**Exhibit 10.2**

 

**VIRGIN ENTERPRISES LIMITED**

 

**and**

 

**NTL GROUP LIMITED**

 

 

----

 

**TRADE MARK LICENCE**

 

**relating to use of the “Virgin” trade marks**

 

----

 

 

Arnold & Porter (UK) LLP

Tower 42

25 Old Broad Street

London

EC2N 1HQ

 

Tel. 020 7786 6100

Fax: 020 7786 6299

 

----

 

**TABLE OF CONTENTS**

 
| ** **                                                               | ** **                                             | **Page** |
|--------------------------------------------------------------------------|--------------------------------------------------------|----------|
|                                                                     |                                                   |     |
| **1.**                                                                   | **DEFINITIONS**                                        | **3**    |
| **2.**                                                                   | **ACKNOWLEDGEMENTS AND CONDITIONALITY**                | **16**   |
| **3.**                                                                   | **GRANT**                                              | **17**   |
| **4.**                                                                   | **PAYMENT OF ROYALTIES**                               | **30**   |
| **5.**                                                                   | **CONDITIONS OF USE**                                  | **33**   |
| **6.**                                                                   | **TRADE MARK PROTECTION**                              | **37**   |
| **7.**                                                                   | **DEALINGS**                                           | **39**   |
| **8.**                                                                   | **INDEMNITY, WARRANTIES AND LIMITATIONS OF LIABILITY** | **42**   |
| **9.**                                                                   | **TERMINATION AND EFFECTS OF TERMINATION**             | **44**   |
| **10.**                                                                  | **INFRINGEMENTS**                                      | **51**   |
| **11.**                                                                  | **CONFIDENTIALITY**                                    | **52**   |
| **12.**                                                                  | **NOTICES**                                            | **54**   |
| **13.**                                                                  | **FORCE MAJEURE**                                      | **55**   |
| **14.**                                                                  | **GENERAL**                                            | **55**   |
| **SCHEDULE 1**                                                      | **2**                                                  |
| **Part A - Virgin Marks**                                           | **2**                                                  |
| **Part B - Virgin Signature**                                       | **3**                                                  |
| **SCHEDULE 2**                                                      | **4**                                                  |
| **Part A – Virgin Mobile**                                     | **4**                                                  |
| **SCHEDULE 3**                                                      | **7**                                                  |
| **Service Levels**                                                       | **7**                                                  |
| **SCHEDULE 4**                                                      | **12**                                                 |
| **Existing rights of Licensees**                                         | **12**                                                 |
| **SCHEDULE 5**                                                      | **15**                                                 |
| **Use of “Virgin” or “V” by themselves**             | **15**                                                 |
| **SCHEDULE 6**                                                      | **16**                                                 |
| **Virgin Money letter agreement**                                        | **16**                                                 |
| **SCHEDULE 7**                                                      | **17**                                                 |
| **Virgin Retail letter agreement**                                       | **17**                                                 |
| **SCHEDULE 8**                                                      | **18**                                                 |
| **TM GUIDELINES**                                                        | **18**                                                 |
| **V****irgin R****ed B****ook**                                          | **18**                                                 |
| **Virgin Brand Book**                                                    | **18**                                                 |
| **Virgin Group Policy on selling techniques**                            | **18**                                                 |
| **O****ffshore O****utsourcing -  o****verall  b****rand  a****pproach** | **28**                                                 |
| **SCHEDULE 9**                                                      | **31**                                                 |
| **Worked Example of Clause 9.9**                                         | **31**                                                 |

 

2

----

 

**THIS DEED is dated** April 3 2006

 

BETWEEN:

 

(1)                                      **VIRGIN ENTERPRISES LIMITED** (Company Number01073929) a company incorporated in England whose registered office is at 120Campden Hill Road, London W8 7AR (**“VEL”**);

 

(2)                                      **NTL GROUP LIMITED** (Company Number 2591237)a company incorporated in England whose registered office is at ntl House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP (the **“Licensee”**).

 

**RECITALS**

 

(A)                                  VEL is the legal andbeneficial owner of the Marks (as defined below);

 

(B)                                    Virgin Mobile and VirginNet have been licensed to use the Marks pursuant to the Virgin Mobile Licenceand the Virgin Net Licence (both defined herein) respectively; and

 

(C)                                    VEL has agreed togrant the Licensee and members of the NTL Group a licence, to use the Marks inthe form of the Names (as defined below) on the terms and conditions ofthis Deed.

 

**THE PARTIES AGREE AS FOLLOWS:**

 

# **1.**                                       DEFINITIONS

#  

## 1.1                                     In this Deed, the Recitals aboveand the Schedules to it, the following terms shall have the following meanings:

 

**“Accounting Standards”** means in conformitywith United States Generally Accepted Accounting Principles or any generallyaccepted and applicable accounting standards used by NTL Incorporated from timeto time;

 

**“Adult Content”**means Contentpredominantly containing material of a sexually explicit nature and which israted “18” or “R18” under the British Board of Film Classification’s (or itsreplacement or successor body’s) age related classification categories (or anysuccessor or replacement rating classification system) or any such sexuallyexplicit Content which, although not required to be rated by the British Boardof Film Classification, falls within the descriptors of such classificationcategories;

 

**“Affiliate”** means with respect toany person, any corporation, company, partnership or other organisation whichdirectly or indirectly is within the Control of such person or over which suchperson has Control or is under common Control with such person or over whichsuch person has an option to acquire Control or common Control;

 

**“Ancillary Services”**means, subject to thepresently existing and exclusive rights of existing licensees of VEL (as listedin Schedule 4), any services or facilities

 

3

----

 

(including AssociatedFacilities) which are, from time to time, whether now or in the future:

 

### (a)                          reasonably ancillary to theprovision of Communications Services to Customers; or

###  

### (b)                         equivalent to those ordinarilyprovided from time to time by third party providers of services equivalent orsubstantially similar to Communications Services and offered in conjunctionwith or as part of those Communications Services; or

###  

### (c)                          offered in conjunction with oras part of the Communications Services and approved by VEL in advance inwriting (such approval not to be unreasonably withheld, conditioned ordelayed),

###  

butexcluding Bundled Services or Partner Services (which are the subject of aseparate grant of rights under this Deed);

 

**“Annual Report”** means NTLIncorporated’s financial report to the SEC in respect of each Financial Year onForm 10-K pursuant to the Securities Exchange Act of 1934 and anyreplacement or equivalent report so filed with the SEC;

 

**“Aspirational Service Levels”**means the customer and staff satisfaction, advocacy, customer service andcomplaint handling measures set out in section 3.4 of Schedule 3;

 

**“Associated Facilities”**means facilities which are generally non-customer facing and which are requiredfor use in association with the use of a Communications Network orCommunications Services or are required for the purpose of:

 

### (a)                          making the provision of thatnetwork or service possible;

###  

### (b)                         making possible the provision ofother services provided by means of that network or service; or

###  

### (c)                          supporting the provision of suchother services;

###  

**“Banking Services”** means all and anyservices which are currently provided in the ordinary course of business by aUnited Kingdom clearing bank or a United States of America money center bank orwhich from time to time form the core business of any such bank, includingbut not limited to the taking of deposits, the provision of loans (whethersecured or unsecured and including by the subscription for loan stock or otherdebt securities), guarantees, performance bonds and letters of credit, theprovision of domestic and international cash transmission and other payment orclearance facilities, the provision of credit or debit cards, smart cards andstored value cards and the like, and of all forms of bank account for allcurrencies, the provision of custody services, the provision of foreigncurrency exchange services and the provision of advice in connection with anyof the foregoing;

 

4

----

 

**“BaseService Levels”****means the levels of customerservice and complaint handling set out in section 1 of Schedule 3;

 

**“Bundled Services”** means a package ofproducts or services incorporating one or more Communications Services offeredtogether with third party or non “Virgin”-branded Communications Servicesand/or products or services reasonably ancillary or complementary toCommunications Services;

 

**“Business Day”** means any day(excluding Saturdays and Sundays) on which banks generally are open in Londonfor the transaction of normal banking business;

 

**“Chief Marketing Officer”** means the personnominated by VEL and employed by a member of the NTL Group pursuant to clause5.10;

 

**“Chosen Names”** means the namesagreed in accordance with Part E of Schedule 2;

 

**“CommencementDate”**means the date of the passing of the resolution referred to in clause 2.4 ofthis Deed;

 

**“Communications Network”** means a system orsystems for the conveyance of messages, information or signals serving for theimpartation of anything including Content between persons, between a person anda thing or between things or for the actuation or control of apparatus, and theapparatus, software and data comprised in such system or systems, comprising:

 

(a)                          fixed line connections(e.g. copper wire, coaxial cable and/or fibre optic cable); and/or

 

(b)                         non-fixed connectionsusing any part of the electromagnetic spectrum (e.g. satellite, digitalterrestrial, analogue terrestrial, DAB, DVB-H, GSM, GPRS, WIMAX, WIFI), and

 

howsoever in each caseas such system, systems or connections may be created, develop or convergefrom time to time, whether with a technology or method now in existence orsubsequently developed, created or invented;

 

**“Communications Services”** means communicationsservices, or access to such services, consisting in or having as theirprincipal feature the conveyance of messages, information or signals by meansof a Communications Network. For illustrative purposes only and withoutprejudice to the generality of the foregoing, the types of servicescontemplated at the Commencement Date include the following:

 

### (a)                              internet services (which, forexample, includes email, web mail, instant messaging, provision of webspace,access to the worldwide web, home networking, electronic messaging,voice/video/data services transmitted over internet protocol);

###  

### (b)                             television or radio serviceswhich, for example, includes:

 

5

----

 

#### (i)                              accessto “free to air” television and radio services (e.g. BBC1,  Radio 4 and Virgin Radio);

####  

#### (ii)                           premiumor subscription-based television services (e.g. access to Film Four and SkySports);

####  

#### (iii)                        conditionalaccess or encrypted television services (e.g. Top Up TV);

####  

#### (iv)                       interactivetelevision services;

####  

#### (v)                          Video onDemand and Pay per View; or

####  

### (c)                                  telephone services (which, forexample, includes fixed line, wireless, Mobile Radio TelecommunicationServices, data and text services (including SMS)), and

###  

### howsoever and ineach case as such services may be:

###  

#### (i)                              receivedor accessed (e.g. via a television set, set top box, personal computer, mobilephone or any other device); and

####  

#### (ii)                           created,develop or converge from time to time,

####  

#### whether with a technology or method now inexistence or subsequently developed, created or invented;

####  

**“Consumer Revenues”** means the amount ofconsumer revenue relating to the Licensed Activities reported in NTLIncorporated’s statement of operations contained in its Quarterly Report or itsAnnual Report, as appropriate;

 

**“Content”** means any content ormaterial conveyed or generally intended to be conveyed via a CommunicationsNetwork including text, speech, music, sounds, visual images or data of anydescription or any combination of the foregoing, but excluding any message,information or signal used for the actuation and control of the apparatuscomprising a Communications Network or for the routing of any message,information or signal within a Communications Network;

 

**“Control”** is to be construed inaccordance with section 416 of the Income and Corporation Taxes Act 1988and “controlling” and “controlled” shall be construed accordingly;

 

**“****Core Equipment****”** means anyequipment, device or accessory (whether now in existence or which may fromtime to time be created or developed, or as such equipment, devices oraccessories converge or become multi-purpose) which either:

 

(a)                                  is primarily intended for the provision, delivery,reception, access or use of Communications Services (including mobile handsets,SIM cards, Data Cards, telephone handsets, set top boxes, personal videorecorders (PVRs) for use with the Communications Services, modems, routers andremote control devices for set top boxes), but excluding, save to the extentthat they fall

 

6

----

 

withinsub-paragraph (b) of this definition, television sets, radio sets andpersonal computers; or

 

(b)                                 has, as an included feature, the capability toprovide, deliver, receive, access or use the Communications Services providedby the NTL Group (including via a built-in decoder, receiver or internet protocolconnection), provided that the NTL Group is thereby facilitating access to itsCommunications Services in preference to those of a third party;

 

**“Customer”** means:

 

### (a)                              any consumer or any smallbusiness user who works at or from home who has contracted with the NTL Groupfor the provision of Communications Services or any person (including localauthorities, housing associations or property developers) who has contractedwith the NTL Group for the provision of Communications Services to any consumeror small business user; and/or

###  

### (b)                             in the case of Mobile RadioTelecommunication Services and/or Roaming Services, means any consumer orbusiness user who has contracted with the NTL Group for the provision of thoseservices;

###  

**“Data Cards”** means data communicationscards for use in conjunction with mobile handsets, laptop computers or otherportable computing and communications devices which allow or enable access tothe internet, access to email services, remote access to private computernetworks, fax services, instant messaging and text messaging services and othercommunications services through 3G, 2.5G, GPRS, HSCSD or wireless LAN networksor similar;

 

### **“****Direct Sales Channels****”** means sales methods consistingof door-to-door, on-line, internet, mail-order, telesales and all other formsof direct or distance selling methods;

###  

### **“DirectSelling Policy”**means the guidelines relating to selling techniques forming part of the TMGuidelines as set out in Part 3 of Schedule 8;

###  

**“Domain Names”** means those domainnames listed in Part D of Schedule 2 (subject to the limitations setout therein) together with any additional domain names registered in accordancewith clause 6.3;

 

**“****Electronic Entertainment Products****”** means non-physical electronic entertainment content (such asmusic and video downloads);

 

**“EPG”** means any electronicprogramme guide which consists of (a) the listing and/or promotion of someor all of the programmes included in any one or more programme services(including Video on Demand and Pay per View); and/or (b) a facility forobtaining access in whole or in part to the programme services (includingVideo on Demand and Pay per View) listed or promoted in such guide, and in thecase of both (a) and (b) may include programme services(including Video on Demand and Pay per View) provided by persons other than theprovider of the guide;

 

7

----

 

**“Fair Market Value”** means the valuecalculated on a fair market value basis that a willing buyer, contracting witha willing solvent seller, with neither being under a compulsion to transact,would pay for the Marks, with both the buyer and the seller being reasonablycognisant of all relevant factors and circumstances and in circumstances whereboth are seeking to protect their maximum economic self interest;

 

**“Financial Year”** means the period oftwelve months ending on 31st December or such other financial year as NTLIncorporated shall adopt from time to time;

 

**“Fit and Proper Person”**means a director who:

 

(a)                              has not at any timebeen disqualified by a court from acting as a company director, including adisqualification made pursuant to the Company Directors Disqualification Act1986; and

 

(b)                             is not an undischargedbankrupt or a person in respect of whom a bankruptcy restrictions order is inforce;

 

**“Force Majeure Event”** means any of thefollowing:

 

### (a)                              acts of God, flood, earthquake,lightning, epidemic, riots and insurrection, war, terrorism, fire, embargos,third party labour or industrial disputes, judicial or government action andacts of civil or military authority, compliance with any law or governmentalorder; and

###  

### (b)                             accidents, breakdown ormalfunction of plant or machinery, computer virus or similar, sabotage ormalicious damage, in each case, to the extent that such event is not within thereasonable control of a party and where that party has taken reasonable stepsto prevent the occurrence of such event in accordance with current goodindustry practice;

###  

**“Holding Company”** means any parentundertaking as defined in Sections 258 and 259 of the Companies Act of 1985 (asamended), save that reference to an undertaking shall be deemed to include anundertaking registered in an overseas jurisdiction;

 

**“Intellectual Property Rights”** means all rights inor in relation to any and all patents, utility models, trade and service marks,rights in designs, get up, trade, business or domain names, copyrights, moralrights, topography rights (whether registered or not and any applications toregister or rights to apply for registration of any of the foregoing), rightsin inventions, know-how, trade secrets and other confidential information,rights in databases and all other intellectual property rights of a similar orcorresponding character which may now or in the future subsist in any part ofthe world and any rights to receive any remuneration in respect of such rights;

 

**“Insolvency Event”** means any of thefollowing events unless remedied or set aside within thirty (30) days of suchevent in respect of a party:-

 

8

----

 

### (a)                                  the passing of a resolution forits winding up or where a court of competent jurisdiction makes an order for aparty to be wound up or dissolved or a party is otherwise dissolved except forthe purposes of a solvent reconstruction, reorganisation, merger orconsolidation;

###  

### (b)                                 where an administrator orreceiver is appointed or an administration order is made or an administrativereceiver is appointed or an encumbrancer takes possession of or sells the wholeor part of a party’s undertaking, assets, rights or revenue;

###  

### (c)                                  where either party is unable topay its debts within the meaning of section 123 of the Insolvency Act1986;

###  

### (d)                                 where either party enters into ascheme of arrangement, composition or voluntary arrangement in satisfaction ofits debts with its creditors; or

###  

### (e)                                  any event analogous to any tothe above occurs in any relevant jurisdiction;

###  

**“Licensed Activities”** means the activitiesdescribed in clause 3 and carried out under the Marks;

 

**“Licensed Revenues”** is calculated asfollows:

 

### (a)                          Consumer Revenues; less

###  

### (b)                         any revenues accruing to the NTLGroup from activities carried out other than pursuant to the Marks which havebeen included in Consumer Revenues; plus

###  

### (c)                          any other revenues accruing tothe NTL Group from activities carried out pursuant to the Marks which have notbeen included in Consumer Revenues;

###  

### less (to the extentnot already deducted in the calculation of (a), (b) and (c) above):

###  

#### (i)                              valueadded tax, sales tax, excise duties and equivalent taxes and duties; and

####  

#### (ii)                           bad debt expense in accordance withAccounting Standards (save that such deduction shall not exceed 4% ofLicensed Revenues);

####  

**“Licensee Marks”** means the registeredtrade marks and trade mark applications listed in Parts A and B of Schedule 2,as updated from time to time;

 

**“Marks”** means the VirginMarks and the Names, each as updated from time to time, together with suchother trade mark applications which may be made by VEL after the date ofthis Deed in respect of the Licensed Activities and any resultingregistrations;

 

**“Minimum Term”** means the period of10 years from the Commencement Date;

 

**“Mobile Accessories”** means products(excluding Core Equipment) primarily intended for use in conjunction with CoreEquipment relating to Mobile Radio

 

9

----

 

TelecommunicationServices (for example, mobile handset chargers, mobile telephone cases, in-caraccessories, bluetooth headsets and mobile card readers/writers);

 

**“Mobile Content”**means****the non-physical content (in whatever medium) of anyservices capable of being received or delivered by Mobile RadioTelecommunication Services, Roaming Services and/or Ancillary Services(relating to Mobile Radio Telecommunication Services) to or from Core Equipmentintended to be used in conjunction with Mobile Radio Telecommunication Servicesor a Mobile Device, or which is generally intended and primarily promoted foruse in conjunction with such Core Equipment and/or Mobile Device, includingelectronic data services, music, ringtones, truetones, electronic commerce,information provision, games, radio and video services, teleshopping or on-lineshopping facilities;

 

**“Mobile Devices”**means portable devicescapable of playing, receiving, storing or recording data (e.g. MP3players/iPods, digital cameras), provided the device is primarily intended foruse in conjunction with Core Equipment relating to Mobile RadioTelecommunication Services;

 

**“****Mobile Electronic Payment Services****”** means services which allow users of Mobile RadioTelecommunication Services to pay for products or services using Core Equipmentintendedto be used in conjunction with Mobile Radio Telecommunication Services and e-money services provided over a MobileRadio Telecommunication Service;

 

### **“Mobile****Interactive Services”** means services primarily intended foruse with and primarily promoted for use with Mobile Radio TelecommunicationServices and/or Roaming Services which allow the interaction between CoreEquipment intended to be used in conjunction with Mobile RadioTelecommunication Services and a remote system, such as voting, polling, gamingand gambling services and any other similar services with the prior writtenconsent of VEL (not to be unreasonably withheld, conditioned or delayed) which,for the purposes of this definition, shall only be reasonably withheld ifeither:

###  

### (a)                      VEL has prior to the request forconsent granted an existing exclusive licence for such services to a thirdparty; or

###  

### (b)                     such services would, in VEL’sreasonable opinion, materially harm or otherwise materially disparage thereputation of the Marks,

###  

provided that theLicensee shall only seek such consent in good faith and if in its reasonableopinion it will be able to exploit such services within a reasonable timeframe;

 

**“Mobile Radio TelecommunicationServices”**means Communications Services designed or adapted to be used in motionconsisting of the conveyance of any message, information or signal through theagency of wireless telegraphy;

 

10

----

 

**“Names”** means (a) theLicensee Marks; (b) the names set out in Part C of Schedule 2; (c) theChosen Names; and (d) any other names comprising of “Virgin” (whether as aname or in the form of the Virgin Signature) always used in conjunctionwith and always in front of any word or words which is or are suitable todescribe or denote the Licensed Activities, such additional word or words to beapproved by VEL in advance in writing (such approval not to be unreasonablywithheld, conditioned or delayed);

 

**“NTL Group”** means the Licenseeand any undertaking which is a Holding Company of that undertaking or aSubsidiary of that undertaking or a Subsidiary of such Holding Company;

 

**“NTL Incorporated”** means the ultimateHolding Company of the Licensee from time to timeor,in the circumstances described in clause 4.9, shall have the meaning set forthin that clause;

 

**“NTL TV Content”**means any televisionContent (including a TV Programme Service), the primary purpose of which isself promotion, advertising of the Licensed Activities or making availableother direct offers for products and services forming part of the LicensedActivities by means of advertorials, infomercials, commercials and any othermethod used by broadcasters to the public with a view of promoting their owngoods or services including barker channels;

 

**“Other Email Services”** means the provisionof an email address together with anindividual subscriber address facilityto enable email communications including the word “Virgin” to:

 

### (a)                              staff of the Virgin Group orstaff of a Virgin Company in the ordinary course of their business;

###  

### (b)                             the customers of or subscribersto a service or business provided by any Virgin Company solely for the purposeof communicating with other subscribers or customers of such Virgin Company orsuch Virgin Company itself as an ancillary or incidental part of suchservice or business not attracting additional payment including, by way ofexample, dating services and internet auctions; or

###  

### (c)                              the customers of or subscribersto a service or business provided by any Virgin Company as an ancillary or incidental and minor part of that service orbusiness not attracting additional payment to enable email communications by and to such customers or subscribers,

###  

### provided that such Virgin Company may not provide any otherCommunications Services under the Marks, unless otherwise permitted under theterms of this Deed, without the prior written consent of the Licensee;

###  

“Other Equipment” means any equipment, deviceor accessory (other than Core Equipment) capable of use with or complementaryto the provision, delivery or use of the Communications Services but not brandedwith the Marks (e.g. MP3

 

11

----

 

players/iPods, digital cameras, scart leads,PCs,);

 

**“Other Premium TV Content”**meanspremium television Content (e.g. a kids channel or a music channel) for which arecipient of a Communications Service incurs any additional charge (whetheralone or as part of a bundle or package of premium television Content), inaddition to the basic subscription or charge for access to such CommunicationsService, and where such premium television Content is equivalent orsubstantially similar to any premium television Content provided from time totime by any third party provider of Communications Services and branded withthat third party provider’s marks;

 

**“Other Webspace Services”**means the provision of a URL for webspace to the customers of or subscribers toa service or business provided by any Virgin Company solely for the purpose ofcommunicating with other subscribers or customers of such Virgin Company orsuch Virgin Company itself as an ancillary or incidental part of suchservice or business not attracting additional payment including, by way ofexample, dating services and internet auctions, provided that such Virgin Company may not provide any otherCommunications Services, unless otherwise permitted under the terms of thisDeed, without the prior written consent of the Licensee;

 

**“Partner Services”** means the provisionof access by means of any Communications Service, in conjunction with or as part ofthe Communications Services, to any products or services of a third party,subject to the provisions of clause 3.7;

 

**“****Pay per View****”** means exhibition through aCommunications Service of television Content which Customers can select forviewing for a fee;

 

**“Permitted Email Address”** means any emailaddress in any form incorporating the Domain Names or the Chosen Names;

 

**“Permitted Third Party”** has the meaning givento it in clause 7.1(b);

 

**“Permitted Webspace Address”** means a URL forwebspace provided to Customers in any form incorporating the Domain Namesor the Chosen Names;

 

**“Physical Entertainment Products”**meansphysical entertainment products (such as compact discs and DVDs);

 

**“Quarter”** means each period ofthree months ending on 31 March, 30 June, 30 September and 31 December;

 

**“Quarterly Report”** means NTLIncorporated’s financial report to the SEC in respect of each Quarter on Form 10-Qpursuant to the Securities Exchange Act of 1934 and any replacement orequivalent report so filed with the SEC;

 

**“Restricted Content”**means:

 

(a)                                  books, including audiobooks and comic or cartoon books (whether periodical or otherwise);

 

12

----

 

(b)                                 a radio broadcaststation service, such as currently licensed by VEL to Virgin Radio;

 

(c)           video games or PC games;

 

(d)                                 online games of chanceand/or skill;

 

(e)                                  original musical worksor music videos pursuant to a record label as currently licensed by VEL toVirgin Music Group;

 

**“****Retail Stores****”** means NTL Group’s physical retail storesand concessions within third party physical retail stores;

 

**“Roaming Services”** means servicescomprising a facility enabling a user of any mobile communications network(other than the network that has allocated the user’s international mobilesubscriber identity number or equivalent number) to obtain access to any MobileRadio Telecommunication Services;

 

**“RPI”** means the UnitedKingdom retail prices index (all items) as published by the Office for NationalStatistics (or by any government department or other body upon which duties inconnection with such index devolve) or other official cost of living indexpublished in place of that index and which most nearly represents the currentbasis of calculation of such index;

 

**“Royalties”** means the paymentsdescribed in clause 4;

 

**“Sales Channels”** means Retail Stores,Direct Sales Channels and all other forms of sales routes including third partysales routes;

 

**“SEC”** means the USSecurities and Exchange Commission or its replacement or successor body;

 

**“****Securities Exchange Act of 1934****”** means the Securities Exchange Act of1934, as amended from time to time, of the United States of America;

 

**“Service Levels”** means the BaseService Levels, Technical Service Levels and Aspirational Service Levels;

 

**“Site”** means any of the NTLGroup’s internet sites using the Domain Names;

 

**“Subsidiary”** means any subsidiaryundertaking as defined in Sections 258 and 259 of the Companies Act of 1985 (asamended), save that reference to an undertaking shall be deemed to include anundertaking registered in an overseas jurisdiction;

 

**“Substitute Annual Report”** has the meaning givento it in clause 4.9;

 

**“Substitute Quarterly Report”** has the meaning givento it in clause 4.9;

 

**“Technical Service Levels”** means the technical performance measures set out in section 2 of Schedule 3;

 

13

----

 

**“Term”** means the term of thisDeed which is to be a period of thirty (30) years from the Commencement Dateunless terminated earlier in accordance with this Deed;

 

**“Territory”** means the UnitedKingdom of Great Britain and Northern Ireland, the Republic of Ireland, theIsle of Man and the Channel Islands;

 

**“TM Guidelines”** means the “Virgin”guidelines for the usage of the Marks by members of the NTL Group comprised ofthe Virgin Brand Book, the Little Red Book, the Direct Selling Policy and theOutsourcing Guidelines supplied to the Licensee by VEL in writing prior to theCommencement Date and as annexed to this Deed as Schedule 8, as amended orupdated by agreement in writing of the parties from time to time;

 

**“TV Programme Service”** means a lineartelevision service, howsoever distributed, consisting of television programmes,the timing and sequence of which are prescheduled or controlled, by thebroadcaster or provider, but excluding any Pay per View services (which are thesubject of an exclusive grant of rights under this Deed);

 

**“Video on Demand”**means the exhibitionthrough a Communications Service of television Content the scheduling of whichis not pre-determined by the provider, but which a Customer is able to selectat any time and the viewing of which he can control at his discretion;

 

**“Virgin Company”** means any person(other than any member of the NTL Group or any other company licensed under theterms of this Deed) which has been authorised to use the name “Virgin” or theinitial “V” whether alone or in conjunction with any other word, name or markfrom time to time;

 

**“Virgin Group”** means:

 

(a)                          VEL and any companywhich is a Holding Company of that company or a Subsidiary of that company or aSubsidiary of such Holding Company; or

 

(b)                         any undertaking whichis under the Control whether directly or indirectly of any person mentioned in (i) to(v) below or any combination of them:

 

(i)                             R.C.N. Branson (the “Individual”)together with the trustees of any settlement created by the Individual;

 

(ii)                          any spouse of theIndividual, or any child or remoter issue of the Individual’s grandparents andany spouses or such child or remoter issue;

 

(iii)                       the trustee ortrustees for the time being of any settlement made by any person mentioned in (ii) aboveacting within that capacity;

 

(iv)                      any personalrepresentative of the Individual acting within that capacity; or

 

14

----

 

(v)                        any person acting asbare nominee for the Individual or any of the persons mentioned in (i) to (iv) inclusiveabove;

 

**“Virgin Marks”**means the registeredtrade marks and trade mark applications listed in Part A of Schedule 1and the Virgin Signature (including the logo set out in Part B of Schedule 1)as updated from time to time;

 

**“Virgin Mobile”**means****Virgin Mobile Telecoms Limited;

 

**“Virgin Mobile Licence”** means the trade marklicence dated 9 August 1999, and amended on 2 July 2004, between VELand Virgin Mobile;

 

**“Virgin Money Group”** means Virgin MoneyLimited and/or Virgin Money Holdings (UK) Limited or their successors in titleor assigns;

 

**“Virgin Net”**means****Virgin Net Limited;

 

**“Virgin Net Licence”** means the trade marklicence dated 8 November 2004 between VEL and Virgin Net;

 

**“Virgin Signature”**means the “Virgin”signature and the signature marks set out in Schedule 1;

 

**“V Marks”**means the registeredtrade marks and trade mark applications listed in Schedule 2, Part B,as updated from time to time; and

 

**“Vouchers”** means any payment orreplenishment service, facility or method in card and electronic form (includingtop up cards, electronic top up and ATM/SMS top up) through which a Customercan purchase any products or services relating to the Licensed Activities, butexcludinggift tokens or giftvouchers.

 

## 1.2                                     The headings in this Deed areinserted only for the purpose of convenience and shall not affect theconstruction of this Deed.

##  

## 1.3                                     The Schedules form part ofthis Deed.

##  

## 1.4                                     References to any statute orstatutory provision or order or regulation made thereunder shall include thatstatute, provision, order or regulation as amended, modified, re-enacted orreplaced from time to time.

##  

## 1.5                                     Words denoting the singularshall include the plural and vice versa.

##  

## 1.6                                     References to a party or theparties is to a party or the parties (as the case may be) to this Deed andshall include any permitted assignees of a party.

##  

## 1.7                                     References to the masculine,feminine or neuter gender respectively includes the other genders and anyreference to the singular includes the plural (and vice versa).

##  

## 1.8                                     A person includes anyindividual, firm, corporation, unincorporated association, government, state oragency of state, association, partnership, joint venture or other entity(whether or not incorporated or having a separate legal personality).

 

15

----

 

## 1.9                                     A person includes a reference tothat person’s legal personal representatives and successors.

##  

## 1.10                               A company shall be construed soas to include any company, corporation or other body corporate wherever andhowever incorporated or established.

##  

## 1.11                               Writing shall include any modesof reproducing words in a legible and non-transitory form and “written”shall be construed accordingly.

##  

## 1.12                               References to “includes” and “including”shall mean “includes without limitation” and “including without limitation”.

##  

## 1.13                               Where any rights are stated asbeing licensed under this Deed on an “exclusive” basis, it shall mean that onlythe Licensee and members of the NTL Group are permitted to use such rights and(for the avoidance of doubt) VEL, any member of the Virgin Group and any VirginCompany shall not be permitted to utilise such rights.

##  

# **2.**                                       ACKNOWLEDGEMENTSAND CONDITIONALITY

#  

## 2.1                                     The Licensee acknowledges:

##  

### (a)                          receipt of the TM Guidelines;

###  

### (b)                         that all rights in the Marksbelong to VEL;

###  

### (c)                          save as expressly set out inthis Deed, that no member of the NTL Group shall acquire or claim any title toany of the Marks by virtue of the rights granted to them by this Deed orthrough their use of the Marks either before or after the date of this Deed;

###  

### (d)                         except in respect of trade marksthat are the subject of an assignment to and/or re-filing by NTL pursuant toclauses 7.5, 9.13 and 9.14 of this Deed, that all goodwill generated or accruedby the use of the Marks by the Licensee and any other member of the NTL Groupshall at all times be deemed to have accrued to VEL and the Licensee shall, andshall procure that all other members of the NTL Group shall, if so requested byVEL, execute an assignment in favour of VEL of any and all such goodwill; and

###  

### (e)                          that it and the members of theNTL Group shall only use the Marks in relation to products and services formingpart of the Licensed Activities.

###  

## 2.2                                     At VEL’s cost (except to theextent that it specifically falls within the Licensee’s obligations under thisDeed) the Licensee shall do any act and execute and deliver any documentsreasonably required to give effect to clause 2.1.

##  

## 2.3                                     (a)        If at the Commencement Date:

##  

#### (i)                              VirginMobile Holdings (UK) plc is not a wholly-owned Subsidiary of the NTL Group; or

####  

#### (ii)                           NTLGroup has not appointed the majority of the directors of the board

 

16

----

 

#### of Virgin Mobile Holdings (UK) plc,

 

#### this Deed will apply, with such changes asare required, *mutatis mutandis,* so that thisDeed does not apply to Virgin Mobile’s operations until such time as the NTLGroup owns 100% of the issued ordinary shares of Virgin Mobile Holdings (UK)plc and NTL Group has appointed the majority of the directors of the board ofVirgin Mobile Holdings (UK) plc or until such time as the NTL Group gives thenotice provided for in clause 2.3(c) (the “Notice”);

####  

### (b)                         until NTL Group gives theNotice, Virgin Mobile and VEL shall continue to be bound by the terms of theVirgin Mobile Licence without regard to this Deed. Any disputes as to theappropriate application of this Deed during this period shall be addressed bythe parties in good faith in accordance with clause 14.6;

###  

### (c)                          NTL Group may give VELwritten notice at any time after the Commencement Date specifying that, withimmediate effect, this Deed shall be effective in respect of Virgin Mobile and,in which event, the parties shall procure that the Virgin Mobile Licence shallbe terminated on such date. The Notice may be given, in NTL Group’sdiscretion, whether or not Virgin Mobile Holdings (UK) plc is wholly-ownedprovided that the NTL Group owns more than 50% of the issued ordinary shares ofVirgin Mobile Holdings (UK) plc at the time that NTL Group gives the Notice. Theparties agree that they shall periodically review the situation at least onceevery six months in order to consider whether the Virgin Mobile Licence shouldbe terminated; and

###  

### (d)                         upon the NTL Group owning 100%of the issued ordinary shares of Virgin Mobile Holdings (UK) plc and appointingthe majority of the directors of the board of Virgin Mobile Holdings (UK) plc,the parties shall immediately procure that the Virgin Mobile Licence isterminated as soon as reasonably practicable unless otherwise agreed.

###  

## 2.4                                    ThisDeed shall be conditional upon and shall become effective only if shareholdersof Virgin Mobile Holdings (UK) plc pass an ordinary resolution on a pollapproving this Deed at an extraordinary general meeting convened in accordancewith Note 2 on Rule 16 of the City Code on Takeovers and Mergers inconnection with the proposed acquisition of Virgin Mobile Holdings (UK) plcwhen announced by the NTL Group.

##  

# **3.**                                       GRANT

#  

**Exclusive Rights**

 

## 3.1                                     In consideration of theRoyalties and the covenants and undertakings contained in this Deed, VEL herebygrants to the Licensee and to all members of the NTL Group for the Term witheffect from the Commencement Date the exclusive rights:

##  

### (a)         to use the Marks inthe Territory in relation to:

###  

(i)                                     the provision of CommunicationsServices to Customers;

 

17

----

 

(ii)                                 the branding (but not themanufacture) of Core Equipment and the sale and supply of Core Equipmentbranded with the Marks to Customers through the Sales Channels;

 

(iii)                              the Communications Networks requiredfor the provision of the Communications Services;

 

(iv)                             making available any of theCommunications Services through Sales Channels;

 

(v)                                the acquisition of sportsContent, movie Content and Other Premium TV Content (and such other genres ofContent as may be agreed between the parties in writing from time to time)to be included within a TV Programme Service or other television service (e.g.Pay per View and Video On Demand), together with the rights to package, bundleand distribute such Content (or any part or parts thereof) under the Marksat NTL’s discretion, whether through the Communications Services or any othersimilar platform or distribution means not branded with the Marks, whetherprovided by the NTL Group or a third party;

 

(vi)                             the acquisition of media rights(including television broadcasting, internet and mobile rights, but excludingradio broadcasting rights) in sports events or series of sports events(including Football Association Premier League and other football games andchampionships) and the exploitation of such media rights. The exploitation ofsuch media rights shall include the creation of Content relating to such mediarights and the packaging, bundling and distribution of such Content (or any part orparts thereof) under the Marks, whether through the Communications Services orany other similar platform or distribution means not branded with theMarks, whether provided by the NTL Group or a third party, including but notlimited to, as a TV Programme Service;

 

(vii)                          the creation, acquisition anddistribution of EPGs, whether through the Communications Services or any otherplatform or distribution means not branded with the Marks, whetherprovided by the NTL Group or a third party, provided that the exclusive rightsgranted under this clause shall not prevent the listing in a thirdparty-branded EPG of any TV Programme Service or television programme of aVirgin Company or prevent any Virgin Company from using the Marks in relationto Teletext or equivalent listing services as part of a TV ProgrammeService; and

 

(viii)                       the creation, acquisition anddistribution of NTL TV Content, whether through the Communications Services orany other similar platform or distribution means not branded with theMarks, whether provided by the NTL Group or a third party;

 

### (b)                         to use the Names as part ofits registered company names and to use the same on headed notepaper and othercorporate materials and communications

 

18

----

 

### which, in the courseof business, bear the company name and in relation to the non-tradingactivities and securities listing of any member of the NTL Group and as may otherwisebe required by law during the Term, provided that when used as a company namesuch name is always followed by the relevant company denotation (e.g. Limited)for the relevant type of company and jurisdiction;

###  

### (c)                          subject to clause 3.3(b) below,to use the Chosen Names and “Virgin.net” throughout the world;

###  

### (d)                         subject to clauses 3.3(a) and(b) below, to use the Domain Names;

###  

### (e)                          to use the Names in theTerritory on or in relation to advertisements, sponsorship, promotionalbrochures, other materials and magazines (in or on any media) in relation tothe Licensed Activities to the extent of the rights granted exclusively underthis clause 3.1. The parties recognise that there may be incidentaladvertising, sponsorship or promotional activities undertaken outside theTerritory by the Licensee, members of the NTL Group or Permitted Third Partieswhich are aimed at Customers or potential Customers (except in the case ofRoaming Services) inside the Territory and which relate to the LicensedActivities provided within the Territory (provided that nothing in this clauseshall prevent other VEL licensees conducting similar activities inside theTerritory under provisions equivalent to those found in this clause 3.1(e));

###  

### (f)                            to use the Marks in relation tothe provision of Roaming Services provided to Customers outside the Territoryand non-Customers inside the Territory, subject to the right of any otherentity which is licensed by VEL to use the name “Virgin Mobile” outside theTerritory to provide services equivalent to the Roaming Services to that entity’scustomers outside that entity’s licensed territory and to non-customers withinits licensed territory;

###  

### (g)                         to use the Marks in theTerritory on or in relation to Vouchers in respect of the Licensed Activitiesunder this clause 3.1; and

###  

### (h)                         to use the Marks in theTerritory in relation to the provision of consultancy services in connectionwith the Licensed Activities relating to Mobile Radio TelecommunicationServices under this clause 3.1 (except those Licensed Activities under clause3.1(e)).

###  

**Non-Exclusive Rights (except inrespect of the Names which is exclusive)**

 

## 3.2                                    In consideration of theRoyalties and the covenants and undertakings contained in this Deed, VEL herebygrants to the Licensee and to all members of the NTL Group for the Term witheffect from the Commencement Date the following non-exclusive rights (exceptthat this grant is exclusive in relation to the use of the Names in theTerritory and exclusive in relation to the Chosen Names and name “Virgin.net”):

##  

### (a)                          subject to clause 3.4(c) and(d), to use the Marks in relation to the creation of Content (other thanRestricted Content) and acquisition of Content, together with the rights topackage, bundle and distribute Content in the Territory under

 

19

----

 

### the Marks (whetherthrough the Communications Services or any other similar platform ordistribution means not branded with the Marks whether provided by the NTL Groupor a third party), provided that in respect of any Restricted Content createdby third parties for the NTL Group, the Licensee shall ensure that the use ofthe Marks in relation to such Restricted Content:

###  

#### (i)                              doesnot create the impression that the Licensee is actually the creator of theRestricted Content or that it is otherwise branded with the Marks;

####  

#### (ii)                           is inaccordance with honest commercial practices and without due cause does not takeunfair advantage of the Marks;

####  

### (b)                         to use the Marks in theTerritory in relation to Ancillary Services;

###  

### (c)                          to use the Marks in theTerritory in relation to Bundled Services;

###  

### (d)                         to use the Marks in theTerritory in relation to Partner Services;

###  

### (e)                          to use the name “Virgin” as part ofits registered company names and to use the same on headed notepaper and othercorporate materials and communications which, in the course of business, bearthe company name and in relation to the non-trading activities and securitieslisting of any member of the NTL Group and as may otherwise be required bylaw during the Term, provided that when used as a company name such name isalways followed by the relevant company denotation (e.g. Limited) for therelevant type of company and jurisdiction;

###  

### (f)                            to use the Marks on or inrelation to the Site, advertisements, sponsorship, materials, promotionalbrochures, other materials, magazines and the physical assets of members of theNTL Group and other materials used in each case in the ordinary course ofconducting and promoting the Licensed Activities;

###  

### (g)                         to use the Marks in theTerritory in relation to promotional products (including those in electronicform) which are incidental to the Licensed Activities provided that they arenormally distributed free by members of the NTL Group in the Territory and notby way of commercial or retail sale;

###  

### (h)                         to use the Marks in theTerritory in relation to the sale and supply of:

###  

#### (i)                              OtherEquipment, unbranded Mobile Accessories, unbranded Mobile Devices and unbrandedCore Equipment through the Retail Stores and Direct Sales Channels (whethersuch Direct Sales Channels are operated by the NTL Group or on its behalf); and

####  

#### (ii)                           brandedMobile Accessories and branded Mobile Devices through the Sales Channels,

####  

#### provided that thesale and supply of unbranded Core Equipment, Mobile Accessories, MobileDevices, and Other Equipment through Retail Stores is ancillary or incidentalto the sale and supply of NTL Group’s Communications Services and branded CoreEquipment, branded Mobile Accessories and branded Mobile Devices through such Retail Stores;

 

20

----

 

### (i)                             to use the Marks in theTerritory on or in relation to Mobile Accessories and Mobile Devices;

###  

### (j)                             to use the Marks in theTerritory in relation to the following:

###  

(i)                                       warranties on the CoreEquipment, Mobile Accessories, Mobile Devices and Other Equipment;

 

(ii)                                    extended warranties on theCore Equipment, Mobile Accessories, Mobile Devices and Other Equipment;

 

(iii)                                 insurance for the CoreEquipment, Mobile Accessories, Mobile Devices and Other Equipment; and

 

(iv)                                bill protection and identityfraud insurance to its Customers in association with a third party insuranceprovider on a co-branded basis;

 

### (k)                          to use the Marks in theTerritory in relation to insurance services not set out in clause 3.2(j),subject to the prior written agreement of Virgin Money Group in accordance withthe provisions of the Virgin Money letter agreement set out in Schedule 6and the prior written consent of VEL (such consent not to be unreasonablywithheld, conditioned or delayed);

###  

### (l)                             to use the Marks in theTerritory in relation to payment services, facilities and methods for thepurchase by its Customers of its own goods and services and/or third partygoods and services including:

###  

(i)                             Vouchers in respect ofthe Licensed Activities under this clause 3.2; and

 

(ii)                         electronic payment services, facilitiesand methods (other than Vouchers) utilising the Communications Services and/ormobile phone handsets, television set top boxes or any other Core Equipment,Mobile Accessories, Mobile Devices and Other Equipment (in all cases, via theCommunications Services provided by the NTL Group under this Deed),including Mobile Electronic Payment Services to Customers, provided that inrespect of the payment for third party goods and services, such services,facilities and methods:

 

(aa)                                    mustbe provided via the NTL Group’s Communications Services;

 

(bb)                                  mustnot be on a credit basis requiring a consumer credit licence as regulated pursuant to the ConsumerCredit Act 1974 (as amended and replaced from time to time); and

 

(cc)                                    must not be an electronicpayment service, facility or method capable of being used to pay for acomprehensive range of third party goods and services unrelated to each otherand which is a Banking Service (e.g. a credit or debit card such as VISA,Mastercard, AMEX, Electron and Maestro);

 

### (m)                       to use the Marks in theTerritory in relation to Banking Services not set out in clause 3.2(l), subjectto the prior written agreement of Virgin Money Group in

 

21

----

 

### accordance with theprovisions of the Virgin Money letter agreement set out in Schedule 6 andthe prior written consent of VEL (such consent not to be unreasonably withheld,conditioned or delayed);

###  

### (n)                         to use the Marks in theTerritory in accordance with the terms of the Virgin Retail letter agreementset out in Schedule 7 of this Deed in relation to the sale and supply ofElectronic Entertainment Products and Physical Entertainment Products;

###  

### (o)                         to use the Marks in theTerritory in relation to the provision of consultancy services relating toMobile Radio Telecommunication Services in connection with the LicensedActivities under this clause 3.2 and those Licensed Activities under clause3.1(h);

###  

### (p)                         to use the Marks in theTerritory on or in relation to software applications specifically designed foruse with Core Equipment and Mobile Devices;

###  

### (q)                         without prejudice to clause3.1(a)(vii) and any other rights granted under this Deed, to use the Marksin the Territory in relation to the creation, publication and distribution(including in electronic form) of magazines where the principal or primarypurpose is the listing of TV Programme Services or other similar CommunicationsServices, provided that the Licensee shall not be permitted to publish anyother printed magazines except as permitted in this Deed;

###  

### (r)                            to use the Marks in theTerritory on or in relation to gift tokens or gift vouchers for the purchase ofany products or services provided in accordance with this Deed;

###  

### (s)                          to use the Marks in theTerritory on or in relation to Mobile Interactive Services; and

###  

### (t)                            without prejudice to clauses3.1(a)(v) to (viii), clauses 3.2(a) and (n) and any other rightsgranted under this Deed, to use the Marks in the Territory on or in relation toany Mobile Content except that, in relation to music, the Licensee may onlyuse the Marks in respect of retailing of music (including provision of accessto music over Mobile Radio Telecommunication Services) subject to the terms ofthe Virgin Retail letter agreement set out in Schedule 7 of this Deed.

###  

**Restrictions on the exercise ofthe rights granted pursuant to clauses 3.1 and 3.2**

 

## 3.3                                     The following restrictions shallapply to the exercise of the rights granted pursuant to clauses 3.1 and 3.2:

##  

### (a)                          VEL recognises that members ofthe NTL Group may:

###  

### (i)                                 use the Domain Names and formsof technology or media now in existence or developed in the future that are orwill be by their nature accessible worldwide, including the internet andcertain TV broadcasts (such as satellite) which have a larger reach orfootprint than can be

 

22

----

 

### contained by aterritorial grant of rights; and

###  

### (ii)                              provide remote access to anyservices forming part of the Licensed Activities to Customers temporarilylocated outside the Territory,

###  

### and VEL acknowledgesand agrees that such worldwide or extra-territorial reach or remote access tothe Licensed Activities shall not be considered a breach by the Licensee or anymember of the NTL Group of this Deed provided that the Licensee agrees that theLicensed Activities (other than the Roaming Services) shall be targeted atCustomers within the Territory and that the Licensee shall not itself and shallprocure that no member of the NTL Group shall actively solicit orders fromoutside the Territory for any of the goods or services that are the subject ofsuch Licensed Activities (other than Roaming Services). Where practicable, theLicensee shall also include a statement in its user terms to the effect thatthe Communications Services and the Licensed Activities (other than the RoamingServices) are not made available outside the Territory;

###  

### (b)                         the Licensee acknowledges thatVEL may grant other parties rights to use the Virgin Marks (but not theChosen Names, the name “Virgin.net” nor the Domain Names other than virginmobile.comwhich is non-exclusive) outside the Territory in relation to activities similaror identical to the Licensed Activities (including Roaming Services) and may grantsuch rights using forms of technology or media developed in the future that willby its nature be accessible world-wide, such that the Virgin Marks may beaccessible to persons within the Territory. The Licensee agrees that the grantof these rights shall not amount to a breach of VEL’s obligations under thisDeed provided that (save in relation to Roaming Services) VEL does notauthorise these other parties to use the Virgin Marks to solicit orders ortarget customers within the Territory for the goods or services that are thesubject of the Licensed Activities where such orders originate from inside theTerritory;

###  

### (c)                          save as otherwise permittedunder this Deed including clauses 3.2(n) and (t), the NTL Group is notpermitted to use the Marks to brand any music download service (other thanringtones) without the agreement of such relevant Virgin Company who has anexclusive licence to use the Virgin Marks in connection with a music downloadservice, but the Licensee and members of the NTL Group may include a musicdownload service as a Partner Service or as part of a Bundled Service inaccordance with this Deed;

###  

### (d)                         the Licensee and members of theNTL Group shall only use the Marks in the form of the Names and shall notuse the name “Virgin” or the “V” from the Virgin Signature by itself, except inthe following circumstances:

###  

### (i)                                 those listed in Schedule 5;

####  

### (ii)                              where there are spaceconstraints and where the Licensee has sought and obtained VEL’s prior writtenconsent (not to be unreasonably withheld, conditioned or delayed);

####  

### (iii)                           where the Licensee has soughtand obtained VEL’s prior written

 

23

----

 

### consent (not to beunreasonably withheld, conditioned or delayed);

####  

### (iv)                           in the case of the V Marks “VFestival”and “V2000 (Series)”, any use shall only be in relation to promotional materialsrelating to the Licensee’s sponsorship of the VFestival; or

####  

### (v)                              as otherwise permitted by the TMGuidelines;

####  

### (e)                         if the Chosen Name is “VirginVision” the Licensee and members of the NTL Group shall not use “Vision” exceptin conjunction with the name “Virgin” or the form “Virgin Vision”; and

###  

### (f)                           in standalone physical retailoutlets operated under the Marks the Licensee may not market or supplyCommunications Services provided by a third party (for the avoidance of doubt,for the purposes of this clause 3.3(f), “third party” shall not include membersof the NTL Group) and sold under a third party brand except with the consent ofVEL not to be unreasonably withheld, conditioned or delayed.

###  

#### **Additionalprovisions relating to Content**

####  

## 3.4                                     The following provisions shallapply in relation to the grant of rights in clauses 3.1(a)(v) to (viii) andclause 3.2(a):

##  

### (a)                          nothing in the grant of rightsin clause 3.1(a)(v), (vi) or (vii), but subject to the provisions ofclause 3.4(b) below, is intended to prevent VEL or a Virgin Company from:

###  

#### (i)                             owningor operating any mixed general entertainment or non-premium TV ProgrammeService (such as Channel 5 or a shopping channel but not, for the avoidance ofdoubt, any sports-based TV Programme Service, movie-based TV Programme Serviceor TV Programme Service consisting of Other Premium TV Content) under theMarks; or

####  

#### (ii)                          acquiringand/or broadcasting sports and/or movie Content on the TV Programme Servicereferred to in clause 3.4(a)(i) above, provided that such broadcast ofsports and/or movie Content is only part of a general entertainmentoffering; or

####  

#### (iii)                       includingany non-premium content as part of the TV Programme Service referred to inclause 3.4(a)(i) above,

####  

### (b)                         notwithstanding the provisionsof clause 3.4(a), the parties agree as follows:

###  

#### (i)                             VELand the Virgin Companies shall not be permitted to own or operate more thanfour (4), in aggregate, TV Programme Services as referred to in clause 3.4(a)(i) underthe Marks to be distributed in or targeted at the Territory;

####  

#### (ii)                          if VELor any Virgin Company provides any TV Programme Service under the Marks to bedistributed in or targeted at the Territory it shall offer the NTL Group rightsto distribute such TV Programme Service

 

24

----

 

#### within a time period and upon the best termsoffered to any third party, and VEL shall only permit or license any otherperson to use the Marks in relation to any TV Programme Service on thecondition that such TV Programme Service is offered for distribution to the NTLGroup by such licensee within a time period and upon the best terms offered toany third party; and

####  

#### (iii)                       if VEL andany Virgin Company provides a TV Programme Service under the Marks to bedistributed in or targeted at the Territory it shall only be permitted todistribute such TV Programme Service through the NTL Group’s CommunicationsServices or via a third party’s distribution means or platform using suchthird party’s brand name (for example, a third party branded television platform orinternet service),

####  

### (c)                          save as expressly permittedunder clauses 3.1(a)(v) to (viii), the Licensee agrees not to use theMarks for a TV Programme Service or in relation to the commissioning orproduction of original film or television programmes, provided that VEL acceptsthat the Licensee shall be free to pursue such commissioning and production oforiginal film and television programmes under any mark or brand name other thanthe Marks so long as this is done in such a way to avoid creating theimpression that any third party services are branded with the Marks (unless therelevant provider is a Virgin Company) and such use is in accordance withhonest commercial practices and does not take unfair advantage of the Marks;

###  

### (d)                         the Licensee agrees not to usethe Marks in relation to the creation of any Adult Content provided that theNTL Group shall be permitted, subject to compliance with applicable laws andregulations, to provide access to and to package, bundle and distribute AdultContent through the Communications Services under the Marks.

###  

**Limitations on Bundled Services**

 

## 3.5                                     Where members of the NTL Groupare offering Bundled Services, the Licensee shall and shall procure thatmembers of the NTL Group shall use its or their reasonable endeavours to ensurethat the use of the Marks in relation to the Bundled Services:

##  

### (a)                          does not create the impressionthat any of the Bundled Services are offered by members of the NTL Group on astandalone basis separate from Communications Services;

###  

### (b)                         does not create the impressionthat the relevant member of the NTL Group is actually the provider (otherwiseas an intermediary or conduit) of the third party or non-“Virgin” brandedelements of the Bundled Services;

###  

### (c)                          could not reasonably beconsidered to result in consumer confusion (regarding who is providing thethird party or non-“Virgin” branded elements of the Bundled Services); and

###  

### (d)                         does not create the impressionthat any third party services are branded with the Marks (unless the relevantprovider is a Virgin Company).

 

25

----

 

## 3.6                                     The packaging, bundling anddistribution by the Licensee of Content as contemplated by clauses 3.1(a), (v),(vi) and (vii) and 3.2(a) shall not constitute a BundledService.

##  

**Limitations on Partner Services**

 

## 3.7                                     Where members of the NTL Groupare providing Partner Services, the Licensee shall and shall procure thatmembers of the NTL Group shall use its or their reasonable endeavours to ensurethat the use of the Marks in relation to the Partner Services:

##  

### (a)                         does not create the impressionthat the relevant member of NTL Group is actually the provider (otherwise as anintermediary or conduit) of the Partner Services or any of the goods orservices which are subject of the Partner Services;

###  

### (b)                        could not reasonably beconsidered to result in consumer confusion (regarding who is providing thePartner Services); and

###  

### (c)                         does not create the impressionthat any third party goods or services are branded with the Marks (unless therelevant provider is a Virgin Company).

###  

## 3.8                                     Notwithstanding the provisionsof clauses 3.5 and 3.7, VEL confirms that in connection with provision ofBundled Services and Partner Services, where the trade marks and trade names ofthird parties appear along with or in association with the Marks, the Licenseeshall be entitled to provide registration and authentication services, billingand payment services (but not Banking Services unless otherwise permitted inaccordance with this Deed) and customer and technical support using the Marks.

##  

## **Limitations on Co-Branding**

##  

## 3.9                                     The parties acknowledge that thetrade marks and trade names of third parties and any member of the NTL Group may appearalong with or in association with the Marks provided that:

##  

### (a)                          such trade marks and trade namesare used to identify the products and services being offered or to identify atrading entity;

###  

### (b)                         such trade marks and trade namesare not used in combination with the Marks so as to form a new orcomposite mark (other than as expressly permitted under this Deed) without theprior written consent of VEL (such consent not to be unreasonably withheld,conditioned or delayed); and

###  

### (c)                          such trade marks and trade namesare not used in any manner which is not in accordance with honest andcommercial practices or without due cause takes unfair advantage thereof orcould reasonably be considered to result in consumer confusion.

###  

**Domain Names and Internet Use**

 

## 3.10                               The parties agree andacknowledge that the Licensee and members of the NTL Group shall primarily useand market a domain name and a URL using the Chosen Names in the form “ChosenName.com” and “virgin.com/Chosen Name” and that any other

 

26

----

 

## Domain Names shallprimarily be used to generate additional traffic to the Site and/or forspecific activities or promotions.

##  

## 3.11                              Throughout the Term, VEL shallprocure that a clearly accessible hyperlink is maintained (and appears ‘abovethe fold’) on the Virgin.com website (or such other main portal websiteoperated by or on behalf of the Virgin Group from time to time) to the Site andthe Licensee shall and shall procure that members of the NTL Group shall ensurethat a hyperlink is maintained on the Site to the Virgin.com website (or suchother main portal website operated by or on behalf of the Virgin Group fromtime to time).

##  

**Reservation of VEL’s Rights**

 

## 3.12                              VEL shall not use or license theuse of the Marks, the name “Virgin”, the letter “V” or anything confusinglysimilar thereto in the Territory at any time during the Term in relation toCommunications Services but VEL and/or any Virgin Company shall not beprevented by virtue of this Deed from using the Virgin Marks in relation to:

##  

### (a)                          promoting their own business,products and/or services and/or offering their products and/or services withreference to the “Virgin” name in the Territory through any third partyCommunications Services or Communications Network or to the customers of anythird party Communications Services or Communications Network;

###  

### (b)                         any non-exclusive rights underthis Deed;

###  

### (c)                          Other Email Services and OtherWebspace Services;

###  

### (d)                         Communications Services providedin the ordinary course of business within premises and locations ordinarilyforming part of the activities licensed by VEL to such Virgin Companywhere the provision of such Communications Services is incidental to and aminor adjunct of their principal business including, retail outlets, health andfitness centres, hotels, aeroplanes, trains, cars, motorcycles, ships or othermodes or transport, private airport lounges, train station lounges and othertransportation lounges;

###  

### (e)                          any Content offered by VirginCompanies, except as set out in clause 3.1(a) (v) to (viii) andsubject to the provisions of clause 3.4;

###  

### (f)                            internet cafes; or

###  

### (g)                         sponsorship of any sportsevents, tournaments, leagues or teams,

###  

provided that:

 

#### (i)                              allsuch use of the Virgin Marks in accordance with this clause, other than inrelation to (g) above, is confined to use in conjunction with, and alwaysin front of, any word or words which are used to describe or denote theactivities licensed by VEL to the relevant Virgin Company (subject to anyexceptions equivalent to those under clause 3.3(d)); and

####  

#### (ii)                           this isdone in accordance with honest commercial practices and in the

 

27

----

 

#### ordinary course of VEL and/or any VirginCompany business and in such a way which could not reasonably be considered toresult in consumer confusion as to who is the actual provider of such services.

####  

**Extension of Grant**

 

## 3.13                               VEL shall notify the Licensee ifand when:

##  

## (a)                              the rights to use the Marks inthe Territory in relation to the creation of the Restricted Content becomeavailable; and/or

##  

## (b)                             it intends to use or grant alicence for use of the Marks in the Territory in relation to internet cafes,the commissioning or production of original film and/or television programmes(to the extent not already licensed in this Deed) and/or the rights to acquireand/or brand a TV Programme Service with the Marks (to the extent not alreadylicensed in this Deed),

##  

## and shall:

##  

#### (i)                              givethe Licensee reasonable details of any proposals submitted by or to the VirginGroup for the licensing of such rights; and

####  

#### (ii)                           givethe Licensee an opportunity, within a time period and on terms no lessfavourable than those given to third parties, to submit a written proposalrelating to the exploitation of those rights by the Licensee on reasonablecommercial terms.

####  

#### The Licensee shall submit any writtenbusiness proposal as soon as reasonably practicable and VEL shall consider suchproposal as soon as reasonably practicable and on a good faith basis. VELagrees, for a period of sixty (60) days (or such other period as the parties may agreein good faith) from VEL’s original notice to enter into good faith discussionswith the Licensee and not to grant a licence in respect of those rights to anyother party during such period.

####  

**No Grant to Third Parties**

 

## 3.14                              VEL agrees that it shall notduring the Term and for a period of twelve (12) months from the date oftermination or expiry of this Deed or, at the Licensee’s option, twenty four(24) months (subject in such latter case to the Licensee paying to VEL a sumequivalent to the amount paid to VEL in the last four full quarters for which aroyalty was paid, adjusted to take account of RPI from the date of terminationor expiry of the Deed to the end of the twelve (12) month period following suchtermination or expiry):

##  

### (a)                          use itself nor grant to anyperson other than the Licensee the right to use the Marks in the Territory inrelation to any of the exclusive Licensed Activities specified in clause 3.1(except to the extent other licensees of the Marks are permitted to use them inrespect of services equivalent to Communications Services in the mannerdescribed in clause 3.12(d));

###  

### (b)                         use itself nor grant to anythird party the right to use the Chosen Names or the name “Virgin.net” anywherein the world;

 

28

----

 

### (c)                          use itself nor grant to anyperson other than the Licensee the right to use the Names in the Territory;

###  

### (d)                         use itself nor grant to anythird party the right to use the letter “V” (whether plain or in stylised form)in front of (i) the non-“Virgin” part of the Chosen Names anywhere inthe world; or (ii) any word or words which are identical or colourablysimilar to the Names in the Territory; and

###  

### (e)                          use itself nor grant to anythird party other than the Licensee the right to use the Marks in respect ofthe marketing or supply in physical retail outlets of Communications Servicesand Core Equipment provided by any third party and sold under that third partybrand (and warrants that it has not granted any such rights prior to the dateof this Deed) in the Territory save that the Licensee acknowledges that VirginRetail Limited (or its successors and/or assignees) has been granted as at theCommencement Date under the VRL Licence as defined in Schedule 7 of thisDeed certain rights to sell third party equipment that may fall within thedefinition of Core Equipment in this Deed.

###  

**Miscellaneous Provisions**

 

## 3.15                              The parties acknowledge that the“Virgin” logo appearing at Part B of Schedule 1 is a new version ofthe logo and agree, to the extent that this is reasonably practicable, to agradual transition toward use of this logo over time.

##  

## 3.16                              Members of the NTL Group shallbe entitled to do all acts which would otherwise be restricted by the copyrightin the Marks in connection with the carrying on and provision of the LicensedActivities.

##  

## 3.17                              Subject to paragraph 5.5 of Schedule 3,the Licensee undertakes that it and relevant members of the NTL Group shallmake genuine use of the Marks as soon as reasonably practicable after theCommencement Date (unless otherwise agreed between the parties) in relation tothe Communications Services provided from time to time by the NTL Group for atleast the Minimum Term.

##  

## 3.18                              The parties acknowledge that,during the Term, major technological changes and advancements will occur inrelation to the Licensed Activities which the parties are unable to foresee asat the Commencement Date. As such, the parties declare that it is their commonintention that this Deed is intended to cover such changes and advancements andto enable the Licensed Activities in respect of which the Marks may beused to develop over the Term. The parties further acknowledge that thedefinitions of “Communications Services” and “Communications Network” providedfor in this Deed are intended to include not only existing communicationsservices and networks, but also new communications services and networks whichresult from innovations, technological developments and discoveries and thetrend towards the convergence of such communications services and networks toensure that the NTL Group can effectively compete with new communicationsservices and networks introduced by others as well as innovate and introducenew communications services and networks of its own. The parties agree thatthis Deed, including the definitions of “Communications Services” and “CommunicationsNetwork”, shall be construed accordingly.

##  

## 29

## 

 

## 3.19                              Withoutprejudice to the provisions of clause 3.18, should either party at any timeduring the Term be of the view that this Deed as drafted, including thedefinitions of “Communications Services” and “Communications Network”, does notfully reflect the common intentions of the parties as stated in clause 3.18, itmay notify the other party to that effect and the parties will meet within14 days to agree in good faith appropriate amendments to this Deed. In theevent that the parties fail to reach agreement on appropriate amendments withinone hundred and eighty (180) days of any notification given under this clause3.19, either party may refer the matter to dispute resolution inaccordance with clause 14.6.

##  

## 3.20                              Forclarification it is stated that prior to granting this Licence the parties havesigned the letters of agreement annexed in Schedules 6 and 7 to this Deed.

##  

# **4.**                                       PAYMENT OF ROYALTIES

#  

## 4.1                                     Exceptas set out in clause 4.12 and clause 6.9, and subject to clause 4.13 theLicensee agrees to pay VEL a royalty the greater of:

##  

## (a)                                  onequarter of one per cent (0.25%) of the Licensed Revenues; or

##  

## (b)                                 twomillion one hundred and twenty five thousand pounds (£2,125,000),

##  

## in respect of each Quarterduring the Term. In respect of any part of a Quarter during the Term, theRoyalties shall be determined in accordance with the following provisions ofthis clause 4, but shall be reduced pro rata in accordance with the number ofdays during which this Deed subsists compared with the number of days in theQuarter in question.

##  

## 4.2                                    TheLicensee shall, within ten (10) Business Days after the date on which NTLIncorporated has filed a Quarterly Report with the SEC in respect of a Quarter,deliver to VEL a statement in respect of such Quarter, certified as correct bythe chief financial officer of NTL Incorporated, of the total Licensed Revenuesand the Royalties due to VEL in respect of such Quarter.

##  

## 4.3                                    Allamounts payable under this Deed are expressed exclusive of VAT. Each partyshall, to the extent required by law, pay VAT on all sums becoming due from itto the other party under the provisions of this Deed at the appropriate rate inforce, upon receipt of a valid VAT invoice.

##  

## 4.4                                    VELshall be entitled to render an invoice in respect of the Royalties due under clause4.1 upon receipt of the statement referred to in clause 4.2. The Licensee shallpay such Royalties within thirty (30) Business Days following receipt by theLicensee of an appropriate VAT invoice.

##  

## 4.5                                    TheLicensee shall, within ten (10) Business Days after the date on which NTLIncorporated has filed an Annual Report in respect of a Financial Year, deliverto VEL a statement in respect of such Financial Year, certified as correct bythe chief financial officer of NTL Incorporated, of the total Licensed Revenuesand the Royalties due to VEL in respect of such Financial Year. In the eventthat the sum of the Royalties paid by the Licensee under clause 4.4 for thatFinancial Year are less or more than those certified under this clause 4.5, theLicensee shall pay any additional

 

30

----

 

## Royalties due to VEL or VELshall return to the Licensee any excess Royalties paid, as the case may be,within ten (10) Business Days of such certificate.

##  

## 4.6                                    Allpayments of Royalties to VEL will be made in Sterling to VEL’s bank account or as directed by VEL.All payments due to the Licensee will be made in Sterling to the Licensee’sbank account or as directed by the Licensee.

##  

## 4.7                                    Ifeither party fails to pay any sum due and payable under these terms to theother party which is not the subject of a dispute between the parties, theamount due will bear interest, accruing from the due date until the date ofactual payment, calculated at a daily rate equivalent to two per cent. abovethe base rate then in effect of Lloyds Bank plc (or its successor in title)(both before and after any court judgment).

##  

## 4.8                                    NTLIncorporated’s Quarterly Reports and Annual Reports shall be prepared inaccordance with Accounting Standards and, in respect of Annual Reports, shallbe audited by NTL Incorporated’s auditors. As such, save as set out in clause4.10, VEL shall have no rights of inspection or audit of the Licensee’s booksand records nor of any other member of the NTL Group.

##  

## 4.9                                    If atany time NTL Incorporated shall no longer be a registrant reporting under theSecurities Exchange Act of 1934, or NTL Incorporated shall no longer reportConsumer Revenues in its Quarterly Report or Annual Report, the NTL Group shallprovide substitute reports to VEL that include the same information in respectof Consumer Revenues as would have been included in its Quarterly Report orAnnual Report as contemplated by this Deed (such substitute reports,respectively, a “Substitute Quarterly Report” and a “Substitute Annual Report”)and shall be certified as correct and audited in the manner provided in clauses4.2, 4.5 and 4.8. Such Substitute Quarterly Reports in respect of each of thefirst three quarters of each Financial Year shall be due within sixty (60) daysof the end of that quarter and the Substitute Annual Report shall be due withinninety (90) days of the end of the Financial Year. In each such case, FinancialYear shall mean the fiscal year of, and the Substitute Quarterly Reports andSubstitute Annual Reports shall be produced in respect of, a company designatedby NTL Group which shall be the company whose subsidiaries are responsible for100% of Consumer Revenues and which has the most direct supervisory orgovernance role in respect of such subsidiaries, references to NTL Incorporatedin this Deed shall be deemed to refer to such company, and such SubstituteQuarterly Reports Substitute and Annual Reports shall be deemed to be QuarterlyReports and Annual Reports for the purposes set forth in this Deed.

##  

## 4.10                              In theevent that VEL has reasonable grounds to believe that there is a material errorin the calculation of the Royalties, it shall notify the Licensee in writingand the parties shall use reasonable endeavours toresolve any discrepancies raised by VEL in good faith. Any disputes as to thecalculation of Royalties shall be referred to the dispute resolution procedureset out in clause 14.6. If such dispute has not been resolved and the mediatorappointed pursuant to clause 14.6 decides that a material error may havebeen made, VEL shall be entitled to carry out an audit of the NTL Group’s booksof accounts as reasonably necessary to determine whether there has been amaterial error in the statements certified under clauses 4.2 and 4.5 or in theinformation certified under clause 4.9. Any such audit shall be conducted asfollows:

##  

### (a)                          uponthe written request of VEL and not more than once in each period of

 

31

----

 

### twelve months, and only afterNTL Incorporated has published its accounts for any given Financial Year, theLicensee shall permit one of KPMG Audit plc, Ernst and Young LLP, Deloitte & Touche LLP orPricewaterhouseCoopers LLP, or their successors in title as appointed by VELand agreed by the Licensee (or, failing agreement, such other auditing firm ofinternational repute as is agreed), to have access during normal business hoursto such records of the NTL Group as are reasonably necessary to determinewhether there has been any material error in calculating the Royalties andwhether there has been an overpayment or underpayment of Royalties pursuant tothis Deed for any Quarter in such Financial Year or for the whole of theFinancial Year in question. In the absence of material error, such accountingfirm shall not be entitled to question the application of the NTL Group’sjudgement in applying the Accounting Standards (or that of their accountantsand auditors);

###  

### (b)                         theLicensee, at the cost of VEL, shall and shall procure that relevant members ofthe NTL Group will provide such assistance to the accounting firm as isreasonably necessary in connection with the audit, provided that the Licenseehas received reasonable advance notice of such audit from VEL. Such accountingfirm shall execute a confidentiality undertaking no less strict than theconfidentiality obligations set forth in this Deed in a form reasonablyacceptable to the Licensee and suitable for the purpose of performing the auditunder this clause 4.10. Such accounting firm shall carry out its audit withintwo (2) calendar months and report only on matters which bear on whetherthe Royalties paid or due to be paid by the Licensee were determined andaccurately calculated in accordance with this Deed. The report shall beaddressed to both VEL and the Licensee;

###  

### (c)                          theserights with respect to any Quarter or any Financial Year shall terminate twelve(12) months after the end of such Quarter or Financial Year;

###  

### (d)                         if,after consultation with the parties, such accounting firm concludes that therewas an overpayment or underpayment, the Licensee shall pay the additionalroyalties due to VEL or VEL shall return to the Licensee any excess royaltiespaid, as the case may be, and in each case together with interest thereon,within thirty (30) days after the accounting firm’s written report is deliveredto both VEL and the Licensee. The fees and disbursements charged by suchaccounting firm shall be paid by VEL unless the accounting firm concludes thatthere has been an underpayment by more than five percent (5%) of the royaltiesdue, in which case the Licensee shall pay its reasonable fees anddisbursements. Neither VEL nor the Licensee shall consult with such accountingfirm in person or orally unless the other parties are given reasonable advancenotice of and the opportunity to participate in such consultation; allcommunications made in writing shall be copied to the other party who may respondto the accounting firm in question with a copy to the other parties; and

###  

### (e)                          thedecision of the accounting firm, acting as expert and not as arbitrator, shallbe final and binding upon the parties (save in the case of fraud or a materialerror), and not subject to dispute resolution procedures under clause 14.6 orotherwise. Should either party fail to comply with the decision, the cost ofany proceedings brought to enforce same shall be at the sole expense of the

 

32

----

 

### non-complying party, who shallreimburse the complying party for its reasonable attorneys’ fees and reasonabledisbursements.

###  

## 4.11                              VELand the Licensee shall treat all information subject to review under thisclause 4 in accordance with the confidentiality provisions of this Deed.

##  

## 4.12                              VELaccepts that the Licensee may not be able to provide the CommunicationsServices by reference to the Marks (other than the services formerly licensedpursuant to the Virgin Net Licence and the services licensed pursuant to theVirgin Mobile Licence) for a period of time after the Commencement Date. Subjectto clause 6.9 and clause 4.13, during that time the Licensee agrees to pay toVEL a royalty equal to the greater of:

##  

## (a)                                  onequarter of one per cent (0.25%) of the Consumer Revenues, together with, to theextent not already included in Consumer Revenues, any other revenues accruingto the NTL Group from activities carried out pursuant to the Marks, less baddebt expense in accordance with Accounting Standards (save that such deductionin respect of such bad debt expense shall not exceed four per cent (4%) ofConsumer Revenues); or

##  

## (b)                                 twomillion one hundred and twenty five thousand pounds (£2,125,000),

##  

## in respect of each Quarterduring the Term. In respect of any part of a Quarter during the Term, theRoyalties shall be determined in accordance with the provisions of this clause4, but shall be reduced pro rata in accordance with the number of days duringwhich this Deed subsists compared with the number of days in the Quarter inquestion.

##  

## 4.13                              If theNTL Group has acquired a majority of the issued ordinary shares of VirginMobile Holdings (UK) plc but the Licensee has not served the notice set out inclause 2.3(c) of this Deed such that the Virgin Mobile Licence remains inforce, then the royalties payable pursuant to the Virgin Mobile Licence shallbe deducted from royalties due under this clause 4.

##  

## 4.14                              TheLicensee agrees to provide, at the reasonable request of VEL, a monthly revenuereport with sufficient information for the purposes of determining theroyalties due and payable under this Deed (as generally distributed within theNTL Group to senior management).

##  

# **5.**                                       CONDITIONS OF USE

#  

## 5.1                                    TheLicensee acknowledges that the value and reputation of the Marks is such thatthey denote high quality status and agrees to and shall procure that relevantmembers of the NTL Group shall:

##  

### (a)                          useall reasonable endeavours to apply the Marks to goods and services of a style,appearance and quality so as to maintain the value and reputation of the Marks;

###  

### (b)                         subjectto clause 5.2, use the Marks in accordance with the TM Guidelines; and

 

33

----

 

### (c)                          useall reasonable endeavours to apply the Marks to goods and services of astandard consistent with good industry practice and standards.

###  

## 5.2                                     TheLicensee shall not be obliged to consult VEL as to its manner of use of theMarks where such use is in accordance with the TM Guidelines. However, theLicensee may submit designs and/or proposed advertising, marketing orpromotional materials using the Marks to VEL for approval, such approval not tobe unreasonably withheld, conditioned or delayed. Where VEL has not sent (bycourier, post, email or facsimile) to the Licensee at its then usual businessor email address a written response in relation to the designs and/or materialssubmitted by the Licensee within five Business Days (or such other period as may beagreed between the parties) of receipt of such designs and/or materials, VELshall be deemed to have approved the designs and/or materials for the purposesof this clause.

##  

## 5.3                                     In theevent that either party wishes to create any logo incorporating the Marksspecific to the Licensee, then the parties shall work together to create suchlogo, provided that the Licensee agrees that VEL shall have the right of finaldesign approval of such logo in respect of matters such as brand consistency.

##  

## 5.4                                     TheLicensee shall use all reasonable endeavours to comply with the followingconditions of use:

##  

### (a)                          wherereasonably practicable, and upon request from VEL, the Licensee shall displayand shall procure that the relevant members of the NTL Group shall display astatement in the following terms:

###  

“*Virgin” and the Virgin Signature logo are registeredtrade marks of Virgin Enterprises Limited and are used under licence*”;

 

### (b)                         theMarks may not be used in combination with any other marks, names, words,logos, symbols or devices to form a new or composite mark (except asspecified in this Deed) without the prior written consent of VEL, such consentnot to be unreasonably withheld, conditioned or delayed;

###  

### (c)                          theexercise of the rights granted by this Deed to the members of the NTL Groupshall comply in all material respects with all applicable laws and regulationsin force within the Territory save to the extent that such compliance is madeimpractical by the action or inaction of VEL;

###  

### (d)                         theLicensee shall and shall procure that relevant members of the NTL Group shallobtain and comply in all material respects with all necessary consents,licences and authorisations required in connection with the provision of theLicensed Activities within the Territory save to the extent that suchcompliance is made impractical by the action or inaction of VEL; and

###  

### (e)                          theMarks shall not be used in any manner which, knowingly, wilfully or recklessly,would bring them into disrepute or otherwise materially damage the goodwill orreputation of the Marks or materially damage VEL’s right in and to the Marks.

###  

## 5.5                                     Duringthe Term the Licensee shall not use, and shall procure that no relevant

 

34

----

 

## members of the NTL Group use,without VEL’s prior consent (such consent not to be unreasonably conditioned,withheld or delayed):

##  

### (a)                          anymarks which are confusingly similar to but not identical with the Marks (or “Vision”if the Chosen Name is “Virgin Vision”) in relation to the Licensed Activities;

###  

### (b)                         theMarks or any marks which are confusingly similar to but not identical with theMarks (or “Vision” if the Chosen Name is “Virgin Vision”) in relation to anyactivities other than the Licensed Activities.

###  

## 5.6                                    Inorder to ensure that any relevant member of the NTL Group is complying with theobligations under this Deed, the Licensee shall, and shall procure thatrelevant members of the NTL Group shall, on reasonable written request fromVEL:

##  

### (a)                          providereasonable quantities of free samples of any materials (including alladvertising, marketing and promotional materials) bearing the Marks used inconnection with the Licensed Activities prior to or in the course of theirinstallation, sale or distribution;

###  

### (b)                         provideVEL as soon as practicable with full particulars of proposed advertisingcampaigns bearing the Marks used in connection with the Licensed Activities;

###  

### (c)                          promptlyprovide VEL on an aggregate basis with sufficient details of all materialcomplaints made by customers, distributors, retailers and/or members of thepublic (but shall not be obliged to supply personal data or identifycomplainants where to do so would be in breach of the Data Protection Act 1998)relating to the Licensed Activities conducted under the Marks together withreports on the resolution of such complaints and shall comply with anyreasonable directions or recommendations given by VEL in respect thereof;

###  

### (d)                         provideVEL with details of any material claims, litigation, arbitration oradministrative proceedings, investigations or enquiries which are in progressor threatened in writing against the relevant member of the NTL Groupconcerning the Licensed Activities carried out using the Marks. This clauseshall not require any member of the NTL Group to waive or jeopardise its rightsto any privilege in relation to such proceedings, investigations or enquiries;

###  

### (e)                          meetwith VEL once in each calendar year in order to review the exercise of therights granted by this Deed to the members of the NTL Group;

###  

### (f)                            whereVEL has reasonable grounds to believe that any member of the NTL Group is notcomplying with this Deed, VEL (or its nominated representatives) may uponreasonable notice in writing during business hours, enter the premises of anymember of the NTL Group at which the Licensed Activities are carried out, orthe Marks are otherwise used and have access to all documents which may bereasonably requested to assess whether the relevant member of the NTL Group iscomplying with the obligations under the terms of this Deed provided that:

 

35

----

 

#### (i)                              VEL shall use its reasonable endeavours to ensure that it shall causeas a little disruption as possible whilst on such premises;

####  

#### (ii)                           VEL acknowledges that it or its nominated representative shall be underthe supervision of the relevant member of the NTL Group whilst at the premises;and

####  

#### (iii)                       VEL shall not interfere in any way with thecomputer systems of any member of the NTL Group but where access to anycomputer systems is reasonably necessary for VEL’s inspection under thisclause, such access shall be carried out by a representative of the NTL Groupto the reasonable direction of VEL or its nominated representative, subject tocompliance with the Data Protection Act 1998;

####  

### (g)                         provideVEL with the reports referred to in Schedule 3, copies of customer servicescripting, copies of pro-forma letters sent to customers and any brand trackingstudies/reports undertaken or commissioned by the NTL Group.

###  

VEL acknowledges andagrees that the Licensee shall be deemed to have complied with the provisionsof clause 5.6(a) and (b) if the information and materials requestedunder such provisions is provided to or made available to the Chief MarketingOfficer.

 

## 5.7                                     If atany time the Licensee or any member of the NTL Group fails to comply in anymaterial respect with the conditions of use or standards of quality andpresentation set out in this clause 5 (other than with respect to ServiceLevels), VEL may direct the Licensee or such member of the NTL Group, inwriting, to take such reasonable steps as may be necessary to ensurecompliance with this clause 5 and the Licensee shall procure that the relevantmember of the NTL Group shall, within twenty five (25) days or any such periodas the parties may agree, correct any such non-compliance. In relation tothe TM Guidelines this may include the withdrawal of non-complyingadvertising, marketing or promotional materials where reasonably practicable.

##  

## 5.8                                    Theparties shall comply with the obligations set out in Schedule 3 withrespect of the Service Levels.

##  

## 5.9                                    TheLicensee recognises that it is part of a group of companies and businesseslicensed by VEL to use the Marks and agrees that it shall cooperate in VirginGroup activities and initiatives, including charitable initiatives associatedwith Virgin Unite, procurement initiatives, marketing forums, promotions of thevirgin.com website, provided that the NTL Group shall not be required toparticipate in any activity or initiative where it considers in its absolutediscretion that such participation may be detrimental to the NTL Group orits business, operations or other activities. Where any Virgin Company requestsits products or services be accessible through the Communications Servicesprovided by the NTL Group and/or be included as part of the PartnerServices, then the Licensee shall consider in all good faith such requests onterms that are no less favourable than those offered to any other third partywhere such request does not unreasonably impact on its business.**VEL shall use all reasonable efforts to facilitateactivities and initiatives proposed by the Licensee in conjunction with anyVirgin Company and on terms no less favourable than those offered to any otherthird party.

 

36

----

 

## 5.10                              VEL,or any Affiliate of VEL nominated by VEL, shall have the right to appoint asuitably qualified senior sales and marketing executive for employment as ChiefMarketing Officer of the NTL Group reporting directly to the CEO, COO or to thesenior person in charge of the consumer division of the NTL Group. Suchemployment shall commence no earlier than the Commencement Date (and such rightwill then continue during the Term) and shall be with the relevant employingcompany in the NTL Group upon that company’s usual terms and conditions ofemployment and subject to satisfactory references and immigration status. Ifthe proposed appointee is not approved by that company for employment as aresult of the references or immigration status or if the employee then leavesthe employment of the NTL Group, then VEL, or any Affiliate of VEL nominated byVEL, shall have a right to appoint an alternative executive. This clause shallnot prevent the relevant NTL Group employing company from terminating suchemployment at any time in accordance with such terms and conditions ofemployment provided that VEL, or any Affiliate of VEL nominated by VEL, shallhave a right to appoint an alternative executive. The Licensee may recommendto VEL a suitably qualified senior sales and marketing executive for employmentas Chief Marketing Officer and VEL shall consider such recommendation in goodfaith.

##  

## 5.11                              VELshall provide reasonable support and guidance to the members of the NTL Groupengaged in the Licensed Activities, as may be requested from time to time,in relation to the members of the NTL Group’s use and/or proposed use of theMarks.

##  

## 5.12                              VELshall use all reasonable efforts to ensure that the members of the NTL Groupare treated no less favourably thanother Virgin Companies.

##  

## 5.13                              Theparties acknowledge that the NTL Group may not currently comply with allaspects of the Direct Selling Policy but that, prior to launch of products orservices under the Marks, it will comply with the Direct Selling Policy withrespect to those products or services.

##  

# **6.**                                       TRADE MARK PROTECTION

#  

## 6.1                                    TheLicensee acknowledges VEL’s right, title and interest in the Marks (subject tothis Deed) and undertakes not to do and shall procure that the members of theNTL Group shall not do any act which would jeopardise or invalidate theregistration of the Marks nor to do any act which could give rise to anyapplication to remove the Marks or which would otherwise prejudice in amaterial way VEL’s right, title and interest in the Marks.

##  

## 6.2                                    TheLicensee and VEL each undertake that they shall, and the Licensee shall procurethat relevant members of the NTL Group shall, at the other’s request and attheir own expense, execute or procure the execution of any document which may benecessary to allow recordal of the rights granted to the members of the NTLGroup by this Deed and the corresponding cancellation of such recordal on theexpiry or termination of this Deed, for whatever reason.

##  

## 6.3                                    TheLicensee shall not and shall procure that no member of the NTL Group shall seekany registration of any trade mark, copyright, domain name or analogous rightwhich is identical with or confusingly similar to any of the Marks or whichotherwise incorporates the “Virgin” name. VEL agrees, at the Licensee’s cost,to register any

 

37

----

 

## additional and available domainnames comprising a new and relevant domain name suffix relating to the LicensedActivities and containing the Names as are reasonably requested by theLicensee, and all such domain names shall, when registered, automatically bedeemed “Domain Names” for the purposes of this Deed. The Licensee shall beresponsible for administering sub-domains for which no registration in requiredand applying for and maintaining SSL licences (e.g. certificates for securewebsites) in the name of VEL, for which purpose VEL consents to the use of itsname on such applications and registrations and agrees to provide itsreasonable assistance (including, without limitation, information) as theLicensee may from time to time require for these purposes.

##  

## 6.4                                    VELshall take all reasonable steps to ensure that the registrations of the Markscover (and, if applicable, are extended to cover) the scope of the LicensedActivities to the extent that registrations are available in the Territory andshall accordingly make all such formal trade mark applications in its own nameas are, in its reasonable opinion, necessary (at its cost).

##  

## 6.5                                     VELshall:

##  

### (a)                          useall reasonable endeavours toprosecute any pending applications for the Marks to registration as soon asreasonably practicable hereafter which shall include seeking in good faith toovercome all oppositions and objections;

###  

### (b)                         ensurethat the registrations of such of the Marks as are registered are renewed asand when they fall due for renewal;

###  

### (c)                          uponthe written reasonable request, and at the expense of the Licensee, apply andprosecute further trade mark registrations in the Territory which feature theMarks in the form of the Names, following which such applications andregistrations shall be added to Schedule 2. The Licensee shall have theright to review and provide comment on any such pending applications, and VELshall, in good faith, consider such comments; and

###  

### (d)                         maintainand protect the goodwill and reputation of the Marks, provided that VEL shallnot be in breach of this clause 6.5(d) to the extent that diminution ofthe goodwill and reputation of the Marks is caused by a breach of this Deed bythe Licensee or a member of the NTL Group.

###  

## 6.6                                    Otherthan those additional trade marks and additional domain names requested by theLicensee in accordance with clauses 6.3 and 6.5(c), the costs of filing,pursuing and renewing other formal trade mark applications and other anyregistrations in the Territory for any of the Marks and the Domain Names underclause 6 which relate in whole or in part to the Licensed Activities shallbe paid in full and in a timely manner by VEL.

##  

## 6.7                                    TheLicensee shall and shall procure that relevant members of the NTL Group shall,at the reasonable request and expense of VEL, provide reasonable assistance inconnection with the protection and maintenance by VEL of its rights in and tothe Marks as VEL may from time to time in its reasonable discretiondetermine necessary including providing details of sales figures, Customernumbers, marketing spend, launch dates and dates of first use of the Marks bythe members of the NTL Group.

 

38

----

 

## 6.8                                    Withoutprejudice to the rights of the members of the NTL Group under this Deed, theLicensee shall and shall procure that relevant members of the NTL Group shallimmediately stop using, or as VEL may direct, modify the use of, any Marksin relation to any part or parts of the Licensed Activities, on receipt ofwritten notice from VEL that such use infringes or is reasonably likely toinfringe the Intellectual Property Rights of a third party (other than anyVirgin Company) provided always that:

##  

### (a)                         VELgives the Licensee full details of the alleged infringement, together with awritten opinion from competent external and independent legal counselspecialising in intellectual property law to the effect that such useconstitutes, or is reasonably likely to constitute, an infringement of theIntellectual Property Rights of a third party; and

###  

### (b)                        VELshall permit the relevant members of the NTL Group to recommence use of theMarks if, and as soon as reasonably practicable after, VEL settles the matterwith the third party with the effect that use by the members of the NTL Groupis permitted or would no longer amount to an infringement of such third party’sIntellectual Property Rights,

###  

provided that nothingin this clause 6.8 shall prevent the members of the NTL Group from exercisingany rights they may have against VEL.

 

## 6.9                                    TheLicensee shall not be required to make any Royalty payments in relation tothose Licensed Activities in respect of which it is unable to use the Marks forany period during which such use of the Marks by any member of the NTL Group issuspended under clause 6.8.

##  

# **7.**                                       DEALINGS

#  

## 7.1                                     Saveas otherwise specified in this Deed, the rights granted under this Deed arepersonal to the Licensee and the other members of the NTL Group and they shallnot delegate, assign, sub-license or sub-contract any of those rights (exceptby way of mortgage, charge or security, and only until such time as that fundingshall be repaid notice of which shall be given to VEL) to any third partywithout the prior written consent of VEL (such consent not to be unreasonablywithheld or delayed) provided that:

##  

### (a)                          theLicensee may assign all of its rights and obligations under this Deed to asolvent member of the NTL Group as part of a reorganisation of the NTLGroup without the prior written consent of VEL provided that:

###  

#### (i)                              notice of any such assignment and details of the assignee shall beprovided to VEL by the Licensee and the assignee is thereafter deemed to be theLicensee for the purposes of this Deed;

####  

#### (ii)                           the Licensee shall procure that, in the event of such assignee ceasingto be a solvent member of the NTL Group, any such rights and/or obligationsassigned shall revert automatically back to the Licensee or

 

39

----

 

#### such other member of the NTL Group as the Licensee shall direct;

####  

#### (iii)                       this Deed shall be binding on any successorsor permitted assignee of the Licensee and the Licensee shall and shall procurethat any such successor or permitted assignee of the Licensee is notified ofthe terms of this Deed; and

####  

#### (iv)                       such assignee is resident in the U.K. for tax purposes,

####  

### (b)                         theLicensee shall be entitled to authorise third parties to use the Marks inrelation to the services they provide to the members of the NTL Group engagedin the Licensed Activities or in connection with the promotion or sale of theNTL Group’s products and services (a “Permitted Third Party”), provided that:

###  

#### (i)                             such third parties agree in writing to bebound by terms relating to use of the Marks no less onerous than under thisDeed;

####  

#### (ii)                          such parties shall only be permitted to usethe Marks in accordance with honest commercial practices and in a way whichdoes not take unfair advantage of the Marks and which is not misleading andcould not reasonably be considered to result in consumer confusion;

####  

#### (iii)                       for the avoidance of doubt, any authorisationgranted pursuant to this clause 7.1(b) shall terminate immediately ontermination of this Deed,

####  

### (c)                          theLicensee shall be permitted to grant to Customers a non-transferable right(without the right to sub-license) to use their Permitted Email Address andPermitted Webspace Address and to reproduce the same upon materials for thepurpose of providing the Permitted Email Address and Permitted Webspace Addressto third parties;

###  

### (d)                         anyrights granted to or enjoyed by a member of the NTL Group shall automaticallycease subject to clauses 9.10 and clause 9.12 and 9.13 on that member ceasingto be part of the NTL Group; and

###  

### (e)                          anyact or omission on the part of any member of the NTL Group or any thirdparty authorised to use the Marks under this Deed which would constitute abreach of any term or condition of this Deed shall constitute a breach of thatterm or condition by the Licensee provided that this shall be without prejudiceto VEL’s rights to take direct action as against that member or third party.

###  

## 7.2                                     In theevent of any assignment by the Licensee in accordance with clause 7.1, theLicensee shall execute and procure the execution by the assignee of a novationagreement with VEL (and VEL agrees to execute such novation agreement) so as togive effect to the transfer and to bind the assignee to all provisions to thisDeed.

##  

## 7.3                                     Saveas otherwise specified in this Deed, the rights granted under this Deed arepersonal to VEL and VEL shall not delegate, assign, sub-license or sub-contractany of those rights including its rights under the Marks (except by way ofmortgage, charge or security, and only until such time as that funding shall berepaid notice of which shall be given to the Licensee) to any third partywithout the prior written

 

40

----

 

## consent of the Licensee (suchconsent not to be unreasonably withheld, conditioned or delayed), provided thatVEL may assign all of its rights and obligations under this Deed includingits rights under the Marks to a solvent member of the Virgin Group as part ofa reorganisation of the Virgin Group without the prior written consent of theLicensee, provided that:

##  

(a)                                      notice of any such assignment and details ofthe assignee shall be provided to the Licensee by VEL and the assignee isthereafter deemed to be the Licensor for the purposes of this Deed;

 

(b)                                     VEL procures that the assignment of therelevant marks is subject to the Licensee’s rights under this Deed;

 

(c)                                      VEL shall procure that the assignee shalltake subject to the Licensee’s rights under this Deed in relation to thosemarks;

 

(d)                                     VEL shall procure the execution by theassignee of a novation agreement with the Licensee (and the Licensee agrees toexecute such novation agreement) so as to give effect to the transfer and bindthe assignee to all provisions to this Deed; and

 

(e)                                      such assignee is resident in the UnitedKingdom for tax purposes.

 

## 7.4                                    ThisDeed shall be binding on any successors or permitted assignee of the Licenseeand the Licensee shall procure that any such successor or permitted assignee ofthe Licensee is notified of the terms of this Deed. This Deed shall be bindingon any successors or permitted assignee of VEL and VEL shall procure that anysuch successor or permitted assignee of VEL is notified of the terms of thisDeed.

##  

## 7.5                                     In theevent that VEL:

##  

## (a)                              choosesnot to renew any one or all of the trade mark registrations for the Names VELagrees to notify the Licensee and, at the Licensee’s request, VEL agrees thatin consideration for one hundred pounds (£100), all title to those Names it haschosen not to renew and the goodwill associated with such marks in theTerritory shall be assigned to the Licensee. This obligation to assign shallnot apply in respect of any Community Trade Marks which VEL shall, at theLicensee’s request and cost, either convert to a series of national marksand in respect of any such national conversions in the Territory, assign thosesolely relating to the Territory to the Licensee or cancel them in which eventVEL confirms that the Licensee shall be entitled to register a national mark inthe form of any such Community Trade Mark; or

##  

## (b)                             irremediablyfails (with no prospect of mitigating or resolving such failure) to renew anyof the trade mark registrations for the Names VEL acknowledges that it shallnot object to the Licensee seeking to re-file such marks. VEL agrees to notifythe Licensee of any such failure to renew as soon as it discovers such failureand the Licensee agrees to notify VEL should it become aware of any impendingor missed deadline for renewal.

##  

## 7.6                                     Forthe purposes of clause 7.5(a) and (b), VEL hereby irrevocably appoints anyof the

 

41

----

 

## officers and directors of theLicensee from time to time to be its true and lawful attorney (each an “Attorney”)with the full power and authority of VEL in its name to execute on VEL’s behalfin whatever manner required any document or thing lawfully necessary in such form asthe Attorney in his absolute discretion may reasonably deem necessary ordesirable to give effect to the assignment referred to in clause 7.5(a) andany refiling pursuant to clause 7.5(b) and/or any documents required tofacilitate any such refiling and its prosecution to grant and VEL undertakes toratify whatever the Attorney may do in its name or on its behalf inexercising such powers.

##  

# **8.**                                           INDEMNITY, WARRANTIES ANDLIMITATIONS OF LIABILITY

#  

## **Warranties**

##  

## 8.1                                     VELwarrants to the Licensee that:

##  

### (a)                          it isa limited company duly organised, existing and in good standing under the lawsof England and resident in the United Kingdom for tax purposes and isbeneficially entitled to the Royalties paid pursuant to clause 4.1 and 4.12 ofthis Deed;

###  

### (b)                         it iseither (as applicable) the owner or registered proprietor of, or applicant forregistration of the Marks and the Domain Names, and that it has the right togrant the rights granted to the members of the NTL Group under this Deed and ithas not granted and will not grant those or any conflicting rights to any otherperson in the Territory during the Term;

###  

### (c)                          at thedate of this Deed it has paid all current renewal fees necessary to ensure thecontinued registration of the Marks and the Domain Names where applicable andthat it, or any third party acting on its behalf in such matters, has a securesystem in place prompting payment of all renewals in a timely manner beforethey become due and shall pay all renewal fees as they become due (subject toclause 7.5);

###  

### (d)                         it isnot aware of any other rights whose grant under this Deed would be necessary toenable the members of the NTL Group to carry on the Licensed Activities underthe Marks;

###  

### (e)                          itwill not itself exercise, and it has not appointed, authorised or allowed andit will not appoint, authorise or allow anyone else to exercise, any rightswhich are inconsistent with the rights granted hereunder;

###  

### (f)                            it isnot aware of any actual, proposed or threatened claims, litigation orchallenges as to its ownership of the Marks or the Domain Names or claims ofIntellectual Property Rights infringement by third parties in relation to theuse of the rights licensed hereunder; and

###  

### (g)                         as faras it is aware, use of the Marks and the Domain Names by members of the NTLGroup in accordance with the terms of this Deed will not infringe theIntellectual Property Rights of any third party;

###  

## (h)                         VELowns all such goodwill as exists in the Marks.

 

42

----

 

## **Indemnity and limitations and exclusions of liability**

##  

## 8.2                                     Theprovisions of the remainder of this clause 8 set out each party’s entireliability (including any liability for the acts and omissions of its employeesor agents) to the other party in respect of:

##  

### (a)                          anybreach of its contractual obligations arising under this Deed; and

###  

## (b)                         anyrepresentation, statement or tortious act or omission including negligencearising under or in connection with this Deed.

##  

## 8.3                                     Anyact or omission of a party falling within clause 8.2 shall for the purposes ofthis clause 8 be known as an “Event of Default”.

##  

## 8.4                                     Neitherparty excludes or limits liability to the other party for fraud or for death orpersonal injury due to its own negligence or its employees’ or agents’negligence whilst acting in the course of their employment, or any breach ofany obligations implied by Section 12 of the Sale of Goods Act 1979 or Section 2of the Supply of Goods and Services Act 1982.

##  

## 8.5                                     Subjectto clause 8.4, in respect of any claim arising in respect of an Event ofDefault only (but not, for the avoidance of doubt, in respect of anyIntellectual Property Rights claim pursuant to clause 8.6), neither party shallbe liable to the other in respect of any Event of Default for:

##  

## (a)                          anyloss or damage suffered by the other as a result of a claim or action broughtby a third party (except to the extent that such party is entitled to recoverin respect of such a claim or action under any express term of this Deed); or

##  

## (b)                         anyspecial, indirect or consequential loss or damage, even if such loss or damagewas reasonably foreseeable or such party had been advised of the possibility ofthe other party incurring the same.

##  

## 8.6                                     Subjectto clause 8.7, VEL agrees to indemnify and hold harmless the Licensee from andagainst all costs (including the costs of enforcement, reasonable legal costs,fees and expenses and value added tax), liabilities, injuries, direct, special,indirect and consequential loss and expenses, actions, proceedings, claims,demands and damages arising directly or indirectly from a claim or threatenedclaim by a third party against the Licensee that any exercise of theIntellectual Property Rights licensed to it under this Deed infringes theIntellectual Property Rights of any third party. The benefit of this indemnityshall, for the avoidance of doubt, extend to claims made against the NTL Groupby any other Virgin Company conducting similar activities outside the Territoryin respect of the provision by the NTL Group of the Licensed Activities inaccordance with this Deed.

##  

## 8.7                                     Subjectto clause 8.4, the maximum liability of each party during the Term, inaggregate, in respect of:

##  

## (a)                          anyand all Events of Default; and/or

##  

## (b)                         anyand all claims pursuant to clause 8.6 where they arise in respect of use by

 

43

----

 

## the NTL Group of the non-”Virgin”part of the Names and where such claims relate primarily to the non-”Virgin”part of the Names (and not primarily to the use of the Virgin Marks or thename “Virgin” in association or conjunction with the non-”Virgin” part ofthe Names),

##  

## shall be limited to a sum notexceeding two hundred million pounds sterling (£200,000,000), subject to thefollowing:

##  

## (i)                                     anyclaim for indemnification pursuant to clause 8.6 in respect of use by the NTLGroup of the Virgin Marks and/or where the claim relates primarily to the useof the Virgin Marks or the name “Virgin” in association or conjunction with thenon-”Virgin” part of the Names and/or any other Intellectual PropertyRights licensed under this Deed shall be unlimited; and

##  

## (ii)                                  whereany claim arises in respect of use by the NTL Group of the name “Vision” (ifthe Names include “Virgin Vision”), whether such claim is for indemnificationpursuant to clause 8.6 and/or involves a claim by the NTL Group for an Event ofDefault by VEL, then VEL’s maximum liability, in aggregate, in respect of anyand all such claims shall be limited to a sum not exceeding thirty millionpounds (£30,000,000).

##  

## 8.8                                     Themonetary limits of liability set out in clause 8.7 shall be subject to a 1%increase on each anniversary of the Commencement Date.

##  

## 8.9                                     Afailure by either party to perform its obligations under this Deed shallnot be treated as an Event of Default if and to the extent such failure wascaused wholly or mainly by the other party’s failure to perform any of itsobligations under this Deed.

##  

## 8.10                               Nothingin this clause shall confer any right or remedy upon a party to which it wouldnot otherwise be legally entitled.

##  

## 8.11                              Theparties expressly agree that should any limitation or exclusion in this clause8 be held to be invalid or void under any applicable statute or rule oflaw it shall, to that extent, be deemed omitted, but if any party therebybecomes liable for loss or damage which would otherwise have been excluded,such liability shall remain subject to the other limitations and provisions setout herein.

##  

## 8.12                              Theprovisions of this clause shall continue to apply notwithstanding thetermination or expiry of this Deed for any reason whatsoever.

##  

## 8.13                              Savefor those expressly set out in this Deed, all warranties, terms, conditions,undertakings and obligations, whether express or implied, by statute, commonlaw, trade usage, course of dealing or otherwise are excluded to the maximumextent legally possible.

##  

# **9.**                                       TERMINATION AND EFFECTS OFTERMINATION

#  

## 9.1                                     TheDeed shall commence on the Commencement Date and shall continue for the Termunless terminated earlier in accordance with the terms of this Deed. This Deed(and any authorisations granted by the Licensee to third parties pursuant to clause

 

44

----

 

## 7.1(b)) shall expireautomatically without need for further notice on expiration of the Term. TheLicensee shall be entitled to renew this Deed following the Term on reasonablecommercial terms in accordance with sub-clauses 9.1(a) to (c) of thisclause 9.1. If the Licensee wishes to renew this Deed:

##  

### (a)                          itshall give notice in writing at least twelve (12) months prior to the expirydate of its intention to renew;

###  

### (b)                         theparties shall commence negotiation of the terms for the renewed agreement withinthree (3) months of such notice and shall devote such resource as isrequired to ensure that the negotiation is completed at least six (6) monthsprior to the original expiry date (provided that if the negotiations have notbeen completed prior to expiry of the Term this Deed will terminateautomatically); and

###  

### (c)                          theparties shall act reasonably and in good faith in the conduct of suchnegotiation.

###  

## 9.2                                     In theevent that VEL has reasonable and bona fide grounds to believe that the use (orlack of use) of the Marks by any member of the NTL Group (including theLicensee) has been or is reasonably likely to result in a long-term andmaterial diminution in the value of the Marks including the reputation orgoodwill in the Marks, then:

##  

### (a)                          VELshall serve written notice in accordance with clause 12.1 specifying the sameand the parties shall call a meeting of their senior representatives to discussthe issues raised;

###  

### (b)                         theparties shall agree a plan to resolve the issues raised during a period ofthirty (30) days (“Resolution Plan”) following the written notice referred toin clause 9.2(a) above;

###  

### (c)                          if theparties fail to agree such a Resolution Plan, then each party’s chief executiveofficer, chief operating officer or equivalent officer shall meet in a goodfaith effort to resolve the outstanding issues and agree a Resolution Plan withthe original thirty (30) day period. In the event of any failure to resolvesuch issues and/or agree a Resolution Plan within the original thirty (30) dayperiod such issues shall be referred to the dispute resolution procedure inclause 14.6;

###  

### (d)                         if theResolution Plan is agreed under clauses 9.2(b) or (c), then immediately onagreement thereof, each party shall implement any duties, actions orresponsibilities allocated to it in such Resolution Plan in order to resolvethe dispute in good faith, such Resolution Plan to be implemented within afurther period of ninety (90) days from agreement of the Resolution Plan orsuch other period as may be agreed in the Resolution Plan;

###  

### (e)                          if theNTL Group complies with its obligations under the Resolution Plan, then nofurther action will be taken by VEL in respect of that particular breach. Inthe event that the Resolution Plan fails to substantially remedy the breach oralleged breach, or there is a new breach, then the procedure in this clause 9.2shall be repeated; and

 

45

----

 

### (f)                            if theNTL Group fails to comply with its obligations under the Resolution Plan withinthe agreed timetable (and provided that such failures are not attributable toany act or omission of VEL) and the use or lack of use of the Marks by anymember of the NTL Group in the reasonable view of VEL remains materiallydamaging on a long term basis to the Marks or VEL (or is still likely to be),or the dispute resolution process under clause 14.6 has been unsuccessful,  then VEL shall be entitled to terminate thisDeed on one hundred and eighty (180) days written notice (provided that anydamage shall cease immediately). If the NTL Group in good faith disputes thefairness or validity of such notice, then this shall be referred to disputeresolution in clause 14.6 to the extent that failure to agree a Resolution Planin respect of the same had not already been referred to dispute resolution.

###  

## 9.3                                     In theevent that any member of the NTL Group commits persistent and material breachesor a flagrant and material breach of any term or condition of this Deed then:

##  

### (a)                          VELshall serve written notice in accordance with clause 12.1 specifying the sameand the parties shall call a meeting of their senior representatives to discussthe issues raised;

###  

### (b)                         theparties shall agree a plan to resolve the issues raised during a period ofsixty (60) days (“Contract Resolution Plan”) following the written noticereferred to in clause 9.3(a) above;

###  

### (c)                          if theparties fail to agree such a Contract Resolution Plan, then each party’s chiefexecutive officer, chief operating officer or equivalent officer shall meet ina good faith effort to resolve the outstanding issues and agree a ContractResolution Plan within the original sixty (60) day period. In the event of anyfailure to resolve such issues and/or agree a Contract Resolution Plan withinthe original sixty (60) day period such issues shall be referred to the disputeresolution procedure in clause 14.6;

###  

### (d)                         if theContract Resolution Plan is agreed under clauses 9.3(b) or (c), thereaftereach party shall implement any duties, actions or responsibilities allocated toit in such Contract Resolution Plan in order to resolve the dispute in goodfaith, such Contract Resolution Plan to be implemented within a further periodof one hundred and eighty (180) days from agreement of the Contract ResolutionPlan or such other period as may be agreed in the Contract ResolutionPlan;

###  

### (e)                          if theNTL Group complies with its obligations under the Contract Resolution Plan,then no further action will be taken by VEL in respect of that particularbreach or alleged breach. In the event that the Contract Resolution Plansubstantially fails to remedy the breach or alleged breach, or there is a newbreach, then the procedure in this clause 9.3 shall be repeated; and

###  

### (f)                            if theNTL Group fails to comply with its obligations under the Contract ResolutionPlan within the agreed timetable (and provided that such failures are notattributable to any act or omission of VEL) and the breach remains a materialbreach, on a long term basis, in the reasonable view of VEL or the disputeresolution process under clause 14.6 has been unsuccessful, then VEL shall beentitled to terminate this Deed on one hundred and eighty (180) days

 

46

----

 

### written notice (provided thatany such material breach shall cease immediately). If the NTL Group in goodfaith disputes the fairness or validity of such notice, then this shall bereferred to dispute resolution in clause 14.6 to the extent that failure toagree a Contract Resolution Plan in respect of the same had not already beenreferred to dispute resolution.

###  

## 9.4                                     VELshall have the right, by giving one hundred and eighty (180) days notice inwriting to the Licensee and/or any relevant party or parties, to terminate thisDeed if:

##  

### (a)                          theLicensee or any relevant party suffers an Insolvency Event;

###  

### (b)                         theLicensee or any relevant party challenges the validity of or the entitlement ofVEL to use or license the use of any of the Marks (other than where such use orlicence is in breach of the rights and licences granted to the Licensee underthis Deed), except that action by the Licensee under clauses 6 and 8 shall notbe treated as any such challenge; and

###  

### (c)                          theLicensee or any relevant party ceases or threatens to cease to use the Marksand/or carry on the whole or any material part of the Licensed Activities.

###  

## 9.5                                     TheLicensee shall notify VEL if there is a change of Control of the Licensee, orany Holding Company of the Licensee other than as part of a groupre-organisation or where the shareholders of the Licensee or Holding Company ofthe Licensee following a re-organisation remain substantially the same. If anymember of the board of directors of the ultimate Holding Company of the companyacquiring such Control of the Licensee, or the acquirer itself, is not a Fitand Proper Person then, within thirty (30) days of such notification, VEL shallnotify the Licensee of such fact and its intention to exercise its right toterminate this Deed under this clause 9.5 unless the Licensee procures theremoval of such director. The Licensee shall have a further thirty (30) days toprocure the removal of such director. In the event that the Licensee fails toprocure such removal, then VEL shall have the right by giving one hundred andeighty (180) days notice in writing to the Licensee to terminate this Deed.

##  

## 9.6                                     VELshall notify the Licensee if there is a change of Control of VEL, or anyHolding Company of VEL other than as part of a group re-organisation orwhere the shareholders of VEL or Holding Company of VEL following are-organisation remain substantially the same. If any member of the board ofdirectors of the ultimate Holding Company of the company acquiring such Controlof VEL, or the acquirer itself, is not a Fit and Proper Person then, withinthirty (30) days of such notification, the Licensee shall notify VEL of suchfact and its intention to exercise its right to terminate this Deed under thisclause 9.6 unless VEL procures the removal of such director. VEL shall have afurther thirty (30) days to procure the removal of such director. In the eventthat VEL fails to procure such removal, then the Licensee shall have the rightby giving one hundred and eighty (180) days notice in writing to VEL toterminate this Deed.

##  

## 9.7                                     TheLicensee shall have the right to terminate this Deed:

##  

### (a)                          bygiving one year’s notice in writing to VEL expiring no earlier than the

 

47

----

 

### expiry of the Minimum Term; and

###  

### (b)                         bygiving one hundred and eighty (180) days notice in writing to VEL if VELsuffers an Insolvency Event or ceases to trade or carry on business.

###  

## 9.8                                     In theevent that:

##  

### (a)                          thevalue and reputation of the Marks materially diminishes such that they nolonger denote high quality status, have become generic, have lost theirdistinctiveness or no longer represent the Virgin brand values and/or continueduse by the Licensee and/or any member of the NTL Group has been or is likely tobe damaging to the goodwill or reputation of such member of the NTL Group on along term basis (other than as a result of any breach of this Deed by theLicensee or any member of the NTL Group or any third party authorised to usethe Marks by or on behalf of the Licensee). (For the avoidance of doubt theparties agree that the diminution in value, loss of high quality status, distinctivenessor change of brand value may be caused by or attributable to the act oromission of any Virgin Company or any representative thereof or spokespersontherefor); or

###  

### (b)                         VELdirects the Licensee to stop using or materially modify the use of the Marks inrelation to a material part of the Licensed Activities under clause 6.8and such direction has significant impact on the Licensee’s business or part thereofor if the Licensee is otherwise prevented by law or by order of a court ofcompetent jurisdiction from exercising a material part of the rightsgranted to it under this Deed for the remainder of the Term; or

###  

### (c)                          VELcommits a persistent and material or flagrant and material breach of any termor condition of this Deed,

###  

## then:

##  

#### (i)                              the Licensee shall serve written notice in accordance with clause 12.1specifying the same and the parties shall call a meeting of their seniorrepresentatives to discuss the issues raised;

####  

#### (ii)                           the parties shall agree a plan to resolve the issues raised during aperiod of sixty (60) days (“VEL Resolution Plan”) following the written noticereferred to in clause 9.8(i) above;

####  

#### (iii)                        if the parties fail to agree such a VEL Resolution Plan, then eachparty’s chief executive officer, chief operating officer or equivalent officershall meet in a good faith effort to resolve the outstanding issues and agree aVEL Resolution Plan within the original sixty (60) day period. In the event ofany failure to resolve such issues and/or agree a VEL Resolution Plan withinthe original sixty (60) day period such issues shall be referred to the disputeresolution procedure in clause 14.6;

####  

#### (iv)                       if the VEL Resolution Plan is agreed under clause 9.8(ii) or(iii), thereafter each party shall implement any duties, actions orresponsibilities allocated to it in such VEL Resolution Plan in order to

 

48

----

 

#### resolve the dispute in good faith, such VEL Resolution Plan to beimplemented within a further period of one hundred and twenty (120) days fromagreement of the VEL Resolution Plan or such other period as may be agreedin the Resolution Plan;

####  

#### (v)                          if VEL complies with its obligations under the VEL Resolution Plan,then no further action will be taken by the Licensee, in the event that the VELResolution Plan substantially fails to remedy the issue then the procedure inthis clause 9.8 shall be repeated; and

####  

#### (vi)                       if VEL fails to comply with its obligations under the VEL ResolutionPlan within the agreed timetable (and provided that such failures are notattributable to any act or omission of the Licensee), and the breach, oralleged breach, remains unrectified in the reasonable view of NTL Group, or thedispute resolution process under clause 14.6 has been unsuccessful, then theLicensee shall be entitled to terminate this Deed on one hundred and eighty(180) days written notice. If VEL in good faith disputes the fairness orvalidity of such notice, then this shall be referred to dispute resolution inclause 14.6 to the extent that failure to agree a VEL Resolution Plan inrespect of the same had not already been referred to dispute resolution.

####  

## 9.9                                     In theevent of any change of Control of the Licensee, or any Holding Company of theLicensee other than as part of a group re-organisation or where the shareholdersof the Licensee or Holding Company of the Licensee following a re-organisationremain substantially the same, the Licensee shall have the right to terminatethis Deed by giving one year’s written notice to VEL within six months of suchchange of Control, provided that if such notice expires at any time during theMinimum Term the Licensee shall pay VEL an amount calculated as follows:

##  

## B x { t=1åt=A [1 /  ( 1 + i ) t ] }

##  

## where

##  

## A = the number of Quartersbetween the date of termination of this Deed and the expiry of the Minimum Termrounded to the nearest whole number;

##  

## B = the average of the royaltypayments made by the Licensee in respect of the four full Quarters whichimmediately preceded the date of termination;

##  

## i = quarterly effective interestrate calculated as follows:

##  

## i = { [ [ (r – g) / (1 + g) ] +1] ^ 0.25 } -1;

##  

## g = 2%;

##  

## r = the weighted average cost ofcapital (“WACC”) for the NTL Group to be agreed at the relevant time of changeof control and, in the absence of agreement between the parties, to bedetermined by a jointly appointed independent investment bank of internationalrepute.

##  

## A worked example of this formulais set out, for illustrative purposes only, at

 

49

----

 

## Schedule 9.

##  

## 9.10                                  Uponexpiration of the Term or earlier termination of this Deed for any reason, theLicensee, and any relevant party or parties, shall have a period of no morethan one hundred and eighty (180) days thereafter, or ninety (90) days in thecase of a member of the NTL Group ceasing to be a member of the NTL Group, to:

##  

### (a)                          ceaseall use of the Marks provided that the Licensee, and any relevant party orparties, shall immediately cease to use the Marks to acquire any new customers;

###  

### (b)                         removefrom any establishment or place (including the internet and any websites) allrepresentations of the Marks including all signs or display material bearingthe Marks where it is reasonably practicable or financially proportionate toremove such representations;

###  

### (c)                          deliver(at its expense) to VEL (or to any person, firm or company nominated by VEL)such products and other materials in its possession or under its control whichreproduce or display the Marks or, at the election of VEL, destroy suchproducts and other materials and provide VEL with satisfactory evidence oftheir destruction, provided that the Licensee shall be entitled to sell and/ordistribute to existing Customers only any existing products and/or materialsproduced in relation to the Licensed Activities during the one hundred andeighty (180) day period following termination or expiry; notwithstanding theforegoing, the Licensee shall have the absolute right to re-brand or otherwiseremove, delete or cover up the Marks on any products or materials and to sell,distribute and market such products or materials so long as the Marks are notdisplayed on such products or materials and it is obvious that the Marks werepreviously displayed on such products or materials;

###  

### (d)                         changeits name to a name that does not incorporate the Marks or any part thereofor anything colourably similar thereto or starting with “V” (including a nameconsisting of “V” by itself) and cease to use the name “Virgin” as a businessor trading name or part thereof,

###  

provided that inrelation to any early termination under clause 9.2(f) or 9.3(f), anydamaging use of the Marks or any material breach of this Deed giving rise tosuch termination shall cease immediately upon termination.

 

## 9.11                                   Forthe avoidance of doubt, notwithstanding the time limits set out in clauses 9.2,9.3 and 9.8, the parties shall be under an obligation to remedy any breach assoon as reasonably practicable.

##  

## 9.12                                   Terminationof this Deed for any reason shall otherwise be without prejudice to the rightsof either party which may have accrued up to the date of such terminationor during the phase out period under clause 9.10. In addition, in relation to atermination pursuant to clause 9.7(b), the Licensee shall have the option totake an assignment of the Names, such assignment to be subject to (a) therights of any existing licensees of such Names; and (b) payment by theLicensee of a sum representing the Fair Market Value of the Names.

 

50

----

 

## 9.13                                  Forthe purposes of giving effect to the assignment in accordance with clause 9.12,VEL shall promptly execute an assignment of the Names in favour of the Licenseein a form reasonably satisfactory to the Licensee and VEL irrevocably andseverally appoints the Licensee and any person nominated for the purpose by theLicensee (in writing and signed by an officer of the Licensee) as its attorney(with full power of substitution and delegation) in its name and on its behalfand as its act and deed to execute such assignment and any other deed,assurance, agreement, instrument, act or thing which may be required togive effect to the assignment of the Names in favour of the Licensee, and VELcovenants with the Licensee to ratify and confirm all such acts or things made,done or executed by that attorney.

##  

## 9.14                                   Exceptas otherwise provided herein, neither party may terminate this Deedwithout the written consent of the other.

##  

# **10.**                                         INFRINGEMENTS

#  

## 10.1                                  Eachparty shall promptly notify the other of any unauthorised use or infringementor suspected or threatened infringement of the Marks or of any passing off orof any other act or thing which might materially vitiate or prejudice therights of VEL or the members of the NTL Group in and to or under the Marksrespectively that comes to its notice at any time giving reasonable particularsthereof.

##  

## 10.2                                  Subjectonly to clause 10.5 below, VEL shall have the exclusive right in its absolutediscretion and at its expense to take whatever action it believes necessary andproper in connection with any unauthorised use, infringement, suspected orthreatened infringement, passing off, or other unlawful interference with therights of VEL in the Marks save that in taking such action it shall also act inthe interests of the Licensee and other members of the NTL Group to the extentthat to do so does not significantly prejudice VEL and/or VEL’s rights in theMarks.

##  

## 10.3                                  TheLicensee agrees to provide to VEL all reasonable assistance which VEL may requirein connection with any action it may decide to take in relation to anyunauthorised use, infringement, suspected or threatened infringement, passingoff or other unlawful interference with the rights of VEL (including, withoutlimitation, bringing or joining in proceedings or lending its name to anyproceedings brought by VEL and providing VEL with details of sales figures,Customer numbers, marketing spend, launch dates and dates of first use of theMarks by members of the NTL Group). The Licensee and any other member of theNTL Group shall be fully indemnified by VEL in respect of all costs andexpenses incurred by the Licensee or anyother member of the NTL Group in providing such assistance save that VEL shallnot be liable under such indemnity:

##  

### (a)                          for costs or expenses which would have been incurredduring the ordinary course of business notwithstanding such action; or

###  

### (b)                         if the aggregate costs or expenses which arise out ofsuch action (or series of actions arising out of similar facts orcircumstances) does not exceed one thousand pounds (£1,000).

###  

## 10.4                               Theprovisions of Section 30(2) of the Trade Marks Act 1994 (as amended,re-enacted or replaced from time to time) or similar or equivalent legislationin any

 

51

----

 

## country of the world, if any,are expressly excluded by the parties for the purposes of this Deed.

##  

## 10.5                              If,having been requested in writing by the Licensee to do so, VEL fails to takeaction in respect of any event described in clause 10.2 for a period exceedingtwenty five (25) days, the Licensee shall be entitled to do so, at its ownexpense, in its own name and, if appropriate, that of VEL and VEL agrees toprovide the Licensee all reasonable assistance which the Licensee may requirein connection with the action it takes provided always that:

##  

### (a)                          theLicensee notifies VEL in writing of its intention to do so;

###  

### (b)                         theLicensee shall only be permitted to take such action if failure to do so wouldhave a material adverse effect on the Licensed Activities carried out under theMarks;

###  

### (c)                          the Licenseeshall not be permitted to take such action if it would have a material adverseeffect on the Marks or VEL. For the avoidance of doubt, nothing in this Deedshall other than as set out in this clause 10 prevent or restrict the Licenseefrom enforcing any right arising under this Deed, provided it does so in amanner consistent with this clause 10, or any agreement it may have withany third party;

###  

### (d)                         theLicensee will indemnify VEL from and against all costs and expenses (including,without limit, disbursements, reasonable legal costs, fees and expenses andvalue added tax), actions, proceedings, claims, demands and damages arisingdirectly from such action; and

###  

### (e)                          theLicensee keeps VEL up-to-date with details of the status of such proceedings,

###  

where such action istaken against another licensee of the Marks, VEL reserves the right tointervene between the parties and require the dispute and any proceedings to besuspended for a period of thirty (30) days whilst negotiations to resolve theissues take place. The Licensee agrees to act in good faith in respect of anysuch negotiations. In the event that any such resolution requires amendments tobe made to the respective Deeds of the Licensee and any other licensee of theMarks, VEL will use its reasonable endeavours to effect the necessary changesas soon as practicable.

 

## 10.6                              Theproportion of the costs and damages recovered in respect of any action pursuantto clauses 10.2 or 10.5 shall first, reimburse the party who brought the actionin respect of all costs and expenses incurred as a result of bringing theaction and the remainder shall be divided between the parties in suchproportions as is fair and reasonable, reflecting the effect on theirrespective businesses and the loss suffered.

##  

# **11.**                                 CONFIDENTIALITY

#  

## 11.1                               Eachof the parties shall keep secret and confidential any information which it may obtainrelating to the business of the other.  Suchinformation shall be treated as proprietary and confidential to the partyimparting the same. Each party hereby

 

52

----

 

## agrees that it shall use suchinformation received or procured by it from the other solely for the purposesof this Deed and that it shall not at any time during or after completion,expiry or termination of this Deed disclose the same whether directly orindirectly to any third party except:

##  

### (a)                          withthe prior written consent of the other party;

###  

### (b)                         to theextent necessary to comply with any law or the valid order of a court ortribunal of competent jurisdiction or the rule, regulation or direction of anygovernmental or other regulatory authority or agency ( including the rules ofany listing authority or exchange) in which event the relevant party shall sonotify the other as promptly as reasonably practicable (and if possible priorto making any disclosure) and shall use its reasonable endeavours to seekconfidential treatment of such information;

###  

### (c)                          to itsauditors, legal advisers and other professional advisers provided that it usesits reasonable endeavours to procure that such persons maintain suchconfidentiality;

###  

### (d)                         inorder to enforce its rights under this Deed; and

###  

### (e)                          to anyperson with a bona fide and legitimate interest in such information who entersinto a confidentiality agreement including a prospective purchaser of NTLIncorporated or any part of its business and provided that such personagrees to use the information only for the purpose of such bona fide andlegitimate interest.

###  

## 11.2                               Theprovisions of clause 11.1 shall not apply to:

##  

### (a)                          anyinformation in the public domain otherwise than by breach of this Deed;

###  

### (b)                         informationobtained from a third party who is free to divulge the same;

###  

### (c)                          informationthat was already known to the receiving party prior to disclosure under thisDeed and was not previously acquired by the receiving party from the disclosingparty under an obligation of confidentiality or non-use towards the disclosingparty; or

###  

### (d)                         informationthat can be shown by documentary evidence to have been created by one party tothis Deed independently from work under this Deed.

###  

## 11.3                              Neitherparty nor any representative thereof or spokesperson therefor shall make anypublic statement, announcement or press release regarding the other partywithout the other party’s prior written consent (not to be unreasonablywithheld, conditioned or delayed), nor make any negative or derogatory publiccomments or statements (expressly or by implication) regarding the other partyor any aspect of the relationship between the parties.

##  

## 11.4                              VELand the Licensee shall divulge information the subject of this clause only tothose employees who are directly involved in the performance of this Deed andshall ensure that such employees are aware of and comply with these obligationsas to confidentiality.

 

53

----

 

## 11.5                              Eachparty acknowledges and agrees that damages would not be an adequate remedy forany breach of this clause and that either party shall be entitled to seek theremedies of injunction, specific performance and other equitable relief for anythreatened or actual breach of this clause.

##  

## 11.6                              Theobligations contained in this clause shall survive the termination orexpiration of this Deed.

##  

# **12.**                                 NOTICES

#  

## 12.1                              Anynotice or other communication required or authorised to be given under thisDeed shall be in writing and either be delivered by hand or sent by first class postor facsimile transmission (provided that in the case of facsimile transmission,the notice is confirmed by being delivered by hand or sent by first class postwithin forty eight hours of transmission) as follows:

##  

**Addressfor notices to VEL:**

Virgin EnterprisesLimited

120 Campden Hill Road

London

W8 7AR

 

**Attention:**

Intellectual PropertyDepartment

Fax:  020 7313 2091

 

**Addressfor notice to the Licensee:**

NTL Group Limited

NTL House

Bartley Wood BusinessPark

Hook

Hampshire

RG27 9UP

 

**Attention:**

NTL Legal Department

Fax:  01256 752170

 

## 12.2                              Theparties may change the address, facsimile number or the name of the personfor whose attention notices are to be addressed by serving a notice on theother party in accordance with the provisions of this clause.

##  

## 12.3                               Allnotices given in accordance with clause 12.1 above shall be deemed to have beenserved as follows:

##  

### (a)                          ifdelivered by hand, at the time of delivery;

###  

### (b)                         ifposted, at the expiration of 3 Business Days after the envelope containing

 

54

----

 

### the same was delivered into thecustody of the postal authorities; or

###  

### (c)                          if communicatedby facsimile, at the time of transmission,

###  

provided that where,in the case of delivery by hand or transmission by facsimile, such delivery ortransmission occurs after 6 p.m. on a Business Day or on a day which isnot a Business Day, service shall be deemed to occur at 9 a.m. on the nextfollowing Business Day. References to time in this clause are to local time inthe country of the addressee.

 

## 12.4                              Inproving such service it shall be sufficient to prove that the envelopecontaining such notice was properly addressed and delivered either to theaddress shown or into the custody of the postal authorities as a pre-paid firstclass letter, or that the facsimile transmission was made after obtainingin person or by telephone appropriate evidence of the capacity of the addresseeto receive the same, as the case may be.

##  

# **13.**                                 FORCE MAJEURE

#  

## 13.1                              Noparty shall be deemed in breach or default of this Deed or otherwise liable tothe other party for any failure or delay in performing any of its obligations underthis Deed where and to the extent that the delay or non-performance is due to aForce Majeure Event, provided that:

##  

### (a)                          if aparty is prevented or delayed in the performance of any of its obligationsunder this Deed by Force Majeure Event that party shall, immediately uponbecoming aware of that fact, give written notice to the other party of thenature, extent and expected duration of the circumstances giving rise to theForce Majeure Event;

###  

### (b)                         theparty claiming to be prevented or delayed in the performance of any obligationsunder this Deed by reason of the Force Majeure Event shall take all steps asare reasonably practicable to bring the Force Majeure Event to a close or tofind a solution by which this Deed may be performed despite the continuanceof the Force Majeure Event and shall keep the other party regularly informed ofthe status and progress of its efforts to bring the Force Majeure Event to aclose or to find an alternative solution by which its obligations under thisDeed may be performed;

###  

### (c)                          immediatelyafter the end of the Force Majeure Event the affected party shall give writtennotice to the other that the Force Majeure Event has ended and shall resumeperformance of its obligations under this Deed; and

###  

### (d)                         if theForce Majeure Event continues for a period of more than six (6) months theparty not subject to the Force Majeure Event may terminate this Deed bygiving not less than ninety (90) days written notice of such termination to theother party. No party shall have any liability to the other in respect of thetermination of this Deed due to the Force Majeure Event, but any rights orliabilities, which accrued prior to termination, shall subsist.

 

55

----

 

# **14.**                                 GENERAL

#  

**NoBreach and Waiver**

 

## 14.1                              Nodelay, failure or indulgence by either party to perform any provision ofthis Deed shall operate or be construed as a waiver of that party’s powers orrights under this Deed or prejudice that party’s rights to subsequent action.Any waiver by either party of its rights under this Deed shall not operate as awaiver in respect of any subsequent breach. No single or partial exercise ofany power or right by either party shall preclude any other or further exercisethereof or the exercise of any such other power or right under this Deed.

##  

## **Modifications**

##  

## 14.2                              Noamendment or modification to this Deed will be effective or binding unless itis in writing, signed by all the parties and specifically states that it is anamendment to this Deed.

##  

**Invalidity**

 

## 14.3                              If atany time any one or more of the provisions (or part of one or more of theprovisions) of this Deed becomes invalid, illegal or unenforceable in anyrespect, under any law, the validity, legality and enforceability of theremaining provisions (or part or parts) shall not in any way be affectedor impaired.

##  

**EntireAgreement**

 

## 14.4                              Subjectto clause 2.3 in respect of the Virgin Mobile Licence, this Deed (and theletter of agreement between the NTL Group and VEL of even date relating to theVirgin Mobile Licence) sets out the entire agreement and understanding betweenVEL and the Licensee and relevant members of the NTL Group in respect of theuse of the Marks by the Licensee and relevant members of the NTL Group andsupersedes all previous representations, understandings, licences oragreements, whether oral or written, in relation to such use. It is agreedthat:

##  

### (a)                          noparty has entered into this Deed in reliance upon any representation, warrantyor undertaking of any other party which is not expressly set out or referred toin this Deed;

###  

### (b)                         subjectonly to clause 14.4 (c) below, no party shall have a claim or remedy inrespect of misrepresentation (whether negligent or otherwise) or untruestatement made by any other party; and

###  

### (c)                          thisclause shall not exclude any liability for fraudulent misrepresentation.

###  

**IndependentContractors**

 

## 14.5                               Nothingin this Deed shall create, or be deemed to create, a partnership, a jointventure, an agency, a fiduciary duty or employment between the parties. Theonly relationship created by this Deed is that of independent contractors, and,except as expressly provided herein, neither party by virtue of this Deed hasauthority to transact any business in the name of the other party or on itsbehalf or incur any liability for or on behalf of the other party.

 

56

----

 

**Disputes**

 

## 14.6                              In theevent of any dispute or difference which may arise between the parties inconnection with or arising out of this Deed, directors or other seniorrepresentatives of the parties with authority to settle the dispute will,within ten (10) Business Days of a written notice from one party to theother, meet in a good faith effort to resolve the dispute. If the dispute isnot resolved at that meeting, the parties will attempt to settle it bymediation in accordance with the CEDR Model Mediation Procedure. For theavoidance of doubt, in the case of any dispute arising under clauses 9.2, 9.3,9.6 or 9.8 the escalation process under those clauses shall apply beforereferring the matter to a mediation under the CEDR Rules. Unless otherwiseagreed by the parties the mediator will be nominated by CEDR. To initiatethe mediation a party must give notice in writing to the other parties to thedispute requesting mediation. The mediation will begin within thirty (30) daysfollowing receipt of such notice and shall last no more than one (1) dayunless otherwise determined by the mediator. No party may commence anyCourt proceedings in respect of any dispute arising out of this Deed until ithas attempted to settle the dispute by mediation and either the mediation hasterminated or the other party has failed to participate in the mediation,provided that the right to issue proceedings is not prejudiced by delay.Neither party may initiate legal action until the above process has beencompleted provided that nothing in this clause shall be construed asprohibiting a party from applying to a court for interim injunctive relief atany time where either party has reasonable cause to do so to avoid damage toits business or to preserve any right of action it may have.

##  

**GoverningLaw and Jurisdiction**

 

## 14.7                              ThisDeed shall be governed by and construed in accordance with English law. Subjectto clause 14.6 each of the parties irrevocably submits to the exclusivejurisdiction of the Courts of England.

##  

**Counterparts**

 

## 14.8                              ThisDeed may be executed in counterparts, each of which shall be considered anoriginal, with the same effect as if the parties or their representatives signedthe same instrument.

##  

**FurtherAssurances**

 

## 14.9                              VELand the Licensee shall, at their own expense, execute and deliver all suchdocuments and take or procure the execution of all such documents (in a form reasonablysatisfactory to both parties) as may from time to time be required to givefull effect to this Deed.

##  

**ThirdParty Rights**

 

## 14.10                        Otherthan members of the NTL Group, a person who is not party to this Deed shallhave no rights under the Contracts (Rights of Third Parties) Act 1999 toenforce any term of this Deed. This clause does not affect any right or remedyof any person which exists or is available otherwise than pursuant to that Act.

 

57

----

 

**Costs**

 

## 14.11                         Eachparty shall bear its own costs in connection with the negotiation, preparationand implementation of this Deed.

##  

**Successors**

 

## 14.12                        Theprovisions of this Deed shall be binding upon and shall inure for the benefitof VEL, the Licensee, members of the NTL Group and their respective successorsin title and assignees permitted in accordance with the terms of this Deed.

 

58

----

 

**IN WITNESS**of whichthis Deed has been executed as a Deed and has been delivered on the date statedat the beginning of this Deed.

 
| EXECUTED as a deed by                                                                                                                                                            | )                  |                 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|----------------------|
| **VIRGIN  ENTERPRISES**                                                                                                                                                          | )                  |                 |
| **LIMITED**                                                                                                                                                                      | )                  |                 |
| acting by                            and: | )                  |                 |
|                                                                                                                                                                             |               |
|                                                                                                                                                                             |               |
|                                                                                                                                                                             |               |
| /s/ Gordon McCallum                                                                                                                                                              |               | /s/ Ashley Stockwell |   |
| Director                                                                                                                                                                         | Director/Secretary |
|                                                                                                                                                                             |               |
|                                                                                                                                                                             |               |
| EXECUTED as a deed by                                                                                                                                                            | )                  |                 |
| **NTL GROUP  LIMITED**:                                                                                                                                                          | )                  |                 |
| acting by                            and  | )                  |                 |
|                                                                                                                                                                             | )                  |                 |
|                                                                                                                                                                             |               |
|                                                                                                                                                                             |               |
|                                                                                                                                                                             |               |
| /s/ Robert Mackenzie                                                                                                                                                             |               | Robert Gale          |   |
| Director                                                                                                                                                                         | Director/Secretary |
|                                                                                                                                                                                  |                    |                      |  |  |  |

 

----

 

**SCHEDULE 1**

** **

**Part A - Virgin Marks**

 
| **Trade Mark**                          | ** ** | **Application/ Registration  Number** | ** ** | **Country**        | ** ** | **Class**                                                    | ** ** | **Status** | ** ** |
|----------------------------------------------|------------|--------------------------------------------|------------|--------------------|------------|--------------------------------------------------------------|------------|------------|------------|
| VIRGIN                                       |       | 1371870                                    |       | UK                 |       | 38                                                           |       | Registered |       |
| Virgin Signature                             |       | 1371869                                    |       | UK                 |       | 38                                                           |       | Registered |       |
| VIRGIN                                       |       | 1369779                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| Virgin  Signature                            |       | 1369812                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| VIRGIN                                       |       | 1559467                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| Virgin Signature                             |       | 1559468                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| VIRGIN                                       |       | 1120875                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| Virgin Signature                             |       | 1120874                                    |       | UK                 |       | 9                                                            |       | Registered |       |
| VIRGIN                                       |       | 1120876                                    |       | UK                 |       | 16                                                           |       | Registered |       |
| VIRGIN                                       |       | 1230088                                    |       | UK                 |       | 16                                                           |       | Registered |       |
| Virgin Signature                             |       | 1259731                                    |       | UK                 |       | 16                                                           |       | Registered |       |
| Virgin  Signature                            |       | 229679                                     |       | Ireland            |       | 9,38                                                         |       | Registered |       |
| VIRGIN                                       |       | 229682                                     |       | Ireland            |       | 9,38                                                         |       | Registered |       |
| VIRGIN                                       |       | 611459                                     |       | European Community |       | 38                                                           |       | Registered |       |
| Virgin Signature                             |       | 611467                                     |       | European Community |       | 38                                                           |       | Registered |       |
| VIRGIN                                       |       | 217182                                     |       | European Community |       | 9                                                            |       | Registered |       |
| V                                            |       | 2140053                                    |       | UK                 |       | 3,5,9,12,14, 16, 18, 25, 28, 32, 33, 35, 36, 38, 39, 41,  42 |       | Registered |       |
| V2000 & Device (Series of  12) |       | 2209145                                    |       | UK                 |       | 41                                                           |       | Registered |       |
| VFestival                                    |       | 3223153                                    |       | European Community |       | 16, 25, 41                                                   |       | Pending    |       |

 

2

----

 

**Part B - VirginSignature**

 

 

3

----

 

**SCHEDULE 2**

** **

**Part A – VirginMobile**

 
| **Trade Mark**                             | ** ** | **Application/  Registration  Number** | ** ** | **Country**        | ** ** | **Class**                  | ** ** | **Status** | ** ** |
|-------------------------------------------------|------------|----------------------------------------|------------|--------------------|------------|----------------------------|------------|------------|------------|
| Virgin Mobile Logo                              |       | 1746247                                |       | European Community |       | 9, 16, 38                  |       | Registered |       |
| Virgin Xtras Logo                               |       | 1914464                                |       | European Community |       | 9, 16, 38                  |       | Registered |       |
| Virgin Mobile Bites Logo (series of  two)  |       | 2349168                                |       | UK                 |       | 36, 38, 39, 41, 43, 44, 45 |       | Registered |       |
| Virgin Mobile Louder Logo (series of  two) |       | 2336825                                |       | UK                 |       | 9, 16, 35, 38, 41          |       | Registered |       |
| VIRGIN MOBILE LOUDER (series of  three)    |       | 2336826                                |       | UK                 |       | 9, 16, 35, 38, 41          |       | Registered |       |
| VIRGIN MOBILE                                   |       | 2365570                                |       | UK                 |       | 9, 38                      |       | Registered |       |
| Virgin Mobile Logo                              |       | 2365571                                |       | UK                 |       | 9, 38                      |       | Registered |       |
| VIRGIN MOBILE                                   |       | 229681                                 |       | Ireland            |       | 9, 38                      |       | Registered |       |
| Virgin Mobile Logo                              |       | 229680                                 |       | Ireland            |       | 9, 38                      |       | Registered |       |

 

**Part B**

 

**ONLY TO BEUSED IN CONJUNCTION WITH AND CLOSE PROXIMITY TO THEMARKS REFERRED TO IN PART A ABOVE**

 
| **Trade Mark**                | ** ** | **Application/  Registration  Number** | ** ** | **Country** | ** ** | **Class** | ** ** | **Status** | ** ** |
|------------------------------------|------------|----------------------------------------|------------|-------------|------------|-----------|------------|------------|------------|
| V MOBILE                           |       | 2208171                                |       | UK          |       | 9, 38     |       | Registered |       |
| V DIFFERENT  (Series of four) |       | 2208182                                |       | UK          |       | 9, 38     |       | Registered |       |

 

4

----

 

**Part C - sub-brands, productor service names**

 

Virgin.net

VirginBroadband

VirginMobile

VirginTV

VirginPhone (subject to review if Virgin Mobile is not acquired by the NTL Group)

FixedLine Telephony (name to be agreed)

 

**Part D – Domain Names**

 

Virgin.net

Virginnet.co.uk

Virginmobile.co.uk

Virgin-mobile.co.uk

Virginmobile.org.uk

Virginmobilelouder.co.uk

Virginmobile-messaging.co.uk

Virginmobilephone.org.uk

Virgin-mobile-phones.co.uk

Virginmobileringtones.co.uk

Virginmobileringtones.org.uk

Virginmobiles.co.uk

Virgin-mobiles.co.uk

Virginmobileuk.com

Virginxtra.co.uk

Virgin-xtra.co.uk

Virginxtras.co.uk

Virgin-xtras.co.uk

Vmlouder.co.uk

Vmlouder.com

virgin-extra.co.uk

virginextra.co.uk

virgin-extras.co.uk

virgin-wireless.co.uk

virginbroadband.co.uk (subject to this name being transferred to VEL)

virgintv.co.uk (subject to this name being transferred to VEL)

virginmedia.com

virgincommunications.com

virginvision.com

 

The URLs virginmobile.com/mobile, virginmobile.com/uk,virginmobile.com/mobileuk, virgin.com/mobileuk

 

On a non-exclusive basis outside the Territory the following domainnames:

virginmobile.com

virginphone.com

virgin.tv

virginbroadband.com (subject to this name being transferred to VEL)

virgintv.com (subject to this name being transferred to VEL)

 

5

----

 

**Part E - Chosen Names**

 

Assoon as reasonably practicable after the Commencement Date, the parties shallagree the names to be used by members of the NTL Group as their corporate namesand umbrella brand name for the Licensed Activities (the “**Chosen Names**”).The Chosen Names may be selected from the list below in this Part Eor otherwise agreed between the parties. VEL agrees not to use or license theuse of the names listed in this Part E that are not selected as the ChosenNames in the Territory for the Term.

 

VirginVision

VirginMedia

VirginMedia Group

VirginCommunications

 

6

----

 

**SCHEDULE 3**

** **

**Service Levels**

 

1.                                           **BaseService Levels**

 

1.1                                     With regard toservices and/or products provided under the Marks, the Licensee agrees, andshall procure that relevant members of the NTL Group agree, to use allreasonable endeavours to comply with the following:

 

(a)                           acknowledging allwritten complaints within 7 days and, if required, responding in full within 28days;

 

(b)                          responding to allemail and telephone complaints within 48 hours and, if required, following upwithin an agreed and reasonable time period; and

 

(c)                           ensuring thatemployees are fully-trained, competent, courteous and respectful and use honestand ethical selling and marketing practices (see the Outsourcing Guidelines andthe Direct Selling Policy as appended).

 

1.2                                     With regard toservices and/or products provided under the Marks, the Licensee agrees, andshall procure that relevant members of the NTL Group agree, to use allreasonable endeavours to follow the TM Guidelines and to uphold Virgin’sposition as “Consumer Champion” and the Virgin brand values of:

 

(a)                           value for money;

 

(b)                          good quality;

 

(c)                           brilliant customerservice;

 

(d)                          innovation;

 

(e)                           competitive challenge;and

 

(f)                             fun.

 

1.3                                     With regard toservices and/or products provided under the Marks, the Licensee agrees, andshall procure that relevant members of the NTL Group agree, to use allreasonable endeavours to have:

 

(a)                           a complaints level ofless than 1.5% of total customers, assessed quarterly;

 

(b)                          50% of all calls tocustomer management centre answered within 30 seconds, assessed quarterly; and

 

(c)                           no more than 10% ofcalls to customer management centre abandoned, assessed quarterly.

 

7

----

 

2.                                           **TechnicalService Levels:**

 

2.1                                    With regard to aparticular service or product and with effect from the date on which theCommunications Services are provided by the NTL Group under the Marks, theLicensee agrees, and shall procure that relevant members of the NTL Groupagree, to use reasonable endeavours to comply with the following

 

2.2                                     Broadband

 

(a)                           Broadband serviceavailability target of 99% (uptime) – defined as availability of IP Corenetwork from regional headends (UBR’s), through national IP network anddelivered to www interconnect;

 

(b)                          Broadband responsetime no greater than 50 milliseconds – defined as the mean response time fortraffic originating at the edge of the IP network travelling across the nationalinfrastructure to any other IP network edge and return to the originatingdevice, measured in milliseconds. Measured using an UDP test generated bynetworks’ performance test devices.

 

2.3                                     Digital TV

 

(a)                           DTV serviceavailability of broadcast channels of 99% (uptime) – defined as theavailability of all broadcast channels to all customers. Measured from contentacquisition at central headends to distribution from regional headends withinfranchises, until a reliable measure of availability of service at the customer’sequipment is implemented which shall supersede this;

 

(b)                          DTV time to changechannel of less than 2.0 seconds – defined as the time to change channel from 1broadcast channel to another and to have full video and audio presented to the TVset. Measured under test conditions.

 

2.4                                     Fixed line telephone

 

(a)                           Fixed line dial toneavailability of 99% - defined as availability of dial tone measured from thestreet cabinet as it is distributed to the customer’s premises;

 

(b)                          Fixed line telephony ‘lostcalls’ of no more than 0.5% (as published by Ofcom) – defined as calls lostafter being set-up through failure of telephony switch hardware or software. (note:the metric is reported as the inverse and the Ofcom target is 99.5%).

 

2.5                                     Mobile Telephony

 

If the Virgin MobileLicence is terminated under clause 2.3 and Virgin Mobile maintains itsrelationship with T-Mobile for the provision of Mobile Radio TelecommunicationServices, VEL shall not impose additional technical service levels. However, ifthe NTL Group terminates the agreement with T-Mobile then

 

8

----

 

the technical servicelevels provided to Customers of its Mobile Radio Telecommunication Serviceswill not be materially lower than those provided through the current agreementwith T-Mobile.

 

3.                                           **AspirationalService Levels**

 

3.1                                    The Licenseeacknowledges that the Licensor wishes all members of the NTL Group to meet thetargets set out in section 3.4 below for the Aspirational Service Levels. However,the parties acknowledge that the Aspirational Service Levels are not, as at theCommencement Date, currently measured or reported on this basis by members ofthe NTL Group. Therefore, with effect from the Commencement Date, the Licenseeagrees, and shall procure that relevant members of the NTL Group agree, to usereasonable endeavours to:

 

(a)                           measure performance onthe basis of the Aspirational Service Levels;

 

(b)                          identify currentlevels of performance against the Aspirational Service Levels in sections3.4(a), (b), (d) and (g) being the base case;

 

(c)                           identify changesrequired to make improvements on base case levels of performance; and

 

(d)                          propose a timetable inwhich to implement the changes and improvements against the base case.

 

3.2                                    Notwithstanding theprovisions of section 3.1, the parties agree that improvements towards thetargets set out in section 3.4 for the Aspirational Service Levels willneed to be implemented over a reasonable period of time.

 

3.3                                    The partiesacknowledge that progress toward the Aspirational Service Level targets will bedependent upon the provision of assistance from VEL.

 

3.4                                    The AspirationalService Levels are:

 

(a)                          a customersatisfaction level of 90% “satisfied” (i.e. 3/5) or above and 30% “delighted”(i.e. 5/5) assessed quarterly by polling a combination of at least 1,000customers “how satisfied are you with your experience with Virgin [ChosenName]?”;

 

(b)                         an advocacy level of70% “definitely would recommend” (i.e. 5/5) or “likely to recommend” (i.e. 4/5)assessed quarterly by polling a combination of at least 1,000 customers “howlikely are you to recommend Virgin [Chosen Name] to others?;

 

(c)                          a complaints level ofless than 1% of total customers, assessed quarterly;

 

(d)                         a customersatisfaction level after complaining to match or better the general Customersatisfaction level referred to in paragraph 3.4(a) above;

 

9

----

 

(e)                           80% of all calls tocustomer management centre, to be answered within 20 seconds, assessed quarterly;

 

(f)                             no more than 5% ofcalls to customer management abandoned centre; and

 

(g)                          a staff satisfactionlevel of 70% “satisfied” (i.e. 4/5) or “very satisfied” (i.e. 5/5) assessedannually by polling at least 1,000 members of staff “how satisfied are youworking for Virgin [Chosen Name] overall?”

 

4.                                           **Measurementand reporting**

 

4.1                                     The Licensee agrees toreport the following in connection with the Service Levels described above andprovide VEL with a copy of such report within 10 Business Days of the end ofeach measurement period:

 

(a)                           produce a customersatisfaction report on at least a quarterly basis (to include total number ofcustomers polled);

 

(b)                          produce a complaintsreport on at least a quarterly basis (to include total number of Customers and totalnumber of complaints);

 

(c)                           produce a reportsetting out performance against the percentage of calls answered and abandonedtargets on a quarterly basis;

 

(d)                          staff satisfactionsurvey to be performed on an annual basis (to include total number of staffpolled); and

 

(e)                           produce a reportsetting out performance against Technical Service Levels on a quarterly basisadditionally including the approximate length of any periods of downtimeaffecting 2.2(a), 2.3(a) and 2.4(a).

 

5.                                           **Failureto meet Service Levels**

 

5.1                                    The partiesacknowledge that the Service Levels are guidelines only and failure to achievesuch Service Levels shall not constitute a breach of this Deed or otherwisegive rise to a right to terminate. However, the parties acknowledge that wherethe actual service levels are persistently and significantly lower than thoseBase Service Levels and Technical Service Levels identified in sections 1 and 2above or, in the case of the Aspirational Service Levels, persistently andsignificantly lower than those performance levels identified as the base caseunder section 3.1(b), VEL may take into account the Licensee’sperformance in respect of the Service Levels as compared with good industrypractice and standards (where reliable and quality data relating to such goodindustry practice and standards is available to the parties) together withother evidence of material breach of this Deed and/or material damage to theMarks or VEL, in determining whether to exercise its rights pursuant to clauses9.2 and 9.3.

 

5.2                                    Where the actualservice levels are persistently and significantly lower than those Base ServiceLevels and Technical Service Levels identified in sections 1 and 2

 

10

----

 

above or, in the caseof the Aspirational Service Levels, persistently and significantly lower thanthose performance levels identified as the base case under section 3.1(b),the Licensee shall immediately put in place a remedial action plan to thereasonable satisfaction of VEL.

 

5.3                                    Without prejudice tothe provisions of sections 5.1 and 5.2, the Aspirational Service Levels areaspirational guidelines only and, provided that the Licensee is fulfilling itsobligations under section 3.1 above, failure to achieve the AspirationalService Levels shall not constitute a breach of this Deed.

 

5.4                                    The parties shall meeton an annual basis to review performance against the Service Levels. Whereperformance against the Aspirational Service Levels is below the targets theparties shall, as appropriate, agree a plan aimed at improving such performanceand/or changes to such targets, where appropriate, by the NTL Group.

 

5.5                                    The Base ServiceLevels set out in sections 1.1(a) and (b) and 1.3 must be met, unlessotherwise agreed by the parties, before the date on which the CommunicationsServices are provided by the NTL Group under the Marks (other than the servicesformerly licensed pursuant to the Virgin Net Licence and the services licensedpursuant to the Virgin Mobile Licence).

 

11

----

 

**SCHEDULE 4**

** **

**Existing rights ofLicensees**

 

All rightsare exclusive save as otherwise stated.

 

**Virgin.com:**

Main website for the Virgin Companies;

 

**Virgin Books:**

Publishing and distribution of books (branded) and online retailing ofbooks (branded and unbranded);

 

**Virgin Active:**

Operation of gyms and fitness centers;

 

**Virgin Balloon Flights:**

Operation of passenger balloon flights;

 

**Virgin Brides:**

One stop bridal and wedding shop;

 

**Virgin Cars:**

Retailer of new and used cars;

 

**Virgin Clothing/Virgin Ware:**

Design, manufacture and retail of branded clothing and underwear;

 

**Virgin Experience Days:**

Provider of experience gift vouchers and certificates;

 

**Virgin Express:**

European airline;

 

**Virgin Nigeria:**

Nigerian airline;

 

**Virgin Jewellery:**

Retailer of jewellery;

 

**Virgin Money:**

Provider of banking, insurance and investment products and services;

 

**Virgin Trains:**

Train operator;

 

**Virgin Unite:**

The Virgin Group’s independent charitable arm;

 

12

----

 

**Virgin Wines:**

Online retailer of wine;

 

**Virgin Life Care:**

Incentivised wellness programmes;

 

**Virgin Stem Cells / Health Bank:**

Storage of cord blood;

 

**Virgin Comics:**

Publication, distribution, licensing and merchandising of comics andanimation; animation and illustration services;

 

**Virgin Incentives/ The Virgin Voucher:**

Voucher redeemable against Virgin and non-Virgin goods and services;

 

**Virgin Atlantic:**

International airline;

 

**Virgin Atlantic Cargo:**

Air cargo and freight services;

 

**Virgin Holidays and Virgin Vacations:**

Holiday tour operators;

 

**Virgin Galactic:**

Sub orbital space flight experiences and space tourism;

 

**Virgin Limited Edition / Virgin Hotels**(non-exclusive)**:**

Operation, management and marketing of hotels, clubs, restaurants,public houses and cafes including premium properties such as Necker Island,Ulusaba, Kasbah Tamadot and The Roof Gardens;

 

**Virgin Games:**

Online and remote gaming and gambling- games of chance, skill andchance and skill combined;

 

**Virgin Megastores:**

Entertainment retailers;

 

**Virgin Digital:**

Digital music downloads;

 

**Radio Free Virgin**(non-exclusive)**:**

Online streaming of music;

 

**Virgin Radio:**

Radio broadcaster;

 

**Virgin Cosmetics:**

Retailing and direct selling of branded cosmetics and associatedproducts;

 

13

----

 

**Virgin Drinks:**

Manufacture and distribution of soft drinks;

 

**Virgin Vodka:**

Manufacture and distribution of vodka and spirits;

 

**Virgin Limobike:**

Passenger motorbike services;

 

**V Festival:**

Music festivals;

 

**V2 Records/Music:**

Record label and music publisher;

 

**Virgin Records/Music:**.

Record label and music publisher.

 

14

----

 

**SCHEDULE 5**

** **

**Use of “Virgin”or “V” by themselves**

 

The Licensee is permitted to use the word“Virgin” or the letter “V” from the “Virgin” signature by itself on any of thefollowing equipment, provided that in the case of use of the letter “V” thisshall be limited as applicable to use on a specific button or key on any of thefollowing:

 

Telephone handsets

 

Telephone displays/screens

 

Remote controls

 

SIM Cards

 

Keyboards

 

Data Cards

 

Head Sets

 

15

----

 

**SCHEDULE 6**

** **

**Virgin Money letteragreement**

 

#### Virgin Money Limited

#### Virgin Money Holdings (UK) Limited

#### Discovery House

#### Whiting Road

#### Norwich

#### Norfolk NR4 6EJ

####  

Virgin Enterprises Limited

120 Campden Hill Road

London W8 7AR

 

NTL Group Limited

NTL HouseBartley Wood Business ParkHookHampshire RG27 9UP

 

Date: 3 April 2006

 

Dear Sirs

 

**VIRGIN MONEY LETTER**

 

**Proposed Trade Mark Licence between VirginEnterprises Limited (“VEL”) and NTL Group Limited (“NTL”)(the “NTL Licence”)**

 

**Trade Mark Licence between VEL and VirginMoney Holdings (UK) Limited (“VMH”)(the “VMH Licence”)**

 

**Trade Mark Licence between VEL and VirginMoney Limited (“VML”)(the “VML Licence”)**

 

**Trade Mark Licence between Virgin EnterprisesLimited (“VEL”) and Virgin Mobile Telecoms Limited (“Virgin Mobile”)(the“Mobile Licence”)**

 

Whereas:

 

(A)                    Under the terms of the VMH Licenceand the VML Licence, VMH, VML and their affiliates are permitted by VEL to usethe VIRGIN trade marks in relation to financial services including the sale andmarketing of general insurance products and services and Banking Services.

 

16

----

 

(B)                     Virgin Mobilecurrently provides:

 

(i)                           mobile phone handsetinsurance to its customers;

 

(ii)                        replenishment methods in cardand electronic form (including top ups) through which customers can purchaseproducts or services relating to its licensed activities; and

 

(iii)                   MobileElectronic Payment Services to subscribers and any other product or servicepayment facility where the provision of such services are designed to be usedvia terminal equipment and/or a SIM card and which are not Banking Services,

 

(together the **“Mobile Services”**).

 

(C)                      NTL Group is in the process ofacquiring ownership of Virgin Mobile and VEL and NTL intend to enter into theNTL Licence for the use of the VIRGIN trade marks in relation to communicationsservices, including the Mobile Services, in the UK and the Republic of Ireland.The NTL Group wishes to offer its customers the following services which itwill provide under the VIRGIN trade marks:

 

(i)                           warranties on CommunicationsEquipment;

 

(ii)                        extended warranties onCommunications Equipment;

 

(iii)                     insurance for mobile phonehandsets and other Communications Equipment;

 

(iv)                    bill protection and identity fraudinsurance to its customers in association with a third party insurance provideron a co-branded basis;

 

(v)                       payment services, facilities andmethods for the purchase of its own goods and services and/or third party goodsand services including:

 

(a)                       payment or replenishmentservices, facilities and methods in card and electronic form (including top upcards, electronic top up and ATM/SMS top up) through which NTL Group customerscan purchase any products or services relating to its licensed activities on apre-pay or stored value basis (but excluding gift tokens or gift vouchers); and

 

(b)                      electronic payment services,facilities and methods (other than as set out in paragraph C(v)(a) above)utilising the Communications Services and/or utilising mobile phone handsets,television set top boxes or any other Communications Equipment, in all cases,via Communications Services, on a credit or contract basis (i.e. “closed loop”services) including but not limited to those services, facilities and methodsset out in paragraph B(iii) above, provided that in respect of the payment

 

17

----

 

for third party goods and services, suchservices, facilities and methods must be:

 

(I)                   providedvia the NTL Group’s Communications Services;

 

(II)               must not be on a credit basis requiringa consumer credit licence as regulated pursuant to the Consumer Credit Act 1974(as amended and replaced from time to time); and

 

(III)           must not be Open Loop.

 

For example, the NTL Group may use the VIRGIN trade marks to brand apayment card/mechanism which can be used to pay for goods and services fromunrelated third parties via any of the NTL Group’s Communications Services but,for the avoidance of doubt, such card/mechanism shall not be capable of generaluse as a debit, credit or prepaid card/mechanism badged with an Open Loopnetwork such as VISA, MasterCard, AMEX, Electron and Maestro.

 

(vi)                           gift tokens and giftvouchers for products and services relating to the licensed activities.

 

**DEFINITIONS**

 

1.                                      In thisAgreement, the following terms shall have the following meanings:

 

**“Banking Services”**means all and any services which are currently provided in the ordinary courseof business by a United Kingdom clearing bank or a United States of Americamoney center bank or which from time to time form the core business of any suchbank, including but not limited to the taking of deposits, the provision ofloans (whether secured or unsecured and including by the subscription for loanstock or other debt securities), guarantees, performance bonds and letters ofcredit, the provision of domestic and international cash transmission and otherpayment or clearance facilities, the provision of credit or debit cards, smartcards and stored value cards and the like, and of all forms of bank account forall currencies, the provision of custody services, the provision of foreigncurrency exchange services and the provision of advice in connection with anyof the foregoing;

 

**“Bundled Services”**means a package of products or services incorporating one or moreCommunications Services offered by NTL pursuant to the NTL Licence togetherwith third party or non “Virgin”-branded Communications Services and/orproducts or services reasonably ancillary or complementary to CommunicationsServices;

 

**“Commencement Date**”means the date the NTL Licence comes into force;

 

18

----

 

**“Communications Equipment”**meansCore Equipment, Mobile Devices, Mobile Accessories and Other Equipment asdefined in the NTL Licence from time to time;

 

**“Communications Services”**meansthe services as defined in the NTL Licence from time to time;

 

**“General Insurance”**meansgeneral insurance policies, products or services as licensed under the VMHLicence;

 

**“Mobile Electronic Payment Services”**means services which allow users of mobile radio telecommunication services topay for products or services using their terminal equipment and/or SIM card ande-money services provided over a mobile radio telecommunication service;

 

**“NTL Group”**meansNTL and any group undertaking of NTL (as such term is defined in Sections 258and 259 of the Companies Act 1985 (as amended));

 

**“Open Loop”**means an electronic payment service, facility or method capable of being usedto pay for a comprehensive range of third party goods and services unrelated toeach other and which is a Banking Service;

 

**“Partner Services”**means the provision of access by means of Communications Services provided byNTL pursuant to the NTL Licence, in conjunction with or as part of suchCommunications Services, to products or services of a third party.

 

**PART ONE**

 

In consideration of VEL paying to VMH and VML the sum of £100 (receiptof which is acknowledged by VMH and VML), VMH, VML and VEL hereby agree asfollows:

 

2.                                      For the avoidanceof doubt the activities set out in paragraphs (C)(i) and (ii) will not bedeemed to be General Insurance and do not require a licence from VML and/or VMHunder this Agreement. To the extent that the activities set out in paragraphs(C)(iii) and/or (iv) are General Insurance, then VML and/or VMH (asappropriate) hereby grant to VEL the non-exclusive and royalty free licence backof the right to use the VIRGIN trade marks in relation to such activities,together with the right to sub-licence such rights to the NTL Group under theNTL Licence, provided that the provisions of paragraph 5 shall apply.

 

3.                                      To the extentthat the activities set out in paragraphs (C)(v) and/or (vi) above are BankingServices, then VML and/or VMH (as appropriate) hereby grant to VEL thenon-exclusive and royalty free licence back of the right to use the VIRGINtrade marks in relation to such activities, together with the right tosub-license such rights to the NTL Group under the NTL Licence, provided thatthe provisions of paragraph 5 shall apply.

 

4.                                      For the avoidanceof doubt, VEL, VMH and VML acknowledge and agree that:

 

19

----

 

(i)                                    nothingin this Agreement shall prevent the NTL Group from offering or undertaking anyof the activities referred to in paragraph C above or any General Insurance orany Banking Services to the extent that such activities are not done pursuantto the VIRGIN trade marks;

 

(ii)                                 useof the VIRGIN trade marks by the NTL Group in respect of the provision ofBundled Services or Partner Services or otherwise in circumstances where use ofthe VIRGIN trade marks does not create the impression that such services areprovided directly by the NTL Group shall not be construed as use of the VIRGINtrade marks in relation to the provision of General Insurance or BankingServices, or the offering or undertaking of those activities pursuant to theVIRGIN trade marks, and such use shall not be in breach of this Agreement orthe NTL Licence;

 

(iii)                              VMLand VMH shall retain all other rights in relation to financial servicesincluding General Insurance and Banking Services as licensed under the VML Licenceand VMH Licence;

 

(iv)                             theparties agree that the conduct of consumer hire (including consumer hire asregulated pursuant to the Consumer Credit Act 1974, as amended and replacedfrom time to time) is not a Banking Service; and

 

(v)                                Thegrant back of such rights under this Part One is solely for the purposes ofgranting the sub licence to NTL.

 

**PART TWO**

 

In consideration of the mutual obligations agreed and undertakingsgiven in this Part Two VMH, VML and NTL hereby agree as follows:

 

5.                                      In respect of theactivities set out in paragraphs 2 and 3 above where NTL is intending, byreference to the VIRGIN trade marks, to:

 

(i)                                    re-tenderthe fulfilment of or renew any existing or expired contracts relating toGeneral Insurance or Banking Services activities; or

 

(ii)                                 engagethe services of a third party for any of such General Insurance or BankingServices activities,

 

then NTL shall:

 

(a)                                  notifyVMH and VML of such intention and give VMH and/or VML (as appropriate) anopportunity to submit a written proposal on reasonable terms relating to thefulfilment of those activities within a time period no less favourable thanthat given to all other notified third parties and VMH and/or VML shall submitany written business proposal as soon as reasonably practicable and NTL shallconsider such proposal as soon as

 

20

----

 

reasonably practicable and on a good faithbasis. NTL agrees, for a period of sixty days (or such other period as theparties may agree in good faith) from NTL’s original notice, to enter into goodfaith discussions with VMH or VML (as appropriate) and not to enter into anycontract with a third party in respect of the fulfilment of such activitiesduring such period; or

 

(b)                                 whereit is considering re-tendering or engaging a third party under sub-paragraphs5(i) and (ii) as a result of any unsolicited third party proposal relating tothe fulfilment of any of those activities set out in paragraphs 2 and 3, giveVMH or VML (as appropriate) a right to match or better the terms of suchproposal within a reasonable time period specified by NTL and NTL shall notenter into any contract relating to such proposal unless VMH or VML (asappropriate) has been unable to match or better the  terms of that proposal within the specifiedtime period.

 

6.                                      If NTL wishes tolaunch any Banking Services under the VIRGIN trade marks which are not licensedunder paragraph 3 above (including to the extent that such Banking Services areon a credit basis requiring a consumer credit licence as regulated pursuant tothe Consumer Credit Act 1974 (as amended and replaced from time to time) andare Open Loop), then it shall notify VMH and VML and, within 14 days of receiptof such notice (or such other period as the parties may agree), VMH and VMLshall either:

 

(i)                                   undertake to workwith NTL in good faith on an exclusive basis for sixty days (or such otherperiod as the parties may agree) to reach a commercial and operationalagreement on reasonable commercial terms by which VMH and/or VML provide NTLwith a service that provides such activities with use of the VIRGIN trademarks; or

 

(ii)                                consent in writing tothe use by the NTL Group of the VIRGIN trade marks in respect of suchactivities such consent to be given at the sole discretion of VMH and VML and,in this event, NTL shall be free to enter into discussions with other financialproviders or partners for the provision of such activities with the use of theVIRGIN trade marks.

 

Should a mutually agreeable solution not be determined in accordancewith (i) and (ii) above then NTL shall be free to enter into discussions withother financial providers or partners for the provision of such activities, butwithout the use of the VIRGIN trade marks.

 

7.                                      VMH, VML and NTLagree to consider in good faith any opportunities to cross market theirrespective products and services on terms to be agreed including but notlimited to the opportunity for VMH and VML to offer their banking, investmentand insurance services to the customers of NTL, and NTL to offer its productsand services to customers of VMH and VML.

 

21

----

 

8.                                      In the eventthat, for any reason, the grant back of rights to VEL by VMH and/or VML (asappropriate) should terminate, then such rights shall be deemed to be grantedhereunder by VMH and/or VML (as appropriate) directly to the NTL Group. TheParties shall, at their own expense, execute and deliver all such documents andtake such steps or procure the execution of all such documents (in a formreasonably satisfactory to the parties) as may, from time to time, be requiredto give full effect to this paragraph.

 

**PART THREE**

 

9.                                      ThisAgreement shall come into force on the Commencement Date.

 

10.                               Theparties further acknowledge and agree that, in the event that the NTL Groupdoes not acquire a majority of the issued ordinary shares in Virgin Mobile (andthereby does not serve the notice as set out in clause 2.3 of the NTL Licenceor otherwise terminate the Mobile Licence), then this Agreement will be deemedamended with such changes as are required, mutatis mutandis, so that thisAgreement does not apply to the mobile communications business as carried on byVirgin Mobile at the Commencement Date. All parties shall co-operate, at theirown expense, to execute and deliver all such documents and take all such stepsor procure the execution of all such documents (in a form reasonablysatisfactory to the parties) as may, from time to time, be required to givefull effect to this paragraph.

 

11.                               Theparties shall keep secret and confidential any information which it may obtainrelating to the business of the other. Such information shall be treated asproprietary and confidential to the party imparting the same. Each party herebyagrees that it shall use such information received or procured by it from theother solely for the purposes of this Agreement and that it shall not at anytime during or after completion, expiry or termination of this Agreementdisclose the same whether directly or indirectly to any third party except withthe prior written consent of the other party.

 

12.                                ThisAgreement shall be governed by the laws of England and Wales.

 

Please confirm your acceptance of the terms of this letter by signingwhere indicated below.

 
| /s/ Patrick McCall                     |   |
|----------------------------------------|--------|
| for and on behalf of                   |
| **Virgin Money Holdings (UK) Limited** |

 

22

----

 
| /s/ Simon Leeming        |   |
|--------------------------|--------|
| for and on behalf of     |
| **Virgin Money Limited** |

 
| /s/ Gordon McCallum            |   |
|--------------------------------|--------|
| for and on behalf of           |
| **Virgin Enterprises Limited** |

 
| /s/ Robert Gale       |   |
|-----------------------|--------|
| for and on behalf of  |
| **NTL Group Limited** |

 

23

----

 

**SCHEDULE 7**

** **

**Virgin Retail letteragreement**

 

#### Virgin Retail Limited

120 Campden Hill Road

London W8 7AR

 

#### Virgin Retail Group Limited

120 Campden Hill Road

London W8 7AR

 

Virgin Enterprises Limited

120 Campden Hill Road

London W8 7AR

 

NTL Group Limited

NTL House

Bartley Wood Business Park

Hook

Hampshire RG27 9UP

 

#### Date: 3 April 2006

####  

#### Dear Sirs

####  

**VIRGIN RETAIL LETTER**

 

**Proposed trade mark licence between VirginEnterprises Limited (“VEL”) and NTL Group Limited (“NTL”) (the “NTL Licence”)**

 

**Trade mark licence between VEL and VirginRetail Limited (“VRL”) (the “VRL Licence”) dated 31 July 1994**

 

**Retail stores agreement between, inter alia,Virgin Mobile Telecoms Limited (“Virgin Mobile”) and VRL and Virgin RetailGroup Limited (“VRGL”) (the “Retail Stores Agreement”) dated 1 October 2003 asamended and restated with effect from 1 April 2004**

 

**Trade mark licence between VEL and VirginMobile (the “Mobile Licence”) which includes, as an attachment, a letteragreement between Virgin Mobile, VRL and VRGL dated 2 July 2004 (the “RetailLetter”)**

 

Capitalised terms shall have the meaning given to them under thisletter of agreement (“Agreement”).

 

24

----

 

Whereas:

 

(A)          Underthe terms of the VRL Licence, the Virgin Retail Group is permitted by VEL touse the VIRGIN trade marks in the UK in relation to the sale of music productsand a range of non-music products including, *interalia*, DVDs, games, hi-fi equipment, portable audio, TVs, videorecorders, camcorders, cameras and interactive entertainment products (such ascomputer games) within the Virgin Retail Group’s physical stores. The VirginRetail Group is not permitted to brand any of the products with the VIRGINtrade marks. The Virgin Retail Group also currently sells music products, gamesand DVDs via the internet.

 

(B)          Underthe terms of the Retail Stores Agreement and the Mobile Licence, Virgin Mobileis permitted by the Virgin Retail Group to operate concessions within theVirgin Retail Group stores and to operate its own retail channel including itsown “Virgin Mobile”-branded standalone retail stores, in each case, in relationto Mobile Radio Telecommunications Services.

 

(C)          Underthe terms of the Retail Letter, Virgin Mobile is permitted to sell ElectronicEntertainment Products through concessions within the Virgin Retail Group’sstores and through “Virgin Mobile”-branded standalone retail stores, in eachcase, either supplied by the Virgin Retail Group or, where the Virgin RetailGroup is unable to supply such Electronic Entertainment Products on ReasonableWholesale Terms, obtained from another source. Under the Retail Letter, VirginMobile is also permitted to sell Physical Entertainment Products through theconcessions within Virgin Retail Group’s stores. In relation to theaforementioned concessions, the parties must also agree the manner in whichElectronic Entertainment Products and/or Physical Entertainment Products aresold (except to the extent that such sales are covered by the Retail StoresAgreement) .

 

(D)          TheNTL Group is in the process of acquiring ownership of Virgin Mobile and VEL andthe NTL Group intend to enter into the NTL Licence for the use of the VIRGINtrade marks in relation to Communications Services (including Mobile RadioTelecommunication Services) in the UK and the Republic of Ireland. The NTLGroup requires, as part of the NTL Licence, *interalia*, retail rights relating to or arising out of the CommunicationsServices, including the activities referred to in paragraphs (B) and (C), andrights relating to the branding and sale of Core Equipment, Mobile Accessories,Mobile Devices and Other Equipment, in each case, in the UK and the Republic ofIreland.

 

1.             Definitions:- in this Agreement (including the recitals), the following terms shall havethe following meanings:

 

**“Commencement Date”**means the date the NTL Licence comes into force;

 

**“Communications Services”**means communications services, or access to such services, consisting in orhaving as their principal feature the conveyance of messages, information orsignals by means of a communications network. For

 

25

----

 

illustrative purposes only and without prejudice to the generality ofthe foregoing, the types of services contemplated at the Commencement Dateinclude the following:

 

(a)           internetservices (which, for example, includes email, web mail, instant messaging,provision of webspace, access to the worldwide web, home networking, electronicmessaging, voice/video/data services transmitted over internet protocol);

 

(b)           televisionor radio services which, for example, includes:

 

(i)            accessto “free to air” television and radio services (e.g. BBC1,  Radio 4 and Virgin Radio);

 

(ii)           premiumor subscription-based television services (e.g. access to Film Four and SkySports);

 

(iii)          conditionalaccess or encrypted television services (e.g. Top Up TV);

 

(iv)          interactivetelevision services;

 

(v)           videoon demand and pay per view; or

 

(c)           telephoneservices (which, for example, includes fixed line, wireless, Mobile RadioTelecommunication Services, data and text services (including SMS)), and

 

howsoever and in each case as such services may be:

 

(i)            receivedor accessed (e.g. via a television set, set top box, personal computer, mobilephone or any other device); and

 

(ii)           created,develop or converge from time to time,

 

whether with a technology or method now in existence or subsequentlydeveloped, created or invented;

 

“**Core Equipment**” means any equipment,device or accessory (whether now in existence or which may from time to time becreated or developed, or as such equipment, devices or accessories converge orbecome multi-purpose) which either:

 

(a)                                  is primarily intendedfor the provision, delivery, reception, access or use of CommunicationsServices (including mobile handsets, SIM cards, data cards, telephone handsets,set top boxes, personal video recorders (PVRs) for use with the CommunicationsServices, modems, routers and remote

 

26

----

 

control devices for set top boxes), but excluding, save to the extentthat they fall within sub-paragraph (b) below, television sets, radio sets andpersonal computers; or

 

(b)                                 has, as an includedfeature, the capability to provide, deliver, receive, access or use theCommunications Services provided by the NTL Group (including via a built-indecoder, receiver or internet protocol connection), provided that the NTL Groupis thereby facilitating access  to itsCommunication Services in preference to those of a third party;

 

**“Direct Sales Channels”**means sales methods consisting of door-to-door, on-line, internet, mail-order,telesales and all other forms of direct or distance selling methods;

 

**“Electronic Entertainment Products”**means non-physical electronic entertainment content (such as music and videodownloads);

 

**“Mobile Accessories”**means products (excluding Core Equipment) primarily intended for use inconjunction with Core Equipment relating to Mobile Radio TelecommunicationServices (for example, mobile handset chargers, mobile telephone cases, in-caraccessories, bluetooth headsets and mobile card readers/writers);

 

**“Mobile Devices”**meansportable devices capable of playing, receiving, storing or recording data (e.g.MP3 players/iPods, digital cameras), provided the device is primarily intendedfor use in conjunction with Core Equipment relating to Mobile RadioTelecommunication Services;

 

**“Mobile Radio Telecommunication Services”**means Communications Services designed or adapted to be used in motionconsisting of the conveyance of any message, information or signal through theagency of wireless telegraphy;

 

**“NTL Group”** meansNTL and any group undertaking of NTL (as such term is defined in Sections 258and 259 of the Companies Act 1985 (as amended));

 

**“Other Equipment”**means any equipment, device or accessory (other than Core Equipment) capable ofuse with or complementary to the provision, delivery or use of the CommunicationsServices but not branded with the VIRGIN trade marks (e.g. MP3 players/iPods,digital cameras, scart leads, PCs);

 

**“Physical Entertainment Products”**meansphysical entertainment products (such as compact discs and DVDs);

 

**“Reasonable Wholesale Terms”**means where the Virgin Retail Group are able to supply to Virgin Mobile or theNTL Group, as the case may be, sufficient quantities of products of the sametype and range and equivalent functionality and quality as those specified inVirgin Mobile’s or NTL Group’s notification and on terms of purchase (includingas to price) which taken as a whole are reasonably

 

27

----

 

comparable to those available to Virgin Mobile or the NTL Group fromthird party suppliers;

 

**“Retail Stores”**means NTL Group’s physical retail stores, and concessions within third partyphysical retail stores, primarily intended for the sale and supply of the Communication Services andbranded Core Equipment;

 

**“Virgin Retail Group”**meansVRL and VRGL and their subsidiaries.

 

**PART ONE**

 

In consideration of VEL paying to VRL and VRGL the sum of £100 (receiptof which is acknowledged by VRL and VRGL), VRL, VRGL and VEL hereby agree asfollows:

 

2.                                       VRL and/or VRGL,as appropriate, hereby grant to VEL the non-exclusive and royalty free licenceback of the right to use the VIRGIN trade marks in relation to the sale andsupply of Core Equipment (to the extent that it is unbranded), MobileAccessories, Mobile Devices and Other Equipment through Retail Stores, togetherwith the right to sub-license such rights to the NTL Group under the NTLLicence, provided that the saleand supply of unbranded Core Equipment, Mobile Accessories, Mobile Devices andOther Equipment by the NTL Group through Retail Stores is ancillary or incidental to the sale and supply of the Communication Services andbranded Core Equipment through such Retail Stores.

 

3.                                       VRL and/or VRGL,as appropriate, agree that the sale and supply of the branded Core Equipmentthrough the Retail Stores and/or Direct Sales Channels is not licensed to theVirgin Retail Group under the VRL Licence, nor is the sale or supply ofCommunications Services, and as far as VRL and VRGL are concerned VEL is freeto license the right to use the VIRGIN trade marks in relation to suchactivities to the NTL Group.

 

4.                                       VRL and/or VRGL,as appropriate, agree that the sale and supply of the Communications Services,Core Equipment, Mobile Accessories, Mobile Devices and Other Equipment throughthe Direct Sales Channels are not licensed to the Virgin Retail Group under theVRL Licence and VEL is free to license the right to use the VIRGIN trade marksin relation to such activities to the NTL Group.

 

5.                                       VRL and/or VRGL,as appropriate, agree that under the VRL Licence they are only permitted tooffer video on demand services under the VIRGIN trade marks within the VirginRetail Group’s physical stores.

 

**PART TWO**

 

In consideration of the mutual obligations agreed and undertakingsgiven in this Part Two, VRL and VRGL and NTL Group hereby agree as follows:

 

28

----

 

6.                                      VRL and/or VRGL,as appropriate, hereby grant to the NTL Group the non-exclusive and royaltyfree licence to use the VIRGIN trade marks, subject to the provisions ofparagraph 8 below and in conjunction with the rights granted by VEL under theNTL Licence, in relation to:

 

(a)                                   PhysicalEntertainment Products offered for sale in concessions within Virgin RetailGroup’s stores only;

 

(b)                                  ElectronicEntertainment Products offered for sale in Retail Stores, including concessionswithin Virgin Retail Group’s stores; and

 

(c)                                   DVDs offered forsale in conjunction with the provision of video on demand services.

 

7.                                      In the event thatthe NTL Group acquires a majority of the shares and/or control of Virgin Mobile(and thereby serves notice pursuant to clause 2.3 of the NTL Licence) then theRetail Stores Agreement and Retail Letter shall continue in full force andeffect (and, for the avoidance of doubt, shall not be capable of termination inaccordance with clause 19.4 of the Retail Stores Agreement) but shall be deemedto apply, with such changes as are required, *mutatismutandis*, to enable the NTL Group to take the benefit of thearrangements set out therein including for the avoidance of doubt but notlimited to the following specific amendments:

 

(a)                                the Retail StoresAgreement shall be extended to cover the products and services of the NTL Groupprovided under the VIRGIN trade marks licensed under the NTL Licence in orderto allow the NTL Group to market, supply and sell their products and servicesin the Stores (as defined in the Retail Stores Agreement) and the followingdefinitions in the Retail Stores Agreement shall be deemed amended as follows

 

(i)             “Product”shall include Core Equipment, Mobile Accessories, Mobile Devices and OtherEquipment;

 

(ii)            “Services” shallinclude Communications Services;

 

(iii)           “VMProducts” and “VM Services” shall include all Products and Services madeavailable by the NTL Group; and

 

(iv)           “Business” shall bedeemed amended accordingly.

 

(b)                                      in addition tothe volume bonuses currently payable by VM in accordance with clause 8 of theRetail Stores Agreement, the volume bonus will extend to new connections of theNTL Group’s Services as follows:

 

### (i)             The definition of “Connections”will be amended as follows:

###  

### “Connection”means:

 

29

----

 

### (a)                                                                         aperson who is not a Customer Return and to whom a VM SIM Card has been issuedor sold by VM through the Stores and who has transmitted or received a Messageover the Network; and

###  

### (b)                                                                        inrespect of residential broadband internet, digital cable television and/orfixed-line telephony services provided by the NTL Group for sale orsubscription through the Stores in accordance with this Agreement, the sale orsubscription by a Customer to a new RGU (or revenue generating unit).”

###  

### (ii)                                        Paymentof volume bonuses in respect of new RGUs is subject to the followingprovisions:

###  

### (A)                           “Customer”means an NTL customer account holder who is registered to use any of NTLGroup’s residential broadband internet, digital cable television and/orfixed-line telephony services and in whose premises NTL equipment has beeninstalled, where applicable;

###  

### (B)                             Novolume bonus will be payable:

###  

### (aa)                           unlessand until a Customer registers and remains a Customer beyond any contractual orstatutory “cooling off” period and a person will not be deemed a Customer ifthat person exercises any right to cancel the contract or the Services areterminated for any reason during the “cooling off” period;

###  

### (bb)                         inrespect of customers who NTL cannot verify as having been introduced via theStores; and

###  

### (cc)                           inrespect of potential customers who are not accepted as customers by NTL; and

###  

### (C)                             theNTL Group shall be entitled to claim back or deduct 66% of the volume bonus ifa Customer cancels the Services or if NTL cancels the Customer’s account within100 days of agreeing to receive the Services for any reason. In the event ofany clawback, NTL will inform VR how many customers have cancelled the Servicesor how many customer accounts have been cancelled by NTL subject always toNTL’s internal confidentiality provisions and only for the purposes of thisAgreement.

 

30

----

 

8.                                      In respect of theoffer for sale through any on-line store owned or operated by the NTL Groupunder the VIRGIN trade marks of: (i) the categories of products set out inparagraph 6(b) above; and (ii) Other Equipment to the extent that it fallswithin the scope the VRL Licence for the sale of non-music products (such asDVDs, games, hi-fi equipment, portable audio equipment, TVs, video recorders,camcorders, cameras and interactive entertainment products (such as computergames)  (but excluding Core Equipment, MobileAccessories and Mobile Devices) where NTL Group intends to:

 

(a)                                   re-tender thefulfilment of or renew any existing or expired supply contracts in respect ofsuch products; or

 

(b)                                  engage the servicesof a third party for the supply of any of such products,

 

then it shall:

 

(i)            notifythe Virgin Retail Group of such intention and give the Virgin Retail Group anopportunity to submit a written proposal relating to the supply of suchproducts within a time period no less favourable to that given to all othernotified third parties; and

 

(ii)           wherethe Virgin Retail Group is able to supply such products on Reasonable WholesaleTerms within a reasonable time period from the date of notification and on anongoing basis, and subject to the agreement of a mutually acceptable contract,all parties acting reasonably, NTL Group shall only sell those productssupplied by the Virgin Retail Group. Where the Virgin Retail Group is not ableto offer Reasonable Wholesale Terms or is otherwise unable to supply such relevantproducts, or the parties are unable to agree a mutually acceptable contractwithin a reasonable time, NTL Group may sell such products obtained fromanother source.

 

9.                                      The Virgin RetailGroup recognises that it is part of a group of companies and businesseslicensed by VEL to use the Virgin trade marks and agrees that it shallcooperate in Virgin Group activities and initiatives with the NTL Group. Wherethe NTL Group requests its products or services be accessible through theRetail Stores provided by VRL then VRL shall consider in all good faith suchrequests on terms that are no less favourable than those offered to any otherthird party.**VEL shall use allreasonable efforts to facilitate activities and initiatives proposed by the NTLGroup in conjunction with VRL and on terms no less favourable than thoseoffered to any other third party The Virgin Retail Group and NTL Group agree toconsider in good faith any opportunities to cross market their respectiveproducts and services on terms to be mutually agreed between the parties.

 

10.                                In the event that, forany reason, the grant back of rights to VEL by VRL and/or VRGL, as appropriate,should terminate, then such rights shall be deemed to be granted hereunder byVRL and/or VRGL, as appropriate, directly to NTL Group.

 

31

----

 

All parties shall, at their own expense, execute and deliver all suchdocuments and take all such steps or procure the execution of all suchdocuments (in a form reasonably satisfactory to the parties) as may, from timeto time, be required to give full effect to this paragraph.

 

**PART THREE**

 

11.           ThisAgreement shall come into force on the Commencement Date.

 

12.           Theparties further acknowledge and agree that, in the event that NTL does notacquire a majority of the issued ordinary shares of Virgin Mobile (and therebydoes not serve the notice as set out in clause 2.3 of the NTL Licence orotherwise terminate the Mobile Licence), then this Agreement will be deemedamended with such changes as are required, *mutatismutandis*, so that this Agreement does not apply to the Mobile RadioTelecommunications Services business as carried on by Virgin Mobile at theCommencement Date. All parties shall co-operate, at their own expense, toexecute and deliver all such documents and take all such steps or procure theexecution of all such documents (in a form reasonably satisfactory to theparties) as may, from time to time, be required to give full effect to thisparagraph.

 

13.           ThisAgreement shall be governed by the laws of England and Wales.

 

Please confirm your acceptance of the terms of this letter by signingwhere indicated below.

 
| /s/ John Jackson          |   |
|---------------------------|--------|
| for and on behalf of      |
| **Virgin Retail Limited** |

#####  

| /s/ John Jackson                |   |
|---------------------------------|--------|
| for and on behalf of            |
| **Virgin Retail Group Limited** |

 
| /s/ Gordon McCallum            |   |
|--------------------------------|--------|
| for and on behalf of           |
| **Virgin Enterprises Limited** |

 

32

----

 
| /s/ Robert Gale       |   |
|-----------------------|--------|
| for and on behalf of  |
| **NTL Group Limited** |

 

33

----

 

**SCHEDULE 8**

** **

**TM Guidelines**

** **

**PART 1- VIRGIN RED BOOK**

** **

**PART 2- VIRGIN BRAND BOOK**

 

**PART 3- VIRGIN GROUP POLICY ON SELLING TECHNIQUES**

 

**PART 4 - OFFSHORE OUTSOURCING - OVERALLBRAND APPROACH**

 

34

----

 

**PART 1**

**VIRGIN RED BOOK**

 

**How to use this guide**

 

1                  Look at and use the red swatches at the back.Your starting point should always be: match to the ideal red swatch, whateveryou’re producing.

 

2                  Look to see if we’ve given specific help forthe type of item you’re producing – for example: vinyl graphics, acrylics,paint and so on.

 

3                  Discuss these with your suppliers. This bookis only a guide, and nothing beats talking to your suppliers and testingthings. Ink systems vary and technologies change, and what works in onesituation may need refining next time round. You’ll also notice that thesamples in this book aren’t uniform. That just shows the differences anddifficulties inherent in colour matching. They are, however, the best possiblematch we can find.

 

3                  If the material you want to produce isn’tshown here (it’s impractical to include everything), then talk to yoursuppliers to try and match. Virgin Enterprises Ltd may also be able to suggestother sources of advice (for example other group companies who’ve tackledsomething similar) – see inside front cover for their contact details.

 

**The glossary**

 

At the back of this book is aglossary of the terms used. While we’ve tried to keep things simple, technicalterms are frequently unavoidable. Most of you will be familiar with these –they’re widely used throughout the industry.

 

If there’s anything you’reunsure about, the glossary is a useful starting point, though please talk toyour manufacturer/supplier for the full picture.

 

 

**Little RedBook**

Virgin red specifications

 

35

----

 

**Get reddy!**

 

Red is the lifeblood of ourlook. It says ‘Virgin’ in a way that’s immediate and obvious. Few organisationshave so effectively aligned themselves with a colour as Virgin has: mostconsumers reddily* identify our brand with a rich and vibrant red. Not evenmegabrands such as Nike and IBM can claim such an association.

 

What advantages does thisgive us? Well, red means activities across our group are visually linked. Red actsas a trigger to say ‘Virgin’ to customers, with all the values that brings. Redmarks us out from the competition.

 

**Getting it right**

 

So if red’s doing a good jobfor us, it’s important we support it. That means producing it as accurately andconsistently as possible.

 

Whether it’s company vans orcola cans, stationery or station signs, the red should be as close to ideal aspossible. While this might initially sound straightforward, in practice it’snot. Printing and manufacturing techniques vary – printing on paper isdifferent from painting a plane, and so on.

 

What might look like theright red in isolation rarely is. And if different shades appear, then theeffect of having a ‘Virgin red’ is lessened.

 

This guide will help youachieve accuracy and consistency:

•                  It explains, and shows, what ‘ideal Virgin red’looks like.

•                  It lists specifications your suppliers need tomatch that red, for a range of materials and methods.

•                  It suggests who to contact if you need help oradvice.

 

**Help and advice**

 

Please contact theTrademarks/Intellectual Property Department of Virgin Enterprises Ltd.

 

Telephone +44 (0)20 7313 2053

Facsimile +44 (0)20 7313 2091

 

Trademarks/IntellectualProperty Department

Virgin Enterprises Ltd

120 Campden Hill Road

LONDON

W8 7AR

 

----

* Sorry forall the ‘red’ puns in this book – we decided to leave them in when we proof redit.

 
| 01.00  | ** ** | **Print**               | ** ** |
|--------|------------|-------------------------|------------|
|   |       |                    |       |
| 02.00  | ** ** | **Vinyls**              | ** ** |
|   |       |                    |       |
| 03.00  | ** ** | **Paint**               | ** ** |
|   |       |                    |       |
| 04.00  | ** ** | **Acrylics**            | ** ** |
|   |       |                    |       |
| 05.00  | ** ** | **Laminates**           | ** ** |
|   |       |                    |       |
| 06.00  | ** ** | **Websafe and Fabrics** | ** ** |
|   |       |                    |       |
| 07.00  | ** ** | **Glossary**            | ** ** |
|   |       |                    |       |
| 08.00  | ** ** | **Swatches**            | ** ** |

 

1

----

 

**Print**

** **

**Spot colour:**

 

6 parts PMS rubine red, 5parts PMS yellow

 

**Processcolour:**

 

Cyan 0%, Magenta 100%,Yellow76%, Black 6%

 

This is the standard red, andthe one most testing has been done on. With a heavy ink film thickness itshould appear rich and vibrant on most paper and card stocks, both coated anduncoated.

 

Please liaise with yourprinter and, if possible, their ink manufacturer (especially in flexo andgravure printing) to ensure accurate colour matching.

 

 

**Newspapers**

 

Colour work in newspapers isusually produced differently to conventional litho and it can be hard toachieve a vibrant red. Also, one newspaper rarely uses the same system asanother, so liaise with each publication as much as possible to avoid dullresults.

 

 

**Can printing**

 

The appearance of colourdepends on the can’s base and material. The main type used in the UK is clearbase aluminium. Overseas manufacturers may also use white base aluminium andwhite base steel.

 

A suitable spot colour inkmix for offset letterpress is:

 

**Clear base aluminium:**

 
| 5DWQ1256 |   | Yellow            |   | 22.00  | % |
|----------|--------|-------------------|--------|--------|---|
| 5WDQ899  |   | Yellow Shade  Red |   | 21.10  | % |
| AKO456U  |   | Resin             |   | 10.00  | % |
| TP15731  |   | Constant Mix      |   | 24.50  | % |
| 5DWQ1285 |   | Blue Shade  Red   |   | 22.40  | % |
|     |   | Total             |   | 100.00 | % |

 

This is the formula forValspar Ink’s Light Red 6R5B12347 used on Virgin Cola cans.

 

2

----

 

**Vinyls**

 

There are three main types ofvinyl, each for particular uses and circumstances.

 

**Opaque**

 

3M Scotchcal Opaque Film 100series: Tomato Red 100-13 Avery Fascal Opaque Film: Spicy Red 987 QM

 

Both are acceptable for thesetypical uses: general non-illuminated signs and fascias, interior signdirectories, vehicle markings, window graphics.

 

 

 

**Translucent**

 

3M Scotchcal Translucent Film3630 series: Red 3630-33

 

Typical uses: high visibilitygraphics – day and night, internally illuminated signage, shop fascias etc.

 

 

**Reflective**

 

3M Scotchlite Plus ReflectiveFilm 680 series: Red Reflective 680-72

 

Typical uses: vehiclemarkings, directional and safety signage.

 

 

**Furtheradvice**

 

In some special cases, suchas aviation marking films (which are available on a white base), you may needto print solid red onto the material. Always match against the Virgin spot redswatch in this guide, as ink/pigment systems differ between manufacturers.

 

3

----

 

**Paint**

 

Of the several paintmanufacturing standards, our preference is NCS (Natural Colour System).

 

Wherever possible you shoulduse NCS. However some manufacturers use RAL standards.

 

**NCSreference:**

 

S 1085–Y90R

 

 

**RALreference:**

 

3020 Traffic Red

 

 

Please note that the DuluxColour Dimensions system has been discontinued and replaced by NCS.

 

**Furtheradvice**

 

Sometimes an area you want topaint may be so big and dominant that the full Virgin red could be just a bit “toomuch”. Exactly when’s hard to say, but if you imagine painting an entire receptionarea in Virgin red, you can picture it being a touch too vibrant and loud.

 

So, in special cases, you maywant to tone down the red to a more muted, dark or subtle shade, which worksbetter in its environment. There are several examples of this across groupcompanies – get in touch with Virgin Enterprises Ltd (see the inside frontcover) for more information.

 

4

----

 

**Acrylics**

 

In most cases, ‘off theshelf’ products will be fine. There are two main brands:

 

**RohmPlexiglass:**

 

Red 2758

 

 

**IneousAcrylics**(formerly ICIperspex):

 

Red 440

 

 

Typical uses: mouldedsignage, shop fascias etc.

 

**Specially-made**

 

Depending on quantities andcosts, many manufacturers can make a ‘special’ acrylic to match to the Virgin red.

 

**Other advice**

 

Whatever you’re producing,remember to view and match it under the correct lighting conditions.Lightbulbs, daylight and other factors may affect appearance depending on thetransparency, thickness etc. Basically, what something looks like in themanufacturer’s factory may not be what it looks like in situ, and you shouldcheck this out early on.

 

Also, check with themanufacturers that the colour doesn’t fade over time, or with exposure tosunlight etc.

 

5

----

 

**Laminates**

 

For interior designs, such asretail shelving, cladding and desktops, you may want to use laminates. Ourrecommended material is Formica.

 

**FormicaColour system:**

 

4164 Pillarbox Red

 

 

 

6

----

 

**Websafe (Internet/screen display)**

 

Hexadecimal value forwebsites and online use: #CC0000

 

RGB value for CD-Roms andother on screen applications: 204r 0g 0b

 

These colours are ‘websafe’.This means they appear clean and consistent whatever the screen resolution,from 256 to ‘millions’ of colours (the standard minimum/maximum range).

 

They also keep file sizesreasonable. Non-websafe colours can deteriorate, vary or even disappear at lowresolutions.

 

**Fabric**

 

Most textile companies arehappy to match to the Virgin red.

 

Some manufacturers may preferthe NCS or RAL specification (see 03.00 paints). And some may only be able tosupply an off-the-shelf colour, which is obviously the least desirable.

 

The guidance we gave aboutavoiding overpowering red on large areas (see Further advice in 03.00 Paints)also applies when producing uniforms and carpets etc.

 

7

----

 

**Glossary**

 

Most of you will be familiarwith the terms and phrases used throughout this book – they’re widely usedthroughout the design, printing and manufacturing industries.

 

However you may sometimescome across something you’re less sure about. This brief glossary gives a fewquick definitions to help you on the way, though talking to your manufacturer/supplierwill always give you the full understanding you need.

 

**Glossary**

 

**black**

 

One of the four colours(cyan, magenta, yellow, black) that make up CMYK process colours. ‘K’ is for ‘Key’,black being the key colour.

 

**coated**

 

Coated has several meaningsin printing, but the one you need to consider is coated paper. Coated paper haschina clay or similar on it to give a smoother surface – if you imagine lookingat paper under a microscope it’s normally quite rough. On coated paper, inksticks to the surface in a more uniform way. So pictures, for example, canappear better than on uncoated paper.

 

**CMYK**

 

An acronym of the fourcolours (cyan, magenta, yellow, black) that make up a colour created by processcolour.

 

The CMYKmix for Virgin red is0% cyan, 100% magenta, 76% yellow, 6% black.

 

**cyan**

 

One of the four colours(cyan, magenta, yellow, black) that make up CMYK process colours. Cyan is alight sky blue.

 

**flexo**

 

An abbreviation offlexography. This printing technique uses flexible rubber or plastic plates.

 

**gloss**

 

In this context, a shinyfinish. Gloss is the opposite of matt.

 

**gravure**

 

An abbreviation ofphotogravure. This printing technique etches a negative of the image into ametal plate. This is then applied to ink and paper to produce a positiveimprint. It’s less common than lithography, but is used by some largemagazines, for example.

 

**hue**

 

Words like hue, tint andshade are almost, but not quite, the same thing. Hue is the appearance of acolour as affected by adding another colour to it.

 

**lithography**

 

Often abbreviated to litho.This printing technique puts a negative of the image onto a metal (orhistorically stone) plate by chemically treating areas with oil and water toaccept or reject ink. This is then applied to paper to produce a positiveimprint. This is the most common method of printing for brochures, posters,stationery etc.

 

**magenta**

 

One of the four colours(cyan, magenta, yellow, black) that make up CMYK process colours. Magenta is abright pinky red.

 

**matt**

 

Matt is the opposite toglossy or shiny. Matt finish reflects much less light than gloss, giving a moreeven appearance.

 

**opaque**

 

Something that’s opaque doesn’tallow light to pass through it, so you can’t “see through it” at all. See alsotranslucent and transparent later on.

 

8

----

 

**Pantone**

 

The brand name for themost-widely used series of prepared printing inks. Specifying a pantone numberenables you to choose a colour with reasonable accuracy, though its finalappearance is affected by issues such as whether the paper is gloss or matt,uncoated or coated and so on. 

 

It’s important you do notallow printers to substitute pantone 485 forVirgin red. Though they may claim it’s thenearest ink to Virgin red, it’snot. You must insist on the spot colour (6 parts PMS rubine red, 5 parts PMS yellow) instead.

 

**PMS**

 

PMS is an acronym for PantoneMatching System, and is basically just another word for a Pantone colour.

 

**processcolours**

 

Most colours can be createdby mixing together a combination ofprocess colours. The process palette contains – CMYK (cyan, magenta,yellow, black).

 

The CMYK mix for Virgin redin 0% cyan, 100% magenta, 76% yellow, 6% black.

 

**reflective**

 

A substrate that’s reflectivemeans light neither passes through nor is absorbed.

 

**rubine**

 

A deep pinky red. PantoneRubine Red is used in the Virgin spot red colour formula.

 

**saturation**

 

A colour that’s saturated isappearing at its richest, fullest possible strength. It isn’t diluted ordulled.

 

**shade**

 

Words like shade, hue andtint are almost the same thing, but notquite. Shade either refers to the depth of colour (ie pink is a shadeof red), or is used as a way ofdescribing small differences between almost identical colours.

 

**screenprinting**

 

This printing technique usesa fine mesh to support a stencil, throughwhich ink is squeezed. It’s commonly used for printing onto fabrics, suchas t-shirts.

 

**specialcolour**

 

See spot colour.

 

**spot colour**

 

Any colour additional to orinstead of the process colours. If you’reprinting a piece of stationery in red and black, the red would be a spotcolour. If you’re printing a brochure with colour pictures and have the facility to use a fifth colour, you’dprint it in CMYK process coloursplus a Virgin spot red.

 

**stock**

 

A word used to describe thetype of paper.

 

**substrate**

 

The substrate is, basically,the surface onto which you are printing, painting etc. If a substrate is whiteor neutral, then it probably won’t affect the appearance of the colour placedon it. But if it is itself a colour, then obviously it may.

 

You also need to think aboutissues such as absorbency/porousness. The simplest example of this is kitchenpaper, which is very absorbent and thus ‘soaks up’ whatever is placed on it – soa colour’s appearance is affected. Obviously you’re unlikely to be producingVirgin kitchen paper, but some printing papers are affected by this too. Forexample newsprint paper is generally more absorbent than the paper used forglossy magazines, brochures etc.

 

**tint**

 

Words like tint, shade andhue are almost, but not quite, the same thing. Tint refers to the variety of acolour, especially one made lighter by adding white to it. A colour can bereproduced at tints starting from 100% (full colour) down towards 5% (virtuallywhite):

 

Usually, printers etc work in10% increments:

 

Please note: tints of Virginred under 100% can appear pink.

 

**translucent**

 

Mid way between opaque andtransparent, something that’s translucent allows light to pass through it, butin a diffused way.

 

**transparent**

 

Something that’s transparentallows light to pass through it fully, enabling you to see clearly objects onthe other side. Like a window. Transparent things can be coloured, but stillsee-through-able – ie stained glass.

 

**uncoated**

 

Paper without any china claycoating. See coated.

 

**yellow**

 

One of the four colours(cyan, magenta, yellow, black) that make up CMYK process colours.

 

9

----

 

**Swatches**

 

These swatch pages show boththe Virgin spot red and the 4 colour process Virgin red.

 

Please use these, whereapplicable, to support your specifications.

 
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
|---------------------------------------------|------------|---------------------------------------------|
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |

 

10

----

 
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
|---------------------------------------------|------------|---------------------------------------------|
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |

 

11

----

 
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
|---------------------------------------------|------------|---------------------------------------------|
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN  SPOT RED:**                       | ** ** | **VIRGIN  SPOT RED:**                       |
| 6 parts PMS rubine red, 5  parts PMS yellow |       | 6 parts PMS rubine red, 5  parts PMS yellow |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |
|                                        |       |                                        |
| **VIRGIN 4  COLOUR PROCESS RED:**           | ** ** | **VIRGIN 4  COLOUR PROCESS RED:**           |
| 0c 100m 76y 6k                              |       | 0c 100m 76y 6k                              |

 

 

12

----

 

**Why this red?...**

 

In early days, it was a shadeof red based on an ink called pantone 485.

 

Over time, marketing anddesign teams began to look for ways to improve this. The problems were:

•                  It often appeared orangey and washed out,lacking the impact of a rich, dramatic red.

•                  It was, essentially, for printing onto paper,and often didn’t work well in other areas such as painting planes or producingcola cans.

•                  It was also widely used by other companies,and thus lacked the uniqueness to be a true Virgin red.

 

**A better red**

 

For these reasons, it wasdecided to **stop using pantone 485**andcreate a new bespoke Virgin red that, in print, is rich and vibrant. The resultis the red shown in this guide.

 

**Colourspecification quick check**

 

 
| **Print**                      | ** ** | ** **       | ** ** | ** **            | ** ** | ** ** | ** ** |
|--------------------------------|------------|------------------|------------|-----------------------|------------|------------|------------|
| ** **                     | ** ** | ** **       | ** ** | ** **            | ** ** | ** ** | ** ** |
| Litho, screen, flexo,  gravure | ** ** | ** **       | ** ** | **Spot  colour**      | ** ** | ** ** | ** ** |
|                           |       |             |       | 6pts PMS Rubine,      |       |       |       |
|                           |       |             |       | 5pts PMS Yellow       |       |       |       |
| ** **                     | ** ** | ** **       | ** ** | **4 colour  process** | ** ** | ** ** | ** ** |
|                           |       |             |       | 0c 100m 76y 6k        |       |       |       |
|                           |       |             |       |                  |       |       |       |
| Offset letterpress             | ** ** | ** **       | ** ** | ** **            | ** ** | ** ** | ** ** |
|                           |       | **Spot  colour** |       |                  |       |       |       |
|                           |       | 5DWQ1256         |       | Yellow                |       | 22.00      | %          |
|                           |       | 5WDQ899          |       | Yellow Shade Red      |       | 21.10      | %          |
|                           |       | AKO456U          |       | Resin                 |       | 10.00      | %          |
|                           |       | TP15731          |       | Constant Mix          |       | 24.50      | %          |
|                           |       | 5DWQ1285         |       | Blue Shade Red        |       | 22.40      | %          |

 
| **Vinyls**                                | ** ** | ** **             |
|-------------------------------------------|------------|------------------------|
| 3M  Scotchcal Opaque 100 series           | ** ** | **Opaque**             |
|                                      |       | Tomato  Red 100-13     |
|                                      |       |                   |
| Spandex  Avery FasCal                     | ** ** | **Opaque**             |
|                                      |       | Spicy  Red 987 QM      |
|                                      |       |                   |
| 3M  Scotchcal Translucent 3630 series     | ** ** | **Translucent**        |
|                                      |       | Red  3630-33           |
|                                      |       |                   |
| 3M  Scotchlite Plus Reflective 680 series | ** ** | **Reflective**         |
|                                      |       | Red  Reflective 680-72 |
| **Paint**                                 | ** ** | ** **             |
| NCS  system –                        |       | S  1085-Y90R           |
| RAL  system –                        |       | 3020  Traffic Red      |
|                                      |       |                   |
| **Acrylics**                              | ** ** | ** **             |
| Plexiglass                                |       | Red  2758              |
| Ineous  Acrylic (Perspex)                 |       | Red  440               |
|                                      |       |                   |
| **Laminates**                             | ** ** | ** **             |
| Formica  Colour System –             |       | 4164  Pillarbox Red    |
|                                      |       |                   |
| **Websafe**                               | ** ** | ** **             |
| On  screen applications                   | ** ** | **Hexadecimal**        |
|                                      |       | #CC0000                |
| ** **                                | ** ** | **RGB**                |
|                                      |       | 204r  0g 0b            |

 

13

----

 

**PART 2**

**VIRGIN BRAND BOOK**

 

**Contents**

 
| 01.00  | **Introduction**                               |
|--------|------------------------------------------------|
|   | ** **                                     |
| 02.00  | **Making our mark**                            |
|   | ** **                                     |
| 03.00  | **Why it all matters**                         |
|   |                                           |
| 04.00  | **The seven deadly sins**                      |
|   |                                           |
| 04.01  | When should we use the Virgin  logo?           |
|   |                                           |
| 04.02  | Which logo should we use?                      |
|   |                                           |
| 04.03  | How much of the logo should be  visible?       |
|   |                                           |
| 04.04  | How big should the logo be?                    |
|   |                                           |
| 04.05  | What colours should we use?                    |
|   |                                           |
| 04.06  | How much can we alter the logo?                |
|   |                                           |
| 04.07  | Can we use just the word ‘virgin’?   |
|   |                                           |
| 05.00  | **Virgin and the Internet**                    |
|   | ** **                                     |
| 06.00  | **The steps in launching a new  Virgin brand** |
|   | ** **                                     |
| 07.00  | **The key rules**                              |
|   | ** **                                     |
| 08.00  | **Swatches**                                   |

 

2

----

 

**Introduction**

 

 

**The Virginbrand is our greatest asset. It unites us all.**

 

 

The signature logotells customers something is a Virgin business, with all the associations andaspirations that conveys. The logo is invaluable, in both creative andcommercial terms. It has helped each Virgin company launch their ownpersonality.

 

While no-oneunderestimates the power of the Virgin name, few of us know the legalboundaries that protect registrations, prevent misuse and disable imposters. Asthe Virgin group moves into ever more diverse markets (both what we do andwhere we go) these boundaries become ever more important. We must demonstrate aclear and consistent use of the Virgin logo in order to prevent others from weakeningour name and brand.

 

In practice, this meansthat certain legal and trademark issues affect the way Virgin can be used, bothas a graphic mark and as a brand word. You need to be aware of these issues,and take them into account when launching a new venture or brand. In fact weall do - one aim of this book is to enable every Virgin company, from thesmallest to the largest, to share the same knowledge and approach.

 

Many of you will recognise the points this booktalks about. Few are new, and you’re probably already doing most of them asthey arise from ‘best practice’ throughout the group.

 

This book covers usingthe Virgin logo, particularly in relation to naming and creating identities fornew companies, brands, products and services.

 

All other areas ofdesign are excluded from this - those are your prerogative and I’m not tryingto stifle creativity or style. I want to define the boundaries we all have towork within, explain why these boundaries matter and provide the help andresources necessary to achieve them.

 

I’ve produced this bookwith the Virgin Enterprises Ltd legal team (VEL). Their role is to registereverybody’s trademarks, monitor those registrations and take action againstinfringements.

 

What they do can seem abit complicated, especially when all you’re interested in is producing anexciting and effective identity for a new Virgin venture, but there are severalkey points worth sharing. Hopefully you’ll find these valuable, relevant andstraightforward.

 

More than anythingelse, I want to help you make the most of our brand. It embodies what Virgin isall about. Let’s all aim to use it in this spirit.

 

 

3

----

 

**Making our mark**

 

 

**How theVirgin logo was developed.**

 

 

 

The original VirginRecords logo, designed by swords ‘n sorcery poster wizard Roger Dean, wassuperceded in the early 1970s by the one we all know.

 

In true urban mythstyle, this really was drawn on the back of a napkin (by graphic designer RayKyte).

 

In his autobigraphy,Richard wrote: “Ray Kyte created the concept and supplied the visual stylingfor a signature-style logo which can be interpreted as my personal endorsement,the ‘V’ forming an expressive tick. Some marketing experts once analysed thelogo and wrote about the upbeat way it rises from left to right. This, ofcourse, might have been going through Ray’s head when he developed the originalidea.”

 

To begin with, the markwas the thinner version known as ‘tick’.

 

However this createdsome problems, as the skinny lines fill in and disappear at smaller sizes.

 

A bolder and morerobust version was drawn, known as ‘blobby’.

 

This is the versionmost group companies now use, with the idea that soon everyone will. See 04.02for more on making sure you use the correct version.

 

 

4

----

 

**Why it all matters**

 

 

Trademark law is hardly asexy subject, and linking it to design can seem like tying a plough to aracehorse, but it’s vital to the success of everybody in the Virgin group. 

 

In the last five years we’vespent around £5.5m protecting our own trademarks with licence agreements,registrations and applications. We’ve also spent around £7m on litigation,lawyers and settlements to fight off copycats and infringements. That’s a lotof money. 

 

The chief cause of costs isthe fact we constantly come under challenge. Firstly from people who want tobar or qualify our access to a new market. They are usually acting forlegitimate reasons (competition and so on), but they need responding tolegally. 

 

Secondly, there are peoplewho’d love to have a little of that Virgin magic rub off on their own business,and who aren’t above a little shameless copying in order to achieve this. Someof these - like Virginia and Virgin Pizza opposite - might seem small beer, butothers can be tiresomely expensive. One individual has tried to register 37different Verjam companies: Verjam Group, Verjam Management, Verjam Music,Verjam Cola and so on. We can chuckle at this, but the danger of customersbeing confused as to what is genuine Virgin and what’s not is both real andgrowing. Customers’ perception of our quality can be affected if lower-qualityoutfits are allowed to trade under ‘Virgin’, or under something that visuallymimics the logo. (And believe us we are talking lower quality: we tasted aVirgin pizza.) 

 

There are also instanceswhere we need to come to agreements, for example if we move into a new marketwhere someone else already uses Virgin. When Virgin Atlantic starting flying toSouth Africa, we needed to establish the Virgin brand - which meant settlingwith long-established but ‘not us’ outfits like Virgin Health Club Group - sothat **we** became what people thought of whenthey thought of Virgin. 

 

It would be good to reducethe costs of all this. And, given that we’re expanding globally, we have to -or it could become a huge burden. One simple way of doing so is for all groupcompanies not to break the seven deadly sins - explained over the followingpages. That may sound a bit melodramatic, but it’s fairly straightforward. Inessence it means being aware of seven issues whenever you design an identity,dream up a name or endorse something with the Virgin brand. If we all thinkabout these issues, then we’re keeping our own house in order - which makes iteasier for VEL to register and protect your trademarks, and also gives us astronger case for the defence when we tackle those pesky copyists. It alsogives a halo effect, where we protect and reinforce one another. 

 

The consequences will be thatwe’ll safeguard public perception of our quality and save money - the twothings listed at the top of this section as vital to everybody’s success.

 

 

5

----

 

**The seven deady sins**

 

6

----

 

**When should we use the Virginlogo?**

 

 

**Answer:**

Always in main names andbrands. Consult VEL for new names.

 

The Virgin logo is howcustomers recognise something’s a Virgin venture - in a sense they regard it asRichard’s signature. It’s one of our greatest assets: make the most of it.

 

Wherever possible, use the logorather than just the word Virgin in type, particularly in the names ofcompanies and major products and services. If something is launched which ismeant to be Virgin but which doesn’t use the logo, customers may be uncertainas to its Virgin-ness. For example, it’s arguable that by omitting the logofrom their identity, Virgin Vie caused some consumer doubt: 

 

 

The balance is now beingredressed:

 

 

Using the logo also helpstighten legal protection. If you use Virgin just as a word, then it gets harderfor us to prove that consumers know for sure what is and isn’t a Branson-backedventure. In other words, what demonstrates clearly and visually to the personin the street that Virgin Vie is one of ours and Virgin Pizza ain’t? Answer:the logo. 

 

 

® and TM

 

In some markets it canbe beneficial to accompany the Virgin logo with the ® symbol. It tellspotential infringers we have a registration for that identity.

 

You can only do this ifyou have a registered trademark for those goods or services in that market.Check with VEL if you’re not sure. Using it without a registration is acriminal offence!

 

There are no such restrictions over TM, so you can use this whenever you believe it’sof benefit.

 

**Name game**

 

Trademark licences areprecise and prescriptive about the name(s) that a company can use. Anyalteration or addition needs checking with VEL.

 

Althoughcustomer confusion is the main concern, it’s also worth thinking of other groupcompanies when brainstorming a brand. With so many things going on throughoutthe group, it’s increasingly likely names could have several uses. For example,one company might want to call its sightseeing tours Virgin View, and anotherto open up a chain of opticians called Virgin View. When everyone consults withVEL, such clashes will be avoided.

 

VEL is more able tosafeguard names that relate either to goods, services or activities - eg VirginTrains, Virgin Publishing - or to a key aspect/value of the service - eg VirginDirect, Virgin Active.

 

 

Thereare three reasons for this: 

**1     **itpoints customers in the right direction 

**2     **itreduces possible confusion 

**3     **ithelps maintain the reputation of each individual company.

 

‘Virgin’ should always come first. So ‘VirginView’ is acceptable, but ‘View from Virgin’ isn’t.

 

7

----

 

**Which logo should we use?**

 

 

**Answer:**

Only use ‘Blobby’.

 

**Blobby**- the right one, being used by most group companies. (Trains, Atlantic,Direct, Cola, VML....)

 

 

**Son ofblobby**- being usedby Virgin Sun and Holidays. (Note extra space between V and i, less kink in V).

 

 

**Bastard son of blobby**- being used by Travel (has extra thick andstraight V).

 

 

**Tick**- the original, but now superceded by blobby.Being phased out by Megastores, Interactive and Group.

 

 

**Son of tick**- still being used by Publishing, beingphased out by Radio (slightly thicker V, less space between V and i)

 

 

**Bastard sonof tick**- being phasedout by Virgin Western. (Our west of England property services company, nothingto do with John Wayne.)

 

 

8

----

 

People might think there’s only one Virgin logo, but a recent audit ofgroup companies unearthed six different versions floating around. 

 

Put all these scripts on top of one another and the effect is, well,interesting.

 

 

To the average punter, the difference between these versions isnegligible and unimportant: they’re all still clearly the Virgin logo. 

 

But it should matter to us. Firstly we should have enough respect forour logo to make sure we use the right one. Secondly it looks neater if we’reall in harmony. And thirdly it helps us see off the copycats by demonstratingwe’re definite about our logo - whereas if we’re doing odd little variationsourselves it’s easier for imposters to claim the boundaries are vague and upfor grabs. 

 

From a trademark point of view, there’s also the possibility thatvariations could drift so far away from the registered version that a new registrationis needed. 

 

If you need artwork for the blobby logo, please contact VEL. 

 

Please note that we’ve also registered versions in Arabic script,Chinese script and so on. If you’re moving into a market where these may be useful,please contact VEL.

 

9

----

 

**How much of the logo should bevisible?**

 

 

**Answer:**

All of it. VEL may allowbleeding or cropping in special pre-approved circumstances.

 

Two of the reasons ourlogo works so well are that it’s simple and recognisable. These are both attributesworth respecting.

 

That means not bleedingor cropping the logo, 

 

andnot adding bits directly to it.

 

In the past some of thesethings have slipped through, but from now on it would be better if they’reavoided. Again, this helps protect the integrity of our trademarkregistrations. Anything that alters the logo in the ways listed above can, ineffect, create a new logo - which could require a new registration. The legal requirementfor this is that our logos should all be ‘substantially the same’.

 

All of the logo should bevisible - you can’t take part of it. However, using the V on its own isacceptable on condition that it’s always in conjunction with, or in closeproximity to, the Virgin signature. For guidance on this issue please consultVEL.

 

 

Some particular circumstancesmay warrant slight exceptions, if the reasons are good enough. Please contactVEL at the initial stage of any such idea, so they can advise and assist.

 

For example, the logo bleedsoff the edges of the new Virgin Atlantic tailfin. This was permitted because atailfin is an odd and restrictive shape which constrains the logo. Bleedingenables the logo to appear at a much larger size, greatly increasing the impactof the design without affecting legibility or Virgin-ness.

 

 

Likewise a cola can, beingcurved and three-dimensional, may warrant a large logo which, though it cannever be seen all at once, is acceptable since it maximises our identity on theshelf. This was the approach used on cans produced for the UK market.

 

 

10

----

 

**How big should the logo be?**

 

 

**Answer:**

It should be the major partof an identity, with the V at least 10mm high. Keep it legible, and keep theback of the r upright.

 

**Proportion**

 

If the Virgin logo is howcustomers identify something as a Virgin venture, logic suggests that the logoshould be the main part of the identity. From a registration point of view, itwould be better for us too. 

 

That means the logo shouldn’tbe dominated by other elements:

 

 

In fact if the balance isborderline, such as in Virgin Limobike, it’s preferable for the logo to bepredominant.

 

 

You can test a design byreducing the overall identity down to a small size - as small as it mightappear on a business card for example - and check how visible Virgin still is.

 

**Size**

 

The minimum size of thelogo depends on the environment in which it appears. The rule of thumb is thatit must be at least 10mm from top to bottom of the V.

 

 

Obviously this applies bestto small items such as stationery and business cards. A logo that small on aposter wouldn’t work, so please increase this minimum in proportion to theenvironment. 

 

In some special circumstancesVEL may consent to smaller versions. This would include items with constraints -for example pens or badges. Please submit proposals for approval, making surethat the production technique can reproduce the logo accurately (ie there is nofilling in or degradation due to it being so small). 

 

You should also only use thelogo at the correct angle, and don’t rotate or slant it. The correct way up iswhen the left edge of the r is upright:

 

 

Our planes, for example,always fly at a 11° tilt so that the logo is still upright even at 40,000 feet.

 

 

(only joking - mind you, itmight get BA thinking...)

 

11

----

 

**What colours should we use?**

 

 

**Answer:**

Red, black and white. AskVEL if you want another.

 

The logo should only everappear in white, black or red. Please don’t print it in any other colour. 

 

That permits the followingcombinations: 

 

 

As much as possible youshould aim to use the logo in these colours. That’s not to say other colourscan’t be used, just that so doing could necessitate a fresh registration -which costs money.

 

If you do yearn for aparticular background colour please contact VEL to talk it through. They’re happyto help.

 

**Red all about it**

 

Always specify the correctred to your printers/manufacturers.

 

For print items, this iseither a ‘special’:

6 parts PMS rubine red, 5parts PMS yellow

 

or a four-colour processequivalent:

0c, 100m, 76y, 6k.

 

Historically pantone 485 wasused, but it had problems in consistency and reproduction. Recently the colourspecified above has been preferred, as it gives a stronger, more consistent anduniquely Virgin red.

 

VEL has produced a detailed guide to theVirgin red, including samples and suggested specifications for items such asfabrics, vinyls and on-screen displays. This will help you work with yoursuppliers/manufacturers to match the best possible red. For copies of the‘Little red book’, contact VEL.

 

12

----

 

**How much can we alter the mark?**

 

 

**Answer:**

Not at all, unless you haveVEL’s prior permission.

 

With all this desktop publishing software around, it’s easy to getwacky with the special effects. But VEL prefer it if you avoid blurring,stretching, shadow-printing and so on.

 

 

Oh and please try not to stand on it either.

 

 

Again this is a legal best practice thing: monkeying around with thelogo can move it outside the terms of a registration. That in turn couldinvolve costs in then extending the registration, and could give more fuel tochallenges that, since we’re doing all kinds of random things, the boundariesare unclear. 

 

Of course there may be special occasions when it’s creatively desirableto use one or other of these techniques - though we’ve just taken the mickeyout of it, the Virgin radio ad is actually very effective. If you’ve come upwith a cracker, please show it to VEL - they’ll let you know whether it is orisn’t on.

 

13

----

 

**Can weuse just the word ‘virgin’?**

 

 

**Answer:**

Not in puns or everyday phrases.

 

Virgin’s a great word -people recognise it as our brand, and yet it still has a number of othermeanings in everyday language. It’s often tempting to use it in these ways, asdoing so can seem to create a little pun: losing my virginity, virgin on theridiculous, flying into virgin territory and so on. Ellipsis seems fun too:virg**insider**, virg**information**.

 

It would seem rather churlishto say we’d prefer you not to do these things, but there’s a good reason forkeeping such wordplay to a minimum. Time for a little more legal stuff, I’mafraid.

 

When it comes to registeringwords, there are three basic types:

 

**1     **invented words such as Sony and Kodak. Thesehave the most protection, and, equally, are easy to protect.

 

**2     **normal words which have developed a secondarymeaning when used with certain goods or services - eg Boots (chemists) andApple (computers). Virgin comes into this category. There is a need to becareful and consistent when protecting such words.

 

**3     **descriptive everyday words such as beautifuland great, which no-one can trademark as they’re reasonably required byeveryone.

 

Most of the time when you useVirgin, you’re using it as a type 2 word - Virgin Trains,VirginRadio, Virgin Holidays and so on.

 

Phrases like ‘losing myvirginity’ and ‘virgin on the ridiculous’ on the other hand, move the wordtowards type 3. This begins to create problems for our registration of the wordVirgin, which depends on our claim that it is type 2. At present, thatregistration enables us to stop, for example, British Airways launching a routethey’ve never flown before with the slogan “we’re moving into virginterritory”.

 

However, the more you useVirgin as a descriptive everyday word and not as a brand, the more ourprotection is weakened. It looks like group companies aren’t supporting our ownclaim that Virgin is a type 2 word, and thus dilutes our case for making othersrespect it as such.

 

If this all seems a bitcomplicated, please get in touch with the VEL team. They’ll explain the issuemore, and advise you if a proposal is a good idea or not. It’s not that you’renot allowed to have fun with the word, just that it’s preferable if you checkwith VEL so they can keep an eye on what’s going on.

 

And yes, Richard is awarethat he himself has used ‘Losing my virginity’. He’s given himself a severeticking off. Honestly.

 

14

----

 

**Virgin and the Internet**

 

 

**Websitenames**

 

Do a web search for ‘virgin’and chances are most of the sites suggested are, um, well, nothing to do withus.

 

Partly for this reason, butalso to be clear and consistent, we want it to be simple for people to findVirgin companies on the net. The best way to do this is to negate the need forsearching by having just one web address. Customers will get familiar with it,and we can easily establish it as the place to go for all Virgin information. Asingle web address will also give consistency to all advertising, promotionaland other material.

 

For that reason we havecreated **www.virgin.com**

** **

We strongly recommend you usethis URL as the entry point to your site. From the www.virgin.com homepage,customers can head to the particular Virgin company they’re interested in.

 

If you use www.virgin.com inyour material, there is no fee.

 

If you prefer customers tohead straight to your site, then it may be possible for you to use a branchname, for example: www.virgin.com/view You’ll need prior approval fromVEL.

 

If you want to use a totallydifferent domain name, for example www.virginview.co.uk, then you must getVEL’s permission, explaining to them why you need such an exception. If theyagree, they will register the domain name - you’ll need to pay a fee for this.However the plan is that all companies will follow the www.virgin.com route.

 

**Registrations**

** **

Domain names have to beregistered in much the same way as trademarks. VEL manage this.

 

To date they have registered2000 names that incorporate ‘virgin’ in some way. Almost all of theseregistrations are protective measures to stop other people using them.

 

15

----

 

**The steps in launching a new Virgin brand**

 

 

**Once yourbusiness plan gets the nod...**

** **

**Propose aname and draft identity.**

** **

You’re probably going to need graphicdesigners. It’s important you pick the right ones.

 

Some designers may look for ways to get awayfrom the Virgin logo, or be radical with it. If they say: “it’s been used toomuch, it spoils the balance of the design, it’s not appropriate for thisventure, look what happens if we do this...” be wary.

 

It’s far better to use designers who recognisethat the Virgin logo is a foundation, and that the issue is not changing it,but respecting it and bringing value to it. They should see it as their job tobuild brands.

 

Make designers aware of the issues in thisbook, and include its parameters within your design brief.

 

You can also talk with senior marketing peopleat our most high-profile companies. They have years of experience in using theVirgin logo and in building successful brands with it. They’re available andhappy to give advice and support.

 

**Consult VELand get the go-ahead.**

** **

**VEL willapprove your proposal from a trademark point of view.**

** **

They will also arrange for your identity to beapproved creatively.

 

Involve VEL right from the beginning. This wayany potential problems can be resolved at early stages, and designs won’t bedeveloped which could cause registration difficulties or extra costs.

 

VEL aren’t just here for processing your registration, they’re here to help. Put it this way, theyunderstand everything in this brand book, so if any of it was meaningless orjust plain dull to you, get in touch and they’ll explain exactly what it meansfor your proposal.

 

The Virgin Management Board has ultimateresponsibility over the way you use the brand.

 

Your company board includes a Group non-executivedirector, who acts as a representative of the Virgin Management Ltd Board. Theywill be able to advise you.

 

**VEL willcarry out a trademark search.**

** **

This involves on-line and other searches throughall registered names and logos, to see if anyone is already using somethingthat clashes with your suggestion.

 

If there is, then it’s back three spaces....

 

If there isn’t then...

 

**You canrefine and then start using the name and identity, while the registrationprocess continues.**

** **

**VEL willapply for a registration.**

** **

From you, they need:

 

•     to know what markets you willhave a presence in

 

•     to know what goods/services you will be providing

 

•     a copy of your design proposal.

 

VEL lawyers around the world will do this. Thetime it takes can vary, from, on average, eight months in the UK, to - forexample -two years in Japan or four years in Bangladesh.

 

**Publicationin the Trademark Gazette.**

** **

If the registration process doesn’t throw upany problems, then your name and identity will be published in the TrademarkGazette. This gives the public three months in which to comment.

 

**Registrationcertificate issued.**

** **

Any opposition will need legal settlement, butonce a submission is approved unopposed, a trademark certificate will beissued. VEL hold these on behalf of group companies.

 

The certificate protects your name and youridentity, and stops anybody doing anything similar.

 

16

----

 

**The keyrules**

 

 

**Use thecorrect version of the logo (‘blobby’). You can get this from Virgin EnterprisesLtd.**

** **

** **

**Size so theV of Virgin is at least 10mm high.**

** **

** **

**Don’t blur,crop, stretch or add to the logo. It must be fully visible, and you can’t useonly part of it - ie the V on its own is not allowed.**

** **

** **

**Keep theback of the r upright.**

** **

**In brandsand identities use the logo (not ‘Virgin’ in normal type). The logo should bethe dominant element. Virgin comes first (‘Virgin View’ not ‘View fromVirgin’).**

** **

** **

**The mark canonly be: red on white; white on red; black on white; white on black.**

** **

**Use theright red:**

6 parts PMS rubine red,

5 parts PMS yellow

 

or 0c 100m 76y 6k.

 

**Please don’tuse pantone 485.**

 

17

----

 

**Swatches**

 

 
|  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |
|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|
|                                                                          |   |                                                                          |   |                                                                          |   |                                                                          |
|  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |
|                                                                          |   |                                                                          |   |                                                                          |   |                                                                          |
|  

 

VIRGIN SPOT RED:  6 parts PMS rubine red, 5 parts PMS yellow  |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |   |  

 

VIRGIN SPOT  RED:  6 parts PMS rubine red, 5 parts PMS yellow |
|                                                                          |   |                                                                          |   |                                                                          |   |                                                                          |
|  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |
|                                                                          |   |                                                                          |   |                                                                          |   |                                                                          |
|  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |
|                                                                          |   |                                                                          |   |                                                                          |   |                                                                          |
|  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |   |  

 

VIRGIN 4  COLOUR PROCESS RED:  0c 100m 76y 6k                 |

 

18

----

 

**Glued into cover**

 

19

----

 

**Glued into cover**

 

20

----

 

**PART 3**

**VIRGIN GROUP POLICY ON SELLING TECHNIQUES**

 

Summary Page

 

Overall viewpoint

 

Virgin’spolicy is to help consumers to make a buying choice rather than to sell in anunsolicited or aggressive manner.

 

Inreturn, consumers can expect that Virgin will not interrupt them with anunsolicited attempt to make a sale and that if engaged in a sales conversationwith Virgin that they will not be pressurised, forced or embarrassed intobuying something.

 

Summary

 

**1.**                **Outbound telemarketing: unsolicited telephone calls**

Unsolicitedtelephone calls to consumers are unacceptable.

Thecall must be either:-

•                  Followingup on a previous piece of communication such as DM; or

•                  Followingup on a customer enquiry; or

•                  Contactinga current customer with a relevant message (but allowing them the option torefuse further such contact).

**2.**              **Direct promotions: selling to people on the street or in store**

Interrupting consumers to sell to them faceto face is unacceptable.

The guidelines are:-

•                  Addvalue - give them a piece of promotional communication with no strings attachedand without interrupting them unduly; or

•                  Sellto consumers only in response to an approach made by them (e.g. to apromotional stand).

**3.****              Door to door:  knocking on doors**

Unsolicited knocking on doors to sell toconsumers is unacceptable.

At home selling is only acceptable if iteither:-

•                  Followsup on a specific piece of DM detailing the nature, time and reason for thepotential visit. The DM should give the consumer clear and straightforwardopportunities to decline the visit. This should include a telephone number,email address and website.

•                  Followsa customer enquiry with a prior appointment; or

•                  It’spart of a pre-arranged buying party.

**4.****              SMS, Email andDirect Mail**

Unsolicited DM should ideally be sent to anopt-in list and the list should by supplied by a member of the Direct MailAssociation (DMA). However opt-out lists may be used subject to compliancewith the Data Protection Act. Unsolicited SMS and emails must be based on anopt-in in accordance with the Privacy and Electronic Communications (ECDirective) Regulations 2004. All activity should at least conform to theCommittee of Advertising Practice (CAP) code and Direct Mail Association (DMA)best practice.

 

1

----

 

**Virgin Group Policy on Direct Selling**

 

**Background**

 

Consumers know Virgin as an exciting and trustworthy brand. What linkall of the diverse companies in the group are the brand values (i.e. what people expect of Virgin, no matterwhat industry) - which can be described as:

 

•                  value for money

•                  good quality

•                  brilliant customer service

•                  innovation

•                  competitively challenging

•                  fun

 

Virgin has a huge reputationand with that comes a responsibility to not disappoint people. The image isstrong and people are drawn to it – in the UK Virgin enjoys 100% brandawareness, it is the third most respected brand, and over 50% of the populationsay they use at least one Virgin product regularly(1). This loyalty is drivenby the fact that consumers expect Virgin to give them a better deal, and tocome up with a new and better way of doing things.

 

Historically, Virgin has avoided hard-selling tactics to driveacquisition (with the notable exception of Virgin Energy). However, as Virgingrows and diversifies further, there is a requirement to outline some brandguidelines i.e. what does the brand mean in some every day, commercialactivities?

 

# **1.**                                       SellingTechniques

#  

The key areas of Selling that we will cover in this policy are:

 

1.               Outboundtelemarketing:  unsolicited telephonecalls to consumers

2.               Directpromotions:  face-to-face selling on thestreet or in stores

3.               Door to door:  face-to-face selling in home

 

Please see the end of the document for sections on DM / email / SMS andbusiness-to-business activity.

 

# **2.**                                       OverallViewpoint

#  

Virgin selling is done in a friendly, peer-to-peer style – i.e. Virginhelps consumers to make a choice to buy, rather than just “selling” to them. Assuch, aggressive selling practices jar with the Virgin brand. Virgin evokes asense of freedom, it champions consumer choice, and it is confident andfriendly. Virgin builds products that the consumer needs and wants; it offersthese products to consumers in an imaginative and engaging way - and consumerscome to it of their own free will. Conversely, some forms of direct sellingtend to be the activity of a brand which has no such relationship or rapportwith the consumer. These are the forms of direct selling covered by thispolicy.

 

----

(1) Source: HPI quant research2002

 

2

----

 

# **3.**                                       Outboundtelemarketing:  unsolicited telephonecalls

#  

Virgin’s policy is not to do unsolicited outbound telemarketing. Branddamage is suffered due to the intrusive and unsolicited nature of the outboundcall.

 

The call mustbe either:-

 

•                  Followingup on a customer enquiry; or

•                  Followingup on a previous piece of communication such as DM, so long as the originalcommunication was also not “cold” (see section on DM, email and SMSbelow).

•                  [Inall the above instances, if the original data transaction is over 3 months oldthen the data must be checked for suppression against the Telephone PreferenceService].

•                  Contactinga current customer. If doing so, the communication must be relevant to them(e.g. a service announcement) and should abide by the rules as set out bythe Data Protection Act (e.g. ask for permission or give the consumer a chanceto refuse further such contact).

 

Further guidelines on selling to consumers over the phone are based onthe principles of sensitivity and respect:-

 

•                  Describethe benefits of the product in a no-nonsense, peer-to-peer friendly way andallow the customer to make up their own mind about it.

•                  Pursuethe sale if the customer is interested but respect the “no” that a customergives – especially an emphatic or repeated “no”.

•                  Getto the point quickly – don’t waste their time.

•                  However,don’t be afraid to ask for the sale if you think they may want to buy.

•                  Finishthe call politely and graciously, ensuring that the customer feels positive atthe end of the experience.

•                  Onlyuse other parts of the Virgin Group as a way in to the conversation (e.g. namedropping other Virgin successes) with their prior consent.

 

# **4.**                                       Directpromotions:  selling to people on thestreet or in store

#  

Virgin’s policy on direct promotions is based on the nature of theactivity. The essence of the policy is to show respect for the consumer so theguidelines would be:-

 

•                  Addvalue and capture consumers’ imagination.

•                  Approachthe activity in an Above The Line sense: aim to entice consumers to find out more by attracting them to theactivity, rather than by targeting them personally.

•                  Donot be aggressive e.g. interrupt them, stop them walking, touch themphysically; persist in talking to them about something they are not interestedin.

•                  Dueto the potentially aggressive nature of face-to-face marketing, do not continueto press them with marketing messages beyond the first “no”.

 

The following is an acceptable part of marketing activity for aVirgin product or service: -

 

•                  Distributingleaflets

 

3

----

 

•                  Streettheatre

•                  Roadshowstands

•                  Engagingpeople in a conversation about the brand / product

•                  Salespromotions which adhere to the CAP code (British Code of Advertising, SalesPromotion and Direct Marketing).

•                  Recruitingconsumers to take part in market research

 

Some unacceptable examples would be: -

 

•                  Doingthe activity outside, inside or adjacent to other Virgin companies withouttheir consent

•                  Usingother parts of the Virgin Group as a way in to the conversation (e.g. namedropping other Virgin successes) without their consent

•                  Approachingchildren under the age of 16

•                  Intrusivelystopping people who are obviously not interested

•                  Repeatinga scripted marketing spiel to people who have not expressed any interest

•                  Pressuringconsumers to sign a contract, including the use of marketing ruses to get animmediate sale:  e.g. VAT free if yousign now

•                  Streetactivity that is overly offensive to passers by

 

# **5.**                                       Door todoor:  knocking on doors

#  

Virgin’s policy is not to engage in unsolicited door-to-door directselling. It is the most intrusive form of direct selling and thereforewould be the most damaging to the brand reputation. There has been recentdebate in the UK about making this type of activity illegal.

 

Direct selling in homes which is not unsolicited is acceptable – e.g.appointments that consumers have previously made and agreed to; buying partiessuch as those organised by Virgin Cosmetics sales reps; and selling whichfollows up on a specific piece of DM detailing the nature, time and reason forthe potential visit. The DM should give the consumer clear and straightforwardopportunities to decline the visit. This should include a telephone number,email address and website.

 

In these instances, the guidelines would be: -

 

•                  Describethe benefits of the product in a no-nonsense, peer-to-peer friendly way andallow the customer to make up their own mind about it.

•                  Getto the point quickly – don’t waste their time.

•                  Don’tuse other parts of the Virgin Group as a way in to the conversation (e.g. namedropping other Virgin successes) without their prior consent.

•                  Don’tpressurise consumers to sign a contract, including the use of marketing rusesto get an immediate sale:  e.g. VAT freeif you sign now

•                  Pursuethe sale if the customer is interested but respect the “no” that a customergives – especially an emphatic or repeated “no”.

•                  However,don’t be afraid to ask for the sale if you think they may want to buy.

•                  Nomatter if a sale has been made or not, finish the meeting politely andgraciously, ensuring that the customer feels positive at the end of theexperience.

 

4

----

 

# **6.**                                       Email, SMS &Direct Mail

#  

## According to the CAP, marketing communications should not be sentunsolicited to consumers if explicit consent is required (i.e. an “opt in”).Marketing communications should not be sent to customers who have asked not toreceive them (i.e. and “opt-out”). Opt out’s are sufficient for marketingdirect mail, but opt in’s are required for marketing by email and SMS. Theonly exception (known as the “soft opt in”) is if marketers want to marketsimilar products to their existing customers by email and SMS, as long as anopportunity to object to further such marketing is given on each occasion.

##  

# **7.**                                       Direct Mail

#  

There are two main kinds of consumer lists that a marketer canpurchase:  opt-in and opt-out. Opt-inlists are preferred from a brand point of view as the customer has proactivelychosen to hear from the brand (“warm” contact). Opt-out lists, in which theconsumer receives mail by default unless they proactively opt-out, willpotentially result in cold piece of communication by the brand, so should behandled sensitively (“cold” contact). Guidelines would be to:-

 

•                  Capturethe imagination of the consumer with the creative execution

•                  Makeit easy for them to refuse further such contact

•                  Donot chase up a piece of cold communication with further cold contact e.g.outbound telemarketing

 

All mailings should comply with the Direct Mail Association’s (DMA’s)Code of Practice. Mailings to cold lists require that at the original point ofobtaining data from the consumer, he or she was given the full data protectiondisclosure necessary (who is using the data, why, what purposes it will be foretc.). The best way to ensure that this has happened is to only rent lists fromDMA member list brokers or managers, and to ensure that a DMA approved listwarranty is signed.

 

# **8.**                                       Email andSMS

#  

Unsolicited email and SMS requires explicit opt-in. The exceptions(when an opt-out is still acceptable) will be: when contacting current customers and when a prospective customer entersinto a conversation by e.g. entering a competition or prize draw.

 

General CAP rules state that promoters and marketers should: -

 

•                  Becapable of meeting the response for a promotion / demand for the product;

•                  Onlyuse the word “free” if the product is totally free other than national rate fora cost of response, delivery and/or travelling to pick up the product;

•                  Inany promotion specify how the consumer can participate, the start date, theclosing date, any proof of purchase requirements, the prizes available,restrictions, availability & the promoters name and address.

•                  Notclaim consumers have won a prize if they have not or exaggerate consumers’chances of winning a prize;

•                  Inany prize promotions specify the limit on the number of entries, whether there’sa cash alternative, when prizewinners will receive their prizes, how winnerswill be notified, and when winners’ names will be published.

 

Some further Virgin guidelines on DM, Email and SMS marketing would be:-

 

5

----

 

•                  Berelevant. The best response / conversion rates and most positive consumerexperience will arise from a message which is relevant to that individual andwhich captures their imagination. An intrusive or irrelevant piece ofcommunication is likely to annoy and alienate them.

 

•                  Avoidusing a premium rate response mechanism such as expensive text or phone call. ICSTIS(Independent Committee for the Supervision of Standards of TelephoneInformation Services) requires all promotions with a telephone response toquote how much it will cost for the consumer to respond.

 

# **9.**                                       Business-to-BusinessDirect Selling

#  

In the business-to-business environment, cold telemarketing is not apreferred or common activity for a Virgin company. However, speculative contactis part of the business world and businesses are set up to deal with coldcalling so it is not as intrusive or disrespectful as it is when contactingconsumers. However, there still remains the concern that Virgin is thereforeseen to be slightly desperate to get a sale and not displaying the kind ofconfidence that people expect from the brand. The policy would be:

 

•                  Onlycall to follow up a piece of Direct Mail or email which has been sent to thebusiness.

•                  Onlycall to follow up on a recommendation or to operate within a relationship,which already exists.

•                  Pursuethe sale if the customer is interested but respect the “no” that a customergives – especially an emphatic or repeated “no”.

•                  Describethe benefits of the product in a no-nonsense, peer-to-peer friendly way andallow the customer to make up their own mind about it.

•                  Getto the point quickly – don’t waste their time.

•                  Don’tbe afraid to ask for the sale if you think they may want to buy.

•                  Finishthe call politely and graciously, ensuring that the customer feels positive atthe end of the experience.

•                  Don’tuse other parts of the Virgin Group as a way in to the conversation (e.g. namedropping other Virgin successes) without their prior consent.

 

# **10.**                                 For furtherinformation, contact...

#  

Ashley Stockwell, Virgin Group Brand Marketing Director

**ashley@virgin.com**

 

Catherine Salway, Virgin Group Brand Manager

**catherine.salway@virgin.com**

 

Advertising Standards Authority

**www.asa.org.uk**

 

British Code of Advertising, Sales Promotion and Direct Marketing **www.cap.org.uk**

 

Direct Mail Association

**www.dma.org.uk**

 

6

----

 

Direct Selling Association

**www.dsa.org.uk**

 

ICSTIS (Independent Committee for the Supervision of Standards ofTelephone Information Services):

**www.icstis.org.uk**

 

7

----

 

# **PART 4**

#  

# **OFFSHORE OUTSOURCING - OVERALLBRAND APPROACH**

#  

•                  Ourultimate goal is to save money and improve our businesses

 

•                  Weshould save as much money as we possibly can, as long as the Virgin brandreputation and customer service quality are not compromised

 

# **1.**                                       Summary ofbrand & customer service issues

#  

## •                  **Customer Service Quality** – the quality of callswitnessed on the recent field trip fell short of a typical Virgin standard

•                  **Redundancies** – arguments with staff and unions- resulting negative PR coverage, staff and consumer perceptions

•                  **Globalisation of the brand** – followingglobal corporate brands in the goldrush – resulting negative PR coverage, staffand consumer perceptions

•                  **Becoming entirely process driven** – losingthe Virgin culture

 

# **2.**                                       Summary ofbrand preferred choices on offshore outsourcing

#  

•                  Puttingseats offshore as a result of growth or attrition is preferred to making any UKemployees redundant.

 

•                  Ifhigher cost issues in South Africa could be overcome then SA would be less of arisk for front line customer service quality, and it also makes sense tostrengthen our ties with a territory we are already investing in.

 

•                  Tappinginto current operations (e.g. Atlantic’s offices in Johannesburg) would allowus to trial offshore outsourcing underneath the radar of publicity.

 

•                  Creatingour own function that we can control & manage would allow us to stampthe Virgin culture on an operation, enjoy cost savings from working together ¬ giving profit margins to an outsourcer.

 

•                  Outsourcingoperations that support the business rather than the customer service functionwould give us the chance to save money without it affecting our customerservice (e.g. accounts payable, IT, payroll).

 

•                  Findingone common function to outsource together onshore, such as payroll, would giveus the chance to trial group outsourcing for the first time in a bite-sized waybefore taking a riskier step (more functions; overseas).

 

8

----

 

# **BRAND GUIDELINES FOR A BEST PRACTICE APPROACH TO OFFSHORE OUTSOURCING**

#  

### 1.                                       **Management ofthe operation**

###  

The overall approach is to put more effort into the offshore outsourcedoperation than we would a UK one. This is to ensure that we don’t lose customerservice quality and to protect the brand reputation.

 

•                  Puta minimum of one Virgin person on site to manage the operation full time.

•                  Giveall of the staff in the outsourced operation a full induction into Virgin’s wayof doing businesses – including brand, culture and customer service. Thisshould include an initiation trip around current Virgin businesses in the hometerritory for as many people as possible.

•                  Workwith the local community and government to make sure that the benefit to theeconomy is not just ring-fenced but truly adding value to the local communityand economy.

 

### 2.                                       **Training andtreatment of local staff**

###  

The overall approach is to respect the staff in the same way as wewould UK staff. This may require some investment that the local outsourcermay think is unnecessary but this protects the brand reputation and willalso decrease attrition.

 

•                  Developa training programme that is more extensive than anything currently in use inthe UK. Initial and on-going training should include:-

•                              Skills &software training

•                              Fullimmersion into Virgin – brand, personality, customer expectations etc.

•                              Customerfamiliarisation – their lifestyle, needs and attitudes, why they buy thisproduct, how they buy it, how they use it etc.

•                              Conversationaltips & phrases, and teach a level of informality that the local staffwill probably find a bit strange.

•                              Languagetraining....

•                  Positivelanguage training is critical, but the key is to be respectful to the staff andtheir identities and to be transparent about where we are servicing ourcustomers from:

•                              Difficultnames can be shortened or real nick-names used, but fake British names shouldnot be used.

•                              WatchingBritish TV can be part of the language training but agents should notpretend to be in the UK watching e.g. Eastenders, Coronation Street.

•                              Agentsshould not pretend to be in the UK by quoting the weather.

•                  Workwith local trade & labour experts to develop a pay and benefitspackage that is fair and respectful. Not necessarily more than the going rate, butwell thought out, based on the needs and attitudes of the local staff, andwinning their loyalty just as we would UK employee’s.

•                  Putcareer paths in place so staff know they can progress with the company.

•                  Treatstaff like our own employees – access to Virgin extranet, Tribe, secondmentsaround the group, etc.

•                  Organisejob swaps between offshore operation and home country.

 

9

----

 

•                  Listento, and act upon what staff say in employee forums and focus groups.

•                  Involvetheir families

•                  Investin the physical environment – the space per staff member, the chairs they siton, paint, posters, plants. Invest in plenty of chill-out areas:  relaxing rooms & cafes

•                  Investin the safety and security of the staff – transport to work, security guardsetc. where necessary.

 

### 3.                                       **Treatment****of UK redundancies**

###  

•                  Totallytransparent and fair treatment of the staff who are made redundant.

•                  PRstrategy to minimise risk...

 

Please refer to Angela Smith, Group HR Manager, for full strategy.

 

### 4.                                       **PR strategy tominimise risk**

###  

The PR strategy will hinge upon the fair treatment of UK staff who arebeing made redundant, how we are respecting & benefiting the localstaff and what we are doing to help the local community, as previously covered.

 

## •                  Please refer to Group PRDepartment for full strategy:  JackieMcQuillan and Will Whitehorn.

•                  Pleaseadvise Group PR Department in advance of any known planned redundancies.

 

10

----

 

**SCHEDULE 9**

** **

**Worked Example of Clause9.9**

 

Thepurpose of this example is to calculate, in the event of termination of theDeed prior to the expiry of the Minimum Term under Clause 9.9, the sum payable.This calculation uses a baseline, B, defined as the average royalty payment bythe Licensee in respect of the four full quarters immediately preceding thedate of termination, grown at a constant rate, g, (defined at 2% annually) andthen discounted using r, the WACC of the NTL Group. For illustrative purposes,this example uses the following assumptions:

 

•                  g, annual growth rate, as defined inLicense Agreement (2%)

 

•                  r, NTL Group WACC, as defined in LicenseAgreement. Value of r for illustrative purposes (10%)

 

•                  A, number of quarters until the end ofMinimum Term, as defined in License agreement. Value of A for illustrativepurposes (20 quarters)

 

•                  B, average royalty payment over last fourquarters, as defined in License agreement. Value of B for illustrative purposes(£2.0m)

 

•                  i, quarterly discount rate, calculated asper formula in License Agreement (1.9%)

 

•                  calculated as follows: { [ [ (0.1 – 0.02)/ (1.02) ] +1 ] ^ 0.25 } -1 =0.0191

 

Thepresent value of each quarterly royalty payment is shown below. The net presentvalue i.e. the amount to be paid by the Licensee to VEL is the sum of presentvalues of all the quarterly royalty payments. In this particular example, thisamounts to £33m.

 

 

11

----