-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HsxIXivnVHesxn/3WqUHIzWS/iPsxU5+uITKHDCyVcl7BH2sPUh0zoA0jwXGP3kr LZNmxyjWxAHT2tAmSvfURA== 0000947871-00-000175.txt : 20000223 0000947871-00-000175.hdr.sgml : 20000223 ACCESSION NUMBER: 0000947871-00-000175 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000222 GROUP MEMBERS: (COGECOM) S.A. GROUP MEMBERS: COMPAGNIE GENERALE DES COMMUNICATIONS GROUP MEMBERS: FRANCE TELECOM / GROUP MEMBERS: FRANCE TELECOM S.A. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NTL INC/NY/ CENTRAL INDEX KEY: 0001083198 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 134051921 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-56709 FILM NUMBER: 550044 BUSINESS ADDRESS: STREET 1: 110 E 59TH ST 26TH FL STREET 2: C/O NTL COMMUNICATIONS CORP CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129068440 MAIL ADDRESS: STREET 1: 110 EAST 59TH STREET 26TH FL STREET 2: C/O NTL COMMUNICATIONS CORP CITY: NEW YORK STATE: NY ZIP: 10022 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FRANCE TELECOM / CENTRAL INDEX KEY: 0001038143 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 6 PLACE D ALLERAY STREET 2: 75505 CITY: PARIS CEDEX 15 STATE: I0 MAIL ADDRESS: STREET 1: 6 PLACE D ALLERAY STREET 2: 75505 CITY: PARIS CEDEX 15 STATE: I0 SC 13D/A 1 AMENDMENT NO. 3 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - -------------------------------------------------------------------------------- SCHEDULE 13D/A (Amendment No. 3) Under the Securities Exchange Act of 1934 NTL Incorporated ----------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share ---------------------------------------------------- (Title of Class of Securities) 629407107 (Common Stock) -------------------------------------------------------------- (CUSIP Number) France Telecom S.A. Compagnie Generale des Communications Jean-Louis Vinciguerra (COGECOM) S.A. Senior Executive Vice President Pierre Hilaire 6 place d'Alleray Chairman of the Board of Directors 75505 Paris Cedex 15 6 place d'Alleray France 75505 Paris Cedex 15 (33-1) 44-44-01-59 France (33-1) 44-44-18-62 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Alfred J. Ross, Jr. Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Telephone: (212) 848-4000 February 17, 2000 -------------------------------------------------------------- (Date of Event which requires Filing of this Statement) - -------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 8 CUSIP No. 629407107 - -------------------------------------------------------------------------------- 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person France Telecom S.A. IRS Identification Number: N/A - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization France - -------------------------------------------------------------------------------- 7. Sole Voting Power 0 Number of Shares ----------------------------------------------------- 8. Beneficially Shared Voting Power 20,148,341 Owned by Each ----------------------------------------------------- 9. Reporting Person Sole Dispositive Power 0 With ----------------------------------------------------- 10. Shared Dispositive Power 20,148,341 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 20,148,341 shares of Common Stock - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 13.16% of the aggregate number of all outstanding shares of Common Stock - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 2 of 8 CUSIP No. 629407107 - -------------------------------------------------------------------------------- 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Compagnie Generale des Communications (COGECOM) S.A. IRS Identification Number: N/A - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization France - -------------------------------------------------------------------------------- 7. Sole Voting Power 0 Number of Shares ----------------------------------------------------- 8. Beneficially Shared Voting Power 20,148,341 Owned by Each ----------------------------------------------------- 9. Reporting Person Sole Dispositive Power 0 With ----------------------------------------------------- 10. Shared Dispositive Power 20,148,341 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 20,148,341 shares of Common Stock - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 13.16% of the aggregate number of all outstanding shares of Common Stock - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 3 of 8 This Amendment No. 3 (the "Amendment") amends and supplements the joint statement on Schedule 13D filed on August 25, 1999, and previously amended and supplemented by Amendment No. 1 on October 26, 1999, and Amendment No.2 on January 31, 2000 (as amended and supplemented, the "Schedule 13D"), of France Telecom, a societe anonyme organized under the laws of France ("FT") and Compagnie Generale des Communications (COGECOM), a societe anonyme organized under the laws of France and a wholly owned subsidiary of FT ("COGECOM"), with respect to the common stock, par value $0.01 per share (the "Common Stock"), of NTL Incorporated, a Delaware corporation with its principal executive offices at 110 East 59th Street, New York, NY 10022 (the "Issuer"). All capitalized terms used in this Amendment that are not otherwise defined herein have the meanings ascribed to such terms in the Schedule 13D. FT and COGECOM are filing this Amendment in respect of FT entering into (i) a Purchase Agreement (the "Preferred Stock Purchase Agreement"), dated as of February 17, 2000, by and among Banque Nationale de Paris, Credit Agricole Indosuez, Deutsche Bank AG Paris Branch and Westdeutsche Landesbank Girozentrale Paris Branch (collectively the "Banks"), FT and the Issuer; and (ii) a Put and Call Option Agreement (the "Option Agreement"), dated as of February 17, 2000, among the Banks and FT. Item 1. Security and Issuer No change. Item 2. Identity and Background No change Item 3. Source and Amount of Funds or Other Consideration Item 3 is hereby amended by incorporating by reference in their entirety the paragraphs set forth in item 4 below. Item 4. Purpose of Transaction Item 4 is hereby amended by adding the following paragraphs: The Banks, FT and the Issuer entered into the Preferred Stock Purchase Agreement pursuant to which the Banks and FT agreed to purchase from the Issuer 1,850,000 shares of 5% Cumulative Preferred Stock, Series A ("Series A 5% Cumulative Preferred Stock"), for aggregate consideration of $1,850,000,000. FT is obligated under the Preferred Stock Purchase Agreement to purchase 750,000 shares of Series A 5% Cumulative Preferred Stock. The issuance of the Series A 5% Cumulative Preferred Stock is conditional, among other things, upon completion of the Issuer's acquisition from Cablecom Holding AG, a company organized under the laws of Switzerland, of certain assets. FT has the right to assign 4 of 8 its obligation to purchase 750,000 shares of Series A 5% Cumulative Preferred Stock under the Preferred Stock Purchase Agreement to one or more financial institutions (the "Financial Institutions"), it being contemplated that such Financial Institutions will become parties to the Option Agreement. A copy of the Preferred Stock Purchase Agreement is attached hereto as Exhibit 10.6 and incorporated by reference herein. A copy of the Certificate of Designation of the Series A 5% Cumulative Preferred Stock is attached hereto as Exhibit 10.7 and incorporated by reference herein. The Banks and FT have also entered into the Option Agreement pursuant to which FT has the option of requiring the Banks and the Financial Institutions, if any, to sell to FT the shares of Series A 5% Cumulative Preferred Stock acquired by the Banks and the Financial Institutions, if any, pursuant to the Preferred Stock Purchase Agreement (the "Bank Shares") and the Banks have the option of requiring FT to purchase from the Banks and the Financial Institutions, if any, the Bank Shares after two years from issuance of Series A 5% Cumulative Preferred Stock. The Banks and the Financial Institutions, if any, also have the right to require FT to purchase the Bank Shares upon the occurrence of certain events of default. A copy of the Option Agreement is attached hereto as Exhibit 10.8 and incorporated by reference herein. The Series A 5% Cumulative Preferred Stock, once issued, will have voting rights only in certain limited circumstances and will be mandatorily redeemable in cash after two years from issue at the option of the holders. In addition, the holders of the Series A 5% Cumulative Preferred Stock (other than holders which are commercial banks) would after an interim period be able to elect to exchange such Series A 5% Cumulative Preferred Stock, subject to certain conditions being satisfied, for up to a 50% interest in a new subsidiary of NTL ("Eurotel") which is yet to be established and which will own certain or all of the Issuer's then existing broadband communications, broadcast and cable television interests in Continental Europe outside of France. The Issuer and FT have agreed that if FT becomes a holder of the Series A 5% Cumulative Preferred Stock and exercises the right to exchange such Series A 5% Cumulative Preferred Stock for shares of Eurotel representing at least 49% interest in Eurotel, the Issuer and FT will enter into a shareholders' agreement that will provide FT with certain governance rights with respect to Eurotel. Should all of the Series A 5% Cumulative Preferred Stock not be exchanged for shares of Eurotel, any remaining shares that shall not have been exchanged may either be redeemed for cash by NTL at NTL's option or, after a period of six months following the consummation of the exchange, be convertible into Common Stock. Item 5. Interest in Securities of the Issuer Item 5 is hereby amended and restated as follows: (a) On February 3, 2000, the Issuer effected a second five-for-four stock split through a stock dividend (the "Second Stock Split"). The number of shares reflected herein is adjusted for the Second Stock Split. After giving effect to the Second Stock Split and based on 5 of 8 141,451,700 shares of Common Stock outstanding as of February 16, 2000, a figure provided to FT and GOGECOM by the Issuer, FT and COGECOM on the date hereof were the beneficial owners of 20,148,341 shares of Common Stock (assuming conversion of the Series A Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the 5 3/4% Convertible Notes), which represents approximately 13.16% of the Common Stock outstanding. Item 6. Contracts, Arrangements, Understanding of Relationships with Respect to Securities of the Issuer Item 6 is hereby amended by incorporating by reference in their entirety the paragraphs set forth in item 4 above. Item 7. Material to be Filed as Exhibits Item 7 is hereby amended to include the following exhibits, attached hereto: Exhibit 10.6 Preferred Stock Purchase Agreement, dated February 17, 2000, by and among the Banks, FT and the Issuer. Exhibit 10.7 Form of Certificate of Designation of the Voting Powers, Designation, Preferences and Relative, Participating, Optional or other Special Rights and Qualifications, Limitations and Restrictions of the 5% Cumulative Participating Convertible Preferred Stock, Series A of the Issuer. Exhibit 10.8 Put and Call Option Agreement, dated February 17, 2000, among the Banks and FT. 6 of 8 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 22, 2000 France Telecom S.A. By: /s/ Jean-Louis Vinciguerra ------------------------------------ Name: Jean-Louis Vinciguerra Title: Senior Executive Vice President 7 of 8 After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 22, 2000 Compagnie Generale des Communications (COGECOM) S.A. By: /s/ Pierre Hilaire ------------------------------------ Name: Pierre Hilaire Title: Chairman of the Board of Directors 8 of 8 EX-10.6 2 PURCHASE AGREEMENT NTL Incorporated PURCHASE AGREEMENT --------------------------- February 17, 2000 Banque Nationale de Paris 16, Boulevard des Italiens 75009 Paris France Credit Agricole Indosuez 9 Quai du President Paul Doumer 92400 Courbevoie France Deutsche Bank AG Paris Branch 3, Avenue de Friedland 75008 Paris France Westdeutsche Landesbank Girozentrale Paris Branch 15, Avenue de Friedland 75008 Paris France France Telecom 6, Place d'Alleray 75505 Paris Cedex 15 France Ladies and Gentlemen: NTL Incorporated, a Delaware corporation ("NTL"), proposes, subject to the terms and conditions set forth herein (including Attachment I and Exhibits A, B, C, D, E and F hereto), to issue and sell to Banque Nationale de Paris, Credit Agricole Indosuez, Deutsche Bank A.G., Westdeutsche Landesbank Girozentrale and France Telecom (each, a "Purchaser" and, collectively, the "Purchasers"), 1,850,000 shares of 5% Cumulative Preferred Stock of NTL having an aggregate liquidation preference of $1.85 billion (the "Preferred Shares") and having the terms set forth in the Certificate of Designation at tached hereto as Attachment I (the "Certificate of Designation"). 1. NTL represents and warrants to, and agrees with, the Purchasers that: (a) NTL's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and NTL's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 have been made available to the Purchasers in connection with the offering of the Preferred Shares. All documents filed by NTL or its subsidiaries with the United States Securities and Exchange Commission (the "Commission") pursuant to the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), are referred to herein as the "Exchange Act Reports". The Exchange Act Reports, when they were filed with the Commission, complied in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder. The Exchange Act Reports did not, as of their respective dates, contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. NTL and its subsidiaries have timely filed all reports and registration statements and made all filings required to be made with the Commission under the Exchange Act, the United States Securities Act of 1933, as amended (the "Securities Act"), or the applicable rules and regulations of the Commission thereunder; (b) There has not been any material adverse change in, or any ad- verse development which materially affects, the business, assets, properties, financial condition or results of operations of NTL and its subsidiaries taken as a whole since December 31, 1998; and, since December 31, 1998, there has not been any material change in the capital stock, long-term debt or any other liability of NTL or any of its subsidiaries not reported in an Exchange Act Report or any material adverse change or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of opera tions of NTL and its subsidiaries taken as a whole; provided, however, that any change resulting from the proposed acquisition of Cablecom Holdings AG and its associated businesses and assets (the "Strategic Acquisition") shall not be deemed a material change for purposes of this Section 1(b); 2 (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 nec essary, except where the failure to be so qualified in any such jurisdiction does not or would not subject such Significant Subsidiary to any material liability or disability; (d) NTL has an authorized, issued and outstanding capitalization as set forth in the attached Exhibit A, and all of the issued shares of capital stock of NTL have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued shares of capital stock of each Significant Subsidiary of NTL have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by NTL, free and clear of all liens, encumbrances, equities or claims; (e) The Preferred Shares, including any dividends payable by NTL with respect to the Preferred Shares in the form of additional shares of 5% Cumulative Preferred Stock (the "Dividend Shares"), have been duly and validly authorized by NTL, and, when issued and delivered (in the case of the Preferred Shares, against payment therefor as provided herein), will be duly and validly issued and fully paid and non-assessable, and the issuance of the Preferred Shares and the Dividend Shares is not subject to preemptive or other similar rights; (f) The execution and delivery of this Purchase Agreement and the consummation of the transactions contemplated herein (including, without limitation, any redemption payments under paragraph 6(a) of the Certificate of Designation) have been duly authorized by all necessary corporate action on the part of NTL, and except with respect to consummation of the exchange provided for in Section 8 of the Certificate of Designation (the "Exchange"), as to which paragraph 1(g) is applicable, when executed by NTL and the Purchasers will not conflict with or result in any breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or 3 imposition of any security interest, lien, charge or encumbrance upon any property or assets of NTL or its Significant Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which NTL or any of its Significant Subsidiaries is a party or by which NTL or any of its Significant Subsidiaries may be bound or to which any of the property or assets of NTL or any of its Significant Subsidiaries is subject (an "Agreement"), nor will such action or, assuming satisfaction of all conditions set forth in paragraph 8(b) of the Certificate of Designation, the Exchange result in any violation of the provisions of the Restated Certificate of Incorporation or the By-laws of NTL or of any of its Significant Subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over NTL or any of its Significant Subsidiaries or any of their properties or any of the federal and cantonal laws of the Swiss Confederation or the laws of France; and other than the filing of the Certificate of Designation with the Secretary of State of the State of Delaware, no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body or under the federal and cantonal laws of the Swiss Confederation or the laws of France is required for the issuance and sale of the Preferred Shares and any dividends paid with respect to the Preferred Shares or the consummation by NTL of the transactions contemplated with respect to, or in connection with, the Strategic Acquisition, this Purchase Agreement and the Put and Call Option Agreement (the "Option Agreement"), by and among the Purchasers; (g) No Agreement exists as of the date hereof which would be breached or violated by consummation of the Exchange, or with respect to which con summation of the Exchange would give rise to a right to terminate or otherwise cause a loss of any material right thereunder, other than certain Agreements with respect to which the foregoing representation will be true if NTL retains more than 50% ownership of the assets that are the subject of such Agreements. (h) This Purchase Agreement has been duly authorized, executed and delivered by NTL and constitutes valid and legally binding obligations of NTL enforceable against NTL in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer, moratorium and similar laws affecting the rights of creditors generally; (i) Neither NTL nor any of its Significant Subsidiaries is in violation of its Certificate of Incorporation or By-laws (or equivalent documents) or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which it is a party or by which it or any of its properties may be bound; 4 (j) There are no claims, actions, suits, arbitration, proceedings or investigations pending against NTL or any of its Significant Subsidiaries or of which any property of NTL or any of its Significant Subsidiaries is the subject which, if determined aversely to NTL or any of its Significant Subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future financial condition, shareholder's equity or results of operations of NTL and its subsidiaries taken as a whole; and, to the best of NTL's knowledge, no such claims, actions, suits, arbitration, proceedings or investigations are threatened or contemplated by governmental authorities or threatened or contemplated by others; (k) The audited consolidated balance sheet of NTL and its subsid- iaries for the fiscal years ended as of December 31, 1996, December 31, 1997, and December 31, 1998, and the related audited consolidated statements of income, retained earnings, stockholders' equity and cash flow of NTL and its subsidiaries, together with all related notes and schedules thereto, and the unaudited consolidated balance sheet of NTL and its subsidiaries as of September 30, 1999, and the related unaudited consolidated statements of income, retained earnings, stockholders' equity and cash flow of NTL and its subsidiaries together with all related notes and schedules thereto (the "Interim Financial Statements"), all of which are contained in the respective Exchange Act Reports (i) were prepared in accordance with the books of account and other financial records of NTL and its subsidiaries, (ii) present fairly the consolidated financial condition and results of operations of NTL and its subsidiaries as of the dates thereof or for the periods covered thereby, (iii) have been prepared in accordance with U.S. generally accepted accounting principles and practices applied on a basis consistent with the past practices of NTL and its subsidiaries and (iv) in case of the Interim Financial Statements, include all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the consolidated financial condition and the results of the operations of NTL and its subsidiaries as of the dates thereof or for the periods covered thereby; (l) The execution of, and consummation of the transactions con- templated in, this Purchase Agreement will not (either alone or upon the occurrence of any additional or subsequent events) (i) constitute an event under any Benefit Plan, Employee Agreement, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any current, former or retired employee, officer, consultant, independent contractor, agent or director of NTL or any of its subsidiaries (an "Employee"); or (ii) result in the triggering or imposition of any restrictions or limitations on the right of NTL, any of its subsidiaries or the Purchasers to amend or terminate any Benefit Plan. No payment or benefit which will or may be made by NTL, any of its subsidiaries, the Purchasers or any of their respective affiliates with respect to any Employee will be characterized as an "excess parachute payment," within 5 the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended through the date hereof (the "Code"). (m) Each Benefit Plan (other than any Benefit Plan that is a multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) (a "Multiemployer Plan") of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) is in substantial compliance with applicable law and has been administered and operated in all material respects in accordance with its terms; (2) each Benefit Plan (other than any Multiemployer Plan) which is intended to be "qualified," within the meaning of Section 401(a) of the Code, has received a favorable determination letter from the Internal Revenue Service and, to the knowledge of NTL, no event has occurred and no condition exists which could reasonably be expected to result in the revocation of any such determination; (3) the actuarial present value of the accumulated plan benefits (whether or not vested) under any Benefit Plan covered by Title IV of ERISA (other than any Multiemployer Plan) as of the close of its most recent plan year did not exceed the fair value of the assets allocable thereto; (4) no Benefit Plan covered by Title IV of ERISA has been terminated and no proceedings have been instituted to terminate or appoint a trustee to administer any such plan; (5) no "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any Benefit Plan covered by Title IV of ERISA; (6) no Benefit Plan (other than any Multiemployer Plan) subject to Section 412 of the Code or Section 302 of ERISA has incurred any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 703 of ERISA, or obtained a waiver of any minimum funding standard or an extension of any amortization period under Section 412 of the Code or Section 303 or 304 of ERISA; (7) NTL and each ERISA Affiliate have made all contributions to each Multiemployer Plan required by the terms of each such Multiemployer Plan or any collectively bargained agreement; (8) neither NTL nor any ERISA Affiliate has incurred any unsatisfied withdrawal liability under Part I of Subtitle E of Title IV of ERISA to any Multiemployer Plan and neither NTL nor any ERISA Affiliate would be subject to any material withdrawal liability if, as of the close of the most recent fiscal year of any such plan ended prior to the date hereof, NTL or any such ERISA Affiliate were to engage in a complete withdrawal (as defined in Section 4203 of ERISA) or potential withdrawal (as defined in Section 4205 of ERISA) from any such plan; (9) neither NTL nor any of its subsidiaries, nor, to the knowledge of NTL, any other "disqualified person" or "party in interest" (as defined in Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in any transactions in connection with any benefit Plan that could reasonably be expected to result in the imposition of a material penalty pursuant to Section 502 of ERISA, material damages pursuant to Section 409 of ERISA or a material tax pursuant to Section 4975 of the Code; (10) no Benefit Plan provides for post-employment or retiree welfare benefits, except to the extent required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code; and (11) no claim or action has been made or commenced or, to the knowl edge of NTL, threatened, with respect to any Benefit Plan (other than routine 6 claims for benefits payable in the ordinary course, and appeals of such denied claims) which could result in a material liability of NTL or any subsidiary thereof. For the purposes of this Section 1(m), "Benefit Plan" means each plan, program, policy payroll practice, contract, agreement or other arrangement provid ing for compensation, retirement benefits, severance, termination pay, performance awards, stock or stock-related awards, fringe benefits or other employee benefits of any kind, whether formal or informal, funded or unfunded, written or oral and whether or not legally binding, including, without limitation, each "employee benefit plan", within the meaning of Section 3(3) of ERISA and each Multiemployer Plan, which plan, program, policy, payroll practice, contract, agreement or arrangement is maintained by NTL, any of its subsidiaries or any ERISA Affiliate or to which NTL, any such subsidiary or any ERISA Affiliate contributes (or has any obligation to contribute) or is a party; "Employee Agreement" means each management, employment, severance, consulting, non-compete, confidentiality, or similar agreement or contract between NTL or any ERISA Affiliate and any Employee pursuant to which NTL has or may have any material liability contin gent 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 "affili ated service group" with NTL within the meaning of Section 414(b), (c) or (m) of the Code, or required to be aggregated with NTL under Section 414(o) of the Code or is under "common control" with NTL, within the meaning of Section 4001(a)(14) of ERISA; (n) NTL is not and has not at any time during the prior five years been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code; (o) Each of NTL and its subsidiaries has timely filed or caused to be timely filed (including pursuant to any valid extensions of time for filing) with the appropriate taxing authority, all material returns, statements, forms, and reports for taxes (the "Returns") required to be filed by or with respect to the income, properties or opera tions of NTL and/or any of its subsidiaries. The returns accurately reflect in all material respects all liability for taxes of NTL and its subsidiaries as a whole for the periods covered thereby. NTL and each of its subsidiaries have paid all material taxes payable by them which have become due other than those contested in good faith and for which adequate reserves have been established in accordance with generally accepted account ing principles. There is no material action, suit, proceeding, investigation, audit or claim now pending or, to the best knowledge of NTL or any of its subsidiaries, threatened by any authority regarding any taxes relating to NTL or any of its subsidiaries. As of the Time of Delivery, neither NTL nor any of its subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of NTL or any of 7 its subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of NTL or any of its subsidiaries not to be subject to the normally applicable statute of limitations which agreement or waiver would have a material adverse effect on NTL. Neither NTL nor any of its subsidiaries has provided, with respect to themselves or property held by them, any consent under Section 341 of the Code. None of NTL or any of its subsidiaries has incurred or will incur, any material tax liability in connection with the Strategic Acquisition or any other transactions contemplated hereby (it being under stood that the representation contained in this sentence does not cover any future tax liabilities of NTL or any of its subsidiaries arising as a result of the operation of their businesses in the ordinary course of business); (p) No stamp, transfer, sales and use, value added, documentary, registration, issuance or similar tax, assessment or other governmental charge will be imposed under United States federal law or New York or Delaware state law on the sale or delivery of the Preferred Shares, or on the delivery of the Dividend Shares, as applicable, pursuant to this Purchase Agreement or the Option Agreement or upon the execution, delivery or performance of this Purchase Agreement or the Option Agreement; (q) It is not, and will not be, necessary in connection with the offer, sale or delivery of the Preferred Shares and the Dividend Shares to the Purchasers in the manner contemplated in this Purchase Agreement to register either the Preferred Shares or the Dividend Shares under the Securities Act; (r) NTL is not, and upon the issuance and sale of the Preferred Shares and, as applicable, the issuance of the Dividend Shares, as contemplated herein will not be, an "investment company" or an entity "controlled" by an "investment company" (as such terms are defined in the Investment Company Act of 1940, as amended); (s) When issued, the Preferred Shares and the Dividend Shares will be eligible for resale pursuant to Rule 144A(d)(3) of the Securities Act and will not be, on or on any date following the Time of Delivery, of the same class of securities (within the meaning of Rule 144A(d)(3) under the Securities Act) listed on a U.S. national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system (as such term is used in the rules under the Exchange Act); (t) None of NTL, any of its affiliates, or any person acting on its or their behalf has offered or sold or will offer or sell any Preferred Shares or Dividend Shares by means of any general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act); 8 (u) None of NTL, any of its affiliates, or any person acting on its or their behalf, has engaged, directly or indirectly, in any action for the purpose of, or which might reasonably be expected to cause or result in: (1) creating actual, or apparent, active trading in either the Preferred Shares or the Dividend Shares, as applicable, or any other securities exchangeable for, or representing the right to receive, Preferred Shares or Dividend Shares or (2) stabilization or manipulation of the price of any security of NTL to facilitate the sale or resale of the Preferred Shares or the Dividend Shares, as applica- ble; and (v) (i) No action has been or will be taken in any jurisdiction by NTL that would permit a public offering of either the Preferred Shares or the Dividend Shares, or distribution of any document issued in connection with the proposed resale of the Preferred Shares or the Dividend Shares, as applicable, or any other offering material, in any country or jurisdiction where action for that purpose is required; and (ii) NTL will comply with all applicable securities laws and regulations in each jurisdiction in which they, directly or indirectly, purchase, offer, sell or deliver the Preferred Shares or the Dividend Shares, as applicable, or distribute any offering material. 2. Subject to the terms and conditions set forth herein, NTL shall issue and sell to the Purchasers, and the Purchasers agree to purchase from NTL the Preferred Shares at an aggregate purchase price of $1.85 billion (the "Purchase Price"). The aggregate number of Preferred Shares purchased by each Purchaser pursuant to this Purchase Agreement and the portion of the Purchase Price payable by each Purchaser in respect of such Preferred Shares are set forth in Exhibit B hereto. Each of the Purchasers, severally and not jointly, shall purchase such number of shares of Preferred Shares set opposite that Purchaser's name on Exhibit B hereto for the consideration set forth on such Exhibit, and there shall be no obligation to purchase a number of Preferred Shares in excess of such number of Preferred Shares. 3. (a) Each of the Purchasers hereby acknowledges and agrees with NTL that the Preferred Shares have not been, and are not required to be, registered under the Securities Act and the Preferred Shares may not be offered or sold except pursuant to registration or to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each of the Purchasers hereby acknowledges and agrees with NTL that, upon issuance of the Dividend Shares, the Dividend Shares will not have been, and will not be required to be, registered under the Securities Act and may not be offered or sold except pursuant to registration or to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. (b) Each of the Purchasers hereby represents that it understands that the purchase of the Preferred Shares involves substantial risk. Each of the Purchasers hereby represents that it has experience as an investor in securities of companies and 9 acknowledges that it is able to fend for itself, can bear the economic risk of its investment in the Preferred Shares and has such knowledge and experience in financial or business matters, that it is capable of evaluating the merits and risks of this investment in the Preferred Shares and protecting its own interests in connection with this investment. Each of the Purchasers hereby represents that it is an "accredited investor" as defined in Rule 501(a) promulgated under the Securities Act. (c) With regard to the purchase of the Preferred Shares by France Telecom from the each of the Purchasers (other than France Telecom), as contemplated in the Option Agreement, France Telecom agrees and covenants that it will be a "qualified institutional buyer" as defined in Rule 144A under the Securities Act, on the date of such resale. (d) Each of the Purchasers hereby represents and covenants that, except as contemplated in this Purchase Agreement and in the Option Agreement, it is acquiring the Preferred Shares for investment for its own account, not as a nominee or agent, and not with a view of the public resale or distribution thereof within the meaning of the Securities Act. Each of the Purchasers further agrees and covenants that it has not entered and will not enter into any contract or other agreement with respect to the distribution or delivery of the Preferred Shares or Dividend Shares, other than (i) pursuant to Rule 144 under the Securities Act, (ii) pursuant to any transaction that does not require registration under the Securities Act, (iii) as contemplated in this Agreement or the Op tion Agreement, or (iv) with the prior written consent of NTL. (e) Each of the Purchasers agrees and acknowledges that, when issued, the Preferred Shares and the Dividend Shares will be eligible for resale pursuant to Rule 144A(d)(3) of the Securities Act and will not be, on or on any date following the Time of Delivery, of the same class of securities (within the meaning of Rule 144A(d)(3) under the Securities Act) listed on a U.S. national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system (as such term is used in the rules under the Exchange Act); and (f) Each of the Purchasers agrees and covenants that neither it, nor any of its respective affiliates, nor any person acting on its or their behalf, will (i) solicit any offers to buy, or offer, sell or deliver any of the Preferred Shares or the Dividend Shares, as applicable, to any person or (ii) distribute or furnish any offering material relating to the proposed resale of the Preferred Shares or the Dividend Shares, as applicable, provided that France Telecom shall have the right to communicate with financial institutions (and take such other actions as may be reasonably necessary) for purposes of assigning France Telecom's obligations in accordance with Section 12, as long as such communications are conducted in a manner that would not require the Preferred Shares or the Dividend Shares to be registered under the Securities Act. 10 (g) Each of the Purchasers agrees and covenants that the certificates for the Preferred Shares and the Dividend Shares shall bear the legend set forth in paragraph 11(b) of the Certificate of Designation. (h) Each of the Purchasers (other than France Telecom) acknowl- edges that it is not a Qualified Holder as defined in the Certificate of Designation and that it does not have a right to exchange the Preferred Shares for Eurotel Stock pursuant to Section 8(a) of the Certificate of Designation. (i) Subject to the provisions of Section 12, each of the Purchasers herewith agrees not to sell, pledge or otherwise transfer the Preferred Shares or interest therein (other than to another Purchaser or to an affiliate of a Purchaser which agrees to be bound by this Agreement or as otherwise contemplated in the Option Agreement) at any time prior to the earlier of the second anniversary of the Time of Delivery or the expiration of the Option Agreement. 4. (a) The Preferred Shares to be purchased by the Purchasers hereunder will be represented by one or more stock certificates issued to each Purchaser evidencing the Preferred Shares. NTL will deliver the stock certificates evidencing the Preferred Shares to the Purchasers, against payment by or on behalf of the Purchasers of the Purchase Price by wire transfer of immediately available funds to an account designated by NTL. Such issuance, delivery and payment shall occur immediately prior to the completion of the Strategic Acquisition on the date of completion of the Strategic Acquisition, of which date NTL shall give Purchasers at least five business days prior notice (or at such other time and date as the Purchasers and NTL may agree upon in writing). Such time and date are herein called the "Time of Delivery". If completion of the Strategic Acquisition does not occur on or before June 29, 2000, the provisions of this Purchase Agreement shall cease to have any effect (except as regards any prior breaches by either party). (b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof, including any additional documents requested by the Purchasers pursuant to Sections 7(a) and (b) hereof and the Preferred Shares will be delivered at the offices of Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"), Four Times Square, New York, New York 10036, all at the Time of Delivery. 11 5. NTL agrees and covenants: (a) To file the Certificate of Designation with the Secretary of State of the State of Delaware so that it is effective immediately prior to or at the Time of Delivery; (b) To deliver to the Purchasers or an affiliate thereof (as applicable), (i) on or prior to the Time of Delivery and (ii) within 30 days after a request by the Purchasers, valid statement described in Treasury Regulation section 1.897-2(g)(1)(ii) and to comply with the notice requirements in Treasury Regulation section 1.897-2(h); (c) To use the Purchase Price primarily for the purpose of consum- mating the Strategic Acquisition, including, without limitation, refinancing of any assumed indebtedness incurred in connection therewith, and if any portion of the Purchase Price is left after consummation of the Strategic Acquisition, to use such remainder for purposes of acquiring companies or businesses primarily engaged in the broadband communications, broadcasting and cable television business in Continental Europe (out side of France); (d) To pay and discharge, and to cause each of its subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties would otherwise attach thereto, and all lawful claims which, if unpaid, might become a lien or charge upon any properties of NTL or any of its subsid iaries, provided that neither NTL or any of its subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with generally accepted accounting principles; (e) To enter into such agreements and take such actions as the Purchasers may reasonably request in order to expedite or facilitate any transfer or disposition of the Preferred Shares, or the Dividend Shares, as applicable, in compliance with the provisions of Section 3 above, including without limitation, directing the transfer agent to register the transfer of the Preferred Shares or the Dividend Shares, as applicable, as directed by or on behalf of the Purchasers; and (f) None of NTL, any of its affiliates, or any person acting on its or their behalf will (i) engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with any offer or sale of the Preferred Shares or the Dividend Shares, as applicable, in the United States of America; (ii) solicit any offers to buy, or offer, sell or deliver any Preferred Shares or 12 Dividend Shares, as applicable, to any person; (iii) distribute or furnish any offering material relating to the proposed resale of the Preferred Shares or the Dividend Shares, as applicable; (g) For so long as NTL is neither subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under the Ex change Act, it will provide the information required by Rule 144A(d)(4) of the Securities Act; (h) If any shares of Common Stock of NTL are issued to a Pur- chaser (or its assign) pursuant to paragraph 9 of the Certificate of Designation, that such shares shall be entitled to registration rights consistent with those set forth in the Investment Agreement, dated July 26, 1999, between NTL and France Telecom (the "Investment Agreement"); and (i) Prior to the Time of Delivery, the Rights Agreement (as de- fined in the Investment Agreement) will be amended to provide that the ownership by a Purchaser of the Preferred Shares or common stock issuable upon conversion thereof will not result in the Purchaser being deemed an Acquiring Person (as such term is defined in the Rights Agreement) or result in the occurrence of a Stock Acquisition Date, Section 11(a)(ii) Event or Section 13 Event (as such terms are defined in the Rights Agreement), or as otherwise may be necessary. 6. (a) NTL covenants and agrees with the Purchasers that NTL will pay or cause to be paid the following: (i) the cost of preparing the stock certificates for the Preferred Shares, (ii) the cost of filing the Certificate of Designation with the Secretary of State of the State of Delaware, (iii) any stamp, transfer, sales and use, value added, documentary, registration, issuance or similar tax, assessment or other governmental charge imposed on the sale or delivery of the Preferred Shares, or on the delivery of the Dividend Shares, as applicable, pursuant to this Purchase Agreement or the Option Agreement or upon the execution, delivery or performance of this Purchase Agreement or the Option Agreement and (iv) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 6. It is understood, however, that, except as provided in this Section 6, the Purchasers will pay all of their own costs and expenses, including the fees of their counsel. (b) NTL hereby agrees to indemnify and hold each of the Pur- chasers (which shall include their respective directors, officers, agents, employees and affiliates) harmless from and against any and all costs, taxes (other than withholding taxes or taxes measured by the net income or net profits of a Purchaser as a result of distributions on or in redemption of the Preferred Shares and/or the Dividend Shares, except as provided in paragraph 4(f) of the Certificate of Designation) fines, penalties, 13 damages, actions, losses, liabilities, expenses (including, but not limited to, the fees and expenses of counsel) and claims (the "Losses") incurred by any of the Purchasers (including France Telecom, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof) as a result of or in connection with the consummation of transactions contemplated herein, arising out of or resulting from any breach of a representation or warranty made by NTL contained in this Purchase Agreement, or arising out of the performance of any such Purchaser of its obligations under this Purchase Agreement or the compliance by such Purchaser with the instructions set forth herein or delivered hereunder, other than those Losses resulting solely from such Purchaser's gross negligence or willful misconduct or the legal or regulatory status of the Purchaser. Each Purchaser shall use its best efforts to notify NTL of the written assertion of a claim against it or of any action commenced against it, promptly after it shall have received any such written assertion of a claim or shall have been served with the summons or other first legal process, giving information as to the nature and basis of the claim; provided that such Purchaser's failure to so notify shall not affect the obligations of NTL hereunder. Each Purchaser shall be entitled to retain counsel of its choice in any such suit and NTL shall pay the fees, expenses and disbursements of such counsel, and all other expenses in connection therewith. The indemnity set forth herein shall be in addition to any rights that the Purchasers may have at common law or otherwise, including any right of contribution. With respect to the Purchasers (other than France Telecom) this Section 6(b) shall survive (a) as long as the Purchasers hold the Preferred Shares and/or the Dividend Shares, as applicable, and, (b) with regard to any event that may occur during the time the Purchasers hold the Preferred Shares and/or the Dividend Shares, as applicable, beyond the time that the Purchasers hold the Preferred Shares and/or the Dividend Shares, as applicable. With respect to France Telecom, this Section 6(b) shall survive for a period of two (2) years following the date hereof. (c) Upon the request of NTL and at NTL's expense, each Purchaser shall provide NTL, to the extent permitted by law, with two Internal Revenue Service Forms 1001, 4224 or W-BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service or other applicable taxing authority certifying that such Purchaser is entitled to a reduction in, or exemption from, withholding or other taxes for which NTL is liable under this Purchase Agreement (including in this Section 6) or otherwise. 7. (a) The obligations of the Purchasers to purchase the Preferred Shares shall be subject to the truth and accuracy of the representations and warranties on the part of NTL contained herein as of the date hereof and as of the Time of Delivery, to the truth and accuracy of the statements of NTL made in any certificates pursuant to the provisions hereof, to the performance by NTL of its obligations hereunder and to the following additional conditions: 14 (i) Prior to the Time of Delivery, NTL shall have furnished to the Purchasers (including France Telecom, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof) (i) the Certificate of Designation executed by a duly authorized officer of NTL and duly approved by NTL's Board of Directors to be filed with the Secretary of State of the State of Delaware and (ii) such further information, certificates and documents as the Purchasers, France Telecom and their respective counsel may reasonably request; (ii) NTL shall have furnished to the Purchasers (including France Telecom, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof) certificates of NTL, signed by the Chief Executive Offi- cer, the President, the Executive Vice President or a Senior Vice President of NTL and by the principal accounting or financial officer of NTL, as to the truth and accuracy of the representations and warranties of NTL herein as of the date hereof and as of the Time of Delivery as to the performance by NTL of all of its obligations hereunder to be performed at or prior to such Time of Delivery, and as to such other matters as the Purchasers and their respective counsel may reasonably request; (iii) The Purchasers (including France Telecom, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof) shall have received an opinion of Skadden Arps regarding the Preferred Shares and the Dividend Shares, as applicable, substantially as set forth as Exhibit C; (iv) On the date of issuance, sale and delivery of the Preferred Shares, the Purchasers, other than France Telecom, shall have received (a) an opinion of Shearman & Sterling, substantially in the form and substance as set forth as Exhibit D, (b) an opinion of in-house counsel (Directeur Juridique) of France Telecom, substantially in the form and substance as set forth as Exhibit E, and (c) an opinion of White & Case LLP, substantially in the form and substance as set forth as Exhibit F; and (v) None of the following pursuant to or within the meaning of any Bankruptcy Law shall have occurred: (A) NTL or any Significant Subsidiary having (1) commenced a voluntary case or filed a petition in bankruptcy or become insolvent; (2) consented to the entry of an order for relief against it in an involuntary case in which it is the debtor; (3) consented to the appointment of a Custodian of it or for all or substantially all of its property or assets; or (4) made a general assignment for the benefit of its creditors; 15 (A) an involuntary petition against NTL or any Significant Subsidiary having been filed in an insolvency proceeding, and such involuntary filing not having been dismissed within sixty (60) days after such filing; (B) a court of competent jurisdiction having entered an order or decree under any Bankruptcy Law that: (1) is for relief against NTL or any Significant Subsidiary in an involuntary case; (2) appoints a Custodian of NTL or any Significant Subsidiary or for all or substantially all of its property or assets; or (3) orders the liquidation of NTL or any Significant Subsidiary, and the order or decree remains unstayed and in effect for 60 days. (C) NTL or any Significant Subsidiary having proposed or become a party to any dissolution or liquidation. For purposes of this Section, the term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or foreign law for the relief of debtors or the protection of creditors, and the term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. (vi) Neither NTL nor any Significant Subsidiary shall have become unable to pay its debts as they shall become due or shall have pro- posed a written agreement of composition or extension of its debts. (b) The obligations of each party to consummate the transactions contemplated hereby are further subject to the condition that the Strategic Acquisition be consummated substantially simultaneously with the consummation of the transactions contemplated hereby. 8. The respective agreements, representations, warranties and other statements of NTL and the Purchasers, as set forth in this Purchase Agreement or made by or on behalf of them, respectively, pursuant to this Purchase Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Purchasers or any controlling person of any Purchaser (including France Telecom or any controlling person of France Telecom, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof), or NTL or any officer or director or controlling person of NTL, and shall survive delivery of and payment for the Preferred Shares. 16 9. This Purchase Agreement may be terminated by mutual agreement of the parties, notwithstanding any assignment by France Telecom pursuant to Section 12 hereof, in which event, (i) NTL shall not then be under any liability or obligation to the Purchasers with respect to this Purchase Agreement, the Preferred Shares and the Dividend Shares, except as provided in Section 6(a) and 6(b) hereof, (ii) the Purchasers shall not then be under any liability or obligation to NTL with respect to this Purchase Agreement except as provided in Section 6(a) hereof and (iii) all provisions of this Purchase Agreement shall cease to have any effect with the exception of this Section 9, Section 13, Section 14 and Section 15. 10. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail, telex or facsimile transmission to Banque Nationale de Paris, 16, Boulevard des Italiens, 75009 Paris, France, Attention: Philippe Roca, Fax No.:(33)(1)40-14-69-40; Credit Agricole Indosuez, 9 Quai du President Paul Doumer, 92400 Courbevoie, France, Attention: Damien Scaillierez, Fax No.: (33)(1)41-89-39-53; Deutsche Bank AG, Paris Branch, 3, Avenue de Friedland, 75008 Paris, France, Attention: Benoit Deschamps, Fax No.: (33)(1)42-89-00- 45; Westdeutsche Landesbank Girozentrale, Paris Branch, 15, Avenue de Friedland, 75008 Paris, France, Attention: Khaled Osman, Fax No. (33)(1)45-63-15-71; and France Telecom, 6, Place d'Alleray, 75505 Paris Cedex 15, France, Attention: Philippe McAllister, Fax No.: (33)(1)44-44-86-00, with copies to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, Attention: Alfred J. Ross, Esq., Fax No.: (212) 848-7179; and if to NTL shall be delivered or sent by mail, telex or facsimile transmission to NTL Incorporated, 110 East 59th Street, New York, New York 10022, Attention: General Counsel, Fax No.: (212) 906-8497, with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, Attention: Thomas H. Kennedy, Esq., Fax No.: (917) 777-2526. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 11. Except as provided in Section 12 hereof, this Purchase Agreement shall be binding upon, and inure solely to the benefit of, the Purchasers and NTL and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Purchase Agreement. No purchaser of any of the Preferred Shares from any of the Purchasers, other than France Telecom or an affiliate of France Telecom, shall be deemed a successor or assign with respect to this Purchase Agreement by reason merely of such purchase. 12. This Purchase Agreement may not be assigned by any of the Purchas- ers without the express written consent of NTL, except that (i) the Purchasers other than France Telecom may assign this Purchase Agreement (including, but not limited to, their rights under Section 6(b)) to France Telecom or an affiliate of any of the Purchasers or France Telecom without the consent of NTL, provided, however, that no 17 such assignment shall release any of such Purchasers from their obligations hereunder and (ii) France Telecom may, without the consent of any other party to this Purchase Agreement, assign its obligation to purchase 750,000 Preferred Shares, to (x) any one or more financial institutions (it being understood and agreed that (i) such assignment shall release France Telecom only from its obligation to purchase the Preferred Shares and (ii) France Telecom shall remain liable for the performance of all its other obligations hereunder) or (y) an affiliate of France Telecom (it being understood and agreed that France Telecom shall remain liable for the performance by its affiliate of all of the other obligations of France Telecom to be performed hereunder). Notwithstanding anything to the contrary contained in this Agreement, the parties hereto acknowledge and agree that, notwithstanding any assignment by France Telecom of its obligation to purchase the Preferred Shares, France Telecom shall remain a party to this Agreement, with the right to rely on the representations and warranties contained herein, with the right of action to enforce any covenants and agreements contained herein and to otherwise preserve all rights specifically given to France Telecom hereunder. The parties further acknowledge that France Telecom is entering into the Option Agreement in reliance on the representations, warranties, covenants and agreements contained herein. NTL and the Purchasers shall not modify, amend or terminate this Purchase Agreement or waive any condition contained herein or any of their rights hereunder without the express written consent of France Telecom. 13. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed in and to be performed entirely in that state and without regard to any applicable conflicts of laws principles. 14. Each of NTL and each Purchaser irrevocably agrees that any legal suit, action, or proceeding against it arising out of or in connection with this Purchase Agreement, the Preferred Shares or the Securities, as the case may be, may be instituted in the Supreme Court of the State of New York, County of New York or the U.S. District Court for the Southern District of New York, as applicable, and irrevocably waives any objection which it may now or hereinafter have to the laying of venue of any such pro ceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. 15. France Telecom irrevocably waives any immunity to jurisdiction which it has or hereafter may acquire (including any immunity, sovereign or otherwise pursuant to public law or status, to pre-judgment attachment and execution) in any legal suit, action or proceeding against it arising out of or based on this Purchase Agreement or the transactions contemplated hereby that is instituted in the Supreme Court of the State of New York, County of New York or the U.S. District Court for the Southern District of New York, or in any competent court of the French Republic or any other jurisdiction 18 (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property. Without limiting the generality of the foregoing, France Telecom agrees that the waivers set forth in this Section 15 shall have the fullest scope permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and are intended to be irrevocable for purposes of such Act. 16. This Purchase Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 19 If the foregoing is in accordance with your understanding, please sign and return to us six counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the Purchasers and NTL. Very truly yours, NTL INCORPORATED By: /s/ John Gregg ---------------------------------- Name: John Gregg Title: Chief Financial Officer Accepted as of the date hereof: BANQUE NATIONALE DE PARIS By: /s/ Lionel Bordarier By: /s/ Christophe Delafontaine -------------------------------- -------------------------------- Name: Lionel Bordarier Name: Christophe Delafontaine Title: Directeur Title: Directeur Adjoint CREDIT AGRICOLE INDOSUEZ By: /s/ Michel Chabanel By: /s/ Damien Scaillierez -------------------------------- -------------------------------- Name: Michel Chabanel Name: Damien Scaillierez Title: DEUTSCHE BANK A.G. PARIS BRANCH By: /s/ Benoit Deschamps By: /s/ Antoine de Maistre -------------------------------- -------------------------------- Name: Benoit Deschamps Name: Antoine de Maistre Title: Directeur WESTDEUTSCHE LANDESBANK GIROZENTRALE PARIS BRANCH By: /s/ Barbara Selves By: /s/ Nadine Veldung -------------------------------- -------------------------------- Name: Barbara Selves Name: Nadine Veldung Title: Directeur Title: Directeur 20 FRANCE TELECOM By: /s/ Eric Bouvier -------------------------------- Name: Eric Bouvier Title: Senior Vice-President 21 Exhibit A Capital Stock of NTL Incorporated Our authorized capital stock consists of 400,000,000 shares (or, in the event the NTL stockholders approve an increase in the number of authorized shares of NTL Common Stock at the upcoming special meeting of stockholders (the "Share Increase"), 800,000,000 shares) of common stock, par value $.01 per share; and 10,000,000 shares of preferred stock, par value $.01 per share. As of the close of business on January 31, 2000, as adjusted for the 5-for-4 stock split by way of a stock dividend paid on February 3, 2000: 133,199,042 shares of NTL Common Stock issued and outstanding, each including an associated right to purchase NTL Junior Participating Preferred Stock; 6.8818 shares of NTL 13% Series A Preferred Stock issued and outstanding; 142,308.635 shares of NTL 13% Series B Preferred Stock issued and outstanding; 52,217 shares of NTL 9.90% Series B Preferred Stock issued and outstanding; 500,000 shares of NTL 5 1/4% Series A Preferred Stock issued and outstanding; 4,447.92 shares of NTL 5 1/4% Series B Preferred Stock issued and outstanding; 6,620.88 shares of NTL 5 1/4% Series C Preferred Stock issued and outstanding; 6,707.78 shares of NTL 5 1/4% Series D Preferred Stock issued and outstanding; 6,795.82 shares of NTL 5 1/4% Series E Preferred Stock issued and outstanding; 750,000 shares of NTL 5% Series A Cumulative Participating Convertible Preferred Stock issued and outstanding; 5,000 shares of NTL 5% Series C Cumulative Participating Convertible Preferred Stock issued and outstanding; 9,437.5 shares of NTL 5% Series D Cumulative Participating Convertible Preferred Stock issued and outstanding. There are (i)28,452,055 shares of NTL common stock reserved for issuance upon exercise of stock options of NTL outstanding pursuant to employee stock option and 22 similar plans; (ii)18,340,094 shares of NTL common stock reserved for issuance upon the conversion of NTL preferred stock; (iii) 11,092,213 shares of NTL common stock reserved for issuance upon conversion of the NTL 5 3/4% Convertible Subordinated Notes due 2009; (iv) 4,395,966 shares of NTL common stock reserved for issuance upon the exercise of the outstanding warrants to acquire shares of NTL common stock outstanding; and (v) 15,288,266 shares of NTL common stock reserved for issuance upon conversion of the outstanding 7% Convertible Subordinated Notes due 2008. 23 Exhibit B Purchaser Number of Shares of Purchase Price Preferred Banque Nationale de Paris 275,000 $275,000,000 Credit Agricole Indosuez 275,000 $275,000,000 Deutsche Bank AG 275,000 $275,000,000 Westdeutsche Landesbank Girozentrale 275,000 $275,000,000 France Telecom 750,000 $750,000,000 24 Exhibit C [Omitted] Exhibit D [Omitted] Exhibit E [Omitted] Exhibit F [Omitted] EX-10.7 3 CERTIFICATE OF DESIGNATION ATTACHMENT I ------------ CERTIFICATE OF DESIGNATION OF THE VOTING POWERS, DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF THE 5% CUMULATIVE PREFERRED STOCK, SERIES A, OF NTL INCORPORATED ------------------------------- PURSUANT TO SECTION 151(g) OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE ------------------------------- The undersigned, Executive Vice President, General Counsel and Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"), HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH, Section B of the Corporation's Restated Certificate of Incorporation and Section 151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the creation of the series of Preferred Stock hereinafter provided for and has established the dividend, redemption and voting rights thereof and has adopted the following resolution, creating the following new series of the Corporation's Preferred Stock: "BE IT RESOLVED that, pursuant to authority expressly granted to the Board of Directors by the provisions of Article FOURTH, Section B of the Restated Certificate of Incorporation of the Corporation and Section 151(g) of the DGCL, there is hereby created and authorized the issuance of a new series of the Corporation's Preferred Stock, par value $0.01 per share ("Preferred Stock"), with the following powers, designations, dividend rights, voting powers, rights on liquidation, redemption rights and other preferences and relative, participating, optional or other special rights and with the qualifications, limitations or restrictions on the shares of such series (in addition to the powers, designations, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions thereof set forth in the Restated Certificate of Incorporation that are applicable to each series of Preferred Stock) hereinafter set forth. (1) Number and Designation. 1,850,000 shares of the Preferred Stock of the Corporation shall be designated as 5% Cumulative Preferred Stock, Series A (the "5% Preferred Stock"), and no other shares of Preferred Stock shall be designated as 5% Preferred Stock. (2) Definitions. For purposes of the 5% Preferred Stock, the following terms shall have the meanings indicated: "Bankruptcy Event" shall mean any of the following: (i) a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of any Major Entity in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of any Major Entity or for all or substantially all of the property and assets of any Major Entity or (C) the winding up or liquidation of the affairs of any Major Entity; or (ii) any Major Entity (A) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereinafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of any Major Entity, or for all or substantially all of the property and assets of any Major Entity or (C) effects any general assignment for the benefit of creditors. "Board of Directors" shall mean the board of directors of the Corporation. "Board of Directors" shall also mean the Executive Committee, if any, of such board of directors or any other committee duly authorized by such board of directors to perform any of its responsibilities with respect to the 5% Preferred Stock. "Business Day" shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. "Common Stock" shall mean the Corporation's Common Stock, par value $0.01 per share. "Constituent Person" shall have the meaning set forth in paragraph (9)(e) hereof. 2 "Conversion Rate" shall have the meaning set forth in paragraph (9)(a) hereof. "Corporation" shall have the meaning set forth in the preamble. "Current Market Price" of publicly traded shares of Common Stock or any other class of capital stock or other security of the Corporation or any other issuer for any day shall mean the last reported sale price for such security on the principal exchange or quotation system on which such security is listed or traded. If the security is not admitted for trading on any national securities exchange or the Nasdaq National Market, "Current Market Price" shall mean the average of the last reported closing bid and asked prices reported by the Nasdaq as furnished by any member in good standing of the National Association of Securities Dealers, Inc., selected from time to time by the Corporation for that purpose or as quoted by the National Quotation Bureau Incorporated. In the event that no such quotation is available for such day, the Current Market Price shall be the average of the quotations for the last five Trading Days for which a quotation is available within the last 30 Trading Days prior to such day. In the event that five such quotations are not available within such 30-Trading Day period, the Board of Directors shall be entitled to determine the Current Market Price on the basis of such quotations as it reasonably considers appropriate. "Determination Date" shall have the meaning set forth in paragraph (9)(a) hereof. "Dividend Payment Date" shall mean the applicable redemption date of the 5% Preferred Stock as set forth in paragraph 6(a). "Dividend Periods" shall mean quarterly dividend periods commencing on March 31, June 30, September 30 and December 31 of each year and ending on and including the day preceding the first day of the next succeeding Dividend Period (except that the initial Dividend Period shall commence on the Issue Date and the final Dividend Period shall end on but exclude the Dividend Payment Date. "Eurotel" shall mean an entity which is or will be a direct or indirect, wholly-owned subsidiary of the Corporation, which entity owns all of the outstanding capital stock of entities that are primarily engaged in the broadband communications, broadcasting and cable television business in Continental Europe (outside of France). 3 "Eurotel Stock" shall mean capital stock of Eurotel with the greatest voting power and the power to control or direct the management of Eurotel of the type and class held, directly or through any of its subsidiaries, by the Corporation. "Exchange Act"" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulation thereunder. "Exchange Date" shall have the meaning set forth in paragraph (9)(a) hereof. "Expiration Time" shall have the meaning set forth in paragraph (9)(d)(v) hereof. "5% Preferred Stock" shall have the meaning set forth in paragraph (1) hereof. "5% Convertible Preferred" shall have the meaning set forth in paragraph (3)(d) hereof. "5% Convertible Series A" shall have the meaning set forth in paragraph (3)(d) hereof. "5% Convertible Series B" shall have the meaning set forth in paragraph (3)(d) hereof. "5 1/4% Preferred" shall have the meaning set forth in paragraph (3)(d) hereof.1 "5 1/4% Series A" shall have the meaning set forth in paragraph (3)(d) hereof. "GAAP" shall mean United States generally accepted accounting principles and practices as in effect from time to time and applied consistently throughout the periods involved. "Holdco" shall have the meaning set forth in paragraph (11) hereof. - -------- 1 Called for redemption on February 7, 2000. As soon as appropriate certificates of elimination are filed, this Certificate of Designation will be amended to eliminate references. 4 "Issue Date" shall mean the date on which shares of 5% Preferred Stock are first issued. "Investment Agreement" means the agreement, dated July 26, 1999, between France Telecom and the Corporation. "Junior Securities" shall have the meaning set forth in paragraph (3)(c) hereof. "Junior Securities Distribution" shall have the meaning set forth in paragraph (4)(e) hereof. "Liquidation Right" shall mean, for each share of 5% Preferred Stock, an amount equal to US$1,000 per share, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders. "Major Entity" shall mean any of the Corporation, NTL Communications Corp., Diamond Cable Communications Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any Significant Subsidiary. "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic securities market regulated by the National Association of Securities Dealers, Inc. "Nasdaq National Market" shall have the meaning set forth in Rule 4200(a)(23) of the rules of the National Association of Securities Dealers, Inc. "9.9% Series B Preferred" shall have the meaning set forth in paragraph (3)(d) hereof. "NYSE" means the New York Stock Exchange. "outstanding", when used with reference to shares of stock, shall mean issued shares, excluding shares held by the Corporation or a subsidiary. "Parity Securities" shall have the meaning set forth in paragraph (3)(b) hereof. 5 "Person" shall mean any individual, partnership, association, joint venture, corporation, business, trust, joint stock company, limited liability company, any unincorporated organization, any other entity, a "group" of such persons, as that term is defined in Rule 13d-5(b) under the Exchange Act, or a government or political subdivision thereof. "Preferred Stock" shall have the meaning set forth in the first resolution above. "Purchase Agreement" shall mean the Purchase Agreement, dated February 17, 2000, among the Corporation and certain parties identified therein with respect to the 5% Preferred Stock. "Purchase Shares" shall have the meaning set forth in (9)(d)(v) hereof. "Qualified Holder" shall mean any holder other than a commercial bank or an affiliate of a commercial bank. "Record Date" shall have the meaning set forth in paragraph (9)(d)(iv) hereof. "Redemption Date" shall have the meaning set forth in paragraph (6)(a) hereof. "Redemption Obligation" shall have the meaning set forth in paragraph (6)(b) hereof. "Redemption Price" shall have the meaning set forth in paragraph (6)(a) hereof. "Senior Securities" shall have the meaning set forth in paragraph (3)(a) hereof. "set apart for payment" shall be deemed to include, without any action other than the following, the recording by the Corporation in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to a declaration of dividends or other distribution by the Board of Directors, the allocation of funds to be so paid on any series or class of capital stock of the Corporation; provided, however, that if any funds for any class or series of Junior Securities or any class or series of Parity Securities are placed in a separate account of the Corporation or 6 delivered to a disbursing, paying or other similar agent, then "set apart for payment" with respect to the 5% Preferred Stock shall mean placing such funds in a separate account or delivering such funds to a disbursing, paying or other similar agent, as the case may be. "Significant Subsidiary" shall have the meaning given to such term in Regulation S-X under the Exchange Act. "13% Preferred" shall have the meaning set forth in paragraph (3)(d) hereof. "Trading Day" shall mean any day on which the securities in question are traded on the NYSE, or if such securities are not listed or admitted for trading on the NYSE, on the principal national securities exchange on which such securities are listed or admitted, or if not listed or admitted for trading on any national securities exchange, on the Nasdaq National Market, or if such securities are not quoted thereon, in the applicable securities market in which the securities are traded. "Transaction" shall have the meaning set forth in paragraph (9)(e) hereof. "25-Day Average Market Price" shall mean, for any security, the volume- weighted average of the Current Market Prices of that security for the twenty-five Trading Days immediately preceding the date of determination. (3) Rank. Any class or series of stock of the Corporation shall be deemed to rank: (a) prior to the 5% Preferred Stock, either as to the payment of dividends or as to distribution of assets upon liquidation, dissolution or winding up, or both, if the holders of such class or series shall be entitled by the terms thereof to the receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up, in preference or priority to the holders of 5% Preferred Stock ("Senior Securities"); (b) on a parity with the 5% Preferred Stock, either as to the payment of dividends or as to distributions of assets upon liquidation, dissolution or winding up, or both, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock and of such class of stock or series shall be entitled by the terms thereof to the receipt of dividends or of amounts 7 distributable upon liquidation, dissolution or winding up, or both, in proportion to their respective amounts of accrued and unpaid dividends per share or liquidation preferences, without preference or priority one over the other and such class of stock or series is not a class of Senior Securities ("Parity Securities"); and (c) junior to the 5% Preferred Stock, either as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding up, or both, if such stock or series shall be Common Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and of amounts distributable upon liquidation, dissolution or winding up, in preference or priority to the holders of shares of such stock or series ("Junior Securities"). (d) Each of the 13% Series B Senior Redeemable Exchangeable Preferred Stock (the "13% Preferred") and the 5 1/4% Convertible Preferred Stock, Series A (the "5 1/4% Series A") and any dividends paid on the 5 1/4% Series A in accordance with its terms, to the extent that such dividends are paid in preferred stock having terms substantially identical to the 5 1/4% Series A and any dividends paid on preferred stock issued as in-kind dividends thereon, to the extent such dividends are paid in preferred stock having terms substantially identical to the 5 1/4% Series A (the 5 1/4% Series A and all such in-kind dividends being hereinafter referred to as the "5 1/4% Preferred"), is a Senior Security. Each of the 5% Cumulative Participating Convertible Preferred Stock, Series A (the "5% Convertible Series A") and any dividends paid on the 5% Convertible Series A in accordance with its terms, to the extent that such dividends are paid in preferred stock having terms substantially identical to the 5% Convertible Series A and any dividends paid on preferred stock issued as in-kind dividends thereon, to the extent such dividends are paid in preferred stock having terms substantially identical to the 5% Convertible Series A (the 5% Convertible Series A and all such in-kind dividends being hereinafter referred to as the "5% Convertible Preferred"), is a Parity Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B Preferred") and the Series A Junior Participating Preferred Stock is a Junior Security. Except for the Preferred Stock proposed to be issued under the terms of the Investment Agreement (and collectively with any dividends paid thereon in preferred stock, the "5% Convertible Series B"), each of which would be a Parity Security, there shall be no issue of other Senior Securities, Parity Securities or rights or options exercisable for or convertible into any such securities, except as approved by the holders of the 5% Preferred Stock, or as otherwise permitted, pursuant to paragraph 9(c). 8 (e) The respective definitions of Senior Securities, Junior Securities and Parity Securities shall also include any rights or options exercisable for or convertible into any of the Senior Securities, Junior Securities and Parity Securities, as the case may be. The 5% Preferred Stock shall be subject to the creation of Junior Securities, Parity Securities and Senior Securities as set forth herein. (4) Dividends. (a) The holders of shares of 5% Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends (after taking into account revaluation of the assets and liabilities of the Corporation to the extent deemed reasonable by the Board of Directors of the Corporation after consultation with legal and financial advisors) but without regard to any contractual or other restrictions with respect thereto, dividends at the quarterly rate of US$12.50 per share (assuming a US$1,000 face amount) payable in additional shares of the 5% Preferred Stock. All dividends on the 5% Preferred Stock shall be payable in arrears on the Dividend Payment Date and shall be cumulative from the Issue Date (except that dividends on additional shares of the 5% Preferred Stock issued as dividends on 5% Preferred Stock shall accrue from the date such additional shares of 5% Preferred Stock are issued or would have been issued in accordance with this Certificate of Designation if such dividends had been declared), whether or not in any Dividend Period or Dividend Periods there shall be funds of the Corporation legally available for the payment of such dividends. The total accumulative dividends for all Dividend Periods terminating on or prior to the applicable redemption date shall be payable to the holders of record of shares of the 5% Preferred Stock, as they appear on the stock records of the Corporation at the close of business on the record date for such dividend. Upon receipt by the Company of notice from the holders of the 5% Preferred Stock that they have elected to require the Company to discharge its Redemption Obligation, the Board of Directors shall fix as such record date the fifth Business Day preceding the Dividend Payment Date and shall give notice on or prior to the record date of the number of additional shares of 5% Preferred Stock payable in respect of the dividends accrued up to but excluding the Dividend Payment Date. (b) For the purpose of determining the number of additional shares of 5% Preferred Stock to be issued as dividends pursuant to paragraph (4)(a), each such share of additional 5% Preferred Stock shall be valued at US$1,000. Holders of such additional shares of 5% Preferred Stock shall be entitled to receive dividends payable at the rates specified in paragraph (4)(a). 9 (c) The dividends payable for the initial Dividend Period, or any other period shorter than a full Dividend Period, on the 5% Preferred Stock shall accrue daily and be computed on the basis of a 360-day year and the actual number of days in such period. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the 5% Preferred Stock that may be in arrears except as otherwise provided herein. (d) So long as any shares of the 5% Preferred Stock are outstanding, no dividends, except as described in the next succeeding sentence, shall be declared or paid or set apart for payment on Parity Securities or Junior Securities, for any period, nor shall any Parity Securities or Junior Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such Parity Securities or Junior Securities) by the Corporation (except for conversion into or exchange into other Parity Securities or Junior Securities, as the case may be) unless, in each case, (i) full cumulative dividends on all outstanding shares of the 5% Preferred Stock for all Dividend Periods terminating on or prior to the date of such redemption, repurchase or other acquisition shall have been paid or set apart for payment (together with any payments that may be required under paragraph (12)(c)), (ii) sufficient funds shall have been paid or set apart for the payment of the dividend for the current Dividend Period with respect to the 5% Preferred Stock and (iii) the Corporation is not in default with respect to any redemption of shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below. When dividends are not fully paid in additional shares of 5% Preferred Stock or a sum sufficient for such payment is not set apart, as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and all dividends declared upon Parity Securities shall be declared ratably in proportion to the respective amounts of dividends accumulated and unpaid on the 5% Preferred Stock and accumulated and unpaid on such Parity Securities. (e) So long as any shares of the 5% Preferred Stock are outstanding, no dividends (other than (i) any rights issued pursuant to the Rights Agreement and (ii) dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Junior Securities) shall be declared or paid or set apart for payment or other distribution declared or made upon Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (other than a redemption, purchase, or other acquisition of shares of Common Stock made for purposes of an employee incentive or benefit plan of the Corporation or any subsidiary) (all such dividends, distributions, redemptions or purchases being hereinafter referred to as "Junior Securities Distributions") for any consideration (or any moneys 10 be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Corporation, directly or indirectly (except by conversion into or exchange for Junior Securities, including pursuant to paragraph 4(d) of the 9.9% Series B Preferred), unless in each case (A) full cumulative dividends on all outstanding shares of the 5% Preferred Stock and all other Parity Securities shall have been paid or set apart for payment for all past Dividend Periods and dividend periods for such other stock, (B) sufficient funds shall have been paid or set apart for the payment of the dividend for the current Dividend Period with respect to the 5% Preferred Stock and all other Parity Securities, (C) the Corporation is not in default with respect to any redemption of shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below and (D) the Corporation has fully performed its obligations under paragraphs (4)(a) and (6) hereof. (f) Notwithstanding the provisions of Section 6(b) of the Purchase Agreement, all payments by the Corporation of dividends on 5% Preferred Stock to a holder thereof that is not a Qualified Holder (a "Non-Qualified Holder") will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by the United States of America or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in the second succeeding sentence, any tax imposed on or measured by the net income or net profits of a Non-Qualified Holder pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Non-Qualified Holder is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect to such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the Corporation agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under the 5% Preferred Stock, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such 5% Preferred Stock. If any amounts are payable in respect of Taxes pursuant to the preceding sentence, the Corporation agrees to reimburse each Non-Qualified Holder, upon the written request of such Non-Qualified Holder, for taxes imposed on or measured by the net income or net profits of such Non-Qualified Holder pursuant to the laws of the jurisdiction in which such Non-Qualified Holder is organized or in which the principal office or applicable lending office of such Non-Qualified Holder is located or under the laws of any political subdivision or taxing authority of any 11 such jurisdiction in which such Non-Qualified Holder is organized or in which the principal office or applicable lending office of such Non-Qualified Holder is located and for any withholding of taxes as such Non-Qualified Holder shall determine are payable by, or withheld from, such Non-Qualified Holder, in respect of such amounts so paid to or on behalf of such Non-Qualified Holder pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Non-Qualified Holder pursuant to this sentence. The Corporation will furnish to each Non-Qualified Holder within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Corporation. The Corporation agrees to indemnify and hold harmless each Non-Qualified Holder, and reimburse such Non-Qualified Holder upon its written request, for the amount of any Taxes so levied or imposed and paid by such Non-Qualified Holder. (5) Liquidation Preference. (a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Securities, the holders of the shares of 5% Preferred Stock shall be entitled to receive the Liquidation Right. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the shares of 5% Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of 5% Preferred Stock and any such other Parity Securities ratably in accordance with the respective amounts that would be payable on such shares of 5% Preferred Stock and any such other stock if all amounts payable thereon were paid in full. For the purposes of this paragraph (5), (i) a consolidation or merger of the Corporation with one or more corporations, or (ii) a sale or transfer of all or substantially all of the Corporation's assets, shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Corporation. (b) Subject to the rights of the holders of any Parity Securities, upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of the 5% Preferred Stock, as provided in this paragraph (5), any other series or class or classes of Junior Securities shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the 5% Preferred Stock shall not be entitled to share therein. 12 (6) Redemption. (a) On and after the date that is the second anniversary of the Issue Date (the "Redemption Date"), each holder of shares of 5% Preferred Stock that is a Qualified Holder shall have the right to require the Corporation, to the extent the Corporation shall have funds legally available therefor (after taking into account revaluation of the assets and liabilities of the Corporation to the extent deemed reasonable by the Board of Directors of the Corporation after consultation with legal and financial advisors) but without regard to any contractual or other restrictions with respect thereto, to redeem all or some of such Qualified Holder's shares of 5% Preferred Stock, from time to time in part, or in whole, at US$1,000 per share (the "Redemption Price"), payable in cash, together with accrued and unpaid dividends thereon to, but excluding, the date fixed for redemption, without interest. Any holder of shares of 5% Preferred Stock that is a Qualified Holder which elects to exercise its rights pursuant to this paragraph (6)(a) shall deliver to the Corporation a written notice of election not less than 20 days prior to the date on which such Qualified Holder demands redemption pursuant to this paragraph (6)(a), which notice shall set forth the name of the Qualified Holder, the number of shares of 5% Preferred Stock to be redeemed and a statement that the election to exercise a redemption right is being made thereby, and shall deliver to the Corporation on or before the date of redemption certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly endorsed for transfer to the Corporation. (b) If the Corporation is unable to redeem all outstanding shares of 5% Preferred Stock requested by any holder of 5% Preferred Stock to be redeemed pursuant to paragraph (6)(a) (the "Redemption Obligation") because the Corporation does not have funds legally available therefor, the Redemption Obligation shall be discharged as soon as the Corporation has funds legally available to discharge such Redemption Obligation and its obligations under paragraph (12)(c). So long as the Corporation fails to discharge the Redemption Obligation for any reason, dividends shall continue to accrue on the Redemption Price in accordance with paragraph (4) in addition to dividends that accrue pursuant to paragraph (12)(c). If and so long as any Redemption Obligation with respect to the 5% Preferred Stock shall not be fully discharged, the Corporation shall not (i) directly or indirectly, redeem, purchase, or otherwise acquire any Parity Security or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Parity Securities (except in connection with a redemption, sinking fund or other similar obligation to be satisfied pro rata with the 5% Preferred Stock) or (ii) declare or make any Junior Securities Distribution (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Junior Securi- 13 ties), or, directly or indirectly, discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of the Junior Securities. (c) On and after the date that is the earlier of (i) the second anniversary of the Issue Date or (ii) the date an exchange is consummated pursuant to paragraph (8)(a), the Corporation shall have the right to redeem from any Qualified Holder, upon not less than five days' nor more than ten days' notice of the redemption date, from time to time in part, or in whole, shares of 5% Preferred Stock, at the Redemption Price, payable in cash, together with accrued and unpaid dividends thereon, including any dividend required under paragraph (12)(c), to, but excluding, the date fixed for redemption, without interest. (d) Upon the redemption of 5% Preferred Stock, the Corporation shall pay the Redemption Price, any accrued and unpaid dividends in arrears to, but excluding, the Dividend Payment Date, and any other dividend required under paragraph (12)(c). (e) For purposes of paragraph (6)(a), unless full cumulative dividends (whether or not declared) on all outstanding shares of 5% Preferred Stock and any Parity Securities shall have been paid or contemporaneously are declared and paid or set apart for payment for all Dividend Periods terminating on or prior to the applicable redemption date and notice has been given in accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be redeemed, and no sum shall be set aside for such redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice has previously been given in accordance with paragraph (7). (7) Procedure for Redemption. (a) When the Corporation is requested to redeem shares of 5% Preferred Stock pursuant to paragraph (6), notice of the request for such redemption shall be given by certified mail, return receipt requested, postage prepaid, mailed not less than 20 days prior to the redemption date, by each requesting 14 holder to the Corporation at the following address and confirmed by facsimile transmission: NTL Incorporated 110 East 59th Street New York, New York 10022 Facsimile: (212) 906-8497 Each such notice shall state (i) the redemption date and (ii) if the holder is requiring the Corporation to redeem fewer than all the shares of 5% Preferred Stock held by such holder, the number of shares that the Corporation is being required to redeem from such holder. Within 10 days of receipt of any such notice from a holder of the 5% Preferred Stock, the Corporation shall respond to each requesting holder with a notice sent by certified mail, return receipt requested, postage prepaid, to each requesting holder at such holder's address as the same appears on the stock register of the Corporation and confirmed by facsimile transmission to each requesting holder of record if the Corporation has been furnished with such facsimile address by the holder(s); provided, however, that neither the failure to give such notice nor confirmation nor any defect therein or in the mailing thereof, to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to the other holders. Each such notice shall (i) confirm the redemption date and the number of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of shares to be redeemed from such holder and (ii) state (A) the amount payable, (B) the place or places where certificates for such shares are to be surrendered or the notice should be sent for payment of the redemption price, and (C) that dividends on the shares to be redeemed will cease to accrue at and from such redemption date, except as otherwise provided herein. Any notice that was mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. (b) If notice has been mailed by the Corporation in response to any holder who has given the Corporation notice requesting redemption of any of its shares of 5% Preferred Stock, as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing for the payment of the redemption price of the shares called for redemption and dividends accrued and unpaid thereon, if any), (i) except as otherwise provided herein, dividends on the 15 shares of 5% Preferred Stock so called for redemption shall cease to accrue, (ii) said shares shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of the 5% Preferred Stock shall cease (except the right to receive from the Corporation the Redemption Price without interest thereon, upon surrender and endorsement of the certificates for any shares so redeemed, and to receive any dividends payable thereon, including any amounts payable pursuant to paragraph (12)(c)). (c) Upon surrender of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the Redemption Price aforesaid, plus any dividends payable thereon, including any amounts payable pursuant to paragraph 12(c). If fewer than all the outstanding shares of 5% Preferred Stock are to be redeemed due to the restriction set forth in paragraph (6)(b), the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be selected pro rata (with any fractional shares being rounded to the nearest whole share). In case fewer than all the shares represented by any such certificate are redeemed, without cost to the holder thereof either (i) a new certificate shall be issued representing the non-surrendered shares, or (ii) at the option of the holder, the holder shall be entitled to retain its existing certificates, which shall be deemed to represent the number of shares of 5% Preferred Stock that have not been redeemed. (8) Exchange. (a) Upon at least 30 days' written notice to the Corpora- tion, a Qualified Holder shall have the right, at such Qualified Holder's option, to exchange all or any part of such shares of 5% Preferred Stock for shares of Eurotel Stock (or to effect a constructive exchange in accordance with paragraph (12)(d)) having a value (calculated pursuant to paragraph 8(c) below) equal to the Redemption Price of the shares of 5% Preferred Stock with respect to which the exchange right is being exercised, together with accrued and unpaid dividends thereon to, but excluding, the date fixed for exchange, of such shares of 5% Preferred Stock. (b) Any exchange pursuant to paragraph 8(a) shall be subject to the following requirements: (i) The 5% Preferred Stock shall have been outstanding for at least six months. 16 (ii) Consummation of the exchange will not cause the Corporation, any subsidiary of the Corporation, or Eurotel to become in breach or contravention of, or give rise to a right to terminate or otherwise cause a loss of any material right under, any material agreement, contract, instrument or obligation of or binding on such entity; and the Corporation covenants and agrees not to enter into any such agreement, contract or instrument or incur such obligation after the date of issuance of the 5% Preferred Stock. (iii) All necessary approvals of any governmental competition or other regulatory bodies or authorities having jurisdiction over the exchange or any matters arising as a result thereof shall have been received, and the exchange will have no material negative effect on any material governmental license, permit or authorization held by Eurotel or any subsidiary of Eurotel; provided that after receipt of a notice from a Qualified Holder under paragraph 8(a) the Corporation shall, subject to receiving in the case of competition approvals full cooperation from the Qualified Holder, promptly take all reasonable steps necessary to receive all such governmental competition and regulatory approvals and to avoid any such material negative effect. (iv) The maximum amount of Eurotel Stock that may be acquired upon an exchange shall be 50% of the outstanding amount thereof. Any shares of 5% Preferred Stock remaining outstanding after acquisition of the maximum amount of Eurotel Stock shall be subject to redemption in accordance with paragraph 6(a) hereof. (c) The aggregate value at any time of the Eurotel Stock shall equal the aggregate amount expended by the Corporation and its subsidiaries in the acquisition of the entities that comprise Eurotel (less the aggregate amount of debt, as reflected on the consolidated balance sheet of Eurotel prepared in conformity with GAAP, which is incurred or assumed by Eurotel or any of its subsidiaries or entities comprising Eurotel or its predecessors in connection therewith (the "Acquisition Debt")), together with any amounts invested in Eurotel or any of its subsidiaries (other than by Eurotel or its subsidiaries) after such acquisition and prior to the exchange, reduced by any dividends, distribution or transfers of any assets from Eurotel to any other Person increasing at a rate of 5% per annum from the date of such acquisition or investment to the date the value of Eurotel is being calculated. The value of each share of Eurotel Stock shall be pro rata to the aggregate value of Eurotel. 17 (d) If at the time of any exchange of all of the 5% Preferred Stock, the Eurotel Stock acquired as a result of such exchange does not constitute 50% of the outstanding shares of Eurotel Stock, the Qualified Holder shall have the right (subject to the conditions set forth in paragraph (b) above) to acquire from the Corporation an additional amount of Eurotel Stock (the "Additional Amount") such that the amount of Eurotel Stock held by such Qualified Holder as a result of the exchange and the acquisition of the Additional Amount equals 50% of the outstanding shares of Eurotel Stock. The Additional Amount shall be acquired for cash at the same per share value calculated pursuant to paragraph (c) above. (e) If Eurotel shall issue to the Corporation any option, warrant or right to acquire Eurotel Stock, or if the issued Eurotel Stock shall be comprised of more than one class, the rights of the Qualified Holder under this paragraph (8) shall be equitably adjusted so as to maintain the intent of this paragraph (8) that the Qualified Holder may acquire 50% of the Eurotel Stock from the Corporation at a value reflecting the provisions of paragraph 8(c). (f) If any of the requirements set forth in paragraph (8)(b) cannot be satisfied upon a Qualified Holder's exchange for Eurotel Stock under paragraph 8(a) or acquisition of Eurotel Stock under paragraph 8(d) of 50% of the outstanding amount of Eurotel Stock, as determined in good faith by such Qualified Holder and the Corporation, the Qualified Holder shall have the right to acquire, upon exchange under paragraph 8(a) of any part of the 5% Preferred Stock held by the Qualified Holder or acquisition under paragraph 8(d), such amount of Eurotel Stock as would allow the requirements set forth in paragraph (8)(b) to be satisfied. If the Qualified Holder exercises the right described in the previous sentence, it shall have the right (i) to exchange or acquire the remaining amount of Eurotel Stock as soon as possible after the restrictions on the exchange or acquisition of the entire amount of Eurotel Stock permitted hereunder shall cease to exist or (ii) to require redemption of any amount of Preferred Shares that such Qualified Holder shall hold after exercising its rights under the first sentence of this paragraph (8)(f). (g) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Eurotel Stock upon exchange of the 5% Preferred Stock pursuant hereto; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Eurotel Stock in a name other than that of the holder of the 5% Preferred Stock to be exchanged and no such issue or delivery shall be made unless and until the Person 18 requesting such issue or delivery has paid to the Corporation the amount of any such tax or established, to the satisfaction of the Corporation, that such tax has been paid. (9) Conversion. (a) Subject to and upon compliance with the provisions of this paragraph (9), each holder of shares of 5% Preferred Stock which is a Qualified Holder shall have the right, at any time and from time to time after the date which is six months from the consummation of an exchange pursuant to paragraph (8)(a), at such holder's option, to convert any or all outstanding shares of 5% Preferred Stock held by such holder, but not fractions of shares, into fully paid and non-assessable shares of Common Stock by surrendering such shares to be converted, such surrender to be made in the manner provided in paragraph (9)(b) hereof. The number of shares of Common Stock deliverable upon conversion of each share of 5% Preferred Stock shall be equal to $1,000 divided by the 25-Day Average Market Price as of the date the exchange is consummated (the "Exchange Date"), as adjusted as provided herein, provided that such conversion rate (the "Conversion Rate") shall not be less than the price that would cause an adjustment pursuant to Schedule 25, Section 2(c) of the Restated Transaction Agreement, dated July 26, 1999, by and among Bell Atlantic Corporation, Cable and Wireless plc, Cable & Wireless Communications plc and the Corporation. The Conversion Rate is subject to adjustment from time to time pursuant to paragraph (9)(d) hereof. The right to convert shares called for redemption pursuant to paragraph 6(c) shall terminate at the close of business on the date immediately preceding the date fixed for such redemption unless the Corporation shall default in making payment of the amount payable upon such redemption, in which case such right of conversion shall be reinstated. Upon conversion, any accrued and unpaid dividends, including any dividends required under paragraph (12)(c), on the 5% Preferred Stock at the date of conversion shall be paid to the holder thereof in accordance with the provisions of paragraph (4). (b) (i) In order to exercise the conversion privilege, the holder of each share of 5% Preferred Stock to be converted shall surrender (or constructively surrender in accordance with paragraph (12)(d)) the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Corporation, or to any transfer agent of the Corporation previously designated by the Corporation to the holders of the 5% Preferred Stock for such purposes, with a written notice of election to convert completed and signed, specifying the number of shares to be converted. Such notice shall state that the holder has satisfied any legal or regulatory requirement for conversion, including compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976; provided, however, that the Corporation shall use its best efforts in cooperating with such holder to obtain such 19 legal or regulatory approvals to the extent its cooperation is necessary. Such notice shall also state the name or names (with address and social security or other taxpayer identification number, if applicable) in which the certificate or certificates for Common Stock are to be issued. Unless the shares issuable on conversion are to be issued in the same name as the name in which such share of 5% Preferred Stock is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or the holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). All certificates representing shares of 5% Preferred Stock surrendered for conversion shall be canceled by the Corporation or the transfer agent. (ii) Subject to the last sentence of paragraph (9)(a), holders of shares of 5% Preferred Stock at the close of business on a dividend payment record date shall not be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date if such holder shall have surrendered (or made a constructive surrender under paragraph (12)(d)) for conversion such shares at any time following the preceding Dividend Payment Date and prior to such Dividend Payment Date. (iii) Subject to a holder's election under paragraph (12)(d), as promptly as practicable after the surrender (including a constructive surrender under paragraph (12)(d)) by a holder of the certificates for shares of 5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to such holder, or on the holder's written order, a certificate or certificates (which certificate or certificates shall have the legend set forth in paragraph (12)(d)) for the whole number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock issuable upon the conversion of such shares in accordance with the provisions of this paragraph (9), and any fractional interest in respect of a share of Common Stock arising on such conversion shall be settled as provided in paragraph (9)(c). Upon conversion of only a portion of the shares of 5% Preferred Stock represented by any certificate, a new certificate shall be issued representing the unconverted portion of the certificate so surrendered without cost to the holder thereof. Subject to a holder's election under paragraph (12)(d), upon the surrender (including a constructive surrender under paragraph (12)(d)) of certificates representing shares of 5% Preferred Stock to be converted, such shares shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares so surrendered shall 20 immediately terminate except the right to receive the Common Stock and other amounts payable pursuant to this paragraph (9). (iv) Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of 5% Preferred Stock shall have been surrendered (or deemed surrendered pursuant to an election under paragraph (12)(d)) and such notice received by the Corporation as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby at such time on such date and such conversion shall be into a number of shares of Common Stock equal to the product of the number of shares of 5% Preferred Stock surrendered times the Conversion Rate in effect at such time on such date, unless the stock transfer books of the Corporation shall be closed on that date, in which event such Person or Persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be based upon the Conversion Rate in effect on the date upon which such shares shall have been surrendered and such notice received by the Corporation. (c) (i) No fractional shares or scrip representing fractions of shares of Common Stock shall be issued upon conversion of the 5% Preferred Stock. Instead of any fractional interest in a share of Common Stock that would otherwise be deliverable upon the conversion of a share of 5% Preferred Stock, the Corporation shall pay to the holder of such share an amount in cash based upon the Current Market Price of Common Stock on the Trading Day immediately preceding the date of conversion. If more than one share shall be surrendered for conversion (or deemed surrendered under paragraph (12)(d)) at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph (12)(d)) for conversion by such holder. (ii) Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of 5% Preferred Stock shall have been surrendered (or deemed surrendered under paragraph (12)(d)) and such notice received by the Corporation as aforesaid, and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to 21 have become the holder or holders of record of the shares of Common Stock repre- sented thereby at such time on such date and such conversion shall be into a number of shares of Common Stock equal to the product of the number of shares of 5% Preferred Stock surrendered times the Conversion Rate in effect at such time on such date, unless the stock transfer books of the Corporation shall be closed on that date, in which event such Person or Persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such stock transfer books are open, but such conversion shall be based upon the Conversion Rate in effect on the date upon which such shares shall have been surrendered (or deemed surrendered under paragraph (12)(d)) and such notice received by the Corporation. (d) The Conversion Rate shall be adjusted from time to time as follows: (i) If the Corporation shall after the Exchange Date (A) declare a dividend or make a distribution on its Common Stock in shares of its Common Stock, (B) subdivide its outstanding Common Stock into a greater number of shares, (C) combine its outstanding Common Stock into a smaller number of shares, or (D) effect any reclassification of its outstanding Common Stock, the Conversion Rate in effect on the record date for such dividend or distribution, or the effective date of such subdivision, combination or reclassification, as the case may be, shall be proportionately adjusted so that the holder of any share of 5% Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number and kind of shares of Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share been converted immediately prior to the record date in the case of a dividend or distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of business on the Business Day next following the record date (except as provided in paragraph (9)(h)) in the case of a dividend or distribution and shall become effective immediately after the opening of business on the Business Day next following the effective date in the case of a subdivision, combination or reclassification. Adjustments in accordance with this paragraph (9)(d)(i) shall be made whenever any event listed above shall occur. (ii) If the Corporation shall after the Exchange Date fix a record date for the issuance of rights or warrants (in each case, other than any rights issued pursuant to a shareholder rights plan) to all holders of Common Stock 22 entitling them (for a period expiring within 45 days after such record date) to subscribe for or purchase Common Stock (or securities convertible into Common Stock) at a price per share (or, in the case of a right or warrant to purchase securities convertible into Common Stock, having an effective exercise price per share of Common Stock, computed on the basis of the maximum number of shares of Common Stock issuable upon conversion of such convertible securities, plus the amount of additional consideration payable, if any, to receive one share of Common Stock upon conversion of such securities) less than the 25-Day Average Market Price on the date on which such issuance was declared or otherwise announced by the Corporation (the "Determination Date"), then the Conversion Rate in effect at the opening of business on the Business Day next following such record date shall be adjusted so that the holder of each share of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (I) the Conversion Rate in effect immediately prior to such record date by (II) a fraction, the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding on the close of business on the Determination Date and (B) the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights or warrants (or in the case of a right or warrant to purchase securities convertible into Common Stock, the aggregate number of additional shares of Common Stock into which the convertible securities so offered are initially convertible), and the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding on the close of business on the Determination Date and (B) the number of shares that the aggregate proceeds to the Corporation from the exercise of such rights or warrants for Common Stock would purchase at such 25-Day Average Market Price on such date (or, in the case of a right of warrant to purchase securities convertible into Common Stock, the number of shares of Common Stock obtained by dividing the aggregate exercise price of such rights or warrants for the maximum number of shares of Common Stock issuable upon conversion of such convertible securities, plus the aggregate amount of additional consideration payable, if any, to convert such securities into Common Stock, by such 25-Day Average Market Price). Such adjustment shall become effective immediately after the opening of business on the Business Day next following such record date (except as provided in paragraph (9)(h)). Such adjustment shall be made successively whenever such a record date is fixed. In the event that after fixing a record date such rights or warrants are not so issued, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect if such record date had not been fixed. In determining whether any rights or warrants entitle the holders of Common Stock to subscribe for or purchase shares of Common Stock at less than such 25-Day Average Market Price, there shall be taken 23 into account any consideration received by the Corporation upon issuance and upon exercise of such rights or warrants, the value of such consideration, if other than cash, to be determined by the Board of Directors in good faith. In case any rights or warrants referred to in this subparagraph (ii) shall expire unexercised after the same have been distributed or issued by the Corporation (or, in the case of rights or warrants to purchase securities convertible into Common Stock once exercised, the conversion right of such securities shall expire), the Conversion Rate shall be readjusted at the time of such expiration to the Conversion Rate that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iii) If the Corporation shall fix a record date for the making of a distribution to all holders of its Common Stock of evidences of its indebtedness, shares of its capital stock or assets (excluding regular cash dividends or distributions declared in the ordinary course by the Board of Directors and dividends payable in Common Stock for which an adjustment is made pursuant to paragraph (9)(d)(i)) or rights or warrants (in each case, other than any rights issued pursuant to a shareholder rights plan) to subscribe for or purchase any of its securities (excluding those rights and warrants issued to all holders of Common Stock entitling them (for a period expiring within 45 days after such record date) to subscribe for or purchase Common Stock or securities convertible into shares of Common Stock, which rights and warrants are referred to in and treated under subparagraph (ii) above) (any of the foregoing being hereinafter in this subparagraph (iii) called the "Securities"), then in each such case the Conversion Rate shall be adjusted so that the holder of each share of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (I) the Conversion Rate in effect immediately prior to the close of business on such record date by (II) a fraction, the numerator of which shall be the 25-Day Average Market Price per share of the Common Stock on such record date, and the denominator of which shall be the 25-Day Average Market Price per share of the Common Stock on such record date less the then-fair market value (as determined by the Board of Directors in good faith, whose determinations shall be conclusive) of the portion of the assets, shares of its capital stock or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that after fixing a record date such distribution is not so made, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect if such record date had not been fixed. Such adjustment shall become effective immediately at the opening of business on the Business Day next following (except as provided in paragraph (9)(h)) 24 the record date for the determination of shareholders entitled to receive such distribution. For the purposes of this subparagraph (iii), the distribution of a Security, which is distributed not only to the holders of the Common Stock on the date fixed for the determination of shareholders entitled to such distribution of such Security, but also is distributed with each share of Common Stock delivered to a Person converting a share of 5% Preferred Stock after such determination date, shall not require an adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided, however, that on the date, if any, on which a Person converting a share of 5% Preferred Stock would no longer be entitled to receive such Security with a share of Common Stock (other than as a result of the termination of all such Securities), a distribution of such Securities shall be deemed to have occurred and the Conversion Rate shall be adjusted as provided in this subparagraph (iii) (and such day shall be deemed to be "the date fixed for the determination of shareholders entitled to receive such distribution" and "the record date" within the meaning of the three preceding sentences). If any rights or warrants referred to in this subparagraph (iii) shall expire unexercised after the same shall have been distributed or issued by the Corporation, the Conversion Rate shall be readjusted at the time of such expiration to the Conversion Rate that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (iv) In case the Corporation shall, by dividend or otherwise, distribute to all holders of its Common Stock cash in the amount per share that, together with the aggregate of the per share amounts of any other cash distributions to all holders of its Common Stock made within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the 25-Day Average Market Price immediately prior to the date of declaration of such dividend or distribution (excluding any dividend or distribution in connection with the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, and any cash that is distributed upon a merger, consolidation or other transaction for which an adjust ment pursuant to paragraph 9(e) is made), then, in such case, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the close of business on the Record Date for the cash dividend or distribution by a fraction the numerator of which shall be the Current Market Price of a share of the Common Stock on the Record Date and the denominator shall be such Current Market Price less the per share amount of cash so distributed during the 12-month period applicable to one share of Common Stock, such adjustment to be effective immediately prior to the opening of business on the Business Day following the Record Date; provided, 25 however, that in the event the denominator of the foregoing fraction is zero or negative, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of 5% Preferred Stock shall have the right to receive upon conversion, in addition to the shares of Common Stock to which the holder is entitled, the amount of cash such holder would have received had such holder converted each share of 5% Preferred Stock at the beginning of the 12-month period. In the event that such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conver sion Rate which would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if any adjustment is required to be made as set forth in this paragraph (9)(d)(iv), the calculation of any such adjustment shall include the amount of the quarterly cash dividends paid during the 12-month reference period only to the extent such dividends exceed the regular quarterly cash dividends paid during the 12 months preceding the 12-month reference period. For purposes of this paragraph (9)(d)(iv), "Record Date" shall mean, with respect to any dividend or distribution in which the holders of Common Stock have the right to receive cash, the date fixed for determination of shareholders entitled to receive such cash. In the event that at any time cash distributions to holders of Common Stock are not paid equally on all series of Common Stock, the provisions of this paragraph 9(d)(iv) will apply to any cash dividend or cash distribution on any series of Common Stock otherwise meeting the requirements of this paragraph, and shall be deemed amended to the extent necessary so that any adjustment required will be made on the basis of the cash dividend or cash distribution made on any such series. (v) In case of the consummation of a tender or exchange offer (other than an odd-lot tender offer) made by the Corporation or any subsidiary of the Corporation for all or any portion of the outstanding shares of Common Stock to the extent that the cash and fair market value (as determined in good faith by the Board of Directors of the Corporation, whose determination shall be conclusive and shall be described in a resolution of such Board) of any other consideration included in such payment per share of Common Stock at the last time (the "Expiration Time") tenders or exchanges may be made pursuant to such tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller excess being disregarded in computing the adjustment to the Conversion Rate provided in this paragraph (9)(d)(v), the first reported sale price per share of the Common Stock on the Trading Day next succeeding the Expiration Time, then the Conversion Rate shall be adjusted so that the same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior to the Expiration Time by a fraction the numerator of 26 which shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchase Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchase Shares) on the Expiration Time and the first reported sale price of the Common Stock on the Trading Day next succeeding the Expiration Time, and the denominator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) on the Expiration Time multiplied by the first reported sale price of the Common Stock on the Trading Day next succeeding the Expiration Time, such adjustment to become effective immediately prior to the opening of business on the day following the Expiration Time. (vi) No adjustment in the Conversion Rate shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in the Conversion Rate; provided, however, that any adjustments that by reason of this subparagraph (vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made, and provided further that any adjustment shall be required and made in accordance with the provisions of this paragraph (9) (other than this subparagraph (vi)) not later than such time as may be required in order to preserve the tax-free nature of a distribution for United States income tax purposes to the holders of shares of 5% Preferred Stock or Common Stock. Notwithstanding any other provisions of this paragraph (9), the Corporation shall not be required to make any adjustment of the Conversion Rate for the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in shares of Common Stock under such plan. All calculations under this paragraph (9) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph (9)(d) to the contrary notwithstanding, the Corporation shall be entitled, to the extent permitted by law, to make such adjustments in the Conversion Rate, in addition to those required by this paragraph (9)(d), as it in its discretion shall determine to be advisable in order that any stock dividends subdivision of shares, reclassification or combination of shares, distribution or rights or warrants to purchase stock or securities, or a distribution of other assets (other than cash dividends) hereafter made by the Corporation to its shareholders shall not be taxable. 27 (vii) In the event that, at any time as a result of shares of any other class of capital stock becoming issuable in exchange or substitution for or in lieu of shares of Common Stock or as a result of an adjustment made pursuant to the provisions of this paragraph (9)(d), the holder of 5% Preferred Stock upon subsequent conversion shall become entitled to receive any shares of capital stock of the Corporation other than Common Stock, the number of such other shares so receivable upon conversion of any shares of 5% Preferred Stock shall thereafter be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained herein. (e) If the Corporation shall be a party to any transaction (including without limitation, a merger, consolidation, sale of all or substantially all of the Corporation's assets or recapitalization of the Common Stock and excluding any transaction as to which paragraph (9)(d)(i) applies) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which shares of Common Stock shall be converted into the right to receive stock, securities or other property (including cash or any combination thereof), there shall be no adjustment to the Conversion Rate but each share of 5% Preferred Stock which is not converted into the right to receive stock, securities or other property in connection with such Transaction shall thereafter be convertible into the kind and amount of shares of stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of shares or fraction thereof of Common Stock into which one share of 5% Preferred Stock was convertible immediately prior to such Transaction, assuming such holder of Common Stock (i) is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be ("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of stock securities and other property (including cash) receivable upon such Transaction (provided that if the kind or amount of stock, securities and other property (including cash) receivable upon such Transaction is not the same for each share of Common Stock of the Corporation held immediately prior to such Transaction by other than a Constituent Person or an affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this paragraph (9)(e) the kind and amount of stock, securities and other property (including cash) receivable upon such Transaction by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). The provisions of this paragraph (9)(e) shall similarly apply to successive Transactions. 28 (f) If: (i) the Corporation shall declare a dividend (or any other distribution) on the Common Stock; or (ii) the Corporation shall authorize the granting to the holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of any class or any other rights or warrants; or (iii) there shall be any subdivision, combination or reclassi- fication of the Common Stock or any consolidation or merger to which the Corpora tion is a party and for which approval of any shareholders of the Corporation is required, or the sale or transfer of all or substantially all of the assets of the Corporation as an entirety; or (iv) there shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Corporation; then the Corporation shall cause to be filed with any transfer agent designated by the Corporation pursuant to paragraph (9)(b) and shall cause to be mailed to the holders of shares of the 5% Preferred Stock at their addresses as shown on the stock records of the Corporation, as promptly as possible, but at least ten days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend (or such other distribution) or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights or warrants are to be determined or (B) the date on which such subdivision, combination, reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up or other action is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such subdivision, combination, reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of any distribution, right, warrant subdivision, combination, reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, winding up or other action, or the vote upon any of the foregoing. 29 (g) Whenever the Conversion Rate is adjusted as herein provided, the Corporation shall prepare an officer's certificate with respect to such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the effective date of such adjustment and shall mail a copy of such officer's certificate to the holder of each share of 5% Preferred Stock at such holder's last address as shown on the stock records of the Corporation. If the Corporation shall have designated a transfer agent pursuant to paragraph (9)(b), it shall also promptly file with such transfer agent an officer's certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment which certificate shall be conclusive evidence of the correctness of such adjustment. (h) In any case in which paragraph (9)(d) provides that an adjustment shall become effective on the day next following a record date for an event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of 5% Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to paragraph (9)(c). (i) For purposes of this paragraph (9), the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation. The Corporation shall not pay a dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation. (j) There shall be no adjustment of the Conversion Rate in case of the issuance of any stock of the Corporation in a reorganization, acquisition or other similar transaction except as specifically set forth in this paragraph (9). If any single action would require adjustment of the Conversion Rate pursuant to more than one subparagraph of this paragraph (9), only one adjustment shall be made and such adjustment shall be the amount of adjustment that has the highest absolute value. (k) If the Corporation shall take any action affecting the Common Stock, other than action described in this paragraph (9), that in the opinion of the Board of Directors materially adversely affects the conversion rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors 30 may determine to be equitable in the circumstances; provided that the provisions of this paragraph (9)(k) shall not affect any rights the holders of 5% Preferred Stock may have at law or in equity. (l) (i) The Corporation covenants that it will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares of Common Stock or its issued shares of Common Stock held in its treasury, or both, for the purpose of effecting conversion of the 5% Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all outstanding shares of 5% Preferred Stock not theretofore converted. For purposes of this paragraph (9)(l) the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of 5% Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single holder. (ii) The Corporation covenants that any shares of Common Stock issued upon conversion of the 5% Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable. Before taking any action that would cause an adjustment increasing the Conversion Rate such that the quotient of $1,000.00 and the Conversion Rate would be reduced below the then-par value of the shares of Common Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation will take any corporate action that, in the opinion of its counsel, may be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock based upon such adjusted Conversion Rate. (iii) Prior to the delivery of any securities that the Corpora- tion shall be obligated to deliver upon conversion of the 5% Preferred Stock, the Corporation shall comply with all applicable federal and state laws and regulations which required action to be taken by the Corporation. (m) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property on conversion of the 5% Preferred Stock pursuant hereto; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the 5% Preferred Stock to be converted and no such issue or delivery shall be made unless and until the Person requesting such issue or delivery 31 has paid to the Corporation the amount of any such tax or established, to the satisfaction of the Corporation, that such tax has been paid. (10) Voting Rights. (a) The holders of record of shares of 5% Preferred Stock shall not be entitled to any voting rights except as hereinafter provided in this paragraph (10) or as otherwise provided by law. When and if the holders of 5% Preferred Stock are entitled to vote by law or pursuant to this paragraph (10), each holder will be entitled to one vote per share except that when any other series of preferred stock shall have the right to vote with the 5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock and other series shall have with respect to such matters one vote per $1,000 of stated liquidation preference. (b) Without the written consent of the holders of at least 662/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred Stock or the vote of holders of at least 662/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred Stock at a meeting of the holders of 5% Preferred Stock called for such purpose, the Corporation will not amend, alter or repeal any provision of the Restated Certificate of Incorporation (by merger or otherwise) so as to adversely affect the preferences, rights or powers of the 5% Preferred Stock; pro vided that any such amendment that changes the dividend payable on, or the aggregate Liquidation Rights of, the 5% Preferred Stock shall require the affirmative vote at a meeting of holders of 5% Preferred Stock called for such purpose or written consent of the holder of each share of 5% Preferred Stock. (c) Without the written consent of the holders of at least 66 2/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred Stock or the vote of holders of at least 662/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred Stock at a meeting of such holders called for such purpose, the Corporation will not issue any additional 5% Preferred Stock or create, authorize or issue any Parity Securities or Senior Securities or increase the authorized amount of any such other class or series; provided that this paragraph (9)(c) shall not limit the right of the Corporation to (i) issue additional shares of 5% Preferred Stock as dividends pursuant to paragraph (4) or (ii) to issue Parity Securities or Senior Securities in order to refinance, redeem or refund the 13% Preferred, the 5 1/4% Preferred, the 5% Convertible Preferred Series A or the 5% Convertible Preferred Series B, provided that in the case of a refinancing, redemption or refund of the 13% Preferred or the 5 1/4% Preferred, the maximum accrual value (i.e., the sum of stated value and maximum amount payable in kind over the term from issuance to first date of mandatory redemption or redemption at the option of the holder) of such Parity 32 Securities or Senior Securities issued by the Corporation in such refinancing, as shall be reflected on the Corporation's consolidated balance sheet prepared in accordance with GAAP applied on a basis consistent with the Corporation's prior practice, may not exceed the maximum accrual value of the 13% Preferred, or the 5 1/4% Preferred or the 5% Convertible Preferred respectively, as reflected on the Corporation's consolidated balance sheet as contained in the report filed by the Corporation with the United States Securities and Exchange Commission pursuant to the Exchange Act that is most recent prior to such refinancing. (d) Nothing in this paragraph (10) shall be in derogation of any rights that a holder of shares of 5% Preferred Stock may have in his capacity as a holder of shares of Common Stock. (e) Except as otherwise set forth in this paragraph (10) or as required by law, the holders of 5% Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers, except as provided by this Certificate or in any agreement the Corporation and a holder and the consent or vote of such holders shall not be required for the taking of any corporate action by the Corporation or the Board of Directors. The provisions of this paragraph (10) are in lieu of, and not in addition to, any voting rights specified in the Restated Certifi cate of Incorporation as applicable to a series of Preferred Stock. (11) Holding Company. Notwithstanding anything herein to the contrary, if the Corporation is reorganized such that the Common Stock is exchanged for the common stock of a new entity ("Holdco") whose common stock is traded on NASDAQ or another recognized securities exchange, then the Corporation, by notice to the holders of the 5% Preferred Stock but without any required consent on their part, may cause the exchange of this 5% Preferred Stock for 5% preferred stock of Holdco having the same terms, conditions, ranking and other rights as set forth herein, provided that (i) Holdco shall be incorporated under the Delaware General Corporation Law and be based in the United States and (ii) to the extent permitted by applicable law, the certificates representing shares of the 5% Preferred Stock prior to the formation of Holdco shall be deemed to represent shares of the new 5% preferred stock, and the holder thereof shall not be required to surrender or exchange its certificates representing shares of 5% Preferred Stock. (12) General Provisions. (a) The headings of the paragraphs, subpara graphs, clauses and subclauses of this Certificate of Designation are for 33 convenience of reference only and shall not define, limit or affect any of the provisions hereof. (b) The shares of 5% Preferred Stock shall bear the following legend: THE SHARES OF PREFERRED STOCK, PAR VALUE $0.01, OF THE CORPORATION (THE "PREFERRED STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR IN ACCORDANCE WITH ANY APPLICABLE EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, THE REGIS TRATION REQUIREMENTS UNDER THE ACT. THE TRANS FER OF THE PREFERRED STOCK EVIDENCED BY THIS CER TIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED FEBRUARY [ ], 2000, AS MAY BE AMENDED, AMONG THE CORPORATION AND CERTAIN PURCHASERS, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK UPON WRITTEN REQUEST TO THE CORPORATION. SO LONG AS ANY OF THE PREFERRED STOCK ARE RESTRICTED SECURITIES WITHIN THE MEANING OF RULE 144(a)(3) UNDER THE ACT, THE CORPORATION WILL, DURING ANY PERIOD IN WHICH (A) THE CORPORATION IS NOT SUBJECT TO AND IN COMPLIANCE WITH SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), OR (B) THE COR PORATION IS NOT EXEMPT FROM THE REPORTING OBLIGATIONS OF RULE 12g3-2(B) OF THE EXCHANGE ACT, PROVIDE TO EACH HOLDER OF SUCH RESTRICTED SECURITIES AND TO EACH PRO SPECTIVE PURCHASER (AS DESIGNATED BY SUCH HOLDER) OF SUCH RESTRICTED SECURITIES, UPON THE REQUEST OF SUCH HOLDER OR PROSPECTIVE PURCHASER, ANY 34 INFORMATION REQUIRED TO BE PROVIDED BY SUBJECTION (d)(4)(i) OF RULE 144(A) UNDER THE ACT. (c) If the Corporation shall have failed to declare or pay dividends as required pursuant to paragraph (4) hereof or shall have failed to discharge the Redemption Obligation pursuant to paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be entitled to receive, in addition to all other amounts required to be paid hereunder, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends (after taking into account revaluation of the assets and liabilities of the Corporation to the extent deemed reasonable by the Board of Directors of the Corporation after consultation with legal and financial advisors) but without regard to any contractual or other restrictions with respect thereto, cash dividends on (i) the aggregate dividends which the Corporation shall have failed to declare or pay or (ii) the aggregate Redemption Price together with accrued and unpaid dividends on the 5% Preferred Stock, as applicable, in each case at a rate of 2% per quarter, compounded quarterly, for the period during which the failure to pay dividends or failure to discharge the Redemption Obligation shall continue. (d) (i) Whenever in connection with any exchange or conversion of the 5% Preferred Stock for Eurotel Stock or Common Stock, as applicable, the Qualified Holder is required to surrender certificates representing such shares of 5% Preferred Stock, the Qualified Holder may, by written notice to the Corporation and its transfer agent, elect to retain such certificates. In such case, the certificates so retained by the Qualified Holder shall be deemed (as and to the extent permitted by the law of the jurisdiction of incorporation of Eurotel and with respect to Common Stock, Delaware) to represent, at and from the date of such exchange, the number of shares of Eurotel Stock or the Common Stock, as the case may be, issuable upon such exchange pursuant to paragraph (8) or conversion pursuant to paragraph (9). (ii) (A) A Qualified Holder which has previously elected to retain certificates representing the 5% Preferred Stock in accordance with para graph (12)(d)(i) upon exchange or conversion may subsequently elect to receive certificates representing the shares of Eurotel Stock or the Common Stock issued upon such exchange or conversion. To receive certificates representing such shares of Eurotel Stock or the Common Stock, as applicable, the holder of such certificates shall surrender it, duly endorsed or assigned to the Corporation or in blank, at the office of the Corporation, or to any transfer agent of the Corporation previously 35 designated by the Corporation for such purposes, with a written notice of that election. (B) Unless the certificates to be issued shall be registered in the same name as the name in which such surrendered certificates are registered, each certificate so surrendered shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the Qualified Holder or the Qualified Holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). All certificates so surrendered shall be canceled by the Corporation or the transfer agent. (C) As promptly as practicable after the surrender by the Qualified Holder of such certificates, the Corporation shall issue and shall deliver to such Qualified Holder, or on the Qualified Holder's written order, a certificate or certificates for the number of duly authorized, validly issued, fully paid and non-assessable shares of Eurotel Stock or the Common Stock, as applicable, represented by the certificates so surrendered. IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate of Designation to be signed by the undersigned this [ ] day of [ ], 2000. NTL INCORPORATED By: ---------------------------------------- Name: Richard J. Lubasch Title: Executive Vice President, General Counsel and Secretary EX-10.8 4 PUT AND CALL OPTION AGREEMENT Dated February 17, 2000 ----------------------------- BANQUE NATIONALE DE PARIS CREDIT AGRICOLE INDOSUEZ DEUTSCHE BANK AG PARIS BRANCH WESTDEUTSCHE LANDESBANK GIROZENTRALE PARIS BRANCH and FRANCE TELECOM ----------------------------- PUT AND CALL OPTION AGREEMENT ----------------------------- TABLE OF CONTENTS ----------------- Page ---- 1. Definitions and Interpretation.............................................1 2. Conditions.................................................................6 3. Put Option.................................................................7 4. Call Option................................................................8 5. Sale Price and Refund of Option Premium....................................9 6. Fees, Option Premium and Default Interest.................................10 7. Payments..................................................................11 8. Undertakings..............................................................12 9. Representations and Warranties............................................14 10. Put Acceleration Events...................................................17 11. Indemnity.................................................................20 12. Increased costs...........................................................22 13. Mitigation by the Finance Parties.........................................23 14. Costs and Expenses........................................................24 15. Possible Extension of the Call Option Period and of the Put Option Period.24 16. Assignments and Transfers.................................................26 17. Bank Representative.......................................................26 18. Accession of New Banks....................................................29 19. Applicable Law and Jurisdiction...........................................29 20. Entire Agreement..........................................................29 21. Notices...................................................................29 22. Remedies and Waivers......................................................31 EXHIBIT 3.3 NOTICE EXHIBIT 3.4 STOCK POWER EXHIBIT 18 FORM OF ACCESSION NOTICE TO BE DELIVERED BY AN ADDITIONAL BANK PURSUANT TO CLAUSE 18 THIS AGREEMENT (this "Agreement") is made on February 17, 2000 AMONG: BANQUE NATIONALE DE PARIS whose principal place of business is at 16 boulevard des Italiens, 75009 Paris France, represented by Lionel Bordarier and Christophe Delafontaine ("BNP"); CREDIT AGRICOLE INDOSUEZ whose principal place of business is at 9, Quai du President Paul Doumer, 92400 Courbevoie France, represented by Michel Chabanel and Damien Scaillierez ("CAI"); DEUTSCHE BANK AG acting through its Paris branch whose principal place of business is at 3 avenue de Friedland, 75008 Paris, represented by Benoit Deschamps and Antoine de Maistre ("DB"); WESTDEUTSCHE LANDESBANK GIROZENTRALE acting through its Paris branch whose principal place of business is at 15 avenue de Friedland, 75008 Paris, represented by Barbara Selves and Nadine Veldung ("West LB"); (BNP, CAI, DB and West LB are hereafter referred to each as a "Bank" and collectively as the "Banks") and FRANCE TELECOM whose principal place of business is at 6 Place d'Alleray, 75505 Paris, Cedex 15, France, represented by Eric Bouvier and _______________________ ("France Telecom"). IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED, IT IS HEREBY AGREED as follows: 1. Definitions and Interpretation 1.1 Definitions The following words and expressions where used in this Agreement have the meanings given to them below: "Additional Bank" has the meaning set forth in clause 18 Accession of New Banks; "Affiliate" means in relation to any person, a Subsidiary of that person or a Holding Company of that Person or any other Subsidiary of that Holding Company; "Banks" has the meaning set forth at the beginning of this Agreement to also include any Additional Bank after its accession to this Agreement in accordance with the provisions of clause 18 Accession of New Banks; "Bank Representative" means CAI, appointed pursuant to clause 17 Bank Representative in its separate capacity to act as the Banks' representative or any successor named as Bank Representative pursuant to the terms of this Agreement; "Borrowed Monies Indebtedness" means any indebtedness of any person: (i) for monies borrowed; (ii) whether actual or contingent under any guarantee, security, indemnity or other commitment designed to assure any creditor against loss in respect of any Borrowed Monies Indebtedness of any third party; (iii) under any acceptance credit having a term exceeding 90 days from the date of issue; (iv) under any debenture, bond, note, bill of exchange or commercial paper; (v) for amounts actually owing in respect of any interest rate swap or cross-currency swap or forward sale or purchase contract; or (vi) in respect of the payment obligations under any lease entered into for the purpose of obtaining or raising finance; "Business Day" means any day on which banks are open for general business in New York City and Paris, excluding Saturdays and Sundays; "Call Completion Date" has the meaning set forth in clause 4.2; "Call Option" means the right of France Telecom (exercisable during the Call Option Period) to acquire all (but not less than all) of the Option Stock from the Banks at a price equal to the sum of all Sale Prices as set forth in clause 4.1; "Call Option Period" means the period during which the Call Option can be exercised (within the meaning of clause 1.2.5.), being the period commencing on the Date of Issue and ending 5 Business Days before the Termination Date; "Completion Date" means any Call Completion Date or Put Completion Date being the day on which France Telecom completes the sale and purchase of Option Stock from Banks; 2 "Consolidated Net Worth" means the aggregate of the amount paid up or credited as paid up on the issued ordinary share capital of France Telecom including any capital reserves and retained earnings deducting (to the extent included) any minority interests, all as determined by reference to its most recent consolidated financial statements prepared in accordance with generally accepted accounting principles in France relating to commercial and industrial companies; "Date of Issue" means the date of issue, sale and delivery of the Preferred Stock pursuant to the Purchase Agreement; "Dollars" and "US$" mean the lawful currency of the United States of America; "Finance Party" means the Bank Representative or a Bank; "Group" means France Telecom and its Subsidiaries; "Holding Company" means in relation to a company or corporation, any other company or corporation in respect of which the former is a Subsidiary; "LIBOR" means in relation to each Premium Period or other period concerned (which shall not vary during such period when fixed), the London Interbank Offered Rate for deposits in Dollars for an equivalent period (or, for any period which is not exactly divisible by a month, for a period rounded upwards to the nearest month) as displayed on the relevant page (T 3750) of the Reuters Monitor Money Rates Service (or, if the agreed page is replaced or that service is unavailable, such alternative page or service as the Bank Representative may select) at or about 11 A.M. on the second London banking day before the first day of such period; if no rate available as provided above, LIBOR means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Bank Representative at its request quoted by the Reference Banks to leading banks in the London interbank market at or about 11 A.M on the second London banking day before the first day of the period concerned for deposits in Dollars for an equivalent period; "Majority Banks" means as long as the number of Banks is four, at least two Banks and at any other time, Banks the sum of whose Purchase Prices represent an amount equal to or greater than 50% of the sum of all Purchase Prices at such time; "Market Disruption Event" means: (i) when LIBOR is to be determined by reference to the Reference Banks as provided in the definition of LIBOR and none or only one of the Reference Banks supplies a rate to the Bank Representative to determine LIBOR for the relevant Premium Period or other period concerned, or (ii) before close of business day in London on the day where LIBOR must be determined for a given Premium Period or for another period concerned, the Bank Representative receives notification 3 from a Bank or Banks that the cost to it or to them of obtaining matching deposits in the London Interbank Market would be in excess of LIBOR; "NTL" means NTL Incorporated, a Delaware corporation (or its successor company); "Option Premium" means the premium from time to time payable pursuant to clause 6 Fees, Option Premium and Default Interest; "Option Stock" means the aggregate of 275,000 shares of Preferred Stock held by BNP, 275,000 shares of Preferred Stock held by CAI, 275,000 shares of Preferred Stock held by DB and 275,000 shares of Preferred Stock held by West LB, the number of Preferred Stock held by each Additional Bank, if any, and (in each case) shall include any further or additional securities allotted in respect thereof (whether by way of distribution, bonus or otherwise) or in substitution therefor (whether as a result of conversion, the implementation of a scheme of arrangement or similar proposal or otherwise howsoever); "Overnight Rate" means the rate quoted daily as the overnight rate in the London interbank market for deposits in Dollars and listed in the relevant page of the Reuters Monitor Money Rates Service; "Preferred Stock" means the series of redeemable 5% preferred shares of NTL issuable to and purchasable by the Banks and France Telecom under the Purchase Agreement; "Premium Payment Date" means each of the dates as set out in the table under the definition of "Relevant Margin"; "Premium Period" means the period between each Premium Payment Date, other than the fourth Premium Period, which will be the period between the fourth Premium Payment Date and the date two years after the Date of Issue; "Prepaid LIBOR" means in relation to each Premium Period or other period concerned, the rate equivalent in present value to the LIBOR rate determined in actuarial terms, to be calculated as follows: PL = LIBOR 6 months X 360 -------------------------- 360 + (LIBOR 6 months X j) where "PL" is the Prepaid LIBOR and "j" is the number of days comprising the period for which Prepaid LIBOR is calculated. "Protected Party" means a Finance Party which is or will be, for or on account of Tax, subject to any liability or required to make any payment in relation to a sum received or receivable (or any sum deemed for the purpose of Tax to be received or receivable) under this Agreement or in connection with the Option Stock (including any dividend related thereto); 4 "Purchase Agreement" means the agreement dated the date of this Agreement among NTL, France Telecom and the Banks (including the attached Certificate of Designation, as defined in the Purchase Agreement) relating to the issuance by NTL to, and the purchase by France Telecom (or its assignees) and the Banks of, the Preferred Stock; "Purchase Price" means with respect to each Bank the purchase price paid by such Bank to NTL to purchase the Preferred Stock held by such Bank (pursuant to the Purchase Agreement), such Purchase Price to be in the amount of US$ 275,000,000 in the case of each of BNP, CAI, DB and West LB; "Put Acceleration Events" means any of the events or circumstances set out in clause 10 Put Acceleration Events; "Put Completion Date" has the meaning set forth in clause 3.3; "Put Option" means the right of each Bank to require France Telecom to acquire all (but not less than all) of the Option Stock it holds as set forth in clause 3.1; "Put Option Period" means the period during which the Put Option can be exercised (within the meaning of clause 1.2.5), being the period commencing on the day 20 Business Days before the Termination Date and ending on the day which is 8 Business Days before the Termination Date; "Reference Banks" means, in relation to LIBOR, the principal London offices of National Westminster Bank, plc, Dresdner Bank, AG and Credit Lyonnais or such other banks as may be appointed by the Bank Representative in consultation with France Telecom; "Relevant Margin" means the margin applicable to the calculation of the Option Premium in respect of each Premium Period, as more particularly set out below:
-------------------- --------------------------- --------------------------- ----------------------------- Premium Period Premium Payment Dates Last day of the Premium Relevant Margin Period -------------------- --------------------------- --------------------------- ----------------------------- First The Date of Issue 6 months after the Date 0.15 per cent per annum of Issue -------------------- --------------------------- --------------------------- ----------------------------- Second 6 months after the Date 1 year after the Date of 0.15 per cent per annum of Issue Issue -------------------- --------------------------- --------------------------- ----------------------------- Third 1 year after the Date of 18 months after the Date 0.25 per cent per annum Issue of Issue -------------------- --------------------------- --------------------------- ----------------------------- -------------------- --------------------------- --------------------------- ----------------------------- Fourth 18 months after the Date 2 years after the Date of 0.25 per cent per annum of Issue (the last Issue Premium Payment Date) -------------------- --------------------------- --------------------------- -----------------------------
5 "Sale Price" means the price to be paid for the Option Stock held by each Bank on the Completion Date as described in clause 5 Sale Price and Refund of Option Premium; "Subsidiary" means with respect to a company or corporation, any company or corporation (i) which is controlled, directly or indirectly, by the first-mentioned company or corporation; (ii) more than half the issued share capital of which is beneficially owned, directly or indirectly, by the first-mentioned company or corporation; or (iii) which is a subsidiary of another Subsidiary of the first-mentioned company or corporation and, for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation has the right or power to direct its affairs and/or has the right to elect a majority of its board of directors or any equivalent body or its chief executive officer; "Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same); "Termination Date" means the second anniversary of the Date of Issue. 1.2 Interpretation 1.2.1 The headings used in this Agreement are for convenience only and shall not affect its meaning. 1.2.2 References to a clause are (unless otherwise stated) to a clause of this Agreement. 1.2.3 Words importing one gender shall (where appropriate) include any other gender and words importing the singular shall (where appropriate) include the plural and vice versa. 1.2.4 References to a time in this Agreement are references to the time prevailing in New York City, except with respect to the determination of LIBOR where the time referred to is the time prevailing in London and except with respect to the application of clause 21.2.3 where the time referred to is the time prevailing in Paris. 1.2.5 Any reference to the "exercise" of the Call Option or of the Put Option shall mean the sending of the notices provided respectively under clauses 4.2, 3.3 or 10.2. 6 2. Conditions 2.1 The provisions of this Agreement are conditional upon the Option Stock being sold to the Banks in accordance with the terms of the Purchase Agreement and issued with the terms set forth in the Certificate of Designation as defined in and attached to the Purchase Agreement. 2.2 If the condition described in clause 2.1 is not satisfied on or before June 29, 2000 the provisions of this Agreement shall cease to have any effect with the exception of the provisions of clauses 11 Indemnity, 14 Costs and Expenses and 19 Applicable Law and Jurisdiction. 3. Put Option 3.1 France Telecom hereby grants to each Bank the right to require France Telecom to purchase all (but not less than all) of the Option Stock that such Bank holds at the Sale Price. 3.2 The Put Option may only be exercised by each Bank: (a) during the Put Option Period; or (b) during any other period in which a Put Acceleration Event has occurred and is continuing. 3.3 The Put Option shall be irrevocably exercisable by sending a notice in the form attached hereto as Exhibit 3.3 given either by each Bank or by the Bank Representative on behalf of all the Banks in writing to France Telecom at any time during the Put Option Period or in any period in which a Put Acceleration Event has occurred and is continuing. Subject to the provisions of clause 15 Possible extension of the Call Option Period and of the Put Option Period, if, at the expiry of the Put Option Period, the Put Option shall not have been so exercised by a Bank, it shall lapse for such Bank. Each notice shall specify the date (the "Put Completion Date"), which shall be not less than 8 Business Days from the date of the notice and which shall be at the latest on the Termination Date (except in case of extension of the Put Option Period as provided in clause 15.1), for the completion of the sale and purchase of the Option Stock concerned by such notice. Each Bank exercising its Put Option shall notify such exercise to the Bank Representative and all the other Banks without delay. 3.4 Completion of the sale and purchase of any Option Stock concerned by a notice received by France Telecom pursuant to clause 3.3 following the exercise of the Put Option shall take place on the Put Completion Date at the office of the Bank Representative or at such other place as the Bank Representative and France Telecom shall agree. At that time the Bank Representative (or, in the case where the notice referred to in clause 3.3 was not sent by the Bank Representative, each Bank having sent such notice) shall deliver to France Telecom duly executed stock powers in the form of Exhibit 3.4 for the Option Stock concerned by the notice(s) sent pursuant to clause 3.3 to effect the transfer of good and marketable title to all such Option Stock free and clear of any and all liens and encumbrances created by 7 the Banks together with all share certificates in respect of the same, against payment to each Bank concerned by such notice (as set forth therein) of the Sale Price attributed to such Bank in respect of all its Option Stock. Completion of the sale and purchase of the Option Stock pursuant to clause 4.3 and 10.2 of this Agreement shall be conducted in accordance with the provisions of this clause 3.4. 3.5 The rights of each Bank under or in connection with this clause 3 Put Option and more generally under or in connection with this Agreement are separate and independent rights and any debt arising under this Agreement to a Bank from France Telecom shall be a separate and independent debt. 3.6 A Finance Party may, except as otherwise stated in this Agreement, separately enforce its rights under this Agreement. 3.7 The obligation of France Telecom to purchase Option Stock from a Bank under this clause 3 Put Option and under clause 10.1 shall be conditioned upon such Bank not having as of the Put Completion Date relating to such Option Stock (i) agreed to amend, modify or terminate, or waived any condition or right of such Bank under, the Purchase Agreement, without the written consent of France Telecom, or (ii) sold, assigned, transferred or created a lien, encumbrance or charge with respect to any of its Option Stock or any of its rights thereto which continues to exist on the Put Completion Date. 4. Call Option 4.1 In consideration of the payment of the option fees and of the Option Premiums as provided in clause 6 Fees, Option Premium and Default Interest, the Banks hereby grant to France Telecom or any Subsidiary of France Telecom designated in writing by France Telecom to the Banks in the notice given by France Telecom pursuant to clause 4.2 the right (exercisable during the Call Option Period) to purchase all (but not some only) of the Option Stock at a price equal to the sum of all Sale Prices. 4.2 The Call Option shall be irrevocably exercisable by sending a notice in the form attached hereto as Exhibit 3.3 given by France Telecom in writing to the Bank Representative at any time during the Call Option Period and exclusively for all the Option Stock at the same time. Any partial exercise of the Call Option shall be null and void, except as permitted under clauses 4.5 and 4.6. If at the expiry of the Call Option Period the Call Option shall not have been so exercised it shall lapse. The notice shall specify the date (the "Call Completion Date"), which shall be not less than 5 Business Days from the date of the notice and which shall be at the latest on the Termination Date (except in case of extension of the Call Option Period as provided in clause 15.1), for the completion of the sale and purchase of the Option Stock. 4.3 Completion of the sale and purchase of the Option Stock following the exercise of the Call Option shall take place on the Call Completion Date in accordance with the procedures set out in clause 3.4 provided that, the duly executed stock powers and the share certificates shall be delivered to France Telecom or to 8 the Subsidiary of France Telecom designated in writing by France Telecom to the Banks as provided in clause 4.1. 4.4 The obligations of each Bank under this clause 4 Call Option and more generally under this Agreement are several. Failure by a Bank to perform its obligations under this Agreement does not affect the obligations of any other party to this Agreement. No Finance Party is responsible for the obligations of any other Finance Party under this Agreement. 4.5 Notwithstanding anything to the contrary contained herein, if the Put Option is exercised by some but not all of the Banks, France Telecom shall have the right to exercise the Call Option hereunder with respect to the Option Stock held by the Banks that did not exercise the Put Option at a price equal to the sum of Sale Prices with respect to such remaining Option Stock. 4.6 Notwithstanding anything to the contrary contained herein, if some but not all of the Banks give notice pursuant to clause 3.3 of the exercise of their Put Option, the completion of the sale and purchase of the Option Stock concerned to take place on a Put Completion Date specified in such notice, France Telecom shall have the right to exercise the Call Option hereunder with respect to the Option Stock held by the Banks having given such notice by giving notice pursuant to clause 4.2 to each such Banks (with a copy to the Bank Representative) for a Call Completion Date which shall be on or before the Put Completion Date specified in the notice given by those Banks having so notified their exercise of the Put Option. 5. Sale Price and Refund of Option Premium 5.1 The Sale Price for the Option Stock held by each Bank shall be equal to its Purchase Price. 5.2 If a Put Option or a Call Option is exercised pursuant to this Agreement, each Bank concerned by such Put Option or Call Option will on the corresponding Completion Date refund to France Telecom (such refund to be paid by partial offset of the Sale Price stated in clause 5.1) an amount equal to the equivalent in present value (determined in actuarial terms) to the Option Premium paid by France Telecom to such Bank on the most recent Premium Payment Date, to the extent to which such payment only accrued after the Completion Date, such amount to be calculated as follows: PP x L' x j ------------ 360 + L' x j where "PP" is Purchase Price, " L' " is the LIBOR minus 0.10 per cent per annum plus the Relevant Margin notified by the Bank Representative for the period remaining between the corresponding Completion Date and the next Premium Payment Date, and "j" is the number of days comprising the period for which "L'" is calculated. For the avoidance of doubt, such formula also covers any so-called "funding breakage costs". 9 If a Market Disruption Event occurs and the Bank Representative or France Telecom so requires, the Bank Representative and France Telecom shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing to a substitute basis for determining the rate to be used to calculate the refund. Any alternative basis agreed pursuant to the preceding paragraph shall, with the prior consent of all the Banks and France Telecom, be binding on all parties. 6. Fees, Option Premium and Default Interest 6.1 France Telecom, in respect of the Call Option, shall pay to the Bank Representative on behalf of (and for distribution to) the Banks (i) on the date of signature of this Agreement an option fee equal to 0.10 per cent of the aggregate amount of the Purchase Prices, (ii) on the earlier of April 30, 2000 and the Date of Issue an option fee equal to 0.05 per cent of the aggregate amount of the Purchase Prices, (iii) on the Date of Issue, an additional option fee equal to 0.05 per cent of the aggregate amount of the Purchase Prices, and (iv) on the third Premium Payment Date if the Call Completion Date has not occurred prior to such date an option fee equal to 0.10 per cent of the aggregate amount of the Purchase Prices. 6.2 France Telecom shall pay to the Bank Representative on behalf of (and for distribution to) the Banks on each Premium Payment Date (for those Banks as to which the Completion Date has not occurred prior thereto) an Option Premium (calculated in accordance with this clause 6.2) in respect of the Call Option. 6.2.1 The Option Premium payable on any given Premium Payment Date shall be equal to the interest which would accrue on a principal amount equal to the aggregate amount of the Purchase Prices attributable to the Option Stock for which the Completion Date has not occurred in respect of the Premium Period commencing on such Premium Payment Date calculated at the rate per annum determined by the Bank Representative to be the aggregate of (a) the Relevant Margin and (b) Prepaid LIBOR. 6.2.2 The first Premium Period will commence on the Date of Issue and end on the date falling six months after that date. Each subsequent Premium Period in respect of this Agreement will commence on the last day of the previous Premium Period and shall end on the date falling six months after such date. 6.2.3 Subject to clause 6.2.4 if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation as provided in the definition of LIBOR, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks. 6.2.4 Unless otherwise determined in accordance with clause 6.2.5, if a Market Disruption Event occurs for any Premium Period, then the Option Premium payable to each Bank on the 10 corresponding Premium Payment Date shall be equal to the interest which would accrue on a principal amount equal to the amount of the Purchase Price paid by such Bank in respect of the Premium Period commencing on such Premium Payment Date calculated at the rate per annum determined by the Bank Representative to be the aggregate of (a) the Relevant Margin and (b) the rate equivalent in actuarial terms (as provided in the definition of Prepaid LIBOR) to the rate notified to the Bank Representative by such Bank as soon as practicable and in any event before the Option Premium is due to be paid in respect of the Premium Period, to be that which expresses as a percentage rate per annum the cost to that Bank of funding its Purchase Price from whatever sources it may reasonably select. 6.2.5 If a Market Disruption Event occurs and the Bank Representative or France Telecom so requires, the Bank Representative and France Telecom shall enter into negotiations (for a period of not more than thirty (30) days) with a view to agreeing to a substitute basis for determining the rate to be used to calculate the Option Premium. Any alternative basis agreed pursuant to the preceding paragraph shall, with the prior consent of all the Banks and France Telecom, be binding on all parties. 6.2.6 France Telecom shall compensate the Bank Representative (to the extent not otherwise reimbursed under this Agreement) and each Bank upon written request from the Bank Representative (which request shall set forth the basis for such compensation and shall, absent manifest error, bind all parties hereto), for all losses (including loss of reasonably anticipated profits), reasonable expenses and liabilities (including any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by a Bank to fund its Purchase Price) which such Bank sustains: (i) as a consequence of the occurrence of a Put Acceleration Event as provided in clause 10 Put Acceleration Events; or (ii) as a consequence of a failure by France Telecom to pay any amount under this Agreement on its due date. 6.3 If either party fails to pay any sum (including any sum payable pursuant to this clause 6.3) on its due date for payment under this Agreement, such party shall pay interest on such sum at a rate equal to the sum of 1.25 per cent per annum and of the Overnight Rate calculated on the basis of actual days elapsed from the due date up to the date of actual payment (as well after as before judgment). Default interest under this clause 6.3 shall be due and payable on the last day of each such period and at least on the last day of every successive three-month period following the due date or, if earlier, on the date on which the sum in respect of which such default interest is accruing shall actually be paid. 11 Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of such successive three-month period applicable to that overdue amount until actual payment but will remain immediately due and payable. 7. Payments 7.1 Except as provided in clause 5.2, all payments by France Telecom hereunder shall be made without set-off or counterclaim and, subject to clause 7.2., free and clear of any deductions or withholdings, in Dollars in same day funds on the due date to the account of the Bank Representative notified to France Telecom by the Bank Representative. 7.2 If at any time France Telecom is required by law to make any deduction or withholding in respect of any Taxes from any payment due to any Finance Party hereunder, the sum due from France Telecom in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Bank Representative receives on the relevant due date and retains (free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made. France Telecom shall promptly deliver to the Bank Representative receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any such deduction or withholding. France Telecom shall promptly upon becoming aware that it must make a Tax deduction or withholding (or that there is any change in the rate or the basis of a Tax deduction or withholding) notify the Bank Representative accordingly. If France Telecom is required to make a Tax deduction or withholding, France Telecom shall make such Tax Deduction or withholding within the time allowed and in the minimum amount required by law. Within 30 days of making either a Tax deduction or withholding or any payment required in connection with a Tax deduction or withholding, France Telecom shall deliver to the Bank Representative evidence reasonably satisfactory to the Bank entitled to the payment that the Tax deduction or withholding has been made or (as applicable) any appropriate payment paid to the relevant tax authority. 7.3 When any payment would otherwise be due on a day which is not a Business Day, the next following Business Day shall be substituted for such day, unless such Business Day falls in the next calendar month, in which case the immediately preceding Business Day shall be substituted therefor. 7.4 Option Premium, default interest and other sums computed on an annualized basis shall accrue from day to day and be calculated on the actual number of days elapsed and on the basis of a 360-day year. 12 7.5 Any certificate or determination of the Bank Representative as to any amount payable or required to be calculated hereunder shall be conclusive and binding on France Telecom and on the Banks in the absence of manifest error. 8. Undertakings 8.1 France Telecom undertakes with each Bank that: 8.1.1 it shall inform the Bank Representative of any Put Acceleration Event or any event which with the giving of notice or lapse of time or both would constitute a Put Acceleration Event forthwith upon becoming aware thereof; 8.1.2 it shall provide the Banks with such financial and other information concerning France Telecom and NTL (to the extent that France Telecom has the right to provide any such information with respect to NTL without violating any confidentiality or fiduciary obligation) and their respective affairs as the Bank Representative may from time to time reasonably require; 8.1.3 it shall obtain, comply with the terms of and do all that is necessary to maintain in full force and effect all authorizations, approvals, licenses and consents required in or by the laws and regulations of France or of the United States of America or any subdivision thereof, to enable it lawfully to enter into and perform its obligations under this Agreement and the Purchase Agreement or to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement and, to the extent applicable, of the Purchase Agreement; 8.1.4 it shall ensure that at all times the claims of the Banks against it under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors; 8.1.5 it shall not, without the prior written consent of the Majority Banks, create or permit to subsist any encumbrance in respect of Borrowed Monies Indebtedness over all or any of its present or future revenues or assets other than: (a) any lien or right of set-off arising solely by operation of law and not by reason of any default; (b) subject to clause 8.1.6, any banker's right of set-off or netting against amounts credited to accounts held by any Group member for amounts outstanding or liabilities of itself or any other Group member which is entered into in the ordinary course of business or as a result of normal banking arrangements or any banker's lien created in respect of any such set-off or netting arrangements but excluding arrangements which are established primarily for the purpose of affording a preferential position to the relevant creditor; 13 (c) any lien incurred in respect of purchase money indebtedness applied for the acquisition of an asset by France Telecom or any Subsidiary of France Telecom; (d) any lien incurred to finance any development or alteration to any property which is directly owned by France Telecom or any Subsidiary of France Telecom; (e) any lien attached to any asset of any Subsidiary prior to its acquisition by France Telecom; (f) any encumbrance not covered by paragraphs (a) to (e) above, provided that the aggregate amount of Borrowed Monies Indebtedness secured by all encumbrances falling within this paragraph (f) does not, at any time, exceed 25 per cent of Consolidated Net Worth; or (g) renewals of any encumbrances referred to in paragraphs (a) to (f) above; 8.1.6 it shall make sure that its obligations pursuant to this Agreement shall be appropriately reflected in its accounts, including in its audited annual accounts, and if treated off-balance sheet by an appropriate note to the financial statements; and 8.1.7 it shall duly perform and uphold its undertakings and agreements under the Purchase Agreement. 8.2 Each Bank undertakes with France Telecom that it will not, prior to the Completion Date on which the sale of its Option Stock is completed or, if later, the Termination Date, at any time sell, assign, transfer, create a lien with respect to, encumber, charge, exchange or convert any of its Option Stock or any of its rights thereto unless either: 8.2.1 a Put Acceleration Event has occurred and (i) has not been remedied as per clause 10.1.2 or (ii) France Telecom shall have not performed its obligation to purchase Option Stock upon exercise by any of the Banks of the Put Option; or 8.2.2 the prior written consent of France Telecom has been obtained. 9. Representations and Warranties 9.1 France Telecom represents and warrants to each Bank as of the date hereof, and will be deemed to represent and warrant to each Bank on each Premium Payment Date and on each Completion Date, that: 9.1.1 France Telecom is duly incorporated and validly existing under the laws of France and has power to execute, deliver and perform its obligations under this Agreement; all necessary action has been taken by it to authorize the execution, delivery and performance of this 14 Agreement, no limitation on its powers will be exceeded as a result of transactions under this Agreement and this Agreement constitutes valid and legally binding obligations of France Telecom enforceable in accordance with its terms; 9.1.2 the execution, delivery and performance of this Agreement by France Telecom will not contravene any existing law, regulation or authorization to which it is subject, result in any material breach of or default under any agreement or other instrument to which France Telecom is a party or is subject or contravene any provision of France Telecom's corporate documents or to the best knowledge of France Telecom, without having made any specific investigation thereof, result in any material breach of or material default under any agreement or other instrument to which NTL is a party or is subject; 9.1.3 every authorization of, or registration with, governmental or public bodies or courts required by France Telecom in connection with the execution, delivery, performance, validity, enforceability or admissibility in evidence of this Agreement has been obtained or made and is in full force and effect and there has been no default in the observance of any conditions imposed in connection therewith; 9.1.4 no event or circumstance which constitutes or which with the giving of notice or lapse of time or both would constitute a Put Acceleration Event has occurred and is continuing; 9.1.5 under the laws of France in force at the date hereof, it will not be required to make any deduction or withholding from any payment it may make hereunder; 9.1.6 under the laws of France and of the State of New York in force at the date hereof, the claims of the Banks against France Telecom under this Agreement will rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for claims that may arise by operation of law; 9.1.7 it irrevocably waives any immunity to jurisdiction which it has or hereafter may acquire (including any immunity, sovereign or otherwise pursuant to public law or status, to pre-judgment attachment and execution) in any legal suit, action or proceeding against it arising out of or based on this Agreement or the transactions contemplated hereby that is instituted in the Supreme Court of the State of New York, County of New York or the U.S. District Court for the Southern District of New York, or in any competent court of the French Republic or any other jurisdiction (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property. Without limiting the generality of the foregoing, France Telecom agrees that the waivers set forth in this clause 9.1.7 shall have the fullest scope permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and are intended to be irrevocable for purposes of such act; 15 9.1.8 it has not taken any corporate action nor have any other steps been taken or legal proceedings been started or (to its best knowledge and belief) threatened against it for its winding-up, dissolution (liquidation judiciaire), administration or reorganization (redressement judiciaire) or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its assets or revenues; 9.1.9 it is not in breach of or in default under any agreement to which it is a party or which is binding on it or any of its assets to an extent or in a manner which is reasonably likely to have a material adverse effect on its ability to perform its obligations hereunder; 9.1.10 no action or administrative proceeding of or before any court or agency which is reasonably likely to have a material adverse effect on its ability to perform its obligations hereunder has been started or (to the best of its knowledge and belief) threatened against it; 9.1.11 all of the written information supplied by it to the Banks in connection herewith is true, complete and accurate in all material respects and it is not aware of any material facts or circumstances that have not been disclosed to the Banks and which might, if disclosed, adversely affect the decision of a person considering whether or not to provide financing to France Telecom or to acquire the Preferred Stock; 9.1.12 except with respect to encumbrances of the type permitted by clause 8.1.5, to the best knowledge of France Telecom, no encumbrance exists over all or any of its material present or future revenues or assets; 9.1.13 the execution of this Agreement and of the Purchase Agreement and its exercise of its rights and performance of its obligations hereunder and thereunder will not result in the existence of nor oblige it to create any encumbrance over all or any of its present or future revenues or assets; 9.1.14 the execution of this Agreement and of the Purchase Agreement constitutes, and its exercise of its rights and performance of its obligations hereunder and thereunder will constitute, private and commercial acts done and performed for private and commercial purposes; 9.1.15 it has not granted any rights of set-off under or pursuant to the terms of any outstanding credit facilities, bond documentation or note documentation, excluding any notes with a maturity of less than three years, to which it is a party; 9.1.16 it has made its own investigation and assessment of the creditworthiness and general condition of NTL; it shall be solely responsible for continuing to evaluate the foregoing for its own account and shall not rely on any Finance Party for the furnishing of any assessment, information or commentary whatsoever in respect thereof and it has not relied on any 16 statement or information given by any Finance Party in deciding to enter into this Agreement or the Purchase Agreement; and 9.1.17 the representations and warranties of France Telecom under the Purchase Agreement with respect to the purchase by France Telecom from the Banks of the Preferred Shares (as such term is defined in the Purchase Agreement) are true and accurate. 9.2 Each Bank represents and warrants to France Telecom as of the date hereof and on the Completion Date on which the sale of its Option Stock is completed that: 9.2.1 the Purchase Agreement has not been amended, modified or terminated, and no provision or condition thereof or any right of a Bank thereunder has been waived, without the written consent of France Telecom; 9.2.2 each Bank is duly incorporated and validly existing under the laws of France or Germany, as the case may be, has on the date hereof and on the Completion Date the full corporate power and authority to make, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. 10. Put Acceleration Events 10.1 Each Bank may, and if so instructed by all the Banks, the Bank Representative shall, without prejudice to the Banks' other rights hereunder, require France Telecom to acquire the Option Stock held by such Bank (if requested by one Bank) or all the Option Stock (if requested by the Bank Representative) after any of the following events shall have occurred and so long as the same is subsisting, provided that with respect to any event listed in clause 10.1.2, 10.1.3, 10.1.4, 10.1.5, 10.1.8, 10.1.9, 10.1.11 and 10.1.14 the Majority Banks shall have to decide that such an event has occurred and constitutes a Put Acceleration Event prior to any request by any Bank or the Bank Representative that France Telecom acquires Option Stock; 10.1.1 France Telecom fails to pay any sum payable by it under this Agreement in the currency, at the time and in the manner specified in this Agreement unless for sums other than any Sale Price or any Option Premium, such failure to pay is remedied within 10 Business Days of the occurrence thereof; or 10.1.2 France Telecom defaults in the due performance or observance of any other of its obligations under this Agreement or, as long as it is a party to the Purchase Agreement, under the Purchase Agreement and (if such default is in the opinion of the Majority Banks capable of remedy) such default shall not have been remedied within 10 Business Days following written notice thereof to France Telecom by the Bank Representative; or 17 10.1.3 any representation or warranty made or deemed to be made or repeated by France Telecom in or pursuant to this Agreement or in or pursuant to the Purchase Agreement is or proves to have been incorrect or misleading in any material respect; or 10.1.4 it becomes unlawful for France Telecom to perform any or all its obligations under this Agreement or, as long as it is a party to the Purchase Agreement, under the Purchase Agreement; or 10.1.5 France Telecom or NTL is unable to pay its debts as they fall due (in the case of France Telecom is in cessation de paiements), commences negotiations with its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of or a composition with its creditors; or 10.1.6 France Telecom or NTL takes any corporate action or other steps are taken or legal proceedings (which proceedings are not discharged within 60 days from the date of their commencement) are started for its redressement judiciaire, liquidation judiciaire, winding-up, dissolution, administration or reorganization in a bankruptcy or insolvency proceeding; or 10.1.7 France Telecom or NTL takes any corporate action or other steps are taken or legal proceedings are started for the appointment of an administrateur judiciaire, receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its revenues and assets; or 10.1.8 any execution or distress is levied against, or an encumbrancer takes possession of the whole or any material part of, the property, undertaking or assets of France Telecom or NTL; or 10.1.9 NTL defaults in any material respect in the due performance or observance of any of its obligations under the Purchase Agreement and (if such default is in the opinion of the Majority Banks capable of remedy) such default shall not have been remedied within 10 Business Days following written notice thereof to France Telecom, with a copy thereof sent at the same time to NTL at its address set forth in the Purchase Agreement, or any representation or warranty made or deemed to be made or repeated by NTL in or pursuant to Section 1 of the Purchase Agreement is or proves to have been incorrect or misleading in any material respect; or 10.1.10 France Telecom repudiates this Agreement; or 10.1.11 at any time any act, condition or thing required to be done, fulfilled or performed in order (a) to enable France Telecom lawfully to enter into, exercise its rights under and perform the obligations expressed to be assumed by it in this Agreement or under the Purchase Agreement, (b) to ensure that the obligations expressed to be assumed by France Telecom in this Agreement or in the Purchase Agreement are legal, valid and binding or (c) to make this 18 Agreement or the Purchase Agreement admissible in evidence in the city of New York and in France is not done, fulfilled or performed and any such act, condition or thing is, in the opinion of the Majority Banks, material; or 10.1.12 Standard and Poors reduces its credit rating of France Telecom's long-term debt below A - or Moody's reduces its credit rating of France Telecom's long-term debt below Aa3; or 10.1.13 it becomes unlawful in any jurisdiction for a Bank to perform any of its obligations as contemplated by this Agreement or the Purchase Agreement or to hold Preferred Stock, in which case the Put Acceleration Event shall be deemed to occur solely with respect to such Bank; or 10.1.14 any company or person or a group of persons and/or of companies acting in concert, other than France Telecom, acquires control directly or indirectly of NTL, within the meaning of the term "control" as set forth in the definition of Subsidiary or France Telecom and/or any Subsidiary thereof shall no longer be the registered and beneficial owner of capital stock of NTL representing at least 2 per cent of the voting rights of all outstanding NTL capital stock; or 10.1.15 companies of the Group, on a consolidated basis (including France Telecom), or France Telecom on an individual basis sell, lease, transfer or otherwise dispose of (including by discontinuation), by one or more transactions or series of transactions (whether related or not), the whole or any substantial part (the book value of which is, (i) in the case of companies of the Group on a consolidated basis, when aggregated with the book value of the Group's revenues or, as the case may be, the Group's assets which have been sold, leased, transferred or otherwise disposed of during any twelve month period following the date of this Agreement, 20 per cent or more of the book value of the whole, determined by reference to France Telecom's latest consolidated financial statements delivered by France Telecom pursuant to clause 8.1.2 and (ii) in the case of France Telecom on an individual basis when aggregated with the book value of its revenues or, as the case may be, assets which have been sold, leased, transferred or otherwise disposed of during any twelve month period following the date of this Agreement, 20 per cent or more of the book value of the whole, determined by reference to France Telecom's latest statutory audited financial statements delivered by France Telecom pursuant to clause 8.1.2) of the Group's revenues or assets in the case of companies of the Group on a consolidated basis or of France Telecom's revenues or assets in the case of France Telecom on an individual basis, other than: (a) disposals of stock in trade in the ordinary course of business; (b) disposals on arm's length commercial terms, for full value and for cash consideration; 19 (c) in the case of companies of the Group other than France Telecom, disposals to another member of the Group; (d) disposals required by law, regulation, governmental order or governmental authority; or (e) disposals, the proceeds of which are to be reinvested in the Group in the case of companies of the Group other than France Telecom or used to repay any Borrowed Monies Indebtedness within six months. 10.2 The rights conferred upon the Banks and the Bank Representative pursuant to clause 10.1 may be exercised even if the Put Option Period has not then begun. If France Telecom is required to purchase all or part of the Option Stock pursuant to clause 10.1, then completion of the transaction shall take place pursuant to the notice given to France Telecom in accordance with clause 3.3 or 4.2 and in accordance with the provisions of clause 3.4. 11. Indemnity 11.1 Notwithstanding anything to the contrary in this Agreement or any other agreement referred to in this Agreement including the Purchase Agreement, France Telecom agrees to indemnify and hold harmless each of the Finance Parties and each director, officer, employee and affiliate thereof (each an "indemnified person") from and against any and all actions, suits, proceedings (including any investigations or inquiries), claims, losses, damages, liabilities or expenses of any kind or nature whatsoever which may be incurred by or asserted against or involve any such indemnified person as a result of or arising out of or in any way related to or resulting from this Agreement, from the Purchase Agreement or from holding Preferred Stock, and France Telecom agrees to reimburse each indemnified person for any reasonable and documented legal or other out-of-pocket expenses incurred in connection with investigating, defending or preparing to defend any such action, suit, proceeding (including any inquiry or investigation) or claim (whether or not any such indemnified person is a party to any action or proceeding out of which any such expenses arise); provided that France Telecom shall not have to indemnify any indemnified person against loss, claim, damage, expense or liability to the extent that the same resulted primarily from the gross negligence or willful misconduct of such indemnified person. Promptly after receipt by an indemnified person of notice of the commencement of any action, suit or proceeding, or existence of a claim, such indemnified person shall give written notice to France Telecom with respect thereto. At France Telecom's request, the Banks and their counsel shall cooperate and consult with France Telecom and the counsel appointed at France Telecom's cost by France Telecom. The Banks shall provide France Telecom with all information or documents in relation to any such action, suit, proceeding or claim which France Telecom may reasonably request. In the event of a disagreement on the strategy to be implemented with regard to any such action, suit, proceeding or claim or if France Telecom chooses not to intervene in the defense of the indemnified person, the indemnified person will keep ultimate management of its defense for its own benefit. 20 11.2 (a) France Telecom shall (within 5 Business Days of demand by the Bank Representative) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party. (b) Paragraph (a) above shall not apply with respect to any Tax assessed on a Finance Party: (A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or (B) under the law of the jurisdiction in which that Finance Party's office through which that Finance Party will perform its obligations under this Agreement and the Purchase Agreement is located in respect of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party other than a dividend in kind in relation to the Preferred Stock; (c) A Protected Party making or intending to make a claim pursuant to paragraph (a) above shall promptly notify the Bank Representative of the event which will give, or has given, rise to the claims, following which the Bank Representative shall notify France Telecom; (d) A Protected Party shall, on receiving payment from France Telecom under this clause 11.2, notify the Bank Representative. 11.3 (a) All consideration payable under this Agreement by France Telecom to a Finance Party shall be deemed to be exclusive of any value added tax (VAT). If VAT is chargeable, France Telecom shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT. (b) Where this Agreement requires France Telecom to reimburse a Finance Party for any costs or expenses, France Telecom shall also at the same time pay and indemnify that Finance Party against all VAT incurred by that Finance Party in respect of the costs or expenses save to the extent that that Finance Party is entitled to repayment or credit in respect of the VAT. 11.4 France Telecom shall promptly indemnify the Bank Representative (acting on behalf and for distribution to the Banks) for any cost relating to any stamp, transfer, sales and use, value added, documentary, registration, issuance or similar tax, assessment or other governmental charge imposed on the sale or delivery of the Preferred Stock pursuant to the Purchase Agreement, on the sale or delivery of the Option Stock pursuant to this Agreement, or upon the execution, delivery or performance of the Purchase Agreement and this Agreement. 21 11.5 France Telecom shall promptly indemnify the Bank Representative against any cost, loss or liability incurred by the Bank Representative (acting reasonably) as a result of: (a) investigating any event which it reasonably believes is a Put Acceleration Event; or (b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized. 11.6 If any sum due from France Telecom under this Agreement (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of: (i) making or filing a claim or proof against France Telecom; or (ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, France Telecom shall, as an independent obligation, within 5 Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to calculate the conversion of that Sum from the First Currency into the Second Currency and (B) the market rate or rates of exchange actually available to such Finance Party at the time of its receipt of that Sum. France Telecom waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency or currency unit other than that in which it is expressed to be payable. 11.7 In the event any Finance Party receives, as a result of judgment, settlement, indemnification or otherwise, any amounts that in the aggregate exceed the amount of damages, costs or expenses actually suffered or incurred by such Finance Party and with respect to which such Finance Party has received reimbursement, indemnification or other payment from France Telecom pursuant to this Agreement, such Finance Party shall promptly pay to France Telecom the amount equal to the excess of the aggregate amounts received by such Finance Party with respect to such damages, costs or expenses over the amounts of damages, costs or expenses actually suffered or incurred by such Finance Party. 12. Increased costs 12.1 (a) Subject to clause 12.3, France Telecom shall, within five Business Days of a demand by the Bank Representative, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party as a result of (i) the introduction of or any change in (or in the interpretation or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement. 22 (b) In this Agreement "Increased Costs" means: (i) a reduction in the return on or calculated by reference to any amount received or receivable by a Finance Party under this Agreement or a reduction in the rate of return on a Finance Party's overall capital; (ii) an additional or increased cost; or (iii) a reduction of any amount due and payable under this Agreement, which is incurred or suffered by a Finance Party to the extent that it is attributable to that Finance Party having entered into this Agreement or the Purchase Agreement or performing its obligations under this Agreement or the Purchase Agreement. 12.2 (a) A Finance Party intending to make a claim pursuant to clause 12.1 shall notify the Bank Representative of the event giving rise to the claim, following which the Bank Representative shall promptly notify France Telecom. (b) Each Finance Party shall, as soon as practicable after a demand by the Bank Representative, provide a certificate confirming the amount of its Increased Costs. 12.3 Clause 12.1 does not apply to the extent any Increased Cost is (i) attributable to a Tax deduction required by law to be made by France Telecom; (ii) otherwise compensated for pursuant to this Agreement, including under clause 11.2 (or would have been compensated for under clause 11.2 but was not so compensated solely because one of the exclusions in paragraph (b) of clause 11.2 applied); or (iii) attributable to gross negligence of the relevant Finance Party or to the willful breach by the relevant Finance Party of any law or regulation or of this Agreement or the Purchase Agreement. 13. Mitigation by the Finance Parties 13.1 (a) Each Finance Party shall, in consultation with France Telecom (such consultation to extend to the analysis of all possible steps to be taken reasonably by each Finance Party), take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under any of clause 7.2, clause 11 Indemnity, clause 12 Increased Costs or clause 15 Possible Extension of the Call Option Period and of the Put Option Period. (b) Paragraph (a) above does not in any way limit the obligations of France Telecom under this Agreement. 23 13.2 (a) France Telecom shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under clause 13.1. (b) A Finance Party is not obliged to take any steps under clause 13.1 if, in the opinion of that Finance Party (acting reasonably), to do so would be detrimental to it. 14. Costs and Expenses 14.1 France Telecom shall promptly on demand pay the Banks the amount of all reasonable fees and disbursements of one law firm incurred by them in connection with the negotiation, preparation and execution of this Agreement and any other documents referred to in this Agreement (including the Purchase Agreement). 14.2 If France Telecom requests an amendment, waiver or consent, France Telecom shall, within 10 Business Days of demand, reimburse the Bank Representative for the amount of all reasonable fees and disbursements of one law firm incurred by the Bank Representative and the Banks in responding to, evaluating, negotiating or complying with that request or requirement. 14.3 France Telecom shall, within 10 Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including fees and disbursements of one law firm in France and of one law firm in the United States of America for all Finance Parties) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, this Agreement and any other documents referred to in this Agreement including the Purchase Agreement. 15. Possible Extension of the Call Option Period and of the Put Option Period 15.1 To the extent that on the last day of the Call Option Period or of the Put Option Period any law, regulation or judicial decision prohibits or otherwise renders impossible the transfer of all or part of the Option Stock from any or all Banks to France Telecom, the duration of the Call Option Period and of the Put Option Period shall be extended until 20 Business Days following the date on which each Finance Party and France Telecom has been notified that such prohibition or impossibility is terminated (whether or not such date is after the Termination Date), subject to the following conditions: (a) if the transfer of all or part of the Option Stock from the Banks to France Telecom is prohibited by a decision of a tribunal at the request of a person who is either France Telecom or an Affiliate thereof, the duration of the Call Option Period shall not be extended unless such judicial decision determines on the merits that France Telecom is prohibited by a newly enacted law or regulation from acquiring the Option Stock from the Banks under this Agreement; (b) as long as the period during which the Put Option Period and/or the Call Option Period is extended hereunder, France Telecom agrees to use all reasonable efforts to cause NTL to (i) fully cooperate 24 and ensure that the reasons for such extension disappear as soon as possible, and (ii) assist as much as possible the other parties hereto in the elaboration of any action taken to reach such result; 15.2 It is only after a final court decision, not subject to appeal, has ruled that the circumstances which have led to the extension of the Call Option Period and/or of the Put Option Period cannot be lifted, that each Bank will be entitled to request France Telecom to pay to such Bank the Sale Price of such Bank as if the transfer of the Option Stock could occur and France Telecom will have to pay such Sale Price within 5 Business Days from such request; in such circumstances after such payment and as long as France Telecom cannot become the holder of the Option Stock (i) each Bank shall use its best efforts to transfer the Option Stock to France Telecom as soon as possible, (ii) each Bank shall ensure that all income (net of any Tax bearing on such Bank in respect thereof) received by such Bank in relation with the Option Stock be transferred to France Telecom as soon as possible after receipt and (iii) to the maximum extent possible without suffering a prejudice therefrom, each Bank will utilize its best efforts, in good faith, to accept any possible alternate solution to the payment of the Sale Price. 15.3 As long as the Call Option Period and/or the Put Option Period are extended beyond the Termination Date as provided in clause 15.1 and unless the Sale Price has been paid in accordance with the provisions of clause 15.2, for the first time on the Termination Date, then on the date which is falling six months after the Termination Date and thereafter on each date which is falling six months after the preceding date on which such a payment is made, France Telecom shall pay to each Bank a premium calculated like the Option Premium except that the Relevant Margin shall be equal to 0.50 per cent per annum. 15.4 As long as the Call Option Period and/or the Put Option Period are extended beyond the Termination Date as provided in clause 15.1, to the extent the Banks receive (or are deemed to receive for tax purposes) any income in relation with the Preferred Stock and have to pay Taxes in connection therewith, without limiting the generality of the provisions of clauses 7.2 and 11.2, France Telecom shall (within 5 Business Days of demand by the Bank Representative) pay to such Banks an amount sufficient to ensure that, after the making of such payment, such Banks are fully indemnified for any such Taxes including any Tax on any amount so received pursuant to this clause 15.4. 15.5 As long as the Call Option Period and/or the Put Option Period are extended beyond the Termination Date, and more generally any time a substantive provision of this Agreement cannot be applied in accordance with its terms, the parties to this Agreement agree to meet in good faith to try to find any possible alternative solution which will allow the parties to this Agreement to maintain generally the economic equilibrium of this Agreement and achieve their original intentions when entering into this Agreement, provided that nothing in this clause 15.5 shall entail that, in order to achieve such objective, any Bank shall have to suffer a prejudice or take any action which it considers, in good faith, to be detrimental to it. 25 15.6 Except as provided in clauses 15.1 through 15.5, all the provisions of this Agreement will remain unchanged as long as the Call Option Period and/or the Put Option Period are extended as provided in clause 15.1. 16. Assignments and Transfers 16.1 This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors. 16.2 None of the parties hereto may assign or transfer any of its rights or obligations under this Agreement without, in the case of France Telecom, having obtained the prior written consent of the Bank Representative on behalf of the Banks and, in the case of any Finance Party, the prior written consent of France Telecom which, in the case of an assignment or transfer to any such Finance Party's Affiliate, shall not be refused without reasonable justification. 17. Bank Representative 17.1 Each Bank hereby appoints the Bank Representative to act as its agent in connection herewith and authorises the Bank Representative to exercise such rights, powers and discretions as are specifically delegated to the Bank Representative by the terms hereof together with all such rights, powers and discretions as are reasonably incidental thereto (it being declared, for the avoidance of doubt, that the Bank Representative shall have no authority to commence legal proceedings against France Telecom on behalf of any Bank without the prior written consent of such Bank). 17.2 The Bank Representative may: (i) assume that none of those events mentioned in clause 10 Put Acceleration Events has occurred and that France Telecom is not in breach of its obligations hereunder unless it has actual knowledge or actual notice to the contrary; (ii) engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts whose advice or services may to it seem reasonably necessary, expedient or desirable and rely upon any advice so obtained; (iii) rely as to any matters of fact which might reasonably be expected to be within the knowledge of France Telecom upon a certificate signed by or on behalf of France Telecom; (iv) rely on any communication or document believed by it to be genuine; (v) refrain from exercising any right, power or discretion vested in it hereunder unless and until instructed by the Majority Banks as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised; and 26 (vi) refrain from acting in accordance with any instructions of the Majority Banks to begin any legal action or proceeding arising out of or in connection with this Agreement until it shall have received such security as it may require (whether by way of payment in advance or otherwise) for all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such instructions. 17.3 The Bank Representative shall: (i) promptly inform each Bank of the contents of any notice or document received by it from France Telecom hereunder; (ii) promptly notify each Bank of the occurrence of any of those events mentioned in clause 10 Put Acceleration Events or any default by France Telecom in the due performance of its obligations under this Agreement of which the Bank Representative has actual knowledge or actual notice; (iii) subject to the foregoing provisions of this clause, act in accordance with any instructions given to it by the Majority Banks; and (iv) if so instructed by the Majority Banks, refrain from exercising a right, power or discretion vested in it hereunder. 17.4 Notwithstanding anything to the contrary expressed or implied herein, the Bank Representative shall not: (i) be bound to enquire as to the occurrence or otherwise of any of those events mentioned in clause 10 Put Acceleration Events or as to the performance or otherwise by France Telecom of its obligations hereunder; (ii) be bound to account to any Bank for any sum or the profit element of any sum received by it for its own account; (iii) be bound to disclose to any other person any information relating to France Telecom if such disclosure would or might in its opinion constitute a breach of any law or regulation or be otherwise actionable at the suit of any person; or (iv) be under any obligation other than those for which express provision is made herein. 17.5 Subject to the appointment and acceptance of a successor Bank Representative as provided below, the Bank Representative may at any time and upon not less than 60 (sixty) days' notice from the Majority Banks shall resign as Bank Representative by giving written notice to the Banks and France Telecom. Upon any such resignation, the Majority Banks shall have the right to appoint a successor Bank Representative acceptable to France Telecom. If no successor Bank Representative shall have been so appointed by the Majority Banks and shall have accepted such appointment within thirty days after the 27 retiring Bank Representative gave notice of resignation, the retiring Bank Representative may on behalf of the Banks, appoint a successor Bank Representative, which shall be a Bank or a bank which is a subsidiary or a parent company of a Bank. Upon the acceptance of any appointment as Bank Representative by a successor Bank Representative, such successor Bank Representative shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Bank Representative, and the retiring Bank Representative shall be discharged from its duties and obligations hereunder as Bank Representative. The provisions of this clause 17.5 shall continue in effect for the benefit of the retiring Bank Representative in respect of any actions taken or omitted to be taken by it while it was acting as the Bank Representative. 17.6 The Bank Representative shall be indemnified by each Bank against any and all costs, claims, expenses (including but not limited to legal fees) and liabilities which the Bank Representative may incur in complying with any instructions received by it from the Majority Banks in the proportion which the Purchase Price of such Bank bears to the aggregate amount of all Purchase Prices, provided no Bank shall have any obligation under this clause 17.6 to indemnify the Bank Representative against any such costs, claims, expenses and liabilities incurred by the Bank Representative in the course of any legal proceedings taken against France Telecom without the prior written consent of such Bank. 17.7 The Bank Representative does not accept any responsibility for the accuracy and/or completeness of any information supplied to any Bank in connection with the transactions contemplated by this Agreement or the Purchase Agreement or for the legality, validity, effectiveness, adequacy or enforceability of this Agreement or the Purchase Agreement and the Bank Representative shall not be under any liability as a result of taking or omitting to take any action in relation to this Agreement save in the case of gross negligence or wilful misconduct. 17.8 Each Bank agrees that it will not assert or seek to assert against any director, officer or employee of the Bank Representative any claim it might have in respect of the matters referred to in clause 17.7. 17.9 The Bank Representative may accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with France Telecom. 17.10 It is understood and agreed by each Bank that it has itself been, and will continue to be, solely responsible for making its own independent appraisal of and investigation into the financial condition, creditworthiness, affairs, status and nature of France Telecom and NTL and accordingly each Bank confirms to the Bank Representative that it has not relied, and will not hereafter rely, on the Bank Representative: (i) to check or inquire on its behalf into the adequacy, accuracy or completeness of any information provided by France Telecom and NTL in connection with this Agreement or the Purchase Agreement or the transactions therein contemplated (whether or not such information has been or is hereafter circulated to such Bank by the Bank Representative); or 28 (ii) to assess or keep under review on its behalf the financial condition, creditworthiness, affairs, status or nature of France Telecom and NTL. 18. Accession of New Banks To the extent that prior to the Date of Issue France Telecom substitutes to itself, in whole or in part, one or more banks to acquire Preferred Stock under the Purchase Agreement, any such bank (an "Additional Bank") shall become party to this Agreement and shall be allowed to participate in the arrangements contemplated by this Agreement, in which case, upon and with effect from delivery to the Bank Representative by such Additional Bank and France Telecom of an Accession Notice in the form attached as Exhibit 18, such Additional Bank shall be treated as a Bank as if it had been named as such at the beginning of this Agreement, provided that such Additional Bank is a first rank bank established in Paris, with a rating of its long-term debt by Standard & Poors of at least "A" unless the prior written approval of the Majority Banks has been obtained, such approval not to be unreasonably withheld. 19. Applicable Law and Jurisdiction 19.1 This Agreement and the rights and obligations of the parties shall be governed by and construed in accordance with the law of the State of New York, United States of America. 19.2 Each of the Finance Parties and France Telecom irrevocably agrees that any legal suit, action or proceeding against it arising out of or in connection with this Agreement, the Preferred Stock or the Option Stock, as the case may be, may be instituted in the Supreme Court of the State of New York, County of New York or the U.S. District Court for the Southern District of New York, as applicable, and irrevocably waives any objection which it may now or hereinafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. 20. Entire Agreement This Agreement constitutes the entire and only legally binding agreement between the parties relating to its subject matter and no amendment or modification of this Agreement shall be effective unless made in writing signed by or on behalf of all the parties and expressed to be such an amendment or modification. 21. Notices 21.1 Any notice shall be in writing and signed by or on behalf of the person giving it. Except in the case of personal service, any notice shall be sent or delivered to the party to be served at the address given below or in the Accession Notice in the case of an Additional Bank. Any alteration in such details shall, to have effect, be notified to the other parties in accordance with this clause. 21.2 Service of a notice must be effected by one of the following methods: 29 21.2.1 personally on an authorized representative of France Telecom or a Bank or the Bank Representative, as the case may be, in which case notice shall be treated as served at the time of such service; 21.2.2 by prepaid first class mail (or by airmail if from one country to another) to the address of France Telecom, a Bank or the Bank Representative, as the case may be, and shall be treated as served on the second (or if by airmail the fourth) Business Day after the date of posting. In proving service it shall be sufficient to prove that the envelope containing the notice was correctly addressed, postage paid and posted; or 21.2.3 by facsimile to France Telecom, a Bank or the Bank Representative, as the case may be, in which case notice shall be treated as served at the expiration of 2 hours after the time of dispatch, if dispatched before 3.00 p.m. on any Business Day and, in any other case, at 10.00 a.m. on the Business Day following the date of dispatch, but in any event only if a confirmation of the receipt by the recipient of the facsimile appears correctly on the sender's facsimile transmission report. 30 21.3 The relevant address and facsimile numbers of the parties are as follows:
----------------------------- ------------------------- -------------------------- ------------------------ Party Attention Facsimile number Address ----------------------------- ------------------------- -------------------------- ------------------------ the Bank Representative Damien Scaillierez (33-1) 41-89-39-53 Credit Agricole Indosuez 9, Quai du President Paul Doumer 92400 Courbevoie, France ----------------------------- ------------------------- -------------------------- ------------------------ Banque Nationale de Paris Philippe Roca (33-1) 40-14-69-40 Financements Structures 20, Boulevard des Italiens 75009 Paris, France ----------------------------- ------------------------- -------------------------- ------------------------ Credit Agricole Indosuez Damien Scaillierez (33-1) 41-89-39-53 Credit Agricole Indosuez 9, Quai du President Paul Doumer 92400 Courbevoie, France ----------------------------- ------------------------- -------------------------- ------------------------ Deutsche Bank AG Benoit Deschamps (33-1) 42-89-00-45 3, Avenue de Friedland Paris Branch 75008 Paris, France ----------------------------- ------------------------- -------------------------- ------------------------ Westdeutsche Landesbank Khaled Osman (33-1) 45-63-15-71 15, Avenue de Friedland Girozentrale 75008 Paris, France Paris Branch ----------------------------- ------------------------- -------------------------- ------------------------ France Telecom Philip McAllister (33-1) 212, rue Raymond 44-44-86-00 Losserand 75014 Paris, France ----------------------------- ------------------------- -------------------------- ------------------------ with a copy to: Shearman & Sterling Alfred J. Ross, Jr. (212) 848-7179 599 Lexington Avenue New York, NY 10022, U.S.A. ----------------------------- ------------------------- -------------------------- ------------------------
22. Remedies and Waivers No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law. 31 THIS AGREEMENT has been duly executed on the date stated above. BANQUE NATIONALE DE PARIS By: /s/ Lionel Bordarier By: /s/ Christophe Delafontaine -------------------------- -------------------------------- Title : Directeur Title : Directeur Adjoint CREDIT AGRICOLE INDOSUEZ By: /s/ Michel Chabanel By: /s/ Damien Scaillierez -------------------------- -------------------------------- Title : Head of Acquisition Title : Fonde de Pouvoir Finance DEUTSCHE BANK AG PARIS BRANCH By: /s/ Benoit Deschamps By: /s/ Antoine de Maistre -------------------------- -------------------------------- Title : Directeur Title : WESTDEUTSCHE LANDESBANK GIROZENTRALE PARIS BRANCH By: /s/ Barbara Selves By: /s/ Nadine Veldung -------------------------- -------------------------------- Title : Directeur Title : Directeur FRANCE TELECOM By: /s/ Eric Bouvier By: -------------------------- -------------------------------- Title : Head of the Mergers Title : & Acquisitions Department CREDIT AGRICOLE INDOSUEZ, as Bank Representative By: /s/ Michel Chabanel By: /s/ Damien Scaillierez -------------------------- -------------------------------- Title : Head of Acquisition Title : Fonde de Pouvoir Finance 32 EXHIBIT 3.3 NOTICE [To be delivered for purposes of exercising the Put or Call Option] To: [______](1) Reference is hereby made to the Put and Call Option Agreement dated February 17, 2000, among Banque Nationale de Paris, Credit Agricole Indosuez, Deutsche Bank AG Paris Branch, Westdeutsche Landesbank Girozentrale Paris Branch and France Telecom [as amended](2). The undersigned hereby gives notice pursuant to clause [___](3) of the Put and Call Option Agreement that it irrevocably exercises its rights under the Put and Call Option Agreement (Put Option/Call Option)(4) to [sell/purchase](4) [___] shares of 5% Cumulative Preferred Stock, Series A of NTL Incorporated, with a Completion Date for delivering the shares and the amount payable with respect thereto under the Put and Call Option Agreement to be on [___], 200[___].(5) Payment of the Purchase Price (being US $ _____________) shall be made in same day funds to the undersigned at [insert payment instructions]. [In case of exercise of the Call Option, if applicable indicate the name of the Subsidiary of France Telecom to receive and pay for the Option Stock and relevant instructions.] Dated: [_____________] [ENTITY NAME] By: ___________________ Name: Title: - -------------------------------------------------------------------------------- 1 If notice is given by a Bank or the Bank Representative of its exercise of the Put Option, notice should be given to France Telecom. If notice is given by France Telecom of its exercise of the Call Option, notice should be given to the Bank Representative and in connection with clause 4.6 to each Bank concerned. 2 Delete if not necessary. 3 Refer to appropriate clause: clause 3.3 or 10.2 with respect to the Put Option; 4.2 with respect to the Call Option. 4 Delete inapplicable references. 5 Specify a Completion Date which is not less than 5 Business Days (for the Call Option) or 8 Business Days (for the Put Option) from the date of the notice and which will be at the latest on the Termination Date. (i) EXHIBIT 3.4 STOCK POWER FOR VALUE RECEIVED, [_____________] does hereby sell, assign and transfer unto [_____________] Shares of 5% Cumulative Preferred Stock, Series A of NTL Incorporated represented by Certificate No. [_____________] (the "Stock"), standing in its name on the books of said corporation and does hereby irrevocably constitute and appoint [_____________] attorney to transfer the said Stock on the books of said corporation with full power of substitution in the premises. Dated: [_____________], 200[__] [NAME OF ENTITY] By: ___________________ Name: In presence of: ---------------- Name: (ii) EXHIBIT 18 FORM OF ACCESSION NOTICE TO BE DELIVERED BY AN ADDITIONAL BANK PURSUANT TO CLAUSE 18 To: [Bank Representative] (a) Reference is hereby made to the Put and Call Option Agreement dated February 17, 2000, among Banque Nationale de Paris, Credit Agricole Indosuez, Deutsche Bank AG Paris Branch, Westdeutsche Landesbank Girozentrale Paris Branch and France Telecom (the "Option Agreement"). Terms defined in the Option Agreement have the same meanings herein. (b) We hereby confirm and give you notice pursuant to clause 18 Accession of New Banks of the Option Agreement that we wish to accede to the Option Agreement and become a Bank for purposes of the Option Agreement. (c) We hereby confirm that we have received a copy of the Option Agreement and the Purchase Agreement and attached Certificate of Designation and hereby undertake and agree to be bound by the terms and conditions thereof insofar as such terms and conditions apply to a Bank. (d) We hereby confirm that our Option Stock will, upon closing of the purchase thereof, consist of [______] shares of Preferred Stock. (e) We hereby confirm that at the date hereof the representations set out in clause 9.2 of the Option Agreement would be true (to the extent that such representations can relate to ourselves) if repeated by reference to and in respect of ourselves on the date of this Notice and hereby repeat the same. (f) We hereby confirm that we have received separately on the date hereof from France Telecom the fees which should have been due to us on or prior to the date hereof pursuant to the provisions of clause 6.1 of the Option Agreement. (g) Our details for notices under the Option Agreement are: Address: Telephone Number: Telex Number: Facsimile Number: (iii) (h) This Accession Notice shall be governed by and construed in accordance with the laws of the State of New York, United States of America applicable to contracts executed in and to be performed entirely in that state and without regard to any applicable conflicts of law principles. [NAME OF ENTITY] --------------- by: We hereby confirm our acceptance of the accession by [________] to the Option Agreement as provided above and hereby confirm that from the date hereof we agree to treat [________] as a Bank under the Option Agreement as if it had been named as such at the beginning of the Option Agreement. France Telecom By : ________________ Title: (iv) -----END PRIVACY-ENHANCED MESSAGE-----