EXECUTION VERSION
(CONFORMED COPY)
NTL Incorporated
PURCHASE AGREEMENT
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July 15, ▇▇▇▇
▇▇▇▇▇▇ Telecom, S.A.
▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Cedex 15
France
Ladies and Gentlemen:
NTL Incorporated, a Delaware corporation ("NTL"), proposes, subject to
the terms and conditions set forth herein (including the Schedules, Attachments
and Exhibits hereto), to issue and sell to France Telecom, S.A. (the
"Purchaser"), 2,702,703 shares (the "Common Shares") of NTL's common stock, par
value $0.01 per share (the "Common Stock") and 750,000 shares (the "Preferred
Shares") of 5% Convertible Preferred Stock having an aggregate liquidation
preference of $750,000,000 (the "Preferred Stock") and having the terms set
forth in the Certificate of Designation attached hereto as Attachment I (the
"Certificate of Designation"). All Common Shares and Preferred Shares sold to
the Purchaser hereunder are referred to herein as the "Securities".
1. NTL represents and warrants to, and agrees with, the Purchaser
that:
(a) NTL's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and NTL's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999 have been made available to the Purchaser
in connection with the offering of the Securities. All documents of NTL
filed with the United States Securities and Exchange Commission (the
"Commission") pursuant to the United States Securities Exchange Act of
1934, as amended (the "Exchange Act") are referred to herein as the
"Exchange Act Reports". The Exchange Act Reports, when they were filed
with the Commission, complied in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder. The Exchange Act Reports did
not, as of their respective dates, contain any untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the
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circumstances under which they were made, not misleading. NTL has
timely filed all reports and registration statements and made all
filings required to be made with the Commission under the Exchange Act,
the United States Securities Act of 1933, as amended (the "Securities
Act"), or the applicable rules and regulations of the Commission
thereunder;
(b) There has not been any material adverse change in, or any
adverse development which materially affects, the business, assets,
properties, financial condition or results of operations of NTL and its
subsidiaries taken as a whole since December 31, 1998; and, since
December 31, 1998, there has not been any material change in the
capital stock, long-term debt or any other liability (which would be
required to be reflected on a balance sheet or the notes thereto) of
NTL or any of its subsidiaries not reported in an Exchange Act Report
or any material adverse change or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of NTL and its subsidiaries taken as a whole;
provided, however, that any change resulting from a strategic
acquisition currently being reviewed by NTL of which the Purchaser has
been informed (the "Strategic Acquisition") shall not be deemed a
material change for purposes of this Section 1(b) and Section 7(b);
(c) NTL has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Exchange Act Reports, and has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, or in
which such qualification is necessary, except where the failure to be
so qualified in any such jurisdiction does not or would not subject NTL
to any material liability or disability; and each significant
subsidiary (as defined in Regulation S-X of the Commission, each a
"Significant Subsidiary") of NTL has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with corporate power and authority
to own its properties and conduct its business as it has been currently
conducted, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts
any business, or in which such qualification is necessary, except where
the failure to be so qualified in any such jurisdiction does not or
would not subject such Significant Subsidiary to any material liability
or disability;
(d) NTL has an authorized, issued and outstanding
capitalization as set forth in the attached Exhibit A, and all of the
issued shares of capital stock of NTL have been duly and validly
authorized and issued and are fully paid and non-assessable; and all of
the issued shares of capital stock of each Significant Subsidiary of
NTL have been duly and validly authorized and issued, are fully paid
and non-assessable and (except for directors' qualifying
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shares) are owned directly or indirectly by NTL, free and clear of all
liens, encumbrances, equities or claims;
(e) The Securities, and the shares of Common Stock issuable
upon conversion or redemption of the Preferred Shares, including any
dividends in the form of shares of Preferred Stock or shares of Common
Stock, have been duly and validly authorized by NTL, and, when issued
and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable, and the issuance
of the Securities is not subject to preemptive or other similar rights;
(f) The execution and delivery of this Purchase Agreement and
the consummation of the transactions contemplated herein, have been
duly authorized by all necessary corporate action on the part of NTL,
and when executed by NTL and the Purchaser will not conflict with or
result in any breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any security interest, lien, charge or encumbrance upon any property
or assets of NTL or its Significant Subsidiaries pursuant to any
indenture, mortgage, deed of trust, loan agreement, lease, contract or
other agreement or instrument to which NTL or any of its Significant
Subsidiaries is a party or by which NTL or any or its Significant
Subsidiaries may be bound or to which any of the property or assets of
NTL or any of its Significant Subsidiaries is subject, nor will such
action result in any violation of the provisions of the Restated
Certificate of Incorporation or the By-laws of NTL or of any of its
Significant Subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over NTL or any of its Significant Subsidiaries or any of
their properties; and other than (i) the listing of the Common Shares
and the shares of Common Stock issuable upon conversion or redemption
of, or as a dividend with respect to, the Preferred Shares, on the
Nasdaq National Market, (ii) the notification requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder (the "HSR Act") and
(iii) the filing of the Certificate of Designation with the Secretary
of State of the State of Delaware, no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of
the Securities and the shares of Common Stock issuable upon conversion
or redemption of, or any dividends paid with respect to, the Preferred
Shares, or the consummation by NTL of the transactions contemplated by
this Purchase Agreement;
(g) Neither NTL nor any of its Significant Subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease, contract or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound;
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(h) There are no claims, actions, suits, arbitration,
proceedings or investigations pending against NTL or any of its
Significant Subsidiaries or of which any property of NTL or any of its
Significant Subsidiaries is the subject which, if determined aversely
to NTL or any of its Significant Subsidiaries, would individually or in
the aggregate have a material adverse effect on the current or future
financial condition, shareholder's equity or results of operations of
NTL and its subsidiaries taken as a whole; and, to the best of NTL's
knowledge, no such claims, actions, suits, arbitration, proceedings or
investigations are threatened or contemplated by governmental
authorities or threatened or contemplated by others;
(i) The audited consolidated balance sheet of NTL and its
subsidiaries for the fiscal years ended as of December 31, 1996,
December 31, 1997, and December 31, 1998, and the related audited
consolidated statements of income, retained earnings, stockholders'
equity and cash flow of NTL and its subsidiaries, together with all
related notes and schedules thereto, and the unaudited consolidated
balance sheet of NTL and its subsidiaries as of March 31, 1999, and the
related unaudited consolidated statements of income, retained earnings,
stockholders' equity and cash flow of NTL and its subsidiaries together
with all related notes and schedules thereto (the "Interim Financial
Statements"), all of which are contained in the respective Exchange Act
Reports (i) were prepared in accordance with the books of account and
other financial records of NTL and its subsidiaries, (ii) present
fairly the consolidated financial condition and results of operations
of NTL and its subsidiaries as of the dates thereof or for the periods
covered thereby, (iii) have been prepared in accordance with U.S.
generally accepted accounting principles and practices applied on a
basis consistent with the past practices of NTL and its subsidiaries
and (iv) in case of the Interim Financial Statements, include all
adjustments (consisting only of normal recurring accruals) that are
necessary for a fair presentation of the consolidated financial
condition and the results of the operations of NTL and its subsidiaries
as of the dates thereof or for the periods covered thereby;
(j) The execution of, and consummation of the transactions
contemplated in, this Purchase Agreement will not (either alone or upon
the occurrence of any additional or subsequent events, other than the
Strategic Acquisition) (i) constitute an event under any NTL Benefit
Plan, Employee Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any current,
former or retired employee, officer, consultant, independent
contractor, agent or director of NTL (an "Employee"); or (ii) result in
the triggering or imposition of any restrictions or limitations on the
right of NTL or the Purchaser to amend or terminate any NTL Benefit
Plan. No payment or benefit which will or may be made by NTL, the
Purchaser or any of their respective affiliates with respect to any
Employee will be characterized as an "excess parachute payment", within
the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986,
as amended through the date hereof (the "Code").
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For the purposes of this Section 1(j), "Benefit Plan" means each plan,
program, policy payroll practice, contract, agreement or other
arrangement providing for compensation, retirement benefits, severance,
termination pay, performance awards, stock or stock-related awards,
fringe benefits or other employee benefits of any kind, whether formal
or informal, funded or unfunded, written or oral and whether or not
legally binding, including, without limitation, each "employee benefit
plan", within the meaning of Section 3(3) of ERISA and each
"multi-employer plan" within the meaning of Section 3(37) of 4001(a)(3)
of ERISA; "Employee Agreement" means each management, employment,
severance, consulting, non-compete, confidentiality, or similar
agreement or contract between NTL or any ERISA Affiliate and any
Employee pursuant to which NTL has or may have any material liability
contingent or otherwise; "ERISA Affiliate" means each business or
entity which is or was a member of a "controlled group of
corporations", under "common control" or an "affiliated service group"
with NTL within the meaning of Section 414(b), (c) or (m) of the Code,
or required to be aggregated with NTL under Section 414(o) of the Code
or is under "common control" with NTL, within the meaning of Section
4001(a)(14) of ERISA; and
(k) NTL is not a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code.
2. Subject to the terms and conditions set forth herein, NTL shall
issue and sell to the Purchaser, and the Purchaser agrees to purchase from NTL,
the Common Shares at an aggregate purchase price of $250,000,000 and the
Preferred Shares at an aggregate purchase price of $750,000,000.
3. The Purchaser hereby acknowledges and agrees with NTL that the
Securities have not been registered under the Securities Act and may not be
offered or sold except pursuant to registration or to an exemption from the
registration requirements of the Securities Act. The Purchaser further agrees
that it has not entered and will not enter into any contractual arrangement with
respect to the distribution or delivery of the Securities or shares of Common
Stock issuable upon conversion or redemption of, or as a dividend with respect
to, the Preferred Shares, other than (i) pursuant to a Registration Rights
Agreement between the parties substantially on the terms set forth in Exhibit B
(the "Registration Rights Agreement"), (ii) pursuant to Rule 144 under the
Securities Act, (iii) pursuant to any transaction that does not require
registration under the Securities Act, (iv) any such arrangements with an
affiliate of the Purchaser or (v) with the prior written consent of NTL.
4. (a) The Securities to be purchased by the Purchaser hereunder will
be represented by one or more stock certificates evidencing the Common Shares
and one or more stock certificates evidencing the Preferred Shares. NTL will
deliver the stock certificates evidencing the Securities to the Purchaser,
against payment by or on behalf of the Purchaser of the purchase price therefor
set forth in Section 2 above by wire transfer of immediately available funds to
an account designated by NTL. The time and date of such delivery and payment is
contemplated to be 10:00 a.m., New
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York City time, on July 28, 1999 or such other time and date as the Purchaser
and NTL may agree upon in writing. Such time and date are herein called the
"Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including any
additional documents requested by the Purchaser pursuant to Sections 7(a) and
(d) hereof and the Securities will be delivered at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("▇▇▇▇▇▇▇ ▇▇▇▇"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, all at the Time of Delivery.
5. NTL agrees and covenants:
(a) At any time when NTL is not subject to Section 13 or 15(d)
of the Exchange Act and prior to two years from the Time of Delivery,
for the benefit of the holders from time to time of Securities, to
furnish at its expense, upon request, to holders of Securities
information (the "Additional Issuer Information") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Securities
Act;
(b) To make available to the holders of the Securities as soon
as practicable after the end of each fiscal year, and in any event
within 90 days, an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of NTL and
its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date hereof), and in any event within 45 days,
consolidated summary financial information of NTL and its subsidiaries
for such quarter in reasonable detail;
(c) So long as the Purchaser or any affiliate of the Purchaser
is a holder of at least 75% of the Securities purchased hereunder (a
"Qualified Holder") (determined based on the aggregate number of Common
Shares and shares of Common Stock issuable upon conversion of the
Preferred Shares held by such Qualified Holder, as such aggregate
number of Common Shares and shares of Common Stock issuable upon
conversion of the Preferred Shares may be adjusted for stock dividends,
stock splits, reclassifications or similar transactions), to make
available to the Purchaser copies of all reports or other
communications (financial or other) furnished to shareholders or
members of the Board of Directors of NTL, and to make available to the
Purchaser (x) as soon as they are generally available, copies of any
reports and financial statements furnished to or filed or required to
be filed with the Commission or any securities exchange on which the
Securities or any class of securities of NTL is listed; and (y) such
additional information concerning the business and financial condition
of NTL as the Purchaser may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of NTL and its subsidiaries are consolidated in reports
furnished to its shareholders generally or to the Commission);
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(d) To file the Certificate of Designation with the Secretary
of State of the State of Delaware at the Time of Delivery;
(e) As soon as practicable after the Time of Delivery, to file
a listing application with the Nasdaq National Market with respect to
the Common Shares and the shares of Common Stock issuable upon
conversion or redemption of, or as a dividend with respect to, the
Preferred Shares and to use its best efforts to have the Common Shares
and such shares of Common Stock so listed;
(f) Prior to the Time of Delivery, to amend, to the extent
necessary, the Shareholder Rights Agreement, dated as of October 1,
1993, between NTL and Continental Stock Transfer & Trust Co., as
amended (the "Rights Agreement") to provide that the ownership by the
Purchaser of the Securities and any shares of Common Stock issued upon
conversion, redemption, exchange, or as a dividend with respect to, the
Preferred Shares will not result in the Purchaser being deemed an
Acquiring Person (as such term is defined in the Rights Agreement) or
result in the occurrence of a Stock Acquisition Date, Section 11(a)(ii)
Event or Section 13 Event (as such terms are defined in the Rights
Agreement);
(g) NTL agrees that from the date hereof and prior to the
six-month anniversary of the Time of Delivery (the "Blackout Period"),
it shall not issue or sell any equity securities of NTL or any of its
subsidiaries, other than (i) issuances of common stock upon the
exercise of stock options or warrants outstanding as of the date
hereof, issuances of stock options pursuant to stock option plans and
employee benefit schemes existing as of the date hereof and issuances
of common stock upon exercise of such stock options; (ii) issuances of
equity securities or any securities convertible into or exchangeable or
exercisable for equity securities as consideration for future
acquisitions; provided, however, that in the event of any such issuance
described in this clause (ii), NTL shall notify the Purchaser in
writing of such issuance and shall offer to the Purchaser the right to
purchase (at the price equal to the value at which such equity
securities shall be included in the consideration paid by NTL in such
acquisition) such number of the equity securities being issued as would
be necessary for the Purchaser to maintain the level of ownership of
NTL's equity securities (on a fully diluted basis) that the Purchaser
shall have immediately prior to consummation of such acquisition (it
being understood that the Purchaser's preemptive rights under this
proviso will be exercised in a manner and based on a timetable that
will not restrict or adversely affect NTL's ability to issue securities
in such acquisition in a flexible and cost effective manner); (iii)
issuances of common stock on conversion of the convertible notes
outstanding as of the date hereof or on conversion or in payment of
dividends on shares of preferred stock outstanding as of the date
hereof, and (iv) with the consent of the Purchaser, which consent shall
not be unreasonably withheld, issuances of equity securities as consent
payments to holders of NTL's or any of its subsidiaries' indebtedness
outstanding as of the date hereof. Notwithstanding anything to the
contrary contained in this Section 5(g), during the Blackout Period,
NTL shall have the right to issue up to an aggregate amount of
$250,000,000 of
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equity securities of NTL with the consent of the Purchaser, which
consent shall not be unreasonably withheld;
(h) To file together with the Purchaser as soon as practicable
after the date hereof notifications under the HSR Act and to respond as
promptly as practicable to all inquiries or requests received from the
United States Federal Trade Commission or the Antitrust Division of the
Department of Justice for additional information or documentation and
to respond as promptly as practicable to all inquiries and requests
received from any State Attorney General or other governmental
authority in connection with antitrust matters;
(i) Upon request by the Purchaser, to cooperate in delivering
to the Purchaser or an affiliate thereof (as applicable) within 30 days
after such request a valid statement described in Treasury Regulation
section 1.897-2(g)(1)(ii) and to comply with the notice requirements in
Treasury Regulation section 1.897-2(h); and
(j) To indemnify the Purchaser and each of its affiliates and
hold them harmless against (i) any French tax imposed thereon under
Art. 209 B of the French Tax Code (or any successor provision) as a
result of any activities or investments of NTL or any of its
subsidiaries and (ii) any liability (including penalties, interest and
expenses) arising therefrom. Any such indemnification shall be made on
an after-tax basis and shall be made within 30 days from the date the
Purchaser makes written demand therefor. To the extent that the
Purchaser receives any French tax benefit in respect of an item for
which it received an indemnity payment under this provision, the
Purchaser shall, to the extent it can do so without jeopardizing its
entitlement to such benefit (including any benefit resulting from a
payment by it under this sentence), pay to NTL an amount equal to the
amount of any such tax benefit so realized.
6. NTL covenants and agrees with the Purchaser that NTL will pay or
cause to be paid the following: (i) the cost of producing and, if required,
filing with the Commission of this Purchase Agreement, closing documents
(including any compilations thereof) and any other documents in connection with
the purchase, sale and delivery of the Securities; (ii) the cost of preparing
the stock certificates for the Securities, (iii) the cost of filing the
Certificate of Designation with the Secretary of State of the State of Delaware,
(iv) the cost of filing listing applications with respect to the Common Shares
and the shares of Common Stock issuable upon conversion or redemption of, or as
a dividend with respect to, the Preferred Shares, with the Nasdaq National
Market and (v) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 6. It is understood, however, that, except as provided in this Section
6, the Purchaser will pay all of its own costs and expenses, including the fees
of its counsel.
7. The obligations of the Purchaser to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of NTL
contained herein as of the date hereof and as of the Time of Delivery, to the
accuracy of the statements of NTL made in any
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certificates pursuant to the provisions hereof, to the performance by NTL of its
obligations hereunder and to the following additional conditions:
(a) Prior to the Time of Delivery, NTL shall have furnished to
the Purchaser (i) the Certificate of Designation executed by a duly
authorized officer of NTL and duly approved by NTL's Board of Directors
to be filed with the Secretary of State of the State of Delaware, (ii)
the Registration Rights Agreement executed by a duly authorized officer
in form and substance reasonably satisfactory to the Purchaser and its
counsel, and (iii) such further information, certificates and documents
as the Purchaser and its counsel may reasonably request;
(b) (i) There shall not have been any material adverse change
in, or any adverse development which materially affects, the business,
assets, properties, financial condition or results of operations of NTL
and its subsidiaries taken as a whole since the date hereof, and (ii)
since the date hereof there shall not have been any material change in
the capital stock, long-term debt or any other liability (which would
be required to be reflected on a balance sheet or the notes thereto) of
NTL or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of NTL and its
subsidiaries taken as a whole, other than as set forth or contemplated
herein, except to the extent that any such material adverse change or
adverse development is the result of (x) any change in general economic
conditions in the countries in which NTL and its subsidiaries operate;
(y) any change generally affecting the industry in which NTL and its
subsidiaries operate; or (z) any change in laws and regulations (other
than laws and regulations related to taxation) applicable to the
business of NTL and its subsidiaries;
(c) On or after the date hereof and prior to the Time of
Delivery, there shall not have occurred any of the following: (i) a
suspension or material limitation (except for such limitations as are
in effect as of the date hereof) in trading in securities generally on
the New York Stock Exchange, the London Stock Exchange or the Paris
Stock Exchange; (ii) a suspension or material limitation (except for
such limitations as are in effect as of the date hereof) in trading in
the securities of NTL on the principal exchange or quotation system on
which such securities are traded; (iii) a general moratorium on
commercial banking activities in New York, London or Paris declared by
the relevant authorities; (iv) the imposition of exchange controls by
the United States, the United Kingdom or France; (v) NTL or any
Significant Subsidiary shall have sustained since the date of the
latest audited financial statements included in the Exchange Act
Reports any loss or interference with their business from fire,
explosion, flood, earthquake or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
such Exchange Act Reports, the effect of which would constitute a
material adverse change for purposes of Section 7(b); (vi) the outbreak
or escalation of hostilities involving the United States, the United
Kingdom or
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France, or the declaration by the United States, the United Kingdom or
France of a national emergency or war, if the effect of any such event
specified in this subsection (vi), in the reasonable judgment of the
Purchaser, makes it impracticable or inadvisable to proceed with the
purchase of the Securities on the terms and in the manner contemplated
in this Purchase Agreement; or (vii) the occurrence of any material
adverse change in the existing financial, political or economic
conditions in the United States, the United Kingdom, France or
elsewhere, which, in the judgment of the Purchaser, would materially
and adversely affect the financial markets;
(d) NTL shall have furnished to the Purchaser certificates of
NTL, signed by the Chief Executive Officer, the President or a Senior
Vice President of NTL and by the principal accounting or financial
officer of NTL, as to the accuracy of the representations and
warranties of NTL herein at and as of the Time of Delivery, as to the
performance by NTL of all of its obligations hereunder to be performed
at or prior to such Time of Delivery, and as to such other matters as
the Purchaser and its counsel may reasonably request;
(e) The Purchaser shall have received an opinion of ▇▇▇▇▇▇▇
▇▇▇▇ regarding the Securities and the shares of Common Stock of NTL
issuable upon conversion or redemption of, or as a dividend with
respect to, the Preferred Shares substantially as set forth as Exhibit
C; and
(f) Any waiting period (and any extension thereof) applicable
to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated.
8. (a) As of the Time of Delivery, the Purchaser and their Affiliates
(as defined in the Exchange Act) will have no beneficial ownership (as defined
in Rule 13d-3 promulgated under the Exchange Act) of any securities of NTL other
than as a result of the Purchaser's acquisition of the Securities.
(b) So long as the Purchaser or any affiliate of the Purchaser is a
Qualified Holder and a holder of Preferred Stock, the Purchaser or such
Affiliate of the Purchaser shall have the right in accordance with the
Certificate of Designation to elect one director to the Board of Directors of
NTL. After the time when the Purchaser or any affiliate of the Purchaser shall
no longer be a holder of any shares of Preferred Stock but shall remain a
Qualified Holder, the Purchaser or such affiliate of the Purchaser shall have
the right to nominate one director for election to the Board of Directors of
NTL. NTL shall use best efforts to support election of the Purchaser's (or such
affiliate's) nominee to the Board of Directors of NTL and shall include such
nominee in the list of directors proposed by the Board of Directors of NTL for
election by NTL's stockholders. Further, so long as the Purchaser or any
affiliate of the Purchaser is a Qualified Holder and a holder of Preferred
Stock, NTL shall not increase the total number of its directors to a number that
is greater than ten if such increase would
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cause the number of such directors that the holders of the Preferred Stock are
entitled to elect to be less than 10% of the total number of directors of NTL.
(c) In the event NTL and the Purchaser agree that NTL will issue and
sell to the Purchaser any additional shares of Common Stock or Preferred Stock
or any shares of a new class or series of preferred stock of NTL in connection
with the Strategic Acquisition (any such shares being the "New Securities"),
then the purchase by the Purchaser of the Securities and the New Securities will
be deemed to be a single strategic investment, with the purchase of the
Securities to be deemed an interim funding of such strategic investment. NTL and
the Purchaser further agree that any agreement they may enter into (the
"Investment Agreement") for the issuance and sale of the New Securities to the
Purchaser will provide that the Securities will be subject to the same
restrictions on transferability and standstill requirements as the New
Securities.
9. The respective agreements, representations, warranties and other
statements of NTL and the Purchaser, as set forth in this Purchase Agreement or
made by or on behalf of them, respectively, pursuant to this Purchase Agreement,
shall remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of the Purchaser or
any controlling person of any Purchaser, or NTL, or any officer or director or
controlling person of NTL, and shall survive delivery of and payment for the
Securities.
10. This Purchase Agreement may be terminated by mutual agreement of
the parties, in which event, (i) NTL shall not then be under any liability or
obligation to the Purchaser with respect to the Securities except as provided in
Section 6 hereof and (ii) the Purchaser shall not then be under any liability or
obligation to NTL with respect to this Purchase Agreement except as provided in
Section 6 hereof.
11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Purchaser shall be delivered or sent by mail, telex or
facsimile transmission to: France Telecom, S.A., ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, with a copy to
Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇, Esq.; and if to NTL shall be delivered or sent by mail, telex or
facsimile transmission to NTL Incorporated, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, with a copy to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
12. This Purchase Agreement shall be binding upon, and inure solely to
the benefit of, the Purchaser and NTL and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Purchase Agreement. No purchaser of any of the Securities from the
Purchaser shall be deemed a successor or assign with respect to this Purchase
Agreement by reason merely of such purchase.
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13. This Purchase Agreement may not be assigned by the Purchaser
without the express written consent of NTL, except that the Purchaser may assign
this Purchase Agreement to an affiliate of the Purchaser without the consent of
NTL, provided, however, that no such assignment shall release the Purchaser from
its obligations hereunder, provided further, however, that the Purchaser will
not assign this Purchase Agreement to an affiliate if, in the reasonable
judgment of NTL based on a reasonable inquiry of an internationally recognized
credit rating agency or a major investment banking firm specializing in credit
rating advisory work, such assignment would result in an adverse effect on the
credit rating of NTL or NTL Communications Corp.
14. This Purchase Agreement shall be governed by and constructed in
accordance with the laws of the State of New York.
15. This Purchase Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Purchaser and NTL.
Very truly yours,
NTL INCORPORATED
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief
Executive Officer
Accepted as of the date hereof:
FRANCE TELECOM, S.A.
By: /s/ ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Director - Finance and
Human Resources
ATTACHMENT I
EXHIBIT A
---------
CAPITALIZATION
Number of
Fully
Number of Diluted
Par or Number of Issued and Common
Stated Authorized Outstanding Share
Description of Securities Value Shares Shares Equivalents
Series Preferred Stock: $0.01 10,000,000 N/A N/A
13% Senior Redeemable
Exchangeable Preferred Stock $0.01 " 133,497 N/A
9.9% Non-voting Mandatorily Redeemable
Preferred Stock, Series A $1,000 " 125,280 1,559,785
9.9% Non-voting Mandatorily Redeemable
Preferred Stock, Series B $1,000 " 52,217 650,122
5.25% Convertible Preferred Stock, Series A $1,000 511,069 5,108,861
Common Stock $0.01 400,000,000 81,394,684 81,394,684
Options N/A N/A N/A 18,118,487
Warrants:
$5.566 expire ▇▇▇▇ ▇/▇ ▇/▇ ▇/▇ 741,643
$23.778 expire ▇▇▇▇ ▇/▇ ▇/▇ ▇/▇ 157,760
$43.389 expire ▇▇▇▇ ▇/▇ ▇/▇ ▇/▇ 765,379
$84.00 expire ▇▇▇▇ ▇/▇ ▇/▇ ▇/▇ 1,200,000
Convertible Notes:
7% Convertibles due ▇▇▇▇ ▇/▇ ▇/▇ ▇/▇ 9,795,918
------------------------ -------------
Total: 119,492,639
EXHIBIT B
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REGISTRATION RIGHTS AGREEMENT
PRINCIPAL TERMS
Demand
Registration Rights: The Purchaser may request a total of 3 registrations.
Incidental
Registration Rights: Subject to the provisions of "Cutbacks" below, if at
any time NTL determines that it shall file a
registration statement under the Securities Act of
1933, NTL shall give the Purchaser prompt notice of
such registration. Following such notice, the
Purchaser shall be granted the opportunity to
participate in such registration in proportion to the
percentage ownership of such Securities by the
Purchaser.
Shelf Registration: The Purchaser is entitled to use 2 of its
registration requests to request that NTL file a
shelf registration on behalf of the Purchaser.
Obligations of
the Purchaser: NTL shall use its best efforts to effect any
registration requests, and to comply with the
requirements of all relevant state blue sky and
federal securities laws necessary to effect such
registration requests. NTL shall provide the
Purchaser with such number of registration statements
and prospectus' as the Purchaser shall reasonably
request. NTL shall cooperate in the registration
process and roadshow or other investor meetings in
connection with the sale of the Securities so
registered and shall secure the participation of its
management for such purposes.
Fees and
Expenses: NTL shall pay all fees, expenses, or other costs
incurred with respect to each registration request
made by the Purchaser (other than underwriters'
discounts and commissions and fees and expenses of
Purchaser's counsel), including, without limitation,
all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting
fees, fees of the National Association of Securities
Dealers, Inc. listing fees, messenger and delivery
expenses, all fees necessary to comply with state
blue sky and federal laws, fees and expenses of for
the disbursement of NTL's counsel, auditors or other
advisors.
Indemnification: NTL shall indemnify the Purchaser and its directors
and officers against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser
may become subject insofar as such losses, claims,
damages or liabilities arise out of or are based on
any untrue or alleged untrue
2
statement of any fact contained in any registration
statement, unless the liability relates to material
furnished in writing by the Purchaser to NTL
specifically for use in the registration statement.
Selection of
Underwriters: The Purchaser shall select any underwriters in
connection with the sale of registered Securities,
with the approval of NTL, such approval not to be
unreasonably withheld.
Assignability: The Purchaser may assign all registration rights.
Delay of
Filing or Sales: If NTL shall furnish to the Purchaser a certificate
signed by its Chairman, Chief Executive Officer or
Chief Financial Officer stating that (i) filing a
registration statement or maintaining effectiveness
of a current registration statement would have a
material adverse effect on NTL or its stockholders
in relation to any material financing, acquisition or
other corporate transaction, and NTL has determined
in good faith that such disclosure is not in the best
interests of NTL and its shareholders, or (ii) NTL
has determined in good faith that the filing or
maintaining effectiveness of a current registration
statement would require disclosure of material
information NTL has a valid business purpose of
retaining as confidential, NTL shall be entitled to
postpone filing or suspend the use by the Purchaser
of the registration statement for a reasonable period
of time, but not in excess of 60 consecutive calendar
days. NTL shall be entitled to exercise such
suspension right more than one time in any calendar
year provided that such exercise shall not prevent
Purchaser from being entitled to at least 240 days of
effective registration rights per year and that no
suspension period may commence if it is less than 30
calendar days from the prior such suspension period.
Cutbacks: If a registration by NTL of its securities involves
an underwritten offering, and the managing or lead
underwriter or underwriters shall advise NTL in
writing (a copy of which shall be provided by NTL to
the Purchaser), that in its or their opinion, the
number of securities requested and otherwise proposed
to be included in such registration exceeds the
number that can be sold in such offering within a
price range acceptable to NTL, then NTL shall
allocate the securities to be included in such
registration as follows: First, NTL shall be entitled
to include all of the securities that they have
proposed to be included, and second, to the extent
that any other securities may be included without
exceeding the limitations recommended by the
underwriter as aforesaid, the Purchaser shall be
entitled to participate in
3
that registration on a basis no less favorable than
any other holder of NTL's securities.
EXHIBIT C
FORM OF OPINION OF SKADDEN, ARPS, SLATE ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP