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The
following contracts (not being contracts entered into
in the ordinary course of business) have been entered
into in the two years preceding the date of this document
by BT or another member of the group and are, or may
be, material to the group or have been entered into
by BT or another member of the group and contain a provision
under which a member of the group has an obligation
or entitlement which is, or may be, material to BT or
such other member of the group.
| Airtel
|
| A
sale and purchase agreement dated 2 May 2001 between
BT (Netherlands) Holdings BV, a subsidiary of BT
and Vodafone, under which the BT subsidiary agreed
to sell its entire interest in Airtel Móvil,
S.A. to Vodafone. The sale was completed on 29 June
2001 for a consideration of £1.1 billion (paid
in Euros). |
| Yell
|
| On
25 May 2001, the following agreements were entered
into, under which BT agreed to sell its classified
advertising directory businesses in the UK and the
USA: |
| (i) |
umbrella
agreement between Yell Ltd, BT Holdings Ltd, Yellow
Pages BV, Marchprobe Ltd, Castaim Ltd,Yasmin Two
(US) Inc. and BT; |
| (ii) |
UK
share sale agreement between BT Holdings Ltd and
Marchprobe Ltd under which BT Holdings Ltd agreed
to sell the share capital of Yellow Pages Sales
Ltd to Marchprobe Ltd; |
| (iii) |
UK
business sale agreement between Yell Ltd, Castaim
Ltd and Yasmin Two (US) Inc. under which Yell Ltd
agreed to sell Yell Ltd’s business and assets
to Castaim Ltd and to sell Yell Ltd’s US intellectual
property rights to Yasmin Two (US) Inc; and |
| (iv) |
US
share sale agreement between Yellow Pages BV and
Yasmin Two (US) Inc. under which Yellow Pages BV
agreed to sell the share capital of Yellow Book
USA, Inc. to Yasmin Two (US) Inc. |
The
umbrella agreement sets out the common terms which apply
to the UK share sale agreement, the UK business sale
agreement and the US share sale agreement. The umbrella
agreement contains covenants restricting any member
of the group from carrying on a competing printed classified
directories business for twelve months from completion.
The share sale and business agreements contain standard
warranties and indemnities in favour of Marchprobe Ltd,
Castaim Ltd and Yasmin Two (US) Inc. The warranties
expired on 30 June 2002.
As part of the consideration under the UK business sale
agreement, Castaim Ltd also assumed responsibility for
certain liabilities and obligations of the Yell business.
The sale of Yell was completed on 22 June 2001 for a
consideration of £2.14 billion, comprising (i)
£2 million as consideration for the issued shares
of Yellow Pages Sales Ltd; (ii) £1,288 million
in cash plus £100 million in interest bearing
vendor loan notes and £100 million in deferred
consideration (subject to reduction on ascertainment
of the net assets) as consideration for the assets of
Yell Ltd; (iii) £1 as consideration for the US
intellectual property rights; and (iv) £650 million
as consideration for the issued shares of Yellow Book
USA, Inc. (subject to adjustment in respect of certain
intra-group indebtedness and pursuant to the terms of
the first amending agreement).
Following completion, Yell Ltd agreed a net asset adjustment
with Castaim Ltd in respect of the assets of Yell Ltd,
and Yellow Pages BV agreed a net asset adjustment with
Yasmin Two (US) Inc. in respect of Yellow Book USA,
Inc, which together resulted in the total purchase consideration
received being reduced by approximately £140 million.
| Demerger
Agreement |
On
18 September 2001, BT Group plc, British Telecommunications
plc and mmO2 plc entered into a demerger
agreement (the ‘‘Demerger Agreement’’)
which set out the obligations of the parties in
implementing the steps to achieve the demerger of
mmO2(‘‘the Demerger’’).
Under this agreement, mmO2 agreed to
transfer BT Group Investments to BT Group plc and,
in exchange for that transfer, BT Group agreed to
allot and issue BT Group shares to the mmO2
shareholders in satisfaction of the Demerger dividend
(being the dividend declared by mmO2
of an amount equal to the book value of its shareholding
in BT Group Investments) so that each mmO2
shareholder at the Demerger record time was entitled
to receive one BT Group share for each mmO2
share then held. No party to the Demerger Agreement
gave any representation, warranty or indemnity to
the others and no party had any right to rescind
the agreement. |
| Separation
Agreement |
On
18 September 2001, British Telecommunications plc,
BT Group plc, mmO2 plc and O2
Limited entered into a separation agreement (the
‘‘Separation Agreement’’) relating
to the Demerger. Under the Separation Agreement,
it was agreed that mmO2 would have net
debt (excluding trading balances) of approximately
£500 million on 19 November 2001 (the ‘‘Demerger
Effective Date’’), including loan indebtedness
to BT Group.
BT
Group and mmO2 also agreed to allocate
certain assets and liabilities and rights and obligations,
in each case relating to the mmO2 business,
between their respective groups and agreed, subject
to certain limited exceptions, to indemnify each
other against certain actual and contingent liabilities
to the extent arising directly or indirectly out
of their respective businesses. Furthermore, BT
Group and mmO2 agreed to indemnify one
another against certain liabilities arising from
certain incomplete, false or misleading information
provided by either of BT Group or mmO2,
or their respective groups, for inclusion in public
documents. These indemnities apply indefinitely
and are not subject to any financial limit.
mmO2 plc agreed that, after the Demerger
Effective Date, it would seek to obtain a full and
effective release of each relevant member of the
BT Group from any guarantees, undertakings and indemnities
which the BT Group member may have given in respect
of the mmO2 group, including an undertaking
of support in respect of Viag Interkom’s licence
obligations.
The Separation Agreement sets out the parties’
agreement for the separation of the pensions arrangements
of the BT Group and the mmO2 Group and
also sets out an informal, non-binding dispute resolution
procedure which BT Group and mmO2 have
agreed shall be applied to resolve key disputes
which may arise between them and their respective
groups in connection with their continuing relationship
and the Demerger.
Under the Separation Agreement, BT Group and mmO2
agreed that certain costs of the Demerger would
be apportioned between them as they may agree in
writing.
Under a separate arrangement, BT Group and mmO2
agreed that mmO2 would pay the remaining
amount of approximately US$20 million in respect
of the 1,500,000 non-voting shares in Esat Digifone
Limited (now called O2 Communications
(Ireland)) acquired in April 2000. |
| Property
Sale and Leaseback |
On
13 December 2001, BT sold to Telereal Group Limited
(‘‘Telereal’’) a substantial
part of BT’s property portfolio together with
the BT property division. Around 6,700 properties
comprising offices, telephone exchanges, vehicle
depots, warehouses, call centres and computer centres
were transferred. The transaction also included
the transfer of approximately 350 employees from
BT to Land Securities Trillium (Telecom). Telereal
will be responsible for providing accommodation
and estates management services to BT. In return,
we pay Telereal around £190 million of annual
rental, increasing at 3% a year, for use of the
freeholds. In addition, BT has transferred the economic
risk on a large portion of its leased properties
to Telereal in return for an annual rental commencing
at approximately £90 million per annum.
BT will have the flexibility to vacate approximately
35% by rental value of the estate over the contract
term at no extra cost.
Telereal,
defined above, is a 50/50 joint venture between
Land Securities Trillium Limited (a wholly-owned
subsidiary of Land Securities plc) and William Pears
Family Holdings Limited. The transaction raised
approximately £2.38 billion for BT.
|
| Concert
Unwind Agreement |
On
15 October 2001, AT&T, BT and Concert entered
into binding agreements to terminate the Concert
joint venture. The termination was completed on
1 April 2002, whereupon Concert ceased to exist
as a joint venture. In connection with the termination,
the assets, liabilities, contracts, customers and
other operational items were allocated between BT
and AT&T with appropriate true up payment mechanisms
to reflect the allocation of assets. The assets
and liabilities were allocated between AT&T
and BT with the majority of items originally contributed
by each of AT&T and BT in connection with the
formation of the Concert joint venture being returned
to the relevant parent.
Following termination of the joint venture, Concert
BV was renamed BT Global Networks Holdings (Netherlands)
BV. BT
has entered into a number of ongoing commercial
agreements with AT&T in order to allow it to
continue its global operations, and offer telecommunication
services, in various geographic regions where BT
may no longer have infrastructure as a result of
the transfer of certain assets to AT&T.
In connection with the termination of the Concert
joint venture, AT&T has acquired BT’s minority
interest in AT&T Canada and BT no longer has
any interest or obligation in relation to AT&T
Canada. |
| Cegetel
|
On
5 December 2002, Vivendi Universal (‘‘Vivendi’’)
served a notice exercising its pre-emption rights
under the Shareholders’ Agreement in respect
of Cegetel Groupe SA (‘‘Cegetel’’)
to acquire BT’s entire shareholding –a
26% interest – in Cegetel from Cegetel Holdings
I BV Sarl (‘‘Cegetel Holdings’’),
a BT group company for e4.0 billion (£2.6
billion) in cash. This pre-emption right became
exercisable as a result of Cegetel Holdings having
entered into a share purchase agreement for the
sale of its shareholding in Cegetel to Vodafone
AG for e4.0 billion in cash, in October 2002.
Vivendi paid e2.7 billion of the consideration to
Cegetel Holdings on 17 January 2003 and the transaction
was completed when Vivendi paid the balance of e1.3
billion on 22 January 2003. |
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