Exhibit 5
Dated January 10, 2003
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(1) NTL INCORPORATED
(FORMERLY NAMED
NTL COMMUNICATIONS CORP.)
(2) NTL EUROPE, INC.
(FORMERLY NAMED
NTL INCORPORATED)
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TRANSITIONAL SERVICES AGREEMENT
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INDEX
1. DEFINITIONS.........................................................2
2. SERVICES............................................................7
3. ACCESS AND PREMISES................................................11
4. PAYMENT............................................................13
5. LIABILITY, INDEMNITY AND INSURANCE.................................15
6. LICENCE TO USE THE TRADE MARKS.....................................18
7. SECONDEES..........................................................20
8. FORCE MAJEURE......................................................22
9. CONFIDENTIALITY....................................................23
10. DURATION OF THE SERVICES...........................................24
11. EFFECT OF TERMINATION..............................................25
12. DISPUTE RESOLUTION ON FEES.........................................25
13. DAMAGES NOT AN ADEQUATE REMEDY.....................................26
14. ENTIRE AGREEMENT...................................................26
15. GENERAL............................................................27
16. NOTICES............................................................28
17. GOVERNING LAW AND JURISDICTION.....................................29
EXHIBIT 10.5
THIS AGREEMENT is made on 10 January 2003
BETWEEN:
(1) NTL INCORPORATED, a corporation incorporated in the State of
Delaware, whose principal office is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇ (hereinafter referred
to as "New NTL"); and
(2) NTL EUROPE, INC., a corporation incorporated in the State of
Delaware, whose principal office is located at ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (hereinafter referred to as
"Euroco").
WHEREAS:
(A) Euroco and certain of its subsidiaries (including New NTL) filed
a joint reorganisation plan under Chapter 11 of the United States
Bankruptcy Code on May 8, 2002 which was amended on May 24, 2002
and further amended on July 15 2002, and modified on September 5,
2002, as further amended, modified or supplemented (the "Plan");
(B) On September 5, 2002, the United States Bankruptcy Court for the
Southern District of New York entered an order confirming the
Plan;
(C) The Plan was consummated on January 10, 2003;
(D) Pursuant to the Plan, Euroco and its subsidiaries have divided
their current businesses and investments into two new groups, the
Euroco Group and the New NTL Group, the holding companies for
which are Euroco and New NTL respectively;
(E) Each party currently provides to the other certain services that
the other party requires in order to carry on its business: the
Euroco Group requires assistance in order to fulfil various
legal, regulatory and accounting requirements and confirmation of
the rights contemplated by the Plan with respect to the use of
the "ntl" name and the New NTL Group requires accommodation for
certain of its personnel; and
(F) Euroco and New NTL have agreed that each party will, or will
procure that its subsidiaries will, provide certain services on a
transitional basis to the other party and its subsidiaries on the
terms and subject to the conditions set out in this Agreement.
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IT IS AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement, the following terms shall, unless the context otherwise requires, have the following meanings:
Additional Services the meaning ascribed to such term in clause 2.10;
Additional Services Fees the meaning ascribed to such term in clause 4.2;
Affiliate in relation to New NTL or Euroco, any entity, other than a
Group Company, in which either New NTL or Euroco (as the
context requires) or any of their respective Group Companies
has an economic interest;
Business Day a day (other than a Saturday or Sunday) on which clearing
banks are open for business in the Cities of London and New
York;
Business Hours the hours of 9 a.m. to 5 p.m. (inclusive) on any Business Day
in the time zone of the relevant personnel of the relevant
Group Company of the relevant Services Provider;
Confidential Information in relation to either party, all information and materials of
that party and its Group Companies and Affiliates, or held by
or disclosed to that party or any of its Group Companies on a
confidential basis by or on behalf of a third party, (whether
oral or recorded in any written or other medium), which are or
were marked or otherwise identified as confidential,
restricted, secret or proprietary or which are or were by
their nature, or the circumstances under which they are or
were received confidential, restricted, secret or proprietary
other than:
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(a) any information which is or becomes publicly available
other than as a result of a disclosure in breach of
this Agreement;
(b) any information which is obtained by a party or any of
its Group Companies on a non-confidential basis from a
source (other than from or on behalf of the other
party or any of its Group Companies) that is not, to
the knowledge of the receiving party or any of its
Group Companies, prohibited from disclosing to the
receiving party or any of its Group Companies by a
legal, contractual or fiduciary obligation with
respect to such information; or
(c) any information which the parties agree in writing
will not be treated as Confidential Information;
Due Date the date falling 30 days after the date upon which any invoice
is received by the Services Recipient from the Services
Provider in respect of Services Fees and/or the Secondee Fees
and/or the Property Fees or, if such date is not a Business
Day, on the next following Business Day;
Effective Date the meaning ascribed to such term in the Plan;
Euroco Fees the fees payable by Euroco for the New NTL Services, as
described in clause 4.1, any Additional Services Fees payable
by Euroco to New NTL pursuant to clause 4.2 and any fees
payable by Euroco to New NTL pursuant to clause 4.3;
Euroco Group Euroco and all its Group Companies from time to time on or
after the Effective Date;
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Euroco Occupation End Date the meaning given to the term in clause 3.4;
Euroco Property the meaning given to the term in clause 3.7;
Euroco Services any Additional Services which Euroco agrees to provide or
procure pursuant to clause 2.10;
Expert the meaning ascribed to such term in clause 12.1;
Fees the Services Fees, the Secondment Fees and the Property Fees
(or any of them);
Force Majeure the meaning ascribed to such term in clause 8.1;
Group Company in relation to New NTL or Euroco, such corporation or any
subsidiary undertaking of such corporation and the phrases
"Group Companies", "New NTL Group Companies" and "Euroco Group
Companies" shall be construed accordingly;
Loss subject to clause 5.4, any damages, loss, costs, claims or
expenses;
Newcastle Logo PTV's Logo (as defined in the Newcastle Sponsorship Agreement)
for the 2002/2003 football season;
Newcastle Sponsorship Agreement the sponsorship agreement entered into between (1) Newcastle
United plc (2) Newcastle United Football Company Limited and
(3) Premium TV Limited dated 9 December 1999, as amended by an
agreement dated 12 November 2001;
New NTL Fees the Additional Services Fees payable by New NTL to Euroco
pursuant to clause 4.2;
New NTL Group New NTL and all its Group Companies from time to time on or
after the Effective Date;
New NTL Occupation End Date the meaning given to the term in clause 3.7;
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New NTL Property the meaning given to the term in clause 3.4;
New NTL Services the services to be provided, or procured, by New NTL, as set
out in Schedule 1, together with any Additional Services which
New NTL agrees to provide or procure pursuant to clause 2.10;
personnel in respect of either party, that party's directors and other
officers, employees, contractors, sub-contractors or agents
and those of that party's Group Companies;
Plan the meaning given to it in Recital A;
Property Fees the fees payable by Euroco in respect of the New NTL Property
pursuant to clause 3.5 or the fees payable by New NTL in
respect of the Euroco Property pursuant to clause 3.8 (as the
context requires);
Secondees the New NTL personnel listed in Schedule 4;
Secondment Fees the meaning given to the term in clause 7.2;
Secondment Period the meaning given to the term in clause 7.1;
Services in relation to the services to be provided or procured by New
NTL, the New NTL Services, and, in relation to the services to
be provided or procured by Euroco, the Euroco Services (or any
of them);
Services Fees in relation to New NTL, the New NTL Fees, and, in relation to
Euroco, the Euroco Fees, (as the context demands);
Services Provider New NTL (in relation to the provision of New NTL Services, the
New NTL Property and the Secondees) and Euroco (in relation to
the provision of Euroco Services and the Euroco Property);
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Services Provider Group the New NTL Group (where New NTL is the relevant Services
Provider) and the Euroco Group (where Euroco is the relevant
Services Provider) (as the context demands) and the phrase
"Services Provider Group Companies" shall be construed
accordingly;
Services Recipient Euroco (in relation to the receipt of the New NTL Services,
the Secondees and the occupation of the New NTL Property) and
New NTL (in relation to the receipt of the Euroco Services and
the occupation of the Euroco Property);
Services Recipient Group the Euroco Group (where Euroco is the relevant Services
Recipient) and the New NTL Group (where New NTL is the
relevant Services Recipient) (as the context demands) and the
phrase "Services Recipient Group Companies" shall be construed
accordingly;
Trade Marks the trade mark comprising the adjacent letters "ntl", the
logos set out in Schedule 3 and, in connection with the
Newcastle Sponsorship Agreement only, the Newcastle Logo; and
VAT Value Added Tax in the UK.
1.2 In this Agreement, any reference to a "person" shall be construed
as a reference to any natural person, partnership, joint venture,
corporation, limited liability company or partnership, trust,
firm, association or governmental agency or department or any two
or more of the foregoing.
1.3 The clause headings in this Agreement are for ease of reference
only and shall not affect its interpretation.
1.4 References in this Agreement to numbered clauses or Schedules are
to clauses of or Schedules to this Agreement. The Schedules form
part of this Agreement and shall have the same force and effect
as if expressly set out in the main body of this Agreement, save
that, to the extent that any of the terms of the main body of
this Agreement conflicts with the Schedules, the terms of the
main body of this Agreement shall control.
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1.5 For the purposes of this Agreement, "subsidiary undertaking"
shall have the meaning ascribed thereto in the UK Companies Act
1985.
1.6 Any reference in this Agreement to any statute or statutory
provision shall, unless the context otherwise requires, be
construed as a reference to such statute or statutory provision
(including all instruments, orders, regulations made thereunder
or deriving validity therefrom) as in force on the Effective Date
and as subsequently re-enacted or consolidated.
2. SERVICES
2.1 In consideration of Euroco agreeing to pay the Euroco Fees to New
NTL, New NTL shall provide, or procure the provision of, the New
NTL Services to the Euroco Group Companies on the terms and
conditions of this Agreement.
2.2 In consideration of New NTL agreeing to pay the New NTL Fees to
Euroco, Euroco shall provide, or procure the provision of, the
Euroco Services to the New NTL Group Companies on the terms and
conditions of this Agreement.
2.3 The provision of the Services by the Services Provider to the
Services Recipient Group shall be on a non-exclusive basis. This
Agreement shall not preclude the Services Provider Group from
providing the Services or similar services to any other person,
nor shall it preclude the Services Recipient Group from
obtaining, in whole or in part, Services or similar services from
its own employees or other service providers.
2.4 The Services Provider shall:
2.4.1 perform, or procure the performance of, the
Services by exercising the same degree of care
and skill as the Services Provider Group
Companies exercise in performing the same or
similar services for the Services Provider Group
(and procure that its personnel providing the
applicable Services shall exercise such degree of
care and skill); and
2.4.2 comply with all laws, statutes and regulations in
force from time to time which are applicable to
the provision of the Services,
in each case, subject to the Services Provider having regard
primarily to the commercial and legal compliance requirements of
its Group Companies and to the
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principles set out in clause 2.9 and (in relation to New NTL)
subject to any restrictions and limitations expressly set out in
relation to each of the New NTL Services in column 2 of Schedule
1 or as may be agreed in respect of any Additional Services
pursuant to clause 2.10.
2.5 The Services Provider shall provide the Services Recipient Group
Companies, or procure that the Services Recipient Group Companies
are provided, with such information and records in relation to
the Services as the Services Recipient may from time to time
reasonably request and, without prejudice to the generality of
the foregoing, the Services Provider shall use its reasonable
commercial efforts to respond during Business Hours, orally or by
telephone, facsimile transmission or in writing (as appropriate)
to any request for further information made by the Services
Recipient.
2.6 The Services Recipient shall use its reasonable commercial
efforts, and shall procure that its Group Companies shall use
their reasonable commercial efforts, to take all such actions as
may be reasonably necessary or desirable (including providing to
the Services Provider such information as the Services Provider
may reasonably require) to enable the Services Provider Group
Companies to provide the Services in the manner and within the
time frame required under this Agreement. The Services Recipient
shall use its reasonable commercial efforts to provide that any
information which it provides to the Services Provider or any of
its Group Companies in order to enable the Services Provider to
provide the Services is complete and accurate in all material
respects when so provided by the Services Recipient and the
Services Recipient shall use its reasonable commercial efforts to
respond promptly and during Business Hours to any requests for
guidance or instruction made by the Services Provider.
2.7 Unless otherwise agreed in writing, all employees and
representatives of the Services Provider Group Companies
(including the Secondees) shall be deemed for purposes of all
compensation, tax, regulatory and employee benefits matters to be
employees or representatives of the Services Provider Group
Companies and not employees or representatives of the Services
Recipient Group Companies. In performing the Services, such
employees and representatives (other than the Secondees) shall be
under the direction, control and supervision of, and responsible
to, the Services Provider (and not the Services Recipient). The
Services Provider Group Companies shall have the sole right to
exercise all authority with respect to the employment (including
termination of employment), assignment and compensation of its
employees and representatives.
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2.8 Without prejudice to clause 2.4, in providing the Services, the
Services Provider may use such of the personnel of the Services
Provider Group Companies as it deems necessary or appropriate in
its reasonable discretion provided that, in relation to the New
NTL personnel named in Schedule 1, New NTL shall make such
personnel available (or procure that such personnel are made
available) to the extent provided in Schedule 1, but subject to:
2.8.1 any entitlement which such personnel may have
from time to time to take leave pursuant to the
terms of their employment with the relevant New
NTL Group Company;
2.8.2 the death of any such personnel;
2.8.3 the right of such personnel to resign at any time
from their employment with the relevant New NTL
Group Company and the right of that New NTL Group
Company to terminate their employment; and
2.8.4 the absence of any such personnel from work due
to sickness.
For the avoidance of doubt, nothing in this Agreement shall
oblige the Services Provider to incur any cost or liability which
is not within the Services Provider's budget or business plan
from time to time (recognising however the Services Fees to be
paid by the Services Recipient hereunder), hire any further
employees or representatives, pay any employee or representative
any bonus (other than in accordance with the terms of employment
of the relevant employee) or overtime which would not otherwise
be paid, or employ the services of third parties including but
not limited to consultants and other professional advisers, to
provide the Services, in each case, except to the extent that the
Services Recipient and the Services Provider agree otherwise in
writing. The Services Recipient Group may retain at its own
expense its own consultants, other service providers and other
professional advisers. Anything contained in this Agreement to
the contrary notwithstanding, New NTL shall be responsible for
and shall pay when due all compensation and other payments, if
any, payable to any personnel of New NTL providing Services to
Euroco and to the Secondees, in each case, under the terms of
employment of such persons.
2.9 The Services Provider Group shall use its reasonable commercial
efforts to provide the Services Recipient Group with all Services
reasonably requested by the Services Recipient Group in
accordance with Schedule 1 hereto; provided, however, so long as
the Services Provider Group otherwise uses its reasonable
commercial efforts to
9
provide the Services Recipient Group with such Services on a
timely basis, personnel of the Services Provider shall have as
their first priority all work required by the Services Provider
Group; provided, further, however, that in prioritising the work
to be performed by its personnel, the Services Provider Group
agrees to consider and use its reasonable commercial efforts to
permit its personnel to accommodate the reasonable deadlines for
completion of applicable projects by the Services Recipient Group
(including, without limitation, the required filings dates for
documents with the United States Securities and Exchange
Commission) relative to the deadlines and workload requirements
for completion of projects then being undertaken by such
personnel on behalf of the Services Provider Group. It is further
expressly understood and agreed by the parties that,
notwithstanding anything to the contrary in this Agreement or any
Schedule hereto (save for clause 5.5 which shall apply in any
event), neither New NTL nor any of its Group Companies, personnel
or Affiliates shall have any liability whatsoever for damages as
a result of a failure by the Services Provider Group to provide
Services to the Services Recipient Group or related to the
quality (including but not limited to the adequacy or
completeness) of Services actually provided. Euroco (whether
acting as principal, trustee or agent) shall, and shall procure
that its Group Companies and personnel shall, expressly waive any
right which it or any of them might otherwise have to any claim
for damages on such basis either now or at any time in the
future. For avoidance of doubt, the foregoing two sentences are
not intended to prevent Euroco from exercising any right it may
have under applicable law to seek injunctive relief if
appropriate. The principles set out in this clause 2.9 shall
control and serve as the underlying basis upon which the Services
are to be made available to the Services Recipient Group and
notwithstanding anything to the contrary, whether specific or
general, contained in this Agreement or any Schedule hereto. In
determining whether New NTL has complied with its obligations
under clause 2, the parties agree that the following
considerations (which reflect the basis upon which the New NTL
Services are being offered to the Euroco Group and which govern
the allocation of resources as between the New NTL Group and the
Euroco Group) shall first be taken into account: (i) New NTL and
its Group Companies may have to provide the same or similar
services to other New NTL Group Companies and may be subject to
commitments to provide such services to other persons, all
concurrently with the provision of the Services to the Euroco
Group; (ii) no personnel of the New NTL Group are solely
dedicated to the provision of the New NTL Services and the
personnel of New NTL shall be required to balance the provision
of the New NTL Services with the fulfilment of their other duties
and responsibilities and there is no obligation within this
Agreement or any Schedule hereto that the New NTL Group shall be
required to engage any additional employees, agents or
contractors in order that its employees may be available to
10
provide the New NTL Services; (iii) the personnel of New NTL
shall have as their first priority all work required by the New
NTL Group; provided, however, that in prioritising the work to be
performed by its personnel, New NTL agrees to consider and use
its reasonable commercial efforts to permit its personnel to
accommodate the reasonable deadlines for completion of applicable
projects by Euroco (including, without limitation, the required
filings dates for documents with the United States Securities and
Exchange Commission, which New NTL specifically acknowledges
includes the filing of a report on Form 8-K for Euroco within 15
days following the Effective Date) relative to the deadlines and
workload requirements for completion of projects then being
undertaken by such personnel on behalf of the New NTL Group.
2.10 The parties agree that neither is under any obligation to provide
any services to the other, other than those services expressly
set out in Schedule 1 (in the case of New NTL) or such other
additional services as the relevant Services Provider may (in its
sole discretion) agree in writing to provide or procure from time
to time ("Additional Services").
3. ACCESS, PREMISES AND OCCUPATION OF ACCOMMODATION
3.1 The Services Recipient shall provide the Services Provider and
(as appropriate) any personnel of the Services Provider with such
access to property and computer systems of the Services Recipient
Group (including passwords, software codes and swipe cards) as is
reasonably necessary to enable the provision of the Services
hereunder. Likewise, the Services Provider shall provide the
Services Recipient and (as appropriate) any personnel of the
Services Recipient with such access to property and computer
systems of the Services Provider Group including passwords,
software codes and swipe cards as is reasonably necessary to
enable the Services Recipient Group to take the benefit of the
Services, subject, in each instance, to the Services Recipient
complying and procuring that its Group Companies and personnel
comply with all reasonable security measures which the Services
Provider notifies to it from time to time. The parties shall
co-operate with each other to such extent as is reasonably
necessary for the purposes of internal audit, security procedures
(including confidentiality protection) and fraud management.
3.2 The Services Recipient shall take or shall procure the taking of
such steps as may be reasonably necessary to ensure the safety of
the personnel of the Services Provider during their visit to any
of the premises of the Services Recipient Group for the purposes
of this Agreement.
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3.3 The Services Provider shall procure that in the provision of the
Services, its personnel:
3.3.1 follow any reasonable security, health and safety
and other procedures prevailing in respect of any
property to which such individuals are permitted
access for the purpose of carrying out the
Services and which are notified to it by the
Services Recipient Group from time to time; and
3.3.2 restrict their activities to those areas of the
property to which they have been granted access
and which are necessary or incidental to the
carrying out of the Services from time to time
and shall not enter any other areas without the
consent of the Services Recipient or any of its
Group Companies or appropriate on-site
supervisory personnel.
3.4 New NTL shall, subject to Euroco complying with clause 3.5,
continue to make available to Euroco the residential property
being used by ▇▇ ▇▇▇▇▇ in London immediately prior to the
Effective Date ("New NTL Property"), until the earliest to occur
of the expiry or renewal or earlier determination of the relevant
lease (in relation to each property the "Euroco Occupation End
Date").
3.5 Euroco shall pay to New NTL fees equal to all costs and
liabilities incurred by the New NTL Group in relation to the New
NTL Property arising in respect of the period commencing on the
Effective Date and expiring on the relevant Euroco Occupation End
Date. Such fees shall be payable to New NTL by Euroco on or
before the Due Date. Euroco covenants to indemnify and keep
indemnified the New NTL Group against any Loss suffered by the
New NTL Group arising out of any breach of this clause 3.5 by
Euroco.
3.6 New NTL shall take or omit to take all such action as Euroco may
reasonably request in respect of the New NTL Property, save that
this clause 3.6 shall not extend to include extending or
transferring the lease granted in relation to such property or
acting in breach of such lease.
3.7 Euroco shall, subject to New NTL complying with clause 3.8,
continue to make available to New NTL the residential property
being used by ▇▇ ▇▇▇▇▇ in London immediately prior to the
Effective Date ("Euroco Property") until the earliest to occur of
the expiry or renewal or earlier determination of the lease
relating to such property (the "New NTL Occupation End Date").
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3.8 New NTL shall pay to Euroco fees equal to all costs and
liabilities incurred by the Euroco Group in relation to the
Euroco Property arising in respect of the period commencing on
the Effective Date and expiring on the New NTL Occupation End
Date. Such fees shall be payable to Euroco by New NTL on or
before the Due Date. New NTL covenants to indemnify and keep
indemnified the Euroco Group against any Loss suffered by the
Euroco Group arising out of any breach of this clause 3.8 by New
NTL.
3.9 Euroco shall take or omit to take all such action as New NTL may
reasonably request in respect of the Euroco Property, save that
this clause 3.9 shall not extend to include extending or
transferring the lease granted in relation to such property or
acting in breach of such lease.
4. PAYMENT
4.1 The fees payable by Euroco to New NTL in respect of each of the
New NTL Services (other than any Additional Services) shall be
calculated on the basis described in the third column of the
table set out opposite such service in Schedule 1.
4.2 The fees payable by the Services Recipient to the Services
Provider in respect of any Additional Services which the Services
Provider agrees to provide or procure pursuant to clause 2.10
("Additional Services Fees"), shall, in the absence of agreement
be equal to the documented cost (which, for the avoidance of
doubts, shall take into account not only the compensation payable
to such personnel as may provide the Additional Services but also
general overhead costs in respect of such personnel (including,
but limited to, the provision of equipment, materials, property
and services required by such personnel to provide such
Services)) to the Services Provider Group of providing such
Additional Services (based on the proportion of time spent by the
relevant personnel of the Services Provider in providing such
Additional Services as against the time spent by such personnel
on matters which do not relate to the Services).
4.3 As provided in the Tax Sharing Agreement (as defined in clause
14.1 of this Agreement) Euroco and the Euroco Affiliates (as
defined in the Tax Sharing Agreement) will pay to New NTL an
amount equal to 14.5% of the Tax Return Costs. The "Tax Return
Costs" shall be the costs associated with the preparation and
filing of any Tax Return (as defined in the Tax Sharing
Agreement) pursuant to section 1.1 of the Tax Sharing Agreement
to which Euroco is a party, including the Consolidated Returns
(as defined in the Tax Sharing Agreement) for 2001 and 2002.
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Tax Return Costs shall include, but shall not be limited to, the
aggregate of (i) the cost to the New NTL Group of making
available its personnel to carry out such work (which cost shall
not exceed $23,887 in total) and (ii) any documented out of
pocket costs and expenses incurred by the New NTL Group in
preparing and filing the Tax Returns including the Consolidated
Returns (other than the payment of any Taxes (as defined in the
Tax Sharing Agreement)). In addition to paying 14.5% of the Tax
Return Costs, Euroco shall also reimburse New NTL for all costs
(other than Tax Return Costs) incurred by the New NTL Group in
assisting Euroco or any of Euroco's Group Companies or
Affiliates, in each case from time to time, in preparing any
return or document, in co-operating with Euroco in accordance
with section 8.2 of the Tax Sharing Agreement, or in providing
any information or documents on any other matter whatsoever
relating to taxation including, but not limited to, valuations,
structures, characteristics, attributes and correspondence (the
"Additional Tax Costs"). The Additional Tax Costs shall be the
aggregate of (i) the cost to the New NTL Group of making
available its personnel to carry out such additional work and
(ii) any documented out of pocket costs and expenses incurred by
the New NTL Group in carrying out such work. For the purpose of
calculating the Tax Return Costs and the Additional Tax Costs in
accordance with this clause 4.3 only, the cost to New NTL of
making available its personnel to carry out work for Euroco
and/or the Euroco Affiliates shall be calculated by reference to
the hourly charge-out rates of such personnel, the hourly rate
for ▇▇▇▇ ▇▇▇▇▇▇ being US$ 238.87 and the hourly charge-out rate
for all other New NTL personnel being US$ 219.38.
4.4 The Services Recipient shall, subject to the receipt of a valid
invoice which shall be rendered monthly in arrears, pay to the
Services Provider the Services Fees and (in the case of Euroco
only) the Secondee Fees, in each case, due in respect of the
previous month on or before the Due Date.
4.5 All Fees payable under this Agreement shall be paid in US
dollars. Where any Fee is calculated on the basis of an amount
denominated in a currency other than US dollars, such amount
shall be converted to US dollars by reference to the noon buying
rate as quoted by the Federal Reserve Bank of
New York on the
Business Day immediately prior to the date of the relevant
invoice.
4.6 Separate invoices shall (but only at the Services Recipient's
request) be provided in respect of each of the types of service
itemised in Schedule 1 (in relation to the New NTL Services), in
respect of each of the Additional Services (as appropriate) and
in respect of any amounts charged to Euroco pursuant to clause
4.3. All invoices in respect of Services Fees shall include both
a reasonably detailed description of the Services provided or, in
relation to amounts charged to Euroco and Euroco Affiliates
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by New NTL pursuant to clause 4.3, a reasonably detailed
description of the work carried out by New NTL personnel pursuant
to the Tax Sharing Agreement and a summary of the time spent by
the Services Provider's personnel in providing such Services or
in carrying out such work under the Tax Sharing Agreement (as the
case may be).
4.7 Unless otherwise stated, all amounts referred to in this
Agreement are exclusive of taxes or charges which may be
applicable, which shall be payable at the appropriate rate on the
same date as any payment to which such taxes or other charges
relate. For the avoidance of doubt, the parties acknowledge that
any Services provided to a Services Recipient Group and/or the
provision of Secondees to Euroco Group and/or the use of the New
NTL Property by Euroco and/or the use of the Euroco Property by
New NTL may, in each instance, be liable to VAT.
4.8 The Services Provider shall give to the Services Recipient such
information as the Services Recipient may reasonably require in
order to verify the accuracy of the calculation of the Fees. The
parties agree that, in relation to any Fees which are calculated
by reference to the proportion of time spent by the Service
Provider's personnel in providing such Services as against the
time spent by such personnel on other matters, a signed
acknowledgement by each of the relevant personnel of the amount
of such time is (in the absence of fraud) all that may be
reasonably required with respect to any dispute as to time spent.
If the Services Recipient disputes in good faith the accuracy of
any invoice or the calculation of any Fees, the undisputed
portion shall be paid and the parties shall resolve the disputed
portion in accordance with the dispute resolution procedure set
out in clause 12 and the amount(s) of the invoice relating to the
disputed item(s) of the Fees shall not be payable until the
matter has been resolved or determined in accordance with clause
12.
4.9 If any sum is not paid or is disputed in accordance with the
dispute resolution procedure set out in clause 12 on or before
the Due Date, without prejudice to any other rights or remedies
which it may have, the Services Provider reserves the right to
charge interest on such sum (or, in the case of a dispute, on
such sum as is subsequently determined or agreed to be payable)
on a daily basis from the Due Date to the date of actual payment
at the rate of 2% above the Prime Rate as identified in the Wall
Street Journal from time to time.
5. LIABILITY, INDEMNITY AND INSURANCE
5.1 Subject to clauses 5.2 to 5.5 (inclusive), if the Services
Provider Group Companies fail to exercise the required degree of
skill and care (as provided in clause 2) in the
15
performance of any of the Services, or are otherwise in material
breach of the Services Provider's obligations under this
Agreement, the Services Provider shall, at the request of the
Services Recipient and at the Services Provider's own expense,
carry out, or procure that there is carried out, within a
reasonable period such repeat or remedial services as shall
reasonably be required by the Services Recipient to ensure that
the relevant Services are carried out (save only as to the time
of their performance) as originally planned or as agreed between
the parties. In addition, if any dispute arises between the
parties out of or in relation to this Agreement with respect to
the Service Provider Group's failure to provide any Services or
the quality of Services provided, then upon the request of either
party the parties shall attempt to resolve such dispute promptly
by negotiation between executive officers who have authority to
settle the dispute and who are at a higher level of management
than the persons with direct responsibility for administration of
this Agreement.
5.2 Subject to clause 5.5, the liability of the New NTL Group to the
Euroco Group for Loss caused or contributed to by the New NTL
Group and arising out of or in connection with this Agreement
will in no circumstances whatsoever exceed $US 1.5 million in the
aggregate whether such liability arises in contract, tort,
negligence, misrepresentation, breach of statutory duty or
securities regulation or otherwise howsoever, and whether such
Loss is caused by or arises from a breach of a fundamental or
other term of this Agreement.
5.3 Subject to clause 5.5, the liability of the Euroco Group to the
New NTL Group for Loss caused or contributed by the Euroco Group
and arising out of or in connection with this Agreement will in
no circumstances whatsoever exceed $US 1.5 million in the
aggregate whether such liability arises in contract, tort,
negligence, misrepresentation, breach of statutory duty or
securities regulation or otherwise howsoever, and whether such
Loss is caused by or arises from a breach of a fundamental or
other term of this Agreement.
5.4 Subject to clause 5.5, neither party (nor their respective Group
Companies) nor the officers, directors, employees, stockholders,
partners, representatives, consultants or agents of either party
(or their respective Group Companies) shall be liable to the
other party (or their respective Group Companies) or any of their
respective officers, directors, employees, stockholders,
partners, representatives, consultants or agents for any loss of
profits, revenue, business, goodwill or anticipated savings
(whether direct or indirect) nor any indirect, incidental,
consequential or special damages, loss, costs, claims or expenses
howsoever arising. Both parties recognise that nothing in this
Agreement constitutes an absolute obligation to provide any of
the Services and that the sole extent of the parties' obligations
is expressly qualified as
16
set out in clauses 2.4 and 2.9. The parties further recognise
that, to the extent that the provision of any Services is reliant
on the timely provision of information from the Services
Recipient Group to the Services Provider Group, the Services
Provider Group shall have no liability to the extent that the
Services cannot or have not been provided to the Services
Recipient Group due to the delayed provision of information or
the provision of inaccurate or insufficient information by the
Services Recipient Group.
5.5 Nothing in this Agreement shall exclude or restrict the liability
of either party or any of their respective Group Companies or
personnel for fraud or death or personal injury resulting from
their negligence or the negligence of their personnel arising in
connection with the provision of the Services or otherwise.
5.6 Euroco shall indemnify:
5.6.1 all personnel of New NTL performing any of the
New NTL Services in respect of any Loss suffered
or incurred by such personnel to the extent
arising out of or in connection with the
provision of the New NTL Services, in each case,
to the same extent as any such personnel would be
indemnified if such personnel were an employee of
Euroco, except to the extent that any such Loss
resulted from a breach by New NTL of its
obligations hereunder;
5.6.2 the New NTL Group Companies in respect of any
Loss suffered or incurred by such New NTL Group
Companies to the extent arising out of or in
connection with the provision of the New NTL
Services, except to the extent that any such Loss
resulted from a breach by New NTL of its
obligations hereunder.
5.7 Where in connection with this Agreement, Euroco undertakes any
obligation in respect of any New NTL Group Companies (other than
New NTL) or any personnel of New NTL, Euroco unconditionally and
irrevocably acknowledges and agrees that New NTL is entering into
this Agreement and accepting the benefit of such obligations not
only for itself but also as agent and trustee for such persons.
Where in connection with this Agreement, New NTL undertakes any
obligation in respect of any Euroco Group Companies (other than
Euroco) or any personnel of Euroco, New NTL unconditionally and
irrevocably acknowledges and agrees that Euroco is entering into
this Agreement and accepting the benefit of such obligations not
only for itself but also as agent and trustee for such persons.
17
5.8 For the avoidance of doubt, where the Services require any
personnel of New NTL to act as directors or officers of any
Euroco Group Company or any Affiliate of Euroco, New NTL's sole
responsibility shall be to make such personnel available to the
Euroco Group (subject to the right of any such personnel to
resign at any time from their employment with the relevant New
NTL Group Company and/or to resign from their position as a
director or officer of the relevant Euroco Group Company or
Affiliate of Euroco and subject to the unavailability of
personnel who die or are absent from work due to sickness or
holiday entitlement) and the New NTL Group shall not be
responsible or liable for the acts and omissions of such
personnel as directors or officers of any Euroco Group Company or
any Affiliate of Euroco. Euroco shall effect and maintain at all
times during the period when such New NTL personnel are acting in
such capacity directors' and officers' liability insurance in
form and extent consistent with Euroco's past practice and shall
procure that such personnel of New NTL so acting shall be listed
on such insurance as beneficiaries of the same. Euroco shall
supply such information as New NTL may reasonably require from
time to time to enable New NTL to satisfy itself that the
insurance which Euroco is required to maintain pursuant to this
clause 5.8 is being maintained.
6. LICENCE TO USE THE TRADE MARKS
6.1 The parties acknowledge that, among other things, the Plan
provides that, on the Effective Date, Euroco shall change its
name to NTL Europe, Inc. and, that the Disclosure Statement dated
15 July 2002 distributed to, inter alia, creditors and securities
holders of Euroco and New NTL envisaged that New NTL would permit
Euroco to use the "ntl:" logo and the NTL name on a transitional
basis.
6.2 Subject to the restrictions set out in clause 6.3, New NTL hereby
grants to Euroco and each member of the Euroco Group using the
"ntl" name immediately prior to the Effective Date a
non-exclusive, royalty-free, licence to use the Trade Marks as
part of their corporate names and in connection with the
operation of their respective businesses but only to the same
extent and in the same manner as used by such members during the
six months prior to the Effective Date and, for the avoidance of
doubt, not in respect of any business or in any manner not
carried on during such period. The term of the foregoing licence
shall be as follows (the "Licence Term"): (a) with respect to the
use of the "ntl:" logo other than as part of the corporate name
of Euroco or any member of the Euroco Group and other than in
connection with the Newcastle Sponsorship Agreement, the
foregoing licence shall be for a period of six (6) months from
the Effective Date; (b) with respect to the use of the Newcastle
Logo the foregoing licence shall subsist for the remainder of the
2002/2003 football season; and (c) with respect to the use of
"ntl" as part of the corporate name of
18
Euroco and each other member of the Euroco Group using the NTL
name as part of its corporate name immediately prior to the
Effective Date only, such licence shall be for a period
commencing on the Effective Date and ending on the first to occur
of (i) the date on which more than 50% (whether by a single
transaction or by a series of connected transactions) of the
voting securities of Euroco or the applicable member of the
Euroco Group are sold or transferred to an unaffiliated third
party (or two or more such third parties who actively co-operate
to secure such sale or transfer), (ii) the date on which Euroco
or the applicable member of the Euroco Group cease to conduct any
business and (iii) in relation to any Euroco Group Company using
"ntl" as part of its corporate name immediately prior to the
Effective Date which is a holding company incorporated in the
United States or an operating company incorporated in the United
Kingdom or Europe (the "Core Euroco Entities"), the date which is
six months following the Effective Date if commercially
reasonably practicable or as soon thereafter as Euroco reasonably
believes is commercially reasonably practicable, but in no event
later than the first anniversary of the Effective Date or, in
relation to any other Euroco Group Companies using "ntl" as part
of its corporate name immediately prior to the Effective Date
(the "Non-Core Euroco Entities") and subject to clause 6.6, the
third anniversary of the Effective Date. Euroco agrees that, with
effect from the date which is 14 days after the Effective Date,
it will include and will procure that each of the Core Euroco
Entities and Non-Core Euroco Entities will include, in each case,
for as long as the company in question continues to use "ntl" as
part of its corporate name, a reference, by footnote or
otherwise, on all letterhead, stationary and other similar
identifying documents, that it is not affiliated with New NTL.
6.3 Euroco shall use its reasonable commercial efforts to, except as
permitted by this Agreement or as otherwise consented to in
writing by New NTL:-
6.3.1 prevent any person to use any mark or name
confusingly similar to the Trade Marks in
connection with any telecommunication and data
transmission services in Europe;
6.3.2 not make any representation or do any act which
reasonably could be expected to imply an existing
connection between Euroco and New NTL or between
their respective Group Companies (including, for
the avoidance of doubt, using the adjacent
letters "ntl" in the name of any of its Group
Companies).
6.4 New NTL may, without prejudice to any other rights which it may
have, forthwith upon giving notice terminate the licence granted
in clause 6.2 if Euroco challenges
19
the validity of or entitlement of New NTL to use any of the Trade
Marks or breaches any of the terms of clause 6.3.
6.5 Without prejudice to clause 6.6, upon expiry of each applicable
Licence Term specified in clause 6.2 or upon earlier termination
of the licence granted in clause 6.2 in accordance with clauses
6.4, 8.3 or 10.3:
6.5.1 all rights granted to Euroco pursuant to this
clause 6 shall cease and Euroco and its Group
Companies shall cease to use the Trade Marks for
any purpose;
6.5.2 Euroco shall take all required steps to change
its name and procure that the names of each of
its relevant Group Companies are changed so that
they do not include the "ntl" name as promptly as
possible; and
6.5.3 Euroco shall deliver up to New NTL or, at New
NTL's request, destroy (or procure the delivery
up or destruction of) all stationery, signs or
other materials bearing the Trade Marks.
6.6 Notwithstanding clause 6.2 above, Euroco shall use its reasonable
commercial efforts to take all required steps to change the names
of the Non-Core Euroco Entities (as defined in clause 6.2 above)
as promptly as possible following the expiry of a six month
period commencing on the Effective Date.
7. SECONDEES
7.1 New NTL shall procure that, with effect from the Effective Date,
the Secondees are seconded to Euroco for the period of time set
out against the names of such individuals in the second column of
the table contained in Schedule 4 (in relation to each
individual, the "Secondment Period").
7.2 During the Secondment Period, Euroco shall pay to New NTL, in
accordance with clause 4, the following fees in respect of the
Secondees (the "Secondment Fees"):
7.2.1 the fees set out against the name of the relevant
individual in the third column of the table
contained in Schedule 4;
7.2.2 an amount equal to any bonus payable by the New
NTL Group to the Secondees to the extent that:
20
(a) such bonus relates to services performed
by the Secondee to Euroco or another
member of the Euroco Group during the
Secondment Period; and
(b) the amount of such bonus is approved in
advance in writing by Euroco; and
7.2.3 any out of pocket expenses (including hotel,
travel, entertainment and car hire expenses)
incurred by the Secondee in the performance of
services for the Euroco Group.
In the case of ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇,
Euroco shall have the right to direct and cause any of these
secondees to provide their services to and report to managers at
iesy, in which case Euroco may cause the applicable fees to be
paid for by iesy.
7.3 New NTL agrees to use its reasonable commercial efforts to retain
as employees the Secondees during the Secondment Period.
7.4 During the Secondment Period, the Secondees shall be under the
day to day control of Euroco, in particular in relation to the
allocation and performance of the services for the Euroco Group
and shall be subject to the working practices of, and take
instructions from, Euroco.
7.5 New NTL does not warrant the suitability of the Secondees to
carry out services for the Euroco Group and Euroco acknowledges
that it has satisfied itself that the Secondees are acceptable to
it.
7.6 Euroco shall not at any time during the Secondment Period through
any act or omission directly or indirectly cause a breach of the
contract of employment between New NTL and the relevant Secondee,
or any of the employment policies relating thereto.
7.7 Euroco shall indemnify and keep indemnified the New NTL Group and
the Secondees against any Loss (including, in relation to New NTL
Group, any settlement costs and expenses) made against or
incurred or suffered by the New NTL Group and/or such Secondee
arising out of or in connection with the secondment of the
Secondee to Euroco or the provision of services by the Secondee
for the Euroco Group or Euroco's Affiliates, regardless of the
date on which such Loss arises or is suffered or incurred.
21
7.8 The obligations of New NTL are subject to:
7.8.1 any entitlement which the Secondee may have from
time to time to take leave pursuant to the terms
of their employment with the relevant New NTL
Group Company;
7.8.2 the death of any Secondee;
7.8.3 the right of the Secondee to resign at any time
from their employment with the relevant New NTL
Group Company and, without prejudice to clause
7.3, the right of that New NTL Group Company to
terminate their employment; and
7.8.4 the absence of any Secondee from work due to
sickness.
7.9 The Secondment Fees payable by Euroco shall be payable
notwithstanding the absence of any Secondee for the reasons
detailed in 7.8.1 and 7.8.4 above; provided that, anything
contained in this Agreement to the contrary notwithstanding, with
respect to any Secondee, the applicable "Secondment Period" shall
terminate immediately upon the occurrence of any of the events
referred to in clauses 7.8.2 or 7.8.3.
8. FORCE MAJEURE
8.1 In this Agreement, "Force Majeure" shall mean any event or
circumstance preventing or delaying a party from performing all
or any of its obligations under this Agreement, which arises from
or is attributable to acts, events, omissions or accidents beyond
the reasonable control of the party so affected, including
(without limitation) acts of God, war, riot, civil commotion,
terrorist acts, explosions, third party telecommunications
failures, malicious damage, fires, floods or storms.
8.2 If a party or any of its Group Companies is prevented from or
delayed in the performance of any of its obligations under this
Agreement by Force Majeure, that party shall forthwith serve
notice in writing on the other party specifying the nature and
extent of the circumstances giving rise to Force Majeure, and
shall, subject to service of such notice, have no liability in
respect of the failure to perform such of its obligations as are
prevented by the Force Majeure during the continuation of such
Force Majeure, and for such time after it ceases as is necessary
for that party. In the event of any failure, interruption or
delay in the performance of any of its
22
obligations under this Agreement by Force Majeure or otherwise,
the Service Provider shall, and shall procure, that its Group
Companies shall, use all reasonable endeavours, to recommence its
affected operations and perform its obligations under this
Agreement as soon as reasonably possible.
8.3 If a party is prevented by Force Majeure from the performance of
its obligations under this Agreement for a continuous period in
excess of 20 Business Days, the other party may terminate this
Agreement forthwith insofar as it relates to the particular
Service and/or the Secondees and/or the New NTL Property and/or
the Euroco Property and/or the Trade Mark licence, in each
instance, affected by such Force Majeure, on service of written
notice upon the party so prevented. If a party is prevented by
Force Majeure from the performance of its obligations under this
Agreement, neither party shall have any liability to the other
PROVIDED THAT rights and liabilities that accrued prior to such
termination shall continue to subsist.
9. CONFIDENTIALITY
9.1 Subject to clause 9.2, each party shall, and shall procure that
its Group Companies shall, treat in confidence the other's
Confidential Information and shall not:
9.1.1 disclose in whole or in part Confidential
Information to any person not party to this
Agreement;
9.1.2 use Confidential Information for a purpose other
than for the exercise of its rights or the
performance of its obligations under this
Agreement.
9.2 Notwithstanding the provisions of clause 9.1, each party may
disclose Confidential Information:
9.2.1 to its own personnel and to any of its Group
Companies to the extent required for the proper
performance of this Agreement provided that such
party shall procure compliance by such personnel
or Group Company with clause 9.1 as if such
persons were bound thereby and provided further
that the liability for disclosure or use of such
Confidential Information in breach of clause 9.1
by such personnel or Group Company shall remain
with each party;
9.2.2 to its professional advisers and financial
backers or those of any of its Group Companies
under conditions of confidentiality (it being
23
acknowledged that any fiduciary relationship
between a legal adviser and its client includes a
satisfactory condition of confidentiality); or
9.2.3 to the extent required by law or any regulatory
requirement or by any regulatory authority
(including, without limitation, the Securities
and Exchange Commission, the UK Financial
Services Authority, the UK Listing Authority,
NYSE, NASDAQ and NASDAQ Europe).
9.3 Upon termination of this Agreement, each party shall ensure that
all Confidential Information obtained under or in connection with
this Agreement that belongs to the other party or the other
party's Group Companies in whatever medium the same is recorded
or held is deleted or destroyed upon the other party's request.
9.4 Upon request and, in any event, upon the second anniversary of
this Agreement, each party shall ensure that all other
Confidential Information belonging to the other party in whatever
medium the same is recorded or held is deleted or destroyed.
10. DURATION OF THE SERVICES
10.1 Subject to clauses 10.2 and 10.3, the New NTL Services (other
than any Additional Services) shall be provided with effect from
the Effective Date and thereafter for the period specified in
relation to such Services in the fourth column of the table set
out in Schedule 1. Each of the Additional Services shall be
provided for the period to which the parties agree in writing in
relation to that service pursuant to clause 2.10.
10.2 The Services Recipient may require the cessation of the Services
or any one or more of them upon giving not less than 20 Business
Days' notice to the Services Provider.
10.3 Either party ("the first party") may forthwith upon giving notice
to the other party terminate this Agreement (or any part of it)
on the happening of any of the following events:
10.3.1 if the other party commits a material breach of
any of the provisions of this Agreement and fails
to remedy such breach within 15 Business Days of
a notice from the first party specifying the
breach and requiring the same to be remedied;
10.3.2 if the other party commits such a material breach
as is referred to in clause 10.3.1 which is
incapable of remedy.
24
11. EFFECT OF TERMINATION
Upon termination of this Agreement, the provisions of clauses 1,
3, 4, 5, 9, 11, 12, 13, 14, 15, 16 and 17 shall survive and such
termination shall be without prejudice to any other rights which
either party may have under this Agreement and without prejudice
to any rights which either party may have that accrued prior to
the date on which the termination takes effect.
12. DISPUTE RESOLUTION ON FEES
12.1 If any dispute or difference arises between the parties out of or
relating to this Agreement with respect to any calculation of the
Fees payable to the Services Provider under this Agreement, then
the parties shall attempt to resolve such dispute promptly by
negotiation between executive officers who have authority to
settle the dispute and who are at a higher level of management
than the persons with direct responsibility for administration of
this Agreement. If the dispute has not been resolved by executive
officer negotiation within 30 days of the commencement of such
executive officer negotiation, then upon written notice of either
party to the other party such dispute shall be resolved by
binding arbitration administered by the American Arbitration
Association ("AAA") in accordance with its Commercial Arbitration
Rules. Within ten (10) Business Days after the commencement of
arbitration by either party (the "Commencement Date"), the
parties shall agree upon a person who has an accounting
background and is qualified in making cost allocation
determinations similar to those made under Schedule 1 of this
Agreement, as applicable (the "Qualifications") to act as the
arbitrator. If the parties are not able to mutually agree on an
arbitrator within ten (10) Business Days after the commencement
Date (the "First Selection Period"), each party shall then have
seven (7) Business Days from the expiration of the First
Selection Period (the "Second Selection Period") to select one
person who, in the reasonable determination of such party, meets
the Qualifications, and the two persons so selected shall, within
seven (7) Business Days of the last to be appointed (the "Third
Selection Period"), select an arbitrator who meets the
Qualifications to act as the arbitrator. If a party fails to
select a person within the Second Selection Period as required
above, the person selected by the other party who, in the
reasonable determination of that party, meets the Qualifications,
shall serve as the arbitrator. If, however, both parties select a
person within the Second Selection Period who, in the reasonable
determination of each of the parties, meets the Qualifications,
but the two persons so selected by the parties are unable or fail
to agree upon the arbitrator within the Third Selection Period,
the parties shall, immediately upon the expiration of the Third
Selection Period, provide a written
25
request to the AAA, and the arbitrator shall be selected by the
AAA within seven (7) Business Days of receipt of such written
request. The place of arbitration shall be
New York,
New York,
and the language of the arbitration shall be English. The
prevailing party in the arbitration shall be entitled, in
addition to such other relief as may be granted, to its
reasonable attorney's fees and other costs reasonably incurred in
such arbitration. The parties specifically agree to be bound by
the decisions rendered by the arbitrator and agree not to submit
a dispute subject to this clause 12.1 to any international,
national, federal, state, provincial, local or other court or
arbitration association, except as may be necessary to enforce
the decision rendered by the arbitrator.
12.2 The parties will provide the Arbitrator with such information as
the Arbitrator may reasonably require for the purposes of his
determination within the time limits set forth by him. If either
party claims any such information to be confidential to it then,
provided in the reasonable opinion of the Arbitrator that party
has properly claimed the same as confidential, the Arbitrator
will not disclose such information to the other party or to any
third party.
13. DAMAGES NOT AN ADEQUATE REMEDY
The parties acknowledge that their remedies at law for any breach
of any obligation of confidentiality, infringement,
misappropriation or misuse of any intellectual property right or
threatened breach would be inadequate and, in recognition of this
fact, upon such breach or threatened breach, either party,
without posting any bond, and in addition to all other remedies
which may be available, shall be entitled to immediately seek or
obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
14. ENTIRE AGREEMENT
14.1 Except for the Tax Sharing Agreement (the "Tax Sharing
Agreement") and the Demerger Agreement ("Demerger Agreement")
each of even date and entered into by the parties, this Agreement
supersedes and terminates all prior agreements and arrangements
(including those discussed in the Plan) relating to the provision
of the New NTL Services by New NTL to the Euroco Group and the
provision of the Euroco Services by Euroco to the New NTL Group,
the secondment of the Secondees to the Euroco Group, the
provision of the New NTL Property to Euroco and the provision of
the Euroco Property to New NTL, the payment of the Tax Return
Costs and Additional Tax Costs (in both cases, as defined in
clause 4.3), and
26
the licensing of the Trade Marks to Euroco, which may have been
made by the parties either orally or in writing and sets forth
the entire agreement between the parties in relation to the same.
To the extent any conflict arises between the terms of this
Agreement on the one hand and the terms of the Tax Sharing
Agreement or the Demerger Agreement on the other, the terms of
the Tax Sharing Agreement or the Demerger Agreement (as
appropriate) shall control. All other terms, conditions,
indemnities and warranties whether express or implied, statutory
or otherwise and (subject to clause 14.3) all representations
whether made orally or in writing are hereby excluded save to the
extent that the same appear in this Agreement or are specifically
agreed hereafter in writing by the parties. The foregoing shall
not restrict the ability of New NTL Group Companies and Euroco
Group Companies to enter into separate arrangements with respect
to the provision of technical assistance to NTL Broadcasting
(Thailand) Limited and NTL Broadcast Sdn Bhd.
14.2 Without prejudice to the generality of the foregoing, each of the
parties acknowledges that it has not been induced to enter into
this Agreement by a statement or promise that is not set out in
this Agreement.
14.3 This clause 14 shall not exclude any liability for fraudulent
misrepresentation.
15. GENERAL
15.1 No failure, delay or indulgence on the part of any party in
exercising any power or right under this Agreement shall operate
as a waiver of such power or right.
15.2 No single or partial exercise of any power or right by any party
shall preclude any other or further exercise thereof or the
exercise of any other such power or right under this Agreement.
15.3 Any specific rights or remedies conferred on the parties under
this Agreement are non-exclusive and are in addition to and
without prejudice to all other rights and remedies which any such
party may have available to it against the other or otherwise.
15.4 Subject to clauses 15.5 and 15.6, neither party shall, without
the prior written consent of the other, assign, mortgage, charge,
declare a trust over, transfer or otherwise, dispose of any of
its rights or obligations under this Agreement.
15.5 Notwithstanding clause 15.4, New NTL may at any time, without
Euroco's consent, assign any of its rights under this Agreement
to any of its Group Companies
27
(provided that it notifies Euroco as soon as reasonably
practicable following such assignment).
15.6 Notwithstanding clause 15.4, Euroco may at any time, without New
NTL's consent, assign any of its rights under the Agreement to
any Euroco Group Company which is a wholly owned undertaking of
Euroco provided that:
15.6.1 if such assignee ceases to be a wholly owned
undertaking of Euroco it shall forthwith
re-assign its rights under this Agreement to
Euroco or to any other wholly owned undertaking
of Euroco;
15.6.2 Euroco shall notify New NTL of any such
assignment (or, in the case of 15.6.1,
re-assignment) as soon as reasonably practicable
following such assignment (or re-assignment, as
the case may be).
15.7 No variation of this Agreement shall be effective unless made in
writing signed by or on behalf of each of the parties and
expressed to be such a variation.
15.8 Nothing in this Agreement shall create, or be deemed to create, a
joint venture, contract of employment, partnership, agency or
other similar relationship between the parties or any of their
respective Group Companies and each party agrees not to contend
or represent to the contrary.
15.9 This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and
assigns, and nothing herein, express or implied, is intended to
or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement. Notwithstanding the foregoing,
nothing in this Agreement shall limit in any way either party's
indemnification obligations under this Agreement.
16. NOTICES
16.1 Any notice, consent, statement, request or approval (a "Notice")
to be given under this Agreement shall be in writing and signed
by or on behalf of the party giving it. Any Notice shall be sent
to the party to be served at the address or to the fax number set
out in Schedule 2, and the Notice shall be marked for the
attention of the person named for the purpose in Schedule 2. Any
alteration in such details shall, to have effect, be notified to
the other party in accordance with this clause 16.
28
16.2 Service of a Notice must be effected by one of the following
methods (for the avoidance of doubt, a Notice shall not be
validly served if sent by e-mail):
16.2.1 by prepaid first-class post. In proving service,
it shall be sufficient to prove that the envelope
containing the Notice was correctly addressed,
postage paid and posted; or
16.2.2 by sending it by fax (provided a hard copy of any
such fax is despatched by post within 24 hours of
transmission). In proving service by fax, it
shall be sufficient to prove that the fax was
sent to the fax number specified in Schedule 2 of
the party to whom it was sent and that there was
no evidence that such transmission was
interrupted or otherwise incomplete.
16.3 A Notice shall be deemed to have been received (in the case of
first-class post), on the fourth Business Day after the date of
posting, and (in the case of delivery by fax), on the first
Business Day after the date of transmission.
17. GOVERNING LAW AND JURISDICTION
This 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. Without
prejudice to clause 12, which shall govern with respect to the
matters set forth in clause 4 each of the parties (i) consents to
submit itself to the personal jurisdiction of any federal court
located in the State of
New York or any
New York State court in
the event any dispute arises out of this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such
court, and (iii) agrees that it will not bring any action
relating to this Agreement in any court other than a federal
court sitting in the State of
New York or a
New York State court.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
This Agreement has been duly executed by the parties on the date
set out above.
29
SCHEDULE 1
New NTL Services and Fees
For the avoidance of doubt, the New NTL Services described in this Schedule are expressly qualified by clause 2.9 of the Agreement
------------------------------ ---------------------------------------------------------------------------------
Service Type Description
------------------------------ ---------------------------------------------------------------------------------
Accounting New NTL shall make the services of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ available to train and advise
Euroco's Controller or Accounting Manager in connection with the accounting
functions at Euroco (including, but not limited to, the consolidation of the
results of the members of the Euroco Group). In that regard, New NTL expressly
acknowledges that Euroco will be required to file a report on Form 8-K within
fifteen days following the Effective Date.
Euroco acknowledges and agrees that all decisions relating to the disclosure,
content and presentation of the accounts and reports referred to above shall be
made by, and shall be the responsibility of, Euroco and that neither the New
NTL Group Companies nor New NTL's personnel shall have any liability for any
such decisions.
Subject to the following paragraph, in the event Euroco provides a written
notice that is executed by the Chief Executive Officer and the Principal
Accounting Officer of Euroco to New NTL on or prior to February 21, 2003 that
Euroco is required under the rules and regulations of the Securities Exchange
Act of 1934, as amended (the "1934 Act") to include audited financial
statements and other audited and unaudited financial information and related
textual (including management discussion and analysis) and footnote disclosure
with respect to the New NTL Group Companies (the "Information") in Euroco's
Annual Report on Form 10-K for the year ended December 31, 2002 and any
required amendments thereto (the "Euroco 2002 Form 10-K"), New NTL shall make
available to Euroco (subject to any customary hold harmless letters in relation
to working papers) the Information New NTL reasonably believes necessary, after
consultation with the Principal Accounting Officer of Euroco and Euroco's
outside auditor, in order for Euroco to make such filing with the SEC in
material compliance (solely with respect to the Information) with the
requirements of Form 10-K. Notwithstanding the matters set forth in the
immediately preceding sentence, New NTL expressly disclaims any responsibility,
obligation, duty or liability for the compliance by Euroco of Euroco's
obligations under the 1934 Act relating to, arising out of, or in connection
with the Euroco 2002 Form 10-K or any other filing or correspondence with or
documents furnished to the SEC, except solely for the Information in the form
made available to Euroco for inclusion in the Euroco 2002 Form 10-K. The
Information provided to Euroco and its advisors shall remain Confidential
Information save in so far as, and until, it is (1) included in any filing by
New NTL with the SEC pursuant to New NTL's filing obligations under the 1934
Act or (2) approved in form and content by an authorized officer of New NTL for
use in the Euroco 2002 Form 10-K (such approval not to be unreasonably
withheld).
After consultation by Euroco with its outside auditors, Euroco agrees to
expeditiously use its best efforts to obtain or cause to be obtained (although
there can be no assurance) an exemption (which may take the form of no-action
relief) (the "Exemption") from the Staff of the SEC (which may include, among
others, the Office of Chief Accountant or the Accounting Division of the SEC)
to the requirement under the 1934 Act to include the Information in the Euroco
2002 Form 10-K. At the request of Euroco or its advisors, New NTL agrees to
reasonably cooperate with Euroco and its advisors in the obtaining of the
Exemption; provided that Euroco keeps New NTL and its advisors informed
(including providing any written documentation (including electronic
correspondence) or appropriate summaries of oral conversations with the SEC and
others) on a real-time basis of the status and timing of obtaining of, and the
form and content of, the Exemption.
Chart Continued
------------------------------ -------------------------------------------- -----------------------------------
Service Type Charges Duration
------------------------------ -------------------------------------------- -----------------------------------
Accounting Euroco shall pay New NTL the following Until such time as Euroco files
hourly fees for work performed for Euroco its Annual Report on Form 10-K
by members of the Accounting Staff: for the year ended December 31,
2002 or April 15, 2003 if earlier.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇: $ 399.68
New NTL shall use its reasonable
commercial efforts to cause the
above-named individual to maintain
accurate written records of the time spent
on Euroco matters. Any invoice by New NTL
for such fees shall include copies of such
time records.
In addition, Euroco shall reimburse New
NTL for any documented out-of-pocket costs
or expenses incurred by the New NTL Group
in connection with providing the
applicable service.
Without prejudice to the foregoing, New
NTL's agreement to reasonably cooperate
with Euroco and its advisors in the
obtaining of the Exemption is subject to
the proviso that New NTL is promptly
reimbursed for any out-of-pocket fees and
expenses incurred by or on behalf of New
NTL (including the fees and expenses of
New NTL's advisors) that are attributable
to the obtaining of the Exemption
------------------------------ ---------------------------------------------------------------------------------
Service Type Description
------------------------------ ---------------------------------------------------------------------------------
Financial New NTL will provide Euroco with payroll services through its payroll services
company and provide Euroco with expense reimbursement services for the seconded
employees (provided that Euroco shall be responsible for the prior approval of
all expenses claims submitted for reimbursement) and other New NTL employees,
as applicable.
------------------------------ ---------------------------------------------------------------------------------
Treasury New NTL will make the services of its Treasury department available to Euroco
consistent with such department's prior involvement with managing Cablecom's
bank facilities and for the management of cash-on-hand at Euroco and for bank
reconciliations. For the avoidance of doubt, this shall not extend to
renegotiation or replacement of Cablecom's existing bank facilities.
Euroco acknowledges and agrees that all decisions relating to such treasury
services shall be made by, and shall be the responsibility of, Euroco and that
neither the New NTL Group Companies nor New NTL's personnel shall have any
liability for any such decisions.
------------------------------ ---------------------------------------------------------------------------------
Investor Relations Euroco shall be responsible for the preparation and filing of its own press
announcements and results announcements though Euroco shall be entitled to
consult New NTL's investor relations personnel in respect thereof.
New NTL will make available its Investor Relations personnel to respond to
questions from the investment community on Euroco. New NTL's responsibility in
answering such questions will be strictly limited to the reasonably specific
information provided by Euroco to such personnel and, periodically notifying
Euroco of inquiries received and responses given. Personnel from both parties
will coordinate responses that implicate both parties.
New NTL's Investor Relations personnel's details shall not be listed or used by
Euroco as specific contacts for governmental authorities, regulatory
authorities, the investment community, shareholders, analysts, banks,
stockbrokers or others.
------------------------------ ---------------------------------------------------------------------------------
Legal Euroco's legal counsel shall have access to New NTL's legal department for the
purpose of inquiring about historic transactions.
For the avoidance of doubt, New NTL Group and its personnel shall not and shall
not be deemed to provide legal advice to Euroco or any Euroco Group Company.
------------------------------ ---------------------------------------------------------------------------------
Office Accommodation New NTL shall provide the following office space (including heat, power, light,
IT support, telephone, stationery, fax facilities) :
Office at Quadrant House for ▇▇▇▇ ▇▇▇▇▇ to the extent reasonably available.
Use of temporary office space at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ for
▇▇▇▇ ▇▇▇▇▇ to the extent office space is reasonably available from time to time.
Use of office space at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ for ▇▇▇▇▇▇▇
▇▇▇▇▇.
In addition, ▇▇▇▇ ▇▇▇▇▇ shall have access to the services of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in
the role of personal assistant (based at Quadrant House) consistent with past
practice.
Services, including IT support, shall be made available to Euroco to the extent
Euroco personnel are utilizing New NTL offices - but shall be subject to New
NTL's agreements with third parties (for example, the provision of IT support
shall be limited to the service provided to New NTL by IBM). The provision of
IT hardware and software shall be at the cost and responsibility of Euroco and
shall not be included as IT support. In no event shall the provision of any
services to Euroco be to any extent greater to the services received by New
NTL by any service provider.
------------------------------ ---------------------------------------------------------------------------------
Technical Assistance New NTL will make available technical assistance to NTL Lanbase SL on a basis
consistent with prior practice.
------------------------------ ---------------------------------------------------------------------------------
Joint Venture Management New NTL shall continue to make available the following personnel to answer
questions and provide advice regarding the operations of the following joint
ventures:
The Studio Channel Limited (director ▇▇▇▇ ▇▇▇▇▇, relationship managed by New
NTL Content division)
ITN News Channel Limited (director ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, relationship managed by New
NTL Content division)
Two Way TV Limited (alternate director ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, relationship managed by
New NTL Content division and New NTL Corporate Finance department)
Global Radio Participations SA (director ▇▇▇▇▇ ▇▇▇▇▇▇▇, former part-time CFO
▇▇▇▇ ▇▇▇▇▇▇▇, relationship managed by New NTL's Broadcast division)
Radioscape Limited (attendance at Technical Committee and management of
relationship by New NTL's Broadcast division)
New NTL shall use commercially reasonable efforts to obtain resignations of its
employees from Board seats when Euroco requests.
Such services shall be provided to Euroco consistent with past practice but New
NTL shall not and shall not be deemed to be providing advice to Euroco in
respect of the making available of any New NTL personnel to Euroco where such
persons make recommendations or give advice to Euroco in respect of the
management of such joint ventures. Euroco acknowledges and agrees that it
shall be solely responsible for, and that neither the New NTL Group Companies
nor such New NTL personnel shall have any liability in respect of, decisions
made on the basis of the recommendations or advice of such New NTL personnel.
------------------------------ ---------------------------------------------------------------------------------
Chart Continued
------------------------------ -------------------------------------------- -----------------------------------
Service Type Charges Duration
------------------------------ -------------------------------------------- -----------------------------------
Financial There shall be no charge for expense Payroll services shall be
reimbursement services. provided for up to 6 months.
Euroco shall pay New NTL the following Expense reimbursement services
hourly fees for work performed for Euroco shall be provided for so long as
by the following persons: Euroco utilizes the services of
any New NTL personnel.
▇▇▇▇▇ ▇▇▇▇▇▇▇ - $ 98.15
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ - $ 201.93
Others - $ 219.38
In addition, Euroco shall reimburse New
NTL for any documented out-of-pocket costs
or expenses incurred by the New NTL Group
in connection with providing the
applicable service.
------------------------------ -------------------------------------------- -----------------------------------
Treasury Euroco shall pay New NTL the following These services, including those
hourly fees for work performed for Euroco of ▇▇▇▇▇ ▇▇▇▇▇▇▇, shall be
by the following persons: provided for up to 12 months.
▇▇▇▇▇ ▇▇▇▇▇▇▇ - $ 472.67
Others - $ 169.59
In addition, Euroco shall reimburse New
NTL for any documented out-of-pocket costs
or expenses incurred by the New NTL Group
in connection with providing the
applicable service.
------------------------------ -------------------------------------------- -----------------------------------
Investor Relations To the extent that responses to be given Investor relation services shall
by New NTL's Investor Relations personnel be provided for up to 12 months.
shall consist of more than directing
inquiries to Euroco personnel or Euroco's
website, Euroco shall pay New NTL hourly
fees of $ 178.62 in respect of the time
spent by the relevant personnel in so
doing and Euroco shall reimburse New NTL
for any direct out -of-pocket expenses.
------------------------------ -------------------------------------------- -----------------------------------
Legal In respect of providing information on
historic transactions, Euroco shall pay
New NTL hourly fees of $ 250 in respect of
the time spent by the relevant personnel
in so doing. Euroco shall reimburse New
NTL for any documented out-of-pocket costs
or expenses incurred by the New NTL Group
in connection with providing the
applicable service.
------------------------------ -------------------------------------------- -----------------------------------
Office Accommodation No charge for office accommodation for With respect to Quadrant House,
▇▇▇▇ ▇▇▇▇▇. these services shall be provided
for up to 12 months.
Office space for ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be
charged at a rate of $ 700 per month. With respect to the New York
office for ▇▇▇▇ ▇▇▇▇▇, these
Charges for specific services will be services shall be provided for up
cost-based related to the time and amount to 12 months.
of such services actually used by Euroco
personnel. With respect to the New York
office for ▇▇▇▇▇▇▇ ▇▇▇▇▇, these
The services of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be services shall be provided for up
charged at a rate of $ 71.25 per hour. to 12 months but shall be
terminable at any time by New NTL
upon giving Euroco not less than
one month's notice.
With respect to the services of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, these services
shall be provided for up to 12
months
------------------------------ -------------------------------------------- -----------------------------------
Technical Assistance Technical assistance shall be provided on Technical assistance shall be
the basis of the hourly rate for the provided for up to 12 months.
relevant personnel providing the same
calculated on the basis of annual salary
of individual concerned including
contractual bonus and any bonus awarded
under a bonus scheme in which they
participate divided by 1,880 hours times
1.5 in respect of the time spent by the
relevant personnel in so doing.
In addition, Euroco shall reimburse New
NTL for any documented out-of-pocket costs
or expenses incurred by the New NTL Group
in connection with providing the
applicable service.
------------------------------ -------------------------------------------- -----------------------------------
Joint Venture Management In respect of providing advice, answering Joint venture services shall be
questions and acting as directors of the provided for a period of up to 12
joint ventures, Euroco shall pay New NTL months.
hourly fees of $ 275.09 in respect of the
time spent by the relevant personnel in so
doing. Euroco shall reimburse New NTL for
any documented out-of-pocket costs or
expenses incurred by the New NTL Group in
connection with providing the applicable
service.
------------------------------ -------------------------------------------- -----------------------------------
36
SCHEDULE 2
Parties' Details
Notices shall be addressed as follows:
o To New NTL: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇
fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
and marked for the attention of ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
o To Euroco ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
and marked for the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
37
SCHEDULE 3
NTL Logos
ntl:
ntl:
38
SCHEDULE 4
The Secondees
Name of Secondee Secondment Period Secondment Fees
(US $ per week)
▇▇▇▇ ▇▇▇▇▇ * 6,129.33
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ * 3,694.22
▇▇▇▇▇ ▇▇▇▇▇▇▇ ** 7,361.62
▇▇▇▇▇ ▇▇▇▇▇▇▇ ** 10,606.00
▇▇▇▇▇ ▇▇▇▇▇▇ ** 9,687.38
* One (1) year; provided that the Secondment Period may be (i)
terminated on not less than thirty (30) days prior written notice
by Euroco to New NTL (such notice to expire no earlier than the
date which is four months following the Effective Date); and (ii)
extended for up to an additional one (1) year period upon the
written notice of Euroco delivered to New NTL not less than
ninety (90) days prior to the first anniversary of the Effective
Date.
** Same as above, but in no event longer than their secondment to
iesy.
39
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
SIGNED BY ) Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
for and on behalf of ) Title: Executive Vice President,
NTL INCORPORATED ) General Counsel and Secretary
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
SIGNED BY ) Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
for and on behalf of ) Title: President and Chief Executive
NTL EUROPE, INC. ) Officer
40