) any legal proceedings are commenced by another
party (which proceedings are not discharged within 60
days from the commencement of such proceedings by
another party unless the court decides during such
period that the proceedings will be continued
notwithstanding any objections raised by France Telecom
or NTL, as the case may be), in either case for the
redressement judiciaire, liquidation judiciaire, winding
up, dissolution, administration or reorganization for
bankruptcy or insolvency of France Telecom or NTL,
respectively;"
2.5 As of the Effective Date (as defined in Article III below),
clause 10.1.12 of the Option Agreement is amended by deleting the existing text
and substituting in lieu thereof the following:
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"10.1.12 Standard and Poors downgrades its credit rating of
France Telecom's long-term debt below BBB+ or Xxxxx'x
downgrades its credit rating of France Telecom's
long-term debt below Baa1; or"
2.6 As of the Effective Date (as defined in Article III below),
clause 15.3 of the Option Agreement is amended by deleting "0.50 per cent" and
substituting in lieu thereof "1.40 per cent".
2.7 As of the Effective Date (as defined in Article III below),
Exhibit 3.3 and Exhibit 3.4 of the Option Agreement are amended by deleting "5%
Cumulative Preferred Stock, Series A" and substituting in lieu thereof
"Cumulative Convertible Preferred Stock, Series A" and by deleting "8 Business
Days" in footnote 5 to Exhibit 3.3 of the Option Agreement and substituting in
lieu thereof "5 Business Days".
ARTICLE III - MISCELLANEOUS
3.1 This Waiver and Amendment shall become effective as of the date
of (the "Effective Date"), and simultaneously with, the fulfillment of all of
the following conditions:
(i) the Bank Representative, on behalf of the Banks shall have
received legal opinions satisfactory in form and substance to the Finance
Parties and their legal advisors, White & Case LLP, of Shearman & Sterling,
legal advisors to France Telecom, and the General Counsel of France Telecom
(under New York and French law, respectively) to the effect that this
Waiver and Amendment has been duly authorized, executed and delivered by
France Telecom and is a binding obligation of France Telecom (assuming due
authorization, execution and delivery thereof by the Finance Parties)
enforceable in accordance with its terms (subject to applicable bankruptcy
and similar laws and any other appropriate and customary exceptions); and
(ii) on the date hereof, France Telecom shall have paid to each
Bank the waiver fee referred to in Article 1.2 above.
3.2 France Telecom represents and warrants to each Bank as of the
date hereof that, to France Telecom's knowledge, no Put Acceleration Event
(other than the Put Acceleration Event waived pursuant to Article I above) has
occurred and is subsisting.
3.3 In accordance with clause 14.2 of the Option Agreement, France
Telecom shall reimburse the Bank Representative for the reasonable fees and
disbursements of White & Case LLP as legal advisors to the Bank Representative
and the Banks in connection herewith.
3.4 This Waiver and Amendment is limited as specified herein and in
accordance with clause 20 of the Option Agreement and shall not constitute a
modification, acceptance or waiver of any other provision of the Option
Agreement.
3.5 This Waiver and Amendment and the rights and obligations of the
parties shall be governed by and construed in accordance with the law of the
State of New York, United States of America.
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3.6 Each of the Finance Parties and France Telecom irrevocably
agrees that any legal suit, action or proceeding against it arising out of, or
in connection with, this Waiver and Amendment may be instituted in the Supreme
Court of the State of New York, County of New York, or the U.S. District Court
for the Southern District of New York, and irrevocably waives any objection
which it may now or hereinafter have to the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such
courts in any such suit, action or proceeding.
3.7 This Waiver and Amendment may be executed and delivered
(including by facsimile) in any number of counterparts and by the different
parties hereto in separate counterparts, each of which counterparts when
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A complete set of counterparts shall be
lodged with each Bank and France Telecom.
3.8 From and after the date hereof, all references in the Option
Agreement shall be deemed to be references to the Option Agreement as amended
hereby.
THIS WAIVER AND AMENDMENT has been duly executed on the date stated
above.
BNP PARIBAS
/s/ Xxxxxxxx Xxxx /s/ Xxxxxxx Xxxxxx
-------------------- ---------------------
By: Xxxxxxxx Xxxx By: Xxxxxxx Xxxxxx
CREDIT AGRICOLE INDOSUEZ
/s/ Xxxxxxx Xxxxx
--------------------
By: Xxxxxxx Xxxxx
DEUTSCHE BANK AG
PARIS BRANCH
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxx
-------------------- ---------------------
By: Xxxxxx Xxxxxxxxx By: Xxxxxx Xxxxxxxxx
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WESTDEUTSCHE LANDESBANK GIROZENTRALE
PARIS BRANCH
/s/ Xxxxxx Veldung /s/ Xxxxxx Xxxxx
-------------------- ---------------------
By: Xxxxxx Veldung By: Xxxxxx Xxxxx
FRANCE TELECOM
/s/ Xxxxxxx Xxxxxxxxx
-------------------- ---------------------
By: Xxxxxxx Xxxxxxxxx By:
CREDIT AGRICOLE INDOSUEZ, as Bank Representative
/s/ Xxxxxxx Xxxxx
--------------------
By: Xxxxxxx Xxxxx
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Power of Attorney
I, the undersigned, Xxxxxx XXX, acting in my capacity of Chairman of the Board
of Directors and Chief Executive Officer of France Telecom, a company duly
incorporated under the laws of France, with its registered office located at 0,
xxxxx x'Xxxxxxx 00000 Xxxxx, Xxxxxx, registered with the Paris Commercial
Registry under the number RCS Paris B 000 000 000,
HEREBY GRANT this power of attorney to:
1- Xxxx-Xxxxx XXXXXXXXXXX, Senior Executive Vice President and Chief Financial
Officer of France Telecom,
2- Xxxx XXXXXXX, Senior Vice President Mergers & Acquisitions of France Telecom,
and
3- Xxxxxxx XXXXXXXXX, Director - Mergers and Acquisition of France Telecom
Who may each act separately and successively, with the power of substitution, at
their discretion, to act on behalf of France Telecom in connection with the NTL
/Eurotel closing and in particular to:
- execute in the name and of behalf of France Telecom the Waiver and Third
Amendment to Put and Call Option Agreement,
- and more generally to do all acts and carry out, on behalf of France Telecom,
any and all actions necessary for the performance and implementation of the
contractual documents related to the above-mentioned transaction.
This power of attorney shall be valid for a period of three months from its date
of signature.
Made in Paris, on December 21, 2001
/s/ Xxxxxx Xxx
-------------------------------
Xxxxxx XXX
Chairman of the Board of Directors
And Chief Executive Officer of France Telecom.
