SHARE EXCHANGE AGREEMENT
AMONG
NTL INCORPORATED
AND
THE SHAREHOLDERS OF DIAMOND CABLE COMMUNICATIONS PLC
DATED AS OF JUNE 16, 1998
TABLE OF CONTENTS
PAGE
ARTICLE I
ACQUISITION OF STOCK
Section 1.1 Transfer of Stock...............................................1
Section 1.2 Consideration for Shares........................................1
Section 1.3 Fractional Shares...............................................2
ARTICLE II
CLOSING
Section 2.1 Closing.........................................................2
Section 2.2 Documents to be delivered by Transferors........................3
Section 2.3 Documents to be delivered by NTL................................4
Section 2.4 Board Meetings. ...............................................4
Section 2.5 Form of Documents to be Delivered...............................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties relating to Diamond..............5
Section 3.2 Representations and Warranties of Transferors..................21
Section 3.3 Representations and Warranties of NTL..........................24
Section 3.4 No Counterclaim................................................33
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1(a) Conduct of Business by Diamond.................................33
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Access to Information; Confidentiality.........................37
Section 5.2 Reasonable Best Efforts........................................38
Section 5.3 Stock Options and Stock Appreciation Rights....................39
Section 5.4 Fees and Expenses..............................................41
Section 5.5 Public Announcements...........................................41
Section 5.6 NASDAQ Quotation...............................................42
Section 5.7 Covenant of Transferors........................................42
Section 5.8 Covenant of NTL................................................42
Section 5.9 Standstill Agreements; Confidentiality Agreements..............42
Section 5.10 Conveyance Taxes...............................................43
Section 5.11 Debt Offers....................................................43
Section 5.12 Confidential Information.......................................43
Section 5.13 Shareholders' Agreement........................................44
Section 5.14 Bring-along for Optionholder Shares............................44
Section 5.15 Tag-along for Optionholders Shares.............................44
Section 5.16 No change to Stock Options.....................................45
Section 5.17 Indemnification; Directors and Officers Insurance..............45
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the Closing....45
Section 6.2 Conditions to Obligations of NTL...............................48
Section 6.3 Conditions to Obligations of Transferors.......................49
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PAGE
Section 6.4 Frustration of Closing Conditions..............................50
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination....................................................50
Section 7.2 Effect of Termination..........................................52
Section 7.3 Amendment......................................................52
Section 7.4 Extension; Waiver..............................................52
Section 7.5 Procedure for Termination, Amendment, Extension or Waiver......53
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Survival of Representations, Etc...............................53
Section 8.2 Notices........................................................54
Section 8.3 Definitions....................................................56
Section 8.4 Interpretation.................................................57
Section 8.5 Counterparts...................................................58
Section 8.6 Entire Agreement; No Third-Party Beneficiaries.................58
Section 8.7 Governing Law..................................................58
Section 8.8 Assignment.....................................................58
Section 8.9 Consent to Jurisdiction........................................59
Section 8.10 Headings.......................................................59
Section 8.11 Severability...................................................59
Section 8.12 Liability of AmSouth in its Corporate Capacity.................60
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SHARE EXCHANGE AGREEMENT dated as of June 16, 1998, among NTL
INCORPORATED, a Delaware corporation ("NTL"), and the shareholders of Diamond
Cable Communications plc ("Diamond") set forth on the signature page hereto
("Transferors").
WHEREAS, each Transferor owns the number of ordinary shares, par value
2.5p per share, and deferred shares, par value 25p per share, of Diamond set
forth opposite its name on the signature page hereto (the "Shares").
WHEREAS, NTL desires to acquire from Transferors, and Transferors
desire to transfer to NTL, all of the Shares, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
ACQUISITION OF STOCK
Section 1.1 Transfer of Stock. Upon the terms and subject to the
conditions contained herein, each Transferor will exchange, convey, transfer,
assign and deliver to NTL with full title guarantee, and NTL will acquire on the
Closing Date (as hereinafter defined), all of the Shares set forth opposite its
name on the signature page hereto. Each Transferor shall procure that NTL
acquires good title to the Shares to be acquired by it from such Transferor free
from all liens, charges, encumbrances, equities and claims whatsoever and
together with all rights now or hereafter attaching to them. NTL shall not be
obliged to complete the acquisition of any of the Shares unless the acquisition
of all the Shares is completed simultaneously.
Section 1.2 Consideration for Shares. Upon the terms and subject to
the conditions contained herein, as consideration for the acquisition of the
Shares, on the Closing Date NTL shall transfer to each Transferor
consideration consisting of one share of common stock, par value $.01 per share,
of NTL (the "NTL Common Stock") for (a) each four ordinary shares in Diamond,
provided that if the Closing Date shall have occurred before the fourth month
anniversary date of the date hereof and the NTL Average Stock Price is $52.00
(the "Maximum Average Stock Price") or more, the consideration for each four
ordinary shares will be the number of NTL Common Stock equal in value (at the
NTL Average Stock Price) to the Maximum Average Stock Price; provided;
however if the Closing Date shall have occurred after the fourth month
anniversary date of the date hereof, then the Maximum Average Stock Price shall
increase by $.50 on such date and on each subsequent monthly anniversary date of
the date hereof until the Closing Date and (b) each deferred share in Diamond.
Section 1.3 Fractional Shares. No fractional shares of NTL Common
Stock shall be issued pursuant to this Agreement. All fractional shares of NTL
Common Stock that a holder of shares of Diamond would otherwise be entitled to
receive as a result of the transaction contemplated hereby shall be aggregated
and if a fractional share results from such aggregation, such holder shall be
entitled to receive, in lieu thereof, an amount in cash determined by
multiplying the closing sale price of the NTL Common Stock on the NASDAQ on the
trading day immediately preceding the Closing Date by the fraction of a share of
NTL Common Stock to which such holder would otherwise have been entitled.
ARTICLE II
CLOSING
Section 2.1 Closing. The Closing of the transactions contemplated
herein (the "Closing") shall be held at 9:00 a.m., local time, at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, on the third Business Day after the day in which all of the conditions
set out in Article VI hereof have been satisfied or been waived (the "Closing
2
Date") unless NTL and the Transferors' Representative (as hereinafter defined)
otherwise agree.
Section 2.2 Documents to be Delivered by Transferors. At Closing,
Transferors shall deliver to NTL the following:
(a) duly executed transfers of the Shares by the registered holders in
favour of NTL or such person or persons nominated by NTL, the share certificates
and any additional documentation necessary to establish the transferor's title
to the Shares, to authorize the execution of such transfers and to allow the
transferees (subject to due stamping) to be registered in the Register of
Members of Diamond as holders of the Shares;
(b) the common seal, statutory books and other record books of Diamond
and its subsidiaries written up to Closing;
(c) the certificates in respect of all issued shares in the
subsidiaries of Diamond and duly executed transfers in respect of such shares
not registered in the name of Diamond or a subsidiary of Diamond in favour of
NTL or a person nominated by NTL;
(d) statements of balances at a date not more than seven days prior to
Closing on all bank accounts of Diamond and its subsidiaries;
(e) the resignation letters referred to in Section 2.4 below;
(f) an unqualified letter of resignation from the auditors of Diamond
and its subsidiaries in the form prescribed by Section 394, UK Companies Xxx
0000;
(g) duly executed powers of attorney in the approved terms in respect
of the rights attaching to the Shares;
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(h) evidence reasonably satisfactory to NTL that:
(i) all sums owed by Diamond or its subsidiaries to any
Transferor or their Affiliates or by any Transferor or their
Affiliates to Diamond or any of its subsidiaries have been repaid; and
(ii) any guarantees granted or, security or indemnities given by
Diamond or any of its subsidiaries in respect of obligations of any
Transferor or its Affiliates, have been released or discharged;
(i) evidence reasonably satisfactory to NTL as to the termination of
the management agreement dated as of June 1, 1994 between ECE Management Company
and Diamond Cable Limited as subsequently assigned by the parties to ECE
Management International and Diamond respectively. The Transferors hereby agree,
and shall cause Diamond to agree, that, effective on the Closing Date, the
shareholders agreement, dated September 1, 1994 among European Cable Capital
Partners, L.P., AmSouth Bank of Alabama, as Trustee, C.G.T. Family Corporation,
GS Capital Partners L.P., Xxxxxxx X. XxXxxxxx and Diamond shall be terminated;
and Investor Investments AB, DCI Partners and European Cable Capital Partners
L.P. agree that, effective on the Closing Date, the Relationship Agreements
dated October 12, 1994 and June 21, 1996, respectively, shall be terminated, in
each case without liability to any of the parties to such agreements.
(j) a schedule setting forth each Transferors' tax basis (cost) as
determined under U.S. tax principles in all ordinary shares of Diamond and
deferred shares of Diamond, if any.
Section 2.3 Documents to be Delivered by Ntl. NTL shall deliver to
each Transferor the shares of NTL Common Stock as set out in Section 1.2 and, if
applicable, cash for fractional shares as set out in Section 1.3.
Section 2.4 Board Meetings. Each Transferor shall procure (i) the
holding of a meeting of the board
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of directors of Diamond and each of its subsidiaries immediately prior to the
Closing at which board resolutions in the approved terms shall be passed and
(ii) duly executed resignation letters in the approved terms from all of the
directors of Diamond and its subsidiaries with effect from the end of such board
meeting.
Section 2.5 Form of Documents to be Delivered. All instruments and
documents executed and delivered to NTL pursuant hereto shall be in form and
substance, and shall be executed in a manner, reasonably satisfactory to NTL.
All instruments and documents executed and delivered to Transferors pursuant
hereto shall be in form and substance, and shall be executed in a manner,
reasonably satisfactory to Transferors' Representative. All documents in the
approved terms shall be deemed to be in a form reasonably satisfactory to NTL
and Transferor's Representative.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties Relating to Diamond. Except
as fairly disclosed in the Diamond SEC Documents (as defined in Section 3.1(e))
or as set forth on the Disclosure Schedule delivered by Transferors to NTL in
connection with the execution of this Agreement (the "Transferors Disclosure
Schedule") and making reference to the particular subsection of this Agreement
to which exception is being taken, each Transferor severally and not jointly
represents and warrants to NTL as follows:
(a) Organization, Standing and Corporate Power. (i) Each of Diamond
and its subsidiaries (as defined in Section 8.7) is a corporation duly organized
and validly existing under the laws of England and Wales and has the requisite
corporate power and authority to carry on its business as now being conducted.
Each of Diamond and its subsidiaries is duly qualified or licensed to do
business in each jurisdiction in which the nature of its business
5
or operations makes such licensing necessary except where such failure would not
individually or in the aggregate have a material adverse effect on Diamond. Due
compliance has been made with all the provisions of the UK Companies Xxx 0000
and other legal requirements, in connection with the formation of Diamond and
its subsidiaries, the allotment, issue, purchase and redemption of shares,
debentures and other securities in Diamond and its subsidiaries, any reduction
of the authorized and issued share capital of Diamond or any of its
subsidiaries, any amendment to the memorandum or articles of association of
Diamond or any of its subsidiaries and the passing of resolutions and the
payment of dividends by Diamond and its subsidiaries. Each of Diamond and its
subsidiaries is not in breach of the provisions of its articles of association.
(ii) Complete and correct copies of the memorandum and articles
of association of Diamond, as amended to date have been filed as
Exhibits to the Diamond SEC Documents (as defined below).
(iii) In all material respects, the statutory books and minute
books of Diamond contain accurate records of all meetings and
accurately reflect all other actions taken by the shareholders, the
Board of Directors and all committees of the Board of Directors of
Diamond since Diamond's incorporation.
(b) Subsidiaries. Exhibit 21 to Diamond's Annual Report on Form 10K
for the Year Ended December 31, 1997 ("Diamond's Form 10K") sets forth all the
subsidiaries of Diamond. Except as set forth in Section 3.1(b) of the
Transferors Disclosure Schedule, all such outstanding shares of or other equity
interests in, each such subsidiary have been validly issued and are fully paid
and nonassessable and are owned directly or indirectly by Diamond, free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens") and free of
any other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital
6
stock or other ownership interests) and represent the entire allotted and
issued share capital of each company.
(c) Capital Structure. The authorized share capital of Diamond
consists of 150,000,000 ordinary shares and six (6) deferred shares. As of the
date hereof: (i) 59,138,791 ordinary shares and six (6) deferred shares were
issued and outstanding and the shares comprised all of the shares in Diamond
issued and outstanding; (ii) 870,500 ordinary shares of Diamond were reserved
for issuance pursuant to the Senior Management Option Scheme, a complete and
correct copy of the rules of which has been made available to NTL (such scheme,
the "Stock Plan") and (iii) 654,000 ordinary shares of Diamond were reserved for
issuance pursuant to an option agreement dated January 7, 1995 between Diamond
and CGT Family Corporation, a complete and correct copy of which has been made
available to NTL (such agreement, the "CGT Option Agreement"). As of the date
hereof, Section 3.1(c) of the Transferors Disclosure Schedule sets forth a
complete and correct list of the number of Shares subject to employee share
options or other rights to purchase or receive Shares granted under the Stock
Plan (collectively, "Stock Options"), the dates of grant and exercise prices
thereof. All outstanding shares of Diamond are, and all shares which may be
issued prior to the Closing Date will be, when issued, duly authorized, validly
issued, fully paid and nonassessable. Except as set forth in this Section 3.1(c)
and in Section 3.1(c) of the Transferors Disclosure Schedule and except for
changes since May 15, 1998 resulting from the issuance of Shares pursuant to the
Stock Options or the CGT Option Agreement, (x) there are not issued, reserved
for issuance or outstanding (A) any shares or other securities or loan capital
of Diamond, (B) any securities of Diamond or any Diamond subsidiary convertible
into or exchangeable or exercisable for shares or securities or loan capital of
Diamond, (C) any warrants, calls, options or other rights to acquire from
Diamond or any Diamond subsidiary, and any obligation of Diamond or any Diamond
subsidiary to issue, shares or other securities or loan capital of Diamond and
(y) there are no outstanding obligations of Diamond or any Diamond subsidiary to
repurchase, redeem or otherwise acquire any such
7
securities or loan capital or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities or loan capital. Except as set forth in
Section 3.1(c) of the Transferors Disclosure Schedule, there are no outstanding
(A) securities of Diamond or any Diamond subsidiary convertible into or
exchangeable or exercisable for shares or other securities or ownership
interests or loan capital in any Diamond subsidiary, (B) warrants, calls,
options or other rights to acquire from Diamond or any Diamond subsidiary, and
any obligation of Diamond or any Diamond subsidiary to issue, any shares, or
other securities or ownership interests or loan capital in, or any securities
convertible into or exchangeable or exercisable for any shares, securities or
ownership interests or loan capital in, any Diamond subsidiary or (C)
obligations of Diamond or any Diamond subsidiary to repurchase, redeem or
otherwise acquire any such outstanding securities or loan capital of Diamond
subsidiaries or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities or loan capital. Except as set forth in Section 3.1(c)
of the Transferors Disclosure Schedule, neither Diamond nor any Diamond
subsidiary is a party to any agreement restricting the transfer of, relating to
the voting of, requiring registration of, or granting any preemptive or, except
as provided by the terms of the Stock Options or under the CGT Option Agreement,
antidilutive rights with respect to, any securities or loan capital of the type
referred to in the two preceding sentences. Other than the Diamond subsidiaries,
Diamond does not directly or indirectly beneficially own, any securities or
other beneficial ownership interests in any other entity.
(d) Noncontravention. Except as set forth in Section 3.1(d) of the
Transferors Disclosure Schedule, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets
8
of Diamond or any of its subsidiaries under, (i) the memorandum of association
or articles of association of Diamond or any of its subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to Diamond or any of its subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Diamond or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
losses or Liens that individually or in the aggregate would not (x) have a
material adverse effect on Diamond or (y) reasonably be expected to impair in
any material way the ability of any Transferor to perform its obligations under
this Agreement. No consent, approval, order or authorization of, action by or in
respect of, or registration, declaration or filing with, any federal, state,
local or foreign government, any court, administrative, regulatory or other
governmental agency, commission or authority or any nongovernmental
self-regulatory agency, commission or authority (a "Governmental Entity") is
required by or with respect to Transferors or Diamond or any of its subsidiaries
in connection with the execution and delivery of this Agreement by Transferors
or the consummation by Transferors of the transactions contemplated by this
Agreement, except for (1) such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (2) receipt of
the Required British Approvals (as defined); and (3) such consents, approvals,
orders or authorizations the failure of which to be made or obtained
individually or in the aggregate would not (x) have a material adverse effect on
Diamond or (y) reasonably be expected to impair in any material way the ability
of Transferors to perform their respective obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities; Financial Statements.
(i) Diamond has filed all required registration statements,
prospectuses, reports,
9
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) required to be filed with the SEC since
January 1, 1996 (the "Diamond SEC Documents"). As of their respective dates, the
Diamond SEC Documents complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable to such
Diamond SEC Documents, and none of the Diamond SEC Documents when filed
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) The financial statements of Diamond included in the Diamond
SEC Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") (except, in
the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Diamond and
its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as reflected in such
financial statements or in the notes thereto neither Diamond nor any
of its subsidiaries has any liabilities or obligations of any nature
which, individually or in the aggregate, would have a material adverse
effect on Diamond.
10
(iii) The management accounts of Diamond and its subsidiaries for
the period from January 1, 1998 to April 30, 1998 have been prepared
on a substantially consistent basis as that adopted for the financial
statements included in the Diamond SEC Documents and fairly present,
in all material respects the operating results, working capital
position and net indebtedness of Diamond and its subsidiaries as at
and for the period ended on the date to which they have been prepared
subject to normal quarterly and annual closing adjustments and subject
to the absence of (i) a statement of cash flows and (ii) explanatory
notes that would each be included in financial statements prepared in
accordance with generally accepted accounting principles.
(f) Absence of Certain Changes or Events. Except (x) as disclosed in
Section 3.1(f) of the Transferors Disclosure Schedule, (y) as permitted by
Section 4.1(a) or (z) as disclosed in any Diamond SEC Document filed since
December 31, 1997 and prior to the date hereof, since December 31, 1997 Diamond
and its subsidiaries have conducted their business only in the ordinary and
usual course and since such date there has not been (i) any material adverse
change in Diamond, (ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, shares, other securities or
property) with respect to any of Diamond's shares, (iii) any split, combination
or reclassification of any of Diamond's shares or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for Diamond's shares except for issuances of ordinary shares
upon the exercise of Stock Options awarded prior to the date hereof in
accordance with their present terms, or pursuant to the CGT Option Agreement in
accordance with its present terms (iv)(A) any granting by Diamond or any of its
subsidiaries to any current or former director, executive officer or any of the
persons identified as a key employee of Diamond or its subsidiaries in Section
3.1(f) of Transferors' Disclosure Schedule (the "Key Employees") of any
increase in compensation, bonus or
11
other benefits, except for normal increases as a result of promotions, normal
increases of base pay in the ordinary and usual course of business or as
required under any employment agreements in effect as of December 31, 1997, (B)
any granting by Diamond or any of its subsidiaries to any such current or former
director, executive officer or Key Employee of any increase in severance or
termination pay, or (C) any entry by Diamond or any of its subsidiaries into, or
any amendment of, any employment, deferred compensation, consulting, severance,
termination or indemnification agreement with any such current or former
director, executive officer or Key Employee, (v) except insofar as may have been
required by a change in GAAP, any change in accounting methods, principles or
practices by Diamond materially affecting its assets, liabilities or business,
(vi) any tax election, notice, claim agreement or surrender that individually or
in the aggregate would have a material adverse effect on Diamond or any of its
subsidiaries or tax attributes or any settlement or compromise of any material
Taxation (as hereinafter defined) liability, or (vii) any action taken by
Diamond or any of the Diamond subsidiaries during the period from December 31,
1997 through the date of this Agreement that, if taken during the period from
the date of this Agreement through the Closing Date would constitute a breach of
Section 4.1(a).
(g) Compliance With Applicable Laws; Litigation.
(i) Diamond and its subsidiaries, and the respective employees of
Diamond and its subsidiaries hold all permits, licenses, variances,
exemptions, orders, registrations and approvals of all Governmental
Entities which are required for the operation of the respective
businesses of Diamond and its subsidiaries (the "Diamond Permits"),
except where the failure to have any such Diamond Permits individually
or in the aggregate would not have a material adverse effect on
Diamond. Diamond and its subsidiaries are, and have at all times been,
in compliance with the terms of the Diamond Permits and all applicable
statutes, laws, ordinances, rules and regulations, except where the
failure so to comply individually or in the aggregate, would not have
a
12
material adverse effect on Diamond. No action, demand, requirement,
investigation or proceeding by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to
Diamond or any of its subsidiaries or any of their respective
properties is existing or pending or, to the knowledge (as defined in
Section 8.7) of Transferors, threatened other than, in each case,
those the outcome of which individually or in the aggregate would not
(A) have a material adverse effect on Diamond or (B) reasonably be
expected to impair in any material way the ability of Transferors to
perform their respective obligations under this Agreement or prevent
or materially delay the consummation of any of the transactions
contemplated by this Agreement or the obligations of Diamond or any of
its subsidiaries under any contract with any third party.
(ii) Except as set forth in Section 3.01(g) of the Transferor
Disclosure Schedule (x) neither Diamond nor any Diamond subsidiary is
subject to any outstanding order, judgment, injunction or decree or
is a party to any undertaking or assurance given to any court,
governmental agency or other regulatory body which is still in force
and (y) to the knowledge of Transferors, there is no proceeding or
threatened proceeding which may result in Diamond or any Diamond
subsidiary becoming subject to any such order, judgement, injunction
or decree or being required to be a party to any such undertaking or
assurance.
(iii) Diamond and its subsidiaries have obtained the necessary
licences pursuant to the Wireless Xxxxxxxxxx Xxx 0000, the
Telecommunications Xxx 0000 the Cable and Xxxxxxxxxxxx Xxx 0000, the
Broadcasting Xxx 0000 (as amended) and the Broadcasting Xxx 0000 to
enable them to engage in the cable television and telecommunications
business as described in the Diamond SEC Document (together "the
Licences"). All the Licences are listed in Section 3.1(g)(iii) of the
Transferors
13
Disclosure Schedule and copies have been supplied to NTL. Except as
set forth in Section 3(g)(iii) of the Transferors
Disclosure Schedule, the Licences are (A) in full force and effect in
accordance with the copies supplied to NTL; (B) have been complied
with in all material respects including, without limitation, any build
obligations set out in such licences as currently in effect; and (C)
all fees due and payable to date in respect of such licences have been
paid in full. There are no circumstances which indicate that any of
the Licences will or may be amended in any material respect, revoked
or not renewed, in whole or in part, in the ordinary and usual course
of events and neither the Closing nor the performance by any party of
their obligations under this Agreement will, or is reasonably likely
to, give rise to any of the foregoing. No objection has been made by
the DTI, the ITC or the Director General of Telecommunications and no
proceedings have been threatened 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 Diamond,
in relation to any construction program of Diamond and its
subsidiaries, taken as a whole, for the construction of their
prospective cable television and telecommunications systems.
(h) Incentive Compensation/Benefit Plans. Diamond has delivered to NTL
true and complete copies of the documents listed in Section 3.1(h) of the
Transferors Disclosure Schedule.
(i) With respect to any employee benefit plans and arrangements
of Diamond and its subsidiaries (the "Diamond Benefit Plans"),
Diamond, its subsidiaries and any Diamond Benefit Plans have been
operated, and are, in compliance with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
the Code and all other applicable laws.
(ii) No Diamond Benefit Plan is subject to Title IV of ERISA or
is a "multiemployer plan"
14
within the meaning of Section 3(37) of ERISA. Neither Diamond nor any
of its subsidiaries has incurred any unsatisfied liability under Title
IV of ERISA. None of Diamond nor any of its subsidiaries has any
contingent liability under Section 4204 of ERISA.
(iii) "Schemes" means all and each of the pension schemes
identified in Section 3.1(h)(iii) of the Transferors Disclosure
Schedule, and "Scheme Documents" means the documents relating to the
Schemes identified in Section 3.1(h)(iii) of the Transferors
Disclosure Schedule. The Scheme Documents have been made available to
NTL and comprise all the material documents governing the Schemes.
Except pursuant to the Schemes or as required by applicable law,
neither Diamond or any of its subsidiaries have paid, provided or
contributed towards and are not under any obligation (whether or not
legally enforceable) to pay, provide or contribute towards any
retirement/death/disability benefit for or in respect of any present
or past officer employee (or any spouse, child or dependant of any of
them) of Diamond or any of its subsidiaries. The Schemes are approved
by the Board of the Inland Revenue as an exempt approved Scheme
(within the meaning of Section 592, Income Taxes and Corporation Act
1988).
(iv) The Scheme Documents correctly describe in all material
respects all the benefits which are paid or which may become payable
under the Schemes. The Schemes have at all times, in all material
respects, been operated, and employees have been eligible to join the
Schemes, in accordance with the provisions governing them and all
applicable laws and fiscal and other regulatory requirements. All
amounts due to the Schemes from Diamond or any of its subsidiaries
have been paid and were properly assessed and calculated in accordance
with the provisions governing the Schemes. There are no actions,
suits, complaints or claims pending or threatened against Diamond or
any of its subsidiaries or the trustees of the Schemes.
15
The Schemes provide only money purchase benefits (as defined in
Section 181 of the Pension Schemes Act 1993) and lump sum death
benefits. The rates of contributions payable by Diamond and its
subsidiaries have been shown in Section 3.1(h)(iv) of the Transferors
Disclosure Schedule. The liability for all lump sum death benefits
which may become payable under the Schemes is fully insured with a
reputable insurance company on normal terms and at normal rates with
all lives assured being treated as enjoying good health and all
premiums have been properly paid.
(i) Taxes. (i) Each of Diamond and its subsidiaries has filed all
material Tax (as defined herein) returns, claims, applications,
computations and reports required to be filed by it and all such
returns, claims, applications, computations and reports are complete
and correct in all material respects, or requests for extensions to
file such returns, claims, applications, computations and reports have
been timely filed, granted and have not expired. Except as described
in Section 3.1(i) of the Transferors Disclosure Schedule, Diamond and
each of its subsidiaries has paid all Taxes (as defined herein) which
it or they have become liable to pay and it or they are not now, and
have never been, under a liability to pay any fine, surcharge,
penalty or interest in connection with any Taxes. The most recent
financial statements contained in the Diamond SEC Documents reflect an
adequate reserve in accordance with GAAP for all Taxes payable by
Diamond and its subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements.
(ii) Except as described in Section 3.1(ii) of the Transferors
Disclosure Schedule, no deficiencies for any Taxes have been proposed,
asserted or assessed against Diamond or any of its subsidiaries that
are not adequately reserved for. Diamond has never been included as a
member of any United States consolidated tax group and neither Diamond
nor any of its subsidiaries are or have ever been liable for Taxes
levied in any jurisdiction other than the United Kingdom.
16
(iii) As used in this Agreement, "Tax", "Taxes" or "Taxation"
shall include all (x) national, state, provincial or local, corporate,
capital, income, property, sales, use, occupation, lease, excise,
value added, stamp duty, stamp duty reserve and other taxes or similar
governmental charges, including any interest, penalties, fines,
charges or additions with respect thereto, (y) liability for the
payment of any amounts of the type described in (x) as a result of
being a member of an affiliated, consolidated, combined or unitary,
group or consortium, and (z) liability for the payment of any amounts
as a result of being party to any tax sharing agreement or agreement
relating to tax relief or as a result of any express or implied
obligation to indemnify any other person with respect to the payment
of any amounts of the type described in clause (x) or (y).
(j) Brokers. Except pursuant to advisory fee letters previously made
available by Diamond to NTL, no broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Diamond.
(k) Intellectual Property. Diamond and its subsidiaries own or have a
valid license 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 "Diamond Intellectual Property") necessary
to carry on their respective businesses substantially as currently conducted.
Neither Diamond nor any such subsidiary has received any notice of infringement
of or conflict with, and, to Diamond's knowledge, there are no infringements of
or conflicts (i) with the rights of others with respect to the use of, or (ii)
by others with respect to, any Diamond Intellectual Property that individually
or in the aggregate, in either such case, would have a material adverse effect
on Diamond.
17
(l) Certain Contracts. Except as set forth in Section 3.1(l) of the
Transferors Disclosure Schedule, (A) neither Diamond nor any of its subsidiaries
is a party to or bound by (i) any "material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC), (ii) any non-competition
agreement or any other agreement or obligation which purports to limit in any
material respect the manner in which, or the localities in which, all or any
material portion of the business of Diamond and its subsidiaries (including, for
purposes of this Section 3.1(l), NTL and its subsidiaries, assuming the
transactions contemplated hereby have taken place), taken as a whole, is or
would be conducted, (iii) any agreement or arrangement between Diamond or any
Diamond subsidiary, on the one hand, and any Transferor or its Affiliate (as
defined in Section 8.3 below), on the other, (iv) any contract or other
agreement which would prohibit or materially delay the consummation of any of
the transactions contemplated by this Agreement, (v) any partnership, joint
venture, European Economic Interest Grouping or consortium agreement or any
agreement for sharing income, or (vi) any agreement or arrangement which is
liable to be terminated by another party or under which rights of any person are
liable to arise or be affected as a result of any change in the control,
management or shareholders of Diamond and (B) none of Diamond or any subsidiary
of Diamond is subject to any agreements related to indebtedness for borrowed
money ("Debt Agreements"). (All contracts of the type described in clauses
(A)(i), (ii),(iii), (iv), (v) and (vi) and all Debt Agreements being referred to
herein as "Diamond Material Contracts"). Each Diamond Material Contract is valid
and binding on Diamond (or, to the extent a Diamond subsidiary is a party, such
entity) and is in full force and effect, and Diamond and each Diamond subsidiary
have in all material respects performed all their respective obligations
required to be performed by them to date under each Diamond Material Contract,
except where such noncompliance, individually or in the aggregate, would not
have a material adverse effect on Diamond. Neither Diamond nor any Diamond
subsidiary knows of, or has received notice of, any violation or default under
(nor, to the knowledge of Transferors, does
18
there exist any condition which with the passage of time or the giving of notice
or both would result in such a violation or default under) any Diamond Material
Contract.
(m) Employees. (i) True and complete particulars relating to the
employment of each of the Key Employees are contained in Section 3.1(m) of the
Transferors Disclosure Schedule including, (A) period of continuous employment;
(B) job title or job function and workplace location; (C) all terms and
conditions of employment (including entitlement to annual salary and
arrangements relating to hours of work (including any agreement with any Key
Employee to extend such hours of work) private medical care, permanent health
insurance and company cars); and (D) 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 employees
of Diamond or any of its subsidiaries on which the business of Diamond is
substantially dependent other than the Key Employees.
(ii) 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 have been made
available to NTL.
(iii) Diamond has in all material respects complied with all its
obligations to, and no amount which is in arrears or unpaid is due to
or in respect of, any of the employees of Diamond or any of its
subsidiaries ("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
19
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.
(iv) Except as set forth in Schedule 3.1(m)(iv) of the
Transferors Disclosure Schedule 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.
(v) Except as described in Section 3.1(m)(v) of the Transferors
Disclosure Schedule there are no agreements or arrangements for the
payment of allowances, lump sums or other benefits on death or during
any periods of sickness or disablement for the benefit of any of the
Employees or their dependants.
(vi) No trade union is recognized in relation to any of the
Employees nor has Diamond or any of its subsidiaries 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.
(n) Insolvency. No receiver or administrative receiver has been
appointed of the whole or any part of the assets or undertaking of Diamond or
any of its subsidiaries. No administration order has been made in relation to
Diamond or any of its subsidiaries and no petition for such an order has been
presented. No proposal for a voluntary arrangement between Diamond or any of its
subsidiaries and any of their respective creditors (or any class of them) has
been made to or is in the contemplation of Diamond or any of its subsidiaries.
No petition has been presented, no order has been made and no resolution has
been passed for the winding-up of Diamond or any of its subsidiaries. Neither
Diamond nor any of its subsidiaries has stopped payment to its creditors nor is
any of them insolvent or unable to pay its debts as and when they fall due. No
unsatisfied judgement is outstanding against Diamond or any of its subsidiaries.
Section 3.2. Representations and Warranties of Transferors. Each
Transferor severally and not jointly, as to itself only represents and warrants
to NTL:
(a) Organization, Standing and Corporate Power. Except for Transferors
that are individuals, such Transferor is a corporation, partnership or other
legal entity duly organized, validly existing and in good standing (with respect
to jurisdictions which recognize such concept) under the laws of the
jurisdiction in which it is organized.
(b) Authority; Noncontravention. Except for Transferors that are
individuals, such Transferor has all requisite corporate power and authority to
enter into this Agreement (or partnership). Except for Transferors that are
individuals, the execution and delivery of this Agreement by such Transferor and
the consummation by Transferor of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate (or partnership)
action on the part of such Transferor. This Agreement has been duly executed and
delivered by Transferor and, assuming the due authorization, execution and
delivery by NTL and each other Transferor, constitutes the legal, valid and
binding obligation of Transferor, enforceable against Transferor in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy and similar laws or by general principles of equity (whether
considered in a proceeding in equity or at law). Except as set forth in Section
3.2(b) of the Transferors Disclosure Schedule, the execution and delivery of
this Agreement by such Transferor do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement by such Transferor will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any
21
obligation or loss of a benefit under, or result in the creation of any Lien
upon any of the properties or assets of such Transferor or, if applicable, any
of its subsidiaries under, (i) the memorandum of association or by-laws (or
other governing documents) of such Transferor, (ii) any material loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to such Transferor or its properties or assets or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to such Transferor or its properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not impair in any material way the ability of such Transferor to perform its
obligations under this Agreement. No consent, approval, order or authorization
of, action by or in respect of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Transferor in connection
with the execution and delivery of this Agreement by Transferor or the
consummation by Transferor of the transactions contemplated by this Agreement,
except for (1) such filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" laws; (2) receipt of the Required
British Approvals (as defined); and (3) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or in
the aggregate would not impair in any material way the ability of Transferor to
perform its obligations under this Agreement.
(c) Title, Absence of Liens. Except as set forth in Section 3.2(c) of
the Transferors Disclosure Schedule, all Shares set forth opposite Transferor's
name on the signature page hereto are hereto owned directly or indirectly by
Transferor, free and clear of all Liens and free of any other restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests).
22
(d) Brokers. No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Transferor.
(e) Investment Intent; Private Placement.
(i) Such Transferor is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with
respect to investments in equity securities presenting an investment
decision like that involved in the acquisition of the NTL Common
Stock. Such Transferor or its counsel, accountants or other investment
advisers have requested, received, reviewed and considered all
information deemed relevant by them in making an informed decision to
acquire the NTL Common Stock.
(ii) Such Transferor is acquiring the NTL Common Stock for
investment for its own account only and not with a view to, or for
resale in connection with, any "distribution" thereof within the
meaning of the Securities Act. Such Transferor has no present
intention of selling, granting any participation in, or otherwise
distributing such NTL Common Stock, except in compliance with the
Securities Act or pursuant to an available exemption thereunder.
(iii) Such Transferor understands that the NTL Common Stock which
it is to receive under this Agreement has not been registered under
the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature
of each Transferor's investment intent as expressed herein. Each
Transferor is familiar with Rule 144 under the Securities Act, as
presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Each Transferor
23
further understands that the certificate(s) representing the NTL
Common Stock shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM.
Section 3.2 Representations and Warranties of NTL. Except as fairly
disclosed in the NTL SEC Documents (as defined in Section 3.3(e)) or as set
forth on the Disclosure Schedule delivered by NTL to Transferors prior to the
execution of this Agreement (the "NTL Disclosure Schedule") and making reference
to the particular subsection of this Agreement to which exception is being
taken, NTL represents and warrants to Transferors as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of NTL and its subsidiaries is a corporation or other
legal entity duly organized, validly existing and in good standing
(with respect to jurisdictions which recognize such concept) under the
laws of the jurisdiction in which it is organized and has the
requisite corporate or other power, as the case may be, and authority
to carry on its business as now being conducted, except, as to
subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect on NTL. Each of NTL
and its subsidiaries is duly qualified or licensed to do business and
is in good standing (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its properties makes such
qualification or licensing
24
necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the
aggregate would not have a material adverse effect on NTL.
(ii) NTL has delivered to Transferors prior to the execution of
this Agreement complete and correct copies of its certificate of
incorporation and by-laws, as amended to date.
(b) Subsidiaries. Except as set forth in Section 3.3(b) of the NTL
Disclosure Schedule, Exhibit 21 to NTL's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 includes all the subsidiaries of NTL which
as of the date of this Agreement are subsidiaries. Except as set forth in
Section 3.3(b) of the NTL Disclosure Schedule, all the outstanding shares of
capital stock of, or other equity interests in, each such subsidiary have been
validly issued and are fully paid and nonassessable and are owned directly or
indirectly by NTL, free and clear of all Liens and free of any other restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests).
(c) Capital Structure. As of the date hereof, the authorized capital
stock of NTL consists of 100,000,000 shares of NTL Common Stock and 2,500,000
shares of preferred stock, par value $.01 per share, of NTL ("NTL Preferred
Stock"). At the close of business on May 29, 1998: (i) 41,264,252 shares of NTL
Common Stock were issued and outstanding; (ii) no shares of NTL Common Stock
were held by NTL in its treasury; (iii) 117,465,922 shares of 13% Senior
Redeemable Exchangeable Preferred Stock were issued and outstanding (the "NTL
13% Preferred"), (iv) 1,000,000 shares of Series A Junior Participating
Preferred Stock were reserved for issuance pursuant to a Rights Agreement, dated
as of October 13, 1993, between NTL and Continental Stock Transfer & Trust
Company (the "Rights Agreement"); (v) 7,260,726 shares of NTL Common Stock were
reserved for issuance pursuant to the conversion of the 7% Convertible
Subordinated Notes due 2008 ("2008 Notes") and 973,429 shares of NTL Common
Stock were reserved for issuance upon the exercise of
25
certain warrants (2008 Notes and such warrants, the "NTL Convertible
Securities"); and (vi) 15,764,279 shares of NTL Common Stock were reserved for
issuance pursuant to various NTL employee and director stock option (such
options, collectively, the "NTL Common Stock Options"). Pursuant to an Agreement
and Plan of Amalgamation (the "Amalgamation Agreement") dated February 4, 1998,
between NTL and Comcast UK Cable Partners Limited, NTL will issue additional
shares of NTL Common Stock and may issue new classes of NTL preferred stock.
Except as set forth in this Section 3.3(c) and except for changes since May 29,
1998 resulting from the issuance of shares of NTL Common Stock pursuant to the
conversion or exercise of NTL Convertible Securities or the exercise of NTL
Employee Stock Options, as of the date hereof, (x) there are not issued,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of NTL, (B) any securities of NTL or any NTL subsidiary
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of NTL, (C) any warrants, calls, options or other rights to
acquire from NTL or any NTL subsidiary, and any obligation of NTL or any NTL
subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of NTL, and (y) there are no outstanding obligations of NTL or any
NTL subsidiary to repurchase, redeem or otherwise acquire any such securities or
to issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities. As of the date hereof, there are no outstanding (A) securities of
NTL or any NTL subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests in any
NTL subsidiary, (B) warrants, calls, options or other rights to acquire from NTL
or any NTL subsidiary, and any obligation of NTL or any NTL subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any NTL subsidiary or (C)
obligations of NTL or any NTL subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of NTL subsidiaries or to
26
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Authority; Noncontravention. NTL has all requisite corporate power
and authority to enter into this Agreement to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement by
NTL and the consummation by NTL of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of NTL, including, if required, by the shareholders of NTL prior to the
Closing Date. This Agreement has been duly executed and delivered by NTL and,
assuming the due authorization, execution and delivery by Diamond and each
Transferor, constitutes the legal, valid and binding obligations of NTL,
enforceable against NTL in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy and similar laws or by
general principles of equity (whether considered in a proceeding in equity or at
law). Except as set forth in Section 3.3(d) of the NTL Disclosure Schedule, the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a benefit under, or result in the creation of any Lien upon any of the
properties or assets of NTL or any of its subsidiaries under, (i) the
certificate of incorporation or by-laws of NTL or the comparable organizational
documents of any of its subsidiaries, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to NTL or any
of its subsidiaries or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to NTL or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and
27
(iii), any such conflicts, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not (x) have a material adverse effect on
NTL or (y) reasonably be expected to impair the ability of NTL to perform its
obligations under this Agreement. No consent, approval, order or authorization
of, action by, or in respect of, or registration, declaration or filing with,
any Governmental Entity is required by or with respect to NTL or any of its
subsidiaries in connection with the execution and delivery of this Agreement by
NTL or the consummation by NTL of the transactions contemplated by this
Agreement, except for (1) such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (2) the receipt
of the Required British Approvals; and (3) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or in
the aggregate would not (x) have a material adverse effect on NTL or (y)
reasonably be expected to impair the ability of NTL to perform its obligations
under this Agreement.
(e) SEC Documents; Undisclosed Liabilities. NTL has filed all required
registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated
therein) with the SEC since January 1, 1997 (the "NTL SEC Documents"). As of
their respective dates, the NTL SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such NTL SEC Documents, and none of the NTL SEC Documents when filed
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of NTL included in the NTL SEC Documents
comply as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in
28
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position of NTL
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Except (i) as reflected in such financial statements or in the notes thereto or
(ii) for liabilities incurred in connection with this Agreement or the
transactions contemplated hereby, neither NTL nor any of its subsidiaries has
any liabilities or obligations of any nature which, individually or in the
aggregate, would have a material adverse effect on NTL.
(f) Absence of Certain Changes or Events. Except as set forth in
Section 3.3(f) of the NTL Disclosure Schedule and except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, since December 31, 1997, NTL and its subsidiaries have conducted their
business only in the ordinary course or as disclosed in any NTL SEC Document
filed since such date and prior to the date hereof, and there has not been (i)
any material adverse change in NTL, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of NTL's capital stock, (iii) any split,
combination or reclassification of any of NTL's capital stock or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of NTL's capital stock, except for issuances of
NTL Common Stock upon conversion or exercise of NTL Convertible Securities or
exercise of NTL Employee Stock Options, in each case, awarded prior to the date
hereof in accordance with their present terms, (iv) except as required by a
change in GAAP, any change in accounting methods, principles or practices by NTL
materially affecting its assets, liabilities or business or (v) any tax election
that individually or in the aggregate would have a material adverse effect on
NTL or any of its tax
29
attributes or any settlement or compromise of any material income tax liability.
(g) Compliance with Applicable Laws; Litigation.
(i) NTL, its subsidiaries and employees hold all permits,
licenses, variances, exemptions, orders, registrations and approvals
of all Governmental Entities which are required for the operation of
the businesses of NTL and its subsidiaries (the "NTL Permits"), except
where the failure to have any such NTL Permits individually or in the
aggregate would not have a material adverse effect on NTL. NTL and its
subsidiaries are in compliance with the terms of the NTL Permits and
all applicable statutes, laws, ordinances, rules and regulations,
except where the failure so to comply individually or in the aggregate
would not have a material adverse effect on NTL. As of the date of
this Agreement, no action, demand, requirement or investigation by any
Governmental Entity and no suit, action or proceeding by any person,
in each case with respect to NTL or any of its subsidiaries or any of
their respective properties, is pending or, to the knowledge of NTL,
threatened, other than, in each case, those the outcome of which
individually or in the aggregate would not (A) have a material adverse
effect on NTL or (B) reasonably be expected to impair in any material
way the ability of NTL to perform its obligations under this Agreement
or prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement.
(ii) Neither NTL nor any NTL subsidiary is subject to any
outstanding order, injunction or decree which has had or, insofar as
can be reasonably foreseen, individually or in the aggregate will have
a material adverse effect on NTL.
(h) Absence of Changes in Benefit Plans. Since March 31, 1998, there
has not been any adoption or amendment in any material respect by NTL or any of
its
30
subsidiaries of any collective bargaining agreement or any material bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding providing benefits to any current or former
employee, officer or director of NTL or any of its wholly owned subsidiaries
(collectively, the "NTL Benefit Plans"), or any material change in any actuarial
or other assumption used to calculate funding obligations with respect to any
NTL pension plans, or any material change in the manner in which contributions
to any NTL pension plans are made or the basis on which such contributions are
determined.
(i) ERISA Compliance.
(i) With respect to the NTL Benefit Plans, no event has occurred
and, to the knowledge of NTL, there exists no condition or set of
circumstances, in connection with which NTL or any of its subsidiaries
could be subject to any liability that individually or in the
aggregate would have a material adverse affect on NTL under ERISA, the
Code or any other applicable law.
(ii) Neither NTL nor any of its subsidiaries has incurred any
unsatisfied liability under Title IV of ERISA (other than liability
for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course). No NTL Benefit Plan has incurred an "accumulated
funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code) whether or not waived. To the knowledge of
NTL, there are not any facts or circumstances that would materially
change the funded status of any NTL Benefit Plan that is a "defined
benefit" plan (as defined in Section 3(35) of ERISA) since the date of
the most recent actuarial report for such plan. No NTL Benefit Plan is
a "multiemployer plan" within the meaning of Section 3(37) of ERISA.
31
(j) Taxes. (i) Each of NTL and its subsidiaries has filed all material
Tax returns and reports required to be filed by it and all such returns and
reports are complete and correct in all material respects, or requests for
extensions to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failures to file, to be
complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not have a material adverse effect on
NTL. NTL and each of its subsidiaries has paid (or NTL has paid on its behalf)
all Taxes shown as due on such returns, and the most recent financial statements
contained in the NTL SEC Documents reflect an adequate reserve in accordance
with GAAP for all Taxes payable by NTL and its subsidiaries for all taxable
periods and portions thereof accrued through the date of such financial
statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed against NTL or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or
in the aggregate would not have a material adverse effect on NTL. The
federal income tax returns of NTL and each of its subsidiaries
consolidated in such returns for tax years through 1992 have closed by
virtue of the applicable statute of limitations.
(k) Tax Free Reorganization Matters.
(i) NTL and Transferors each has adopted a plan of reorganization
as provided in the Code and Treasury Regulations promulgated
thereunder (the "Treasury Regulations") with respect to the intended
qualification of the share exchange as a tax free reorganization
within the meaning of Section 368(a)(1)(B) of the Code;
(ii) To the best of NTL's knowledge, immediately after the
exchange contemplated by this Agreement, NTL will own shares of
Diamond's capital stock possessing at least eighty percent (80%) of
the combined voting power of all the shares of
32
capital stock of Diamond entitled to vote and at least eighty percent
(80%) of each class of shares of capital stock of Diamond not entitled
to vote;
(iii) The transactions described in this Agreement have a "bona
fide business purpose" as defined in the Treasury Regulations.
It is understood that neither NTL or Diamond is representing, warranting,
covenanting or indemnifying as to the actual qualification of the share exchange
under Section 368(a)(1)(B) of the Code.
(l) Brokers. No broker, investment banker, financial advisor or other
person, other than Xxxxxxxxx, Xxxxxx & Xxxxxxxx, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of NTL.
Section 3.6 No Counterclaim. Transferors undertake not to exercise any
right of counterclaim or set off any claim or right of recovery against Diamond
or any of its subsidiaries or any of their respective officers, employees,
auditors or advisers in relation to any claim which may be made in respect of
the warranties and representations contained in this Agreement.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1(a) Conduct of Business by Diamond. Except as set forth in
Section 4.1(a) of the Transferors Disclosure Schedule, as otherwise contemplated
by this Agreement or the transactions contemplated hereby as fairly disclosed in
Diamond's capital expenditure budgets previously made available to NTL as part
of the development of Diamond's business telecommunication business or as
consented to by NTL in writing, such consent not to be unreasonably withheld or
delayed, during the period from the date of this
33
Agreement to the Closing Date, Transferors shall cause Diamond and its
subsidiaries to carry on their respective businesses in the ordinary and usual
course consistent with past practice and, to the extent consistent therewith,
use all reasonable efforts to preserve intact their current business
organizations and use reasonable efforts to keep available the services of their
current officers and other key employees and preserve their relationships with
those persons having business dealings with them. Without limiting the
generality of the foregoing (but subject to the above exceptions), during the
period from the date of this Agreement to the Closing Date, Transferors shall
not permit Diamond or any of its subsidiaries to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Diamond to its parent, or by a
subsidiary that is partially owned by Diamond or any of its
subsidiaries, provided that Diamond or any such subsidiary receives or
is to receive its proportionate share thereof, (w) declare, set aside
or pay any dividends on, make any other distributions in respect of,
or enter into any agreement with respect to the voting of, any of its
shares, (x) split, combine, reclassify or vary any class rights
attached to, any of its shares or issue or create or authorize the
issuance of any shares or other securities or loan capital or (y)
capitalize any amount standing to the credit of any reserve or
purchase, redeem or otherwise acquire any shares or other securities
or loan capital of Diamond or any of its subsidiaries or any rights,
warrants or options to acquire any such shares or other securities or
loan capital or otherwise reorganize its share capital (z) grant any
option over any shares or other securities or loan capital or uncalled
capital or issue any securities convertible into shares or other
securities or loan capital;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares or any other securities or loan capital
or any rights, warrants or options to acquire, any such
34
shares or other securities or loan capital (other than the issuance of
ordinary shares upon the exercise of Stock Options outstanding as of
the date hereof in accordance with their present terms or pursuant to
the CGT Option Agreement in accordance with its present terms);
(iii) amend its memorandum or articles of association or other
comparable organizational documents;
(iv) acquire or agree to acquire the shares or stock or other
securities of any other body corporate or any portion of the assets of
any business or any person;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets (including securitizations) other than (A) in the ordinary
course of trading consistent with past practice or (B) the sale,
lease, license or other disposition of up to (pound)750,000 of such
assets, in the aggregate;
(vi) incur any indebtedness for borrowed money, other than
pursuant to agreements or arrangements in effect as of the date
hereof, or issue any debt securities or assume, guarantee or endorse,
or otherwise as an accommodation become responsible for the
obligations of any person for borrowed money in an amount that exceeds
individually or in aggregate (pound)500,000;
(vii) enter into any joint venture, partnership or European
Economic Interest Grouping;
(viii) enter into any contract or commitment or any transaction
otherwise than (A) in the ordinary and usual course of business and
(B) at arms' length and for full value;
(ix) enter into any contract, commitment or arrangement with
Transferors or any of their
35
Affiliates or vary, supplement or amend such existing contract,
commitment or arrangement (other than on terms no less favorable than
would be obtained from unaffiliated third parties, and as approved by
a resolution of the Board of Directors of Diamond that contains such a
conclusion);
(x) engage any employees or consultants having an annual salary
in excess of (pound)100,000 or make a material change in the terms and
conditions of employment or engagement or pension benefits of any
employees or consultants;
(xi) enter into any contract or commitment which either
individually or in the aggregate may result in expenditure in excess
of (pound)250,000 per month;
(xii) enter into any material agreement, arrangement or
understanding with respect to programming (except for the transaction
with [newspaper]), software, the provisioning of cable modem internet
services, billing, the provisioning of digital CATV services and/or
the acquisition of set top boxes, switching equipment or other
computer and/or telecommunications equipment with a value in excess of
(pound)1 million;
(xiii) make or change any material Tax election or method of
accounting or settle any material Tax dispute or controversy; or
(xiv) authorize, or commit or agree to take, any of the foregoing
actions;
provided that the limitations set forth in this Section 4.1(a) (other than
clause (iii)) shall not apply to any transaction between Diamond and any wholly
owned subsidiary or between any wholly owned subsidiaries of Diamond. NTL shall
treat as confidential any information which Diamond discloses to NTL in respect
of any Affiliate and designates as confidential.
36
(b) Other Actions. Except as required by law, Transferors undertake to
NTL that they shall procure that Diamond and its subsidiaries shall not, and NTL
undertakes to Transferors that it shall not and shall not permit any of its
subsidiaries to, voluntarily take any action that would, or that could
reasonably be expected to, result in (i) any of the representations and
warranties given by Transferors (where this undertaking is given by Transferors)
or by NTL (where this undertaking is given by NTL) set forth in this Agreement
that are qualified as to materiality becoming untrue at the Closing Date (as if
made at and as of such time), (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect at the Closing
Date (as if made at and as of such time), or (iii) any of the conditions set
forth in Article VI not being satisfied.
(c) Advice of Changes. At, or prior to, the date hereof, Transferors
shall appoint one Transferor to act as the Transferors' Representative (the
"Transferors' Representative"). The Transferors' Representative is set forth on
Section 4.1, (c) of the Transferors Disclosure Schedule. Each Transferor
(through the Transferors' Representative) and NTL shall promptly advise the
Transferors' Representative or NTL, as the case may be, orally and in writing to
the extent it has knowledge of (i) any representation or warranty contained in
this Agreement that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (ii) any failure to
comply in any material respect with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied under this
Agreement and (iii) any change or event having, or which, insofar as can
reasonably be foreseen, could reasonably be expected to have a material adverse
effect on the truth of any of the representations and warranties or the ability
of the conditions set forth in Article VI to be satisfied; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or
37
remedies with respect thereto) or the conditions to the obligations of the
parties under this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Access to Information; Confidentiality. Subject to the
Confidentiality Agreement dated May 20, 1998, between NTL and Transferors (the
"Confidentiality Agreement"), and subject to restrictions contained in
confidentiality or other agreements to which such party is subject (which such
party will use its reasonable efforts to have waived) and applicable law,
Transferors undertake to NTL to procure that Diamond and its subsidiaries shall,
and NTL undertakes to Transferors that it shall, and shall cause each of its
subsidiaries to, afford to Transferors' Representative or NTL, as the case may
be, and to the officers, employees, accountants, counsel, financial advisors and
other representatives of Transferors' Representative or NTL, as the case may be,
reasonable access during normal business hours during the period prior to the
Closing Date to all the properties, books, contracts, commitments, personnel and
records of Diamond and its subsidiaries (where the undertaking is given by
Transferors) and of NTL and its subsidiaries (where the undertaking is given by
NTL) and, during such period, Transferors undertake to NTL to procure that
Diamond and its subsidiaries shall, and NTL shall, and shall cause each of its
subsidiaries to, furnish promptly to Transferors' Representative or NTL, as the
case may be, (a) a copy of each report, schedule, registration statement and
other document filed by Diamond or any of its subsidiaries (where the undertaken
is given by Transferors) or by NTL or any of its subsidiaries (where the
undertaken is given by NTL) during such period pursuant to the requirements of
federal or state securities laws and (b) all other information concerning the
business, properties and personnel of Diamond or any of its subsidiaries (where
the undertaken is given by Transferors) or of NTL or any of its subsidiaries
(where the undertaking given by NTL) as Transferors'
38
Representative or NTL, as the case may be, may reasonably request. No review
pursuant to this Section 5.1 shall affect any representation or warranty given
by any party hereto. Transferors' Representative shall be entitled to disclose
any information received by it pursuant to this Section 5.1 to the other
Transferors. Each Transferor will and NTL will, hold, and will use all
reasonable efforts to cause its respective officers, employees, accountants,
counsel, financial advisors and other representatives and Affiliates to hold,
any nonpublic information in accordance with the terms of the Confidentiality
Agreement.
Section 5.2 Reasonable Best Efforts. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. Without limitation of the
foregoing, NTL shall, and Transferors shall procure that Diamond and its
subsidiaries shall, promptly supply such information as is reasonably necessary
to enable the confirmations and indications referred to in Section 6.1(a) to be
obtained.
39
(b) In connection with and without limiting the foregoing, Transferors
and NTL shall (i) take all action necessary to ensure that no takeover statute
or similar statute or regulation is or becomes applicable to this Agreement, or
any of the other transactions contemplated by this Agreement and (ii) if any
takeover statute or similar statute or regulation becomes applicable to this
Agreement, or any other transaction contemplated by this Agreement, take all
action necessary to ensure that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the transactions contemplated by this Agreement.
Section 5.3 Stock Options and Stock Appreciation Rights. (a) In
respect of all outstanding Stock Options issued under the Stock Plan, NTL shall
permit each holder thereof to receive, at such holder's option, upon release of
such holder's Stock Option that either is exercisable or not or will become,
upon the Closing, exercisable under the Stock Plan, either (i) an option (the
"NTL Option") to acquire, except as provided in paragraph (b) below, on the same
terms and conditions as were applicable under such Stock Option, one share of
NTL Common Stock for every four ordinary shares in Diamond subject to the Stock
Option (to be adjusted in the same manner as provided for in Section 1.2) at an
exercise price per share of NTL Common Stock (rounded to nearest whole cent)
equal to (A) the aggregate exercise price for the ordinary shares in Diamond
that are the subject of such Stock Option divided by (B) the aggregate number of
whole shares of NTL Common Stock deemed to be subject to such Stock Option in
accordance with the foregoing or (ii) that number of shares of NTL Common Stock
(rounded down to the nearest whole number) as is equal to one share of NTL
Common Stock for every four ordinary shares in Diamond subject to the Stock
Option (to be adjusted in the same manner as provided for in Section 1.2) less
that number of shares of NTL Common Stock (rounded to the nearest whole number)
as is equal in value to (A) the aggregate exercise price for the ordinary shares
in Diamond the subject of the Stock
40
Option divided by (B) the NTL Average Stock Price on the Closing Date.
(b) With respect to the NTL Options issued as contemplated in
paragraph (a) (x) 50% of each holders' NTL Options shall be exercisable from the
Closing Date, (y) 25% shall be exercisable from the first anniversary date of
the Closing Date and (z) 25% shall be exercisable from the second anniversary
date of the Closing Date. Further, such NTL Options shall also be exercisable in
full in the event that the holder of a Stock Option ceases to be an employee or
director of any company in the NTL or Diamond group save where this is as a
result of voluntary resignation or if such employee is dismissed as a result of
his or her gross misconduct in circumstances entitling NTL summarily to dismiss
the employee without prior notice under such employee's or director's service
agreement and applicable law.
(c) As soon as practicable after the date hereof, NTL (and if
appropriate, the Transferors shall procure Diamond, jointly with NTL) shall
deliver to the holders of Stock Options appropriate notices setting forth such
holders' rights pursuant to the Stock Plan and the alternatives offered to them
in accordance with Section 5.3(a) together with any form of release required to
be executed by such holders.
(d) No later than the Closing Date, NTL shall prepare and file with
the SEC a registration statement on Form S-8 (or another appropriate form)
registering a number of shares of NTL Common Stock issuable in accordance with
clauses (i) and (ii) of Section 5.3(a). Such registration statement shall be
kept effective (and the current status of the prospectus or prospectuses
required thereby shall be maintained) at least for so long as NTL Options remain
outstanding and until such time as the shares of NTL Common Stock subject to
such NTL Options as issuable pursuant to clauses (i) and (ii) of Section 5.3(a)
are no longer subject to resale restrictions under the Securities Act.
Section 5.4 Fees and Expenses. Except as provided in Section 5.10
hereof, all fees and expenses
41
incurred in connection with this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the transactions contemplated hereby are consummated. Transferors
represent and undertake that no such fees and expenses have been or will be
borne by Diamond or any of its subsidiaries.
Section 5.5 Public Announcements. NTL will consult with the
Transferors' Representative and each Transferor will, and will procure that
Diamond and its subsidiaries will, consult with NTL before issuing, and provide
the Transferors' Representative or NTL (as appropriate) the opportunity to
review, comment upon and concur with and use reasonable efforts to agree on, any
press release or other public statements with respect to the transactions
contemplated by this Agreement and shall not issue any such press release or
make any such public statement prior to such consultation, except as any party
may determine is required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange. The
parties agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.
Section 5.6 NASDAQ Quotation. NTL shall use reasonable best efforts
to cause the NTL Common Stock issuable under Section 1.2 and Section 5.3 and
upon exercise of NTL Options pursuant to Section 5.3 to be approved for
quotation on the NASDAQ, subject to official notice of issuance, as promptly as
practicable after the date hereof, and (except in respect to NTL Common Stock
issuable upon excise of Adjusted Options) in any event prior to the Closing
Date.
Section 5.7 Covenant of Transferors. Each Transferor agrees that it
will, and will cause its Affiliates to, vote any Voting Securities of NTL which
they are entitled to vote to approve the matters that will be presented to the
shareholders of NTL at the meeting called to approve the Amalgamation Agreement
that are necessary to implement that agreement.
42
Section 5.8 Covenant of NTL. If so required, as promptly as
practicable after the date hereof, NTL shall take all necessary actions to
convene a special meeting of its shareholders to authorize the transaction
contemplated hereby.
Section 5.9 Standstill Agreements; Confidentiality Agreements. During
the period from the date of this Agreement through the Closing Date, Transferors
shall procure that neither Diamond nor any of its subsidiaries shall terminate,
amend, modify or waive any provision of any confidentiality or standstill
agreement to which it is a party. During such period, Transferors shall procure
that Diamond and its subsidiaries shall enforce, to the fullest extent permitted
under applicable law, the provisions of any such agreement, including by
obtaining injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court having jurisdiction.
Section 5.10 Conveyance Taxes. NTL and Transferors shall, and
Transferors shall procure that Diamond shall, cooperate in the preparation,
execution and filing of all returns, questionnaires, applications or other
documents regarding any real property transfer or gains, sales, use transfer,
value added, stock transfer and stamp taxes, any transfer, recording,
registration; and other fees or any similar taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Closing Date; provided,
however, in the event that any stamp duty liability or obligation that arises in
connection with the transaction contemplated hereby, such obligations shall be
the obligations of NTL.
Section 5.11 Debt Offers. NTL and Transferors will each use their
respective reasonable best efforts to obtain, upon terms and conditions which
are reasonably satisfactory to NTL, any required consents of the holders of the
various debt securities of NTL and Diamond in order to permit the transactions
contemplated hereby. The costs, fees and expenses payable by Diamond in
43
connection with its debt offer, if required, shall be subject to the reasonable
approval of NTL.
Section 5.12 Confidential Information. Transferors undertake to NTL
that they shall, and shall cause Diamond and its subsidiaries to, keep
confidential and not at any time after the date of this Agreement disclose or
make known in any way to anyone (other than NTL and Diamond) or use for their
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 business) of Diamond or its subsidiaries or otherwise
relating to the businesses of Diamond and its subsidiaries except information
which is (i) in the public domain or (ii) becomes public knowledge through no
fault of such Transferor or (iii) is required to be disclosed by court order or
other government process or the disclosure of which is necessary to enable such
Transferor to comply with applicable law or defend against claims. In the event
that such Transferor shall be required to make disclosure pursuant to the
provisions of clause (iii) of the preceding sentence, such Transferor shall
promptly notify NTL and take, at the expense of NTL, all reasonably necessary
steps requested by NTL to defend against the enforcement of such court order or
other government process, and permit NTL to participate with counsel of its
choice in any proceeding relating to the enforcement thereof.
Section 5.13 Shareholders' Agreement. Each Transferor hereby agrees
that the proposed transfer of the Shares to NTL pursuant to this Agreement shall
be deemed to comply in all respects with the provisions of Schedule 2 to the
Shareholders Agreement dated September 1, 1994 between European Cable Capital
Partners, L.P., AmSouth Bank of Alabama, CGT Family Corporation, GS Capital
Partners L.P., Xxxxxxx X. XxXxxxxx and Diamond.
Section 5.14 Bring-along for Optionholder Shares. Transferors covenant
and undertake to NTL that insofar as the holders of Stock Options (including the
CGT Family Corporation) ("Option Shareholders") shall validly exercise their
Stock Options in accordance with
44
the rules of the Stock Plan after the date of this Agreement to acquire ordinary
shares in Diamond ("Option Shares") then Transferors will, in accordance with
paragraph 8 of the Schedule to the Rules of the Stock Plan require the Option
Shareholders to sell all of the Option Shares to NTL on the same terms and
conditions as contained in this Agreement and Transferors shall take all steps
and do all matters including the giving of a notice as may be necessary to
achieve this and shall not withdraw the same unless authorized to do so by NTL.
Section 5.15 Tag-along for Optionholders Shares. Without prejudice to
the obligations of Transferors in section 5.14 NTL covenants with and undertakes
to Transferors that in the event that any holders of Stock Options (including
the CGT Family Corporation) shall validly exercise their Stock Options as
described in section 5.14 then NTL shall offer to purchase from the Option
Shareholders all of the Option Shares on the same terms and conditions as set
out in this Agreement and that such offer shall remain capable for acceptance
for a period of 14 days from the date on which it is made.
Section 5.16 No change to Stock Options. Transferors covenant and
undertake to NTL that they will procure that Diamond shall not, except as
specifically contemplated herein or with the prior consent of NTL either (a)
amend the rules of the Stock Plan or the Option Agreement (whether or not with
the prior consent of the holders of Stock Options; or (b) approach, or despatch
any document to, the holders of Stock Options.
Section 5.17 Indemnification; Directors and Officers Insurance. NTL
agrees to maintain for the benefit of Diamond's past and present directors and
officers indemnification arrangements pursuant to Diamond's memorandum and
articles of association and indemnification agreements in existence on the date
hereof covering acts or omissions occurring at or prior to the Closing Date to
the dame extent as are in place at the date of this Agreement. NTL shall also
provide, for an aggregate period of not less than six years from the Closing
Date, Diamond's current directors and officers
45
with a directors' and officers' liability insurance policy that provides
coverage for events occurring prior to the Closing Date that is no less
favorable than Diamond's existing policy.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the
Closing. The respective obligation of each party to effect the Closing is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Required British Approvals. The following shall have occurred:
(i) NTL shall have received a written indication from The
Secretary of State for Trade and Industry ("DTI"), from the
Independent Television Commission ("ITC"), in terms reasonably
satisfactory to NTL and from the Radio Communications Agency ("RCA"),
to the effect that the Closing will not lead to the revocation of any
licenses (issued pursuant to the Cable and Broadcasting Xxx 0000 or
the Broadcasting Xxx 0000 (as amended) or the Broadcasting Xxx 0000 or
the revocation of any of the telecommunications or wireless telegraphy
licenses or RCA licences (issued by the DTI or by the RCA acting for
the DTI pursuant to the Telecommunications Xxx 0000 or the Wireless
Telegraphy Act 1949) which are held by Diamond or any of its
subsidiaries, except for any licenses the loss of which would not have
a material adverse effect on Diamond;
(ii) NTL shall have received written confirmation from the Office
of Telecommunications, in terms reasonably satisfactory to NTL, that
the Director General has not after the date hereof (a) issued any
directions to Diamond or any of its subsidiaries in connection with
their
46
telecommunications licenses issued pursuant to the Telecommunications
Xxx 0000 or their wireless telegraphy licenses issued pursuant to the
Wireless Telegraphy Xxx 0000, (b) given notice to Diamond or any of
its subsidiaries of its intention to make modifications to such
licenses (other than modifications which are to be made to all or
substantially all of the licenses issued pursuant to the
Telecommunications Xxx 0000 or the Wireless Telegraphy Act 1949 (as
appropriate), or (c) taken and has no intention to take any steps
pursuant to Section 16, 17 or 18 of the Telecommunications Xxx 0000 or
the Wireless Xxxxxxxxxx Xxx 0000 in relation to enforcement of any
such licenses, except for, in the case of clause (a), such directions,
in the case of clause (b), such modifications, or, in the case of
clause (c), such enforcement steps as would not have a material
adverse effect on Diamond;
(iii) NTL shall have received written confirmation from the ITC,
in terms reasonably satisfactory to NTL, that the ITC has not after
the date hereof (a) issued any directions to Diamond or any of its
subsidiaries in connection with any license issued pursuant to the
Cable and Broadcasting Xxx 0000 or the Broadcasting Xxx 0000 (as
amended) or the Broadcasting Xxx 0000, (b) given notice to Diamond or
any of its subsidiaries of its intention to make modifications to any
such license (other than modifications which are to be made to all or
substantially all licenses issued pursuant to the Cable and
Broadcasting Xxx 0000 or the Broadcasting Xxx 0000 (as amended) or the
Broadcasting Xxx 0000 as the case may be), or (c) taken and has no
intention to take any steps in relation to enforcement of any such
license, except for, in the case of clause (a), such directions, in
the case of clause (b), such modifications, or, in the case of clause
(c), such enforcement steps as would not have a material adverse
effect on Diamond;
(iv) the Office of Fair Trading shall have indicated to NTL, in
terms reasonably satisfactory to NTL, either that the transaction
47
contemplated hereby does not qualify for investigation by the
Monopolies and Mergers Commission pursuant to the Fair Trading Act
1973 or that The Secretary of State for Trade and Industry has decided
not to refer the transactions contemplated hereby to the Monopolies
and Mergers Commission;
(b) Governmental and Regulatory Approvals. Other than the Required
British Approvals (which are addressed in Sections 6.1(a), all consents,
approvals and actions of, filings with and notices to any Governmental Entity
required of Diamond, NTL or any of their subsidiaries to consummate the
transactions contemplated hereby, the failure of which to be obtained or taken
(i) is reasonably expected to have a material adverse effect on NTL or Diamond
or (ii) will result in a material violation of any laws, shall have been
obtained, all in form and substance reasonably satisfactory to Transferors'
Representative and NTL.
(c) NTL Shareholders' Approval. If so required under applicable law or
stock exchange (including NASDAQ) regulation, a resolution shall have been
passed at a special meeting of shareholders of NTL, convened after proper notice
to, and/or waiver of such notice by, the shareholders, with a quorum of the
shareholders present or represented, to approve the transactions contemplated
hereby.
(d) No Injunctions or Restraints. No judgment, order, decree, statute,
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any court or other Governmental Entity of competent jurisdiction or
other legal restraint or prohibition (collectively, "Restraints") shall be in
effect (i) preventing the consummation of the transactions contemplated hereby,
or (ii) which otherwise is reasonably likely to have a material adverse effect
on Diamond or NTL, as applicable; provided, however, that each of the parties
shall have used its best efforts to prevent the entry of any such Restraints and
to appeal as promptly as possible any such Restraints that may be entered.
48
(e) NASDAQ Quotation. The shares of NTL Common Stock issuable to
Transferors as contemplated by Section 1.2 and the shares of NTL Common Stock
issuable upon exercise of Adjusted Options pursuant to Section 5.3 shall have
been approved for quotation on the NASDAQ, subject to official notice of
issuance.
(f) Required Consents. NTL or Transferors, as the case may be, shall
have obtained (or in the case of Transferors, shall have caused Diamond to
obtain) all consents designated as "Required Consents" in the NTL Disclosure
Schedule or the Transferors Disclosure Schedule (as applicable).
Section 6.2 Conditions to Obligations of NTL. The obligation of NTL to
effect the transactions contemplated hereby is further subject to satisfaction
or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Transferors set forth herein shall be true and correct both when made and at
and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on NTL
(assuming the consummation of the transactions contemplated herein) or Diamond.
(b) Performance of Obligations of Transferors. Transferors shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date.
(c) All steps required to be taken by Diamond in accordance with
section 5.3(a) shall have been taken.
49
(d) No Material Adverse Change. As of the Closing Date, there shall
not have occurred any material adverse change relating to Diamond from the date
hereof.
Section 6.3 Conditions to Obligations of Transferors. The obligation
of Transferors to effect the transactions contemplated hereby is further subject
to satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
of NTL set forth herein shall be true and correct both when made and at and as
of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality," or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on NTL.
(b) Performance of Obligations of NTL. NTL shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. As of the Closing Date, there shall
not have occurred any material adverse change relating to NTL from the date
hereof.
(d) Registration Rights. NTL shall have executed a Registration Rights
Agreement implementing the terms set forth on Exhibit 6.3(d).
(g) Tax Opinion Transferors shall have received an opinion, dated the
Closing Date, from Xxxxxxxx & Xxxxxxxx, counsel to Diamond, in form and
substance reasonably satisfactory to Transferors substantially to the effect
that on the basis of facts, representations and assumptions set forth in such
opinion, for federal income tax purposes the share exchange will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and NTL and
Diamond will each be a party to
50
that reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, Xxxxxxxx & Xxxxxxxx may receive and rely upon
representations from NTL, Diamond and others.
Section 6.4 Frustration of Closing Conditions. None of NTL or
Transferors may rely on the failure of any condition set forth in Section 6.1,
6.2 or 6.3, as the case may be, to be satisfied if such failure was caused by
the failure by any of the Transferors (in the case of the Transferors) or by NTL
(in the case of NTL) to use best efforts to consummate the transactions
contemplated by this Agreement, as required by and subject to Section 5.2.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of NTL and the Majority Transferors (for
the purposes of this Article VII, Transferors holding two-thirds or more of the
aggregate number of Shares shall constitute the "Majority Transferors");
(b) by either NTL or the Majority Transferors:
(i) if the Closing shall not have been consummated by January 31,
1999 (the "End Date"), except if such failure is due to a material
breach of this Agreement by the party seeking to terminate;
(ii) if any Restraint having any of the effects set forth in
Section 6.1(d) shall be in effect and shall have become final and
nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 7.1(b)(ii) shall have used best
efforts to prevent the entry of and to remove such Restraint; or
51
(iii) if so required, NTL shall have failed to acquire the
authorization of its shareholders as contemplated in Section 6.1(c)
hereof.
(c) by NTL, if any Transferor shall have breached or failed to perform
in any material respect any of their respective warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform would
give rise to the failure of a condition set forth in Section 6.2(a) or (b), and
such condition is incapable of being satisfied by the End Date;
(d) by Transferors, if NTL shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform would
give rise to the failure of a condition set forth in Section 6.3(a) or (b), and
such condition is incapable of being satisfied by the End Date; or
(e) by the Majority Transferors if (i) as of a date not more than
three Business Days before the expected Closing Date, the NTL Average Stock
Price determined as of such date is less than $36.00, (ii) notice shall have
been provided to NTL hereunder of an intent to terminate and (iii) within one
Business Day of receipt of such notice, NTL shall not have agreed (by notice to
the Majority Transferors) to increase the consideration payable per each four
ordinary shares such that the value of such consideration shall be $36.00 per
share or more at such time.
Section 7.2 Effect of Termination. In the event of termination of this
Agreement by Transferors or NTL as provided in Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of NTL or Transferors, other than the provisions of Section 3.1(j),
3.2(d), 3.3(l), the last sentence of Section 5.1, Section 5.4 and this Section
7.2, which provisions survive such termination, and except to the extent that
such
52
termination results from the willful and material breach by a party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
Section 7.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties; provided that
each of the Transferors agrees to be bound by any amendment approved by and
entered into by the Majority Transferors ; provided, however, that any amendment
that has or could reasonably be expected to have a disproportionate adverse
effect on one Transferor but that does not similarly affect all Transferors will
also require the approval of the affected Transferor.
Section 7.4 Extension; Waiver. Each Transferor hereby agrees and
irrevocably appoints the Transferors' Representative to waive or extend any
provision of this Agreement. At any time prior to the Closing Date, NTL or the
Transferors' Representative may (a) extend the time for the performance of any
of the obligations or other acts of the other, (b) waive any inaccuracies in the
representations and warranties of the other contained in this Agreement or in
any document delivered pursuant to this Agreement or (c) waive compliance by the
other with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of NTL or the Transferors' Representative to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of NTL or the Transferors'
Representative to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
Section 7.5 Procedure for Termination, Amendment, Extension or Waiver.
A termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 shall, in order to be effective, require, in the case of NTL or any
Transferor who is a body corporate, action by its Board of Directors or, with
respect to any amendment to this Agreement, the
53
duly authorized committee of its Board of Directors to the extent permitted
by law.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Survival of Representations, Etc. All statements contained
in the respective Disclosure Schedules or in any certificate or instrument of
conveyance delivered by or on behalf of any party pursuant to this Agreement or
in connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by such party hereunder. Except for the
representations and warranties of Transferors set forth in Section 3.2 hereof,
neither the representations and warranties of Transferors and NTL nor their
respective covenants (except for those expressly to be performed after the
Closing Date) contained herein shall survive the Closing Date. For the avoidance
of doubt, neither the Transferors nor NTL shall have any liability for a breach
of any representation, warranty or covenant under this Agreement (except for any
breach by such Transferor of its representations and warranties in Section 3.2
hereof or the breach of any covenant by such Transferors expressly to be
performed after the Closing Date in which case only the Transferor that has
committed such breach of a representation and warranty or such breach of a
covenant shall have any liability therefor) and the sole remedy of the parties
hereunder for any such breach (subject to the above exception) shall be
termination of this Agreement pursuant to Section 7.1.
Section 8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
54
(a) if to NTL, to:
NTL Incorporated
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
and to:
Xxxxxxx Xxxxx Xxxxxxxxxx
00 Xxxx Xxxx,
Xxxxxx, Xxxxxxx ECIA 2AL
Telecopy:(000) 00 000 000-0000
Attention: Xxxxxxx Xxxxxxxxxxx / Xxxxx Xxx
(b) If to Transferors, to:
European Cable Capital Partners, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.:
Attention:
AmSouthBank of Alabama, as Trustee
0000 Xxxxx Xxxxxx North, Third Floor
Xxxxxxx Plaza
Birmingham, AL 35203
Telecopy No.:
Attention:
DCI Capital Partners
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Telecopy No.:
Attention:
55
Investor Investments AB
Xxxxxxxxxxxxx 0x
X.X. Xxx 000000, X-000 00
Xxxxxxxxx, Xxxxxx
Telecopy No.:
Attention:
Booth English Cable Inc.
00 Xxxx Xxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy No.:
Attention:
With a copy to:
ECE Management, Inc.
X.X. Xxx 000
Xxxxxx, XX 00000
Telecopy No.:
Attention: Xxxxxx X. Xxxx
With a copy to:
Xxxxxxxx & Xxxxxxxx
0x Xxxxxxxxxx Xxxx
Telecopy: 00-000-000-0000
Telephone: 00-000-000-0000
Attention: Xxxxx X. Xxxxxx
Section 8.3 Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise;
(b) "knowledge" of any person means the actual knowledge of such
person or, where such person is a
56
corporation, such person's executive officers or senior management of such
person's operating divisions and segments person, in each case after due inquiry
which shall include, where it is the knowledge of the Transferors, after making
due enquiry of the board of directors and senior management of Diamond and its
subsidiaries;
(c) "material adverse change" or "material adverse effect" means, when
used in connection with Diamond or NTL, any change, effect, event, occurrence or
state of facts that is, or would reasonably be expected to be, materially
adverse to the business, financial condition or results of operations of such
party and its subsidiaries taken as a whole, other than changes, effects,
events, occurrences or facts caused by changes in general economic or securities
market conditions, changes that affect the U.K. cable industry generally or
changes in the business of Diamond that result from the announcement or proposed
consummation of the transactions contemplated hereby, and the terms "material"
and "materially" have correlative meanings;
(d) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(e) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting Partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person;
(f) "Business Day" shall mean a day on which both (i) NASDAQ if
functional for a normal trading day and (ii) banks in the City of New York are
open for business;
(g) "NTL Average Stock Price" shall mean the volume-weighted average
of the average high and low sales prices of the NTL Common Stock or NASDAQ for
each of the
57
twenty trading days ending on the trading day prior to the date of
determination;
(h) "Required British Approval" shall mean those approvals and
contents set forth in Section 6.1(a);
(i) "in the approved term" shall mean a document, the terms, condition
and form of which have been agreed by the parties to this Agreement and a copy
of which has been identified as such and initialed by or on behalf of NTL and
the Transferor's Representative.
Section 8.4 Interpretation. When a reference is made in this Agreement
to an Article, Section or Exhibit, such reference shall be to an Article or
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
58
Section 8.5 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 8.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement and (b) are not intended to
confer upon any person other than the parties any rights or remedies.
Section 8.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws thereof.
Section 8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by either of the parties hereto without
the prior written consent of the other party; provided, however, that NTL have
the right, at any time at or prior to the Closing, to designate in writing, in
accordance with applicable law, one or more of its direct or indirect wholly
owned subsidiaries or a holding company formed in compliance with Section 251(g)
of the Delaware General Corporation Law to purchase, in whole or in part, the
Shares on the terms set out in this Agreement, and NTL shall remain jointly and
severally liable with its designee(s) under this Agreement following such
designation. Any assignment in violation of the preceding sentence shall be
void. Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
59
Section 8.9 Consent to Jurisdiction. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the State of New York or any New York state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (iii) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of New York or a New York state court.
Section 8.10 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.11 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 8.12 Liability of AmSouth in its Corporate Capacity.
Notwithstanding anything to the contrary in this Agreement: (a) AmSouth Bank
N.A. ("AmSouth") has entered into this Agreement solely as trustee of the trusts
listed in the signature pages hereto and shall have no liability whatsoever in
its corporate capacity for any acts taken or omitted to be taken by it under
this Agreement or otherwise in connection with the transactions provided for
herein; (b) any liability of AmSouth under this Agreement or otherwise in
connection with the transactions
60
contemplated herein shall be limited to and satisfied only from the assets of
the relevant trusts now or hereafter held by AmSouth, as trustee; and (c) if
AmSouth shall resign, be removed, or otherwise cease to serve, as trustee of any
of the trusts, AmSouth shall be fully discharged from any and all liability that
it may have incurred under this Agreement or otherwise in connection with the
transactions provided for herein, in its capacity as trustee of such trusts.
61
IN WITNESS WHEREOF, NTL and Transferors have caused this Agreement to
be signed by them or their respective officers thereunto duly authorized, all as
of the date first written above.
NTL INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
Number of Number of
TRANSFERORS: Ordinary Shares Deferred Shares
EUROPEAN CABLE CAPITAL
PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxxxxx 39,447,443 0
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
AMSOUTH BANK OF ALABAMA,
(No. 2 ACCOUNT)
By: /s/ Xxx X. Xxxxxx 2,187,570 2
--------------------------------
Name: Xxx X. Xxxxxx
Title: Trust Officer
AMSOUTH BANK OF ALABAMA
(NO. 3 ACCOUNT)
By: /s/ Xxx X. Xxxxxx 2,187,570 1
--------------------------------
Name: Xxx X. Xxxxxx
Title: Trust Officer
Number of Number of
Ordinary Shares Deferred Shares
AMSOUTH BANK OF ALABAMA
(NO. 4 ACCOUNT)
By: /s/ Xxx X. Xxxxxx 2,187,556 1
--------------------------------
Name: Xxx X. Xxxxxx
Title: Trust Officer
AMSOUTH BANK OF ALABAMA
(NO. 5 ACCOUNT)
By: /s/ Xxx X. Xxxxxx 2,187,556 1
--------------------------------
Name: Xxx X. Xxxxxx
Title: Trust Officer
BRIDGE STREET FUND 1996, L.P.
By: /s/ Xxxxxxx Xxxxxxxx 497,370 0
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
CGT FAMILY CORPORATION
By: /s/ Xxxx X. Xxxxx 35,000 1
--------------------------------
Name: Xxxx X. Xxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxx 76,923 0
------------------------------------
XXXXXXX X. XXXXXX
GS CAPITAL PARTNERS, L.P.
By: /s/ Xxxxxxx Xxxxxxxx 1,249,115 0
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
Number of Number of
Ordinary Shares Deferred Shares
/s/ Xxxxxxx Xxxxx XxXxxxxx 503 0
------------------------------------
XXXXXXX XXXXX MCDONALD
STONE STREET FUND 1996, L.P.
By: /s/ Xxxxxxx Xxxxxxxx 733,399 0
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-in-fact
DCI CAPITAL PARTNERS
By: /s/ Xxxxxxx Xxxxx 3,909,754 0
--------------------------------
Name: Xxxxxxx xxxxx
Title: General Partner
INVESTOR INVESTMENTS AB
By: /s/ Xxxxxx Xxxxxxx 3,909,754 0
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
BOOTH ENGLISH CABLE, INC.
By: /s/ Xxxxx X. Xxxxx, XX 529,292 0
--------------------------------
Name: Xxxxx X. Xxxxx, XX
Title: President
