Exhibit 2.29
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[FACE OF NOTE]
THIS ACCRETING CONVERTIBLE NOTE DUE 2003, ANY INTEREST HEREIN AND ANY ORDINARY
SHARES ("ORDINARY SHARES") ISSUABLE ON CONVERSION OR IN LIEU OF THE PAYMENT OF
PRINCIPAL HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
REGISTERED UNDER, OR TRANSFERRED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF, THE SECURITIES ACT .
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A SHARE SALE AND PURCHASE AGREEMENT DATED AS OF 1 NOVEMBER 2000
BETWEEN TELEWEST COMMUNICATIONS PLC AND DEUTSCHE TELEKOM AG AND MAY NOT BE SOLD
OR TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH.
CONVERSION OF THIS NOTE AND ANY INTEREST HEREIN IS SUBJECT TO SATISFACTION OF
CERTAIN REQUIREMENTS SET FORTH HEREIN AND ANY ORDINARY SHARES ISSUED ON SUCH
CONVERSION OR IN LIEU OF THE PAYMENT OF PRINCIPAL MAY BE SUBJECT TO THE TRANSFER
RESTRICTIONS REFERRED TO ABOVE.
TELEWEST COMMUNICATIONS PLC
5.00% Accreting Convertible Note Due 2003
No. R-1 (pound) 220,000,000 Initial Principal Amount
Issue Date: 1 November 2000
TELEWEST COMMUNICATIONS PLC, a public limited company incorporated
under the laws of England and Wales with registration number 2983307 (the
"Issuer"), for value received, hereby binds and obliges itself to comply with
the provisions of this Note and this Note shall be subject to all such
provisions which shall be binding on the Issuer and Deutsche Telekom AG
(Deutsche Telekom AG and any wholly owned Subsidiary of Deutsche Telekom AG to
whom this Note has been transferred pursuant to clause 17 herein, the "Holder")
and on all persons claiming through or under them respectively.
This is to certify that this Note has been created and issued by the
Issuer pursuant to its Memorandum and Articles of Association and a resolution
of the board of directors of the Issuer passed on 31 October 2000.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Issuer has caused this Note to be executed as a
Deed on the day and year below written.
Dated 1 November 2000
Executed as a Deed by: TELEWEST COMMUNICATIONS PLC,
Acting by: /s/ Charles Burdick
--------------------------------------
Director
/s/ C. Burns
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Director/Secretary
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[REVERSE SIDE OF NOTE]
TELEWEST COMMUNICATIONS PLC
5.00% Accreting Convertible Note due 2003
1. Principal. The Issuer will pay the Accreted Value of this Note on 1
November 2003 unless this Note is otherwise converted prior to such Maturity
Date in accordance with the terms of this Note.
2. Method of Payment.
(a) General. The Issuer may pay the Accreted Value of this Note (as
reduced pursuant to clause 19 hereof) in the form of cash or, subject to the
provisions of clause 2(c) below, in an Equivalent Amount of Ordinary Shares. The
Holder must surrender this Note to the Issuer to collect principal payments. If
a payment date is a date other than a Business Day, payment may be made on the
next succeeding day that is a Business Day.
(b) Cash Payment. The Issuer will pay the Accreted Value in Pounds
Sterling or in other money of the United Kingdom that at the time of payment is
legal tender for payment of public and private debts. Such payment shall be made
by cheque or by transfer of immediately available funds to an account of the
Holder as instructed by the Holder.
(c) Payment in Ordinary Shares. In the event that the Holder has not
elected to convert the this Note at maturity pursuant to clause 7, the Issuer
may, provided that the maximum aggregate nominal value of Ordinary Shares issued
pursuant to all of the Eurobell Notes does not exceed (pound)75,000,000 and the
Ordinary Shares are listed on the Official List of the UK Listing Authority and
are trading on the London Stock Exchange, with not less than 5 nor more than 9
days notice prior to the Maturity Date (such notice a "Notice of Election"),
elect to pay the Accreted Value in an Equivalent Amount of Ordinary Shares. In
the event that the Issuer elects to pay the Accreted Value in the form of
Ordinary Shares, no fractions of Ordinary Shares or scrip representing Ordinary
Shares will be issued, and no cash adjustment will be payable, in respect
thereof. The Notice of Election to pay in Ordinary Shares shall be mailed or
sent via telefax to the Holder and shall specify the Equivalent Amount of
Ordinary Shares to be issued to the Holder. If the Issuer shall not have
satisfied the notice requirements pursuant to this clause 3(c), the Issuer shall
be deemed to have elected to pay the Accreted Value in the form of cash.
In the event that the Issuer elects to pay the Accreted Value in the
form of Ordinary Shares, the Holder agrees by taking delivery of this Note, to
become a member of the Issuer in respect of the Ordinary Shares to be issued to
it and that, prior to the Issuer allotting and issuing such Ordinary Shares, it
shall if required, furnish appropriate endorsements and transfer documents.
Such Ordinary Shares shall be allotted and issued in certificated
registered form, unless the Holder of the Eurobell Notes instructs the Registrar
in writing to issue such Ordinary Shares in uncertificated form through CREST
and, at the time of issuance the Ordinary Shares are participating securities in
CREST.
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3. Optional Redemption. The Issuer may redeem all (but not a part) of
the Eurobell Notes in cash at 100% of the Accreted Value thereof to the
Redemption Date at any time prior to the Maturity Date by notice in writing to
the Holder in accordance with clause 4 (the "Redemption Notice"); provided that
the average of the middle-market quotations published in the Daily Official List
of the London Stock Exchange for one Ordinary Share for the 30 consecutive
Dealing Days ending on the Dealing Day ten days prior to the date on which the
Redemption Notice is given shall have been at least 130% of the average of the
Conversion Price in effect (or deemed to be in effect) on each such Dealing Day.
4. Notice of Redemption. A Redemption Notice will be mailed at least 20
days but not more than 30 days before the Redemption Date to the Holder of this
Note.
5. Repurchase upon Change in Control. Upon the occurrence of a Change
of Control, the Holder shall have the right to require the repurchase of all
(but not a part) of the Eurobell Notes by the Issuer in cash pursuant to the
offer described below (the "Change of Control Offer") at a purchase price equal
to 100% of the Accreted Value thereof to the date of purchase (the "Change of
Control Payment"). The Issuer is not required to make a Change of Control Offer
following a Change of Control if a third party makes a Change of Control Offer
that would be in compliance with the provisions described in this clause 5 if it
were made by the Issuer and, if this Note is validly tendered pursuant to this
clause 5, such third party purchases this Note.
Within 10 days following the Change of Control, the Issuer shall mail a
notice to the Holder stating:
(i) that a Change of Control has occurred, that the Change of
Control Offer is being made pursuant to this clause 5 and that the
Eurobell Notes, if validly tendered, will be accepted for payment;
(ii) the purchase price and the date of purchase (which shall
be a Business Day no earlier than 15 days nor later than 30 days from
the date such notice is mailed) (the "Change of Control Payment Date");
(iii) that if not tendered, the Eurobell Notes will continue
to accrete interest pursuant to their respective terms and have all
rights, including the Conversion Right attached to each such Note;
(iv) that, unless the Issuer defaults in the payment of the
Change of Control Payment, upon acceptance for payment pursuant to the
Change of Control Offer, the Eurobell Notes shall cease to accrete on
and after the Change of Control Payment Date;
(v) that the Holder will be required to surrender the Eurobell
Notes, together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of each such Note completed, to the
Issuer at the address specified in the notice prior to the close of
business on the Business Day immediately preceding the Change of
Control Payment Date; and
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(vi) the Holder will be entitled to withdraw its election if
the Issuer receives, not later than the close of business on the
Business Day immediately preceding the Change of Control Payment Date,
facsimile transmission or letter stating that the Holder is withdrawing
his election to have the Eurobell Notes purchased.
If the Holder tenders the Eurobell Notes pursuant to the Change of
Control Offer, on the Change of Control Payment Date, the Issuer shall:
(i) accept for payment the Eurobell Notes tendered pursuant to
the Change of Control Offer; and
(ii) pay to the Holder the Change of Control Payment.
6. Ranking and Negative Pledge. This Note will represent a general
unsecured obligation of the Issuer and will rank pari passu to all of its
existing and future Senior Indebtedness and senior to all of its existing and
future Capital Stock and Indebtedness which is expressly subordinated to it.
The Issuer will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Liens of any kind against or upon
any of its property or assets, or any proceeds therefrom, which secure either
(A) Subordinated Debt Securities unless this Note is secured by a Lien on such
property, assets or proceeds that is senior in priority to the Liens securing
such Subordinated Debt Securities or (B) Pari Passu Debt Securities, unless this
Note is equally and ratably secured with the Liens securing such Pari Passu Debt
Securities.
7. Conversion.
(a) The Holder of this Note has (i) the right to convert (the
"Conversion Right") all (but not a part) of the Eurobell Notes into Ordinary
Shares at the Conversion Price (as defined below) (A) on the Maturity Date, (B)
following notification from the Issuer of its intention to exercise its right to
redeem the Eurobell Notes pursuant to clauses 3 and 4 or (C) following
notification from the Issuer that it is making a Change of Control Offer
pursuant to clause 5 and (ii), in the event of a Fundamental Change Transaction,
the right set forth in clause 9 below subject to the terms and conditions set
forth therein (subject, in case of each of (i) and (ii), to any applicable
fiscal or other laws or regulations and as hereinafter provided).
(b) To exercise its Conversion Right (i) on the Maturity Date or (ii)
following notification from the Issuer that the Issuer intends to exercise its
right to redeem this Note together with all other Eurobell Notes pursuant to
clauses 3 and 4, the Holder must:
(i) duly complete a conversion notice in the form of Exhibit A
attached to this Note (the "Conversion Notice") and deliver (or cause
to be delivered) such Conversion Notice to the Issuer at its registered
office on or prior to the close of business on the tenth day prior to
the Maturity Date or Redemption Date, as applicable;
(ii) if required, furnish appropriate endorsements and
transfer documents; and
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(iii) if required, pay any taxes and capital, stamp, issue and
registration duties arising on the exercise of such Conversion Right
(other than any taxes or capital, stamp, issue and registration duties
payable in the United Kingdom in respect of the allotment and issue of
Ordinary Shares upon conversion, which shall be payable by the Issuer),
and all taxes, if any, arising by reference to any disposal or deemed
disposal of this Note in connection with the exercise of such
Conversion Right.
(c) To exercise its Conversion Right upon notification from the Issuer
that the Issuer is making a Change of Control Offer pursuant to clause 5, the
Holder must:
(i) deliver (or cause to be delivered) the duly completed
"Option of the Holder to Elect Purchase" on the reverse side of this
Note, including the sections of such form relating to the Holder's
intention to exercise its Conversion Right, to the Issuer at the
address specified in the notice prior to the close of business on the
Business Day immediately preceding the Change of Control Payment Date ;
(ii) if required, furnish appropriate endorsements and
transfer documents; and
(iii) if required, pay any taxes and capital, stamp, issue and
registration duties arising on the exercise of such Conversion Right
assessed on the Holder or withheld on the Holder's behalf (other than
any taxes or capital, stamp, issue and registration duties payable in
the United Kingdom in respect of the allotment and issue of Ordinary
Shares upon conversion, which shall be payable by the Issuer), and all
taxes, if any, assessed on the Holder or withheld on the Holder's
behalf arising by reference to any disposal or deemed disposal of this
Note in connection with the exercise of such Conversion Right.
8. Conversion Price Adjustments
(a) The price at which the Eurobell Notes shall be convertible into
Ordinary Shares (the "Conversion Price") shall initially be 156.56p (being 125%
of the middle market quotation of Ordinary Shares of 125.25p as at the close of
business on 1 November 2000) per one Ordinary Share. The number of Ordinary
Shares to be issued upon conversion of the Eurobell Notes will be calculated by
dividing the aggregate principal amount represented by the Eurobell Notes at the
initial issuance of each such Note (as reduced pursuant to clause 19 hereof) by
the Conversion Price on the Conversion Date.
(b) Following the occurrence of any of the events specified below, the
Conversion Price shall be adjusted as follows:
(i) If and whenever there shall be an alteration to the
nominal value of the Ordinary Shares as a result of
consolidation, reclassification or subdivision, the
Conversion Price shall be adjusted by multiplying the
Conversion Price in force immediately prior to such
alteration by the following fraction:
A
-
B
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where:
A is the nominal amount of one Ordinary Share
immediately after such alteration; and
B is the nominal amount of one Ordinary Share
immediately before such alteration.
Such adjustment shall become effective on the date the
alteration takes effect.
(ii) If and whenever the Issuer shall issue any Ordinary
Shares credited as fully paid to the holders of
Ordinary Shares (the "Shareholders") by way of
capitalisation of profits or reserves (including any
share premium account or capital redemption reserve)
other than (A) by way of a scrip dividend where the
Market Value of the Ordinary Shares issued in respect
of each existing Ordinary Share does not exceed the
amount of the cash dividend (or the relevant part
thereof where the scrip dividend is offered in place
of part of the cash dividend) in respect of each
existing Ordinary Share (an "Excluded Scrip
Dividend") or (B) where such issue is effected for
the purpose of, or in connection with, a scheme of
arrangement of the Issuer pursuant to Section 425 of
Act and the profits or reserves capitalised resulted
from a reduction in the capital of the Issuer, the
Conversion Price shall be adjusted:
(a) in the case of an issue of Ordinary Shares
other than by way of a scrip dividend by
multiplying the Conversion Price in force
immediately prior to such issue by the
following fraction:
A
-
B
where:
A is the aggregate nominal amount of
the issued Ordinary Shares
immediately before such issue; and
B is the aggregate nominal amount of
the issued Ordinary Shares
immediately after such issue; and
(b) in the case of an issue of Ordinary Shares
by way of a scrip dividend (other than an
Excluded Scrip Dividend), by multiplying the
Conversion Price in force immediately prior
to such issue by the following fraction:
A+B
---
A+C
where:
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A is the aggregate nominal amount of
the issued Ordinary Shares
immediately before such issue;
B is the aggregate nominal amount of
Ordinary Shares issued by way of
such scrip dividend multiplied by a
fraction of which the numerator is
the amount of the cash dividend per
Ordinary Share or the relevant part
thereof as referred to above and
the denominator is the Market Value
of the number of Ordinary Shares
(or, as the case may be, the
fraction of an Ordinary Share)
issued in respect of each existing
Ordinary Share in lieu of the
whole, or the relevant part of, the
relevant cash dividend;
C is the aggregate nominal amount of
Ordinary Shares issued by way of
such scrip dividend.
Such adjustment shall become effective on the date of
issue of such Ordinary Shares.
(iii) If and whenever the Issuer shall pay or make any
Capital Distribution to the Shareholders (except
where the Conversion Price is required to be adjusted
under clause 8(b)(ii)), the Conversion Price shall be
adjusted by multiplying the Conversion Price in force
immediately prior to such Capital Distribution by the
following fraction:
A - B
-----
A
where:
A is the Current Market Price of one
Ordinary Share on the Dealing Day
last preceding the date on which the
Capital Distribution is publicly
announced; and
B is the Fair Market Value on the date
of such announcement, as determined
in good faith by a merchant bank in
London of international repute,
selected in good faith by the
Issuer, acting as an expert, of the
portion of the Capital Distribution
attributable to one Ordinary Share.
Such adjustment shall become effective on the date
that such Capital Distribution is actually made.
(iv) If and whenever the Issuer shall issue Ordinary
Shares to Shareholders as a class by way of rights,
or issue or grant to Shareholders as a class by way
of rights options, warrants or other rights to
subscribe for or purchase any Ordinary Shares, in
each case at a price per Ordinary Share which is less
than 95% of the Current Market Price per Ordinary
Share on the Dealing Day last preceding the date of
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the announcement of the terms of the issue or grant
of such Ordinary Shares, options, warrants or other
rights, the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately
prior to such issue or grant by the following
fraction:
A + B
-----
A + C
where:
A is the number of Ordinary Shares in
issue immediately before such
announcement;
B is the number of Ordinary Shares
which the aggregate amount (if any)
payable for the Ordinary Shares
issued by way of rights, or for the
options or warrants or other rights
issued by way of rights and for the
total number of Ordinary Shares
comprised therein would purchase at
such Current Market Price per
Ordinary Share on the Dealing Day
last preceding the date of the
announcement of the terms of such
issue or grant; and
C is the number of Ordinary Shares
issued or, as the case may be,
comprised in the grant.
Such adjustment shall become effective on the first
date on which the Ordinary Shares are traded
ex-rights, ex-options or ex-warrants on the London
Stock Exchange.
(v) If and whenever the Issuer shall issue any securities
(other than Ordinary Shares or options, warrants or
other rights to subscribe for or purchase any
Ordinary Shares) to Shareholders as a class by way of
rights or grant to Shareholders as a class by way of
rights any options, warrants or other rights to
subscribe for or purchase any securities (other than
Ordinary Shares or options, warrants or other rights
to subscribe for or purchase Ordinary Shares), the
Conversion Price shall be adjusted by multiplying the
Conversion Price in force immediately prior to such
issue or grant by the following fraction:
A - B
-----
A
where:
A is the Current Market Price of one Ordinary
Share on the Dealing Day immediately
preceding the date on which the terms of
such issue or grant is are publicly
announced; and
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B is the Fair Market Value on the date of such
announcement, as determined in good faith by
a merchant bank in London of international
repute, selected in good faith by the
Issuer, acting as an expert, of the portion
of the rights attributable to one Ordinary
Share.
Such adjustment shall become effective on the first
date on which the Ordinary Shares are traded
ex-rights, ex-options or ex-warrants on the London
Stock Exchange.
(vi) If and whenever the Issuer shall issue (otherwise
than as mentioned in clause 8(b)(iv)) wholly for cash
any Ordinary Shares (other than Ordinary Shares
issued on the exercise of Conversion Rights or on the
exercise of any other rights of conversion into, or
exchange or subscription for, Ordinary Shares), or
grant (otherwise than as mentioned in clause
8(b)(iv)) wholly for cash any options, warrants or
other rights to subscribe for or purchase any
Ordinary Shares, in each case at a price per Ordinary
Share which is less than 95% of the Current Market
Price per Ordinary Share on the Dealing Day last
preceding the date of announcement of the terms of
such issue or grant, the Conversion Price shall be
adjusted by multiplying the Conversion Price in force
immediately prior to such issue by the following
fraction:
A + B
-----
A + C
where:
A is the number of Ordinary Shares in
issue immediately before the issue
of such Ordinary Shares or the grant
of such options, warrants or rights;
B is the number of Ordinary Shares
which the aggregate consideration
(if any) receivable for the issue of
such Ordinary Shares or, as the case
may be, for the Ordinary Shares to
be issued or otherwise made
available upon the exercise of any
such options, warrants or rights
would purchase at such Current
Market Price per Ordinary Share on
the Dealing Day last preceding the
date of announcement of the terms of
such issue or grant; and
C is the maximum number of Ordinary
Shares to be issued pursuant to such
issue of such additional Ordinary
Shares or upon exercise of such
options, warrants or rights.
Such adjustment shall become effective on the date of
issue of such additional Ordinary Shares or, as the
case may be, the grant of such options, warrants or
rights.
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(vii) If and whenever the Issuer or any Subsidiary of the
Issuer or (at the direction or request of or pursuant
to any arrangements with the Issuer or any Subsidiary
of the Issuer) any other Issuer, person or entity
(otherwise than as mentioned in clauses 8(b)(iv), (v)
or (vi)) shall issue wholly for cash any securities
other than the Eurobell Notes which by their terms of
issue carry rights of conversion into, or exchange or
subscription for, Ordinary Shares issued or to be
issued by the Issuer (or shall grant any such rights
in respect of existing securities so issued) or
securities which by their terms might be redesignated
as Ordinary Shares, and the consideration per
Ordinary Share receivable upon conversion, exchange,
subscription or redesignation is less than 95% of the
Current Market Price per Ordinary Share on the
Dealing Day last preceding the date of announcement
of the terms of issue of such securities (or the
terms of such grant), the Conversion Price shall be
adjusted by multiplying the Conversion Price in force
immediately prior to such issue (or grant) by the
following fraction:
A + B
-----
A + C
where:
A is the number of Ordinary Shares in
issue immediately before such issue
or grant;
B is the number of Ordinary Shares
which the aggregate consideration
(if any) receivable for the
Ordinary Shares to be issued upon
conversion or exchange or upon
exercise of the right of
subscription attached to such
securities or, as the case may be,
for the Ordinary Shares to be
issued or to arise from any such
redesignation would purchase at
such Current Market Price per
Ordinary Share; and
C is the maximum number of Ordinary
Shares to be issued upon conversion
or exchange of such securities or
upon the exercise of such rights of
subscription attached thereto at
the initial conversion, exchange or
subscription price or rate or, as
the case may be, the maximum number
of Ordinary Shares to be issued or
to arise from any such
redesignation.
Such adjustment shall become effective on the date of
issue or grant.
(viii) If and whenever there shall be any modification of
the rights of conversion, exchange or subscription
attaching to any such securities as are mentioned in
clause 8(b)(vii) (other than in accordance with the
terms (including terms as to adjustment) applicable
to such securities) so that following such
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modification the consideration per Ordinary Share
receivable is less than 95% of the Current Market
Price per Ordinary Share on the Dealing Day last
preceding the date of announcement of the proposals
for such modification, the Conversion Price shall be
adjusted by multiplying the Conversion Price in force
immediately prior to such modification by the
following fraction:
A + B
-----
A + C
where:
A is the number of Ordinary Shares in
issue immediately before such
modification;
B is the number of Ordinary Shares
which the aggregate consideration
(if any) receivable for the
Ordinary Shares to be issued upon
conversion or exchange or upon
exercise of the right of
subscription attached to the
securities so modified would
purchase at such Current Market
Price per Ordinary Share or, if
lower, the existing conversion,
exchange or subscription price of
such securities; and
C is the maximum number of Ordinary
Shares to be issued upon conversion
or exchange of such securities or
upon the exercise of such rights of
subscription attached thereto at
the modified conversion, exchange
or subscription price or rate but
giving credit in such manner as a
merchant bank in London of
international repute, selected in
good faith by the Issuer, shall,
acting as an expert, consider
appropriate for any previous
adjustment under this clause
8(b)(viii) or clause 8(b)(vii).
Such adjustment shall become effective on
the date of modification of the rights of
conversion, exchange or subscription
attaching to such securities.
(ix) If and whenever the Issuer or any of its Subsidiaries
or (at the direction or request of or pursuant to any
arrangements with the Issuer or any of its
Subsidiaries) any other Person shall offer any
securities in connection with which offer
Shareholders as a class are entitled to participate
in arrangements whereby such securities may be
acquired by them (except where the Conversion Price
is required to be adjusted under clauses 8(b)(iv) or
(v) or would be required to be so adjusted if the
relevant issue or grant was at less than 95% of the
Current Market Price per Ordinary Share on the
relevant Dealing Day) the Conversion Price shall be
adjusted by multiplying the Conversion Price in force
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immediately before the making of such offer by the
following fraction:
A - B
-----
A
where:
A is the Current Market Price of one
Ordinary Share on the Dealing Day
immediately preceding the date on
which the terms of such offer are
publicly announced; and
B is the Fair Market Value on the date
of such announcement, as determined
in good faith by a merchant bank in
London of international repute,
selected in good faith by the
Issuer, acting as an expert, of the
portion of the relevant offer
attributable to one Ordinary Share.
Such adjustment shall become effective on the first
date on which the Ordinary Shares are traded
ex-rights on the London Stock Exchange.
(x) If the Issuer (with the prior written approval of the
Holder (such approval not to be unreasonably withheld
or delayed)) or the Holder (with the prior written
approval of the Issuer (such approval not to be
unreasonably withheld or delayed)) determines that an
adjustment should be made to the Conversion Price as
a result of one or more events or circumstances not
referred to in clauses 8(b)(i) to (ix) (even if the
relevant event or circumstance is specifically
excluded from the operation of clauses 8(b)(i) to
(ix)), the Issuer shall, at its own expense and
acting reasonably, request the Auditors acting in
conjunction with a merchant bank in London of
international repute, selected in good faith by the
Issuer, acting as experts, to determine as soon as
practicable what adjustment (if any and provided that
it shall result in a reduction) to the Conversion
Price is fair and reasonable to take account thereof
and the date on which such adjustment should take
effect and upon such determination such adjustment
(if any) shall be made and shall take effect in
accordance with such determination, provided that an
adjustment shall only be made pursuant to this clause
8(b)(x) if the Auditors and such merchant bank are so
requested to make such a determination not more than
21 days after the date on which the relevant event or
circumstance arises.
Where the circumstances giving rise to any adjustment
pursuant to this clause 8(b) have already resulted or
will result in an adjustment to the Conversion Price
or where the circumstances giving rise to any
adjustment arise by virtue of any other circumstances
which have already given or will give rise to an
adjustment to the Conversion Price, such modification
shall be made to the operation of the provisions of
this clause 8(b) as may be advised by the Auditors to
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be in their opinion appropriate to give the intended
result.
(c) For the purpose of any calculation of the consideration receivable
pursuant to clauses 8(b)(vi), (vii) and (viii), the following provisions shall
apply:
(i) the aggregate consideration receivable for Ordinary
Shares issued for cash shall be the amount of such
cash, provided that in no case shall any deduction be
made for any commission or any expenses paid or
incurred by the Issuer for any underwriting of the
issue or otherwise in connection therewith;
(ii) (x) the aggregate consideration receivable for the
Ordinary Shares to be issued or otherwise made
available upon the conversion or exchange of any
securities shall be deemed to be the consideration
received or receivable for any such securities and
(y) the aggregate consideration receivable for the
Ordinary Shares to be issued or otherwise made
available upon the exercise of rights of subscription
attached to any securities or upon the exercise of
any options, warrants or rights shall be deemed to be
that part (which may be the whole) of the
consideration received or receivable for such
securities or, as the case may be, for such options,
warrants or rights which is attributed by the Issuer
in good faith to such rights of subscription or, as
the case may be, for such options, warrants or rights
or, if no part of such consideration is so
attributed, the Fair Market Value of such rights of
subscription or, as the case may be, for such
options, warrants or rights as at the date of the
announcement of the terms of issue of such securities
or, as the case may be, for such options, warrants or
rights (as determined in good faith by an independent
merchant bank in London of international repute
selected in good faith by the Issuer), plus in the
case of each of (x) and (y) above, the additional
minimum consideration (if any) to be received by the
Issuer upon the conversion or exchange of such
securities, or upon the exercise of such rights of
subscription attached thereto or, as the case may be,
upon exercise of such options, warrants or rights
(the consideration in all such cases to be determined
subject to the proviso in clause 8(c)(i)) and (z) the
consideration per Ordinary Share receivable upon the
conversion or exchange of, or upon the exercise of
such rights of subscription attached to, such
securities or, as the case may be, upon exercise of
such options, warrants or rights shall be the
aggregate consideration referred to in (x) or (y)
above (as the case may be) converted into Pounds
Sterling if such consideration is expressed in a
currency other than Pounds Sterling at such rate of
exchange as may be determined in good faith by a
merchant bank of international repute selected in
good faith by the Issuer to be the spot rate ruling
at the close of business on the date of announcement
of the terms of issue of such securities, divided by
the number of Ordinary Shares to be issued upon such
conversion or exchange or exercise at the initial
conversion, exchange or subscription price or rate.
14
(d) If the Conversion Date in relation to this Note shall be after the
record date for any such issue, distribution, grant or offer (as the case may
be) as is mentioned in clauses 8(b)(ii) to (v) and (ix), or any such issue as is
mentioned in clauses 8(b)(vi) and (vii) which is made to the Shareholders or any
of them, but before the relevant adjustment becomes effective under clause 8(b),
the Issuer shall (conditional upon such adjustment becoming effective) procure
that there shall be issued to the Holder such additional number of Ordinary
Shares as, together with the Ordinary Shares issued or to be issued on
conversion of this Note, is equal to the number of Ordinary Shares which would
have been required to be issued on conversion of this Note if the relevant
adjustment (more particularly referred to in the said paragraphs) to the
Conversion Price had in fact been made and become effective immediately after
the relevant record date. Such additional Ordinary Shares will be allotted
within one month after the relevant Conversion Date or of the date of issue of
Ordinary Shares if adjustment results from the issue of Ordinary Shares and
certificates for such Ordinary Shares (if the Ordinary Shares are certificated
securities) will be dispatched within such period of one month.
(e) On any adjustment, the resultant Conversion Price, if not an
integral multiple of one pence, shall be rounded down to the nearest whole
pence. No adjustment shall be made to the Conversion Price where such adjustment
(rounded down if applicable) would be less than 0.1% of the Conversion Price
then in effect. Any adjustment not required to be made, and any amount by which
the Conversion Price has been rounded down, shall be carried forward and taken
into account in any subsequent adjustment but such subsequent adjustment shall
be made on the basis that the adjustment not required to be made has been made
at the relevant time.
(f) No adjustment will be made to the Conversion Price where Ordinary
Shares or other securities (including rights, warrants or options) are issued,
offered, exercised, allotted, appropriated, modified or granted to employees
(including directors holding executive office) of the Issuer or any Subsidiary
or any associated company of the Issuer pursuant to any employees' share scheme
(as defined in Section 743 of the Act or any modification or re-enactment
thereof).
(g) The Conversion Price may not be reduced so that, on conversion of
Notes, Ordinary Shares would be required to be issued at a discount to their par
value.
(h) Where more than one event which gives or may give rise to an
adjustment to the Conversion Price occurs within such a short period of time
that, in the opinion of the Auditors, a modification to the operation of the
adjustment provisions is required in order to give the intended result, such
modification shall be made to the operation of the adjustment provisions as may
be advised by the Auditors to be in their opinion appropriate to give such
intended result.
If any doubt shall arise as to the appropriate adjustment to the
Conversion Price, a certificate of the Auditors upon application of either party
shall be conclusive and binding on all concerned, except in the case of manifest
or proven error.
(i) In default of the Issuer selecting a merchant bank in London of
international repute when required for the purposes of this clause 8, the Holder
shall be entitled to select such bank.
(j) While any Conversion Right may be exercised, the Issuer will:
15
(i) not issue or pay up any securities, in either case by way
of capitalisation of profits or reserves, other than (i) by the issue
of fully paid Ordinary Shares to the Shareholders and other holders of
shares in the capital of the Issuer which by their terms entitle the
holders thereof to receive Ordinary Shares on a capitalisation of
profits or reserves or (ii) by the issue of Ordinary Shares paid up in
full out of profits or reserves (in accordance with applicable law) and
issued wholly, ignoring fractional entitlements, in lieu of the whole
or part of a cash dividend, (iii) by the issue of fully paid equity
share capital (other than Ordinary Shares) to the holders of equity
share capital of the same class and other holders of shares in the
capital of the Issuer which by their terms entitle the holders thereof
to receive Equity Share Capital (other than Ordinary Shares) on a
capitalisation of profits or reserves, unless in any such case, the
same gives rise (or would, but for the fact that the adjustment would
be less than 0.1% of the Conversion Price then in effect, give rise) to
an adjustment of the Conversion Price or (iv) where the issue is
effected for the purpose of, or in connection with, a scheme of
arrangement pursuant to Section 425 of the Act;
(ii) not in any way modify the rights attaching to the
Ordinary Shares with respect to voting, dividends or liquidation nor
issue any other class of equity share capital carrying any rights which
are more favourable than such rights but so that nothing in this
paragraph (ii) shall prevent (a) the issue of any equity share capital
to employees (including directors holding executive office) whether of
the Issuer or any of its Subsidiaries or Affiliates by virtue of their
office or employment pursuant to any scheme or plan approved by the
Issuer in general meeting or which is established pursuant to such a
scheme or plan which is or has been so approved, or (b) any
consolidation or subdivision of the Ordinary Shares or the conversion
of any Ordinary Shares into stock or vice versa or pursuant to any
employees' share scheme (as defined in Section 743 of the Act or any
modification or re-enactment thereof) or (c) without prejudice or any
rule of law or legislation (including regulations made under Section
207 of the Act or any other provision of that or any other
legislation), the conversion of Ordinary Shares into, or the issue of
any Ordinary Shares in, uncertificated form (or the conversion of
Ordinary Shares in uncertificated form into certificated form) or the
amendment of the Articles of Association of the Issuer to enable title
to securities of the Issuer (including Ordinary Shares) to be evidenced
and transferred without a written instrument or any other alteration to
the Articles of Association of the Issuer made in connection with the
matters described in this paragraph or which is supplemental or
incidental to any of the foregoing (including any amendment made to
enable or facilitate procedures relating to such matters and any
amendment dealing with the rights and obligations of holders of
securities, including Ordinary Shares, dealt with under such
procedures) or (e) any issue of equity share capital where the issue of
such equity share capital results or would, but for the fact that the
adjustment would be less than 0.1% of the Conversion Price then in
effect or that the consideration per Ordinary Share receivable therefor
(as described in clause 8(c)) is at least 95% of the Current Market
Price per Ordinary Share otherwise result in an adjustment of the
Conversion Price or (f) any issue of equity share capital or
modification of rights attaching to the Ordinary Shares where prior
thereto the Issuer shall have instructed the Auditors (acting as
experts) to determine what (if any) adjustments should be made to the
Conversion Price as being fair and reasonable to take account thereof
and the Auditors shall have determined either that no adjustment is
16
required or that an adjustment resulting in a reduction of the
Conversion Price is required and, if so, the new Conversion Price as a
result thereof and the basis upon which such adjustment is to be made
and, in any such case, the date on which the adjustment shall take
effect (and so that the adjustment shall be made and shall take effect
accordingly);
(iii) procure that no securities (whether issued by the Issuer
or any of its Subsidiaries or procured by the Issuer or any of its
Subsidiaries to be issued) issued without rights to convert into or
exchange or subscribe for Ordinary Shares shall subsequently be granted
such rights exercisable at a consideration per Ordinary Share which is
less than 95% of the Current Market Price per Ordinary Share at close
of business on the last Dealing Day preceding the date of the
announcement of the proposed inclusion of such rights unless the same
gives rise (or would, but for the fact that the adjustment would be
less than 0.1% of the Conversion Price then in effect, give rise) to an
adjustment to the Conversion Price and that at no time shall there be
in issue Ordinary Shares of differing nominal values;
(iv) not reduce its issued share capital, share premium
account or capital redemption reserve or any uncalled liability in
respect thereof except (a) pursuant to the terms of issue of the
relevant share capital or (b) by means of a purchase or redemption of
share capital of the Issuer which would not constitute a Capital
Distribution as provided in clause 8(c) or (c) as permitted by Section
130(2) of the Act or (d) a reduction of share premium account to
facilitate the writing off of goodwill arising on consolidation which
requires the confirmation of the High Court and which does not involve
the return, either directly or indirectly, of an amount standing to the
credit of the share premium account of the Issuer and in respect of
which the Issuer shall have tendered to the High Court such undertaking
as it may require prohibiting, so long as this Note remain outstanding,
the distribution (except by way of capitalisation issue) of any reserve
which may arise in the books of the Issuer as a result of such
reduction or (e) where the reduction does not involve any distribution
of assets and is effected by way of cancellation for the purposes of a
scheme of arrangement pursuant to Section 425 of the Act or (f) by way
of transfer of reserves as permitted under applicable laws and/or (g)
where the reduction results in (or would, but for the fact that the
adjustment would be less than 1% of the Conversion Price then in
effect, result in) an adjustment to the Conversion Price;
(v) at all times keep available for issue out of its
authorised but unissued capital such number of Ordinary Shares as would
enable the Conversion Rights and all other rights of subscription and
exchange for and conversion into Ordinary Shares to be satisfied in
full;
(vi) not make any issue, grant or distribution or take any
other action if the effect thereof would be that, on the conversion of
Notes, Ordinary Shares would (but for the provisions of clause 8(c))
have to be issued at a discount to their par value or otherwise could
not, under any applicable law then in effect, be legally issued as
fully paid;
(vii) if any offer is made to all (or as nearly as may be
practicable all) Shareholders (or all (or as nearly as may be
practicable all) such Shareholders other than the offeror and/or any
17
associates of the offeror (as defined in Section 430E(4) of the Act or
any modification or re-enactment thereof)) to acquire all or a majority
of the issued ordinary share capital of the Issuer, or if any person
proposes a scheme with regard to such acquisition, give notice of such
offer or scheme to the Holder at the same time as any notice thereof is
sent to its Shareholders (or as soon as practicable thereafter) and
enclose the same information about such offer or scheme as it provides
to the Shareholders and, where such an offer or scheme has been
recommended by the Board of Directors of the Issuer, or where such an
offer has become or been declared unconditional in all respects, use
its best endeavors to procure that a like offer or scheme is extended
to the holders of any Ordinary Shares issued during the period of the
offer or scheme as a result of the exercise of the Conversion Rights;
(viii) make available to the Holder a copy of every document
sent to the Shareholders at the same time as it is sent to the
Shareholders; and
(ix) that for so long as the Ordinary Shares remain listed on
the Official List and are traded on the London Stock Exchange's Market
for Listed Securities, it will use all best endeavors to ensure that
the Ordinary Shares issued pursuant to the terms of this Note will be
admitted to the Official List by the UK Listing Authority and to
trading on the London Stock Exchange's Market for Listed Securities.
(k) The Ordinary Shares arising on conversion of the Eurobell Notes
shall be allotted and issued in certificated registered form, unless the Holder
of the Eurobell Notes instructs the Issuer in its Conversion Notice to issue
such Ordinary Shares in uncertificated form through CREST and, at the time of
issuance the Ordinary Shares are participating securities in CREST.
(l) For purposes of this clause 8:
(i) "securities" includes, without limitation, shares in the
capital of the Issuer; and
(ii) "Subsidiary" means any subsidiary undertaking (within the
meaning of Section 258 of the Act).
(m) Notwithstanding anything in this clause 8, in no event shall the
issuance of any rights or Ordinary Shares to Microsoft Corporation, Liberty
Media International, Inc., Liberty UK Holdings, Inc. and Liberty UK, Inc.
pursuant to the Relationship Agreement on terms in effect on the Issue Date,
give rise to an adjustment hereunder.
9. Fundamental Change Transactions
(a) In the event (i) the Issuer is a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the assets of the Issuer, recapitalisation or
reclassification of Ordinary Shares or any compulsory share exchange), (ii) such
transaction would (A) have constituted a Change of Control but for the increase
in the ownership or acquisition of Ordinary Shares by a Permitted Holder or (B)
comply with the provisions of clause (b) of the "Change of Control" definition
herein, whereby no "person" or "group" including Permitted Holders, would be the
"beneficial owner", directly or indirectly, of more than 50% of the total Voting
18
Stock of the surviving or transferee Person as a result of such transaction,
(iii) such transaction constitutes a Fundamental Change, and (iv) the Ordinary
Shares are no longer (A) listed on the Official List of the UK Listing Authority
and traded on the London Stock Exchange or (B) approved for listing and trading
on any Approved Stock Exchange (any such transaction, a "Fundamental Change
Transaction"), the Issuer undertakes to use its best endeavors to procure, if
requested by the Holder, that in or following any Fundamental Change Transaction
the acquiring Person, successor Person and/or any other relevant Person enters
into such agreements and performs all such actions necessary to give effect to
the conversion, exchange and other provisions set forth in this clause 9.
(b) Subject to such Person agreeing to be bound to give effect to such
conversion, exchange or other provision, upon or following the occurrence of a
Fundamental Change Transaction where the consideration to be received by holders
of Ordinary Shares includes the Listed Share Capital of the acquiror or
successor Person, the relevant price at which this Note may initially be
converted or otherwise exchanged into the Listed Share Capital of the acquiring
or successor Person, including for the purposes of this clause 9(b) the Listed
Share Capital of any wholly owned subsidiary or holding company of such Person,
received by the holders of Ordinary Shares in a Fundamental Change Transaction,
will be determined as set forth below:
(i) where the consideration received by the
holders of Ordinary Shares in any Fundamental Change
Transaction is in part, but not solely, in the form of
the Listed Share Capital of the acquiror or successor
Person, the Conversion Price shall be multiplied by
the following fraction:
A
-------
B+C
where:
A is one Ordinary share;
B is the number of shares, as of the
date the Fundamental Change
Transaction is declared
unconditional in all respects (the
"Fundamental Change Transaction
Date"), of the Listed Share Capital
of the acquiror or successor Person
being received by a holder of one
Ordinary Share pursuant to the
terms of the Fundamental Change
Transaction and;
C is the quotient obtained by
dividing (i) the sum of the
Transaction Value in Pounds
Sterling of cash, securities (other
than the Listed Share Capital of
the acquiror or successor Person
taken into account in B) and any
other property received by a holder
of one Ordinary Share in a
Fundamental Change Transaction by
(ii) the share price of the
relevant Listed Share Capital of
the acquiror or successor Person
during the 10 trading days
immediately prior to the
Fundamental Change Transaction
Date; and
19
(ii) where the consideration received by the
holders of Ordinary Shares in any Fundamental Change
Transaction is solely in the form of the Listed Share
Capital of the acquiror or successor Person, the
Conversion Price shall be multiplied by the following
fraction:
A
-
B
where:
A is an Ordinary Share; and
B is the number of shares of Listed
Share Capital of the acquiror or
successor Person being offered for
each Ordinary Share pursuant to the
terms of the Fundamental Change
Transaction;
such initial price to be adjusted in each of (i) and (ii) in good faith by the
acquiror or successor Person to appropriately reflect any of the events referred
to in clauses 8(b)(i) through 8(b)(x) above.
(c) Upon or following the occurrence of a Fundamental Change
Transaction (except that solely for purposes of this section 9(c), clause
9(a)(ii) and 9(a)(iii) shall not apply) where the consideration received by the
holders of Ordinary Shares from the acquiring or successor Person (including for
purposes of this clause 9(c) from a Permitted Holder) in any such Fundamental
Change Transaction is solely in the form of cash, this Note will become at the
time of such Fundamental Change Transaction convertible only into the kind and
amount of cash receivable upon such Fundamental Change Transaction by a holder
of the number of Ordinary Shares into which this Note was convertible
immediately prior thereto.
10. Notice of Adjustments to Conversion Price. Upon the happening of an
event as a result of which the Conversion Price will be adjusted pursuant to
clause 8, the Issuer shall as soon as reasonably practicable, deliver to the
Holder an Officer's Certificate setting forth brief particulars of the event,
and the previous and adjusted Conversion Price and the date on which such
adjustment takes effect and in any case setting forth such other particulars and
information as the Holder may reasonably require. Simultaneously with the
announcement of the terms of any issue pursuant to clause 8(b)(vi) or (vii) and
the announcement of any proposed modification pursuant to clause 8(b)(viii), the
Issuer shall give notice to the Holder advising as to the date on which the
relevant adjustment of the Conversion Price is likely to become effective and of
the effect of exercising their Conversion Rights pending such date.
20
11. Consolidation, Merger and Sale of Assets. The Issuer shall not
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person unless (i) the
Person that acquired or leased such property and assets of the Issuer shall be a
corporation organised and validly existing under the laws of England and Wales,
or of Scotland or of the United States and shall expressly assume, by
appropriate agreements, all of the obligations of the Issuer under this Note and
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing.
12. Successor Corporation. Upon any consolidation, combination, merger
or any transfer of all or substantially all of the assets of the Issuer, the
surviving entity formed by such consolidation or combination or into which the
Issuer is merged or to which such transfer is made (subject to assuming every
obligation of the Issuer under this Note) shall succeed to, and be substituted
for, and may exercise every right and power of, the Issuer under this Note with
the same effect as if such surviving entity had been named as the Issuer of this
Note, and thereafter, the Issuer shall be released from all obligations and
covenants under this Note.
13. Defaults and Remedies.
(a) The following events are "Events of Default" for purposes of this
Note: (i) the Issuer defaults in the payment of principal of any of the Eurobell
Notes when the same becomes due and payable at maturity, redemption or
otherwise; (ii) the Issuer fails to repurchase any of the Eurobell Notes at the
conclusion of the Change of Control Offer referred to in clause 5; (iii) the
Issuer fails to perform or comply with the provisions described under clause 11;
(iv) the Issuer defaults in the performance of or breaches any other covenant
under any of the Eurobell Notes, which default or breach continues for a period
of 30 consecutive days after written notice by the Holder; (v) there occurs with
respect to any issue or issues of Indebtedness of the Company or any Significant
Subsidiary having an outstanding principal amount of (pound)10 million or more
in the aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (i) an event of default
that has caused the holders thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days following such acceleration and/or (ii) the failure to make a
principal payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within 30 days of
such payment default; (vi) any final judgment or order for the payment of money
in excess of (pound)10 million in the aggregate for all such final judgments or
orders against all such Persons shall be rendered against the Company or any
Significant Subsidiary and shall not be paid or discharged, and there shall be
any period of 60 consecutive days following entry of the final judgment or order
that causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to exceed
(pound)10 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (vii)
(A) a court of competent jurisdiction enters a Bankruptcy Order under any
Bankruptcy Law that: (1) is for relief against the Issuer or a Significant
Subsidiary in an involuntary case or proceeding, (2) appoints a Custodian of the
Issuer or a Significant Subsidiary for all or substantially all of its
properties, or (3) orders the liquidation of the Issuer or a Significant
Subsidiary, and, in each case, such order or decree remains unstayed and in
effect for 60 days, (B) the holder of any Indebtedness with a principal amount
21
of (pound)10 million or more appoints a receiver or similar official with
respect to all or substantially all of the assets of the Issuer or a Significant
Subsidiary and such receiver is not removed for 120 days; or (viii) the Issuer
or a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy
Law (A) commences a voluntary case or proceeding, (B) consents to the entry of a
Bankruptcy Order for relief against it in an involuntary case or proceeding, (C)
consents to the appointment of a Custodian of it or for all or substantially all
of its property, (D) makes a general assignment for the benefit of its creditors
or files a proposal or scheme of arrangement involving the rescheduling or
composition of its Indebtedness, or (E) consents to the filing against it of a
petition in bankruptcy.
(b) For purposes of this Note, the term "Custodian" is defined to mean
any custodian, administrator, receiver, administrative receiver, interim
receiver, receiver and manager, trustee, assignee, liquidator, provisional
liquidator, sequestrator or similar official charged with maintaining possession
or control over property for one or more creditors, whether under any Bankruptcy
Law or otherwise. The term "Bankruptcy Order" is defined to mean any court order
made in a proceeding pursuant to or within the meaning of any Bankruptcy Law,
containing an adjudication of bankruptcy or insolvency, or providing for
liquidation, winding up, dissolution or reorganisation, or appointing a
Custodian of a debtor or of all or any substantial part of a debtor's property,
or providing for the staying, arrangement, adjustment or composition of
Indebtedness or other relief of a debtor.
If an Event of Default (other than an Event of Default specified in
clauses (vii) and (viii) above) occurs and is continuing, then the Holder may
declare the Eurobell Notes to be due and payable immediately. If an Event of
Default specified in clauses (vii) or (viii) above occurs with respect to the
Issuer, the Default Amount of the Eurobell Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Holder. The Holder may not enforce this Note except as provided herein.
14. No Recourse Against Others. A trustee, director, officer, employee,
stockholder or incorporator, as such, of the Issuer shall not have any liability
for any obligations of the Issuer under this Note or for any claim based on, in
respect of or by reason of such obligations or its creation. The Holder by
accepting this Note waives and releases all such liability.
15. Discharge Prior to Redemption or Maturity. The Issuer's obligations
pursuant to this Note will be discharged, except for obligations pursuant to
certain sections herein, subject to the terms of this Note, upon the repayment
or conversion of this Note.
16. Persons Deemed Owners. The registered Holder of this Note shall be
treated as the owner of it for all purposes.
22
17. Transfer and Hedging. The Holder may not, without the prior written
consent of the Issuer, sell, pledge or otherwise transfer this Note other than
to a Person who is at the time of such sale pledge or transfer a wholly owned
Subsidiary of the Holder, such Person to remain a wholly owned Subsidiary of the
Holder until the redemption or conversion of this Note.
The Holder also agrees that, for so long as this Note remains
outstanding, it will not directly or indirectly (a) offer, lend, sell, pledge,
transfer, grant any security interest or option over or in respect of or
otherwise dispose of, or enter into any derivative referenced to or hedging
arrangement (including, without limitation, any put, call, straddle or swap) in
respect of or by reference to, or which would have the economic effect of
transferring or disposing of, this Note, or any Additional Notes, or the
Ordinary Shares into which any such Note is convertible or (b) offer, grant any
option or interest over or in respect of, or enter into any derivative
referenced to or hedging arrangement (including, without limitation, any put,
call, straddle or swap) in respect of or by reference to, or which would have
the economic effect of transferring or disposing of, any existing or future debt
or equity securities in the capital of the Issuer, or agree to do any of the
foregoing.
18. Substitution of Currency. If the United Kingdom adopts the Euro,
the regulations of the European Commission relating to the Euro shall apply to
this Note. The circumstances and consequences described in this paragraph
entitle neither the Issuer nor the Holder to early redemption, rescission,
notice, repudiation, adjustment or renegotiation of the terms and conditions of
this Note or to raise other defenses or to request any compensation claim, nor
will they affect any of the other obligations of Issuer under this Note (other
than, in the event that the United Kingdom adopts the Euro, the redenomination
of the Issuer's obligations under this Note and the Conversion Price from Pounds
Sterling to Euro).
19. Reduction in Principal Amount. Pursuant to, and in accordance with,
the Sections 7.5 and 7.6 of the Share Sale and Purchase Agreement, the Issuer
shall reduce the principal amount of this Note by way of set off permitted by
the terms of such Agreement, such change to be in integrals of (pound)1,000.
Following any such reduction in principal amount, this Note will carry the same
terms and conditions in all respects. For purposes of calculating the Accreted
Value of this Note, any reduction to the principal amount will be deemed to have
occurred on the Issue Date of this Note following notice of such change in
accordance with the Share Sale and Purchase Agreement. For the avoidance of
doubt, following any such reduction in principal amount, there will be no
accretion in respect of the amount by which this Note is reduced over the entire
term of this Note.
20. Definitions. For purposes of this Note, the following terms have
the following meanings:
"Accreted Value" means, for any specified date, the amount provided
below for each (pound)1,000 principal amount at initial issuance (as reduced
pursuant to clause 19 hereof) of this Note:
(i) if the specified date occurs on one of the following dates
(each a "Semi-Annual Accretion Date"), the Accreted Value for each
(pound)1,000.00 will equal the amount set forth below for such
Semi-Annual Accretion Date:
23
---------------------------------------------- --------------------------------------------
Semi-Annual Accretion Date Accreted Value
---------------------------------------------- --------------------------------------------
1 May 2001 (pound)1,025.0
---------------------------------------------- --------------------------------------------
1 November 2001 (pound)1,050.6
---------------------------------------------- --------------------------------------------
1 May 2002 (pound)1,076.9
---------------------------------------------- --------------------------------------------
1 November 2002 (pound)1,103.8
---------------------------------------------- --------------------------------------------
1 May 2003 (pound)1,131.4
---------------------------------------------- --------------------------------------------
1 November 2003 (pound)1,159.7
---------------------------------------------- --------------------------------------------
(ii) if the specified date occurs before the first Semi-Annual
Accretion Date, the Accreted Value will equal the sum of (a) (pound)1000, and
(b) an amount equal to the product of (1) (pound)25 (i.e. the applicable
Accreted Value for the first Semi-Annual Accretion Date less (pound)1000)
multiplied by (2) a fraction, the numerator of which is the number of days from
the Issue Date to the specified date, using a 360-day year of twelve 30-day
months, and the denominator of which is 180 (i.e. the number of days from the
Issue Date to the first Semi-Annual Accretion Date, using a 360-day year of
twelve 30-day months);
(iii) if the specified date occurs between two Semi-Annual Accretion
Dates, the Accreted Value will equal the sum of (a) the applicable Accreted
Value for the Semi-Annual Accretion Date immediately preceding such specified
date and (b) an amount equal to the product of (1) the applicable Accreted Value
for the immediately following Semi-Annual Accretion Date less the Accreted Value
for the immediately preceding Semi-Annual Accretion Date multiplied by (2) a
fraction, the numerator of which is the number of days from the immediately
preceding Semi-Annual Accretion Date to the specified date, using a 360-day year
of twelve 30-day months, and the denominator of which is 180; or
(iv) if the specified date occurs on or after the Maturity Date, the
Accreted Value will equal(pound)1,159.7.
"Act" means the UK Companies Act 1985, as amended.
"Affiliate" is defined to mean, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person, is
defined to mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Approved Stock Exchange" means the London Stock Exchange, the New York
Stock Exchange, the Nasdaq Stock Market, the Amsterdam Stock Exchange, the
Frankfurt Stock Exchange or any successor to such exchanges.
24
"Auditors" is defined to mean the independent public accountants of the
Issuer from time to time.
"Bankruptcy Law" is defined to mean: the UK Insolvency Act 1986 or any
other law of the United Kingdom, any political subdivision thereof or any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganisation or relief of debtors.
"Bankruptcy Order" has the meaning set forth in clause 12(b).
"Board" is defined to mean, with respect to any Person, the Board of
Directors of such Person or any committee of such Board authorised to act for
it.
"Business Day" is defined as any day (other than a Saturday or Sunday)
on which banks in London are open for business.
"Capital Distribution" means:
(A) any distribution of assets in specie charged or provided for in the
accounts of any financial period (whenever paid or made and however described)
but excluding a distribution of assets in specie in lieu of, and to a value not
exceeding, a cash dividend or distribution which would not have constituted a
Capital Distribution under (B) below (and for these purposes a distribution of
assets in specie includes without limitation an issue of shares or other
securities credited as fully or partly paid up (other than Ordinary Shares
credited as fully paid) by way of capitalisation of reserves); and
(B) any cash dividend or distribution of any kind charged or provided
for in the accounts for any financial period (whenever paid or made and however
described), except:
(1) to the extent that it does not, when taken together with
any other cash dividend or distribution or any distribution of assets
in specie previously made or paid in respect of all periods ended after
December 31, 1999, exceed an amount equal to the aggregate of the
consolidated cumulative net profits on ordinary activities less the
aggregate of any consolidated net losses on ordinary activities (after
taxation) attributable to the members of the Issuer for all periods
ending after December 31, 1999 as shown in the audited consolidated
accounts of the Issuer for such periods (provided that such
consolidated cumulative net profits shall exclude any amount arising as
a result of any reduction of share capital, share premium account or
capital redemption reserve but, subject thereto, shall include any
profit transferred from any reserve); or
(2) (to the extent that it would exceed such amount available
under (1) above) to the extent that the rate of that dividend or
distribution, together with all other dividends or distributions on the
class of capital in question charged or provided for in the accounts
for that financial period, does not exceed the total rate of dividend
or distribution on such class of capital charged or provided for in the
accounts of the financial period immediately preceding the financial
period in question, with such adjustments being made where such
financial periods are of different durations as are in the opinion of
25
the Auditors appropriate in the circumstances. In computing such rates
the value of distributions in specie shall be taken into account and
such adjustments as are in the opinion of the Auditors appropriate in
the circumstances shall be made.
A purchase or redemption of share capital by the Issuer shall
not constitute a Capital Distribution or be taken into account in
determining whether any other dividend or distribution shall constitute
a Capital Distribution unless in the case of purchases of Ordinary
Shares by the Issuer, the weighted average price (before expenses) on
any one day in respect of such purchases exceeds by more than 5% the
opening middle market price quoted for the Ordinary Shares on the
London Stock Exchange's Market for Listed Securities as derived from
the Official List at the opening of business either (1) on that date,
or (2) where an announcement has been made of the intention to purchase
Ordinary Shares at some future date at a specified price, on the
Dealing Day immediately preceding the date of such announcement and, if
in the case of either (1) or (2), the relevant day is not a dealing
day, the immediately preceding Dealing Day, in which case such purchase
shall be deemed to constitute a Capital Distribution in the amount of
the aggregate price paid (before expenses) in respect of such Ordinary
Shares purchased by the Issuer.
"Capital Stock" is defined to mean, with respect to any Person, any and
all shares, interests, participations, rights or other equivalents (however
designated, whether voting or non-voting) in the equity of such Person, whether
outstanding at the Issue Date or issued after the Issue Date, including, without
limitation, all Common Stock and Preferred Stock, and any and all rights,
warrants or options exchangeable for or convertible into any thereof.
"Change of Control" is defined to mean the occurrence of any of the
following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), excluding Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Issuer;
(b) the Issuer consolidates with, or merges with or into, another
person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person, or any person consolidates
or combines with, or merges with or into, the Issuer, in any such event pursuant
to a transaction in which the outstanding Voting Stock of the Issuer is
converted into or exchanged for cash, securities or other property, other than
any such transaction where (i) the outstanding Voting Stock of the Issuer is
converted into or exchanged for Voting Stock of the transferee corporation and
(ii) immediately after such transaction no "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), excluding the
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Stock of
the surviving or transferee corporation;
26
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of the Issuer (together with any
new directors whose election by the Board of the Issuer or whose nomination for
election by the stockholders of the Issuer was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason (other than by action of the Permitted Holders)
to constitute a majority of the Board of the Issuer then in office, including,
without limitation, by reason of the provisions of the Issuer's Articles of
Association relating to the rights of certain classes of stockholders of the
Issuer's Common Stock to designate and remove directors of the Issuer; or
(d) any other event which constitutes a Change of Control under (i) the
Issuer's Indenture, dated 3 October 1995, relating to the Issuer's $300,000,000
9 5/8% Senior Debentures due 2006, (ii) the Issuer's Indenture, dated 3 October
1995, relating to the Issuer's $1,536,413,000 11% Senior Discount Debentures due
2006, (iii) the Issuer's Indenture, dated 9 November 1998, relating to the
Issuer's $350,000,000 11 1/4% Senior Notes due 2008, (iv) the Issuer's
Indenture, dated 19 February 1999, relating to the Issuer's (pound)300,000,000 5
1/4% Senior Convertible Notes due 2007, (v) the Issuer's Indenture, dated 15
April 1999, relating to the Issuer's (pound)325,000,000 9 7/8% Senior Discount
Notes due 2009 and $500,000,000 9 1/4% Senior Discount Notes due 2009, (vi) the
Issuer's Indenture, dated 25 January 2000, relating to the Issuer's $450,000,000
11 3/8% Senior Discount Notes due 2010, (pound)180,000,000 9 7/8% Senior Notes
due 20010 and $350,000,000 9 7/8% Senior Notes due 2010, and (vii) the Issuer's
Indenture, dated 7 July 2000, relating to the Issuer's $450,000,000 6% Senior
Convertible Notes due 2005, in each case excluding any such event which would
not be a Change of Control if the definition of "Permitted Holders" herein was
substituted for the definition of "Permitted Holders" in any of the above
indentures;
provided, however, that:
(i) to the extent that one or more regulatory approvals are
required for one or more of the events or circumstances described in
clauses (a) through (c) to become effective under applicable law, such
events or circumstances shall be deemed to have occurred at the time
such approvals have been obtained and become effective under applicable
law; and
(ii) no Change of Control shall be deemed to occur solely by
reason of the placement of any Voting Stock held by a Permitted Holder
into a trust or similar arrangement as a result of a prohibition under
the laws or regulations of the European Community or any of its
predecessors or successors (the "EC") or the European Union or any of
its predecessors or successors (the "EU") or the UK on the ownership of
Voting Stock of the Issuer by persons not organised under or citizens
of a country which is a member of the EC or EU or the UK, if the Issuer
delivers an Opinion of Counsel to the Holder prior thereto confirming
such trust or similar arrangement is necessary as a result of such
prohibition.
"Common Stock" is defined to mean, with respect to any Person, any and
all shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of such Person's common stock or
ordinary shares, whether or not outstanding at the Issue Date, and includes,
27
without limitation, all series and classes of such common stock or ordinary
shares.
"Conversion Date" is the tenth Business Day following the relevant
Conversion Notice Date.
"Conversion Notice" has the meaning set forth in clause 8.
"Conversion Notice Date" is the first Business Day following the date
on which all of the requirements for exercising a Conversion Right as set forth
in clause 7 have been satisfied.
"Conversion Price" is the price at which Ordinary Shares are issuable
upon conversion of this Note, set forth in clause 7.
"Conversion Right" has the meaning set forth in clause 7.
"Current Market Price" means, in respect of an Ordinary Share at a
particular date, the average of the bid and offer quotations published in the
Daily Official List of the London Stock Exchange for one Ordinary Share for the
five consecutive Dealing Days ending on the Dealing Day immediately preceding
such date; provided that if at any time during the said five day period the
Ordinary Shares shall have been quoted ex-dividend and during some other part of
that period the Ordinary Shares shall have been quoted cum-dividend then:
(A) if the Ordinary Shares to be issued do not rank for the
dividend in question, the quotations on the dates on which the Ordinary
Shares shall have been quoted cum-dividend shall for the purpose of
this definition be deemed to be the amount thereof reduced by an amount
equal to the amount of that dividend per Ordinary Share (excluding any
associated tax credit and less the tax (if any) required to be deducted
on payment thereof to a resident of the United Kingdom);
(B) if the Ordinary Shares to be issued do rank for the
dividend in question, the quotations on the dates on which the Ordinary
Shares shall have been quoted ex-dividend shall for the purpose of this
definition be deemed to be the amount thereof increased by such similar
amount,
and provided further that if the Ordinary Shares on each of the said
five Dealing Days have been quoted cum-dividend in respect of a dividend which
has been declared or announced but the Ordinary Shares to be issued do not rank
for that dividend, the quotations on each of such dates shall for the purposes
of this definition be deemed to be the amount thereof reduced by an amount equal
to the amount of that dividend per Ordinary Share (excluding any associated tax
credit and less the tax (if any) required to be deducted on payment thereof to a
resident of the United Kingdom).
"Dealing Day" means a day on which the London Stock Exchange is open
for business.
"Debt Securities" is defined to mean any securities (excluding (x)
notes or other instruments evidencing commercial loans made by and (y) bills of
exchange drawn on, banks or similar financial lending institutions) issued by
28
the Issuer (including by means of any Guarantee by the Issuer of securities of
another person), whether in a public offering or private placement.
"Default" is defined to mean any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Default Amount" is defined to mean 100% of the Accreted Value of this
Note.
"Equity Share Capital" has the meaning ascribed thereto by Section 744
of the Act.
"Equivalent Amount" means the number of Ordinary Shares to be issued
credited as fully paid equal to the number determined by dividing (a) the
Accreted Value of the Eurobell Notes on the Maturity Date by (b) the average of
the middle-market quotations published in the Daily Official List of the London
Stock Exchange for one Ordinary Share for the 10 consecutive Dealing Days ending
on the Dealing Day prior to the date of the Notice of Election, provided,
however, that the Equivalent Amount of Ordinary Shares shall not exceed an
aggregate nominal amount of (pound)75,000,000.
"Eurobell Notes" means this Note together with the January Loan Note
and (if issued) the Deferred Loan Note (each as defined in the Share Sale and
Purchase Agreement).
"Fair Market Value" is defined to mean, with respect to any asset or
property, the price that could be negotiated in an arms-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise agreed by the Issuer and the Holder, Fair Market Value shall be
determined by the Board of the Issuer acting in good faith and shall be
evidenced by a resolution of the Issuer's Board delivered to the Holder.
"Fundamental Change" is defined to mean the occurrence of any
transaction or event in connection with an arrangement or arrangements pursuant
to which all or substantially all of the Ordinary Shares shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalisation or otherwise); provided that, in the case of a plan involving
more than one such transaction or event, for purposes of adjustment of the
conversion price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Ordinary Shares shall be exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash, or
other property.
"GAAP" is defined to mean, at any date of determination, generally
accepted accounting principles in effect in the United Kingdom which are
applicable as of the Issue Date.
"Indebtedness" is defined to mean, with respect to any Person at any
date of determination (without duplication):
(a) any liability, contingent or otherwise, of such Person for borrowed
money;
29
(b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(c) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with respect
thereto and purchase money obligations);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more than
180 days after the date of placing such property in service or taking delivery
and title thereto or the completion of such services, except trade payables;
(e) all obligations of such Person as lessee under capitalised leases;
(f) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by or is otherwise the
legal liability of such Person, provided that the amount of such Indebtedness
shall be the lesser of (A) the Fair Market Value of such asset at such date of
determination, and (B) the amount of such Indebtedness;
(g) all Indebtedness of other Persons guaranteed by such Person or
which is otherwise the legal liability of such Person to the extent such
Indebtedness is guaranteed by or is otherwise the legal liability of such
Person;
(h) to the extent not otherwise included in this definition,
obligations under currency agreements and interest rate protection obligations;
and
(i) any and all deferrals, renewals, extensions and refundings of, or
amendments of or supplements to, any liability or obligation of the kind
described in this definition.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortised portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP.
"Issue Date" is defined to mean 1 November 2000, the original date of
issuance of this Note.
"Lien" is defined to mean any mortgage, charge, pledge, security
interest, encumbrance, lien (statutory or other), hypothecation, assignment for
security, claim, or preference or priority or other encumbrance of any kind upon
or with respect to any property (including, without limitation, any conditional
sale or other title retention agreement or lease in the nature thereof, any sale
with recourse against the seller or any Affiliate of the seller, or any
agreement to give any security interest).
30
"Listed Share Capital" is defined to mean the Equity Share Capital (as
if the term "body corporate" were substituted for the term "company" in the
definition of such expression) of an acquiror or successor Person listed on an
Approved Stock Market.
"London Stock Exchange" is defined to mean the London Stock Exchange
plc.
"Market Value" means the price or value of the Ordinary Shares stated
in, or calculated in accordance with the provisions and at the time of, the
circular or other document relating to the relevant scrip dividend issued by the
Issuer to its Shareholders and used for the purpose of determining the nominal
amount of Ordinary Shares to be issued by way of such scrip dividend.
"Maturity Date" is defined to mean 1 November 2003.
"Officer's Certificate" is defined to mean a certificate signed by any
of the Chairman of the Board, the Chief Executive Officer, the Chief Operating
Officer, the Finance Director or the Secretary of the relevant Person.
"Opinion of Counsel" is defined to mean a written opinion from legal
counsel who is reasonably acceptable to the Holder.
"Ordinary Shares" is defined to mean the ordinary shares, 10 pence
nominal value (as at the date of this Note), of the Issuer credited as fully
paid issuable upon exercise of a Conversion Right and, for purposed of
calculating Conversion Price adjustments pursuant to clause 8, the ordinary
shares and limited non-voting shares of the Issuer.
"Pari Passu Debt Securities" is defined to mean any Debt Securities
that rank pari passu in right of payment to this Note.
"Permitted Holders" is defined to mean TeleCommunications Inc., a
Delaware corporation, Liberty Media Corporation, a Delaware corporation, any
holding company formed to hold a majority of the Voting Stock of Liberty Media
Corporation, AT&T Corp., a New York corporation, Microsoft Corporation, a
Delaware corporation, UnitedGlobalCom, Inc., a Delaware Corporation, United
Pan-Europe Communications N.V., a company organised under the laws of The
Netherlands, NTL Incorporated, a Delaware Corporation, their controlled
Affiliates as of the Issue Date and any Person who becomes a controlled
Affiliate of the Permitted Holders prior to the redemption of the Eurobell
Notes.
"Person" is defined to mean any individual, body corporate,
corporation, partnership, joint venture, trust, unincorporated organisation or
government or any agency or political subdivision thereof, in each case wherever
incorporated, established or existing.
"Pounds Sterling" is defined to mean the lawful currency of the United
Kingdom.
"Preferred Stock" is defined to mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated) of such Person's preferred or preference stock or shares, whether
now outstanding, or issued after the Issue Date, and including without
31
limitation, all classes and series of preferred or preference stock or shares of
such Person.
"record date" means, in relation to any issue of Ordinary Shares,
securities, rights, options or warrants or any dividend or Capital Distribution,
the date as to which holders of shares must be registered in order to
participate therein.
"Redemption Date" is defined to mean, with respect to the Eurobell
Notes, the date on which the Eurobell Notes are to be redeemed by the Issuer
pursuant to the terms of the each such Note.
"Relationship Agreement" is defined to mean the relationship agreement,
dated 3 March 2000, among Microsoft Corporation, Liberty Media International,
Inc., Liberty UK Holdings, Inc., Liberty UK, Inc. and the Issuer.
"Restricted Subsidiary" has the meaning given to it in the Indenture,
dated 25 January 2000, governing the Issuer's Senior Notes and Senior Discount
Notes due 2010.
"Senior Indebtedness" means all Indebtedness of the Issuer including
interest thereon (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganisation relating to the Issuer whether or
not a claim for post-filing interest is allowed in such proceedings), whether
outstanding on the Issue Date or thereafter incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is expressly provided that such obligations are not superior in right of payment
to the Eurobell Notes; provided, however, that Senior Indebtedness shall not
include (1) any liability for taxes or duties owed or owing by the Issuer, (2)
any Indebtedness of the Issuer which is expressly subordinate in right of
payment to any other Indebtedness of the Issuer, which Indebtedness for the
avoidance of doubt shall be subordinated to this Note.
"Share Sale and Purchase Agreement" means the Share Sale and Purchase
Agreement, dated as of 1 November 2000, between the Issuer and the Holder.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary of the Company that, together with its subsidiaries, (i)
for the most recent financial year of the Company, accounted for more than 10%
of the consolidated revenues of the Company and its Restricted Subsidiaries or
(ii) as of the end of such financial year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such financial year.
"Stated Maturity" is defined to mean: (i) with respect to any
Indebtedness, the date specified in such Indebtedness as the fixed date on which
the final installment of principal of such Indebtedness is due and payable; and
(ii) with respect to any scheduled installment of principal of or interest on
any Indebtedness, the date specified in such Indebtedness as the fixed date on
which such installment is due and payable.
"Sterling Equivalent" is defined to mean, with respect to any monetary
amount in a currency other than Pounds Sterling, at any time for the
determination thereof, the amount of Pounds Sterling obtained by converting such
32
foreign currency involved in such computation into Pounds Sterling at the spot
rate for the purchase of Pounds Sterling with the applicable foreign currency as
quoted by The Financial Times (London Edition) published on the last London
Business Day immediately preceding such determination.
"Subordinated Debt Securities" is defined to mean any Debt Securities
which are expressly subordinated in right of payment to this Note.
"Subsidiary" is defined to mean, with respect to any Person, any
corporation, association or other business entity (i) of which outstanding
Capital Stock having at least a majority of the votes entitled to be cast in the
election of directors is owned, directly or indirectly, by such Person and one
or more other Subsidiaries of such Person, or (ii) of which at least a majority
of voting interest is owned, directly or indirectly, by such Person and one or
more other Subsidiaries of such Person.
"Transaction Value" is defined to mean, with respect to a Fundamental
Change Transaction, the Pound Sterling amount or Sterling Equivalent amount as
follows: (1) for cash, the amount of cash received per Ordinary Share; (2) for
any reported securities received in any adjustment event that are: (a) listed on
a United States national securities exchange, (b) reported on a United States
national securities system subject to last sale reporting, (c) traded on a
qualifying European exchange, or (d) traded in the over-the-counter market and
reported on the National Quotation Bureau or similar organisation, either (x) if
there are at least 10 trading days for the relevant reported security within the
30 calendar days immediately before, but not including, the Fundamental Change
Transaction Date, an amount equal to the average closing price per security of
the reported securities for the 10 trading days immediately before (but not
including) the Fundamental Change Transaction Date, or (y) if there are not 10
trading days for any particular reported security within the 30 calendar days
immediately before, but not including, the Fundamental Change Transaction Date,
the market value per security of this reported security on the trading day prior
to the Fundamental Change Transaction Date, as determined by each of at least
two nationally recognised investment banking firm that the Issuer retains for
this purpose, in either case (x) or (y) multiplied by the number of these
reported securities received for one Ordinary Share; and (3) for any other
reported securities, the average of the mid-point of the last bid and ask prices
for the reported security as of the Fundamental Transaction Date from each of at
least two nationally recognised investment banking firms that the Issuer retains
for this purpose, multiplied by the number of the reported securities (as
adjusted as described in this section) received per one Ordinary Share; for all
other property, the Fair Market Value per one Ordinary Share as determined by
nationally recognised investment banking firms that the Issuer retains for this
purpose.
"UK Listing Authority" is defined to mean the Financial Services
Authority in its capacity as the competent authority for the Purposes of Part IV
of the Financial Services Act 1986.
"Voting Stock" is defined to mean with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors, managers or other voting members of the governing body of such
Person.
33
The laws of England and Wales shall govern this Note without regard to
principles of conflict of laws. Each of the Issuer and the Holder irrevocably
agrees that the courts of England are to have exclusive jurisdiction to settle
any disputes which may arise out of or in connection with this Note and
accordingly any legal action or proceedings arising out of or in connection with
this Note may be brought in such courts.
34
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have the Eurobell Notes purchased by the Issuer
pursuant to clause 5 of this Note and the consideration for such purchase to be
in cash, check Box A: [ A ]
If you wish to have the Eurobell Notes purchased by the Issuer
pursuant to clause 5 of this Note and elect to convert the Accreted Value of the
Eurobell Notes, in whole but not in part, as specified below into Ordinary
Shares, check Box B and complete items 1 through 6, as applicable, below: [ B ]
1. The Holder hereby elects to convert(pound)________ nominal principal
amount of the Eurobell Notes.
2. The name of the person in whose name the Ordinary Shares should be
registered is:
Name: ________________________
3. The Holder hereby requests that EITHER:
[A] the certificates for the Ordinary Shares be delivered to the person
whose name and address is given below and in the manner specified
below:
Name: _________________________
Address: _________________________
_________________________
_________________________
Manner of dispatch: ________________
OR
[B] the Ordinary Shares to be delivered in pursuance of this Conversion
Notice be credited to the CREST account details of which are set out
below
CREST Participant ID: _________________
Member Account ID: _________________
4. The certificate representing such Note is attached hereto.
5. The Holder hereby acknowledges and agrees that the Ordinary Shares
issued upon conversion hereof have not been and will not be registered
under the Securities Act.
35
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer.
------------------------------------------
[Insert Name of Holder]
By:
---------------------------------------
Name:
Title:
Dated:
---------------------------
Your Signature: _______________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ___________________________
36
EXHIBIT A
FORM OF CONVERSION NOTICE
Treasurer
Telewest Communications plc
Genesis Business Park
Albert Drive
Woking, Surrey, GU21 5RW
England
Re: 5.0% Accreting Convertible Notes due 2003 of Telewest Communications plc
------------------------------------------------------------------------
Reference is hereby made to the 5.0% Accreting Convertible Note due 2003 of
Telewest Communications plc (the "Note" and, together with the January Loan Note
and (if issued) the Deferred Loan Note, the " Eurobell Notes"), dated as of 1
November 2000, among Telewest Communications plc, as issuer (the "Issuer"), and
Deutsche Telekom AG, as Holder (the "Holder"). Capitalised terms used but not
defined herein shall have the meanings given to them in the Note.
The undersigned Holder of the Eurobell Notes hereby elects to convert the
principal amount of such Notes, in whole but not in part, as specified below
into Ordinary Shares of the Issuer (the "Ordinary Shares") in accordance with
the terms of the Note.
1. The Holder hereby elects to convert(pound)________ principal amount of
the Eurobell Notes.
2. The name of the person in whose name the Ordinary Shares should be
registered is:
Name: ________________________
3. The Holder hereby requests that EITHER:
[A] the certificates for the Ordinary Shares be delivered to the person whose
name and address is given below and in the manner specified below:
Name: _________________________
Address: _________________________
_________________________
_________________________
Manner of dispatch: ________________
OR
[B] the Ordinary Shares to be delivered in pursuance of this Conversion Notice
be credited to the CREST account details of which are set out below
CREST Participant ID: _________________
Member Account ID: _________________
37
5. The certificate(s) representing such Eurobell Notes are attached hereto.
6. The Holder hereby acknowledges and agrees that the Ordinary Shares issued
upon conversion hereof have not been and will not be registered under the
Securities Act.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer.
-----------------------------------------
[Insert Name of Converting Holder]
By:
--------------------------------------
Name:
Title:
Dated:
----------------------------
38