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EXHIBIT (2)
As of 3 MARCH 2000
MEDIAONE INTERNATIONAL HOLDINGS, INC.
MICROSOFT CORPORATION
MEDIAONE UK CABLE, INC. and MEDIAONE CABLE PARTNERSHIP HOLDINGS, INC.
LIBERTY MEDIA INTERNATIONAL, INC.
LIBERTY UK HOLDINGS, INC.
LIBERTY UK, INC.
TELEWEST COMMUNICATIONS plc
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THE REVISED EXISTING
RELATIONSHIP AGREEMENT
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Contents
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Clause Page
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1. INTERPRETATION..............................................................................2
2. CONDITION...................................................................................8
3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS................................................9
4. DIRECTORS..................................................................................10
5. CLOSING....................................................................................10
6. MATTERS REQUIRING CONSENT..................................................................10
7. VOTING AGREEMENT AMONG LIBERTY GROUP AND MEDIAONE GROUP....................................11
8. RESTRICTIONS ON TRANSFERS BY LIBERTY GROUP AND MEDIAONE GROUP..............................13
9. RIGHTS OF FIRST REFUSAL AND CHANGE OF CONTROL..............................................13
Clause 9.1 is deliberately blank.........................................................13
10. SPECIFIC RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL..........................17
11. GENERAL RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL...........................25
12. NON-COMPETITION............................................................................25
13. SCOPE OF COMPANY BUSINESS..................................................................25
14. CONTRACTUAL RESTRICTIONS...................................................................26
15. INDEMNIFICATION............................................................................26
16. GAIN RECOGNITION CONSENT REQUIREMENTS AND CONVERSION.......................................26
17. CITY CODE ON TAKEOVERS AND MERGERS.........................................................27
18. CONFIDENTIALITY............................................................................27
19. JOINT AND SEVERAL LIABILITY FOR CONTROLLED AFFILIATES......................................27
20. TERM.......................................................................................27
21. TERMINATION OF PREVIOUS AGREEMENTS.........................................................27
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<TABLE>
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22. COMPETITION................................................................................28
23. COSTS......................................................................................28
24. FURTHER ASSURANCE..........................................................................28
25. GENERAL....................................................................................28
26. ASSIGNMENT.................................................................................29
27. NOTICES....................................................................................29
28. GOVERNING LAW AND JURISDICTION.............................................................30
29. COUNTERPARTS...............................................................................31
SCHEDULE 1.....................................................................................32
SCHEDULE 2.....................................................................................33
DEED OF ADHERENCE..........................................................................33
SCHEDULE 3.....................................................................................34
PROVISIONS PRESERVED FROM THE OLD RELATIONSHIP AGREEMENT...................................34
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THIS REVISED EXISTING RELATIONSHIP AGREEMENT is made as of 3 March 2000
BETWEEN:
(1) MEDIAONE INTERNATIONAL HOLDINGS, INC. (previously known as US WEST
International Holdings Inc.), a company incorporated in Delaware, USA whose
principal place of business is 7800 East Orchard Road, Englewood, Colorado
80111, USA (MediaOne Holdings);
(2) MEDIAONE UK CABLE, INC. (previously known as US WEST UK Cable Inc.) and
MEDIAONE CABLE PARTNERSHIP HOLDINGS, INC. (previously known as US WEST Cable
Partnership Holdings Inc.), each being a company incorporated in Delaware, USA
whose principal place of business is 7800 East Orchard Road, Englewood, Colorado
80111, USA (MediaOne UK and MediaOne Cable respectively);
(3) LIBERTY MEDIA INTERNATIONAL, INC., a company incorporated in Delaware, USA
whose principal place of business is 9197 South Peoria Street, Englewood,
Colorado 80112 USA (Liberty International) (formerly known as
Tele-Communications International, Inc.);
(4) LIBERTY UK HOLDINGS, INC., a company incorporated in Delaware, USA whose
principal place of business is 9197 South Peoria Street, Englewood, Colorado
80112 USA (Liberty UK Holdings);
(5) LIBERTY UK, INC., a company incorporated in Colorado, USA whose principal
place of business is 9197 South Peoria Street, Englewood, Colorado 80112 USA
(formerly known as United Artists Programming - Europe, Inc.) (Liberty UK);
(6) TELEWEST COMMUNICATIONS plc, a company incorporated in England and Wales
(registered no. 2983307), whose registered office is at Genesis Business Park,
Albert Drive, Woking, Surrey GU21 5RW, England (the Company); and
(7) MICROSOFT CORPORATION, a company incorporated in Washington, whose principal
place of business is at One Microsoft Way, Redmond, WA 98052 6399 (Microsoft).
WHEREAS:
(A) The parties to this Agreement (other than Microsoft) are parties to an
amended and restated relationship agreement dated as of 21 May 1999 (the 1999
Agreement).
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(B) The parties have agreed that this Agreement shall replace the 1999 Agreement
in all respects with effect from satisfaction of the condition set out in clause
2.
THE PARTIES AGREE as follows:
INTERPRETATION
1.1 In this Agreement, unless indicated to the contrary:
Act means the Companies Act 1985 (as amended);
Affiliate means with respect to any Person, any other Person directly or
indirectly Controlling, directly or indirectly Controlled by or under direct or
indirect common Control with such Person;
ADS means an American Depositary Share representing 10 Ordinary Shares;
Board means the board of directors of the Company;
business day means any day other than a Saturday or Sunday or a public holiday
in the State of Colorado, the State of Delaware or England and Wales;
Cable Telephony means any voice or data telecommunications transmission service
which operates in whole or in part by cable links to subscribers' premises, is
interconnected at some point to a public switched network and is intended to
serve customers in the United Kingdom;
Cable Television means any service provided to customers on a subscription or
pay-per-view basis which sends sounds or visual images or both by means of
cable, radio or microwave transmission systems for television reception at two
or more locations, whether sent for simultaneous reception or at different times
in response to subscribers' requests, including without limitation video on
demand and other interactive services and other entertainment,
telecommunications and information services proposed to be offered by the
Company, as described in the Disclosure Documents;
Change in Control means
(a) with respect to MediaOne Holdings and its Affiliates, the acquisition
(whether by merger, consolidation, sale, assignment, lease, transfer or
otherwise, in one transaction or any related series of transactions) of
beneficial ownership of equity interests in MediaOne Holdings or any of its
Affiliates by any Person (other than pursuant to a distribution in specie,
spin off, share dividend, demerger or similar transaction and other than
any acquisition of beneficial ownership by MediaOne Holdings or any of its
Affiliates) as a result of which such Person has the power, directly or
indirectly, to direct the voting and disposition of
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Shares held by MediaOne Holdings and its Affiliates representing at least
15 per cent. of the outstanding Shares of the Company provided that any
change in the Control of MediaOne shall not be deemed a Change in Control
for the purposes of this Agreement; and
(b) with respect to Liberty International and its Affiliates, the acquisition
(whether by merger, consolidation, sale, assignment, lease, transfer or
otherwise, in one transaction or any related series of transactions) of
beneficial ownership of equity interests in Liberty International or any of
its Affiliates by any Person (except pursuant to a distribution in specie,
spinoff, share dividend, demerger or similar transaction and other than any
acquisition of beneficial ownership by Liberty International or any of its
Affiliates) as a result of which such Person has the power, directly or
indirectly, to direct the voting and disposition of Shares held by Liberty
International and its Affiliates representing at least 15 per cent. of the
outstanding Shares of the Company, provided that any change in the Control
of TCI, Liberty Media Corporation, Liberty International or AT&T
Corporation shall not be deemed a Change in Control for purposes of this
Agreement.
A Change in Control shall be deemed voluntary if it is the result of a
transaction agreed to by Liberty International or any of its Affiliates or by
MediaOne Holdings or any of its Affiliates, as the case may be. A Change in
Control shall be deemed involuntary if it is the result of actions by Persons
other than Liberty International or any of its Affiliates or MediaOne Holdings
or any of its Affiliates, as the case may be, taken without the agreement or
consent of Liberty International or any of its Affiliates or of MediaOne
Holdings or any of its Affiliates, as the case may be;
Closing Price means the sale price for Ordinary Shares (i) with respect to
Ordinary Shares to be offered on the London Stock Exchange, the sale price which
appears on the relevant Reuters Screen for the Company as of 11:00 a.m. (London
time) on a Trading Day, provided that if such Ordinary Shares do not appear on
such Reuters Screen or such Reuters Screen is temporarily unavailable, the sale
price with respect to the Ordinary Shares will be the last reported sale price
which appears in the Official List of the London Stock Exchange on a Trading Day
and (ii) with respect to Ordinary Shares to be offered on the New York Stock
Exchange in the form of ADSs the last reported sale price on a Trading Day or,
in case no such sale takes place on such day, the average of the reported
closing bid and asked prices as reported on the New York Stock Exchange
Composite Tape, or, if such sales are not so reported, the reported last sale
price or, if no such sale takes place on such day, the average of the reported
closing bid and asked prices on the principal national securities exchange on
which the ADSs are listed or admitted to trading, or if not listed or admitted
to trading on any national securities exchange, on the NASDAQ National Market
System (NASDAQ), or if the ADSs are not quoted on such
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National Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected by the Board for that purpose;
Control means with respect to, any Person, the possession, directly or
indirectly, by another Person of the power to direct or cause the direction of
the management or policies of such Person, whether through equity ownership, by
contract or otherwise, but a Person shall not be deemed to Control another
Person solely by virtue of any veto rights granted to it as a minority equity
owner or by virtue of super majority voting rights and the words Controlled and
Controlling shall be construed accordingly;
Controlled Affiliate means with respect to any Person, any Affiliate of such
Person which is under the Control of such Person provided that each of Flextech
plc, At Home Corporation and Princes Holdings Limited shall not be treated as a
Controlled Affiliate of the Liberty Group or the MediaOne Group and TWE shall
not be treated as a Controlled Affiliate of the MediaOne Group;
Controlling Shareholder has the same meaning as in paragraph 3.13 of Chapter 3
of the Listing Rules;
Debenture Change of Control means a Change of Control as defined in any of (i)
the Indenture, dated as of October 3, 1995, between the Company and The Bank of
New York, pursuant to which the Company issued its Senior Debentures due 2006,
(ii) the Indenture, dated as of October 3, 1995, between the Company and The
Bank of New York pursuant to which the Company issued its Senior Discount
Debentures due 2007, (iii) the Indenture dated as of November 9, 1998 between
the Company and The Bank of New York, pursuant to which the Company issued its
Senior Notes due 2008, (iv) the Indenture, dated as of February 19, 1999 between
the Company and The Bank of New York, pursuant to which the Company issued its
Senior Convertible Notes due 2007 (v) the Indenture, dated as of 15 April 1999,
between the Company and The Bank of New York, pursuant to which the Company
issued its Sterling and Dollar denominated Senior Discount Notes due 2009 in
each case as in effect as at 1 October 1999 and (vi) a document governing any
other indebtedness of the Company as agreed in writing in advance by Microsoft
and Liberty International (the Indentures), provided that there shall not be
deemed to be any such Change of Control if all the notes which have been issued
pursuant to the Indentures referred to in (i) to (v) prior to 30 September 1999
or pursuant to any document referred to in (vi) shall have been redeemed,
repaid, cancelled or purchased by the Company;
Director means a director of the Company;
Disclosure Documents means the prospectus, registration statement and listing
particulars filed, distributed or used in connection with Old Telewest's initial
public offering of Ordinary Shares in 1994 or in connection with the
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Company's acquisition of SBC CableComms and Old Telewest in 1995 or in
connection with the company's acquisition of General Cable PLC in 1998;
Fair Market Value means as to any property, the price at which a willing seller
would sell and a willing buyer would buy such property having full knowledge of
the facts, in an arm's length transaction without time constraints, and without
being under any compulsion to buy or sell;
Fully Diluted Ordinary Shares means, at any time, the Ordinary Shares in issue
at such time and the Ordinary Shares which would be in issue if all options and
rights outstanding for the time being to subscribe for Ordinary Shares or
securities convertible into or exchangeable for Ordinary Shares (including the
Limited Voting Shares) were exercisable and had been exercised and the relevant
Ordinary Shares and securities issued and all securities convertible into or
exchangeable for Ordinary Shares in issue (or assumed to be in issue) at such
time were convertible or exchangeable and had been converted or exchanged and
the relevant Ordinary Shares issued;
Independent Directors means those Directors who are not designated by the
Liberty Group or the MediaOne Group in accordance with Article 71 of the 1999
Articles and are not partners, officers or employees of, and do not have a
material consultancy with, the Liberty Group or the MediaOne Group;
IPO Documents means the prospectus, registration statement and listing
particulars filed, distributed or used in connection with Old Telewest's initial
public offering of Ordinary Shares in 1994;
Liberty Media Corporation, a Delaware corporation;
Liberty Group means Liberty International and its Affiliates from time to time
or any Person or group of Persons within the meaning given to the expression
"Liberty Group" in the 2000 Articles;
Liberty Shareholders means Liberty UK Holdings and Liberty UK (whilst each is a
member of the Liberty Group and a Shareholder) and/or any Shareholder who is a
member of the Liberty Group for the time being;
Limited Voting Shares means the limited voting convertible ordinary shares of
the Company having the rights set out in the 2000 Articles;
MediaOne means MediaOne Group Inc., a Delaware corporation;
MediaOne Group means MediaOne Holdings and its Affiliates from time to time or
any Person or group of Persons within the meaning given to the expression
"MediaOne Group" in the 2000 Articles;
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MediaOne Shareholder means each of MediaOne UK and MediaOne Cable (whilst it is
a member of the MediaOne Group and a Shareholder) and/or any Shareholder who is
a member of the MediaOne Group for the time being;
Microsoft Group means Microsoft and its Affiliates from time to time and/or any
holding company of Microsoft, and its subsidiary undertakings and any subsidiary
undertakings of any such holding company;
2000 Articles means the articles of association to be adopted by the Company in
the agreed form (conditional upon closing of the acquisition of MediaOne's stake
in the Company by Microsoft) at the Company's Extraordinary General Meeting to
be held in connection with the approval of the offer by the Company for Flextech
plc;
Old Shareholders' Agreement means the shareholders' agreement dated as of 22
November 1994 by and between United Artists Cable Television UK Holdings, Inc.,
Liberty UK, MediaOne UK and MediaOne Cable as amended by an agreement between
the same parties dated 19 June 1995 and supplemented by a further agreement
between the same parties, Old Telewest and the Company dated 3 October 1995;
Old Telewest means Telewest Communications Cable Limited, a company incorporated
in England and Wales (registered no. 2883742) whose registered office is at
Genesis Business Park, Albert Drive, Woking, Surrey GU21 5RW, England;
Ordinary Share means an ordinary share, 10p par value, of the Company, including
any such share represented by an ADS;
Ownership Interest means, with respect to each Person owning an interest in TW
Holdings, all of the interests of such Person in TW Holdings (including, without
limitation, an interest in the profits and losses of TW Holdings, a capital
account interest in TW Holdings and all other rights and obligations of such
Person under the TW Holdings Operating Agreement);
Percentage Ownership has the meaning given to that expression in clause 10.1;
Permitted Demerger means a distribution in specie, share dividend, spin off,
demerger or similar transaction resulting in one or more Affiliates of the
transferor owning 80 per cent. or more of the Shares owned by the transferor's
group (for such purposes meaning the MediaOne Group if a member or members of
such group is or are the transferor(s) or the Liberty Group if a member or
member of the Liberty Group is or are the transferor(s)) immediately prior to
such transaction;
Person means an individual, corporation, general or limited partnership, limited
or unlimited liability company, trust, association, unincorporated organisation,
government or any authority, agency or body thereof, or other entity;
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Private Transfer means the Transfer of Shares by a Shareholder in a negotiated
transaction, rather than through a brokerage transaction effected on a national
securities exchange, NASDAQ or the London Stock Exchange;
Pro Rata Shares means, with respect to any Shareholder Group at any time, the
number of Shares held by TW Holdings attributable to such Shareholder Group
being the product rounded to the nearest whole number of (x) the sum of the
number of Shares owned by TW Holdings multiplied by (y) the aggregate percentage
Ownership Interest in TW Holdings, expressed as a decimal, held by members of
such Shareholder Group as at such time;
Public Transfer means the Transfer of Shares by a Shareholder through a
brokerage transaction effected on a national securities exchange, NASDAQ or the
London Stock Exchange, including a Private Transfer to a broker in anticipation
of a Public Transfer to be effected by that broker;
Qualifying Group has the meaning given to that expression in clause 10.1;
Relevant Person means a director, officer or employee of any of Liberty
International, MediaOne Holdings or their respective Affiliates;
Required Consent has the meaning given to that expression in clause 6.2;
Shareholders means each of MediaOne UK, MediaOne Cable, Liberty UK, Liberty UK
Holdings and each Person who acquires Shares and becomes a party to this
Agreement by completing, executing and delivering a deed of adherence in
accordance with clause 26.2, for so long as it holds any Shares or owns any
Shares and remains a party to this Agreement;
Shareholder Group means any of the Liberty Group or the MediaOne Group;
Shares means the Ordinary Shares and the Limited Voting Shares;
TCI means Tele-Communications, Inc., a Delaware corporation;
Telewest Group means the Company and every Person Controlled by the Company;
Trading Day means each Monday, Tuesday, Wednesday, Thursday and Friday other
than a day on which securities are not traded on the applicable exchange or
market;
Transfer means, in relation to any Shares, to sell, assign, pledge, grant a
security interest in, or otherwise dispose of such shares or any legal or
beneficial interest therein or agree to do any of the foregoing;
TW Holdings means TW Holdings, L.L.C., a Colorado limited liability company;
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TW Holdings Operating Agreement means the amended and restated operating
agreement of TW Holdings dated 1 September 1998, as amended and restated from
time to time;
United Kingdom or UK means England, Wales, Scotland and Northern Ireland, as
their territories and boundaries exist on 1 September 1998, and
Wireless Telephony means any voice or data telecommunications transmission
service which operates by means of radiowave, microwave, cellular or other
similar technology as part of a licensed mobile communications system or
personal communications network.
1.2 In this Agreement unless indicated to the contrary, a reference to:
1.2.1 a statutory provision includes a reference to the statutory provision as
modified or re-enacted or both from time to time whether before or after the
date of this Agreement and any subordinate legislation made under the statutory
provision whether before or after the date of this Agreement;
1.2.2 a Person includes a reference to that Person's legal personal
representatives, successors and lawful assigns;
1.2.3 a clause or schedule, unless the context otherwise requires, is a
reference to a clause of or schedule to this Agreement; and
1.2.4 a document is a reference to that document as from time to time
supplemented or varied.
1.3 The headings in this Agreement do not affect its interpretation.
1.4 Wherever this Agreement requires or permits the calculation of a number or
percentage of Shares in issue held by any Shareholder or Shareholder Group such
number or percentage shall include the Pro Rata Shares of that Shareholder or
Shareholder Group.
CONDITION
2. The provisions of this Agreement are conditional upon this Agreement being
approved by shareholders independent of MediaOne Holdings, Liberty International
and Microsoft at the Company's Extraordinary General Meeting convened in
connection with the approval of the offer by the Company for Flextech plc (the
Flextech Offer) (or any adjournment of that meeting) and on the Flextech Offer
becoming unconditional in all respects. On satisfaction of such condition this
Agreement shall, to the extent provided, replace the 1999 Agreement.
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REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
3.1 Each party represents, warrants and undertakes to each other party (other
than a member of the same Shareholder Group), as of the date of execution of
this Agreement, as follows:
(a) it is duly organised or formed, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation;
(b) it has full power and authority to conduct its business as currently
conducted, to execute and deliver this Agreement and to carry out the
transactions contemplated by this Agreement and the execution, delivery
and performance by it of this Agreement and the consummation by it of
the transactions contemplated by this Agreement have been duly
authorised by all necessary corporate or partnership action;
(c) the obligations expressed to be undertaken by it under this Agreement
are legal, valid and binding upon it except as validity, binding effect
and the enforceability may be subject to or limited by bankruptcy,
insolvency, reorganisation, moratorium and other similar laws relating
to or affecting the rights of creditors generally, and subject to
general principles of equity, regardless of whether considered in a
proceeding at law or in equity;
(d) the execution and delivery of this Agreement by it and compliance by it
with the provisions of this Agreement will not violate, result in any
breach of, constitute a default under or require a consent or waiver
under its certificate of incorporation, articles of incorporation,
bylaws, memorandum and articles of association, operating agreement or
partnership agreement, as the case may be, or any indenture, lease,
agreement or instrument to which it is a party or by which it or any of
its property may be bound, or under any decree, judgment, order,
statute, legal principle, rule or regulation applicable to it, other
than any violation, breach or default that would not have an adverse
effect on the performance by it of the terms of this Agreement; and
(e) it has obtained, made or given all material authorisations, orders,
approvals, consents, registrations, filings and notices required to be
obtained, made or given by it from, with or to any Person with respect
to entering into this Agreement.
3.2 The Company undertakes to Microsoft, MediaOne and Liberty International to
use its best endeavours to establish as soon as reasonably practicable a block
listing for such number of Ordinary Shares as may fall to be issued pursuant to
the conversion of the Limited Voting Shares.
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3.3 It is expressly agreed and acknowledged by the Company that nothing in this
Agreement prevents Liberty International, Microsoft, MediaOne or their
respective Affiliates from making a general offer for the Shares.
3.4 Each of Liberty International, Microsoft and MediaOne severally undertakes
to the Company that, prior to Microsoft, Liberty International, MediaOne or any
of their respective Affiliates purchasing any Ordinary Shares from any third
party or subscribing any Ordinary Shares under clause 10.11, Microsoft, MediaOne
or Liberty International, as the case may be (on behalf of themselves and their
respective Affiliates), shall notify the Company of such proposed purchase and,
prior to such purchase or subscription, redesignate a sufficient number of their
existing Ordinary Shares as Limited Voting Shares in accordance with the 2000
Articles to ensure that such purchase or subscription, in conjunction with such
redesignation, will not amount to a Debenture Change of Control. Any such notice
shall be accompanied by an opinion from leading New York counsel of at least 10
years standing (such opinion to be at the Company's expense and addressed to the
Company) stating that such purchase, in conjunction with such redesignation,
will not amount to a Debenture Change of Control.
DIRECTORS
4.1 DELIBERATELY BLANK
4.2 The Directors other than the MediaOne Designated Directors or the Liberty
Designated Directors (each as defined in the 2000 Articles) shall be appointed
by the Board or the Company in general meeting provided that each such appointee
shall be a person reasonably acceptable to the MediaOne Designated Directors for
so long as the MediaOne Group is a Qualifying Group and the Liberty Designated
Directors for so long as the Liberty Group is a Qualifying Group provided that
the holding of Limited Voting Shares shall not be taken into account in
determining whether the MediaOne Group or the Liberty Group is a Qualifying
Group for the purposes of this Clause 4.
Closing
5. CLAUSE 5 IS DELIBERATELY BLANK
MATTERS REQUIRING CONSENT
6.1 For so long as the MediaOne Group or the Liberty Group is a 15 Per Cent
Group (as defined in clause 10.1), the Company shall not and shall procure that
none of its subsidiary undertakings will do, or agree to do, any of the
following things without the Required Consent and no Shareholder shall knowingly
acquiesce in the doing thereof without the Required Consent:
6.1.1 any material acquisition or disposal outside the ordinary course of the
business of the Telewest Group, and for these purposes an acquisition or
disposal
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shall be deemed material and outside the ordinary course of the business of the
Telewest Group if it represents a class 2 transaction under the Listing Rules of
the London Stock Exchange or the Company intends in any event, or is required,
to announce the acquisition or disposal;
6.1.2 incur any borrowings or indebtedness in the nature of borrowings
(otherwise than under a facility or agreement entered into before 1 September
1998) which when aggregated with any borrowings or indebtedness in the nature of
borrowings of the Telewest Group so incurred and outstanding at the time being
(ignoring intra-group borrowings and indebtedness and borrowings or indebtedness
under any facility or agreement for which the Required Consent has already been
obtained) exceeds (pound)50 million or, after 1 September 1998, grant any
security interests in any assets which, when aggregated with other assets of the
Telewest Group over which security interests are granted after this Agreement
becomes unconditional (ignoring any security interests for which the Required
Consent has already been obtained), together have a Fair Market Value of
(pound)50 million or more, or agree to any material amendment, supplement or
variation of the terms of any borrowings, indebtedness in the nature of
borrowings or security interests;
6.1.3 allot or issue any shares or securities convertible into or exchangeable
for shares or grant any options or rights to subscribe for shares or any such
securities (other than the issue of securities to MediaOne/Liberty Media
Shareholders pursuant to clause 10 and pursuant to the exercise of any option
(to the extent required under its terms to be met by an issue of new shares
rather than a transfer of existing shares) or the conversion or exchange of any
security granted or issued prior to 15 April 1998 or with the Required Consent)
or the conversion of Limited Voting Shares into Ordinary Shares;
6.1.4 appoint or remove the Chief Executive Officer of the Company; or
6.1.5 increase the number of Directors holding office for the time being beyond
16.
6.2 For the purposes of clause 6.1, Required Consent means prior consent by
notice to the Company from:
6.2.1 the MediaOne Group, for so long as the MediaOne Group holds or owns in
aggregate 15 per cent. or more of the Shares in issue for the time being; and
6.2.2 the Liberty Group, for so long as the Liberty Group holds or owns in
aggregate 15 per cent. or more of the Shares in issue for the time being.
VOTING AGREEMENT AMONG LIBERTY GROUP AND MEDIAONE GROUP
7.1 Subject to clause 7.3 the MediaOne Shareholders and the Liberty Shareholders
undertake to one another that they shall exercise the voting rights
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attached to the Shares owned by them and shall cause the Directors nominated by
them to vote (subject to their fiduciary duties as Directors of the Company) in
all matters in such manner as shall be agreed upon by the Liberty Shareholders
and the MediaOne Shareholders provided that if the Liberty Shareholders or the
MediaOne Shareholders (or the directors nominated by them respectively) have a
conflict of interest in any matter, the particular party affected shall abstain
and the others may vote on such matter as they deem appropriate.
7.2 If the Liberty Shareholders and the MediaOne Shareholders cannot agree on
any matter within a period of 10 days after the matter is first presented for
decision, the matter in dispute shall be referred to the Chief Executive
Officers of Liberty International and the ultimate parent company of the
MediaOne Shareholders (or other representatives designated by each of such
Shareholder Groups) and the decision of such officers shall be final and
binding. If those officers cannot agree on any matter presented to them prior to
the earlier of the date the vote is to be taken or five days after the matter is
first submitted to them, voting shall occur in such manner that would be most
likely to continue the status quo, without materially increasing the Company's
financial obligations or materially deviating from its approved budget and
business plan.
7.3 Clauses 7.1 and 7.2 shall cease to apply if the Liberty Group or the
MediaOne Group so elect by notice given to the other following the disposal by
the other after the date hereof of more than 59 million Ordinary Shares (through
one or more transactions) otherwise than to an Affiliate or pursuant to a
Permitted Demerger or a transfer permitted by clause 8.3.2.
7.4 Subject to clause 7.8, each Liberty Shareholder, MediaOne Shareholder and
Microsoft shall exercise its voting rights attached to the Shares owned by it
(and, in relation to the Liberty Shareholder and the MediaOne Shareholder, its
rights under the TW Holdings Agreement in respect of the voting rights attached
to the Shares held by TW Holdings) and shall make reasonable efforts to ensure
that (subject to their fiduciary duties) any appointees that it has on the Board
conduct themselves in such a way that:
7.4.1 the terms of this Agreement are implemented in full;
7.4.2 no amendments to the 2000 Articles shall be effected which would be
contrary to the maintenance of the Company's independence from the
Liberty Group, the MediaOne Group and the Microsoft Group; and
7.4.3 to the extent required by the Listing Rules of the London Stock
Exchange, the Company is capable at all time of carrying on its
business independently of any Controlling Shareholder.
7.5 Subject to clause 7.8, each Liberty Shareholder and MediaOne Shareholder
agrees with the Company not to use its voting rights attached to
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the Ordinary Shares owned by it or a member of the MediaOne Group or the Liberty
Group (as the case may be) (other than its rights arising under article 71 of
the 1999 Articles) (and to exercise its rights under the TW Holdings Operating
Agreement in respect of the voting rights attached to the Ordinary Shares held
by TW Holdings) to vote in favour of the appointment of a person to the Board
who is an employee, partner or officer of, or has a material consultancy with,
any member of the Liberty Group or the MediaOne Group.
7.6 Subject to clause 7.8, if any transaction, arrangement or agreement (or
amendment thereto) to which the Telewest Group is a party or proposes to be a
party gives rise to a conflict between the interests of the Liberty Group or the
MediaOne Group and the interests of the Telewest Group, the prior approval of
the Board consisting solely of the Independent Directors and the Directors
appointed by the MediaOne Group (in the case of an arrangement with the Liberty
Group) or by the Liberty Group (in the case of an arrangement with the MediaOne
Group) shall be required before the Telewest Group can proceed with the
transaction, arrangement or agreement (or amendment thereto), as the case may
be.
7.7 Subject to clause 7.8, any transactions, agreements or arrangements
(including trading arrangements) between any member of the Liberty Group or the
MediaOne Group or the Microsoft Group and the Telewest Group shall be at arm's
length on a normal commercial basis and will be subject to the prior approval of
the Board consisting solely of Independent Directors and the Directors appointed
by the MediaOne Group (in the case of an arrangement with the Liberty Group) or
by the Liberty Group (in the case of an arrangement with the MediaOne Group).
7.8 Clauses 7.4, 7.5, 7.6 and 7.7 shall only apply for so long as and to the
extent that, one or more of the MediaOne Group, the Liberty Group and/or the
Microsoft Group continue to be the Controlling Shareholder of the Company.
RESTRICTIONS ON TRANSFERS BY LIBERTY GROUP AND MEDIAONE GROUP
8. Deliberately blank
RIGHTS OF FIRST REFUSAL AND CHANGE OF CONTROL
Clause 9.1 is deliberately blank
9.2 Rights of first refusal between the Liberty Group and the MediaOne Group
9.2.1 Clauses 9.2.2 to 9.2.7 shall not apply to any Transfer by a Shareholder to
an Affiliate of that Shareholder or to any Transfers pursuant to a Permitted
Demerger (provided that any transferee who is or becomes a member of the
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same Shareholder Group as the transferor first duly completes, executes and
delivers to the Company a deed of adherence in the form set out in Schedule 2).
9.2.2 Subject to clause 9.2.1, a Liberty Shareholder or MediaOne Shareholder
desiring to make a Transfer of Shares (the Seller) shall prior to the entry into
of an agreement for the transfer of Shares (save for an agreement conditional
upon the non-transferring shareholder not exercising its right to purchase such
Shares under this clause) first make a written offer (the Offer) to sell such
Shares to the MediaOne Group or the Liberty Group (as the case may be) (the
Relevant Purchaser) on the same terms and conditions on which the Seller
proposes to Transfer the Shares. If the proposed Transfer is a Public Transfer,
the Seller shall give notice to the Relevant Purchaser stating the number of
Shares it proposes to Transfer and that such Shares will be sold to the Relevant
Purchaser at a price per Share equal to the average of the Closing Prices for
six Trading Days comprising the three Trading Days prior to and including the
date that any notice is sent pursuant to clause 9.2.3 and the three Trading Days
following the date of such notice. If the proposed Transfer is a Private
Transfer, such offer shall state the price and the other terms and conditions of
the proposed Transfer and shall be accompanied by a copy of the offer from the
proposed transferee. The price as so determined or stated in the Seller's notice
shall be the Offer Price. The foregoing notwithstanding, the Seller may withdraw
the Offer without liability to the Relevant Purchaser hereunder if the Offer
Price, determined with respect to any Public Transfer, is less than 90 per cent.
of the Closing Price on the date of the Offer (or if such date is not a Trading
Day, on the immediately preceding Trading Day).
9.2.3 The Relevant Purchaser shall have the right for a period of 30 days after
receipt of the Offer to elect to purchase all, but not less than all, of the
Shares offered at the Offer Price (less, in case of a proposed Public Transfer,
any underwriting or sales commission or discount that would have been paid in
the proposed Public Transfer) by giving written notice of acceptance to the
Seller within that period. If the Relevant Purchaser does not elect to purchase
all the Shares offered, the Seller may Transfer the offered Shares pursuant to
the terms disclosed under clause 9.2.2 which, in the case of a Private Transfer,
shall be at a price equal to or greater than the Offer Price. If the offered
Shares are not Transferred within 90 days after the Relevant Purchaser's option
period expires, a new offer shall be made to the Relevant Purchaser before any
Transfer is made.
9.2.4 If in the case of a Private Transfer, a third party's offer involves
consideration other than immediate payment of cash at closing, the Relevant
Purchaser may pay the Fair Market Value of such other consideration, as
determined by agreement between the Seller and the Relevant Purchaser, in cash.
If they cannot agree on such cash equivalent within seven days after the
Relevant Purchaser gives notice of its election to purchase the offered Shares,
the Relevant Purchaser may, by written notice to the Seller, initiate appraisal
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proceedings under clause 9.2.5 for determination of the Fair Market Value of
such consideration. The Fair Market Value shall be determined without regard to
income tax consequences to the Seller as a result of receiving cash in lieu of
other consideration. Once the Fair Market Value is determined, (i) the Relevant
Purchaser, in its sole discretion, may elect either to purchase the Shares in
cash by giving notice of such election to the Seller within 10 days after
receipt of the appraiser's decision or to withdraw its acceptance of the Offer,
and (ii) the Seller may in its sole discretion withdraw the Offer provided that
in such case it may not Transfer such Shares pursuant to the proposed Private
Transfer.
9.2.5 Any appraisal of the Fair Market Value of consideration shall be made by
an appraiser jointly appointed by the Liberty Group and the MediaOne Group to
make such determination. If the parties fail to agree on an appraiser within 20
days after receipt of the notice requiring or permitting an appraisal of Fair
Market Value, each of the Liberty Group and the MediaOne Group shall appoint one
appraiser, which shall be an investment banking firm of national repute. The two
appraisers so selected shall each make an appraisal of Fair Market Value within
30 days after their selection. If such determinations vary by 20 per cent. or
more of the higher determination, the two appraisers shall select a third
appraiser with similar qualifications which shall make its determination of such
Fair Market Value within 30 days after its selection. Such third appraiser shall
not be informed of or otherwise consider the appraisals of the other two in
reaching its determination. The Fair Market Value shall be the average of the
two closest values if three appraisals are made or, if the determinations of the
first two appraisers vary by 20 per cent. or less of the higher of such two
determinations, the average of those two determinations. If any Shareholder
Group fails to appoint an appraiser as required hereunder, the other Shareholder
Group may refer the matter to the American Arbitration Association, which shall
promptly (and in any case, within 10 days) appoint an appraiser hereunder on
behalf of the Shareholder Group failing to make such appointment. Appraisers
appointed under this clause 9.2.5 shall act as experts and not as arbitrators
and, absent fraud or manifest error, the determination of an appraiser or
appraisers hereunder shall be binding on the parties.
9.3 Change in Control of Liberty International or MediaOne
If at any time there is an involuntary Change in Control with respect to
MediaOne Holdings and its Affiliates or Liberty International and its
Affiliates, MediaOne Holdings and its Affiliates or Liberty International and
its Affiliates, as the case may be, experiencing the Change in Control (the
Subject Group) shall give notice to the other group (the Responding Group)
promptly after the Subject Group becomes aware of the Change in Control. If at
any time a Subject Group experiences a voluntary Change in Control, the Subject
Group shall give notice to the Responding Group promptly after the terms of the
Change in Control are set forth in a binding agreement. The Responding Group
must within 30 days after its receipt of such notice give notice to the
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Subject Group either (a) consenting to the Change in Control or (b) stating the
price at which the Responding Group is willing to sell all of its Shares to the
Subject Group or to buy all of the Subject Group's Shares (the Quoted Price).
Failure to give notice of such election within the time permitted shall be
deemed consent to the Change in Control. If the Responding Group notifies the
Subject Group that it does not consent to the Change in Control, the Subject
Group must, within 30 days after its receipt of the Responding Group's notice,
give notice to the Responding Group of its election to sell all of its Shares to
the Responding Group or to buy all of the Responding Group's Shares, in either
case at the Quoted Price.
9.4 General transfer provisions
9.4.1 The closing of the purchase of any Shares by the Liberty Group or the
MediaOne Group pursuant to clause 9.1, 9.2 or 9.3 shall take place at the
Company's principal offices:
(a) in the case of clause 9. 1, within 60 days after agreement of the price
and proportions in which the Sale Shares can be transferred by the
Seller pursuant to clause 9.1.2 or within 30 days after acceptance by
the Seller of the offer contained in any Offer pursuant to clause
9.1.3; and
(b) in the case of clauses 9.2 and 9.3 on a day specified by the purchaser
(other than a Saturday, Sunday or day on which banking institutions in
New York are required by law to be closed) which is no more than 90
days after the day of exercise of the relevant purchase option,
or, if later, the date on which all necessary consents or approvals as
appropriate to such Transfer by governmental authorities or shareholders (where
relevant) shall have been obtained. At the closing the Seller shall deliver
certificates representing the Shares to be sold free and clear of any lien,
charge or encumbrance, duly endorsed or accompanied by stock transfers executed
in blank, and such other documents as may be reasonably necessary to effectuate
the sale. The Seller shall give customary representations and warranties
regarding the title of such shares to the Relevant Purchaser(s). The purchase
price (to the extent payable in cash) shall be paid in cash in immediately
available funds.
9.4.2 The Relevant Purchaser may rescind its notice of acceptance given pursuant
to clause 9.2.3 at any time on or prior to the thirtieth day following the date
on which such notice is given (but not thereafter) if (i) prior to the date of
such notice of acceptance the Relevant Purchaser had sought in good faith a
waiver from the Panel with respect to the application of any provision of Rule 9
of the City Code on Take-overs and Mergers which absent such waiver would
require the Relevant Purchaser to offer to purchase all of the outstanding
Shares, and (ii) such waiver or any shareholder approval required by the Panel
has been denied (or has not been granted as of the last day of such rescission
period) provided that if the Relevant Purchaser so rescinds its acceptance, the
90 day
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period referred to in clause 9.4.1(b) shall be extended by the number of days
between the date of such acceptance and the date of rescission.
9.4.3 Notwithstanding any other provision of this clause 9, no Person may
Transfer any Shares unless it has complied with all applicable legal
requirements, including without limitation applicable United States federal and
state securities laws. Upon the exercise by a Person of any right to acquire
Shares hereunder, the parties shall use commercially reasonable efforts to
obtain any necessary consents or approvals of any governmental authorities or
other third parties necessary to promptly effect such Transfer.
SPECIFIC RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL
10.1 The following definitions are used in this clause 10:
15 Per Cent. Group means each of the following Shareholder Groups:
(a) the Liberty Group, for so long as the Liberty Group holds 15 per cent.
or more of the Shares in issue for the time being and from time to time
(ignoring any Shares issued after 15 April 1998 pursuant to or for the
purposes of employee share options); and
(b) the MediaOne Group, for so long as the MediaOne Group holds 15 per
cent. or more of the Shares in issue for the time being and from time
to time (ignoring any Shares issued after 15 April 1998 pursuant to or
for the purposes of employee share options);
Percentage Ownership means:
(a) in relation to each 15 Per Cent. Group, issued Shares representing 15
per cent. of the Fully Diluted Ordinary Shares; and
(b) in relation to each 7.5 Per Cent. Group, issued Shares representing 7.5
per cent. of the Fully Diluted Ordinary Shares;
Qualifying Group means a 15 Per Cent. Group or a 7.5 Per Cent. Group;
Qualifying Shareholder means a Shareholder within a Qualifying Group;
Rights Issue means an offering of Shares or securities convertible into Ordinary
Shares (for the avoidance of doubt, Limited Voting Shares constitute such
securities) or carrying the right to vote at general meetings of the Company's
shareholders (whether by way of a rights issue, open offer or otherwise) to
holders of Shares in the capital of the Company in proportion (as nearly as may
be) to their existing holdings of Shares but subject to the Directors having a
right to make such exclusions or other arrangements in connection with the offer
as they deem necessary or expedient:
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(a) to deal with equity securities representing fractional entitlements;
and
(b) provided that such exclusions or arrangements do not affect any
Shareholder Group, to deal with legal or practical problems under the
laws of, or the requirements of any recognised regulatory body or any
stock exchange in, any territory;
7.5 Per Cent. Group means each of the following Shareholder Groups:
(a) the Liberty Group for so long as the Liberty Group holds 7.5 per cent.
or more but less than 15 per cent. of the Shares in issue for the time
being and from time to time (ignoring any Shares issued after 15 April
1998 pursuant to or for the purposes of employee share options); and
(b) the MediaOne Group, for so long as the MediaOne Group holds 7.5 per
cent. or more but less than 15 per cent. of the Shares in issue for the
time being and from time to time (ignoring any Shares issued after 15
April 1998 pursuant to or for the purposes of employee share options).
10.2 Subject to clause 6.1.3, the Company shall give notice to each Qualifying
Shareholder of any proposed issuance (other than a Rights Issue for which such
Qualifying Shareholder shall receive notice to be received by the shareholders
generally) of Ordinary Shares or of securities convertible into or exchangeable
for Ordinary Shares or carrying the right to vote at general meetings of the
Company's shareholders which would (assuming the conversion or exchange of any
such convertible securities and of the securities referred to in Clauses
10.3(ii)(BB)) reduce (A) the percentage of Shares owned by (i) a Qualifying
Group below its Percentage Ownership, or (ii) TW Holdings and/or the MediaOne
Group and/or the Liberty Group together below 50.1 per cent. of the Shares in
issue for the time being (by reference to the nominal value of all Shares in
issue) or (B) the percentage of votes at a general meeting of the Company
exercisable by (i) a Qualifying Group below the number of votes it has based on
its Percentage Ownership, or (ii) TW Holdings and/or the MediaOne Group and/or
the Liberty Group together below 50.1 per cent of the total exercisable votes
for the time being (a Dilutive Issue).
10.3 Without prejudice to clause 10.4, while (a) TW Holdings holds, owns or
votes 50.1 per cent. or more of the Shares in issue for the time being and from
time to time, or (b) TW Holdings, the MediaOne Group and the Liberty Group
together hold, own or vote 50.1 per cent. or more of the Shares in issue (by
reference to the nominal value of all Shares in issue) for the time being and
from time to time the MediaOne Shareholders and the Liberty Shareholders (the
MediaOne/Liberty Shareholders) shall:
(i) on an issue of Ordinary Shares by the Company that would cause such
holding, ownership or voting to fall below 50.1%, have the option to
subscribe for that number of Ordinary Shares necessary to permit TW
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Holdings (in the case of (a) above) or TW Holdings and the
MediaOne/Liberty Shareholders (in the case of (b) above) to maintain
ownership of sufficient issued Shares in aggregate as will represent
50.1 per cent. of the Fully Diluted Ordinary Shares immediately
following such issue and provided that, if in the opinion of leading
external New York counsel of at least 10 years standing (such opinion
to be obtained at the Company's expense and to be addressed to the
Company) such subscription would result in a Debenture Change of
Control then such option shall be an option to subscribe for Ordinary
Shares to the maximum extent possible without, in the opinion of such
leading New York counsel, causing such a Debenture Change of Control,
with the balance of such option being a right to subscribe for Limited
Voting Shares; and
(ii) on an issue of securities by the Company that are convertible into or
exchangeable for Ordinary Shares or which carry the right to vote at
general meetings of the Company's shareholders (including Limited
Voting Shares) (each an Equivalent Security) that would, assuming
conversion or exchange of any such Equivalent Securities, cause such
holding, ownership or voting to fall below 50.1%, have the option to
either:
(AA) subscribe for that number of Equivalent Securities
necessary to permit TW Holdings (in the case of (a) above) or
TW Holdings and the MediaOne/Liberty Shareholders (in the case
of (b) above) to maintain ownership of Shares or sufficient
voting rights in aggregate as will represent 50.1 per cent. of
the Fully Diluted Ordinary Shares immediately following such
issue and provided that, if in the opinion of leading external
New York counsel of at least 10 years standing (such opinion
to be obtained at the Company's expense and to be addressed to
the Company) such subscription would result in a Debenture
Change of Control (either upon subscription for such
Equivalent Securities or upon their conversion or exchange by
TW Holdings or the MediaOne/Liberty Shareholders, as the case
may be) then such option shall be an option to subscribe for
such Equivalent Securities to the maximum extent possible
without, in the opinion of such leading New York counsel,
causing such a Debenture Change of Control, with the balance
of such option being an option to subscribe for a security
identical to such Equivalent Security save that on conversion
or exchange, such security converts or exchanges into Limited
Voting Shares rather than Ordinary Shares (such security being
a Limited Voting Equivalent Security); or
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(BB) immediately prior to the conversion or exchange of the
Equivalent Securities held by Persons other than TW Holdings
or the MediaOne/Liberty Shareholders, subscribe for that
number of Ordinary Shares necessary to permit TW Holdings (in
the case of (a) above) or TW Holdings and the MediaOne/Liberty
Shareholders (in the case of (b) above) to maintain ownership
or voting of sufficient issued Shares in aggregate as will
represent 50.1 per cent. of the Fully Diluted Ordinary Shares
immediately following such conversion or exchange and provided
that, if in the opinion of leading external New York counsel
of at least 10 years standing (such opinion to be obtained at
the Company's expense and to be addressed to the Company) such
subscription would result in a Debenture Change of Control
then such option shall be an option to subscribe for Ordinary
Shares to the maximum extent possible without, in the opinion
of such leading New York counsel, causing such a Debenture
Change of Control, with the balance of such option being a
right to subscribe for Limited Voting Shares;
The Company agrees to give each of MediaOne and Liberty International 8 Trading
Days' written notice of the issue of shares or securities which give rise to any
option under this clause 10.3. For the avoidance of doubt, notice under Clause
10.12 will constitute such notice. Each of TW Holdings and/or the
MediaOne/Liberty Shareholder shall, within 4 Trading Days after receipt of such
notice by MediaOne and Liberty International (being, in the event of the
notification by Microsoft under 10.14, within 2 Trading Days of notice by
Microsoft under that clause) notify the Company whether, and to what extent, it
wishes to exercise such option and whether it would like to subscribe any
surplus Ordinary Shares, Equivalent Securities or, to the extent applicable,
Limited Voting Shares or Limited Voting Equivalent Securities (as the case may
be) under option but not taken up in accordance with this clause. If any
Ordinary Shares, Equivalent Securities or, to the extent applicable, Limited
Voting Shares or Limited Voting or Equivalent Securities (as the case may be)
under option under this clause in respect of a particular Dilutive Issue are not
taken up in accordance with this clause the Company shall allocate such excess
Ordinary Shares, Equivalent Securities or, to the extent applicable, Limited
Voting Shares or Limited Voting Equivalent Securities (as the case may be) to
those MediaOne/Liberty Shareholders who requested additional Ordinary Shares,
Limited Voting Shares or Limited Voting Equivalent Securities or Equivalent
Securities (as the case may be) and, in case of competition for such shares, pro
rata to their existing holdings of Shares.
10.4 The Qualifying Shareholders within each Qualifying Group shall:
(i) on an issue of Ordinary Shares have the option to subscribe for that
number of new Ordinary Shares (in such proportions as they may agree
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and otherwise among them pro rata according to their respective
shareholdings) necessary to permit their Qualifying Group to have
ownership of sufficient issued Shares so as to maintain its Percentage
Ownership immediately following a Dilutive Issue and provided that, if
in the opinion of leading external New York counsel of at least 10
years standing (such opinion to be obtained at the Company's expense
and to be addressed to the Company) such subscription would result in a
Debenture Change of Control then such option shall be an option to
subscribe for Ordinary Shares to the maximum extent possible without,
in the opinion of such leading New York counsel, causing such a
Debenture Change of Control, with the balance of such option being a
right to subscribe for Limited Voting Shares; and
(ii) on an issue of securities by the Company that are convertible into or
exchangeable for Ordinary Shares (including Limited Voting Shares) or
which carry the right to vote at general meetings of the Company that
would, assuming conversion or exchange of such Equivalent Securities,
cause their ownership of issued Shares to fall below its Percentage
Ownership, have the option to either:
(i) subscribe for that number of Equivalent Securities (in such
proportions as they may agree and otherwise among them pro
rata according to their respective shareholdings) necessary to
permit their Qualifying Group to have ownership of sufficient
issued Shares so as to maintain its Percentage Ownership
immediately following such issue assuming that the options
under clause 10.3 are exercised in full and provided that, if
in the opinion of leading external New York counsel of at
least 10 years standing (such opinion to be obtained at the
Company's expense and to be addressed to the Company) such
subscription would result in a Debenture Change of Control
then such option shall be an option to subscribe for
Equivalent Securities to the maximum extent possible without,
in the opinion of such leading New York counsel, causing such
a Debenture Change of Control, with the balance of such option
being a right to subscribe for Limited Voting Equivalent
Securities; or
(ii) on the conversion or exchange of the Equivalent Securities
held by persons other than the Qualifying Shareholders,
subscribe for that number of Ordinary Shares necessary to
permit the Qualifying Shareholders to have ownership of
sufficient issued Shares in aggregate so as to maintain its
Percentage Ownership immediately following such conversion or
exchange assuming that the options under clause 10.3 are
exercised in full provided that, if in the opinion of leading
external New York counsel of at least 10 years standing (such
opinion to be obtained at the Company's
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expense and to be addressed to the Company) such subscription
would result in a Debenture Change of Control then such option
shall be an option to subscribe for Ordinary Shares to the
maximum extent possible without, in the opinion of such
leading New York counsel, causing such a Debenture Change of
Control, with the balance of such option being a right to
subscribe for Limited Voting Shares.
The Company agrees to give each Qualifying Shareholder 8 Trading Days' written
notice of the issue of shares or securities which give rise to any option under
this clause 10.4. Each Qualifying Shareholder shall, within 4 Trading Days after
receipt of such notice, notify the Company whether, and to what extent, it
wishes to exercise such option, which may be exercised in full or in part.
10.5 Prior to exercising their rights under clauses 10.3 or 10.4 the MediaOne
Group and the Liberty Group agree with each other to consult each other and, if
the exercise of their rights to the desired extent may have implications under
Rule 9 of the City Code on Takeovers and Mergers, to consult the Panel. If
within 7 Trading Days of receipt of notice from the Company of the proposed
issue of such securities the Panel has not granted or has denied a waiver of all
requirements under Rule 9 for the Liberty Group or the MediaOne Group to make a
mandatory offer as a result of the exercise of their rights under clauses 10.3
or 10.4 or any shareholder approval required by the Panel has not been granted
or has been denied and both the MediaOne Group and the Liberty Group wish to
exercise their rights under clauses 10.3 or 10.4 to an extent which in aggregate
would trigger the requirement for a mandatory offer under Rule 9, unless Liberty
International and MediaOne Holdings otherwise agree, the Liberty Group and the
MediaOne Group shall exercise their rights under clauses 10.3 or 10.4 only to
the maximum extent practicable without triggering any requirement under Rule 9
for a mandatory offer and, in case of competition, pro rata to their then
existing holdings of Shares.
10.6 Any Shares subscribed for by a Qualifying Shareholder, TW Holdings and/or
the MediaOne/Liberty Shareholders pursuant to clause 10.3(i) or 10.4(i) shall be
subscribed for in cash at a price per Share equal to the average Closing Price
for the 10 consecutive Trading Days ending on the Trading Day on which TW
Holdings and/or the MediaOne/Liberty Shareholders give notice to the Company as
to their intention under clause 10.3 or 10.4, as applicable. Such Shares shall
be issued immediately before the issue of Ordinary Shares which gave rise to the
option described in this clause 10.
10.6A Any Shares subscribed for by TW Holdings and/or the MediaOne/Liberty
Shareholders pursuant to Clause 10.3(ii) or 10.4(ii) shall be subscribed in cash
at a price per share equal to the average Closing Price for the 10 consecutive
Trading Days ending on the Trading Day falling two Trading Days prior to the
date of issue of the Ordinary Shares arising from the
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conversion/exchange of the Equivalent Securities that gave rise to TW Holdings'
and/or the MediaOne/Liberty Shareholders' right to subscribe. Such Shares shall
be issued immediately before the issue of the Ordinary Shares which gave rise to
the option arising on conversion/exchange of the Equivalent Securities.
10.6B Any Equivalent Securities subscribed for by TW Holdings and/or the
MediaOne/Liberty Shareholders pursuant to Clause 10.3(ii) or 10.4(ii) shall be
subscribed in cash at a price per Equivalent Security or Limited Voting
Equivalent Security equal to the subscription price of the Equivalent Securities
to third party investors at the time of their issue.
10.7 The Company will seek statutory authority to allot Shares (pursuant to
section 80 of the Act) and for the disapplication of the statutory pre-emption
rights (pursuant to section 95 of the Act) in accordance with existing ABI
guidelines and hereby agrees to use its reasonable endeavours to renew any and
every such statutory authority to allot and for the disapplication of the
pre-emption rights thereafter for so long as the Company is obligated by the
anti-dilution provisions of this clause 10. The Company further undertakes that
it shall only increase the Fully Diluted Ordinary Shares if thereafter there is
sufficient authorised but unissued share capital for the Company to comply with
its obligations pursuant to this clause 10 and also only if there are
outstanding and valid a statutory authority to allot (pursuant to section 80 of
the Act) and a disapplication of the statutory pre-emption rights (pursuant to
section 95 of the Act) in respect of sufficient Ordinary Shares for the Company
to comply with its obligations under this clause. The Shareholders undertake to
each other and to the Company to vote in favour of any such proposed
resolutions.
10.8 The Company shall use all reasonable efforts to ensure that all Ordinary
Shares issued pursuant to this clause 10 are admitted to the Official List by
the London Stock Exchange.
10.9 MediaOne, Liberty International and TW Holdings agree that, if as a result
of the conversion of the Company's outstanding 5.4% senior convertible notes due
2007, TW Holdings and/or the MediaOne/Liberty Shareholders become entitled to
exercise their option to subscribe for Shares under Clause 10.3(ii) (in relation
to the 50.1% threshold referred to in that clause), they shall seek to satisfy
their right to subscribe for such shares by purchasing Ordinary Shares in the
market and shall only exercise such option to the extent that such purchases are
not possible either (i) at or close to the price per share that would be payable
on exercise of their options in Clause 10, or (ii) without incurring an
obligation to make a mandatory cash offer for the Company under Rule 9, or (iii)
because in the opinion of leading New York counsel of at least 10 years standing
(such opinion to be obtained at the Company's expense and to be addressed to the
Company and to the parties exercising such option) such purchase would result in
a Debenture Change of Control, provided always that this clause 10.9 shall not
apply to a conversion of such notes that would cause a
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Qualifying Shareholder's Qualifying Group to cease being a 15 Per Cent. Group or
a 7.5 Per Cent. Group, as applicable.
10.10 In the event of the exercise of any option under this clause 10 the
Company undertakes to issue the relevant shares or securities on the date on
which the Dilutive Issue is made.
10.11 On any issue of Ordinary Shares to holders of Flextech ordinary shares
under the offer for Flextech plc made by the Company in March 2000 and/or the
provisions of Part XIIIA of the Act in consequence of such Offer (a Flextech
Issue), Microsoft (or a subsidiary of Microsoft) has the option to subscribe for
that number of Ordinary Shares necessary to permit the Microsoft Group to
maintain ownership of sufficient Shares in aggregate as will represent 2.48 per
cent. of the Fully Diluted Ordinary Shares immediately following such issue and
provided that, if in the opinion of leading external New York counsel of at
least 10 years standing (such opinion to be obtained at the Company's expense
and to be addressed to the Company) such subscription would result in a
Debenture Change of Control then Microsoft hereby agrees to Telewest
redesignating a sufficient number of its existing Ordinary Shares as Limited
Voting Shares to ensure that no Debenture Change of Control occurs.
10.12 The Company undertakes to inform Microsoft (such notice to be copied to
Liberty International and MediaOne) in writing no later than 8 Trading Days
prior to a Flextech Issue. Such notice shall state the number of Ordinary Shares
to be issued under that Flextech Issue and the number of Ordinary Shares that
Microsoft has the option to subscribe for under clause 10.11 and such number of
Shares that MediaOne would be entitled to subscribe for if Microsoft so elects
under clause 10.14. Microsoft shall, within 4 Trading Days of receipt of such
notice notify the Company in writing whether or not it wishes to exercise its
option under clause 10.11.
10.13 Any Ordinary Shares subscribed for by any member of the Microsoft Group
pursuant to clause 10.11 shall be subscribed for in cash at a price per share
equal to the average Closing Price for the 10 consecutive Trading Days ending on
the Trading Day on which Microsoft gives notice to the Company of its intention
in relation to its option.
10.14 If Microsoft so requests in writing to Telewest (such notice to be given
within 2 Trading Days of any notice given by the Company under clause 10.12 and
to be copied to MediaOne and Liberty International), the Company shall treat any
Shares held by members of the Microsoft Group at that time as being owned by the
MediaOne Group for the purpose of clauses 10.3 and 10.4 (but for the avoidance
of doubt without prejudice to Microsoft's rights under clause 10.11) provided
that the MediaOne Group shall only be entitled to maintain the joint holdings of
Shares by the MediaOne Group, the Liberty Group and the Microsoft Group at 50.1%
per cent. of the Fully Diluted Ordinary Shares.
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Neither the Liberty Group nor any Liberty Shareholders nor TW Holdings shall be
deemed to acquire any rights under this clause 10.14.
10.15 The parties agree that if the Flextech Offer becomes unconditional in all
respects each of TW Holdings, the Microsoft Group, the Liberty Group and the
MediaOne Group shall be entitled to exercise their rights under clause 10 on the
same day on which Telewest issues Ordinary Shares by way of consideration under
the Flextech Offer and any Dilutive Issue in connection with the Flextech Offer
shall be deemed to take place at each time when Telewest so issues Ordinary
Shares under the Flextech Offer.
10.16 Microsoft, Liberty International and/or MediaOne, as the case may be,
shall remit the subscription moneys due to the Company in respect of any Shares,
Equivalent Securities or Limited Voting Equivalent Securities subscribed by it
pursuant to this clause against the issue to it of the relevant securities or,
as the case may be, the crediting thereof to a relevant CREST account.
GENERAL RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL
11. The Company agrees to use its best efforts, consistent with the interests of
shareholders generally, to ensure that any issuance of Shares is done in a
manner that provides each Shareholder Group with an opportunity to acquire
additional Shares in amounts necessary from time to time to enable them to
maintain their percentage Share ownership in the Company. The Company shall
apply for all such Ordinary Shares to be admitted to the Official List by the
London Stock Exchange.
NON-COMPETITION
12. DELIBERATELY BLANK
SCOPE OF COMPANY BUSINESS
13. The Company agrees with each of the MediaOne Group and the Liberty Group,
for so long as it is a Qualifying Group, that the business of the Company and
its Controlled Affiliates shall be limited to providing Cable Television, Cable
Telephony, Wireless Telephony and any voice, video, internet or data services
provided or able to be provided over a broadband cable network and (except as
limited below with respect to television programming) all services or matters
relevant or complementary thereto, in each case, in the United Kingdom,
including television programming in the United Kingdom incidental to the
Company's Cable Television business in the United Kingdom together with such
business as is carried out by Flextech plc as at date of this Agreement and any
matters incidental thereto (collectively, Company Business), and such other
businesses as such Shareholder Group shall approve by written consent. The
Company shall not own or acquire an equity interest in any person that
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engages in a business other than those in which the Company is permitted to
engage pursuant to this clause 13.
The Liberty Shareholders, the MediaOne Shareholders and their respective
Affiliates shall not use the "Telewest" mark (or any mark confusingly similar to
it) within the UK except with the prior written agreement of the Company.
CONTRACTUAL RESTRICTIONS
14. The Company undertakes to the Liberty Group that so long as the Liberty
Shareholders own more than 5 per cent. of the Company's issued Ordinary Shares
and so long as the contractual restrictions described in Schedule 1 remain in
effect, that the Company will not knowingly take or omit to take (and will not
permit its Controlled Affiliates to take or omit to take) any action that could
cause a breach or violation of the contractual restrictions (as such exist on
the date hereof) described in Schedule 1 save that the restriction in paragraph
(a) of Schedule 1 shall cease to apply 14 days after the date on which the
Flextech Offer is declared unconditional in all respects.
INDEMNIFICATION
15. DELIBERATELY BLANK
GAIN RECOGNITION CONSENT REQUIREMENTS AND CONVERSION
16.1 The Company covenants to each of the MediaOne Group and the Liberty Group
that for so long as (i) they each own or (ii) the MediaOne Group and the Liberty
Group in aggregate own at least 7.5 per cent. of the Ordinary Shares in issue
the Company will not and will procure that no member of the Telewest Group will,
(i) without the written consent of such Shareholder Group, dispose of assets
(including securities of an Affiliate of the Company) in one transaction or a
series of related transactions within any 18 month period having a Fair Market
Value of (pound)20,000,000 or more if, in the judgment of such Shareholder
Group, the disposition could require it to recognise gain under the Gain
Recognition Agreements between it and the US Internal Revenue Service or (ii) in
the case of MediaOne and the Liberty Group, dispose of or reorganise any
interest in or Control of any member of the Telewest Group intra-group or
acquire any equity interest in a Person not Affiliated with the Company
immediately prior to such acquisition if the effect of any such disposition,
reorganisation or acquisition would be to create an intermediate holding Person
within the Telewest Group. The Company shall be entitled to conclusively rely on
notice from either of MediaOne Holdings or Liberty International (as the case
may be) as to any consent given by their respective Shareholder Groups.
16.2 Unless otherwise agreed in writing between Microsoft, MediaOne and Liberty
International, in the event that the holders of Limited Voting Shares are
entitled to convert any of the same into Ordinary Shares in accordance with the
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2000 Articles, each such Group shall only be entitled to convert such proportion
of the maximum number of Limited Voting Shares as can be converted at such time
as the number of Limited Voting Shares held by their respective Groups bears to
the aggregate number of Limited Voting Shares held by both Groups together at
the relevant time.
CITY CODE ON TAKEOVERS AND MERGERS
17. If any Shareholder Group takes any action which causes another Shareholder
Group or Groups to be under an obligation pursuant to Rule 9 of the City Code on
Takeovers and Mergers (the Code), the Shareholder Group which takes such action
shall fulfil all the obligations of such other Shareholder Group or Groups (but
not the Company) thereunder and shall pay all consideration and expenses
attributable to such Shareholder Group or Groups in connection therewith.
CONFIDENTIALITY
18. Save as required by law or any regulatory authority, each Shareholder shall
keep confidential, and shall procure that all members of its Shareholder Group
will keep confidential, any confidential information of the Telewest Group which
is or has been given to it by or on behalf of the Telewest Group unless the
information is already in the public domain other than through the default of
the Shareholder or a member of its Shareholder Group in complying with this
clause.
JOINT AND SEVERAL LIABILITY FOR CONTROLLED AFFILIATES
19. MediaOne Holdings and Liberty International shall each be jointly and
severally liable with their respective Controlled Affiliates for any and all of
the obligations and liabilities of their respective Controlled Affiliates under
this Agreement.
TERM
20. This Agreement shall continue whilst any party hereto retains any rights
and/or obligations hereunder and shall terminate forthwith (in relation to a
party no longer having any rights and/or obligations) upon that ceasing to be
the case.
TERMINATION OF PREVIOUS AGREEMENTS
21.1 This Agreement supersedes the 1999 Agreement except for the provisions of
clauses 15.1 and 15.2 thereof, and each parties' further rights and obligations
thereunder shall cease upon this Agreement becoming unconditional provided that
the parties' rights and obligations accrued thereunder prior to such time
(including, without limitation, all rights and claims under clause 15 of that
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agreement whether or not such a claim has been made or crystallised shall not be
affected).
21.2 The Company, the MediaOne Group and the Liberty Group shall comply with the
provisions of Schedule 3 in place of clauses 16(b) and (c) and 17 of the Old
Relationship Agreement.
COMPETITION
22. DELIBERATELY BLANK
COSTS
23. Each party shall pay its own costs relating to the negotiation, preparation,
execution and performance by it of this Agreement and of each document referred
to in it.
FURTHER ASSURANCE
24. The parties agree that they shall execute and deliver any other documents
and instruments, and take any other actions reasonably requested by another
party necessary or appropriate to give effect to this Agreement.
GENERAL
25.1 Whenever in this Agreement action by a Shareholder Group is required or
permitted, that action shall be deemed taken if approved by members of that
Shareholder Group owning a majority of the total number of Shares (entitled to
vote on the action required or permitted to be taken hereunder) owned by all the
members of that Shareholder Group.
25.2 A variation of this Agreement is valid only if it is in writing and signed
by or on behalf of each party.
25.3 The parties agree that each party would be irreparably damaged if any party
failed to perform any obligation under this Agreement, and that such party would
not have an adequate remedy at law for money damages in such event. Accordingly,
each party hereto will be entitled to specific performance and injunctive and
other equitable relief to enforce the performance of this Agreement. This
provision is without prejudice to any other rights that such party may have
under this Agreement, at law or in equity.
25.4 The failure to exercise or delay in exercising a right or remedy provided
by this Agreement or by law does not constitute a waiver of the right or remedy
or a waiver of other rights or remedies. No single or partial exercise of a
right or remedy provided by this Agreement or by law prevents further exercise
of the right or remedy or the exercise of another right or remedy.
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25.5 The rights and remedies contained in this Agreement are cumulative and not
exclusive of rights or remedies provided by law.
25.6 The invalidity or unenforceability of any provision of this Agreement in
any jurisdiction shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including such provision, in any other
jurisdiction.
25.7 Each date, time or period referred to in this Agreement is of the essence.
If the parties agree in writing to vary a date, time or period, the varied date,
time or period is of the essence.
25.8 Subject to the provisions hereof, this Agreement sets out the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any prior contract, arrangement, understanding or
relationship, oral or written, among the parties relating hereto save for the
provisions of a letter agreement amongst the parties dated 16 December 1999 (as
amended) other than sections 4(a)(iii), (iv) and (v) of that letter agreement
(which are expressly superseded by this Agreement).
ASSIGNMENT
26.1 Subject to clause 26.2, a party may not assign or transfer or purport to
assign a right or obligation under this Agreement without having first obtained
the written consent of the other parties.
26.2 The benefit of the rights of a Shareholder (subject to the burden of the
obligations of a Shareholder) under this Agreement shall be afforded to an
assignee or transferee who is or becomes a member of the same Shareholders Group
as the assignor or transferor provided that the assignee or transferee duly
completes, executes and delivers to the Company a deed of adherence in the form
set out in Schedule 2 and for this purpose, MediaOne and Liberty International
shall each be deemed to be a Shareholder.
NOTICES
27.1 Any notice under this Agreement shall be in writing and signed by or on
behalf of the party giving it and may be served by leaving it or sending it by
fax, prepaid recorded delivery or registered post (and air mail if overseas) to
the address and for the attention of the party receiving it set out in clause
27.2 or as otherwise notified under this Agreement. In the absence of evidence
of earlier receipt, any notice so served shall be deemed to have been received:
(a) if delivered personally, when left at the relevant address;
(b) if sent by first class mail to an address in the United Kingdom, 48
hours after posting it;
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(c) if sent by air mail to an address outside the United Kingdom, 72 hours
after posting it;
(d) if sent by fax, on receipt of confirmation of its transmission.
27.2 The current addresses of the parties for the purpose of clause 27.1 are set
out below. These may be altered by the parties by notice to the other parties at
any time:
Microsoft: One Microsoft Way
Redmond WA 98052-6379
For the attention of: Bob Eshelman
Fax: 001 425 936 7329
MediaOne Holdings 7800 E. Orchard Road Suite 480
MediaOne UK Englewood
MediaOne Cable: Colorado 80111 USA
For the attention of: General Counsel
Fax: 1 303 793 6707
Liberty International, Liberty UK, 9197 South Peoria Street
Liberty UK Holdings: Englewood
Colorado 80112 USA
For the attention of: Charles Tanabe
Fax: 1 720 875 5382
and for the attention of Robert Bennett
Fax: 00 1 720 875 5434
Company: Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
For the attention of: Victoria Hull
Fax: 01483 295165
GOVERNING LAW AND JURISDICTION
28.1 This Agreement is governed by and shall be construed in accordance with
English law.
28.2 The courts of England have exclusive jurisdiction to hear and decide any
suit, action or proceedings, and to settle any disputes, which may arise out of
or in connection with this Agreement (respectively, Proceedings and Disputes)
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and, for these purposes, each party irrevocably submits to the jurisdiction of
the courts of England.
28.3 Each party irrevocably waives any objection which it might at any time have
to the courts of England being nominated as the forum to hear and decide any
Proceedings and to settle any Disputes and agrees not to claim that the courts
of England are not a convenient or appropriate forum.
28.4 Process by which any Proceedings are begun in England may be served on any
party by being delivered in accordance with clause 27 or may be served on the
parties without addresses in England (as set out in clause 27.2 above) by being
delivered to the agents at the addresses indicated below (or such other agent or
address as the party in question may notify to the other parties):
Microsoft: Sisec Limited
21 Holborn Viaduct
London EC1A 2DY
For the attention of: Richard Ufland
Fax: 0207 296 2001
MediaOne Holdings, MediaOne WGM Secretaries Limited
UK, MediaOne Cable: One South Place
London EC2 2WG
For the attention of: Fiona Spiers/Anne
Burditt
Fax: 0207 903 0990
Liberty International, Liberty UK, Grays Inn Secretaries Limited
Liberty UK Holdings: 5 Chancery Lane
London EC4 1BU
For the attention of Philip Goodwin/
Simon Brown
Fax: 0207 404 0087
Nothing contained in this clause 28.4 affects the right to serve process in
another manner permitted by law.
COUNTERPARTS
29. This Agreement may be executed in any number of counterparts each of which
when executed and delivered is an original, but all the counterparts together
constitute the same document.
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SCHEDULE 1
(a) Flextech plc has a right of first refusal with respect to participation in
English language programming business in the United Kingdom and Europe under
certain circumstances described in the IPO Documents.
(b) In an agreement relating to the establishment of a joint venture between BBC
Worldwide and Flextech plc for the establishment and broadcast of television
programme services in the United Kingdom, Liberty International has agreed that
it will not itself, and that it will procure that no company of which it has
voting control will, acquire an interest in excess of 20 per cent. of the issued
share capital of a company which owns a commercial broadcast television channel
which competes with one or more of the channels to be established under such
joint venture.
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SCHEDULE 2
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made on [ ] 199[ ]
BY[_____ _____ ] of [_____ _____] (the Covenantor) in favour of the persons
whose names are set out in the schedule to this Deed and is supplemental to the
Relationship Agreement dated [_____ _____] made by (1) MediaOne International
Holdings, Inc., (2) MediaOne UK Cable, Inc. and MediaOne Cable Partnership
Holdings, Inc., (3) Liberty Media International, Inc., (4) Liberty UK, Inc., (5)
Liberty UK Holdings, Inc., (6) Microsoft Corporation and (7) Telewest
Communications plc (the Relationship Agreement).
THIS DEED WITNESSES as follows:
1. The Covenantor confirms that it has been given and read a copy of the
Relationship Agreement and covenants with each person named in the schedule to
this Deed to perform and be bound by all the terms of the Relationship Agreement
as if the Covenantor were a party to the Relationship Agreement as a
Shareholder.
2. This Deed is governed by English law.
In Witness Whereof this Deed has been executed by the Covenantor and is intended
to be and is hereby delivered on the date first above written.
SCHEDULE
[Parties to Relationship Agreement including those who have executed earlier
deeds of adherence.]
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SCHEDULE 3
PROVISIONS PRESERVED FROM THE OLD RELATIONSHIP
AGREEMENT
1. Costs Relating to Telewest Interests
The Company undertakes to reimburse Liberty International (for itself and on
behalf of TCI and its Affiliates) and MediaOne Holdings (for itself and on
behalf of MediaOne and its Affiliates) for all losses, damages, costs,
liabilities, deficiencies, claims, suits, proceedings, demands, judgements,
assessments, fines, interest, penalties, costs and expenses (including, without
limitation, settlement costs and legal, accounting, experts' and other fees,
costs and expenses) (but excluding taxes) based upon, arising out of or
associated with (i) the ownership of the Telewest Interests prior to, on or
following the Public Offering, (ii) the dissolution and liquidation of the UCs
and obligations and liabilities of the UCs arising prior to, upon or subsequent
to their dissolution relating to the ownership and operation of the Telewest
Interests and (iii) the TCI Investors and the MediaOne Investors having been
members of the UCs.
2. Taxation Costs Relating to Telewest Interests
The Company undertakes to reimburse Liberty International (for itself and on
behalf of TCI and its Affiliates) and MediaOne Holdings (for itself and on
behalf of MediaOne and its Affiliates) for all liabilities for taxes which they
incur and which arise in respect of the operation of the businesses carried on
by the Telewest Interests prior to or following the Public Offering including
(but not limited to) Value Added Tax, income tax levied pursuant to the Pay As
You Earn Regulations and income tax levied pursuant to the Income Tax
(Sub-Contractors in the Construction Industry) Regulations and excluding (for
the avoidance of doubt) any tax liabilities in respect of which Liberty
International or MediaOne Holdings have agreed to indemnify Old Telewest under
the Tax Deed.
3. Limitations on Reimbursement and Payment Obligations
No reimbursement or payment due pursuant to clause 1, 2 or 4 or arising out of
any breach or violation of the Old Relationship Agreement or the Related
Agreements shall be made unless the aggregate amount payable by that party on
account of all such matters exceeds (pound)10,000, and if such amount is
exceeded all payments and reimbursements shall be paid by that party in full.
4. Indemnifications
(a) The Company undertakes to indemnify and hold harmless Liberty
International (for itself and on behalf of TCI and its Affiliates) and
MediaOne Holdings (for itself and on behalf of MediaOne and its
Affiliates) from and against any costs, damages, liabilities and
obligations
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(including but not limited to attorneys' fees and payment of any
settlement or judgment) arising out of any claim, action or proceeding
relating to the IPO Documents and the Contemplated Transactions, except
those matters as to which the Investors specifically made a
representation or warranty to Old Telewest or agreed specifically to
reimburse Old Telewest. If the indemnification provided in this clause
4(a) is at any time legally or procedurally unavailable to any Person,
the Company shall contribute to the amount paid or payable by such
Person on account of such claim, action or proceeding an amount equal
to the amount the Company otherwise would be required to pay that
Person as indemnification under this clause 4(a).
(b) Liberty International and Liberty UK undertake to indemnify and hold
harmless the Company from and against any costs, damages, liabilities
and obligations (including but not limited to attorneys' fees and
payment of any settlement or judgment) arising out of any claim, action
or proceeding relating to any portion of the IPO Documents provided by
the TCI Investors in writing for use in the IPO Documents. If the
indemnification provided in this clause 4(b) is at any time legally or
procedurally unavailable to any Person, Liberty International and
Liberty UK shall contribute to the amount paid or payable by such
Person on account of such claim, action or proceeding an amount equal
to the amount Liberty International and Liberty UK otherwise would be
required to pay that Person as indemnification under this clause 4(b).
(c) MediaOne Holdings and the MediaOne Investors undertake to indemnify and
hold harmless the Company from and against any costs, damages,
liabilities and obligations (including but not limited to attorneys'
fees and payment of any settlement or judgment) arising out of any
claim, action or proceeding relating to any portion of the IPO
Documents provided by the MediaOne Investors in writing for use in the
IPO Documents. If the indemnification provided in this clause 4(c) is
at any time legally or procedurally unavailable to any Person, the
MediaOne Investors shall contribute to the amount paid or payable by
such Person on account of such claim, action or proceeding an amount
equal to the amount the MediaOne Investors otherwise would be required
to pay that Person as indemnification under this clause 4(c).
5. Definitions
Set out below are the definitions of the defined terms which are only used in
this Agreement in Schedule 3 above (which are accurate as at 22 November 1994
being the date of the Old Relationship Agreement):
Contemplated Transactions means the transactions contemplated by the Old
Relationship Agreement and the Related Agreements, including the transfer by
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the MediaOne Investors and the TCI Investors of the Telewest Interests to the
UCs;
MediaOne Investors, means MediaOne UK and MediaOne Cable;
Public Offering means the public offering in 1994 of Ordinary Shares for sale to
the public;
Related Agreements means the following agreements entered into on the date of
the Old Relationship Agreement (22 November 1994):
(a) Technology Licensing Agreements between (i) Old Telewest and Liberty,
and (ii) Old Telewest and MediaOne Holdings;
(b) Trademark Licensing Agreements between (i) Old Telewest and MediaOne,
and (ii) Old Telewest and TCI;
(c) Secondment Agreements between (i) Old Telewest and TCI, and (ii) Old
Telewest and an Affiliate of the MediaOne Investors;
(d) Tax Deed between Old Telewest, Liberty International and MediaOne
Holdings; and
(e) Registration Rights Agreements between (i) Old Telewest and the TCI
Investors and (ii) Old Telewest and the MediaOne Investors;
Tax Deed means deed of indemnity against taxation entered into by Old Telewest,
Liberty International and MediaOne Holdings dated 22 November 1994;
TCI Investors means UAP-E and United Artists Cable Television UK Holdings, Inc.;
Telewest Interests means the interests owned by the TCI Investors and the
MediaOne Investors in the following partnerships, which were engaged in the
Cable Television and Cable Telephony businesses in the UK on the date of the Old
Relationship Agreement:
(a) TCI/U S WEST Cable Communications Group;
(b) Avon Cable Limited Partnership;
(c) Edinburgh Cable Limited Partnership;
(d) Estuaries Cable Limited Partnership;
(e) United Cable (London South) Limited Partnership;
(f) Tyneside Cable Limited Partnership; and
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(g) Cotswolds Cable Limited Partnership;
UCs means Theseus No. 1 (to whom the TCI Investors contributed their Telewest
Interests on 21 November 1994) and Theseus No.2 (to whom the MediaOne Investors
contributed their Telewest Interests on 21 November 1994).
As Witness this Agreement has been executed by the duly authorised
representatives of the parties the day and year first before written.
SIGNED by JOHN CONNORS )
for and on behalf of ) /s/ J. Connors
MICROSOFT CORPORATION )
SIGNED by GARY AMES )
for and on behalf of MEDIAONE ) /s/ A Gary Ames
INTERNATIONAL HOLDINGS, )
INC. )
SIGNED by GARY AMES )
for and on behalf of MEDIAONE ) /s/ A Gary Ames
UK CABLE, INC. )
SIGNED by GARY AMES )
for and on behalf of MEDIAONE ) /s/ A Gary Ames
PARTNERSHIP HOLDINGS, )
INC. )
SIGNED by GRAHAM HOLLIS )
for and on behalf of ) /s/ G. Hollis
LIBERTY MEDIA )
INTERNATIONAL, INC. )
SIGNED by GRAHAM HOLLIS )
for and on behalf of ) /s/ G. Hollis
LIBERTY UK HOLDINGS, INC. )
SIGNED by GRAHAM HOLLIS )
for and on behalf of ) /s/ G. Hollis
LIBERTY UK, INC. )
SIGNED by VICTORIA HULL )
for and on behalf of ) /s/ Victoria Hull
TELEWEST COMMUNICATIONS )
PLC )
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