Exhibit
2.1
AGREEMENT AND PLAN OF AMALGAMATION
AMONG
NTL INCORPORATED,
NTL (BERMUDA) LIMITED
AND
COMCAST UK CABLE PARTNERS LIMITED
DATED AS OF FEBRUARY 4, 1998
TABLE OF CONTENTS
PAGE
ARTICLE I
THE AMALGAMATION
SECTION 1.1 The Amalgamation............................. 1
SECTION 1.2 Closing...................................... 2
SECTION 1.3 Effective Time............................... 2
SECTION 1.4 Effects of the Amalgamation.................. 2
SECTION 1.5 Memorandum of Association and Bye-laws of the
Amalgamated Company.......................... 2
SECTION 1.6 Directors and Officers....................... 3
ARTICLE II
EFFECT OF THE AMALGAMATION ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
SECTION 2.1 Effect on Capital Stock...................... 3
SECTION 2.2 Exchange of Certificates..................... 8
SECTION 2.3 Certain Adjustments.......................... 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of
Partners..................................... 14
SECTION 3.2 Representations and Warranties of
NTL.......................................... 27
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 Conduct of Business.......................... 36
SECTION 4.2 No Solicitation by Partners.................. 41
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Preparation of the Form S-4 and the
Joint Proxy Statement; Stockholders
Meetings..................................... 43
SECTION 5.2 Letters of Partners's Accountants............ 45
SECTION 5.3 Letters of NTL's Accountants................. 45
SECTION 5.4 Access to Information; Confidentiality....... 46
SECTION 5.5 Reasonable Best Efforts...................... 46
SECTION 5.6 Stock Options and Stock Appreciation Rights.. 47
SECTION 5.7 Partners Incentive Plans and Certain
Employee Matters............................. 49
SECTION 5.8 Indemnification, Exculpation and
Insurance.................................... 50
SECTION 5.9 Fees and Expenses............................ 52
SECTION 5.10 Public Announcements......................... 52
SECTION 5.11 NASDAQ Quotation............................. 52
SECTION 5.12 Stockholder Litigation....................... 52
SECTION 5.13 Rights of First Refusal...................... 52
SECTION 5.14 Standstill Agreements; Confidentiality
Agreements................................... 54
SECTION 5.15 Conveyance Taxes............................. 54
SECTION 5.16 Debt Offers.................................. 54
SECTION 5.17 Comcast Name................................. 54
SECTION 5.18 Structure.................................... 55
SECTION 5.19 Relationship with Significant Affiliates..... 55
SECTION 5.20 NTL Preferred Stock.......................... 55
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation
to Effect the Amalgamation................... 56
SECTION 6.2 Conditions to Obligations of NTL............. 59
SECTION 6.3 Conditions to Obligations of Partners........ 60
SECTION 6.4 Frustration of Closing Conditions............ 61
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination.................................. 61
SECTION 7.2 Effect of Termination........................ 63
SECTION 7.3 Amendment.................................... 63
SECTION 7.4 Extension; Waiver............................ 63
SECTION 7.5 Procedure for Termination, Amendment,
Extension or Waiver.......................... 64
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Nonsurvival of Representations and
Warranties................................... 64
SECTION 8.2 Notices...................................... 64
SECTION 8.3 Definitions.................................. 66
SECTION 8.4 Interpretation............................... 68
SECTION 8.5 Counterparts................................. 69
SECTION 8.6 Entire Agreement; No Third-Party
Beneficiaries................................ 69
SECTION 8.7 Governing Law................................ 69
SECTION 8.8 Assignment................................... 70
SECTION 8.9 Consent to Jurisdiction...................... 70
SECTION 8.10 Headings..................................... 70
SECTION 8.11 Severability................................. 70
AGREEMENT AND PLAN OF AMALGAMATION dated as of February 4,
1998, among NTL INCORPORATED, a Delaware corporation ("NTL"), NTL (BERMUDA)
LIMITED, a Bermuda corporation ("Sub"), and COMCAST UK CABLE PARTNERS LIMITED, a
Bermuda corporation ("Partners").
WHEREAS, the respective Boards of Directors of NTL, Sub and
Partners have each approved the amalgamation of Sub with Partners (the
"Amalgamation"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of Class A Common Stock,
par value Pound Sterling.01 per share ("Class A Common"), and each share of
Class B Common Stock, par value Pound Sterling.01 per share ("Class B Common"),
of Partners (the Class A Common and Class B Common, collectively, the "Partners
Common Stock"), other than shares owned by NTL or Dissenting Shares (as defined
in Section 2.1(d)), will be cancelled in consideration for the right to receive
the Amalgamation Consideration (as defined in Section 2.1(b));
WHEREAS, the respective Boards of Directors of NTL, Sub and
Partners have each determined that the Amalgamation and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals and are in the best interests of their respective
stockholders;
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Amalgamation and
also to prescribe various conditions to the Amalgamation;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
THE AMALGAMATION
SECTION 1.1 The Amalgamation. Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with the Bermuda
Companies Act 1981, as amended (the "Companies Act"), Sub shall be amalgamated
with Partners at the Effective Time (as defined in Section 1.3), and the
separate existence of Sub and Partners shall thereupon continue in the form of
the company resulting from the Amalgamation (the "Amalgamated Company"). The
Amalgamated Company shall operate under the name of "NTL (Bermuda) Limited" and
continue under the provisions of the Companies Act and other applicable Bermuda
law.
SECTION 1.2 Closing. The closing of the Amalgamation (the
"Closing") will take place at 10:00 a.m. Eastern time on a date to be specified
by the parties (the "Closing Date"), which shall be no later than the second
Business Day after satisfaction or waiver of the conditions set forth in Article
VI, unless another time or date is agreed to by the parties hereto. The Closing
will be held at such locations in the City of New York and Bermuda as is agreed
to by the parties hereto.
SECTION 1.3 Effective Time. As soon as practicable after the
date hereof, NTL and Partners shall file a joint application for the consent of
the Bermuda Minister of Finance (the "Minister") to the Amalgamation and, as
soon as practicable after satisfaction or, to the extent permitted hereunder,
waiver of all conditions hereunder to the Amalgamation, Sub and Partners shall
make all filings or recordings required by the Companies Act to perfect or
complete the Amalgamation. The Amalgamation shall become effective upon the
issuance of a certificate of amalgamation (the "Certificate of Amalgamation") in
accordance with Section 108 of the Companies Act by the Registrar of Companies
in Bermuda, or at such subsequent date or time as Sub and Partners shall agree
and be specified in the Certificate of Amalgamation (the time the Amalgamation
becomes effective being hereinafter referred to as the "Effective Time").
SECTION 1.4 Effects of the Amalgamation. The Amalgamation
shall have the effects set forth in Section 109 of the Companies Act.
SECTION 1.5 Memorandum of Association and Bye-laws of the
Amalgamated Company. The memorandum of association of Sub which is attached to
this Agreement as Schedule 1.5 (which Schedule should be read with and forms
part of this Agreement) shall be the memorandum of the Amalgamated Company (as
provided in Section 109 of the Companies Act) until thereafter changed or
amended as provided therein or by applicable law. The bye-laws of Sub, as in
effect immediately prior to the Effective Time, shall be the bye-laws of the
Amalgamated Company until thereafter changed or amended as provided therein or
by applicable law.
SECTION 1.6 Directors and Officers. The directors and officers
(and resident representative, if any) of Sub at the Effective Time shall, from
and after the Effective Time, be the directors and officers (and resident
representative, if any), respectively, of the Amalgamated Company until their
successors shall have been duly elected or appointed or qualified or until their
earlier death, resignation or removal in accordance with the Companies Act and
the bye-laws of the Amalgamated Company. The name and address of each proposed
director and officer of the Amalgamated Company is set forth in Section 1.6 of
the NTL Disclosure Schedule (as defined in Section 3.2).
ARTICLE II
EFFECT OF THE AMALGAMATION ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
CANCELLATION OF Partners COMMON STOCK
SECTION 2.1 Effect on Capital Stock. As of the Effective Time,
by virtue of the Amalgamation and without any action on the part of the holder
of any shares of Partners Common Stock:
(a) Cancellation of Treasury and NTL-Owned Partners Common
Stock. Each share of Partners Common Stock that is owned by NTL, any direct or
indirect wholly owed subsidiary of NTL or any direct or indirect wholly owned
subsidiary of Partners, shall automatically be cancelled and shall cease to
exist, and no consideration shall be delivered in consideration therefor.
(b) Cancellation of Partners Stock. The entirety of the
authorized and unissued capital stock of Partners shall be cancelled. Subject to
Section 2.2(e), each issued and outstanding share of Partners Common Stock
(other than Dissenting Shares and shares to be cancelled in accordance with
Section 2.1(a)) shall be cancelled in consideration for the holder thereof
receiving .3745 (the "Exchange Ratio") validly issued, fully paid and
nonassessable shares of common stock, par value $.01 per share ("NTL Common
Stock"), of NTL from NTL, and NTL shall deliver NTL stock to such holder,
provided that:
(i) If, as of the fifth Business Day prior to the Effective
Time (the "Determination Time"), (x) the Rights of First Refusal
relating to Cable London and Birmingham Cable are of no legal effect
(i.e., such rights have been (A) waived or (B) have not been
exercised in accordance with their terms and, in the opinion of
recognized counsel of the jurisdiction of the governing law of such
Rights of First Refusal, are of no further legal force or effect),
or (y) NTL and Partners shall have entered into an agreement,
arrangement or understanding with Telewest and/or General Cable
directly or indirectly relating to the Rights of First Refusal or
ownership interests in Cable London and Birmingham Cable (either of
the circumstances in (x) or (y) hereinafter referred to as
"Resolved"), the Exchange Ratio will remain in effect.
(ii) If, as of the Determination Time, the Rights of First
Refusal relating to both Cable London and Birmingham Cable have been
effectively exercised other than pursuant to clause(y) of Section
2.1(b)(i) (such circumstances hereinafter referred to as
"Exercised"), each share of Partners Common Stock shall be cancelled
in consideration for the receipt, at NTL's election, of (A).3745
validly issued, fully paid and nonassessable shares of NTL Common
Stock, (B) .3108 validly issued, fully paid and nonassessable shares
of NTL Common Stock and the Equity Interest Proceeds (as defined in
Section 8.3) from the sale of the interest in Birmingham Cable under
the applicable Rights of First Refusal, (C).2584 validly issued,
fully paid and nonassessable shares of NTL Common Stock and the
Equity Interest Proceeds from the sale of the interest in Cable
London under the applicable Rights of First Refusal, or (D) .1947
validly issued, fully paid and nonassessable shares of NTL Common
Stock and the Equity Interest Proceeds from the sale of the
interests in Cable London and Birmingham Cable under the applicable
Rights of First Refusal. Any Equity Interest Proceeds payable
pursuant to this Section 2.1(b) shall be payable, at NTL's election,
in cash or in validly issued, fully paid and nonassessable shares of
NTL Common Stock valued at the greater of (1) $30.00 per share and
(2) the NTL Average Market Price as of the Determination Time.
(iii) If, as of the Determination Time, the Rights of First
Refusal relating to Birmingham Cable have been Exercised and the
Rights of First Refusal relating to Cable London have been Resolved,
each share of Partners Common Stock shall be cancelled in
consideration for the receipt, at NTL's election, of (A) .3745
validly issued, fully paid and nonassessable shares of NTL Common
Stock or (B) .3108 validly issued, fully paid and nonassessable
shares of NTL Common Stock and the Equity Interest Proceeds from the
sale of the interest in Birmingham Cable under the applicable Rights
of First Refusal payable in accordance with the last sentence of
Section 2.1(b)(ii).
(iv) If, as of the Determination Time, the Rights of First
Refusal relating to Cable London have been Exercised and the Rights
of First Refusal relating to Birmingham Cable have been Resolved,
each share of Partners Common Stock shall be cancelled in
consideration for the receipt, at NTL's election, of (A) .3745
validly issued, fully paid and nonassessable shares of NTL Common
Stock or (B) .2584 validly issued, fully paid and nonassesable
shares of NTL Common Stock and the Equity Interest Proceeds from the
sale of the interest in Cable London under the applicable Rights of
First Refusal payable in accordance with the last sentence of
Section 2.1(b)(ii).
(v) If, as of the Determination Time, the Rights of First
Refusal relating to both Cable London and Birmingham Cable remain in
legal effect but have not been Exercised or otherwise Resolved
("Unresolved"), each share of Partners Common Stock shall be
cancelled in consideration for the receipt, at the election of NTL,
of either (x).3745 validly issued, fully paid and nonassessable
shares of NTL Common Stock or (y)(A) .1947 validly issued, fully
paid and nonassessable shares of NTL Common Stock, (B) .1161
(subject to adjustment as set forth in Section 5.20) validly issued,
fully paid and nonassessable shares of NTL Class C Redeemable
Preferred Stock having the terms set forth in Exhibit 2.1 ("NTL
Class C Stock"), and (C) .0637 (subject to adjustment as set forth
in Section 5.20) validly issued, fully paid and nonassessable shares
of NTL Class D Redeemable Preferred Stock having the terms set forth
in Exhibit 2.1 ("NTL Class D Stock").
(vi) If, as of the Determination Time, only the Rights of
First Refusal relating to Cable London are Unresolved, each share of
Partners Common Stock shall be cancelled in consideration for the
receipt of (A)(1) if the Rights of First Refusal relating to
Birmingham Cable have been Resolved, .2584 validly issued, fully
paid and nonassessable shares of NTL Common Stock or (2) if the
Rights of First Refusal relating to Birmingham Cable have been
Exercised, at NTL's election, (x) .2584 validly issued, fully paid
and nonassessable shares of NTL Common Stock or (y) .1947 validly
issued, fully paid and nonassessable shares of NTL Common Stock and
the Equity Interest Proceeds from the sale of the interest in
Birmingham Cable under the applicable Rights of First Refusal
payable in accordance with the last sentence of Section 2.1(b)(ii),
and (B) .1161 (subject to adjustment as set forth in Section 5.20)
validly issued, fully paid and nonassessable shares of NTL Class C
Stock.
(vii) If, as of the Determination Time, only the Rights of
First Refusal relating to Birmingham Cable are Unresolved, each
share of Partners Common Stock shall be cancelled in consideration
for the receipt of (A)(1) if the Rights of First Refusal relating to
Cable London have been Resolved, .3108 validly issued, fully paid
and nonassessable shares of NTL Common Stock or (2) if the Rights of
First Refusal relating to Cable London have been Exercised, at NTL's
election, (x) .3108 validly issued, fully paid and nonassessable
shares of NTL Common Stock or (y) .1947 validly issued, fully paid
and nonassessable shares of NTL Common Stock and the Equity Interest
Proceeds from the sale of the interest in Cable London under the
applicable Rights of First Refusal payable in accordance with the
last sentence of Section 2.1(b)(ii), and (B) .0637 (subject to
adjustment as set forth in Section 5.20) validly issued, fully paid
and nonassessable shares of NTL Class D Stock .
The consideration to be issued to holders of Partners Common
Stock is referred to herein as the "Amalgamation Consideration." As
of the Effective Time, all the Partners Common Stock shall no longer
be outstanding and shall automatically be cancelled and shall cease
to exist, and each holder of a certificate representing any such
shares of Partners Common Stock (other than Dissenting Shares) shall
cease to have any rights with respect thereto, except the right to
receive the Amalgamation Consideration and any cash in lieu of
fractional shares of NTL Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate in
accordance with Section 2.2, without interest.
(c) Conversion of Shares of Sub. Each issued and outstanding
share, par value Pound Sterling.01 per share, of Sub shall be converted into and
become one validly issued, fully paid and nonassessable share of the Amalgamated
Company by virtue of the Amalgamation and without any action on the
part of NTL.
(d) Shares of Dissenting Shareholders. Notwithstanding
anything in this Agreement to the contrary, any issued and outstanding shares of
Partners Common Stock held by a person who did not vote in favor of the
Amalgamation and who complies with all the provisions of Bermuda law concerning
the right of holders of Partners Common Stock to require appraisal of their
shares of Partners Common Stock by the Supreme Court of Bermuda (such
shareholder, a "Dissenting Shareholder", and such shares, "Dissenting Shares")
shall be cancelled at the Effective Time in consideration for the right to
receive such consideration as may be payable to such Dissenting Shareholder upon
completion of the Amalgamation pursuant to the laws of Bermuda. In the event
that a Dissenting Shareholder fails to perfect, effectively withdraws or
otherwise loses any right to appraisal and payment under the Companies Act, such
Dissenting Shareholder shall no longer have any right to appraisal thereunder.
Any such Dissenting Shareholder shall be entitled to elect to receive the
Amalgamation Consideration and any cash in lieu of fractional shares of NTL
Capital Stock. Partners shall give NTL (i) prompt notice of any written demands
for appraisal of Dissenting Shares or withdrawals of such demands received by
Partners and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands. Except as required by Section
106 of the Companies Act, prior to the Effective Time, Partners shall not,
without the prior written consent of NTL, make any payment with respect to, or
settle, offer to settle or otherwise negotiate, any such demands.
SECTION 2.2 Exchange of Certificates. (a) Exchange Agent.
Prior to the Effective Time, NTL shall enter into an agreement with such bank or
trust company as may be designated by NTL and be reasonably satisfactory to
Partners (the "Exchange Agent"), which shall provide that NTL shall deposit with
the Exchange Agent as of the Effective Time, for the benefit of the holders of
Partners Common Stock, for exchange in accordance with this Article II, through
the Exchange Agent, certificates representing NTL Capital Stock (as defined
below) (such shares of NTL Capital Stock, together with any dividends or
distributions with respect thereto with a record date after the Effective Time,
any Excess Shares (as defined in Section 2.2(e)) and any cash (including cash
proceeds from the sale of the Excess Shares) payable in lieu of any fractional
shares of NTL Capital Stock being hereinafter referred to as the "Exchange
Fund") issuable pursuant to Section 2.1 in exchange for outstanding shares of
Partners Common Stock.
(b) Exchange Procedures. Promptly after the Effective Time,
NTL will cause the Exchange Agent to mail to each registered holder of a
certificate or certificates other than Dissenting Shareholders, if any, which
immediately prior to the Effective Time represented outstanding shares of
Partners Common Stock (the "Certificates") whose shares were cancelled in
consideration of the receipt of the Amalgamation Consideration pursuant to
Section 2.1, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Partners and NTL may reasonably
specify) and (ii) instructions for use in surrendering the Certificates in
exchange for the Amalgamation Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive in
consideration therefor a certificate representing that number of whole shares of
NTL Common Stock, NTL Class C Stock or NTL Class D Stock (collectively, "NTL
Capital Stock") which such holder has the right to receive pursuant to the
provisions of this Article II, certain dividends or other distributions in
accordance with Section 2.2(c) and cash in lieu of any fractional share of NTL
Capital Stock in accordance with Section 2.2(e), and the Certificate so
surrendered shall forthwith be cancelled. In the event of a surrender of a
Certificate representing shares of Partners Common Stock which are not
registered in the transfer records of Partners under the name of the person
surrendering such Certificate, a certificate representing the proper number of
shares of NTL Capital Stock may be issued to a person other than the person in
whose name the Certificate so surrendered is registered if such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and the
person requesting such issuance shall pay any transfer or other taxes required
by reason of the issuance of shares of NTL Capital Stock to a person other than
the registered holder of such Certificate or establish to the satisfaction of
NTL that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Amalgamation Consideration which the holder thereof has the right
to receive in respect of such Certificate pursuant to the provisions of this
Article II, certain dividends or other distributions in accordance with Section
2.2(c) and cash in lieu of any fractional share of NTL Capital Stock in
accordance with Section 2.2(e). No interest shall be paid or will accrue on any
cash payable to holders of Certificates pursuant to the provisions of this
Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to NTL Capital Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of NTL Common Stock represented thereby,
and, in the case of Certificates representing Partners Common Stock, no cash
payment in lieu of fractional shares shall be paid to any such holder pursuant
to Section 2.2(e), and all such dividends, other distributions and cash in lieu
of fractional shares of NTL Capital Stock shall be paid by NTL to the Exchange
Agent and shall be included in the Exchange Fund, in each case until the
surrender of such Certificate in accordance with this Article II. Subject to the
effect of applicable escheat or similar laws, following surrender of any such
Certificate there shall be paid to the holder of the certificate representing
whole shares of NTL Capital Stock issued in consideration therefor, without
interest, (i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of NTL Capital Stock and, in the case of
Certificates representing Partners Common Stock, the amount of any cash payable
in lieu of a fractional share of NTL Capital Stock to which such holder is
entitled pursuant to Section 2.2(e) and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time and with a payment date subsequent to such surrender payable with
respect to such whole shares of NTL Capital Stock.
(d) No Further Ownership Rights in Partners Common Stock. All
shares of NTL Capital Stock issued upon the surrender of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to this Article II) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of Partners Common Stock,
theretofore represented by such Certificates, subject, however, to the
Amalgamated Company's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared or made by Partners on such shares of Partners Common Stock which
remain unpaid at the Effective Time, and there shall be no further registration
of transfers on the stock transfer books of the Amalgamated Company of the
shares of Partners Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Amalgamated Company or the Exchange Agent for any reason, they shall be
cancelled in accordance with this Article II, except as otherwise provided by
law.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of NTL Capital Stock shall be issued upon the
surrender of Certificates, no dividend or distribution of NTL shall relate to
such fractional share interests and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a stockholder of NTL.
(ii) As promptly as practicable following the Effective
Time, the Exchange Agent shall determine the excess of (A) the
number of whole shares of NTL Capital Stock delivered to the
Exchange Agent by NTL pursuant to Section 2.2(a) over (B) the
aggregate number of whole shares of NTL Capital Stock to be
distributed to former holders of Partners Common Stock pursuant to
Section 2.2(b) (such excess being herein called the "Excess
Shares"). Following the Effective Time, the Exchange Agent shall,
on behalf of the former stockholders of Partners, sell the Excess
Shares at then-prevailing prices on the NASDAQ Stock Market
("NASDAQ") or otherwise all in the manner provided in Section
2.2(e)(iii).
(iii) The sale of the Excess Shares by the Exchange
Agent shall be executed on the NASDAQ through one or more member
firms of the NASDAQ and shall be executed in round lots to the
extent practicable. The Exchange Agent shall use reasonable efforts
to complete the sale of the Excess Shares as promptly following the
Effective Time as, in the Exchange Agent's sole judgment, is
practicable consistent with obtaining the best execution of such
sales in light of prevailing market conditions. Until the net
proceeds of such sale or sales have been distributed to the holders
of Certificates formerly representing Partners Common Stock, the
Exchange Agent shall hold such proceeds in trust for such holders
(the "Common Shares Trust"). The Amalgamated Company shall pay all
commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation of the Exchange Agent
incurred in connection with such sale of the Excess Shares. The
Exchange Agent shall determine the portion of the Common Shares
Trust to which each former holder of Partners Common Stock is
entitled, if any, by multiplying the amount of the aggregate net
proceeds comprising the Common Shares Trust by a fraction, the
numerator of which is the amount of the fractional share interest to
which such former holder of Partners Common Stock is entitled (after
taking into account all shares of Partners Common Stock held at the
Effective Time by such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all former
holders of Partners Common Stock are entitled.
(iv) Notwithstanding the provisions of Section
2.2(e)(ii) and (iii), the Amalgamated Company may, at the option of
NTL exercised prior to the Effective Time, in lieu of the issuance
and sale of Excess Shares and the making of the payments hereinabove
contemplated, pay each former holder of Partners Common Stock an
amount in cash equal to the product obtained by multiplying (A) the
fractional share interest to which such former holder (after taking
into account all shares of Partners Common Stock held at the
Effective Time by such holder) would otherwise be entitled by (B)
the NTL Average Stock Price determined as of the fifth trading day
prior to the Closing Date, and, in such case, all references herein
to the cash proceeds of the sale of the Excess Shares and similar
references shall be deemed to mean and refer to the payments
calculated as set forth in this Section 2.2(e)(iv).
(v) As soon as practicable after the determination of
the amount of cash, if any, to be paid to holders of Certificates
formerly representing Partners Common Stock with respect to any
fractional share interests, the Exchange Agent shall make available
such amounts to such holders of Certificates formerly representing
Partners Common Stock subject to and in accordance with the terms of
Section 2.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to NTL, upon demand, and any
holders of the Certificates who have not theretofore complied with this Article
II shall thereafter look only to NTL for payment of their claim for Amalgamation
Consideration, any dividends or distributions with respect to NTL Capital Stock
and any cash in lieu of fractional shares of NTL Capital Stock.
(g) No Liability. None of NTL, Sub, Partners, the Amalgamated
Company or the Exchange Agent shall be liable to any person in respect of any
shares of NTL Capital Stock, any dividends or distributions with respect
thereto, any cash in lieu of fractional shares of NTL Capital Stock or any cash
from the Exchange Fund, in each case delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by NTL, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to NTL.
(i) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Amalgamated Company, the posting by such person of a bond in
such reasonable amount as the Amalgamated Company may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Amalgamation Consideration and, if applicable, any unpaid
dividends and distributions on shares of NTL Capital Stock deliverable in
respect thereof and any cash in lieu of fractional shares, in each case pursuant
to this Agreement.
SECTION 2.3 Certain Adjustments. If between the date hereof
and the Effective Time, the outstanding shares of Partners Common Stock or of
NTL Common Stock shall be changed into a different number of shares, including
by reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or any dividend payable in stock or other securities shall
be declared thereon with a record date within such period, the Exchange Ratio
or, in the cases of clause (b)(i), (ii), (iii), (iv) or (v) of Section 2.1, the
number of shares of NTL Common Stock, NTL Class C Stock and NTL Class D Stock
issuable, shall be adjusted accordingly to provide to the holders of Partners
Common Stock the same economic effect as contemplated by this Agreement prior to
such change.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Partners. Except
as disclosed in the Partners SEC Documents (as defined in Section 3.1(g)) or as
set forth on the Disclosure Schedule delivered by Partners to NTL in connection
with the execution of this Agreement (the "Partners Disclosure Schedule") and
making reference to the particular subsection of this Agreement to which
exception is being taken, Partners represents and warrants to NTL as follows:
(a) Organization, Standing and Corporate Power. (i) Each of
Partners and its subsidiaries (as defined in Section 8.3) is a
corporation or other legal entity duly organized, validly existing
and in good standing (with respect to jurisdictions which recognize
such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being
conducted, except, as to subsidiaries, for those jurisdictions where
the failure to be so organized, existing or in good standing
individually or in the aggregate would not have a material adverse
effect (as defined in Section 8.3) on Partners. Each of Partners and
its subsidiaries is duly qualified or licensed to do business and is
in good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its business or
the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a material
adverse effect on Partners.
(ii) Partners has delivered to NTL prior to the
execution of this Agreement complete and correct copies of its
memorandum of association and bye-laws, as amended to date.
(iii) In all material respects, the minute books of
Partners contain accurate records of all meetings and accurately
reflect all other actions taken by the stockholders, the Board of
Directors and all committees of the Board of Directors of Partners
since January 1, 1996 and prior to September 25, 1997.
(b) Subsidiaries and Affiliates. Section 3.1(b) of the
Partners Disclosure Schedule sets forth all the subsidiaries of Partners which
as of the date of this Agreement are Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the SEC) and each Significant Affiliate (as
defined herein) and the ownership interest of Partners in such entity. Except as
set forth in Section 3.1(b) of the Partners Disclosure Schedule, all such
outstanding shares of capital stock of, or other equity interests in, each such
Significant Subsidiary or Significant Affiliate have been validly issued and are
fully paid and nonassessable and are owned directly or indirectly by Partners,
free and clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens") and free of
any other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests). At the
Effective Time, the Amalgamated Company will have legal and beneficial title of
Partners' ownership interests of the Significant Affiliates, subject to (i) the
Rights of First Refusal and (ii) Liens existing as of the date hereof in respect
of Debt Agreements (as defined in Section 3.1(o)).
(c) Capital Structure. The authorized capital stock of
Partners consists of 50,000,000 shares of Class A Common, 50,000,000 shares of
Class B Common and 10,000,000 shares of preferred stock, par value Pound
Sterling.01 per share. At the close of business on January 30, 1998: (i)
37,231,997 shares of Class A Common were issued and outstanding; (ii) 12,872,605
shares of Class B Common were issued and outstanding; (iii) no shares of
Partners Preferred Stock were issued and outstanding; and (iv) 20,250 shares of
Partners Common Stock were reserved for issuance pursuant to the 1995 Stock
Option Plan, complete and correct copies of which have been delivered to NTL
(such plan, the "Partners Stock Plan"). Section 3.1(c) of the Partners
Disclosure Schedule sets forth a complete and correct list, as of January 30,
1998, of the number of shares of Partners Common Stock subject to employee stock
options or other rights to purchase or receive Partners Common Stock granted
under the Partners Stock Plan (collectively, "Partners Employee Stock Options"),
the dates of grant and exercise prices thereof. All outstanding shares of
capital stock of Partners are, and all shares which may be issued prior to the
Effective Time will be, when issued, duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. Except as set forth in
this Section 3.1(c) and except for changes since January 30, 1998 resulting from
the issuance of shares of Partners Common Stock pursuant to the Partners
Employee Stock Options or as permitted by Section 4.1(a)(i)(y) and 4.1(a)(ii),
(x) there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of Partners, (B) any securities of
Partners or any Partners subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of Partners, (C)
any warrants, calls, options or other rights to acquire from Partners or any
Partners subsidiary, and any obligation of Partners or any Partners subsidiary
to issue, any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of Partners,
and (y) there are no outstanding obligations of Partners or any Partners
subsidiary to repurchase, redeem or otherwise acquire any such securities or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities. Except as set forth in Section 3.1(c) of the Partners Disclosure
Schedule, there are no outstanding (A) securities of Partners or any Partners
subsidiary convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any Partners
subsidiary, (B) warrants, calls, options or other rights to acquire from
Partners or any Partners subsidiary, and any obligation of Partners or any
Partners subsidiary to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any Partners subsidiary or Significant Affiliate or (C) obligations of Partners
or any Partners subsidiary to repurchase, redeem or otherwise acquire any such
outstanding securities of Partners subsidiaries or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. Except as set forth
in Section 3.1(c) of the Partners Disclosure Schedule, neither Partners nor any
Partners subsidiary is a party to any agreement restricting the transfer of,
relating to the voting of, requiring registration of, or granting any preemptive
or, except as provided by the terms of the Partners Employee Stock Options,
antidilutive rights with respect to, any securities of the type referred to in
the two preceding sentences. Other than the Partners subsidiaries and the
Significant Affiliates, Partners does not directly or indirectly beneficially
own any securities or other beneficial ownership interests in any other entity
except for non-controlling investments made in the ordinary course of business
in entities which are not individually or in the aggregate material to Partners
and its subsidiaries as a whole.
(d) Authority; Noncontravention. Partners has all requisite
corporate power and authority to enter into this Agreement and, subject, in the
case of the Amalgamation, to the Partners Stockholder Approval (as defined in
Section 3.1(k)) to consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement by Partners and the consummation by
Partners of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Partners, subject,
in the case of the Amalgamation, to the Partners Stockholder Approval. This
Agreement has been duly executed and delivered by Partners and, assuming the due
authorization, execution and delivery by NTL and Sub, constitutes the legal,
valid and binding obligation of Partners, enforceable against Partners in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy and similar laws or by general principles of equity
(whether considered in a proceeding in equity or at law). Except as set forth in
Section 3.1(d) of the Partners Disclosure Schedule, the execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon any of the properties or assets of
Partners or any of its subsidiaries under, (i) the memorandum of association or
bye-laws of Partners or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to Partners or any of its
subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Partners or any of its subsidiaries or their respective properties
or assets, other than, in the case of clauses (ii) and (iii), any such
conflicts, violations, defaults, rights, losses or Liens that individually or in
the aggregate would not (x) have a material adverse effect on Partners or (y)
reasonably be expected to impair in any material way the ability of Partners to
perform its obligations under this Agreement. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any federal, state, local or foreign government, any court,
administrative, regulatory or other governmental agency, commission or authority
or any nongovernmental self-regulatory agency, commission or authority (a
"Governmental Entity") is required by or with respect to Partners or any of its
subsidiaries in connection with the execution and delivery of this Agreement by
Partners or the consummation by Partners of the transactions contemplated by
this Agreement, except for (1) the filing with the SEC of (A) a proxy statement
relating to the Partners Stockholders Meeting (as defined in Section 5.1(b))
(such proxy statement, together with the proxy statement relating to the NTL
Stockholders Meeting (as defined in Section 5.1(c)), in each case as amended or
supplemented from time to time, the "Joint Proxy Statement"), and (B) such
reports under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and the transactions
contemplated by this Agreement; (2) the consent of the Minister in connection
with the Amalgamation and the registration of the Amalgamated Company with the
Registrar of Companies in Bermuda in accordance with the Companies Act, (3) such
filings with Governmental Entities to satisfy the applicable requirements of
state securities or "blue sky" laws; (4) receipt of the Required British
Approvals (as defined); and (5) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or in
the aggregate would not (x) have a material adverse effect on Partners or (y)
reasonably be expected to impair in any material way the ability of Partners to
perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities; Financial
Statements. (i) Partners has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with the SEC
since September 20, 1994 (the "Partners SEC Documents"). As of their respective
dates, the Partners SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such Partners SEC Documents, and none
of the Partners SEC Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii) The financial statements of Partners included in the
Partners SEC Documents comply as to form, as of their respective dates of filing
with the SEC, in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present in all material respects the consolidated financial position
of Partners and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except (A) as reflected in such financial statements or in the
notes thereto or (B) for liabilities incurred in connection with this Agreement
or the transactions contemplated hereby, neither Partners nor any of its
subsidiaries has any liabilities or obligations of any nature which,
individually or in the aggregate, would have a material adverse effect on
Partners.
(iii) Section 3.1(e) of the Partners Disclosure Schedule (the
"Preliminary Financial Statements") accurately sets forth as of the date hereof
the most recently available version of the unaudited balance sheet and financial
statements of Partners, its subsidiaries and Significant Affiliates
as of and for the year ended December 31, 1997.
(f) Information Supplied. None of the information supplied or
to be supplied in writing by Partners specifically for inclusion or
incorporation by reference in (i) the registration statement on Form S-4 to be
filed with the SEC by NTL in connection with the issuance of NTL Common Stock in
the Amalgamation (the "Form S-4") will, at the time the Form S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) the Joint Proxy
Statement will, at the date it is first mailed to Partners's stockholders or at
the time of the Partners Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Joint Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Partners with respect to statements made
or incorporated by reference therein based on information supplied by NTL
specifically for inclusion or incorporation by reference in the Joint Proxy
Statement.
(g) Absence of Certain Changes or Events. Except (x) as
disclosed in Section 3.1(g) of the Partners Disclosure Schedule, (y) for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby or (z) as permitted by Section 4.1(a), since December 31,
1996 Partners and its subsidiaries have conducted their business only in the
ordinary course or as disclosed in any Partners SEC Document filed since such
date and prior to the date hereof, and there has not been (i) any material
adverse change in Partners, (ii) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or property) with
respect to any of Partners's capital stock, (iii) any split, combination or
reclassification of any of Partners's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of Partners's capital stock, except for issuances
of Partners Common Stock upon the exercise of Partners Employee Stock Options
awarded prior to the date hereof in accordance with their present terms, (iv)(A)
any granting by Partners or any of its subsidiaries to any current or former
director, executive officer or other key employee of Partners or its
subsidiaries of any increase in compensation, bonus or other benefits, except
for normal increases as a result of promotions, normal increases of base pay in
the ordinary course of business or as was required under any employment
agreements in effect as of December 31, 1996, (B) any granting by Partners or
any of its subsidiaries to any such current or former director, executive
officer or key employee of any increase in severance or termination pay, or (C)
any entry by Partners or any of its subsidiaries into, or any amendment of, any
employment, deferred compensation, consulting, severance, termination or
indemnification agreement with any such current or former director, executive
officer or key employee, (v) except insofar as may have been required by a
change in GAAP, any change in accounting methods, principles or practices by
Partners materially affecting its assets, liabilities or business, (vi) any tax
election that individually or in the aggregate would have a material adverse
effect on Partners or any of its tax attributes or any settlement or compromise
of any material income tax liability, or (vii) any action taken by Partners or
any of the Partners subsidiaries during the period from December 31, 1996
through the date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time would constitute a breach of
Section 4.1(a).
(h) Compliance with Applicable Laws; Litigation. (i)
Partners, its subsidiaries, Significant Affiliates and employees
hold all permits, licenses, variances, exemptions, orders,
registrations and approvals of all Governmental Entities which are
required for the operation of the respective businesses of Partners,
its subsidiaries and its Significant Affiliates (the "Partners
Permits"), except where the failure to have any such Partners
Permits individually or in the aggregate would not have a material
adverse effect on Partners. Partners and its subsidiaries and its
Significant Affiliates are in compliance with the terms of the
Partners Permits and all applicable statutes, laws, ordinances,
rules and regulations, except where the failure so to comply
individually or in the aggregate, would not have a material adverse
effect on Partners. No action, demand, requirement or investigation
by any Governmental Entity and no suit, action or proceeding by any
person, in each case with respect to Partners or any of its
subsidiaries or Significant Affiliates or any of their respective
properties is pending or, to the knowledge (as defined in Section
8.3) of Partners, threatened, other than, in each case, those the
outcome of which individually or in the aggregate would not (A) have
a material adverse effect on Partners or (B) reasonably be expected
to impair in any material way the ability of Partners to perform its
obligations under this Agreement or prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement.
(ii) None of Partners, any Partners subsidiary, or any
Significant Affiliate is subject to any outstanding order,
injunction or decree which has had or, insofar as can be reasonably
foreseen, individually or in the aggregate will have a material
adverse effect on Partners.
(i) Incentive Compensation/Benefit Plans. Partners has
delivered to NTL true and complete copies of the documents listed on Schedule
3.1(i) of the Partners Disclosure Schedule.
(i) With respect to any employee benefit plans and
arrangements of Partners and its subsidiaries (the "Partners Benefit
Plans"), Partners, its subsidiaries and any Partners Benefit Plans
have been operated, and are, in compliance with the applicable
provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), the Code and all other applicable laws.
(ii) No Partners Benefit Plan is subject to Title IV of
ERISA or is a "multiemployer plan" within the meaning of Section
3(37) of ERISA. Neither Partners nor any of its subsidiaries has
incurred any unsatisfied liability under Title IV of ERISA. None of
Partners nor any of its subsidiaries has any contingent liability
under Section 4204 of ERISA.
(iii) None of Comcast Teesside Limited ("Comcast
Teesside"), Comcast Darlington Limited ("Comcast Darlington") or
Cambridge Cable Limited ("Cambridge Cable") has any outstanding
liability to pay compensation for loss of office or employment to
any present or former employee or any payment under the provisions
of the Employment Rights Act 1996 which would have a material
adverse effect on Partners.
(iv) There are no terms of employment for any employee
of Comcast Teesside, Comcast Darlington or Cambridge Cable which
provide that a change in control of any Comcast Teesside, Comcast
Darlington or Cambridge Cable (however change of control may be
defined if at all) shall entitle the employee to treat the change of
control as amounting to a breach of contract or entitling him to any
payment or benefit whatsoever or entitling him to treat himself as
redundant or otherwise dismissed or released from any obligation.
(v) None of Comcast Teesside, Comcast Darlington or
Cambridge Cable is a party to any collective agreement, dismissal
procedures agreement, union membership agreement, or trade dispute
(within the meaning of the Trade Union and Labour Relations
(Consolidation) Act 1992) which would reasonably be expected to have
a material adverse effect on Partners.
(vi) "Schemes" means all and each of the pension schemes
identified in the Section 3.1(i) of the Partners Disclosure
Schedule, and "Scheme Documents" means the documents relating to the
Schemes identified in Section 3.1(i) of the Partners Disclosure
Schedule, which documents comprise all the material documents
governing the Schemes. Except pursuant to the Schemes, Comcast
Teesside, Comcast Darlington and Cambridge Cable have not paid,
provided or contributed towards and are not under any obligation
(whether or not legally enforceable) to pay, provide or contribute
towards and are not under any obligation (whether or not legally
enforceable) to pay, provide or contribute towards any
retirement/death/disability benefit for or in respect of any present
or past employee (or any spouse, child or dependant of any of them)
of Comcast Teesside, Comcast Darlington and Cambridge Cable which
would reasonably be expected to have a material adverse effect on
Partners. The Schemes are approved by the Board of the Inland
Revenue as an exempt approved Scheme (within the meaning of Section
592, Income Taxes and Corporation Act 1988).
(j) Taxes. (i) Each of Partners and its subsidiaries has
filed all material tax returns and reports required to be filed by
it and all such returns and reports are complete and correct in all
material respects, or requests for extensions to file such returns
or reports have been timely filed, granted and have not expired,
except to the extent that such failures to file, to be complete or
correct or to have extensions granted that remain in effect
individually or in the aggregate would not have a material adverse
effect on Partners. Partners and each of its subsidiaries has paid
(or Partners has paid on its behalf) all taxes (as defined herein)
shown as due on such returns, and the most recent financial
statements contained in the Partners Filed SEC Documents reflect an
adequate reserve in accordance with GAAP for all taxes payable by
Partners and its subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed,
asserted or assessed against Partners or any of its subsidiaries
that are not adequately reserved for, except for deficiencies that
individually or in the aggregate would not have a material adverse
effect on Partners. Partners has never been included as a member of
any United States consolidated tax group.
(iii) As used in this Agreement, "taxes" shall include
all (x) national, state, provincial or local income, property,
sales, excise and other taxes or similar governmental charges,
including any interest, penalties or additions with respect thereto,
(y) liability for the payment of any amounts of the type described
in (x) as a result of being a member of an affiliated, consolidated,
combined or unitary group, and (z) liability for the payment of any
amounts as a result of being party to any tax sharing agreement or
as a result of any express or implied obligation to indemnify any
other person with respect to the payment of any amounts of the type
described in clause (x) or (y).
(k) Voting Requirements. The affirmative vote at the Partners
Stockholders Meeting (the "Partners Stockholder Approval") of the holders of a
majority of the total votes able to be cast at general meetings of Partners to
adopt this Agreement is the only vote of the holders of any class or series of
Partners's capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby, including the Amalgamation.
(l) Brokers. No broker, investment banker, financial advisor
or other person other than HSBC Investment Bank plc, the fees and expenses of
which will be paid by Partners, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Partners.
(m) Opinion of Financial Advisor. Partners has received the
opinion of HSBC Investment Bank plc dated the date of this Agreement, to the
effect that, as of such date, the Amalgamation Consideration is fair from a
financial point of view to holders of shares of Partners Class A Common Stock
(other than NTL and its affiliates), a signed copy of which opinion has been
delivered to NTL, it being understood and agreed by NTL that such opinion is for
the benefit of the Board of Directors of Partners and may not be relied upon by
NTL, its affiliates or any of their respective stockholders.
(n) Intellectual Property. Partners and its subsidiaries own
or have a valid license to use all trademarks, service marks, trade names,
patents and copyrights (including any registrations or applications for
registration of any of the foregoing) (collectively, the "Partners Intellectual
Property") necessary to carry on its business substantially as currently
conducted, except for such Partners Intellectual Property the failure of which
to own or validly license individually or in the aggregate would not have a
material adverse effect on Partners. Neither Partners nor any such subsidiary
has received any notice of infringement of or conflict with, and, to Partners's
knowledge, there are no infringements of or conflicts (i) with the rights of
others with respect to the use of, or (ii) by others with respect to, any
Partners Intellectual Property that individually or in the aggregate, in either
such case, would have a material adverse effect on Partners.
(o) Certain Contracts. Except as set forth in Section 3.1(o)
of the Partners Disclosure Schedule, (A) neither Partners nor any of its
subsidiaries is a party to or bound by (i) any "material contract" (as such term
is defined in Item 601(b)(10) of Regulation S-K of the SEC), (ii) any
non-competition agreement or any other agreement or obligation which purports to
limit in any material respect the manner in which, or the localities in which,
all or any material portion of the business of Partners and its subsidiaries
(including, for purposes of this Section 3.1(s), NTL and its subsidiaries,
assuming the Amalgamation has taken place), taken as a whole, is or would be
conducted, (iii) any agreement between Partners or any Partners subsidiary, on
the one hand, and any Significant Affiliate, on the other, or (iv) any contract
or other agreement which would prohibit or materially delay the consummation of
the Amalgamation or any of the transactions contemplated by this Agreement and
(B) none of Partners, any subsidiary of Partners or any Significant Affiliate is
subject to any agreements related to indebtedness for borrowed money ("Debt
Agreements") (all contracts of the type described in clauses (A)(i), (ii) and
(iii) and all Debt Agreements being referred to herein as "Partners Material
Contracts"). Each Partners Material Contract is valid and binding on Partners
(or, to the extent a Partners subsidiary or Significant Affiliate is a party,
such entity) and is in full force and effect, and Partners and each Partners
subsidiary and Significant Affiliate have in all material respects performed all
obligations required to be performed by them to date under each Partners
Material Contract, except where such noncompliance, individually or in the
aggregate, would not have a material adverse effect on Partners and provided
that (except as to Debt Agreements) any representation in this sentence with
respect to a Significant Affiliate is qualified to the knowledge of Partners.
Neither Partners nor any Partners subsidiary knows of, or has received notice
of, any violation or default under (nor, to the knowledge of Partners, does
there exist any condition which with the passage of time or the giving of notice
or both would result in such a violation or default under) any Partners Material
Contract.
SECTION 3.2 Representations and Warranties of NTL. Except as
disclosed in the NTL SEC Documents (as defined in Section 3.2(e)) or as set
forth on the Disclosure Schedule delivered by NTL to Partners prior to the
execution of this Agreement (the "NTL Disclosure Schedule") and making reference
to the particular subsection of this Agreement to which exception is being
taken, NTL represents and warrants to Partners as follows:
(a) Organization, Standing and Corporate Power. (i) Each of
NTL and its subsidiaries (including Sub) is a corporation or other
legal entity duly organized, validly existing and in good standing
(with respect to jurisdictions which recognize such concept) under
the laws of the jurisdiction in which it is organized and has the
requisite corporate or other power, as the case may be, and
authority to carry on its business as now being conducted, except,
as to subsidiaries, for those jurisdictions where the failure to be
so organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect on NTL. Each of
NTL and its subsidiaries is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions
which recognize such concept) in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except
for those jurisdictions where the failure to be so qualified or
licensed or to be in good standing individually or in the aggregate
would not have a material adverse effect on NTL.
(ii) NTL has delivered to Partners prior to the
execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws, as amended to date.
(b) Subsidiaries. Exhibit 21 to NTL's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 includes all the subsidiaries
of NTL which as of the date of this Agreement are Significant Subsidiaries. All
the outstanding shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by NTL, free and clear of all
Liens and free of any other restriction (including any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other ownership
interests).
(c) Capital Structure. The authorized capital stock of NTL
consists of 100,000,000 shares of NTL Common Stock and 2,500,000 shares of
preferred stock, par value $.01 per share, of NTL ("NTL Preferred Stock"). At
the close of business on January 28, 1998: (i) 32,246,544 shares of NTL Common
Stock were issued and outstanding; (ii) no shares of NTL Common Stock were held
by NTL in its treasury; (iii) 780 shares of Series A Non-Voting Convertible
Preferred Stock ("NTL Series A Preferred") were issued and outstanding; (iv)
110,187.358 shares of 13% Senior Redeemable Exchangeable Preferred Stock were
issued and outstanding (the "NTL 13% Preferred"), (v) 1,000,000 shares of Series
A Junior Participating Preferred Stock were reserved for issuance pursuant to a
Rights Agreement, dated as of October 13, 1993, between NTL and Continental
Stock Transfer & Trust Company (the "Rights Agreement"); (vi) 16,167,642 shares
of NTL Common Stock were reserved for issuance pursuant to the conversion of the
NTL Series A Preferred, the 7 1/4% Convertible Subordinated Debentures due 2005
("2005 Debentures") and the 7% Convertible Subordinated Notes due 2008 ("2008
Notes") and 976,426 shares of NTL Common Stock were reserved for issuance upon
the exercise of certain warrants (the NTL Series A Preferred, 2005 Debentures,
2008 Notes and such warrants, the "NTL Convertible Securities"); and (vii)
8,121,836 shares of NTL Common Stock were reserved for issuance pursuant to
various NTL employee and director stock option plans (such plans, collectively,
the "NTL Stock Plans"). Section 3.2(c) of the NTL Disclosure Schedule sets forth
a complete and correct list, as of January 30, 1998, of the number of shares of
NTL Common Stock subject to employee stock options or other rights to purchase
or receive NTL Common Stock granted under the NTL Stock Plans (collectively,
"NTL Employee Stock Options"), the dates of grant and exercise prices thereof.
All outstanding shares of capital stock of NTL are, and all shares which may be
issued pursuant to this Agreement or otherwise will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth in this Section 3.2(c) and except for
changes since January 28, 1998 resulting from the issuance of shares of NTL
Common Stock pursuant to the conversion or exercise of NTL Convertible
Securities or the exercise of NTL Employee Stock Options, as of the date hereof,
(x) there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of NTL, (B) any securities of NTL or
any NTL subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of NTL, (C) any warrants, calls, options or
other rights to acquire from NTL or any NTL subsidiary, and any obligation of
NTL or any NTL subsidiary to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of NTL, and (y) there are no outstanding obligations of NTL or
any NTL subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. As of the date hereof, there are no outstanding (A)
securities of NTL or any NTL subsidiary convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or ownership
interests in any NTL subsidiary, (B) warrants, calls, options or other rights to
acquire from NTL or any NTL subsidiary, and any obligation of NTL or any NTL
subsidiary to issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable or exercisable
for any capital stock, voting securities or ownership interests in, any NTL
subsidiary or (C) obligations of NTL or any NTL subsidiary to repurchase, redeem
or otherwise acquire any such outstanding securities of NTL subsidiaries or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Authority; Noncontravention. NTL and Sub each has all
requisite corporate power and authority to enter into this Agreement and,
subject to the NTL Stockholder Approval (as defined in Section 3.2(l)), to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by each of NTL and Sub and the consummation by each
of NTL and Sub of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of NTL and Sub,
subject, in the case of the Amalgamation and the issuance of NTL Common Stock in
connection with the Amalgamation, to the NTL Stockholder Approval. This
Agreement has been duly executed and delivered by each of NTL and Sub and,
assuming the due authorization, execution and delivery by Partners, constitutes
the legal, valid and binding obligations of each of NTL and Sub, enforceable
against each of NTL and Sub in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy and similar laws or by
general principles of equity (whether considered in a proceeding in equity or at
law). Except as set forth in Section 3.2(d) of the NTL Disclosure Schedule, the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a benefit under, or result in the creation of any Lien upon any of the
properties or assets of NTL or any of its subsidiaries (including Sub) under,
(i) the certificate of incorporation or by-laws of NTL or the comparable
organizational documents of any of its subsidiaries (including Sub), (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to NTL or any of its subsidiaries (including Sub) or
their respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to NTL or
any of its subsidiaries (including Sub) or their respective properties or
assets, other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate would not (x) have a material adverse effect on NTL or (y) reasonably
be expected to impair the ability of NTL to perform its obligations under this
Agreement. No consent, approval, order or authorization of, action by, or in
respect of, or registration, declaration or filing with, any Governmental Entity
is required by or with respect to NTL or any of its subsidiaries (including Sub)
in connection with the execution and delivery of this Agreement by each of NTL
or Sub or the consummation by NTL and Sub of the transactions contemplated by
this Agreement, except for (1) the filing with the SEC of (A) the Joint Proxy
Statement relating to the NTL Stockholders Meeting, (B) the Form S-4 and (C)
such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated by this Agreement; (2) the consent of the Minister in connection
with the Amalgamation and the registration of the Amalgamated Company with the
Registrar of Companies in Bermuda in accordance with the Companies Act; (3) such
filings with Governmental Entities to satisfy the applicable requirements of
state securities or "blue sky" laws; (4) such filings with and approvals of the
NASDAQ to permit the shares of NTL Capital Stock that are to be issued in the
Amalgamation and under the Partners Stock Plans to be approved for quotation on
the NASDAQ; (5) the receipt of the Required British Approvals; and (6) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on NTL or (y) reasonably be expected to impair the ability of NTL to
perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities. NTL has filed all
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) with the SEC since January 1, 1996 (the "NTL SEC
Documents"). As of their respective dates, the NTL SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such NTL SEC Documents, and none of the NTL SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of NTL included in the
NTL SEC Documents comply as to form, as of their respective dates of filing with
the SEC, in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of NTL and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except (i) as
reflected in such financial statements or in the notes thereto or (ii) for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, neither NTL nor any of its subsidiaries has any liabilities
or obligations of any nature which, individually or in the aggregate, would have
a material adverse effect on NTL.
(f) Information Supplied. None of the information supplied or
to be supplied in writing by NTL specifically for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Joint Proxy Statement
will, at the date it is first mailed to NTL's stockholders or at the time of the
NTL Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Form S-4 and the Joint Proxy Statement will
comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by NTL with respect to
statements made or incorporated by reference therein based on information
supplied by Partners specifically for inclusion or incorporation by reference in
the Form S-4 or the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, and except as permitted by Section 4.1(b), since December
31, 1996, NTL and its subsidiaries have conducted their business only in the
ordinary course or as disclosed in any NTL SEC Document filed since such date
and prior to the date hereof, and there has not been (i) any material adverse
change in NTL, (ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any of
NTL's capital stock, (iii) any split, combination or reclassification of any of
NTL's capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares of
NTL's capital stock, except for issuances of NTL Common Stock upon conversion or
exercise of NTL Convertible Securities or exercise of NTL Employee Stock
Options, in each case, awarded prior to the date hereof in accordance with their
present terms or issued pursuant to Section 4.1(b), (iv) except as required by a
change in GAAP, any change in accounting methods, principles or practices by NTL
materially affecting its assets, liabilities or business, (v) any tax election
that individually or in the aggregate would have a material adverse effect on
NTL or any of its tax attributes or any settlement or compromise of any material
income tax liability or (vi) any action taken by NTL or any of the NTL
subsidiaries during the period from December 31, 1996 through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time would constitute a breach of Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation. (i) NTL, its
subsidiaries and employees hold all permits, licenses, variances,
exemptions, orders, registrations and approvals of all Governmental
Entities which are required for the operation of the businesses of
NTL and its subsidiaries (the "NTL Permits"), except where the
failure to have any such NTL Permits individually or in the
aggregate would not have a material adverse effect on NTL. NTL and
its subsidiaries are in compliance with the terms of the NTL Permits
and all applicable statutes, laws, ordinances, rules and
regulations, except where the failure so to comply individually or
in the aggregate would not have a material adverse effect on NTL. As
of the date of this Agreement, no action, demand, requirement or
investigation by any Governmental Entity and no suit, action or
proceeding by any person, in each case with respect to NTL or any of
its subsidiaries or any of their respective properties, is pending
or, to the knowledge of NTL, threatened, other than, in each case,
those the outcome of which individually or in the aggregate would
not (A) have a material adverse effect on NTL or (B) reasonably be
expected to impair in any material way the ability of NTL to perform
its obligations under this Agreement or prevent or materially delay
the consummation of any of the transactions contemplated by this
Agreement.
(ii) Neither NTL nor any NTL subsidiary is subject to
any outstanding order, injunction or decree which has had or,
insofar as can be reasonably foreseen, individually or in the
aggregate will have a material adverse effect on NTL.
(i) Absence of Changes in Benefit Plans. Since December 31,
1996, there has not been any adoption or amendment in any material respect by
NTL or any of its subsidiaries of any collective bargaining agreement or any
material bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding providing benefits to any
current or former employee, officer or director of NTL or any of its wholly
owned subsidiaries (collectively, the "NTL Benefit Plans"), or any material
change in any actuarial or other assumption used to calculate funding
obligations with respect to any NTL pension plans, or any material change in the
manner in which contributions to any NTL pension plans are made or the basis on
which such contributions are determined.
(j) ERISA Compliance. (i) With respect to the NTL Benefit
Plans, no event has occurred and, to the knowledge of NTL, there
exists no condition or set of circumstances, in connection with
which NTL or any of its subsidiaries could be subject to any
liability that individually or in the aggregate would have a
material adverse affect on NTL under ERISA, the Code or any other
applicable law.
(ii) Neither NTL nor any of its subsidiaries has
incurred any unsatisfied liability under Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course). No NTL Benefit Plan has
incurred an "accumulated funding deficiency" (within the meaning of
Section 302 of ERISA or Section 412 of the Code) whether or not
waived. To the knowledge of NTL, there are not any facts or
circumstances that would materially change the funded status of any
NTL Benefit Plan that is a "defined benefit" plan (as defined in
Section 3(35) of ERISA) since the date of the most recent actuarial
report for such plan. No NTL Benefit Plan is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA.
(k) Taxes. (i) Each of NTL and its subsidiaries has filed all
material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material
respects, or requests for extensions to file such returns or reports
have been timely filed, granted and have not expired, except to the
extent that such failures to file, to be complete or correct or to
have extensions granted that remain in effect individually or in the
aggregate would not have a material adverse effect on NTL. NTL and
each of its subsidiaries has paid (or NTL has paid on its behalf)
all taxes shown as due on such returns, and the most recent
financial statements contained in the NTL SEC Documents reflect an
adequate reserve in accordance with GAAP for all taxes payable by
NTL and its subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed,
asserted or assessed against NTL or any of its subsidiaries that are
not adequately reserved for, except for deficiencies that
individually or in the aggregate would not have a material adverse
effect on NTL. The federal income tax returns of NTL and each of its
subsidiaries consolidated in such returns for tax years through 1992
have closed by virtue of the applicable statute of limitations.
(l) Voting Requirements. The affirmative vote at the NTL
Stockholders Meeting (the "NTL Stockholder Approval") of the holders of a
majority of all shares of NTL Common Stock casting votes is the only vote of the
holders of any class or series of NTL's capital stock necessary to approve, in
accordance with the applicable rules of the NASDAQ, the issuance of NTL Common
Stock pursuant to the Amalgamation.
(m) Brokers. No broker, investment banker, financial advisor
or other person, other than Donaldson, Lufkin & Jenrette Securities Corporation,
the fees and expenses of which will be paid by NTL, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of NTL.
(n) Opinion of Financial Advisor. NTL has received the opinion
of Donaldson, Lufkin & Jenrette Securities Corporation, dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio is fair to
NTL from a financial point of view, a signed copy of which opinion has been
delivered to Partners, it being understood and agreed by Partners that such
opinion is for the benefit of the Board of Directors of NTL and may not be
relied upon by Partners, its affiliates or any of their respective stockholders.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 Conduct of Business. (a) Conduct of Business by
Partners. Except as set forth in Section 4.1(a) of the Partners Disclosure
Schedule, as otherwise contemplated by this Agreement or the transactions
contemplated hereby or as consented to by NTL in writing, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, Partners shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary course
consistent with past practice and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business organizations, use
reasonable efforts to keep available the services of their current officers and
other key employees and preserve their relationships with those persons having
business dealings with them. Without limiting the generality of the foregoing
(but subject to the above exceptions), during the period from the date of this
Agreement to the Effective Time, Partners shall not, and shall not permit any of
its subsidiaries to:
(i) other than dividends and distributions by a direct
or indirect wholly owned subsidiary of Partners to its parent, or by
a subsidiary that is partially owned by Partners or any of its
subsidiaries, provided that Partners or any such subsidiary receives
or is to receive its proportionate share thereof, (x) declare, set
aside or pay any dividends on, make any other distributions in
respect of, or enter into any agreement with respect to the voting
of, any of its capital stock, (y) split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares
of its capital stock, except for issuances of Partners Common Stock
upon the exercise of Partners Employee Stock Options, in each case,
outstanding as of the date hereof in accordance with their present
terms, or (z) purchase, redeem or otherwise acquire any shares of
capital stock of Partners or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber
or subject to any Lien any shares of its capital stock, any other
voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities
or convertible securities (other than the issuance of Partners
Common Stock upon the exercise of Partners Employee Stock Options,
in each case, outstanding as of the date hereof in accordance with
their present terms;
(iii) amend its memorandum of association, bye-laws or
other comparable organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any person;
(v) subject to compliance with Section 5.15, sell,
lease, license, mortgage or otherwise encumber or subject to any
Lien or otherwise dispose of any of its properties or assets
(including securitizations), other than (A) in the ordinary course
of business consistent with past practice or (B) the sale, lease,
license or other disposition of up to $1 million of such assets, in
the aggregate or (C) the mortgage, encumbrance or subjecting to
Liens of up to $5 million of such assets, in the aggregate;
(vi) take any action that would cause the
representations and warranties set forth in Section 3.1(g) (with
each reference therein to "ordinary course of business" being deemed
for purposes of this Section 4.1(a)(vi) to be immediately followed
by "consistent with past practice") to no longer be true and
correct;
(vii) incur any indebtedness for borrowed money, other
than pursuant to agreements or arrangements in effect as of the date
hereof, or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for the
obligations of any person for borrowed money;
(viii) make any additional equity investment in, or
enter into any new agreement, arrangement or understanding with, any
Significant Affiliate; or
(ix) authorize, or commit or agree to take, any of the
foregoing actions;
provided that the limitations set forth in this Section 4.1(a) (other than
clause (iii)) shall not apply to any transaction between Partners and any wholly
owned subsidiary or between any wholly owned subsidiaries of Partners. Except as
set forth in Section 4.1(a) of the Partners Disclosure Schedule, Partners shall
not, and shall not permit its subsidiaries to, and shall use its reasonable best
efforts to cause its Significant Affiliates not to, enter into any material
agreement, arrangement or understanding with respect to programming; software;
provisioning of cable modem internet service; billing; provisioning of digital
CATV service; and the acquisition of set-top boxes or switching equipment or
other computer and telecommunications equipment with a value in excess of Pound
Sterling1 million; or technology or similar strategic business issues without
prior approval from NTL. NTL shall treat as confidential any information which
Partners discloses to NTL in respect of any Significant Affiliate and designates
as confidential.
(b) Conduct of Business by NTL. Except as set forth in Section
4.1(b) of the NTL Disclosure Schedule, as otherwise expressly contemplated by
this Agreement or as consented to by Partners in writing, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, NTL shall, and shall cause its subsidiaries to,
carry on their respective businesses in the ordinary course consistent with past
practice and, to the extent consistent therewith, use all reasonable efforts to
preserve intact their current business organizations, use reasonable efforts to
keep available the services of their current officers and other key employees
and preserve their relationships with those persons having business dealings
with them. Without limiting the generality of the foregoing (but subject to the
above exceptions), during the period from the date of this Agreement to the
Effective Time, NTL shall not, and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions by a direct
or indirect wholly owned subsidiary of NTL to its parent, or by a
subsidiary that is partially owned by NTL or any of its
subsidiaries, provided that NTL or any such subsidiary receives or
is to receive its proportionate share thereof, declare, set aside or
pay any dividends on, make any other distributions (whether by
recapitalization, restructuring or otherwise) in respect of, or
enter into any agreement with respect to the voting of, any of its
capital stock, other than reasonable quarterly dividends on NTL
Common Stock if the Board of Directors of NTL shall so determine;
(ii) adopt a plan of complete or partial liquidation;
(iii) enter into any agreement, arrangement or
understanding for a merger, acquisition or other business
combination unless the Board of Directors of NTL determines that
such transaction is in the best interest of the stockholders of NTL
and those persons who will become stockholders of NTL as a result of
the Amalgamation;
(iv) except as contemplated hereby (including in
connection with a transaction permitted by clause (iii)), amend its
certificate of incorporation; or
(v) authorize, or commit or agree to take, any of the
foregoing actions;
provided that the limitations set forth in this Section 4.1(b) shall not apply
to any transaction between NTL and any wholly owned subsidiary or between any
wholly owned subsidiaries of NTL.
(c) Other Actions. Except as required by law, Partners and NTL
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be expected to,
result in (i) any of the representations and warranties of such party set forth
in this Agreement that are qualified as to materiality becoming untrue at the
Effective Time, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect at the Effective Time, or
(iii) any of the conditions to the Amalgamation set forth in Article VI not
being satisfied.
(d) Advice of Changes. Partners and NTL shall promptly advise
the other party orally and in writing to the extent it has knowledge of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply in any
material respect with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement and
(iii) any change or event having, or which, insofar as can reasonably be
foreseen, could reasonably be expected to have a material adverse effect on such
party or on the truth of their respective representations and warranties or the
ability of the conditions set forth in Article VI to be satisfied; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
SECTION 4.2 No Solicitation by Partners. (a) Partners shall
not, nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to, directly or indirectly through another person,
(i) solicit, initiate or encourage or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes any
Partners Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Partners Takeover Proposal or furnish
any nonpublic information relating to Partners and its subsidiaries to any
person that may be considering making, or has made, a Partners Takeover
Proposal; provided that, Partners may, in response to an unsolicited written
proposal from a third party regarding a Partners Takeover Proposal, engage in
the activities specified in clause (ii) if (A) the Board of Directors of
Partners determined in good faith, after obtaining and taking into account the
advice of outside counsel, that such action is required for the Board of
Directors to comply with its fiduciary duties under applicable law and (B)
Partners has received from such third party an executed confidentiality
agreement with terms not materially less favorable to NTL than those contained
in the Confidentiality Agreement (as defined in Section 5.4). For purposes of
this Agreement, "Partners Takeover Proposal" means any inquiry, proposal or
offer from any person relating to any direct or indirect acquisition or purchase
of a business that constitutes 10% or more of the net revenues, net income or
the assets of Partners and its subsidiaries, taken as a whole, or 10% or any
equity securities of Partners, any tender offer or exchange offer that if
consummated would result in any person beneficially owning any equity securities
of Partners, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Partners (or any Partners subsidiary whose business constitutes 10% or more of
the net revenues, net income or the assets of Partners and its subsidiaries,
taken as whole) or the Partners Common Stock, other than the transactions
contemplated by this Agreement; provided that Partners Takeover Proposal shall
not include any matters relating to the Rights of First Refusal and the equity
interests of Partners subject thereto.
(b) Except as provided in the next sentence, the Board of
Directors of Partners shall recommend approval and adoption of this Agreement
and the Amalgamation by Partners's stockholders and shall not withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to NTL,
the approval or recommendation by such Board of Directors. The Board of
Directors of Partners shall be permitted to withdraw or modify in a manner
adverse to NTL (or, if not previously made, not to make) its recommendation to
Partners's stockholders, but only if and to the extent such Board of Directors
determines, after obtaining and taking into account the advice of outside
counsel, that such action is required in response to an unsolicited bona fide
written Superior Partners Takeover Proposal in order for such Board of Directors
to comply with its fiduciary duties under applicable law. "Superior Partners
Takeover Proposal" means any bona fide Partners Takeover Proposal for at least a
majority of the outstanding shares of Partners Common Stock on terms the Board
of Directors of Partners determines in its good faith judgment (taking in to
account the advice of its financial advisor, all of the terms and conditions of
such Partners Takeover Proposal and the conditions to consummation) are more
favorable and provide greater value to Partners and all of its stockholders than
this Agreement and the Amalgamation taken as a whole.
(c) In addition to the obligations of Partners set forth in
paragraphs (a) and (b) of this Section 4.2, Partners shall immediately advise
NTL orally and in writing of any request for information or of any Partners
Takeover Proposal, the material terms and conditions of such request or Partners
Takeover Proposal and the identity of the person making such request or Partners
Takeover Proposal. Partners will, to the extent consistent with the fiduciary
duties of its Board of Directors under applicable law, keep NTL reasonably
informed of the status and details (including amendments or proposed amendments)
of any such request or Partners Takeover Proposal.
(d) Nothing contained in this Section 4.2 shall prohibit
Partners from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to Partners's stockholders if, in the good faith judgment of the
Board of Directors of Partners, after consultation with outside counsel, failure
so to disclose would be inconsistent with its obligations under applicable law.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Preparation of the Form S-4 and the Joint Proxy
Statement; Stockholders Meetings. (a) As soon as practicable following the date
of this Agreement, Partners and NTL shall prepare and file with the SEC the
Joint Proxy Statement and NTL shall prepare and file with the SEC the Form S-4,
in which the Joint Proxy Statement will be included as a prospectus. Each of
Partners and NTL shall use best efforts to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. Partners
will use all best efforts to cause the Joint Proxy Statement to be mailed to
Partners's stockholders, and NTL will use all best efforts to cause the Joint
Proxy Statement to be mailed to NTL's stockholders, in each case as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
NTL shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or to file a general consent to
service of process) required to be taken under any applicable state securities
laws in connection with the issuance of NTL Capital Stock in the Amalgamation
and Partners shall furnish all information concerning Partners and the holders
of Partners Common Stock as may be reasonably requested in connection with any
such action. No filing of, or amendment or supplement to, the Form S-4 or the
Joint Proxy Statement will be made by NTL without the prior consent of Partners,
such consent not to be unreasonably withhold or delayed. NTL will advise
Partners, promptly after it receives notice thereof, of the time when the Form
S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the NTL
Capital Stock issuable in connection with the Amalgamation for offering or sale
in any jurisdiction, or any request by the SEC for amendment of the Joint Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information. If at any time prior to the Effective
Time any information relating to Partners or NTL, or any of their respective
affiliates, officers or directors, should be discovered by Partners or NTL which
should be set forth in an amendment or supplement to any of the Form S-4 or the
Joint Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by law, disseminated to the stockholders of Partners and NTL.
(b) Partners shall duly call, give notice of, convene and hold
a meeting of its stockholders (the "Partners Stockholders Meeting") in
accordance with the Companies Act and Partners's bye-laws for the purpose of
obtaining the Partners Stockholder Approval and, subject to Sections 4.2(b) and
(d), through its Board of Directors, recommend to its stockholders the approval
and adoption of this Agreement and the Amalgamation. Partners agrees that its
obligations to convene the Partners Stockholders Meeting pursuant to this
Section 5.1(b) shall not be affected by the commencement, public proposal,
public disclosure or communication to Partners of any Partners Takeover
Proposal.
(c) NTL shall, as promptly as practicable after the Form S-4
is declared effective under the Securities Act, duly call, give notice of,
convene and hold a meeting of its stockholders (the "NTL Stockholders Meeting")
in accordance with the Delaware General Corporation Law for the purpose of
obtaining the NTL Stockholder Approval and shall, through its Board of
Directors, recommend to its stockholders the approval and adoption of this
Agreement, and the other transactions contemplated hereby. The Board of
Directors of NTL or Sub or any committee thereof shall not withdraw or modify,
or propose publicly to withdraw or modify in a manner adverse to Partners, the
approval or recommendation by such Board of Directors or such committee of this
Agreement and the transactions contemplated hereby.
(d) NTL and Partners will use best efforts to hold the
Partners Stockholders Meeting and the NTL Stockholders Meeting on the same date
and as soon as reasonably practicable after the date hereof.
SECTION 5.2 Letters of Partners's Accountants. Partners shall
use reasonable efforts to cause to be delivered to NTL two letters from
Partners's independent accountants, one dated a date within two business days
before the date on which the Form S-4 shall become effective and one dated a
date within two business days before the Closing Date, each addressed to NTL, in
form and substance reasonably satisfactory to NTL and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
SECTION 5.3 Letters of NTL's Accountants. NTL shall use
reasonable efforts to cause to be delivered to Partners two letters from NTL's
independent accountants, one dated a date within two business days before the
date on which the Form S-4 shall become effective and one dated a date within
two business days before the Closing Date, each addressed to Partners, in form
and substance reasonably satisfactory to Partners and customary in scope and
substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
SECTION 5.4 Access to Information; Confidentiality. Subject to
the Confidentiality Agreement dated March 10, 1997, between NTL and Partners
(the "Confidentiality Agreement"), and subject to restrictions contained in
confidentiality or other agreements to which such party is subject (which such
party will use its reasonable efforts to have waived) and applicable law, each
of Partners and NTL shall, and shall cause each of its respective subsidiaries
to, afford to the other party and to the officers, employees, accountants,
counsel, financial advisors and other representatives of such other party,
reasonable access during normal business hours during the period prior to the
Effective Time to all their respective properties, books, contracts,
commitments, personnel and records and, during such period, each of Partners and
NTL shall, and shall cause each of its respective subsidiaries to, furnish
promptly to the other party (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (b) all other information
concerning its business, properties and personnel as such other party may
reasonably request. No review pursuant to this Section 5.4 shall affect any
representation or warranty given by the other party hereto. Each of Partners and
NTL will hold, and will cause its respective officers, employees, accountants,
counsel, financial advisors and other representatives and affiliates to hold,
any nonpublic information in accordance with the terms of the Confidentiality
Agreement.
SECTION 5.5 Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Amalgamation
and the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. Without
limitation of the foregoing, Partners and NTL shall, and shall cause each of
their subsidiaries to, and, in the case of Partners, shall use its reasonable
best efforts to cause its Significant Affiliates to, promptly supply such
information as is reasonably necessary to enable the confirmations and
indications referred to in Section 6.1(c) to be obtained.
(b) In connection with and without limiting the foregoing,
Partners and NTL shall (i) take all action necessary to ensure that no takeover
statute or similar statute or regulation (other than the U.K. City Code on
Takeovers and Mergers in relation to Cable London) is or becomes applicable to
the Amalgamation, this Agreement, or any of the other transactions contemplated
by this Agreement and (ii) if any takeover statute or similar statute or
regulation becomes applicable to the Amalgamation, this Agreement, or any other
transaction contemplated by this Agreement, take all action necessary to ensure
that the Amalgamation and the other transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Amalgamation and the other transactions contemplated by this Agreement.
SECTION 5.6 Stock Options and Stock Appreciation Rights. (a)
As soon as practicable following the date of this Agreement, the Board of
Directors of Partners (or, if appropriate, any committee administering the
Partners Stock Plan or Partners 1995 Stock Appreciation Rights Plan (the
"Partners SAR Plan", and together with the Partners Stock Plan, the "Partners
Incentive Plans"), if requested by NTL, shall, subject to the rights of the
holders thereunder, adopt such resolutions or take such other actions as may be
required to effect the following:
(i) adjust the terms of all outstanding Partners
Employee Stock Options granted under Partners Stock Plan, whether
vested or unvested, as necessary to provide that, at the Effective
Time, each Partners Employee Stock Option outstanding immediately
prior to the Effective Time shall be adjusted and thereafter
represent an option to acquire, on the same terms and conditions as
were applicable under such Partners Employee Stock Option, the
number of shares of NTL Common Stock equal to the number of shares
of Partners Common Stock subject to the Partners Employee Stock
Option, multiplied by the Exchange Ratio (such product rounded up to
the nearest whole number), at an exercise price per share of NTL
Common Stock (rounded down to nearest whole cent) equal to (A) the
aggregate exercise price for the shares of Partners Common Stock
otherwise purchasable pursuant to such Partners Employee Stock
Option divided by (B) the aggregate number of whole shares of NTL
Common Stock deemed to be subject to such Partners Employee Stock
Option in accordance with the foregoing (each, as so adjusted, an
"Adjusted Option");
(ii) adjust the terms of all outstanding Partners stock
appreciation rights (the "Partners SARs") granted under the Partners
SAR Plan as necessary to provide that, at the Effective Time, each
Partners SAR outstanding immediately prior to the Effective Time
shall be adjusted and thereafter represent a right to receive an
amount of cash, on the same terms and conditions as were applicable
under such Partners SAR, without regard to any provision reducing
the period of exercise of such Partners SAR pursuant to the
cessation of service as a director of Partners, equal to the amount
by which the Fair Market Value (as defined in the Partners SAR Plan)
per share of NTL Common Stock multiplied by the Exchange Ratio
(rounded to the nearest cent) exceeds a base price per share of NTL
Common Stock equal to the base price for the Partners Class A Common
share subject to such Partners SAR (each, as so adjusted, an
"Adjusted SAR"); and
(iii) take such other actions relating to the Partners
Incentive Plans as Partners and NTL may agree are appropriate to
give effect to the Amalgamation, including as provided in Section
5.7.
(b) As soon as practicable after the Effective Time, NTL shall
deliver to the holders of Partners Employee Stock Options and Partners SARs
appropriate notices setting forth such holders' rights pursuant to the
respective Partners Incentive Plan and the agreements evidencing the grants of
awards thereunder and that such awards and agreements shall be assumed by NTL
and shall continue in effect on the same terms and conditions (subject to the
provisions of this Section 5.6, including adjustments required by this Section
5.6 after giving effect to the Amalgamation).
(c) A holder of an Adjusted Option or Adjusted SAR may
exercise such Adjusted Option or Adjusted SAR in whole or in part in accordance
with its terms by delivering a properly executed notice of exercise to NTL,
together with the consideration therefor and the federal withholding tax
information, if any, required in accordance with the related Partners Incentive
Plan.
(d) Except as otherwise contemplated by this Section 5.6 and
except to the extent required under the respective terms of the Partners
Employee Stock Options and Partners SARs in effect as of the date hereof, all
restrictions or limitations on transfer and vesting with respect to Partners
Employee Stock Options and Partners SARs awarded under the Partners Incentive
Plans or any other plan, program or arrangement of Partners or any of its
subsidiaries, to the extent that such restrictions or limitations shall not have
already lapsed, shall remain in full force and effect with respect to such
options and SARs after giving effect to the Amalgamation and the assumption by
NTL as set forth above.
SECTION 5.7 Partners Incentive Plans and Certain Employee
Matters. (a) At the Effective Time, the Partners Incentive Plans shall be
assumed by NTL, with the result that all obligations of Partners under the
Partners Incentive Plans, including with respect to awards outstanding at the
Effective Time under each Partners Incentive Plan, shall be obligations of NTL
following the Effective Time. Prior to the Effective Time, NTL shall take all
necessary actions (including, if required to comply with Section 162(m) or 422
of the Code (and the regulations thereunder) or applicable law or rule of the
NASDAQ, obtaining the approval of its stockholders at the NTL Stockholders
Meeting) for the assumption of the Partners Incentive Plans, including the
reservation, issuance and quotation of NTL Common Stock in a number at least
equal to (x) the number of shares of NTL Common Stock that will be subject to
Adjusted Options and (y) the product of the Exchange Ratio and the number of
shares of Partners Common Stock available for future awards under the Partners
Stock Plan immediately prior to the Effective Time. No later than the Effective
Time, NTL shall prepare and file with the SEC a registration statement on Form
S-8 (or another appropriate form) registering a number of shares of NTL Common
Stock determined in accordance with the preceding sentence. Such registration
statement shall be kept effective (and the current status of the prospectus or
prospectuses required thereby shall be maintained) at least for so long as
Adjusted Options remain outstanding and until such time as the shares of NTL
Common Stock subject to such Adjusted Options are no longer subject to resale
restrictions under the Securities Act.
(b) Following the Effective Time, NTL will honor all
obligations of Partners or its subsidiaries under employment agreements of
Partners or its subsidiaries as amended and/or restated as contemplated in this
Agreement.
SECTION 5.8 Indemnification, Exculpation and Insurance. (a)
For six years after the Effective Time and thereafter with respect to any claims
during such six year period, NTL shall indemnify, defend and hold harmless the
current or former directors and officers of Partners and its subsidiaries (each,
an "Indemnified Party") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of acts or omissions occurring at or prior to the
Effective Time to the fullest extent that Partners is permitted to indemnify
such persons under the laws of Bermuda and Partners's bye-laws as in effect on
the date hereof (and NTL shall advance expenses (including expenses constituting
Costs described in Section 5.8(d)) as incurred to the fullest extent permitted
under applicable law. In addition, from and after the Effective Time, directors
and officers of Partners who become directors or officers of NTL or the
Amalgamated Company will be entitled to the same indemnity rights and
protections as are afforded to other directors and officers of NTL.
(b) In the event that NTL or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of NTL assume the obligations set forth in this
Section 5.8.
(c) For six years after the Effective Time, NTL shall provide
to Partners's current directors and officers liability insurance covering acts
or omissions occurring prior to the Effective Time with respect to those persons
who are currently covered by Comcast Corporation's directors' and officers'
liability insurance policy on terms with respect to such coverage and amount no
less favorable than those of such policy in effect on the date hereof, provided
that in no event shall NTL be required to expend more than $360,000 in the
aggregate to maintain such coverage.
(d) The provisions of this Section 5.8 (i) are intended to be
for the benefit of, and will be enforceable by, each Indemnified Party, his or
her heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise. Each Indemnified Party is hereby
expressly made a third party beneficiary of the provisions in favor of the
Indemnified Parties set forth in this Section 5.8. NTL will pay all reasonable
Costs, including attorney's fees, that may be incurred by any Indemnified Party
in enforcing the indemnity and other obligations provided for in this Section
5.8.
SECTION 5.9 Fees and Expenses. All fees and expenses incurred
in connection with the Amalgamation, this Agreement, and the transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Amalgamation is consummated.
SECTION 5.10 Public Announcements. NTL and Partners will
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with and use reasonable efforts to agree on,
any press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Amalgamation, and shall not issue
any such press release or make any such public statement prior to such
consultation, except as either party may determine is required by applicable
law, court process or by obligations pursuant to any listing agreement with any
national securities exchange. The parties agree that the initial press release
to be issued with respect to the transactions contemplated by this Agreement
shall be in the form heretofore agreed to by the parties.
SECTION 5.11 NASDAQ Quotation. NTL shall use reasonable best
efforts to cause the NTL Common Stock issuable under Article II and upon
exercise of Adjusted Options pursuant to Section 5.6 to be approved for
quotation on the NASDAQ, subject to official notice of issuance, as promptly as
practicable after the date hereof, and in any event prior to the Closing Date.
NTL shall use reasonable best efforts to cause the NTL Class C Preferred and NTL
Class D Preferred to be approved for quotation on the NASDAQ, subject to
official notice of issuance, prior to the 60th day following the Closing Date if
either or both of such preferred stocks are then outstanding.
SECTION 5.12 Stockholder Litigation. Each of Partners and NTL
shall give the other the reasonable opportunity to participate in the defense of
any stockholder litigation against Partners or NTL, as applicable, and its
directors relating to the transactions contemplated by this Agreement.
SECTION 5.13 Rights of First Refusal. (a) From the date hereof
until the Closing Date, the parties hereto shall consult with each other as to
any actions to be taken in connection with the Rights of First Refusal. The
parties hereto agree that NTL shall have the primary role in any negotiations in
respect of the Rights of First Refusal; provided that (i) Partners shall have
received prior notice of and shall have the right to participate in any such
negotiations, (ii) if any offer is made to settle in cash either or both of the
Rights of First Refusal, Partners shall have the right, in its sole discretion,
to veto any such settlement, (iii) Partners shall not accept any offer or
proposed value for Partners' interests in either of the Significant Affiliates
without NTL's consent and (iv) except as otherwise provided herein, Partners
shall take such actions as are requested by NTL in connection with such
negotiations following such consultation. In connection with any negotiated
agreement, arrangement or understanding that would result in the Rights of First
Refusal being Resolved for purposes of Section 2.1(b)(i), (x) NTL shall have the
sole right to determine the terms and conditions of any such agreement,
arrangement or understanding so long as such terms and conditions would not
adversely affect the right of Partners stockholders to receive in the
Amalgamation the Amalgamation Consideration provided for in Section 2.1(b)(i)
and (y) in the event of the entering into of any such agreement, arrangement or
understanding, Partners shall take such actions as are necessary to effect the
transactions contemplated thereby.
(b) Notwithstanding the provisions of Section 5.13(a),(i)
Partners shall not be obligated to take an action requested by NTL if Partners
determines in good faith, after obtaining and taking into account the advice of
outside counsel (which outside counsel shall be made available to NTL and NTL's
outside counsel prior to Partners's final determination), that such action would
reasonably be likely to cause Partners to be in breach of its contractual
obligations or to violate its legal duties and (ii) Partners shall not be
obligated to commence a proceeding or initiate litigation in respect of the
Rights of First Refusal unless (A) such proceeding or litigation is in the
nature of a declaratory judgment or (B) a recognized law firm practicing the law
of the applicable jurisdiction retained by NTL shall be of the view that such
proceeding or litigation has a reasonable likelihood of success on the merits.
SECTION 5.14 Standstill Agreements; Confidentiality
Agreements. During the period from the date of this Agreement through the
Effective Time, Partners shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it or any of
its respective subsidiaries is a party. During such period, Partners shall
enforce, to the fullest extent permitted under applicable law, the provisions of
any such agreement, including by obtaining injunctions to prevent any breaches
of such agreements and to enforce specifically the terms and provisions thereof
in any court having jurisdiction.
SECTION 5.15 Conveyance Taxes. NTL and Partners shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees or any similar taxes
which become payable in connection with the transactions contemplated by this
Agreement that are required or permitted to be filed on or before the Effective
Time. NTL shall pay, and Partners shall pay, without deduction or withholding
from any amount payable to the holders of Partners Common Stock, any such taxes
or fees imposed by any Governmental Entity (and any penalties and interest with
respect to such taxes and fees), which become payable in connection with the
transactions contemplated by this Agreement, on behalf of their respective
stockholders.
SECTION 5.16 Debt Offers. NTL and Partners will each use its
respective reasonable best efforts to obtain, upon terms and conditions which
are reasonably satisfactory to NTL, the consents of the holders of its various
debt securities in order to permit the Amalgamation. The costs, fees and
expenses payable by Partners in connection with its debt offer shall be subject
to the reasonable approval of NTL.
SECTION 5.17 Comcast Name. Promptly following the Closing
Date, NTL shall cause the Amalgamated Company and each of its subsidiaries, to
the extent necessary, to file with the applicable governmental body, agency or
official an amendment to its organizational documents to delete from its name
the name "Comcast", and to do or cause to be done all other acts, including the
payment of any fees required in connection therewith, to cause such amendment to
become effective. As promptly as reasonably practicable following the Closing
Date in a commercially reasonable manner, NTL shall cause the Amalgamated
Company and each of its subsidiaries to cease use of any materials bearing the
name "Comcast" or any derivative thereof.
SECTION 5.18 Structure. (a) During the first 45 days after the
date hereof, the parties will explore in good faith the structure of the
transactions contemplated herein to determine whether tax efficiencies can be
achieved without affecting in any adverse manner the value of the transactions
to NTL or the stockholders of Partners or impairing the ability of the parties
to complete the transactions by the End Date. If such efficiencies are
identified, the parties will use reasonable best efforts to restructure the
transaction in a manner consistent therewith.
(b) As soon as practicable after the date hereof and prior to
the Closing, the parties will use their reasonable best efforts to agree on a
rate (the "Tax Rate") which reflects the tax which the parties anticipate will
be payable by Partners on any transfer of its interest in a Significant
Affiliate pursuant to the applicable Rights of First Refusal.
SECTION 5.19 Relationship with Significant Affiliates. Subject
to Section 5.13, Partners hereby agrees that (i) it will not vote for or consent
to any changes to the agreements or understandings relating to its investment in
Cable London or Birmingham Cable and (ii) it will cause its representative(s) on
the boards of directors of Cable London and Birmingham Cable, subject to their
legal obligations and contractual obligations in effect as of the date hereof,
not to take any action which is likely to have a material adverse effect on
Partners or, after giving effect to the Amalgamation, the Amalgamated Company,
in each case, without the prior approval of NTL, which approval shall not be
unreasonably withheld or delayed.
SECTION 5.20 NTL Preferred Stock. (a) If the NTL Class C Stock
or NTL Class D Stock, or both, are to be issued as part of the Amalgamation
Consideration, prior to the Effective Time, NTL shall take all necessary steps
to file with the Secretary of State of the State of Delaware the Certificates of
Designation with respect to the NTL Class C Stock or NTL Class D Stock, or both,
as the case may be, with such further changes as the parties hereto may agree,
all in accordance with applicable provisions of the Delaware General Corporation
Law, and to amend the Rights Agreement under which the Series A Junior
Participating Preferred Stock ("Rights") are reserved for issuance to cause such
Rights to be issuable in respect of the NTL Class C Stock or NTL Class D Stock,
or both, as the case may be, as contemplated hereby. If, upon formal
designation, each share of NTL Class C Stock or NTL Class D Stock is not
equivalent to a share of NTL Common Stock, the amounts set forth in Section 2.1
and the number (1.00) set forth in Exhibit 2.1 shall be appropriately adjusted.
(b) The definition of Net Proceeds in the Certificates of
Designation for the NTL Class C Stock and the NTL Class D Stock will reflect the
Tax Rate determined pursuant to Section 5.18(b).
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation to Effect
the Amalgamation. The respective obligation of each party to effect the
Amalgamation is subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) Stockholder Approvals. Each of the Partners Stockholder
Approval and the NTL Stockholder Approval shall have been obtained.
(b) Minister Consent. The consent of the Minister to the
Amalgamation shall have been obtained.
(c) Required British Approvals. The following shall have
occurred:
(i) NTL shall have received a written indication from The
Secretary of State for Trade and Industry ("DTI") and from the Independent
Television Commission ("ITC"), in terms reasonably satisfactory to NTL, to the
effect that the Amalgamation will not lead to the revocation of any licenses
(issued pursuant to other the Cable and Broadcasting Act 1984 or the
Broadcasting Act 1980 (as amended) or the revocation or any of the
telecommunications or wireless telegraphy licenses insured by the DTI pursuant
to the Telecommunications Act 1984 or the Wireless Telegraphy Act 1949) which
are held by Partners or any of its subsidiaries or any Significant Affiliate,
except for any licenses the loss of which would not have a material adverse
effect on the licensee;
(ii) NTL shall have received written confirmation from the
Office of Telecommunications, in terms reasonably satisfactory to NTL, that the
Director General has not after the date hereof (a) issued any directions to
Partners or any of its subsidiaries or any Significant Affiliate in connection
with their telecommunication licenses issued pursuant to the Telecommunications
Act 1984 or their wireless telegraphy licenses issued pursuant to the Wireless
Telegraphy Act 1949, (b) given notice to Partners or any of its subsidiaries or
Significant Affiliate of its intention to make modifications to such licenses
(other than modifications which are to be made to all or substantially all of
the licenses issued pursuant to the Telecommunications Act 1984 or the Wireless
Telegraphy Act 1949 (as appropriate), or (c) taken any steps pursuant to Section
18 of the Telecommunications Act 1984 or the Wireless Telegraphy Act 1948 in
relation to enforcement of any such licenses, except for, in the case of clause
(a), such directions, in the case of clause (b), such modifications, or, in the
case of clause (c), such enforcement steps as would not have a material adverse
effect on the licensee;
(iii) NTL shall have received written confirmation from the
ITC, in terms reasonably satisfactory to NTL, that the ITC has not after the
date hereof (a) issued any directions to Partners or any of its subsidiaries or
any Significant Affiliate in connection with any license issued pursuant to the
Cable and Broadcasting Act 1984 or the Broadcasting Act 1990 (as amended), (b)
given notice to Partners or any of its subsidiaries or any Significant Affiliate
of its intention to make modifications to any such license (other than
modifications which are to be made to all or substantially all licenses issued
pursuant to the Cable and Broadcasting Act 1984 or the Broadcasting Act 1990 as
the case may be), or (c) taken any steps in relation to enforcement of any such
license, except for, in the case of clause (a), such directions, in the case of
clause (b), such modifications, or, in the case of clause (c), such enforcement
steps as would not have a material adverse effect on the licensee;
(iv) the Office of Fair Trading shall have indicated to NTL,
in terms reasonably satisfactory to NTL, either that the Amalgamation does not
qualify for investigation by the Monopolies and Mergers Commission pursuant to
the Fair Trading Act 1973 or that The Secretary of State for Trade and Industry
has decided not to refer the Amalgamation to the Monopolies and Mergers
Commission;
(v) The UK Panel on Takeovers and Mergers shall have confirmed
to NTL, in terms reasonably satisfactory to NTL, that the Amalgamation will not
give rise to any obligation upon NTL or Partners or any of its subsidiaries or
associates to make a mandatory cash offer for the shares in Cable London not
owned by Partners pursuant to the principles laid down in Note 7 of Rule 9.1 of
The City Code on Takeovers and Mergers.
(d) Governmental and Regulatory Approvals. Other than the
filing provided for under Section 1.3 and the Minister Consent and the Required
British Approvals (which are addressed in Sections 6.1(b) and 6.1(c)), all
consents, approvals and actions of, filings with and notices to any Governmental
Entity required of Partners, NTL or any of their subsidiaries to consummate the
Amalgamation and the other transactions contemplated hereby, the failure of
which to be obtained or taken (i) is reasonably expected to have a material
adverse effect on the Amalgamated Company and its prospective subsidiaries,
taken as a whole, or (ii) will result in a material violation of any laws, shall
have been obtained, all in form and substance reasonably satisfactory to
Partners and NTL.
(e) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity of competent
jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect (i) preventing the consummation of the
Amalgamation, or (ii) which otherwise is reasonably likely to have a material
adverse effect on Partners or NTL, as applicable; provided, however, that each
of the parties shall have used its best efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such Restraints that may be
entered.
(f) Form S-4. The Form S-4 shall have become effective under
the Securities Act prior to the mailing of the Joint Proxy Statement by each of
Partners and NTL to their respective stockholders and no stop order or
proceedings seeking a stop order shall be threatened by the SEC or shall have
been initiated by the SEC.
(g) NASDAQ Quotation. The shares of NTL Common Stock issuable
to Partners's stockholders as contemplated by Article II and the shares of NTL
Common Stock issuable upon exercise of Adjusted Options pursuant to Section 5.6
shall have been approved for quotation on the NASDAQ, subject to official notice
of issuance.
(h) Required Consents. NTL or Partners, as the case may be,
shall have obtained all consents designated as "Required Consents" in the NTL
Disclosure Schedule or the Partners Disclosure Schedule.
SECTION 6.2 Conditions to Obligations of NTL. The obligation
of NTL to effect the Amalgamation is further subject to satisfaction or waiver
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Partners set forth herein shall be true and correct both when made
and at and as of the Closing Date, as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on NTL or
Partners.
(b) Performance of Obligations of Partners. Partners shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. As of the Closing Date,
there
shall not have occurred any material adverse change relating to Partners from
the date hereof.
(d) Lock-Up. Each of Comcast and Warburg, Pincus Investors,
L.P. shall have agreed to a "lock-up" agreement with NTL preventing them from
selling, transferring or disposing of any interest in the Amalgamation
Consideration received by them for a period of 180 days after the Closing Date.
(e) Dissenting Shares. The number of Dissenting Shares shall
not be more than 5% of the total issued and outstanding shares of Partners Class
A Common Stock.
(f) Audited Balance Sheet. The audited balance sheet and other
financial statements of Partners as at December 31, 1997 and for the quarter and
year then ended shall have been received by NTL and there shall be no material
adverse difference in the amounts reflected therein for revenue and operating
income (earnings before interest, taxes, depreciation and amortization) for the
year and quarter ended December 31, 1997 and thereon for cash and cash
equivalents, net working capital (current assets less current liabilities),
third party debt, shareholder loans and equity as of December 31, 1997 from the
amounts set forth on or in the Preliminary Financial Statements.
SECTION 6.3 Conditions to Obligations of Partners. The
obligation of Partners to effect the Amalgamation is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
warranties of NTL set forth herein shall be true and correct both when made and
at and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to "materiality," or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on NTL.
(b) Performance of Obligations of NTL. NTL shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. As of the Closing Date,
there
shall not have occurred any material adverse change relating to NTL from the
date hereof.
(d) Registration Rights. NTL shall have executed a
Registration Rights Agreement implementing the terms set forth on Exhibit
6.3(d).
SECTION 6.4 Frustration of Closing Conditions. Neither NTL nor
Partners may rely on the failure of any condition set forth in Section 6.1, 6.2
or 6.3, as the case may be, to be satisfied if such failure was caused by such
party's failure to use best efforts to consummate the Amalgamation and the other
transactions contemplated by this Agreement, as required by and subject to
Section 5.5.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, and (except in the case of 7.1(d) or
7.1(e)) whether before or after the Partners Stockholder Approval or the NTL
Stockholder Approval:
(a) by mutual written consent of NTL and Partners;
(b) by either NTL or Partners:
(i) if the Amalgamation shall not have been consummated
by August 4, 1998 (the "End Date"), provided, however, that (x) if
there shall occur at any time subsequent to June 4, 1998 and prior
to August 4, 1998 any Restraint prohibiting, delaying or restricting
the Partners Stockholders Meeting, the voting of shares by Comcast
Corporation in favor of the Amalgamation or the consummation of the
Amalgamation, the End Date shall be extended to October 4, 1998, (y)
if, as of August 4, 1998, the Required Consent of the bondholders of
Partners shall not have been obtained, the End Date shall be
extended to October 4, 1998, and (z) the right to terminate this
Agreement pursuant to this Section 7.1(b)(i) shall not be available
to any party whose failure to perform any of its obligations under
this Agreement results in the failure of the Amalgamation to be
consummated by such time; provided, however, that this Agreement may
be extended not more than 30 days (but in no event to a date later
than September 4, 1998) by either party by written notice to the
other party if the Amalgamation shall not have been consummated as a
direct result of NTL or Partners having failed to receive all
regulatory approvals required to be obtained with respect to the
Amalgamation.
(ii) if the Partners Stockholder Approval shall not have
been obtained at an Partners Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof;
(iii) if the NTL Stockholder Approval shall not have
been obtained at a NTL Stockholders Meeting duly convened therefor
or at any adjournment or postponement thereof; or
(iv) if any Restraint having any of the effects set
forth in Section 6.1(e) shall be in effect and shall have become
final and nonappealable; provided, that the party seeking to
terminate this Agreement pursuant to this Section 7.1(b)(iv) shall
have used best efforts to prevent the entry of and to remove such
Restraint;
(c) by NTL, if Partners shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform would give rise to the failure of a condition set forth in
Section 6.2(a) or (b), and such condition is incapable of being satisfied by the
End Date;
(d) by Partners, if NTL shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform would give rise to the failure of a condition set forth in
Section 6.3(a) or (b), and such condition is incapable of being satisfied by the
End Date; or
(e) by Partners, prior to receipt of the Partners Stockholder
Approval, if, (i) as of a date not more than ten Business Days before the
Partners Stockholders Meeting, the NTL Average Stock Price determined as of such
date is less than $26.70, (ii) notice shall have been provided to NTL hereunder
of an intent to terminate and (iii) within five Business Days of receipt of such
notice, NTL shall not have offered (by notice to NTL) to increase the Exchange
Ratio such that the value of the Amalgamation Consideration shall be $10 per
share of Partners Common Stock or more at such time.
SECTION 7.2 Effect of Termination. In the event of termination
of this Agreement by either Partners or NTL as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of NTL or Partners, other than the provisions of
Section 3.1(l), Section 3.2(m), the last sentence of Section 5.4, Section 5.9,
this Section 7.2 and Article VIII, which provisions survive such termination,
and except to the extent that such termination results from the willful and
material breach by a party of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
SECTION 7.3 Amendment. This Agreement may be amended by the
parties at any time before or after the Partners Stockholder Approval or the NTL
Stockholder Approval; provided, however, that after any such approval, there
shall not be made any amendment that by law requires further approval by the
stockholders of Partners or NTL without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
SECTION 7.4 Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any of
the obligations or other acts of the other parties, (b) waive any inaccuracies
in the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 7.3, waive compliance by the other party with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 7.5 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.1, an amendment of
this Agreement pursuant to Section 7.3 or an extension or waiver pursuant to
Section 7.4 shall, in order to be effective, require, in the case of NTL or
Partners, action by its Board of Directors or, with respect to any amendment to
this Agreement, the duly authorized committee of its Board of Directors to the
extent permitted by law.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 8.2 Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to NTL or Sub, to
NTL Incorporated
110 East 59th Street
New York, New York 10022
Telecopy No.: (212) 906-8497
Attention: Richard J. Lubasch
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telecopy No.: (212) 735-2000
Attention: Thomas H. Kennedy
Appleby, Spurling & Kempe
Cedar House
Hamilton, HM EX, Bermuda
Telecopy: (441) 292-8666
Attention: Hugh Gillespie
(b) if to Partners, to
Comcast UK Cable Partners Limited
Clarendon House
2 Church Street West
Hamilton, HM11, Bermuda
Telecopy No.: (441) 292-4720
Attention: Company Secretary
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy No.: (212) 450-4800
Attention: John Knight
Conyers, Dill & Pearman
Clarendon House, Church Street
P.O. Box HM 666
Hamilton 11M CX, Bermuda
Telecopy No.: (441) 292-4720
Attention: David Lamb
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Telecopy No: (215) 981-7794
Attention: General Counsel
SECTION 8.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person, where
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of a person, whether through
the ownership of voting securities, by contract, as trustee or executor, or
otherwise;
(b) "knowledge" of any person which is not an individual
means the actual knowledge of such person's executive officers or senior
management of such person's operating divisions and segments or (in the case of
Partners) representatives on the board of directors of a Significant Affiliate,
in each case after due inquiry;
(c) "material adverse change" or "material adverse effect"
means, when used in connection with Partners or NTL, any change, effect, event,
occurrence or state of facts that is, or would reasonably be expected to be,
materially adverse to the business, financial condition or results of operations
of such party and its subsidiaries taken as a whole, other than changes,
effects, events, occurrences or facts caused by changes in general economic or
securities market conditions, changes that affect the U.K. cable industry
generally or changes in the business of Partners that result from the
announcement or proposed consummation of the Amalgamation or of the transactions
contemplated hereby, including, without limitation, the existence and possible
exercise of the Rights of First Refusal and actions taken by the parties in
accordance with Section 5.13; and the terms "material" and "materially" have
correlative meanings;
(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity;
(e) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person; provided that, for purposes of this Agreement, neither
Birmingham Cable nor Cable London shall be a subsidiary of Partners;
(f) "Birmingham Cable" means Birmingham Cable Corporation
Limited.
(g) "Business Day" shall mean a day on which both (i) NASDAQ
if functional for a normal trading day and (ii) banks in the City of New York
are open for business, provided that with respect to the Closing Date, Business
Day shall also mean that the Bermuda Ministry of Finance is operating on a
normal schedule on such day;
(h) "Cable London" means Cable London PLC.
(i) "Equity Interest Proceeds" shall mean, with respect to
Partners' interests in Cable London and Birmingham Cable, the pro rata net
proceeds (i.e., the net amount received for the relevant equity interest
(without regard to debt, loans from Partners to Significant Affiliates or the
debt component (i.e., face amount and accrued and unpaid interest)) of any
convertible security) from the consummation of the sale of the relevant interest
under the applicable Rights of First Refusal less the Tax Adjustment; provided
that, in the case of Partners' interest in Cable London, such amount shall be
adjusted as follows: (i) if the convertible debt in Cable London has been
converted prior to or in connection with the exercise of the Rights of First
Refusal relating to Partners' interest in Cable London, the Equity Interest
Proceeds shall be decreased by an amount equal to the debt component of
Partners' share of such convertible debt and (ii) if such convertible debt has
not been converted prior to or in connection with the exercise of such Right of
First Refusal, the Equity Interest Proceeds shall be increased by an amount
equal to the value of Partners' share of such convertible debt (less the debt
component of such convertible debt).
(j) "NTL Average Stock Price" shall mean the average of the
average high and low sales prices of the NTL Common Stock or NASDAQ for each of
the five trading days ending on the trading day prior to the date of
determination;
(k) "Required British Approval" shall mean those approvals and
contents set forth in Section 6.1(c);
(l) "Rights of First Refusal" shall mean in the case of
Birmingham Cable, the right of first refusal set forth in Section 5.2 of the
Co-Ownership Agreement, dated March 12, 1990, between US West International
Holdings Inc. and Comcast Cablevision of Birmingham, Inc., as subsequently
amended, supplemented and novated and, in the case of Cable London, the right of
preemption set forth in Article 15(c) of the Articles of Association of Cable
London;
(m) "Significant Affiliate" shall mean Birmingham Cable
and Cable London; and
(n) "Tax Adjustment" shall mean a percentage of the gross
proceeds which would be payable under the Tax Rate, without giving effect to any
credits or adjustments available to NTL or Partners or any of their subsidiaries
as a result of factors not related to the dispositions of such interest in the
particular Significant Affiliate.
SECTION 8.4 Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns.
SECTION 8.5 Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.6 Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein) and
the Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article II, Section 5.6 and Section 5.8, are not intended to
confer upon any person other than the parties any rights or remedies.
SECTION 8.7 Governing Law. Except for Article I, Article II,
Section 4.2, Section 5.7 and Section 5.17 (collectively, the "Bermuda
Provisions"), which shall be governed by the laws of Bermuda, this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof.
SECTION 8.8 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding two
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 8.9 Consent to Jurisdiction.
(a) Each of the parties hereto (i) consents to submit itself
to the personal jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (iii) agrees (except as
provided in clause (b) of this Section 8.9) that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a federal court sitting in the State of
Delaware or a Delaware state court.
(b) With respect to the Bermuda Provisions, each of the
parties hereto (i) consents to submit itself to the personal jurisdiction of any
court located in Bermuda in the event any dispute arises out of the Bermuda
Provisions, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that it will not bring any action relating to the Bermuda Provisions in
any court other than a court sitting in Bermuda.
SECTION 8.10 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 8.11 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, NTL, Sub and Partners have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
NTL INCORPORATED
By /s/ John Gregg
-------------------------------------------
Title: Managing Director,
Corporate Development
NTL (BERMUDA) LIMITED
By /s/ Richard J. Lubasch
-------------------------------------------
Title: Vice President
COMCAST UK CABLE PARTNERS LIMITED
By /s/ Ken Mikalauskas
-------------------------------------------
Title: Vice President, Finance
Exhibit 2.1-C
-------------
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF CLASS C JUNIOR
PARTICIPATING PREFERRED STOCK
of
NTL INCORPORATED
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
NTL Incorporated, a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the said Corporation, the said
Board of Directors on ______, 1998 adopted the following resolution creating a
series of ________________ shares of Preferred Stock designated as Class C
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Class C Junior Participating Preferred Stock," par value $.01 per
share (the "Class C Junior Preferred Stock"), and the number of shares
constituting such series shall be ____________.
2. Dividends and Distributions. (a) Each share of Class C
Junior Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available for the payment of
dividends, contemporaneously with any dividends with respect to shares of Common
Stock (as defined in Section 11), dividends in an amount per share (rounded to
the nearest cent) equal to, subject to the provision for adjustment hereinafter
set forth, 1.00(*) times the aggregate per share amount of cash dividends
declared by the Board of Directors with respect to the Common Stock, and 1.00(*)
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions (other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock, by reclassification
or otherwise) declared by the Board of Directors with respect to the Common
Stock, to the same extent as, on the same basis as, and in the same form as
(whether payable in cash or in kind), any dividends with respect to shares of
Common Stock. With respect to each dividend payable in respect of the Class C
Junior Preferred Stock, the record date for such dividend shall be the same as
the record date for the corresponding dividend in respect of the Common Stock.
Such dividends shall be payable on the dates specified by the Board of Directors
as the dates for payment of dividends in respect of shares of Common Stock (each
of such dates being a "dividend payment date")(unless such day is not a business
day, in which event on the next succeeding business day). Such dividends shall
be paid to the holders of record at the close of business on the date (the
"record date") specified by the Board of Directors of the Corporation at the
time such dividend is declared; provided that such date shall not be more than
60 days nor less than 10 days prior to the respective dividend payment date. In
the event the Corporation shall at any time after the date of initial issuance
of the Class C Junior Preferred Stock (the "Issuance Date"), (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which each share
of Class C Junior Preferred Stock was entitled to receive immediately prior to
such event under the first sentence of this Section 2(a) shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
(b) So long as any shares of the Class C Junior Preferred
Stock are outstanding, no dividends shall be declared or paid or set apart for
payment or other distribution declared or made upon Parity Securities or Junior
Securities by the Corporation, unless a dividend in the amount and form provided
for herein is paid or set apart for payment on or in respect of the Class C
Junior Preferred Stock.
3. Voting Rights. The holders of shares of Class C Junior
Preferred Stock shall have the following voting rights:
(a) Except as otherwise provided herein, in the Certificate of
Incorporation or under applicable law, (i) each share of Class C Junior
Preferred Stock and each share of Class D Junior Preferred Stock shall be
entitled to vote together with the Common Stock on all matters submitted for a
vote of holders of Common Stock as a single class, (ii) subject to the provision
for adjustment hereinafter set forth, shall be entitled to 1.00(*) votes per
share of Class C Junior Preferred Stock and (iii) shall be entitled to notice of
any stockholders' meeting in accordance with the Certificate of Incorporation
and bylaws of the Corporation. In the event the Corporation shall at any time
after the Issuance Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of Class
C Junior Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) So long as any shares of Class C Junior Preferred Stock
are outstanding, the Corporation shall not, without the written consent or
affirmative vote at a meeting called for that purpose of the holders of
two-thirds or more of the shares of Class C Junior Preferred Stock then
outstanding, amend, alter or repeal, whether by merger, consolidation,
combination, reclassification or otherwise, the Certificate of Incorporation or
by-laws of the Corporation or of any provision thereof (including the adoption
of a new provision thereof) which would result in an alteration or circumvention
of the voting powers, designation and preferences and relative participating,
optional and other special rights, and qualifications, limitations and
restrictions of the Class C Junior Preferred Stock. (*) See Section 5.20.
(c) The consent or votes required in Section 3(b) shall be in
addition to any approval of stockholders of the Corporation which may be
required by law or pursuant to any provision of the Certificate of Incorporation
or bylaws, which approval shall be obtained by vote of the stockholders of the
Corporation in the manner provided in Section 3(a).
4. Reacquired Shares. Any shares of Class C Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
5. Liquidation, Dissolution or Winding Up. (a) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of Junior Securities
unless, prior thereto, the holders of shares of Class C Junior Preferred Stock
shall have received $0.01 per share (the "Class C Liquidation Preference"), and
the holders of Parity Securities shall have received any liquidation preference
due them (the "Parity Preference"). Following the payment of the full amount of
the Class C Liquidation Preference, no additional distributions shall be made to
the holders of shares of Class C Junior Preferred Stock unless, prior thereto,
the holders of shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by dividing (i) the
Class C Liquidation Preference by (ii) 1.00(*) (as appropriately adjusted as set
forth in Section 5(c) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii) being hereinafter referred to as the "Adjustment Number").
Following the payment of the full amount of the Class C Liquidation Preference,
the Parity Preference and the Common Adjustment in respect of all outstanding
shares of Class C Junior Preferred Stock, Class D Junior Preferred Stock and
Common Stock, respectively, holders of shares of Class C Junior Preferred Stock,
Class D Junior Preferred Stock and Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Class C Junior Preferred Stock
and Class D Junior Preferred Stock, and Common Stock, on a per share basis,
respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Class C Liquidation Preference
and the Parity Preference, then such remaining assets shall be distributed
ratably to the holders of all such shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Issuance Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
6. Consolidation, Merger, Share Exchange, etc. In case the
Corporation shall enter into any consolidation, merger, share exchange,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Class C Junior Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1.00(*)
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time after the Issuance Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Class C Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
7. Redemption. (a) Except as set forth in Section 7(b) the
shares of Class C Junior Preferred Stock shall not be redeemable.
(b) If the Right of First Refusal is Exercised, each share of
Class C Junior Preferred Stock shall, within 45 days of the receipt by the
Corporation of the Net Proceeds, be redeemed by the Corporation for a pro rata
(by number of shares of Class C Junior Preferred Stock originally issued) share
of the Net Proceeds. Such redemption shall be, at the election of the
Corporation, payable either (i) in cash, subject to any requirements of law or
the Corporation's debt instruments, or (ii) in shares of Common Stock of the
Corporation valued at the greater of $30 per share [subject to adjustment if
change in NTL Common Stock prior to Issuance Date] or the NTL Average Market
Price as of the date of receipt of the proceeds by the Corporation.
(c) "Net Proceeds" shall mean the net proceeds received for
the Corporation's equity interest (as of the Issuance Date) in Cable London
(without regard to debt, loans from the Corporation to Cable London or the debt
component (i.e., face amount and accrued and unpaid interest) of any convertible
security) from the consummation of the sale of the interest under the Rights of
First Refusal); provided that such amount shall be adjusted as follows: (i) if
the convertible debt in Cable London has been converted prior to or in
connection with the exercise of the Right of First Refusal, the Net Proceeds
shall be decreased by an amount equal to the debt component of the Corporation's
share of such convertible debt, (ii) if such convertible debt has not been
converted prior to or in connection with the exercise of the Right of First
Refusal, the Net Proceeds shall be increased by an amount equal to the value of
the Corporation's share of such convertible debt (less the debt component of
such convertible debt) and (iii) such amount will be reduced by taxes which
would be payable on such sale at the Tax Rate, without giving effect to any
credits or other adjustments available to the Corporation or its subsidiaries as
a result of factors not related to the Corporation's interest in Cable London.
(d) Nothing contained herein shall be deemed to restrict or
prohibit the Corporation from acquiring shares of Class C Preferred Stock
otherwise then pursuant to redemption pursuant to Section 7(b) hereof.
8. Exchange. If (i) the Corporation shall so elect in its sole
discretion or (ii) the Right of First Refusal is Resolved, the Corporation
shall, within 45 days of the date of election with respect to clause (i) or the
date the Rights of Refusal is Resolved with respect to clause (ii), exchange
each share of Class C Junior Preferred Stock into 1.00(*) shares (or, if there
has been one or more adjustments pursuant to the last sentence of Section 2(a),
the adjusted number of shares) of Common Stock of the Corporation.
- ----------
(*) See Section 5.20.
9. Procedure for Redemption or Exchange. (a) In the event of
redemption of the Class C Junior Preferred Stock pursuant to Section 7 or an
exchange of the shares of Class C Junior Preferred Stock pursuant to Section 8,
notice of such redemption or exchange shall be given to each holder of record of
the shares to be redeemed or exchanged at such holder's address as the same
appears on the stock transfer books of the Corporation at least 30 but not more
than 45 days before the date fixed for redemption or exchange, as the case may
be, provided, however, that no failure to give such notice nor any defect
therein shall affect the validity of the redemption or exchange of any share of
Class C Junior Preferred Stock to be redeemed or exchanged except as to the
holder to whom the Corporation has failed to give said notice or except as to
the holder whose notice was defective. Each such notice shall state: (i) the
redemption date or exchange date; (ii) the amount and nature of the
consideration to be paid in respect of each share; (iii) the place or places
where certificates for such shares are to be surrendered for redemption or
exchange; (iv) the specific provision hereof pursuant to which such redemption
or exchange is to be made; and (v) that dividends on the shares to be redeemed
or exchanged will cease to accrue on such redemption date or exchange date. Upon
giving any notice of a redemption pursuant to Section 7 or notice of exchange
pursuant to Section 8, the Corporation shall become obligated to redeem or
exchange the shares of Class C Junior Preferred Stock specified in such notice
on the redemption date or exchange date, as the case may be, specified in such
notice.
(b) Notice having been given as aforesaid, from and after the
redemption date or the exchange date (unless, in the case of a redemption,
default shall be made by the Corporation in providing money for the payment of
the redemption price of the shares called for redemption or, in the case of an
exchange, the Corporation defaults in issuing Common Stock or fails to pay or
set aside for payment accrued and unpaid dividends on the Class C Junior
Preferred Stock to the exchange date), dividends on the shares of Class C Junior
Preferred Stock called for redemption or exchange shall cease to accrue, and all
rights of the holders thereof as stockholders of the Corporation (except the
right to receive from the Corporation the redemption price without interest or
the Common Stock and accrued and unpaid dividends on the Class C Junior
Preferred Stock to the exchange date) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed or exchanged
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall be
redeemed or exchanged by the Corporation at the redemption price or rate of
exchange aforesaid.
(c) The Corporation will pay any and all issuance and
delivery taxes that may be payable in respect of the issuance or delivery of
Common Stock in exchange for shares of Class C Junior Preferred Stock. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of Common Stock
in a name other than that in which the shares of Class C Junior Preferred Stock
so exchange were registered, and no such issuance or delivery shall be made
unless and until the person requesting such issuance has paid to the Corporation
the amount of any such tax or has established to the satisfaction of the
Corporation that such tax has been paid.
(d) If a notice of redemption shall have been given, such
redemption is for consideration consisting solely of cash and if, prior to the
redemption date, the Corporation shall have irrevocably deposited the aggregate
redemption price of the shares of Class C Junior Preferred Stock to be redeemed
in trust for the pro rata benefit of the holders of the shares of Class C Junior
Preferred Stock to be redeemed, so as to be and to continue to be available
therefor, with a bank or trust company that (i) is organized under the laws of
the United States of America or any state thereof, (ii) has capital and surplus
of not less than $250,000,000 and (iii) has, or, if it has no publicly traded
debt securities rated by a nationally recognized rating agency, is the
subsidiary of a bank holding company that has, publicly traded debt securities
rated at least "A" or the equivalent thereof by Standard & Poor's Corporation or
"A-2" or the equivalent by Moody's Investor Service Inc., then upon making such
deposit, all rights of holders of the shares so called for redemption shall
cease, except the right of holders of such shares to receive the redemption
price against delivery of such shares, but without interest, and such shares
shall cease to be outstanding. Any funds so deposited that are unclaimed by
holders of shares at the end of three years from such redemption date shall be
repaid to the Corporation upon its request, after which repayment the holders of
shares of Class C Junior Preferred Stock so called for redemption shall
thereafter be entitled to look only to the Corporation for payment of the
redemption price.
(e) In the event of redemption of shares of Class C Junior
Preferred Stock for shares of Common Stock pursuant to Section 7 or an exchange
of Class C Junior Preferred Stock for shares of Common Stock pursuant to
Section 8:
(i) such redemption or exchange shall be deemed to have been
effected on the redemption date or the exchange date, as the case
may be, and the person in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
redemption or exchange shall be deemed to have become the holder of
record of the shares of Common Stock represented thereby as of the
close of business on the redemption date or the exchange date, as
the case may be;
(ii) all such shares of Common Stock issued upon redemption or
exchange of the Class C Junior Preferred Stock will upon issuance be
duly and validly issued and fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights;
(iii) effective as of the close of business on the redemption
date or exchange date, as the case may be, the holder thereof shall
be deemed to be the holder of the shares of Common Stock for which
such shares of Class C Junior Preferred Stock were redeemed or
exchanged, as the case may be, and, as from the redemption date or
the exchange date, as the case may be, such holder shall be entitled
to all rights of a Common Stock holder;
(iv) prior to the issuance of any such shares of Common Stock,
the Corporation shall comply with all applicable federal and state
laws and regulations which require action to be taken by the
Corporation; and
(v) no fractional shares of Common Stock shall be issued, but
in lieu thereof the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to such
fractional interest multiplied by the closing price reported by the
principal securities exchange on which the shares of Common Stock
are listed and traded on the redemption date or exchange date, as
the case may be.
(f) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, such number of its
authorized but unissued shares of Common Stock and/or its shares of Common Stock
held as treasury stock as shall be required for the purpose of effecting the
redemption or exchange of the Class C Junior Preferred Stock.
10. Fiduciary Duty. The Board of Directors of the Corporation
shall, with respect to all matters except those set forth in Sections 5, 7, 8, 9
and 13, have the obligations and duties (including fiduciary duties) to the
holders of the Class C Junior Preferred Stock to the same extent and as if they
were holders of the Common Stock. With respect to the matters set forth in
Section 5, 7, 8, 9 and 13, the Board of Directors of the Corporation shall act
in good faith and, in the event that the Corporation is not reasonably likely to
enter into any agreement, arrangement or understanding directly or indirectly
relating to the Right of First Refusal or the ownership interest in Cable London
which would result in an exchange pursuant to clause (ii) of Section 8, and the
Right of First Refusal is reasonably likely to be exercised, the Corporation
shall use its reasonable efforts to maximize the proceeds to be received from
the exercise thereof.
11. Ranking. The Class C Junior Preferred Stock shall, with
respect to dividend rights, rank on a parity with, the common stock, par value
$.01 per share, of the Corporation (the "Common Stock") and the Class D Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation (the
"Class D Junior Preferred Stock"). With respect to rights on liquidation,
dissolution and winding up, the Class C Junior Preferred Stock shall rank prior
to all classes of the Common Stock, on a parity with the Class D Junior
Preferred Stock and junior to all other series of Preferred Stock. All equity
securities of the Corporation to which the Class C Junior Preferred Stock ranks
prior (whether with respect to dividends or upon liquidation, dissolution,
winding up or otherwise), are collectively referred to herein as the "Junior
Securities." All equity securities of the Corporation with which the Class C
Junior Preferred Stock ranks on a parity (whether with respect to dividends or
upon liquidation, dissolution or winding up), including the Class D Junior
Preferred Stock, are collectively referred to herein as the "Parity Securities."
All equity securities of the Corporation to which the Class C Junior Preferred
Stock ranks junior (whether with respect to dividends or upon liquidation,
dissolution or winding up) are collectively referred to herein as "Senior
Securities". The respective definitions of Junior Securities, Parity Securities
and Senior Securities shall also include any options exercisable for or
convertible into any of the Junior Securities, Parity Securities and Senior
Securities, as the case may be.
12. Reports. So long as any of the Class C Junior Preferred
Stock is outstanding, the Corporation will furnish the holders thereof with the
quarterly and annual financial reports that the Corporation is required to file
with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 or, in the event the Corporation is
not required to file such reports, reports containing the same information as
would be required in such reports.
13. Definitions. "Exercised" shall mean that the Right of First
Refusal has been validly exercised by Telewest (other than pursuant to Clause
(B) of the definition of "Resolved") and the Corporation (or the relevant
subsidiary of the Corporation) has received the proceeds therefrom in
consideration for the delivery of the equity interests thereunder.
"NTL Average Market Price" means the average of the average
of the high and low sales prices of the Common Stock of the Corporation on the
principal market on which it is traded for each of the five trading days ending
on the last trading day prior to the date of determination.
"Resolved" shall mean that (A) the Right of First Refusal is no
longer of any legal force and effect or (B) that the Corporation shall have
entered into an agreement, arrangement or understanding with Telewest directly
or indirectly relating to a business combination between the Corporation and
Telewest or the Right of First Refusal or the ownership interests in Cable
London.
"Right of First Refusal" shall mean the right of preemption set
forth in Article 15(c) of the Articles of Association of Cable London.
IN WITNESS WHEREOF, NTL INCORPORATED has caused this
Certificate to be made under the seal of the Corporation and signed by
_________________, its __________________, and attested by _________________,
its _________________, this ____ day of ______________, 1998.
NTL INCORPORATED
By:
-------------------------------
Name:
Title:
[SEAL]
Attest:
- -------------------------------
Name:
Title:
Exhibit
2.1-D
------------
-
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF CLASS D JUNIOR
PARTICIPATING PREFERRED STOCK
of
NTL INCORPORATED
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
NTL Incorporated, a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the said Corporation, the said
Board of Directors on ______, 1998 adopted the following resolution creating a
series of ________________ shares of Preferred Stock designated as Class D
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Class D Junior Participating Preferred Stock," par value $.01 per
share (the "Class D Junior Preferred Stock"), and the number of shares
constituting such series shall be ____________.
2. Dividends and Distributions. (a) Each share of Class D
Junior Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available for the payment of
dividends, contemporaneously with any dividends with respect to shares of Common
Stock (as defined in Section 11), dividends in an amount per share (rounded to
the nearest cent) equal to, subject to the provision for adjustment hereinafter
set forth, 1.00(*) times the aggregate per share amount of cash dividends
declared by the Board of Directors with respect to the Common Stock, and
1.00(**) times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock, by
reclassification or otherwise) declared by the Board of Directors with respect
to the Common Stock, to the same extent as, on the same basis as, and in the
same form as (whether payable in cash or in kind), any dividends with respect to
shares of Common Stock. With respect to each dividend payable in respect of the
Class D Junior Preferred Stock, the record date for such dividend shall be the
same as the record date for the corresponding dividend in respect of the Common
Stock. Such dividends shall be payable on the dates specified by the Board of
Directors as the dates for payment of dividends in respect of shares of Common
Stock (each of such dates being a "dividend payment date")(unless such day is
not a business day, in which event on the next succeeding business day). Such
dividends shall be paid to the holders of record at the close of business on the
date (the "record date") specified by the Board of Directors of the Corporation
at the time such dividend is declared; provided that such date shall not be more
than 60 days nor less than 10 days prior to the respective dividend payment
date. In the event the Corporation shall at any time after the date of initial
issuance of the Class D Junior Preferred Stock (the "Issuance Date"), (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which each share of Class D Junior Preferred Stock was entitled to receive
immediately prior to such event under the first sentence of this Section 2(a)
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
(b) So long as any shares of the Class D Junior Preferred Stock
are outstanding, no dividends shall be declared or paid or set apart for payment
or other distribution declared or made upon Parity Securities or Junior
Securities by the Corporation, unless a dividend in the amount and form provided
for herein is paid or set apart for payment on or in respect of the Class D
Junior Preferred Stock.
3. Voting Rights. The holders of shares of Class D Junior
Preferred Stock shall have the following voting rights:
(a) Except as otherwise provided herein, in the Certificate
of Incorporation or under applicable law, (i) each share of Class D Junior
Preferred Stock and each share of Class C Junior Preferred Stock shall be
entitled to vote together with the Common Stock on all matters submitted for a
vote of holders of Common Stock as a single class, (ii) subject to the provision
for adjustment hereinafter set forth, shall be entitled to 1.00(*) votes per
share of Class D Junior Preferred Stock and (iii) shall be entitled to notice of
any stockholders' meeting in accordance with the Certificate of Incorporation
and bylaws of the Corporation. In the event the Corporation shall at any time
after the Issuance Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of Class
D Junior Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
(b) So long as any shares of Class D Junior Preferred Stock are
outstanding, the Corporation shall not, without the written consent or
affirmative vote at a meeting called for that purpose of the holders of
two-thirds or more of the shares of Class D Junior Preferred Stock then
outstanding, amend, alter or repeal, whether by merger, consolidation,
combination, reclassification or otherwise, the Certificate of Incorporation or
by-laws of the Corporation or of any provision thereof (including the adoption
of a new provision thereof) which would result in an alteration or circumvention
of the voting powers, designation and preferences and relative participating,
optional and other special rights, and qualifications, limitations and
restrictions of the Class D Junior Preferred Stock.
(c) The consent or votes required in Section 3(b) shall be in
addition to any approval of stockholders of the Corporation which may be
required by law or pursuant to any provision of the Certificate of Incorporation
or bylaws, which approval shall be obtained by vote of the stockholders of the
Corporation in the manner provided in Section 3(a).
4. Reacquired Shares. Any shares of Class D Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
5. Liquidation, Dissolution or Winding Up. (a) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of Junior Securities
unless, prior thereto, the holders of shares of Class D Junior Preferred Stock
shall have received $0.01 per share (the "Class D Liquidation Preference"), and
the holders of Parity Securities shall have received any liquidation preference
due them (the "Parity Preference"). Following the payment of the full amount of
the Class D Liquidation Preference, no additional distributions shall be made to
the holders of shares of Class D Junior Preferred Stock unless, prior thereto,
the holders of shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by dividing (i) the
Class D Liquidation Preference by (ii) 1.00(*) (as appropriately adjusted as set
forth in Section 5(c) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii) being hereinafter referred to as the "Adjustment Number").
Following the payment of the full amount of the Class D Liquidation Preference,
the Parity Preference and the Common Adjustment in respect of all outstanding
shares of Class C Junior Preferred Stock, Class D Junior Preferred Stock and
Common Stock, respectively, holders of shares of Class C Junior Preferred Stock,
Class D Junior Preferred Stock and Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Class C Junior Preferred Stock
and Class D Junior Preferred Stock, and Common Stock, on a per share basis,
respectively.
- ----------
(*) See Section 5.20.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Class D Liquidation Preference and
the Parity Preference, then such remaining assets shall be distributed ratably
to the holders of all such shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Issuance Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
6. Consolidation, Merger, Share Exchange, etc. In case the
Corporation shall enter into any consolidation, merger, share exchange,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Class D Junior Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1.00(*)
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time after the Issuance Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Class D Junior Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
- ----------
(*) See Section 5.20.
7. Redemption. (a) Except as set forth in Section 7(b) the
shares of Class D Junior Preferred Stock shall not be redeemable.
(b) If the Right of First Refusal is Exercised, each share of
Class D Junior Preferred Stock shall, within 45 days of the receipt by the
Corporation of the Net Proceeds, be redeemed by the Corporation for a pro rata
(by number of shares of Class D Junior Preferred Stock originally issued) share
of the Net Proceeds. Such redemption shall be, at the election of the
Corporation, payable either (i) in cash, subject to any requirements of law or
the Corporation's debt instruments, or (ii) in shares of Common Stock of the
Corporation valued at the greater of $30 per share [subject to adjustment if
change in NTL Common Stock prior to Issuance Date] or the NTL Average Market
Price as of the date of receipt of the proceeds by the Corporation.
(c) "Net Proceeds" shall mean the net proceeds received for the
equity interest (as of the Issuance Date) in Birmingham Cable (without regard to
debt, loans from the Corporation to Birmington Cable or the debt component
(i.e., face amount and accrued and unpaid interest) of any convertible security)
from the consummation of the sale of the interest under the Rights of First
Refusal less taxes which would be payable on such sale at the Tax Rate without
giving effect to any credits or other adjustments available to the Corporation
or its subsidiaries as a result of factors not related to the Corporation's
interest in Birmingham Cable.
(d) Nothing contained herein shall be deemed to restrict or
prohibit the Corporation from acquiring shares of Class D Preferred Stock
otherwise then pursuant to redemption pursuant to Section 7(b) hereof.
8. Exchange. If (i) the Corporation shall so elect in its sole
discretion or (ii) the Right of First Refusal is Resolved, the Corporation
shall, within 45 days of the date of election with respect to clause (i) or the
date the Rights of Refusal is Resolved with respect to clause (ii), exchange
each share of Class D Junior Preferred Stock into 1.00(*) share (or, if there
has been one or more adjustments pursuant to the last sentence of Section 2(a),
the adjusted number of shares) of Common Stock of the Corporation.
- ----------
(*) See Section 5.20.
9. Procedure for Redemption or Exchange. (a) In the event of
redemption of the Class D Junior Preferred Stock pursuant to Section 7 or an
exchange of the shares of Class D Junior Preferred Stock pursuant to Section 8,
notice of such redemption or exchange shall be given to each holder of record of
the shares to be redeemed or exchanged at such holder's address as the same
appears on the stock transfer books of the Corporation at least 30 but not more
than 45 days before the date fixed for redemption or exchange, as the case may
be, provided, however, that no failure to give such notice nor any defect
therein shall affect the validity of the redemption or exchange of any share of
Class D Junior Preferred Stock to be redeemed or exchanged except as to the
holder to whom the Corporation has failed to give said notice or except as to
the holder whose notice was defective. Each such notice shall state: (i) the
redemption date or exchange date; (ii) the amount and nature of the
consideration to be made in respect of each share; (iii) the place or places
where certificates for such shares are to be surrendered for redemption or
exchange; (iv) the specific provision hereof pursuant to which such redemption
or exchange is to be made; and (v) that dividends on the shares to be redeemed
or exchanged will cease to accrue on such redemption date or exchange date. Upon
giving any notice of a redemption pursuant to Section 7 or notice of exchange
pursuant to Section 8, the Corporation shall become obligated to redeem or
exchange the shares of Class D Junior Preferred Stock specified in such notice
on the redemption date or exchange date, as the case may be, specified in such
notice.
(b) Notice having been given as aforesaid, from and after the
redemption date or the exchange date (unless, in the case of a redemption,
default shall be made by the Corporation in providing money for the payment of
the redemption price of the shares called for redemption or, in the case of an
exchange, the Corporation defaults in issuing Common Stock or fails to pay or
set aside for payment accrued and unpaid dividends on the Class D Junior
Preferred Stock to the exchange date), dividends on the shares of Class D Junior
Preferred Stock called for redemption or exchange shall cease to accrue, and all
rights of the holders thereof as stockholders of the Corporation (except the
right to receive from the Corporation the redemption price without interest or
the Common Stock and accrued and unpaid dividends on the Class D Junior
Preferred Stock to the exchange date) shall cease. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed or exchanged
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall be
redeemed or exchanged by the Corporation at the redemption price or rate of
exchange aforesaid.
(c) The Corporation will pay any and all issuance and delivery taxes
that may be payable in respect of the issuance or delivery of Common Stock in
exchange for shares of Class D Junior Preferred Stock. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of Common Stock in a name other
than that in which the shares of Class D Junior Preferred Stock so exchange were
registered, and no such issuance or delivery shall be made unless and until the
person requesting such issuance has paid to the Corporation the amount of any
such tax or has established to the satisfaction of the Corporation that such tax
has been paid.
(d) If a notice of redemption shall have been given, such redemption
is for consideration solely of cash and if, prior to the redemption date, the
Corporation shall have irrevocably deposited the aggregate redemption price of
the shares of Class D Junior Preferred Stock to be redeemed in trust for the pro
rata benefit of the holders of the shares of Class D Junior Preferred Stock to
be redeemed, so as to be and to continue to be available therefor, with a bank
or trust company that (i) is organized under the laws of the United States of
America or any state thereof, (ii) has capital and surplus of not less than
$250,000,000 and (iii) has, or, if it has no publicly traded debt securities
rated by a nationally recognized rating agency, is the subsidiary of a bank
holding company that has, publicly traded debt securities rated at least "A" or
the equivalent thereof by Standard & Poor's Corporation or "A-2" or the
equivalent by Moody's Investor Service Inc., then upon making such deposit, all
rights of holders of the shares so called for redemption shall cease, except the
right of holders of such shares to receive the redemption price against delivery
of such shares, but without interest, and such shares shall cease to be
outstanding. Any funds so deposited that are unclaimed by holders of shares at
the end of three years from such redemption date shall be repaid to the
Corporation upon its request, after which repayment the holders of shares of
Class D Junior Preferred Stock so called for redemption shall thereafter be
entitled to look only to the Corporation for payment of the redemption price.
(e) In the event of redemption of shares of Class D Junior Preferred
Stock for shares of Common Stock pursuant to Section 7 or an exchange of Class D
Junior Preferred Stock for shares of Common Stock pursuant to
Section 8:
(i) such redemption or exchange shall be deemed to have been
effected on the redemption date or the exchange date, as the case
may be, and the person in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
redemption or exchange shall be deemed to have become the holder of
record of the shares of Common Stock represented thereby as of the
close of business on the redemption date or the exchange date, as
the case may be;
(ii) all such shares of Common Stock issued upon redemption or
exchange of the Class D Junior Preferred Stock will upon issuance be
duly and validly issued and fully paid and non-assessable, free of
all liens and charges and not subject to any preemptive rights;
(iii) effective as of the close of business on the redemption
date or exchange date, as the case may be, the holder thereof shall
be deemed to be the holder of the shares of Common Stock for which
such shares of Class D Junior Preferred Stock were redeemed or
exchanged, as the case may be, and, as from the redemption date or
the exchange date, as the case may be, such holder shall be entitled
to all rights of a Common Stock holder;
(iv) prior to the issuance of any such shares of Common Stock,
the Corporation shall comply with all applicable federal and state
laws and regulations which require action to be taken by the
Corporation;
(v) no fractional shares of Common Stock shall be issued, but
in lieu thereof the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to such
fractional interest multiplied by the closing price reported by the
principal securities exchange on which the shares of Common Stock
are listed and traded on the redemption date or exchange date, as
the case may be; and
(f) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, such number of its authorized
but unissued shares of Common Stock and/or its shares of Common Stock held as
treasury stock as shall be required for the purpose of effecting the redemption
or exchange of the Class D Junior Preferred Stock.
10. Fiduciary Duty. The Board of Directors of the Corporation
shall, with respect to all matters except those set forth in Sections 5, 7, 8, 9
and 13, have the obligations and duties (including fiduciary duties) to the
holders of the Class D Junior Preferred Stock to the same extent and as if they
were holders of the Common Stock. With respect to the matters set forth in
Section 5, 7, 8, 9 and 13, the Board of Directors of the Corporation shall act
in good faith and, in the event that the Corporation is not reasonably likely to
enter into any agreement, arrangement or understanding directly or indirectly
relating to the Right of First Refusal or the ownership interest in Birmingham
Cable which would result in an exchange pursuant to clause (ii) of Section 8,
and the Right of First Refusal is reasonably likely to be exercised, the
Corporation shall use its reasonable efforts to maximize the proceeds to be
received from the exercise thereof.
11. Ranking. The Class D Junior Preferred Stock shall, with
respect to dividend rights, rank on a parity with, the common stock, par value
$.01 per share, of the Corporation (the "Common Stock") and the Class C Junior
Participating Preferred Stock, par value $.01 per share, of the Corporation (the
"Class C Junior Preferred Stock"). With respect to rights on liquidation,
dissolution and winding up, the Class D Junior Preferred Stock shall rank prior
to all classes of the Common Stock, on a parity with the Class C Junior
Preferred Stock and junior to all other series of Preferred Stock. All equity
securities of the Corporation to which the Class D Junior Preferred Stock ranks
prior (whether with respect to dividends or upon liquidation, dissolution,
winding up or otherwise), are collectively referred to herein as the "Junior
Securities." All equity securities of the Corporation with which the Class D
Junior Preferred Stock ranks on a parity (whether with respect to dividends or
upon liquidation, dissolution or winding up), including the Class C Junior
Preferred Stock, are collectively referred to herein as the "Parity Securities."
All equity securities of the Corporation to which the Class D Junior Preferred
Stock ranks junior (whether with respect to dividends or upon liquidation,
dissolution or winding up) are collectively referred to herein as "Senior
Securities". The respective definitions of Junior Securities, Parity Securities
and Senior Securities shall also include any options exercisable for or
convertible into any of the Junior Securities, Parity Securities and Senior
Securities, as the case may be.
12. Reports. So long as any of the Class D Junior Preferred
Stock is outstanding, the Corporation will furnish the holders thereof with the
quarterly and annual financial reports that the Corporation is required to file
with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 or, in the event the Corporation is
not required to file such reports, reports containing the same information as
would be required in such reports.
13. Definitions. "Exercised" shall mean that the Right of First
Refusal has been validly exercised by Telewest and/or General Cable (other than
pursuant to clause (B) of the definition of "Resolved") and the Corporation (or
the relevant subsidiary of the Corporation) has received the proceeds therefrom
in consideration for the delivery of the equity interests thereunder.
"NTL Average Market Price" means the average of the average of
the high and low sales prices of the Common Stock of the Corporation on the
principal market on which it is traded for each of the five trading days ending
on the last trading day prior to the date of determination.
"Resolved" shall mean that (A) the Right of First Refusal is no
longer of any legal force and effect or (B) that the Corporation shall have
entered into an agreement, arrangement or understanding with Telewest and/or
General Cable directly or indirectly relating to a business combination between
the Corporation and Telewest or the Right of First Refusal or the ownership
interest in Birmingham Cable.
"Right of First Refusal" shall mean the right of first refusal
set forth in Section 5.2 of the Co-Ownership Agreement, dated March 12, 1990,
between US West International Holdings Inc. and Comcast Cablevision of
Birmingham, Inc., as subsequently amended, supplemented and novated.
IN WITNESS WHEREOF, NTL INCORPORATED has caused this
Certificate to be made under the seal of the Corporation and signed by
_________________, its __________________, and attested by _________________,
its _________________, this ____ day of ______________, 1998.
NTL INCORPORATED
By:
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Name:
Title:
[SEAL]
Attest:
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Name:
Title: