SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) FEBRUARY 17, 2000
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NTL INCORPORATED
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-25691 13-4051921
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(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
110 East 59th Street, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (212) 906-8440
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
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On February 17, 2000, NTL Incorporated ("NTL") announced that NTL, France
Telecom and certain commercial banks entered into an arrangement, subject to
certain conditions, involving the issue of US$1.85 billion of new NTL preferred
stock. The proceeds from this subscription will be used to help fund NTL's
acquisitions in Continental Europe outside of France.
A copy of the Press Release, Certificate of Designation and Purchase
Agreement are attached hereto as exhibits and incorporated herein by reference.
Item 7. Financial Statements and Exhibits
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Exhibits
99.1 Press release, issued February 17, 2000
99.2 Certificate of Designation
99.3 Purchase Agreement
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NTL INCORPORATED
(Registrant)
By: /s/ Richard J. Lubasch
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Name: Richard J. Lubasch
Title: Executive Vice President-
General Counsel
Dated: February 17, 2000
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EXHIBIT INDEX
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Exhibit Page
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99.1 Press release, issued February 17, 2000
99.2 Certificate of Designation
99.3 Purchase Agreement
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NTL INCORPORATED ANNOUNCES AGREEMENT TO ISSUE
$1.85 BILLION OF NEW PREFERRED STOCK
New York, New York (February 17, 2000) -NTL Incorporated (NASDAQ and EASDAQ:
NTLI), announced today that NTL, France Telecom and certain commercial banks
have entered into an arrangement, subject to certain conditions, involving the
issue of US$1.85 billion of new NTL preferred stock. The proceeds from this
subscription will be used to help fund NTL's acquisitions in Continental Europe
outside of France.
Barclay Knapp, Chief Executive Officer of NTL commented "We are delighted to
extend our excellent partnership with France Telecom in this way. Under this
structure, NTL receives immediate capital to put towards our European expansion,
building on our recently announced agreement to acquire the assets of CableCom
Holding A.G."
France Telecom may at any time after six months from issue elect, subject to
certain conditions being satisfied, for the new preferred stock to be exchanged
for up to a 50% interest in a new company which is yet to be established which
will own certain or all of NTL's then existing broadband communications,
broadcast and cable television interests in Continental Europe outside of
France. Under certain circumstances, at NTL's option, any portion of NTL's
obligation that may not be satisfied by the exchange may be satisfied in a
security convertible into NTL common stock or cash. The new preferred stock is
mandatorily redeemable for cash after two years at the option of certain holders
or NTL.
The contents of this press announcement have been approved by Morgan Stanley &
Co Limited for the purposes of Section 57 of the Financial Services Act 1986.
Morgan Stanley & Co Limited, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting as financial adviser to NTL
Incorporated in connection with the contents of this press announcement and to
no one else and will not regard any other person as its customer or be
responsible to anyone other than NTL Incorporated for providing the protection
afforded to customers of Morgan Stanley & Co Limited in connection with the
contents of this press announcement.
* * * * * * * *
<PAGE>
For more information please contact:
In the U.S.:
John F. Gregg, Chief Financial Officer - 212-906-8440
Richard J. Lubasch, Executive Vice President-General Counsel- 212-906-8440
Bret Richter, Vice President -Corporate Finance and Development - 212 906 8440
Erik Tamm, Investor Relations - 212 906-8440
Or e-mail: [email protected].
In the U.K.:
Alison Smith - +44 1252 402 000
EXHIBIT 99.2
FORM OF
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
5% CUMULATIVE PREFERRED STOCK, SERIES A, OF
NTL INCORPORATED
PURSUANT TO SECTION 151(g) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned, Executive Vice President, General Counsel and Secretary of
NTL Incorporated, a Delaware corporation (the "Corporation"), HEREBY CERTIFIES
that the Board of Directors, in accordance with Article FOURTH, Section B of the
Corporation's Restated Certificate of Incorporation and Section 151(g) of the
Delaware General Corporation Law (the "DGCL"), has authorized the creation of
the series of Preferred Stock hereinafter provided for and has established the
dividend, redemption and voting rights thereof and has adopted the following
resolution, creating the following new series of the Corporation's Preferred
Stock:
"BE IT RESOLVED that, pursuant to authority expressly granted to the Board
of Directors by the provisions of Article FOURTH, Section B of the Restated
Certificate of Incorporation of the Corporation and Section 151(g) of the DGCL,
there is hereby created and authorized the issuance of a new series of the
Corporation's Preferred Stock, par value $0.01 per share ("Preferred Stock"),
with the following powers, designations, dividend rights, voting powers, rights
on liquidation, redemption rights and other preferences and relative,
participating, optional or other special rights and with the qualifications,
limitations or restrictions on the shares of such series (in addition to the
powers, designations, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereof set
forth in the Restated Certificate of Incorporation that are applicable to each
series of Preferred Stock) hereinafter set forth.
<PAGE>
(1) Number and Designation. 1,850,000 shares of the Preferred Stock of the
Corporation shall be designated as 5% Cumulative Preferred Stock, Series-A (the
"5% Preferred Stock"), and no other shares of Preferred Stock shall be
designated as 5% Preferred Stock.
(2) Definitions. For purposes of the 5% Preferred Stock, the following
terms shall have the meanings indicated:
"Bankruptcy Event" shall mean any of the following: (i) a court having
jurisdiction in the premises enters a decree or order for (A) relief
in respect of any Major Entity in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect, (B) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of any
Major Entity or for all or substantially all of the property and
assets of any Major Entity or (C) the winding up or liquidation of the
affairs of any Major Entity; or (ii) any Major Entity (A)-commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of any Major Entity, or for all or substantially all of the
property and assets of any Major Entity or (C)-effects any general
assignment for the benefit of creditors.
"Board of Directors" shall mean the board of directors of the Corporation.
"Board of Directors" shall also mean the Executive Committee, if any,
of such board of directors or any other committee duly authorized by
such board of directors to perform any of its responsibilities with
respect to the 5% Preferred Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York,
New York are not required to be open.
"Common Stock" shall mean the Corporation's Common Stock, par value $0.01
per-share.
"Constituent Person" shall have the meaning set forth in paragraph (9)(e)
hereof.
<PAGE>
"Conversion Rate" shall have the meaning set forth in paragraph (9)(a)
hereof.
"Corporation" shall have the meaning set forth in the preamble.
"Current Market Price" of publicly traded shares of Common Stock or any
other class of capital stock or other security of the Corporation or
any other issuer for any day shall mean the last reported sale price
for such security on the principal exchange or quotation system on
which such security is listed or traded. If the security is not
admitted for trading on any national securities exchange or the Nasdaq
National Market, "Current Market Price" shall mean the average of the
last reported closing bid and asked prices reported by the Nasdaq as
furnished by any member in good standing of the National Association
of Securities Dealers, Inc., selected from time to time by the
Corporation for that purpose or as quoted by the National Quotation
Bureau Incorporated. In the event that no such quotation is available
for such day, the Current Market Price shall be the average of the
quotations for the last five Trading Days for which a quotation is
available within the last 30-Trading Days prior to such day. In the
event that five such quotations are not available within such
30-Trading Day period, the Board of Directors shall be entitled to
determine the Current Market Price on the basis of such quotations as
it reasonably considers appropriate.
"Determination Date" shall have the meaning set forth in paragraph (9)(a)
hereof.
"Dividend Payment Date" shall mean the applicable redemption date of the 5%
Preferred Stock as set forth in paragraph 6(a).
"Dividend Periods" shall mean quarterly dividend periods commencing on
March 31, June 30, September 30 and December 31 of each year and
ending on and including the day preceding the first day of the next
succeeding Dividend Period (except that the initial Dividend Period
shall commence on the Issue Date and the final Dividend Period shall
end on but exclude the Dividend Payment Date.
"Eurotel" shall mean an entity which is or will be a direct or indirect,
wholly-owned subsidiary of the Corporation, which entity owns all of
the outstanding capital stock of entities that are primarily engaged
in the broadband communications, broadcasting and cable television
business in Continental Europe (outside of France).
<PAGE>
"Eurotel Stock" shall mean capital stock of Eurotel with the greatest
voting power and the power to control or direct the management of
Eurotel of the type and class held, directly or through any of its
subsidiaries, by the Corporation.
"Exchange Act"" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulation thereunder.
"Exchange Date" shall have the meaning set forth in paragraph (9)(a)
hereof.
"Expiration Time" shall have the meaning set forth in paragraph (9)(d)(v)
hereof.
"5% Preferred Stock" shall have the meaning set forth in paragraph-(1)
hereof.
"5% Convertible Preferred" shall have the meaning set forth in paragraph
(3)(d) hereof.
"5% Convertible Series A" shall have the meaning set forth in paragraph
(3)(d) hereof.
"5% Convertible Series B" shall have the meaning set forth in paragraph
(3)(d) hereof.
"5-1/4% Preferred" shall have the meaning set forth in paragraph (3)(d)
hereof. *
"5-1/4% Series A" shall have the meaning set forth in paragraph (3)(d)
hereof.
"GAAP" shall mean United States generally accepted accounting principles
and practices as in effect from time to time and applied consistently
throughout the periods involved.
"Holdco" shall have the meaning set forth in paragraph (11) hereof.
* Called for redemption on February 7, 2000. As soon as appropriate
certificates of elimination are filed, this Certificate of Designation will
be amended to eliminate references.
<PAGE>
"Issue Date" shall mean the date on which shares of 5% Preferred Stock are
first-issued.
"Investment Agreement" means the agreement, dated July 26, 1999, between
France Telecom and the Corporation.
"Junior Securities" shall have the meaning set forth in paragraph-(3)(c)
hereof.
"Junior Securities Distribution" shall have the meaning set forth in
paragraph-(4)(e) hereof.
"Liquidation Right" shall mean, for each share of 5% Preferred Stock, an
amount equal to US$1,000 per share, plus an amount equal to all
dividends (whether or not earned or declared) accrued and unpaid
thereon to the date of final distribution to such holders.
"Major Entity" shall mean any of the Corporation, NTL Communications Corp.,
Diamond Cable Communications Limited, Diamond Holdings Limited, NTL
(Triangle) LLC or any Significant Subsidiary.
"Nasdaq" means the Nasdaq Stock Market, Inc., the electronic securities
market regulated by the National Association of Securities Dealers,
Inc.
"Nasdaq National Market" shall have the meaning set forth in Rule
4200(a)(23) of the rules of the National Association of Securities
Dealers, Inc.
"9.9%Series B Preferred" shall have the meaning set forth in paragraph
(3)(d) hereof.
"NYSE" means the New York Stock Exchange.
"outstanding", when used with reference to shares of stock, shall mean
issued shares, excluding shares held by the Corporation or a
subsidiary.
"Parity Securities" shall have the meaning set forth in paragraph-(3)(b)
hereof.
<PAGE>
"Person" shall mean any individual, partnership, association, joint
venture, corporation, business, trust, joint stock company, limited
liability company, any unincorporated organization, any other entity,
a "group" of such persons, as that term is defined in Rule 13d-5(b)
under the Exchange Act, or a government or political subdivision
thereof.
"Preferred Stock" shall have the meaning set forth in the first resolution
above.
"Purchase Agreement" shall mean the Purchase Agreement, dated February 17,
2000, among the Corporation and certain parties identified therein
with respect to the 5% Preferred Stock.
"Purchase Shares" shall have the meaning set forth in (9)(d)(v) hereof.
"Qualified Holder" shall mean any holder other than a commercial bank or an
affiliate of a commercial bank.
"Record Date" shall have the meaning set forth in paragraph (9)(d)(iv)
hereof.
"Redemption Date" shall have the meaning set forth in paragraph-(6)(a)
hereof.
"Redemption Obligation" shall have the meaning set forth in
paragraph-(6)(b) hereof.
"Redemption Price" shall have the meaning set forth in paragraph-(6)(a)
hereof.
"Senior Securities" shall have the meaning set forth in paragraph (3)(a)
hereof.
<PAGE>
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which
indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be
so paid on any series or class of capital stock of the Corporation;
provided, however, that if any funds for any class or series of Junior
Securities or any class or series of Parity Securities are placed in a
separate account of the Corporation or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with
respect to the 5% Preferred Stock shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or
other similar agent, as the case may be.
"Significant Subsidiary" shall have the meaning given to such term in
Regulation S-X under the Exchange Act.
"13% Preferred" shall have the meaning set forth in paragraph (3)(d)
hereof.
"Trading Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted
for trading on the NYSE, on the principal national securities exchange
on which such securities are listed or admitted, or if not listed or
admitted for trading on any national securities exchange, on the
Nasdaq National Market, or if such securities are not quoted thereon,
in the applicable securities market in which the securities are
traded.
"Transaction" shall have the meaning set forth in paragraph (9)(e) hereof.
"25-Day Average Market Price" shall mean, for any security, the
volume-weighted average of the Current Market Prices of that security
for the twenty-five Trading Days immediately preceding the date of
determination.
(3) Rank. Any class or series of stock of the Corporation shall be deemed
to-rank:
(a) prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be
entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");
<PAGE>
(b) on a parity with the 5% Preferred Stock, either as to the payment
of dividends or as to distributions of assets upon liquidation, dissolution
or winding up, or both, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred
Stock and of such class of stock or series shall be entitled by the terms
thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, or both, in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other and such
class of stock or series is not a class of Senior Securities ("Parity
Securities"); and
(c) junior to the 5% Preferred Stock, either as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if
the holders of the 5% Preferred Stock shall be entitled to receipt of
dividends, and of amounts distributable upon liquidation, dissolution or
winding up, in preference or priority to the holders of shares of such
stock or series ("Junior Securities").
(d) Each of the 13% Series-B Senior Redeemable Exchangeable Preferred
Stock (the "13% Preferred") and the 5-1/4% Convertible Preferred Stock,
Series A (the "5-1/4% Series A") and any dividends paid on the 5-1/4%
Series A in accordance with its terms, to the extent that such dividends
are paid in preferred stock having terms substantially identical to the
5-1/4% Series A and any dividends paid on preferred stock issued as in-kind
dividends thereon, to the extent such dividends are paid in preferred stock
having terms substantially identical to the 5-1/4% Series A (the 5-1/4%
Series A and all such in-kind dividends being hereinafter referred to as
the "5-1/4% Preferred"), is a Senior Security. Each of the 5% Cumulative
Participating Convertible Preferred Stock, Series A (the "5% Convertible
Series A") and any dividends paid on the 5% Convertible Series A in
accordance with its terms, to the extent that such dividends are paid in
preferred stock having terms substantially identical to the 5% Convertible
Series A and any dividends paid on preferred stock issued as in-kind
dividends thereon, to the extent such dividends are paid in preferred stock
having terms substantially identical to the 5% Convertible Series A (the 5%
Convertible Series A and all such in-kind dividends being hereinafter
referred to as the "5% Convertible Preferred"), is a Parity Security. Each
of the 9.9% Non-Voting Mandatorily Redeemable Preferred Stock, Series-B
("9.9% Series-B Preferred") and the Series A Junior Participating Preferred
Stock is a Junior Security. Except for the Preferred Stock proposed to be
issued under the terms of the Investment Agreement (and collectively with
any dividends paid thereon in preferred stock, the "5% Convertible Series
B"), each of which would be a Parity Security, there shall be no issue of
other Senior Securities, Parity Securities or rights or options exercisable
for or convertible into any such securities, except as approved by the
holders of the 5% Preferred Stock, or as otherwise permitted, pursuant to
paragraph-9(c).
<PAGE>
(e) The respective definitions of Senior Securities, Junior Securities
and Parity Securities shall also include any rights or options exercisable
for or convertible into any of the Senior Securities, Junior Securities and
Parity Securities, as the case may be. The 5% Preferred Stock shall be
subject to the creation of Junior Securities, Parity Securities and Senior
Securities as set forth herein.
(4) Dividends. (a)--The holders of shares of 5% 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 (after taking into account
revaluation of the assets and liabilities of the Corporation to the extent
deemed reasonable by the Board of Directors of the Corporation after
consultation with legal and financial advisors) but without regard to any
contractual or other restrictions with respect thereto, dividends at the
quarterly rate of US$12.50 per share (assuming a US$1,000 face amount) payable
in additional shares of the 5% Preferred Stock. All dividends on the 5%
Preferred Stock shall be payable in arrears on the Dividend Payment Date and
shall be cumulative from the Issue Date (except that dividends on additional
shares of the 5% Preferred Stock issued as dividends on 5% Preferred Stock shall
accrue from the date such additional shares of 5% Preferred Stock are issued or
would have been issued in accordance with this Certificate of Designation if
such dividends had been declared), whether or not in any Dividend Period or
Dividend Periods there shall be funds of the Corporation legally available for
the payment of such dividends. The total accumulative dividends for all Dividend
Periods terminating on or prior to the applicable redemption date shall be
payable to the holders of record of shares of the 5% Preferred Stock, as they
appear on the stock records of the Corporation at the close of business on the
record date for such dividend. Upon receipt by the Company of notice from the
holders of the 5% Preferred Stock that they have elected to require the Company
to discharge its Redemption Obligation, the Board of Directors shall fix as such
record date the fifth Business Day preceding the Dividend Payment Date and shall
give notice on or prior to the record date of the number of additional shares of
5% Preferred Stock payable in respect of the dividends accrued up to but
excluding the Dividend Payment Date.
(b) For the purpose of determining the number of additional shares of
5% Preferred Stock to be issued as dividends pursuant to paragraph-(4)(a),
each such share of additional 5% Preferred Stock shall be valued at
US$1,000. Holders of such additional shares of 5% Preferred Stock shall be
entitled to receive dividends payable at the rates specified in
paragraph-(4)(a).
<PAGE>
(c) The dividends payable for the initial Dividend Period, or any
other period shorter than a full Dividend Period, on the 5% Preferred Stock
shall accrue daily and be computed on the basis of a 360-day year and the
actual number of days in such period. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or
payments on the 5% Preferred Stock that may be in arrears except as
otherwise provided herein.
(d) So long as any shares of the 5% Preferred Stock are outstanding,
no dividends, except as described in the next succeeding sentence, shall be
declared or paid or set apart for payment on Parity Securities or Junior
Securities, for any period, nor shall any Parity Securities or Junior
Securities be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such Parity Securities or Junior Securities)
by the Corporation (except for conversion into or exchange into other
Parity Securities or Junior Securities, as the case may be) unless, in each
case, (i)-full cumulative dividends on all outstanding shares of the 5%
Preferred Stock for all Dividend Periods terminating on or prior to the
date of such redemption, repurchase or other acquisition shall have been
paid or set apart for payment (together with any payments that may be
required under paragraph (12)(c)), (ii)-sufficient funds shall have been
paid or set apart for the payment of the dividend for the current Dividend
Period with respect to the 5% Preferred Stock and (iii)-the Corporation is
not in default with respect to any redemption of shares of 5% Preferred
Stock by the Corporation pursuant to paragraph-(6) below. When dividends
are not fully paid in additional shares of 5% Preferred Stock or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the 5% Preferred Stock and all dividends declared
upon Parity Securities shall be declared ratably in proportion to the
respective amounts of dividends accumulated and unpaid on the 5% Preferred
Stock and accumulated and unpaid on such Parity Securities.
(e) So long as any shares of the 5% Preferred Stock are outstanding,
no dividends (other than (i)-any rights issued pursuant to the Rights
Agreement and (ii)-dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or
any subsidiary) (all such dividends, distributions, redemptions or
purchases being hereinafter referred to as "Junior Securities
Distributions") for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for Junior Securities, including pursuant to
paragraph-4(d) of the 9.9% Series-B Preferred), unless in each case
(A)-full cumulative dividends on all outstanding shares of the 5% Preferred
Stock and all other Parity Securities shall have been paid or set apart for
payment for all past Dividend Periods and dividend periods for such other
stock, (B)-sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the
5% Preferred Stock and all other Parity Securities, (C)-the Corporation is
not in default with respect to any redemption of shares of 5% Preferred
Stock by the Corporation pursuant to paragraph-(6) below and (D)-the
Corporation has fully performed its obligations under paragraphs (4)(a) and
(6) hereof.
<PAGE>
(f) Notwithstanding the provisions of Section 6(b) of the Purchase
Agreement, all payments by the Corporation of dividends on 5% Preferred
Stock to a holder thereof that is not a Qualified Holder (a "Non-Qualified
Holder") will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties,
fees, assessments or other charges of whatever nature now or hereafter
imposed by the United States of America or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Non-Qualified
Holder pursuant to the laws of the jurisdiction in which it is organized or
the jurisdiction in which the principal office or applicable lending office
of such Non-Qualified Holder is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to
such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Corporation agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under the 5% Preferred Stock, after
withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such 5% Preferred Stock . If any
amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Corporation agrees to reimburse each Non-Qualified Holder, upon the
written request of such Non-Qualified Holder, for taxes imposed on or
measured by the net income or net profits of such Non-Qualified Holder
pursuant to the laws of the jurisdiction in which such Non-Qualified Holder
is organized or in which the principal office or applicable lending office
of such Non-Qualified Holder is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such
Non-Qualified Holder is organized or in which the principal office or
applicable lending office of such Non-Qualified Holder is located and for
any withholding of taxes as such Non-Qualified Holder shall determine are
payable by, or withheld from, such Non-Qualified Holder, in respect of such
amounts so paid to or on behalf of such Non-Qualified Holder pursuant to
the preceding sentence and in respect of any amounts paid to or on behalf
of such Non-Qualified Holder pursuant to this sentence. The Corporation
will furnish to each Non-Qualified Holder within 45 days after the date the
payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Corporation. The Corporation
agrees to indemnify and hold harmless each Non-Qualified Holder, and
reimburse such Non-Qualified Holder upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Non-Qualified
Holder.
(5) Liquidation Preference. (a)--In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph-(5), (i)-a consolidation or merger of the Corporation with one or more
corporations, or (ii)-a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any Parity Securities,
upon any liquidation, dissolution or winding up of the Corporation, after
payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the 5%
Preferred Stock shall not be entitled to share therein.
<PAGE>
(6) Redemption. (a) On and after the date that is the second anniversary of
the Issue Date (the "Redemption Date"), each holder of shares of 5% Preferred
Stock that is a Qualified Holder shall have the right to require the
Corporation, to the extent the Corporation shall have funds legally available
therefor (after taking into account revaluation of the assets and liabilities of
the Corporation to the extent deemed reasonable by the Board of Directors of the
Corporation after consultation with legal and financial advisors) but without
regard to any contractual or other restrictions with respect thereto, to redeem
all or some of such Qualified Holder's shares of 5% Preferred Stock, from time
to time in part, or in whole, at US$1,000 per share (the "Redemption Price"),
payable in cash, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. Any holder of shares
of 5% Preferred Stock that is a Qualified Holder which elects to exercise its
rights pursuant to this paragraph (6)(a) shall deliver to the Corporation a
written notice of election not less than 20 days prior to the date on which such
Qualified Holder demands redemption pursuant to this paragraph (6)(a), which
notice shall set forth the name of the Qualified Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby, and shall deliver to the Corporation
on or before the date of redemption certificates evidencing the shares of 5%
Preferred Stock to be redeemed, duly endorsed for transfer to the Corporation.
(b) If the Corporation is unable to redeem all outstanding shares of
5% Preferred Stock requested by any holder of 5% Preferred Stock to be
redeemed pursuant to paragraph (6)(a) (the "Redemption Obligation") because
the Corporation does not have funds legally available therefor, the
Redemption Obligation shall be discharged as soon as the Corporation has
funds legally available to discharge such Redemption Obligation and its
obligations under paragraph (12)(c). So long as the Corporation fails to
discharge the Redemption Obligation for any reason, dividends shall
continue to accrue on the Redemption Price in accordance with paragraph (4)
in addition to dividends that accrue pursuant to paragraph (12)(c). If and
so long as any Redemption Obligation with respect to the 5% Preferred Stock
shall not be fully discharged, the Corporation shall not (i)-directly or
indirectly, redeem, purchase, or otherwise acquire any Parity Security or
discharge any mandatory or optional redemption, sinking fund or other
similar obligation in respect of any Parity Securities (except in
connection with a redemption, sinking fund or other similar obligation to
be satisfied pro rata with the 5% Preferred Stock) or (ii)-declare or make
any Junior Securities Distribution (other than dividends or distributions
paid in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Junior Securities), or, directly or indirectly,
discharge any mandatory or optional redemption, sinking fund or other
similar obligation in respect of the Junior Securities.
(c) On and after the date that is the earlier of (i) the second
anniversary of the Issue Date or (ii) the date an exchange is consummated
pursuant to paragraph (8)(a), the Corporation shall have the right to
redeem from any Qualified Holder, upon not less than five days' nor more
than ten days' notice of the redemption date, from time to time in part, or
in whole, shares of 5% Preferred Stock, at the Redemption Price, payable in
cash, together with accrued and unpaid dividends thereon, including any
dividend required under paragraph (12)(c), to, but excluding, the date
fixed for redemption, without interest.
(d) Upon the redemption of 5% Preferred Stock, the Corporation shall
pay the Redemption Price, any accrued and unpaid dividends in arrears to,
but excluding, the Dividend Payment Date, and any other dividend required
under paragraph (12)(c).
(e) For purposes of paragraph (6)(a), unless full cumulative dividends
(whether or not declared) on all outstanding shares of 5% Preferred Stock
and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods
terminating on or prior to the applicable redemption date and notice has
been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5%-Preferred Stock are redeemed pro rata and
notice has previously been given in accordance with paragraph (7).
(7) Procedure for Redemption. (a)--When the Corporation is requested to
redeem shares of 5% Preferred Stock pursuant to paragraph (6), notice of the
request for such redemption shall be given by certified mail, return receipt
requested, postage prepaid, mailed not less than 20 days prior to the redemption
date, by each requesting (1)
<PAGE>
holder to the Corporation at the following address and confirmed by facsimile
transmission:
NTL Incorporated
110 East 59th Street
New York, New York 10022
Facsimile: (212) 906-8497
Each such notice shall state (i) the redemption date and (ii) if the holder
is requiring the Corporation to redeem fewer than all the shares of 5% Preferred
Stock held by such holder, the number of shares that the Corporation is being
required to redeem from such holder.
Within 10 days of receipt of any such notice from a holder of the 5%
Preferred Stock, the Corporation shall respond to each requesting holder with a
notice sent by certified mail, return receipt requested, postage prepaid, to
each requesting holder at such holder's address as the same appears on the stock
register of the Corporation and confirmed by facsimile transmission to each
requesting holder of record if the Corporation has been furnished with such
facsimile address by the holder(s); provided, however, that neither the failure
to give such notice nor confirmation nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the notice or
the validity of the proceedings for redemption with respect to the other
holders. Each such notice shall (i) confirm-the redemption date and the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder and (ii) state-(A) the amount payable, (B)-the place or places where
certificates for such shares are to be surrendered or the notice should be sent
for payment of the redemption price, and (C)-that dividends on the shares to be
redeemed will cease to accrue at and from such redemption date, except as
otherwise provided herein. Any notice that was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice.
<PAGE>
(b) If notice has been mailed by the Corporation in response to any
holder who has given the Corporation notice requesting redemption of any of
its shares of 5% Preferred Stock, as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i)-except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii)-said shares shall no
longer be deemed to be outstanding, and (iii)-all rights of the holders
thereof as holders of the 5% Preferred Stock shall cease (except the right
to receive from the Corporation the Redemption Price without interest
thereon, upon surrender and endorsement of the certificates for any shares
so redeemed, and to receive any dividends payable thereon, including any
amounts payable pursuant to paragraph (12)(c)).
(c) Upon surrender of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of
the Corporation shall so require and the notice shall so state), such
shares shall be redeemed by the Corporation at the Redemption Price
aforesaid, plus any dividends payable thereon, including any amounts
payable pursuant to paragraph 12(c). If fewer than all the outstanding
shares of 5% Preferred Stock are to be redeemed due to the restriction set
forth in paragraph (6)(b), the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
selected pro rata (with any fractional shares being rounded to the nearest
whole share). In case fewer than all the shares represented by any such
certificate are redeemed, without cost to the holder thereof either (i) a
new certificate shall be issued representing the non-surrendered shares, or
(ii) at the option of the holder, the holder shall be entitled to retain
its existing certificates, which shall be deemed to represent the number of
shares of 5% Preferred Stock that have not been redeemed.
(8) Exchange. (a) Upon at least 30 days' written notice to the Corporation,
a Qualified Holder shall have the right, at such Qualified Holder's option, to
exchange all or any part of such shares of 5% Preferred Stock for shares of
Eurotel Stock (or to effect a constructive exchange in accordance with paragraph
(12)(d)) having a value (calculated pursuant to paragraph 8(c) below) equal to
the Redemption Price of the shares of 5% Preferred Stock with respect to which
the exchange right is being exercised, together with accrued and unpaid
dividends thereon to, but excluding, the date fixed for exchange, of such shares
of 5% Preferred Stock.
(b) Any exchange pursuant to paragraph 8(a) shall be subject to the
following requirements:
(i) The 5% Preferred Stock shall have been outstanding for at
least six months.
<PAGE>
(ii) Consummation of the exchange will not cause the Corporation,
any subsidiary of the Corporation, or Eurotel to become in breach or
contravention of, or give rise to a right to terminate or otherwise
cause a loss of any material right under, any material agreement,
contract, instrument or obligation of or binding on such entity; and
the Corporation covenants and agrees not to enter into any such
agreement, contract or instrument or incur such obligation after the
date of issuance of the 5% Preferred Stock.
(iii) All necessary approvals of any governmental competition or
other regulatory bodies or authorities having jurisdiction over the
exchange or any matters arising as a result thereof shall have been
received, and the exchange will have no material negative effect on
any material governmental license, permit or authorization held by
Eurotel or any subsidiary of Eurotel; provided that after receipt of a
notice from a Qualified Holder under paragraph 8(a) the Corporation
shall, subject to receiving in the case of competition approvals full
cooperation from the Qualified Holder, promptly take all reasonable
steps necessary to receive all such governmental competition and
regulatory approvals and to avoid any such material negative effect.
(iv) The maximum amount of Eurotel Stock that may be acquired
upon an exchange shall be 50% of the outstanding amount thereof. Any
shares of 5% Preferred Stock remaining outstanding after acquisition
of the maximum amount of Eurotel Stock shall be subject to redemption
in accordance with paragraph 6(a) hereof.
(c) The aggregate value at any time of the Eurotel Stock shall equal
the aggregate amount expended by the Corporation and its subsidiaries in
the acquisition of the entities that comprise Eurotel (less the aggregate
amount of debt, as reflected on the consolidated balance sheet of Eurotel
prepared in conformity with GAAP, which is incurred or assumed by Eurotel
or any of its subsidiaries or entities comprising Eurotel or its
predecessors in connection therewith (the "Acquisition Debt")), together
with any amounts invested in Eurotel or any of its subsidiaries (other than
by Eurotel or its subsidiaries) after such acquisition and prior to the
exchange, reduced by any dividends, distribution or transfers of any assets
from Eurotel to any other Person increasing at a rate of 5% per annum from
the date of such acquisition or investment to the date the value of Eurotel
is being calculated. The value of each share of Eurotel Stock shall be pro
rata to the aggregate value of Eurotel.
<PAGE>
(d) If at the time of any exchange of all of the 5% Preferred Stock,
the Eurotel Stock acquired as a result of such exchange does not constitute
50% of the outstanding shares of Eurotel Stock, the Qualified Holder shall
have the right (subject to the conditions set forth in paragraph (b) above)
to acquire from the Corporation an additional amount of Eurotel Stock (the
"Additional Amount") such that the amount of Eurotel Stock held by such
Qualified Holder as a result of the exchange and the acquisition of the
Additional Amount equals 50% of the outstanding shares of Eurotel Stock.
The Additional Amount shall be acquired for cash at the same per share
value calculated pursuant to paragraph (c) above.
(e) If Eurotel shall issue to the Corporation any option, warrant or
right to acquire Eurotel Stock, or if the issued Eurotel Stock shall be
comprised of more than one class, the rights of the Qualified Holder under
this paragraph (8) shall be equitably adjusted so as to maintain the intent
of this paragraph (8) that the Qualified Holder may acquire 50% of the
Eurotel Stock from the Corporation at a value reflecting the provisions of
paragraph 8(c).
(f) If any of the requirements set forth in paragraph (8)(b) cannot be
satisfied upon a Qualified Holder's exchange for Eurotel Stock under
paragraph 8(a) or acquisition of Eurotel Stock under paragraph 8(d) of 50%
of the outstanding amount of Eurotel Stock, as determined in good faith by
such Qualified Holder and the Corporation, the Qualified Holder shall have
the right to acquire, upon exchange under paragraph 8(a) of any part of the
5% Preferred Stock held by the Qualified Holder or acquisition under
paragraph 8(d), such amount of Eurotel Stock as would allow the
requirements set forth in paragraph (8)(b) to be satisfied. If the
Qualified Holder exercises the right described in the previous sentence, it
shall have the right (i) to exchange or acquire the remaining amount of
Eurotel Stock as soon as possible after the restrictions on the exchange or
acquisition of the entire amount of Eurotel Stock permitted hereunder shall
cease to exist or (ii) to require redemption of any amount of Preferred
Shares that such Qualified Holder shall hold after exercising its rights
under the first sentence of this paragraph (8)(f).
<PAGE>
(g) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Eurotel Stock upon exchange of the 5% Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be required to
pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of shares of Eurotel Stock in a name other than that of
the holder of the 5% Preferred Stock to be exchanged and no such issue or
delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or
established, to the satisfaction of the Corporation, that such tax has been
paid.
(9) Conversion. (a)- Subject to and upon compliance with the provisions of
this paragraph (9), each holder of shares of 5% Preferred Stock which is a
Qualified Holder shall have the right, at any time and from time to time after
the date which is six months from the consummation of an exchange pursuant to
paragraph (8)(a), at such holder's option, to convert any or all outstanding
shares of 5% Preferred Stock held by such holder, but not fractions of shares,
into fully paid and non-assessable shares of Common Stock by surrendering such
shares to be converted, such surrender to be made in the manner provided in
paragraph (9)(b) hereof. The number of shares of Common Stock deliverable upon
conversion of each share of 5% Preferred Stock shall be equal to $1,000 divided
by the 25-Day Average Market Price as of the date the exchange is consummated
(the "Exchange Date"), as adjusted as provided herein, provided that such
conversion rate (the "Conversion Rate") shall not be less than the price that
would cause an adjustment pursuant to Schedule 25, Section 2(c) of the Restated
Transaction Agreement, dated July 26, 1999, by and among Bell Atlantic
Corporation, Cable and Wireless plc, Cable & Wireless Communications plc and the
Corporation. The Conversion Rate is subject to adjustment from time to time
pursuant to paragraph (9)(d) hereof. The right to convert shares called for
redemption pursuant to paragraph 6(c) shall terminate at the close of business
on the date immediately preceding the date fixed for such redemption unless the
Corporation shall default in making payment of the amount payable upon such
redemption, in which case such right of conversion shall be reinstated. Upon
conversion, any accrued and unpaid dividends, including any dividends required
under paragraph (12)(c), on the 5% Preferred Stock at the date of conversion
shall be paid to the holder thereof in accordance with the provisions of
paragraph (4).
<PAGE>
(b) (i) In order to exercise the conversion privilege, the holder of
each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (12)(d)) the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation
to the holders of the 5% Preferred Stock for such purposes, with a written
notice of election to convert completed and signed, specifying the number
of shares to be converted. Such notice shall state that the holder has
satisfied any legal or regulatory requirement for conversion, including
compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976;
provided, however, that the Corporation shall use its best efforts in
cooperating with such holder to obtain such legal or regulatory approvals
to the extent its cooperation is necessary. Such notice shall also state
the name or names (with address and social security or other taxpayer
identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable
on conversion are to be issued in the same name as the name in which such
share of 5% Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates
representing shares of 5% Preferred Stock surrendered for conversion shall
be canceled by the Corporation or the transfer agent.
(ii) Subject to the last sentence of paragraph (9)(a), holders of
shares of 5%-Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date if
such holder shall have surrendered (or made a constructive surrender
under paragraph (12)(d)) for conversion such shares at any time
following the preceding Dividend Payment Date and prior to such
Dividend Payment Date.
<PAGE>
(iii) Subject to a holder's election under paragraph (12)(d), as
promptly as practicable after the surrender (including a constructive
surrender under paragraph (12)(d)) by a holder of the certificates for
shares of 5% Preferred Stock as aforesaid, the Corporation shall issue
and shall deliver to such holder, or on the holder's written order, a
certificate or certificates (which certificate or certificates shall
have the legend set forth in paragraph (12)(d)) for the whole number
of duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock issuable upon the conversion of such shares in
accordance with the provisions of this paragraph (9), and any
fractional interest in respect of a share of Common Stock arising on
such conversion shall be settled as provided in paragraph (9)(c). Upon
conversion of only a portion of the shares of 5% Preferred Stock
represented by any certificate, a new certificate shall be issued
representing the unconverted portion of the certificate so surrendered
without cost to the holder thereof. Subject to a holder's election
under paragraph (12)(d), upon the surrender (including a constructive
surrender under paragraph (12)(d)) of certificates representing shares
of 5% Preferred Stock to be converted, such shares shall no longer be
deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the
right to receive the Common Stock and other amounts payable pursuant
to this paragraph (9).
(iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of 5% Preferred Stock shall have been
surrendered (or deemed surrendered pursuant to an election under
paragraph (12)(d)) and such notice received by the Corporation as
aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Common Stock represented
thereby at such time on such date and such conversion shall be into a
number of shares of Common Stock equal to the product of the number of
shares of 5%-Preferred Stock surrendered times the Conversion Rate in
effect at such time on such date, unless the stock transfer books of
the Corporation shall be closed on that date, in which event such
Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall
be based upon the Conversion Rate in effect on the date upon which
such shares shall have been surrendered and such notice received by
the Corporation.
(c) (i) No fractional shares or scrip representing fractions of shares
of Common Stock shall be issued upon conversion of the 5% Preferred Stock.
Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred
Stock, the Corporation shall pay to the holder of such share an amount in
cash based upon the Current Market Price of Common Stock on the Trading Day
immediately preceding the date of conversion. If more than one share shall
be surrendered for conversion (or deemed surrendered under paragraph
(12)(d)) at one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of 5% Preferred Stock surrendered
(or deemed surrendered under paragraph (12)(d)) for conversion by such
holder.
<PAGE>
(ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of 5% Preferred Stock shall have been
surrendered (or deemed surrendered under paragraph (12)(d)) and such
notice received by the Corporation as aforesaid, and the Person or
Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to
the product of the number of shares of 5% Preferred Stock surrendered
times the Conversion Rate in effect at such time on such date, unless
the stock transfer books of the Corporation shall be closed on that
date, in which event such Person or Persons shall be deemed to have
become such holder or holders of record at the close of business on
the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Rate in effect
on the date upon which such shares shall have been surrendered (or
deemed surrendered under paragraph (12)(d)) and such notice received
by the Corporation.
(d) The Conversion Rate shall be adjusted from time to time as follows:
(i) If the Corporation shall after the Exchange Date (A) declare
a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B)-subdivide its outstanding Common Stock into a
greater number of shares, (C) combine its outstanding Common Stock
into a smaller number of shares, or (D) effect any reclassification of
its outstanding Common Stock, the Conversion Rate in effect on the
record date for such dividend or distribution, or the effective date
of such subdivision, combination or reclassification, as the case may
be, shall be proportionately adjusted so that the holder of any share
of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that
such holder would have owned or have been entitled to receive after
the happening of any of the events described above had such share been
converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately
after the opening of business on the Business Day next following the
record date (except as provided in paragraph (9)(h)) in the case of a
dividend or distribution and shall become effective immediately after
the opening of business on the Business Day next following the
effective date in the case of a subdivision, combination or
reclassification. Adjustments in accordance with this paragraph
(9)(d)(i) shall be made whenever any event listed above shall occur.
<PAGE>
(ii) If the Corporation shall after the Exchange Date fix a
record date for the issuance of rights or warrants (in each case,
other than any rights issued pursuant to a shareholder rights plan) to
all holders of Common Stock entitling them (for a period expiring
within 45 days after such record date) to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) at a price
per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise
price per share of Common Stock, computed on the basis of the maximum
number of shares of Common Stock issuable upon conversion of such
convertible securities, plus the amount of additional consideration
payable, if any, to receive one share of Common Stock upon conversion
of such securities) less than the 25-Day Average Market Price on the
date on which such issuance was declared or otherwise announced by the
Corporation (the "Determination Date"), then the Conversion Rate in
effect at the opening of business on the Business Day next following
such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (I)-the Conversion Rate in effect immediately prior to
such record date by (II)-a fraction, the numerator of which shall be
the sum of (A)-the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B)-the number of
additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the
aggregate number of additional shares of Common Stock into which the
convertible securities so offered are initially convertible), and the
denominator of which shall be the sum of (A)-the number of shares of
Common Stock outstanding on the close of business on the Determination
Date and (B)-the number of shares that the aggregate proceeds to the
Corporation from the exercise of such rights or warrants for Common
Stock would purchase at such 25-Day Average Market Price on such date
(or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock
obtained by dividing the aggregate exercise price of such rights or
warrants for the maximum number of shares of Common Stock issuable
upon conversion of such convertible securities, plus the aggregate
amount of additional consideration payable, if any, to convert such
securities into Common Stock, by such 25-Day Average Market Price).
Such adjustment shall become effective immediately after the opening
of business on the Business Day next following such record date
(except as provided in paragraph (9)(h)). Such adjustment shall be
made successively whenever such a record date is fixed. In the event
that after fixing a record date such rights or warrants are not so
issued, the Conversion Rate shall be readjusted to the Conversion Rate
which would then be in effect if such record date had not been fixed.
In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at
less than such 25-Day Average Market Price, there shall be taken into
account any consideration received by the Corporation upon issuance
and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of
Directors in good faith. In case any rights or warrants referred to in
this subparagraph (ii)-shall expire unexercised after the same have
been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common
Stock once exercised, the conversion right of such securities shall
expire), the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of
such expired rights or warrants.
<PAGE>
(iii) If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of
its indebtedness, shares of its capital stock or assets (excluding
regular cash dividends or distributions declared in the ordinary
course by the Board of Directors and dividends payable in Common Stock
for which an adjustment is made pursuant to paragraph (9)(d)(i)) or
rights or warrants (in each case, other than any rights issued
pursuant to a shareholder rights plan) to subscribe for or purchase
any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring
within 45 days after such record date) to subscribe for or purchase
Common Stock or securities convertible into shares of Common Stock,
which rights and warrants are referred to in and treated under
subparagraph (ii) above) (any of the foregoing being hereinafter in
this subparagraph (iii) called the "Securities"), then in each such
case the Conversion Rate shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock determined by
multiplying (I) the Conversion Rate in effect immediately prior to the
close of business on such record date by (II)-a fraction, the
numerator of which shall be the 25-Day Average Market Price per share
of the Common Stock on such record date, and the denominator of which
shall be the 25-Day Average Market Price per share of the Common Stock
on such record date less the then-fair market value (as determined by
the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock
or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and
in the event that after fixing a record date such distribution is not
so made, the Conversion Rate shall be readjusted to the Conversion
Rate which would then be in effect if such record date had not been
fixed. Such adjustment shall become effective immediately at the
opening of business on the Business Day next following (except as
provided in paragraph (9)(h)) the record date for the determination of
shareholders entitled to receive such distribution. For the purposes
of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date
fixed for the determination of shareholders entitled to such
distribution of such Security, but also is distributed with each share
of Common Stock delivered to a Person converting a share of 5%
Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii);
provided, however, that on the date, if any, on which a Person
converting a share of 5% Preferred Stock would no longer be entitled
to receive such Security with a share of Common Stock (other than as a
result of the termination of all such Securities), a distribution of
such Securities shall be deemed to have occurred and the Conversion
Rate shall be adjusted as provided in this subparagraph (iii) (and
such day shall be deemed to be "the date fixed for the determination
of shareholders entitled to receive such distribution" and "the record
date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii)-shall expire
unexercised after the same shall have been distributed or issued by
the Corporation, the Conversion Rate shall be readjusted at the time
of such expiration to the Conversion Rate that would have been in
effect if no adjustment had been made on account of the distribution
or issuance of such expired rights or warrants.
<PAGE>
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per
share that, together with the aggregate of the per share amounts of
any other cash distributions to all holders of its Common Stock made
within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (iv) has been made exceeds 5.0% of the 25-Day Average Market
Price immediately prior to the date of declaration of such dividend or
distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, and any cash that is distributed
upon a merger, consolidation or other transaction for which an
adjustment pursuant to paragraph 9(e) is made), then, in such case,
the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which
shall be the Current Market Price of a share of the Common Stock on
the Record Date and the denominator shall be such Current Market Price
less the per share amount of cash so distributed during the 12-month
period applicable to one share of Common Stock, such adjustment to be
effective immediately prior to the opening of business on the Business
Day following the Record Date; provided, however, that in the event
the denominator of the foregoing fraction is zero or negative, in lieu
of the foregoing adjustment, adequate provision shall be made so that
each holder of 5% Preferred Stock shall have the right to receive upon
conversion, in addition to the shares of Common Stock to which the
holder is entitled, the amount of cash such holder would have received
had such holder converted each share of 5% Preferred Stock at the
beginning of the 12-month period. In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if
such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth
in this paragraph (9)(d)(iv), the calculation of any such adjustment
shall include the amount of the quarterly cash dividends paid during
the 12-month reference period only to the extent such dividends exceed
the regular quarterly cash dividends paid during the 12 months
preceding the 12-month reference period. For purposes of this
paragraph (9)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the
right to receive cash, the date fixed for determination of
shareholders entitled to receive such cash.
In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the
provisions of this paragraph 9(d)(iv) will apply to any cash dividend
or cash distribution on any series of Common Stock otherwise meeting
the requirements of this paragraph, and shall be deemed amended to the
extent necessary so that any adjustment required will be made on the
basis of the cash dividend or cash distribution made on any such
series.
<PAGE>
(v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any
subsidiary of the Corporation for all or any portion of the
outstanding shares of Common Stock to the extent that the cash and
fair market value (as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be conclusive
and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at
the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as amended) exceed by more
than 5.0%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Rate provided in this paragraph
(9)(d)(v), the first reported sale price per share of the Common Stock
on the Trading Day next succeeding the Expiration Time, then the
Conversion Rate shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction the numerator
of which shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders
based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Purchase Shares") and (y)-the product of the number of shares of
Common Stock outstanding (less any Purchase Shares) on the Expiration
Time and the first reported sale price of the Common Stock on the
Trading Day next succeeding the Expiration Time, and the denominator
of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time
multiplied by the first reported sale price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such adjustment to
become effective immediately prior to the opening of business on the
day following the Expiration Time.
(vi) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease
of at least 1% in the Conversion Rate; provided, however, that any
adjustments that by reason of this subparagraph (vi) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment until made, and provided further that any
adjustment shall be required and made in accordance with the
provisions of this paragraph (9) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the
tax-free nature of a distribution for United States income tax
purposes to the holders of shares of 5% Preferred Stock or Common
Stock. Notwithstanding any other provisions of this paragraph (9), the
Corporation shall not be required to make any adjustment of the
Conversion Rate for the issuance of any shares of Common Stock
pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment
of additional optional amounts in shares of Common Stock under such
plan. All calculations under this paragraph (9) shall be made to the
nearest dollar or to the nearest 1/1,000 of a share, as the case may
be. Anything in this paragraph (9)(d) to the contrary notwithstanding,
the Corporation shall be entitled, to the extent permitted by law, to
make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (9)(d), as it in its discretion shall
determine to be advisable in order that any stock dividends
subdivision of shares, reclassification or combination of shares,
distribution or rights or warrants to purchase stock or securities, or
a distribution of other assets (other than cash dividends) hereafter
made by the Corporation to its shareholders shall not be taxable.
<PAGE>
(vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or
substitution for or in lieu of shares of Common Stock or as a result
of an adjustment made pursuant to the provisions of this paragraph
(9)(d), the holder of 5% Preferred Stock upon subsequent conversion
shall become entitled to receive any shares of capital stock of the
Corporation other than Common Stock, the number of such other shares
so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions contained herein.
(e) If the Corporation shall be a party to any transaction (including
without limitation, a merger, consolidation, sale of all or substantially
all of the Corporation's assets or recapitalization of the Common Stock and
excluding any transaction as to which paragraph (9)(d)(i) applies) (each of
the foregoing being referred to herein as a "Transaction"), in each case as
a result of which shares of Common Stock shall be converted into the right
to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate
but each share of 5% Preferred Stock which is not converted into the right
to receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of
shares of stock, securities and other property (including cash or any
combination thereof) receivable upon the consummation of such Transaction
by a holder of that number of shares or fraction thereof of Common Stock
into which one share of 5% Preferred Stock was convertible immediately
prior to such Transaction, assuming such holder of Common Stock (i) is not
a Person with which the Corporation consolidated or into which the
Corporation merged or which merged into the Corporation or to which such
sale or transfer was made, as the case may be ("Constituent Person"), or an
affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of stock securities and other
property (including cash) receivable upon such Transaction (provided that
if the kind or amount of stock, securities and other property (including
cash) receivable upon such Transaction is not the same for each share of
Common Stock of the Corporation held immediately prior to such Transaction
by other than a Constituent Person or an affiliate thereof and in respect
of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this paragraph (9)(e) the
kind and amount of stock, securities and other property (including cash)
receivable upon such Transaction by each non-electing share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
non-electing shares). The provisions of this paragraph (9)(e) shall
similarly apply to successive Transactions. (1)
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or
(ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or
(iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to
which the Corporation is a party and for which approval of any
shareholders of the Corporation is required, or the sale or transfer
of all or substantially all of the assets of the Corporation as an
entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (9)(b) and shall cause to be mailed to
the holders of shares of the 5%-Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up. Failure to give
or receive such notice or any defect therein shall not affect the legality or
validity of any distribution, right, warrant subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.
<PAGE>
(g) Whenever the Conversion Rate is adjusted as herein provided, the
Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of
such officer's certificate to the holder of each share of 5% Preferred
Stock at such holder's last address as shown on the stock records of the
Corporation. If the Corporation shall have designated a transfer agent
pursuant to paragraph (9)(b), it shall also promptly file with such
transfer agent an officer's certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment which certificate shall be conclusive evidence of
the correctness of such adjustment.
(h) In any case in which paragraph (9)(d) provides that an adjustment
shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i)
issuing to the holder of any share of 5% Preferred Stock converted after
such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant
to paragraph (9)(c).
(i) For purposes of this paragraph (9), the number of shares of Common
Stock at any time outstanding shall not include any shares of Common Stock
then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(j) There shall be no adjustment of the Conversion Rate in case of the
issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this
paragraph (9). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this
paragraph-(9), only one adjustment shall be made and such adjustment shall
be the amount of adjustment that has the highest absolute value.
(k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this paragraph (9), that in the
opinion of the Board of Directors materially adversely affects the
conversion rights of the holders of the shares of 5% Preferred Stock, the
Conversion Rate may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the Board of Directors may determine
to be equitable in the circumstances; provided that the provisions of this
paragraph (9)(k) shall not affect any rights the holders of 5% Preferred
Stock may have at law or in equity.
(l) (i) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of 5%
Preferred Stock not theretofore converted. For purposes of this paragraph
(9)(l) the number of shares of Common Stock that shall be deliverable upon
the conversion of all outstanding shares of 5% Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were
held by a single holder.
(ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly
authorized, validly issued, fully paid and non-assessable. Before
taking any action that would cause an adjustment increasing the
Conversion Rate such that the quotient of $1,000.00 and the Conversion
Rate would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the
Corporation will take any corporate action that, in the opinion of its
counsel, may be necessary in order that the Corporation may validly
and legally issue fully paid and non-assessable shares of Common Stock
based upon such adjusted Conversion Rate.
(iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5%
Preferred Stock, the Corporation shall comply with all applicable
federal and state laws and regulations which required action to be
taken by the-Corporation.
<PAGE>
(m) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
5% Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
5% Preferred Stock to be converted and no such issue or delivery shall be
made unless and until the Person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or established, to the
satisfaction of the Corporation, that such tax has been paid.
(10) Voting Rights. (a) The holders of record of shares of 5% Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this paragraph (10) or as otherwise provided by law. When and if the holders
of 5% Preferred Stock are entitled to vote by law or pursuant to this paragraph
(10), each holder will be entitled to one vote per share except that when any
other series of preferred stock shall have the right to vote with the 5%
Preferred Stock as a single class on any matter, then the 5% Preferred Stock and
other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference.
(b) Without the written consent of the holders of at least 66-2/3% of
aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66-2/3% of aggregate Liquidation
Rights of the outstanding shares of 5% Preferred Stock at a meeting of the
holders of 5% Preferred Stock called for such purpose, the Corporation will
not amend, alter or repeal any provision of the Restated Certificate of
Incorporation (by merger or otherwise) so as to adversely affect the
preferences, rights or powers of the 5% Preferred Stock; provided that any
such amendment that changes the dividend payable on, or the aggregate
Liquidation Rights of, the 5% Preferred Stock shall require the affirmative
vote at a meeting of holders of 5% Preferred Stock called for such purpose
or written consent of the holder of each share of 5% Preferred Stock.
(c) Without the written consent of the holders of at least 66-2/3% of
aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66-2/3% of aggregate Liquidation
Rights of the outstanding shares of 5% Preferred Stock at a meeting of such
holders called for such purpose, the Corporation will not issue any
additional 5% Preferred Stock or create, authorize or issue any Parity
Securities or Senior Securities or increase the authorized amount of any
such other class or series; provided that this paragraph (9)(c) shall not
limit the right of the Corporation to (i) issue additional shares of 5%
Preferred Stock as dividends pursuant to paragraph (4) or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or
refund the 13% Preferred, the 5-1/4% Preferred, the 5% Convertible
Preferred Series A or the 5% Convertible Preferred Series B, provided that
in the case of a refinancing, redemption or refund of the 13% Preferred or
the 5-1/4% Preferred, the maximum accrual value (i.e., the sum of stated
value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the
holder) of such Parity Securities or Senior Securities issued by the
Corporation in such refinancing, as shall be reflected on the Corporation's
consolidated balance sheet prepared in accordance with GAAP applied on a
basis consistent with the Corporation's prior practice, may not exceed the
maximum accrual value of the 13% Preferred, or the 5-1/4% Preferred or the
5% Convertible Preferred respectively, as reflected on the Corporation's
consolidated balance sheet as contained in the report filed by the
Corporation with the United States Securities and Exchange Commission
pursuant to the Exchange Act that is most recent prior to such refinancing.
<PAGE>
(d) Nothing in this paragraph (10) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.
(e) Except as otherwise set forth in this paragraph (10) or as
required by law, the holders of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and
powers, except as provided by this Certificate or in any agreement the
Corporation and a holder and the consent or vote of such holders shall not
be required for the taking of any corporate action by the Corporation or
the Board of Directors. The provisions of this paragraph (10) are in lieu
of, and not in addition to, any voting rights specified in the Restated
Certificate of Incorporation as applicable to a series of Preferred Stock.
(11) Holding Company. Notwithstanding anything herein to the contrary, if
the Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on NASDAQ
or another recognized securities exchange, then the Corporation, by notice to
the holders of the 5% Preferred Stock but without any required consent on their
part, may cause the exchange of this 5% Preferred Stock for 5% preferred stock
of Holdco having the same terms, conditions, ranking and other rights as set
forth herein, provided that (i) Holdco shall be incorporated under the Delaware
General Corporation Law and be based in the United States and (ii) to the extent
permitted by applicable law, the certificates representing shares of the 5%
Preferred Stock prior to the formation of Holdco shall be deemed to represent
shares of the new 5% preferred stock, and the holder thereof shall not be
required to surrender or exchange its certificates representing shares of 5%
Preferred Stock.
(12) General Provisions. (a) The headings of the paragraphs, subparagraphs,
clauses and subclauses of this Certificate of Designation are for convenience of
reference only and shall not define, limit or affect any of the provisions
hereof.
<PAGE>
(b) The shares of 5% Preferred Stock shall bear the following legend:
THE SHARES OF PREFERRED STOCK, PAR VALUE $0.01, OF THE CORPORATION (THE
"PREFERRED STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR IN
ACCORDANCE WITH ANY APPLICABLE EXEMPTION FROM, OR TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS UNDER THE ACT. THE TRANSFER OF THE
PREFERRED STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED
FEBRUARY [ ], 2000, AS MAY BE AMENDED, AMONG THE CORPORATION AND CERTAIN
PURCHASERS, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE
CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
PREFERRED STOCK UPON WRITTEN REQUEST TO THE CORPORATION.
SO LONG AS ANY OF THE PREFERRED STOCK ARE RESTRICTED SECURITIES WITHIN THE
MEANING OF RULE-144(a)(3) UNDER THE ACT, THE CORPORATION WILL, DURING ANY
PERIOD IN WHICH (A) THE CORPORATION IS NOT SUBJECT TO AND IN COMPLIANCE
WITH SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE "EXCHANGE ACT"), OR (B) THE CORPORATION IS NOT EXEMPT FROM THE
REPORTING OBLIGATIONS OF RULE-12g3-2(B) OF THE EXCHANGE ACT, PROVIDE TO
EACH HOLDER OF SUCH RESTRICTED SECURITIES AND TO EACH PROSPECTIVE PURCHASER
(AS DESIGNATED BY SUCH HOLDER) OF SUCH RESTRICTED SECURITIES, UPON THE
REQUEST OF SUCH HOLDER OR PROSPECTIVE PURCHASER, ANY INFORMATION REQUIRED
TO BE PROVIDED BY SUBJECTION (d)(4)(i) OF RULE-144(A) UNDER THE ACT.
(c) If the Corporation shall have failed to declare or pay dividends
as required pursuant to paragraph (4) hereof or shall have failed to
discharge the Redemption Obligation pursuant to paragraph (6) hereof, the
holders of shares of 5% Preferred Stock shall be entitled to receive, in
addition to all other amounts required to be paid hereunder, when, as and
if declared by the Board of Directors, out of funds legally available for
the payment of dividends (after taking into account revaluation of the
assets and liabilities of the Corporation to the extent deemed reasonable
by the Board of Directors of the Corporation after consultation with legal
and financial advisors) but without regard to any contractual or other
restrictions with respect thereto, cash dividends on (i) the aggregate
dividends which the Corporation shall have failed to declare or pay or (ii)
the aggregate Redemption Price together with accrued and unpaid dividends
on the 5% Preferred Stock, as applicable, in each case at a rate of 2% per
quarter, compounded quarterly, for the period during which the failure to
pay dividends or failure to discharge the Redemption Obligation shall
continue.
(d) (i) Whenever in connection with any exchange or conversion of the
5% Preferred Stock for Eurotel Stock or Common Stock, as applicable, the
Qualified Holder is required to surrender certificates representing such
shares of 5% Preferred Stock, the Qualified Holder may, by written notice
to the Corporation and its transfer agent, elect to retain such
certificates. In such case, the certificates so retained by the Qualified
Holder shall be deemed (as and to the extent permitted by the law of the
jurisdiction of incorporation of Eurotel and with respect to Common Stock,
Delaware) to represent, at and from the date of such exchange, the number
of shares of Eurotel Stock or the Common Stock, as the case may be,
issuable upon such exchange pursuant to paragraph (8) or conversion
pursuant to paragraph (9).
(ii) (A) A Qualified Holder which has previously elected to
retain certificates representing the 5% Preferred Stock in accordance
with paragraph (12)(d)(i) upon exchange or conversion may subsequently
elect to receive certificates representing the shares of Eurotel Stock
or the Common Stock issued upon such exchange or conversion. To
receive certificates representing such shares of Eurotel Stock or the
Common Stock, as applicable, the holder of such certificates shall
surrender it, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of
the Corporation previously designated by the Corporation for such
purposes, with a written notice of that election.
(B) Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered
certificates are registered, each certificate so surrendered
shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the Qualified
Holder or the Qualified Holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Corporation demonstrating that
such taxes have been paid). All certificates so surrendered shall
be canceled by the Corporation or the transfer agent.
<PAGE>
(C) As promptly as practicable after the surrender by the
Qualified Holder of such certificates, the Corporation shall
issue and shall deliver to such Qualified Holder, or on the
Qualified Holder's written order, a certificate or certificates
for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Eurotel Stock or the Common Stock, as
applicable, represented by the certificates so surrendered.
IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate of
Designation to be signed by the undersigned this [--] day of [ ], 2000.
NTL INCORPORATED
By:
----------------------------
Name: Richard J. Lubasch
Title: Executive Vice President,
General Counsel and
Secretary
EXHIBIT 99.3
NTL Incorporated
PURCHASE AGREEMENT
February 17, 2000
Banque Nationale de Paris
16, Boulevard des Italiens
75009 Paris
France
Credit Agricole Indosuez
9 Quai du President Paul Doumer
92400 Courbevoie
France
Deutsche Bank AG
Paris Branch
3, Avenue de Friedland
75008 Paris
France
Westdeutsche Landesbank Girozentrale
Paris Branch
15, Avenue de Friedland
75008 Paris
France
France Telecom
6, Place d'Alleray
75505 Paris Cedex 15
France
Ladies and Gentlemen:
NTL Incorporated, a Delaware corporation ("NTL"), proposes, subject to the
terms and conditions set forth herein (including Attachment I and Exhibits A, B,
C, D, E and F hereto), to issue and sell to Banque Nationale de Paris, Credit
Agricole Indosuez, Deutsche Bank A.G., Westdeutsche Landesbank Girozentrale and
France Telecom (each, a "Purchaser" and, collectively, the "Purchasers"),
1,850,000 shares of 5% Cumulative Preferred Stock of NTL having an aggregate
liquidation preference of $1.85 billion (the "Preferred Shares") and having the
terms set forth in the Certificate of Designation attached hereto as Attachment
I (the "Certificate of Designation").
1. NTL represents and warrants to, and agrees with, the Purchasers that:
(a) NTL's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and NTL's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999 have been made available to the Purchasers in
connection with the offering of the Preferred Shares. All documents filed
by NTL or its subsidiaries with the United States Securities and Exchange
Commission (the "Commission") pursuant to the United States Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are referred to
herein as the "Exchange Act Reports". The Exchange Act Reports, when they
were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act and the applicable rules and regulations
of the Commission thereunder. The Exchange Act Reports did not, as of their
respective dates, contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. NTL and its subsidiaries have timely
filed all reports and registration statements and made all filings required
to be made with the Commission under the Exchange Act, the United States
Securities Act of 1933, as amended (the "Securities Act"), or the
applicable rules and regulations of the Commission thereunder;
<PAGE>
(b) There has not been any material adverse change in, or any adverse
development which materially affects, the business, assets, properties,
financial condition or results of operations of NTL and its subsidiaries
taken as a whole since December 31, 1998; and, since December 31, 1998,
there has not been any material change in the capital stock, long-term debt
or any other liability of NTL or any of its subsidiaries not reported in an
Exchange Act Report or any material adverse change or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of NTL and its subsidiaries taken as a whole;
provided, however, that any change resulting from the proposed acquisition
of Cablecom Holdings AG and its associated businesses and assets (the
"Strategic Acquisition") shall not be deemed a material change for purposes
of this Section 1(b);
(c) NTL has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Exchange Act Reports, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, or in which such
qualification is necessary, except where the failure to be so qualified in
any such jurisdiction does not or would not subject NTL to any material
liability or disability; and each significant subsidiary (as defined in
Regulation S-X of the Commission, each a "Significant Subsidiary") of NTL
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties and conduct its
business as it has been currently conducted, and has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, or in which such qualification
is necessary, except where the failure to be so qualified in any such
jurisdiction does not or would not subject such Significant Subsidiary to
any material liability or disability;
(d) NTL has an authorized, issued and outstanding capitalization as
set forth in the attached Exhibit A, and all of the issued shares of
capital stock of NTL have been duly and validly authorized and issued and
are fully paid and non-assessable; and all of the issued shares of capital
stock of each Significant Subsidiary of NTL have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by NTL, free
and clear of all liens, encumbrances, equities or claims;
(e) The Preferred Shares, including any dividends payable by NTL with
respect to the Preferred Shares in the form of additional shares of 5%
Cumulative Preferred Stock (the "Dividend Shares"), have been duly and
validly authorized by NTL, and, when issued and delivered (in the case of
the Preferred Shares, against payment therefor as provided herein), will be
duly and validly issued and fully paid and non-assessable, and the issuance
of the Preferred Shares and the Dividend Shares is not subject to
preemptive or other similar rights;
<PAGE>
(f) The execution and delivery of this Purchase Agreement and the
consummation of the transactions contemplated herein (including, without
limitation, any redemption payments under paragraph 6(a) of the Certificate
of Designation) have been duly authorized by all necessary corporate action
on the part of NTL, and except with respect to consummation of the exchange
provided for in Section 8 of the Certificate of Designation (the
"Exchange"), as to which paragraph 1(g) is applicable, when executed by NTL
and the Purchasers will not conflict with or result in any breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any security interest,
lien, charge or encumbrance upon any property or assets of NTL or its
Significant Subsidiaries pursuant to any indenture, mortgage, deed of
trust, loan agreement, lease, contract or other agreement or instrument to
which NTL or any of its Significant Subsidiaries is a party or by which NTL
or any of its Significant Subsidiaries may be bound or to which any of the
property or assets of NTL or any of its Significant Subsidiaries is subject
(an "Agreement"), nor will such action or, assuming satisfaction of all
conditions set forth in paragraph 8(b) of the Certificate of Designation,
the Exchange result in any violation of the provisions of the Restated
Certificate of Incorporation or the By-laws of NTL or of any of its
Significant Subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over NTL or
any of its Significant Subsidiaries or any of their properties or any of
the federal and cantonal laws of the Swiss Confederation or the laws of
France; and other than the filing of the Certificate of Designation with
the Secretary of State of the State of Delaware, no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body or under the federal and cantonal laws
of the Swiss Confederation or the laws of France is required for the
issuance and sale of the Preferred Shares and any dividends paid with
respect to the Preferred Shares or the consummation by NTL of the
transactions contemplated with respect to, or in connection with, the
Strategic Acquisition, this Purchase Agreement and the Put and Call Option
Agreement (the "Option Agreement"), by and among the Purchasers;
(g) No Agreement exists as of the date hereof which would be breached
or violated by consummation of the Exchange, or with respect to which
consummation of the Exchange would give rise to a right to terminate or
otherwise cause a loss of any material right thereunder, other than certain
Agreements with respect to which the foregoing representation will be true
if NTL retains more than 50% ownership of the assets that are the subject
of such Agreements.
(h) This Purchase Agreement has been duly authorized, executed and
delivered by NTL and constitutes valid and legally binding obligations of
NTL enforceable against NTL in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
moratorium and similar laws affecting the rights of creditors generally;
(i) Neither NTL nor any of its Significant Subsidiaries is in
violation of its Certificate of Incorporation or By-laws (or equivalent
documents) or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease, contract or other agreement
or instrument to which it is a party or by which it or any of its
properties may be bound;
<PAGE>
(j) There are no claims, actions, suits, arbitration, proceedings or
investigations pending against NTL or any of its Significant Subsidiaries
or of which any property of NTL or any of its Significant Subsidiaries is
the subject which, if determined aversely to NTL or any of its Significant
Subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future financial condition, shareholder's
equity or results of operations of NTL and its subsidiaries taken as a
whole; and, to the best of NTL's knowledge, no such claims, actions, suits,
arbitration, proceedings or investigations are threatened or contemplated
by governmental authorities or threatened or contemplated by others;
(k) The audited consolidated balance sheet of NTL and its subsidiaries
for the fiscal years ended as of December 31, 1996, December 31, 1997, and
December 31, 1998, and the related audited consolidated statements of
income, retained earnings, stockholders' equity and cash flow of NTL and
its subsidiaries, together with all related notes and schedules thereto,
and the unaudited consolidated balance sheet of NTL and its subsidiaries as
of September 30, 1999, and the related unaudited consolidated statements of
income, retained earnings, stockholders' equity and cash flow of NTL and
its subsidiaries together with all related notes and schedules thereto (the
"Interim Financial Statements"), all of which are contained in the
respective Exchange Act Reports (i) were prepared in accordance with the
books of account and other financial records of NTL and its subsidiaries,
(ii) present fairly the consolidated financial condition and results of
operations of NTL and its subsidiaries as of the dates thereof or for the
periods covered thereby, (iii) have been prepared in accordance with U.S.
generally accepted accounting principles and practices applied on a basis
consistent with the past practices of NTL and its subsidiaries and (iv) in
case of the Interim Financial Statements, include all adjustments
(consisting only of normal recurring accruals) that are necessary for a
fair presentation of the consolidated financial condition and the results
of the operations of NTL and its subsidiaries as of the dates thereof or
for the periods covered thereby;
(l) The execution of, and consummation of the transactions
contemplated in, this Purchase Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) (i) constitute an event
under any Benefit Plan, Employee Agreement, trust or loan that will or may
result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase
in benefits or obligation to fund benefits with respect to any current,
former or retired employee, officer, consultant, independent contractor,
agent or director of NTL or any of its subsidiaries (an "Employee"); or
(ii) result in the triggering or imposition of any restrictions or
limitations on the right of NTL, any of its subsidiaries or the Purchasers
to amend or terminate any Benefit Plan. No payment or benefit which will or
may be made by NTL, any of its subsidiaries, the Purchasers or any of their
respective affiliates with respect to any Employee will be characterized as
an "excess parachute payment," within the meaning of Section 280G(b)(1) of
the Internal Revenue Code of 1986, as amended through the date hereof (the
"Code").
<PAGE>
(m) Each Benefit Plan (other than any Benefit Plan that is a
multiemployer plan within the meaning of Section-3(37) or 4001(a)(3) (a
"Multiemployer Plan") of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) is in substantial compliance with applicable
law and has been administered and operated in all material respects in
accordance with its terms; (2) each Benefit Plan (other than any
Multiemployer Plan) which is intended to be "qualified," within the meaning
of Section-401(a) of the Code, has received a favorable determination
letter from the Internal Revenue Service and, to the knowledge of NTL, no
event has occurred and no condition exists which could reasonably be
expected to result in the revocation of any such determination; (3) the
actuarial present value of the accumulated plan benefits (whether or not
vested) under any Benefit Plan covered by Title-IV of ERISA (other than any
Multiemployer Plan) as of the close of its most recent plan year did not
exceed the fair value of the assets allocable thereto; (4) no Benefit Plan
covered by Title-IV of ERISA has been terminated and no proceedings have
been instituted to terminate or appoint a trustee to administer any such
plan; (5) no "reportable event" (as defined in Section-4043 of ERISA) has
occurred with respect to any Benefit Plan covered by Title-IV of ERISA; (6)
no Benefit Plan (other than any Multiemployer Plan) subject to Section-412
of the Code or Section-302 of ERISA has incurred any accumulated funding
deficiency within the meaning of Section-412 of the Code or Section-703 of
ERISA, or obtained a waiver of any minimum funding standard or an extension
of any amortization period under Section-412 of the Code or Section-303 or
304 of ERISA; (7) NTL and each ERISA Affiliate have made all contributions
to each Multiemployer Plan required by the terms of each such Multiemployer
Plan or any collectively bargained agreement; (8) neither NTL nor any ERISA
Affiliate has incurred any unsatisfied withdrawal liability under Part-I of
Subtitle-E of Title-IV of ERISA to any Multiemployer Plan and neither NTL
nor any ERISA Affiliate would be subject to any material withdrawal
liability if, as of the close of the most recent fiscal year of any such
plan ended prior to the date hereof, NTL or any such ERISA Affiliate were
to engage in a complete withdrawal (as defined in Section-4203 of ERISA) or
potential withdrawal (as defined in Section-4205 of ERISA) from any such
plan; (9) neither NTL nor any of its subsidiaries, nor, to the knowledge of
NTL, any other "disqualified person" or "party in interest" (as defined in
Section-4975(e)(2) of the Code and Section-3(14) of ERISA, respectively)
has engaged in any transactions in connection with any benefit Plan that
could reasonably be expected to result in the imposition of a material
penalty pursuant to Section-502 of ERISA, material damages pursuant to
Section-409 of ERISA or a material tax pursuant to Section-4975 of the
Code; (10) no Benefit Plan provides for post-employment or retiree welfare
benefits, except to the extent required by Part-6 of Subtitle-B of Title-I
of ERISA or Section-4980B of the Code; and (11) no claim or action has been
made or commenced or, to the knowledge of NTL, threatened, with respect to
any Benefit Plan (other than routine claims for benefits payable in the
ordinary course, and appeals of such denied claims) which could result in a
material liability of NTL or any subsidiary thereof.
For the purposes of this Section 1(m), "Benefit Plan" means each plan,
program, policy payroll practice, contract, agreement or other arrangement
providing for compensation, retirement benefits, severance, termination
pay, performance awards, stock or stock-related awards, fringe benefits or
other employee benefits of any kind, whether formal or informal, funded or
unfunded, written or oral and whether or not legally binding, including,
without limitation, each "employee benefit plan", within the meaning of
Section 3(3) of ERISA and each Multiemployer Plan, which plan, program,
policy, payroll practice, contract, agreement or arrangement is maintained
by NTL, any of its subsidiaries or any ERISA Affiliate or to which NTL, any
such subsidiary or any ERISA Affiliate contributes (or has any obligation
to contribute) or is a party; "Employee Agreement" means each management,
employment, severance, consulting, non-compete, confidentiality, or similar
agreement or contract between NTL or any ERISA Affiliate and any Employee
pursuant to which NTL has or may have any material liability contingent or
otherwise; "ERISA Affiliate" means each business or entity which is or was
a member of a "controlled group of corporations", under "common control" or
an "affiliated service group" with NTL within the meaning of Section
414(b), (c) or (m) of the Code, or required to be aggregated with NTL under
Section 414(o) of the Code or is under "common control" with NTL, within
the meaning of Section 4001(a)(14) of ERISA;
(n) NTL is not and has not at any time during the prior five years
been a United States real property holding corporation within the meaning
of Section 897(c)(2) of the Code;
<PAGE>
(o) Each of NTL and its subsidiaries has timely filed or caused to be
timely filed (including pursuant to any valid extensions of time for
filing) with the appropriate taxing authority, all material returns,
statements, forms, and reports for taxes (the "Returns") required to be
filed by or with respect to the income, properties or operations of NTL
and/or any of its subsidiaries. The returns accurately reflect in all
material respects all liability for taxes of NTL and its subsidiaries as a
whole for the periods covered thereby. NTL and each of its subsidiaries
have paid all material taxes payable by them which have become due other
than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting
principles. There is no material action, suit, proceeding, investigation,
audit or claim now pending or, to the best knowledge of NTL or any of its
subsidiaries, threatened by any authority regarding any taxes relating to
NTL or any of its subsidiaries. As of the Time of Delivery, neither NTL nor
any of its subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of NTL or any of
its subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of NTL or any of its subsidiaries
not to be subject to the normally applicable statute of limitations which
agreement or waiver would have a material adverse effect on NTL. Neither
NTL nor any of its subsidiaries has provided, with respect to themselves or
property held by them, any consent under Section-341 of the Code. None of
NTL or any of its subsidiaries has incurred or will incur, any material tax
liability in connection with the Strategic Acquisition or any other
transactions contemplated hereby (it being understood that the
representation contained in this sentence does not cover any future tax
liabilities of NTL or any of its subsidiaries arising as a result of the
operation of their businesses in the ordinary course of business);
(p) No stamp, transfer, sales and use, value added, documentary,
registration, issuance or similar tax, assessment or other governmental
charge will be imposed under United States federal law or New York or
Delaware state law on the sale or delivery of the Preferred Shares, or on
the delivery of the Dividend Shares, as applicable, pursuant to this
Purchase Agreement or the Option Agreement or upon the execution, delivery
or performance of this Purchase Agreement or the Option Agreement;
(q) It is not, and will not be, necessary in connection with the
offer, sale or delivery of the Preferred Shares and the Dividend Shares to
the Purchasers in the manner contemplated in this Purchase Agreement to
register either the Preferred Shares or the Dividend Shares under the
Securities Act;
(r) NTL is not, and upon the issuance and sale of the Preferred Shares
and, as applicable, the issuance of the Dividend Shares, as contemplated
herein will not be, an "investment company" or an entity "controlled" by an
"investment company" (as such terms are defined in the Investment Company
Act of 1940, as amended);
(s) When issued, the Preferred Shares and the Dividend Shares will be
eligible for resale pursuant to Rule-144A(d)(3) of the Securities Act and
will not be, on or on any date following the Time of Delivery, of the same
class of securities (within the meaning of Rule-144A(d)(3) under the
Securities Act) listed on a U.S. national securities exchange registered
under Section-6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system (as such term is used in the rules under the
Exchange Act);
<PAGE>
(t) None of NTL, any of its affiliates, or any person acting on its or
their behalf has offered or sold or will offer or sell any Preferred Shares
or Dividend Shares by means of any general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities Act);
(u) None of NTL, any of its affiliates, or any person acting on its or
their behalf, has engaged, directly or indirectly, in any action for the
purpose of, or which might reasonably be expected to cause or result in:
(1) creating actual, or apparent, active trading in either the Preferred
Shares or the Dividend Shares, as applicable, or any other securities
exchangeable for, or representing the right to receive, Preferred Shares or
Dividend Shares or (2) stabilization or manipulation of the price of any
security of NTL to facilitate the sale or resale of the Preferred Shares or
the Dividend Shares, as applicable; and
(v) (i) No action has been or will be taken in any jurisdiction by NTL
that would permit a public offering of either the Preferred Shares or the
Dividend Shares, or distribution of any document issued in connection with
the proposed resale of the Preferred Shares or the Dividend Shares, as
applicable, or any other offering material, in any country or jurisdiction
where action for that purpose is required; and (ii) NTL will comply with
all applicable securities laws and regulations in each jurisdiction in
which they, directly or indirectly, purchase, offer, sell or deliver the
Preferred Shares or the Dividend Shares, as applicable, or distribute any
offering material.
2. Subject to the terms and conditions set forth herein, NTL shall issue
and sell to the Purchasers, and the Purchasers agree to purchase from NTL the
Preferred Shares at an aggregate purchase price of $1.85 billion (the "Purchase
Price"). The aggregate number of Preferred Shares purchased by each Purchaser
pursuant to this Purchase Agreement and the portion of the Purchase Price
payable by each Purchaser in respect of such Preferred Shares are set forth in
Exhibit B hereto. Each of the Purchasers, severally and not jointly, shall
purchase such number of shares of Preferred Shares set opposite that Purchaser's
name on Exhibit B hereto for the consideration set forth on such Exhibit, and
there shall be no obligation to purchase a number of Preferred Shares in excess
of such number of Preferred Shares.
3. (a) Each of the Purchasers hereby acknowledges and agrees with NTL that
the Preferred Shares have not been, and are not required to be, registered under
the Securities Act and the Preferred Shares may not be offered or sold except
pursuant to registration or to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Each of the
Purchasers hereby acknowledges and agrees with NTL that, upon issuance of the
Dividend Shares, the Dividend Shares will not have been, and will not be
required to be, registered under the Securities Act and may not be offered or
sold except pursuant to registration or to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
<PAGE>
(b) Each of the Purchasers hereby represents that it understands that
the purchase of the Preferred Shares involves substantial risk. Each of the
Purchasers hereby represents that it has experience as an investor in
securities of companies and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Preferred
Shares and has such knowledge and experience in financial or business
matters, that it is capable of evaluating the merits and risks of this
investment in the Preferred Shares and protecting its own interests in
connection with this investment. Each of the Purchasers hereby represents
that it is an "accredited investor" as defined in Rule 501(a) promulgated
under the Securities Act.
(c) With regard to the purchase of the Preferred Shares by France
Telecom from the each of the Purchasers (other than France Telecom), as
contemplated in the Option Agreement, France Telecom agrees and covenants
that it will be a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act, on the date of such resale.
(d) Each of the Purchasers hereby represents and covenants that,
except as contemplated in this Purchase Agreement and in the Option
Agreement, it is acquiring the Preferred Shares for investment for its own
account, not as a nominee or agent, and not with a view of the public
resale or distribution thereof within the meaning of the Securities Act.
Each of the Purchasers further agrees and covenants that it has not entered
and will not enter into any contract or other agreement with respect to the
distribution or delivery of the Preferred Shares or Dividend Shares, other
than (i) pursuant to Rule 144 under the Securities Act, (ii) pursuant to
any transaction that does not require registration under the Securities
Act, (iii) as contemplated in this Agreement or the Option Agreement, or
(iv) with the prior written consent of NTL.
(e) Each of the Purchasers agrees and acknowledges that, when issued,
the Preferred Shares and the Dividend Shares will be eligible for resale
pursuant to Rule 144A(d)(3) of the Securities Act and will not be, on or on
any date following the Time of Delivery, of the same class of securities
(within the meaning of Rule 144A(d)(3) under the Securities Act) listed on
a U.S. national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system
(as such term is used in the rules under the Exchange Act); and
(f) Each of the Purchasers agrees and covenants that neither it, nor
any of its respective affiliates, nor any person acting on its or their
behalf, will (i) solicit any offers to buy, or offer, sell or deliver any
of the Preferred Shares or the Dividend Shares, as applicable, to any
person or (ii) distribute or furnish any offering material relating to the
proposed resale of the Preferred Shares or the Dividend Shares, as
applicable, provided that France Telecom shall have the right to
communicate with financial institutions (and take such other actions as may
be reasonably necessary) for purposes of assigning France Telecom's
obligations in accordance with Section 12, as long as such communications
are conducted in a manner that would not require the Preferred Shares or
the Dividend Shares to be registered under the Securities Act.
(g) Each of the Purchasers agrees and covenants that the certificates
for the Preferred Shares and the Dividend Shares shall bear the legend set
forth in paragraph 11(b) of the Certificate of Designation.
<PAGE>
(h) Each of the Purchasers (other than France Telecom) acknowledges
that it is not a Qualified Holder as defined in the Certificate of
Designation and that it does not have a right to exchange the Preferred
Shares for Eurotel Stock pursuant to Section 8(a) of the Certificate of
Designation.
(i) Subject to the provisions of Section 12, each of the Purchasers
herewith agrees not to sell, pledge or otherwise transfer the Preferred
Shares or interest therein (other than to another Purchaser or to an
affiliate of a Purchaser which agrees to be bound by this Agreement or as
otherwise contemplated in the Option Agreement) at any time prior to the
earlier of the second anniversary of the Time of Delivery or the expiration
of the Option Agreement.
4. (a) The Preferred Shares to be purchased by the Purchasers hereunder
will be represented by one or more stock certificates issued to each Purchaser
evidencing the Preferred Shares. NTL will deliver the stock certificates
evidencing the Preferred Shares to the Purchasers, against payment by or on
behalf of the Purchasers of the Purchase Price by wire transfer of immediately
available funds to an account designated by NTL. Such issuance, delivery and
payment shall occur immediately prior to the completion of the Strategic
Acquisition on the date of completion of the Strategic Acquisition, of which
date NTL shall give Purchasers at least five business days prior notice (or at
such other time and date as the Purchasers and NTL may agree upon in writing).
Such time and date are herein called the "Time of Delivery". If completion of
the Strategic Acquisition does not occur on or before June 29, 2000, the
provisions of this Purchase Agreement shall cease to have any effect (except as
regards any prior breaches by either party).
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including any
additional documents requested by the Purchasers pursuant to Sections 7(a)
and (b) hereof and the Preferred Shares will be delivered at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"), Four Times
Square, New York, New York 10036, all at the Time of Delivery.
5. NTL agrees and covenants:
(a) To file the Certificate of Designation with the Secretary of State
of the State of Delaware so that it is effective immediately prior to or at
the Time of Delivery;
(b) To deliver to the Purchasers or an affiliate thereof (as
applicable), (i) on or prior to the Time of Delivery and (ii)-within 30
days after a request by the Purchasers, valid statement described in
Treasury Regulation section 1.897-2(g)(1)(ii) and to comply with the notice
requirements in Treasury Regulation section 1.897-2(h);
(c) To use the Purchase Price primarily for the purpose of
consummating the Strategic Acquisition, including, without limitation,
refinancing of any assumed indebtedness incurred in connection therewith,
and if any portion of the Purchase Price is left after consummation of the
Strategic Acquisition, to use such remainder for purposes of acquiring
companies or businesses primarily engaged in the broadband communications,
broadcasting and cable television business in Continental Europe (outside
of France);
(d) To pay and discharge, and to cause each of its subsidiaries to pay
and discharge, all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties would otherwise
attach thereto, and all lawful claims which, if unpaid, might become a lien
or charge upon any properties of NTL or any of its subsidiaries, provided
that neither NTL or any of its subsidiaries shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in
good faith and by proper proceedings if it has maintained adequate reserves
with respect thereto in accordance with generally accepted accounting
principles;
(e) To enter into such agreements and take such actions as the
Purchasers may reasonably request in order to expedite or facilitate any
transfer or disposition of the Preferred Shares, or the Dividend Shares, as
applicable, in compliance with the provisions of Section-3 above, including
without limitation, directing the transfer agent to register the transfer
of the Preferred Shares or the Dividend Shares, as applicable, as directed
by or on behalf of the Purchasers; and
<PAGE>
(f) None of NTL, any of its affiliates, or any person acting on its or
their behalf will (i) engage in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities Act) in
connection with any offer or sale of the Preferred Shares or the Dividend
Shares, as applicable, in the United States of America; (ii) solicit any
offers to buy, or offer, sell or deliver any Preferred Shares or Dividend
Shares, as applicable, to any person; (iii) distribute or furnish any
offering material relating to the proposed resale of the Preferred Shares
or the Dividend Shares, as applicable;
(g) For so long as NTL is neither subject to Section 13 or 15(d) of
the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, it will provide the information required by Rule
144A(d)(4) of the Securities Act;
(h) If any shares of Common Stock of NTL are issued to a Purchaser (or
its assign) pursuant to paragraph 9 of the Certificate of Designation, that
such shares shall be entitled to registration rights consistent with those
set forth in the Investment Agreement, dated July 26, 1999, between NTL and
France Telecom (the "Investment Agreement"); and
(i) Prior to the Time of Delivery, the Rights Agreement (as defined in
the Investment Agreement) will be amended to provide that the ownership by
a Purchaser of the Preferred Shares or common stock issuable upon
conversion thereof will not result in the Purchaser being deemed an
Acquiring Person (as such term is defined in the Rights Agreement) or
result in the occurrence of a Stock Acquisition Date, Section 11(a)(ii)
Event or Section 13 Event (as such terms are defined in the Rights
Agreement), or as otherwise may be necessary.
6. (a) NTL covenants and agrees with the Purchasers that NTL will pay or
cause to be paid the following: (i) the cost of preparing the stock certificates
for the Preferred Shares, (ii) the cost of filing the Certificate of Designation
with the Secretary of State of the State of Delaware, (iii) any stamp, transfer,
sales and use, value added, documentary, registration, issuance or similar tax,
assessment or other governmental charge imposed on the sale or delivery of the
Preferred Shares, or on the delivery of the Dividend Shares, as applicable,
pursuant to this Purchase Agreement or the Option Agreement or upon the
execution, delivery or performance of this Purchase Agreement or the Option
Agreement and (iv) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6. It is understood, however, that, except as provided in this
Section 6, the Purchasers will pay all of their own costs and expenses,
including the fees of their counsel.
<PAGE>
(b) NTL hereby agrees to indemnify and hold each of the Purchasers
(which shall include their respective directors, officers, agents,
employees and affiliates) harmless from and against any and all costs,
taxes (other than withholding taxes or taxes measured by the net income or
net profits of a Purchaser as a result of distributions on or in redemption
of the Preferred Shares and/or the Dividend Shares, except as provided in
paragraph 4(f) of the Certificate of Designation) fines, penalties,
damages, actions, losses, liabilities, expenses (including, but not limited
to, the fees and expenses of counsel) and claims (the "Losses") incurred by
any of the Purchasers (including France Telecom, notwithstanding any
assignment by France Telecom pursuant to Section 12 hereof) as a result of
or in connection with the consummation of transactions contemplated herein,
arising out of or resulting from any breach of a representation or warranty
made by NTL contained in this Purchase Agreement, or arising out of the
performance of any such Purchaser of its obligations under this Purchase
Agreement or the compliance by such Purchaser with the instructions set
forth herein or delivered hereunder, other than those Losses resulting
solely from such Purchaser's gross negligence or willful misconduct or the
legal or regulatory status of the Purchaser. Each Purchaser shall use its
best efforts to notify NTL of the written assertion of a claim against it
or of any action commenced against it, promptly after it shall have
received any such written assertion of a claim or shall have been served
with the summons or other first legal process, giving information as to the
nature and basis of the claim; provided that such Purchaser's failure to so
notify shall not affect the obligations of NTL hereunder. Each Purchaser
shall be entitled to retain counsel of its choice in any such suit and NTL
shall pay the fees, expenses and disbursements of such counsel, and all
other expenses in connection therewith. The indemnity set forth herein
shall be in addition to any rights that the Purchasers may have at common
law or otherwise, including any right of contribution. With respect to the
Purchasers (other than France Telecom) this Section-6(b) shall survive (a)
as long as the Purchasers hold the Preferred Shares and/or the Dividend
Shares, as applicable, and, (b) with regard to any event that may occur
during the time the Purchasers hold the Preferred Shares and/or the
Dividend Shares, as applicable, beyond the time that the Purchasers hold
the Preferred Shares and/or the Dividend Shares, as applicable. With
respect to France Telecom, this Section 6(b) shall survive for a period of
two (2) years following the date hereof.
(c) Upon the request of NTL and at NTL's expense, each Purchaser shall
provide NTL, to the extent permitted by law, with two Internal Revenue
Service Forms 1001, 4224 or W-BEN, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service or other applicable
taxing authority certifying that such Purchaser is entitled to a reduction
in, or exemption from, withholding or other taxes for which NTL is liable
under this Purchase Agreement (including in this Section 6) or otherwise.
<PAGE>
7. (a) The obligations of the Purchasers to purchase the Preferred Shares
shall be subject to the truth and accuracy of the representations and warranties
on the part of NTL contained herein as of the date hereof and as of the Time of
Delivery, to the truth and accuracy of the statements of NTL made in any
certificates pursuant to the provisions hereof, to the performance by NTL of its
obligations hereunder and to the following additional conditions:
(i) Prior to the Time of Delivery, NTL shall have furnished to
the Purchasers (including France Telecom, notwithstanding any
assignment by France Telecom pursuant to Section 12 hereof) (i) the
Certificate of Designation executed by a duly authorized officer of
NTL and duly approved by NTL's Board of Directors to be filed with the
Secretary of State of the State of Delaware and (ii) such further
information, certificates and documents as the Purchasers, France
Telecom and their respective counsel may reasonably request;
(ii) NTL shall have furnished to the Purchasers (including France
Telecom, notwithstanding any assignment by France Telecom pursuant to
Section 12 hereof) certificates of NTL, signed by the Chief Executive
Officer, the President, the Executive Vice President or a Senior Vice
President of NTL and by the principal accounting or financial officer
of NTL, as to the truth and accuracy of the representations and
warranties of NTL herein as of the date hereof and as of the Time of
Delivery as to the performance by NTL of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, and as
to such other matters as the Purchasers and their respective counsel
may reasonably request;
(iii) The Purchasers (including France Telecom, notwithstanding
any assignment by France Telecom pursuant to Section 12 hereof) shall
have received an opinion of Skadden Arps regarding the Preferred
Shares and the Dividend Shares, as applicable, substantially as set
forth as Exhibit C;
(iv) On the date of issuance, sale and delivery of the Preferred
Shares, the Purchasers, other than France Telecom, shall have received
(a) an opinion of Shearman & Sterling, substantially in the form and
substance as set forth as Exhibit D, (b) an opinion of in-house
counsel (Directeur Juridique) of France Telecom, substantially in the
form and substance as set forth as Exhibit E, and (c) an opinion of
White & Case LLP, substantially in the form and substance as set forth
as Exhibit F; and
<PAGE>
(v) None of the following pursuant to or within the meaning of
any Bankruptcy Law shall have occurred: (A) NTL or any Significant
Subsidiary having (1) commenced a voluntary case or filed a petition
in bankruptcy or become insolvent; (2) consented to the entry of an
order for relief against it in an involuntary case in which it is the
debtor; (3) consented to the appointment of a Custodian of it or for
all or substantially all of its property or assets; or (4) made a
general assignment for the benefit of its creditors;
(B) an involuntary petition against NTL or any Significant
Subsidiary having been filed in an insolvency proceeding, and
such involuntary filing not having been dismissed within sixty
(60) days after such filing;
(C) a court of competent jurisdiction having entered an
order or decree under any Bankruptcy Law that: (1) is for relief
against NTL or any Significant Subsidiary in an involuntary case;
(2) appoints a Custodian of NTL or any Significant Subsidiary or
for all or substantially all of its property or assets; or (3)
orders the liquidation of NTL or any Significant Subsidiary, and
the order or decree remains unstayed and in effect for 60 days.
(D) NTL or any Significant Subsidiary having proposed or
become a party to any dissolution or liquidation.
For purposes of this Section, the term "Bankruptcy Law" means Title 11, U.S.
Code or any similar Federal, state or foreign law for the relief of debtors or
the protection of creditors, and the term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
(vi) Neither NTL nor any Significant Subsidiary shall have become
unable to pay its debts as they shall become due or shall have
proposed a written agreement of composition or extension of its debts.
(b) The obligations of each party to consummate the transactions
contemplated hereby are further subject to the condition that the Strategic
Acquisition be consummated substantially simultaneously with the
consummation of the transactions contemplated hereby.
8. The respective agreements, representations, warranties and other
statements of NTL and the Purchasers, as set forth in this Purchase Agreement or
made by or on behalf of them, respectively, pursuant to this Purchase Agreement,
shall remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of the Purchasers or
any controlling person of any Purchaser (including France Telecom or any
controlling person of France Telecom, notwithstanding any assignment by France
Telecom pursuant to Section 12 hereof), or NTL or any officer or director or
controlling person of NTL, and shall survive delivery of and payment for the
Preferred Shares.
9. This Purchase Agreement may be terminated by mutual agreement of the
parties, notwithstanding any assignment by France Telecom pursuant to Section 12
hereof, in which event, (i) NTL shall not then be under any liability or
obligation to the Purchasers with respect to this Purchase Agreement, the
Preferred Shares and the Dividend Shares, except as provided in Section 6(a) and
6(b) hereof, (ii) the Purchasers shall not then be under any liability or
obligation to NTL with respect to this Purchase Agreement except as provided in
Section 6(a) hereof and (iii) all provisions of this Purchase Agreement shall
cease to have any effect with the exception of this Section 9, Section 13,
Section 14 and Section 15.
<PAGE>
10. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to Banque Nationale de Paris, 16, Boulevard des Italiens,
75009 Paris, France, Attention: Philippe Roca, Fax No.:(33)(1)40-14-69-40;
Credit Agricole Indosuez, 9 Quai du President Paul Doumer, 92400 Courbevoie,
France, Attention: Damien Scaillierez, Fax No.: (33)(1)41-89-39-53; Deutsche
Bank AG, Paris Branch, 3, Avenue de Friedland, 75008 Paris, France, Attention:
Benoit Deschamps, Fax No.: (33)(1)42-89-00-45; Westdeutsche Landesbank
Girozentrale, Paris Branch, 15, Avenue de Friedland, 75008 Paris, France,
Attention: Khaled Osman, Fax No. (33)(1)45-63-15-71; and France Telecom, 6,
Place d'Alleray, 75505 Paris Cedex 15, France, Attention: Philippe McAllister,
Fax No.: (33)(1)44-44-86-00, with copies to Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, Attention: Alfred J. Ross, Esq., Fax No.:
(212) 848-7179; and if to NTL shall be delivered or sent by mail, telex or
facsimile transmission to NTL Incorporated, 110 East 59th Street, New-York, New
York 10022, Attention: General Counsel, Fax No.: (212) 906-8497, with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York
10036, Attention: Thomas H. Kennedy, Esq., Fax No.: (917) 777-2526. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
11. Except as provided in Section 12 hereof, this Purchase Agreement shall
be binding upon, and inure solely to the benefit of, the Purchasers and NTL and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Purchase Agreement. No purchaser of
any of the Preferred Shares from any of the Purchasers, other than France
Telecom or an affiliate of France Telecom, shall be deemed a successor or assign
with respect to this Purchase Agreement by reason merely of such purchase.
12. This Purchase Agreement may not be assigned by any of the Purchasers
without the express written consent of NTL, except that (i) the Purchasers other
than France Telecom may assign this Purchase Agreement (including, but not
limited to, their rights under Section 6(b)) to France Telecom or an affiliate
of any of the Purchasers or France Telecom without the consent of NTL, provided,
however, that no such assignment shall release any of such Purchasers from their
obligations hereunder and (ii) France Telecom may, without the consent of any
other party to this Purchase Agreement, assign its obligation to purchase
750,000 Preferred Shares, to (x) any one or more financial institutions (it
being understood and agreed that (i) such assignment shall release France
Telecom only from its obligation to purchase the Preferred Shares and (ii)
France Telecom shall remain liable for the performance of all its other
obligations hereunder) or (y) an affiliate of France Telecom (it being
understood and agreed that France Telecom shall remain liable for the
performance by its affiliate of all of the other obligations of France Telecom
to be performed hereunder). Notwithstanding anything to the contrary contained
in this Agreement, the parties hereto acknowledge and agree that,
notwithstanding any assignment by France Telecom of its obligation to purchase
the Preferred Shares, France Telecom shall remain a party to this Agreement,
with the right to rely on the representations and warranties contained herein,
with the right of action to enforce any covenants and agreements contained
herein and to otherwise preserve all rights specifically given to France Telecom
hereunder. The parties further acknowledge that France Telecom is entering into
the Option Agreement in reliance on the representations, warranties, covenants
and agreements contained herein. NTL and the Purchasers shall not modify, amend
or terminate this Purchase Agreement or waive any condition contained herein or
any of their rights hereunder without the express written consent of France
Telecom.
13. This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed entirely in that state and without regard to any
applicable conflicts of laws principles.
14. Each of NTL and each Purchaser irrevocably agrees that any legal suit,
action, or proceeding against it arising out of or in connection with this
Purchase Agreement, the Preferred Shares or the Securities, as the case may be,
may be instituted in the Supreme Court of the State of New York, County of New
York or the U.S. District Court for the Southern District of New York, as
applicable, and irrevocably waives any objection which it may now or hereinafter
have to the laying of venue of any such proceeding, and irrevocably submits to
the non-exclusive jurisdiction of such courts in any such suit, action or
proceeding.
<PAGE>
15. France Telecom irrevocably waives any immunity to jurisdiction which it
has or hereafter may acquire (including any immunity, sovereign or otherwise
pursuant to public law or status, to pre-judgment attachment and execution) in
any legal suit, action or proceeding against it arising out of or based on this
Purchase Agreement or the transactions contemplated hereby that is instituted in
the Supreme Court of the State of New York, County of New York or the U.S.
District Court for the Southern District of New York, or in any competent court
of the French Republic or any other jurisdiction (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property. Without limiting the
generality of the foregoing, France Telecom agrees that the waivers set forth in
this Section-15 shall have the fullest scope permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States and are intended to be
irrevocable for purposes of such Act.
16. This Purchase Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Purchasers and NTL.
Very truly yours,
NTL INCORPORATED
By: /s/ John Gregg
------------------
Name: John Gregg
Title: Chief Financial
Officer
Accepted as of the date hereof:
BANQUE NATIONALE DE PARIS
By: /s/ Lionel Bordarier By:/s/Christophe Delafontaine
- ------------------------- -----------------------------
Name: Lionel Bordarier Name: Christophe Delafontaine
Title: Directeur Title:Directeur Adjoint
CREDIT AGRICOLE INDOSUEZ
By: /s/ Michel Chabanel By: /s/ Damien Scaillierez
- ------------------------ ---------------------------
Name: Michel Chabanel Name: Damien Scaillierez
Title: Head of Acquisition Title: Fonde de Pouvoir
Finance
DEUTSCHE BANK A.G.
PARIS BRANCH
By: /s/ Benoit Deschamps By: /s/ Antoine de Maistre
- ------------------------- ---------------------------
Name: Benoit Deschamps Name: Antoine de Maistre
Title: Directeur Title: Legal Advisor
WESTDEUTSCHE LANDESBANK GIROZENTRALE
PARIS BRANCH
By: /s/ Barbara Selves By: /s/ Nadine Veldung
- ----------------------- -----------------------
Name: Barbara Selves Name: Nadine Veldung
Title: Directeur Title: Directeur
FRANCE TELECOM
By: /s/ Eric Bouvier
- ------------------------
Name: Eric Bouvier
Title: Senior Vice-President
<PAGE>
Exhibit A
Capital Stock of NTL Incorporated
Our authorized capital stock consists of 400,000,000 shares (or, in the event
the NTL stockholders approve an increase in the number of authorized shares of
NTL Common Stock at the upcoming special meeting of stockholders (the "Share
Increase"), 800,000,000 shares) of common stock, par value $.01 per share; and
10,000,000 shares of preferred stock, par value $.01 per share. As of the close
of business on January 31, 2000, as adjusted for the 5-for-4 stock split by way
of a stock dividend paid on February 3, 2000:
133,199,042 shares of NTL Common Stock issued and outstanding, each including an
associated right to purchase NTL Junior Participating Preferred Stock;
6.8818 shares of NTL 13% Series A Preferred Stock issued and outstanding;
142,308.635 shares of NTL 13% Series B Preferred Stock issued and outstanding;
52,217 shares of NTL 9.90% Series B Preferred Stock issued and outstanding;
500,000 shares of NTL 5-1/4% Series A Preferred Stock issued and outstanding;
4,447.92 shares of NTL 5-1/4% Series B Preferred Stock issued and outstanding;
6,620.88 shares of NTL 5-1/4% Series C Preferred Stock issued and outstanding;
6,707.78 shares of NTL 5-1/4% Series D Preferred Stock issued and outstanding;
6,795.82 shares of NTL 5-1/4% Series E Preferred Stock issued and outstanding;
750,000 shares of NTL 5% Series A Cumulative Participating Convertible Preferred
Stock issued and outstanding;
5,000shares of NTL 5% Series C Cumulative Participating Convertible Preferred
Stock issued and outstanding;
9,437.5 shares of NTL 5% Series D Cumulative Participating Convertible Preferred
Stock issued and outstanding.
There are (i)28,452,055 shares of NTL common stock reserved for issuance upon
exercise of stock options of NTL outstanding pursuant to employee stock option
and similar plans; (ii)18,340,094 shares of NTL common stock reserved for
issuance upon the conversion of NTL preferred stock; (iii) 11,092,213 shares of
NTL common stock reserved for issuance upon conversion of the NTL 5-3/4%
Convertible Subordinated Notes due 2009; (iv) 4,395,966 shares of NTL common
stock reserved for issuance upon the exercise of the outstanding warrants to
acquire shares of NTL common stock outstanding; and (v) 15,288,266 shares of NTL
common stock reserved for issuance upon conversion of the outstanding 7%
Convertible Subordinated Notes due 2008.
<PAGE>
Exhibit B
<TABLE>
<CAPTION>
Purchaser Number of Shares of Preferred Purchase Price
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Banque Nationale de Paris 275,000 $275,000,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Credit Agricole Indosuez 275,000 $275,000,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Deutsche Bank AG 275,000 $275,000,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale 275,000 $275,000,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
France Telecom 750,000 $750,000,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>
