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

  
	
  Virgin Red Book

  	
  18

  
	
  Virgin Brand Book

  	
  18

  
	
  Virgin Group Policy on selling techniques

  	
  18

  
	
  Offshore Outsourcing -
  overall
  brand
  approach

  	
  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 Number
01073929) a company incorporated in England whose registered office is at 120
Campden 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 and
beneficial owner of the Marks (as defined below);


 


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


 


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


 


THE PARTIES AGREE AS FOLLOWS:


 


1.                                       DEFINITIONS


 


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


 


“Accounting Standards” means in conformity
with United States Generally Accepted Accounting Principles or any generally
accepted and applicable accounting standards used by NTL Incorporated from time
to time;


 


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


 


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


 


“Ancillary Services” means, subject to the
presently existing and exclusive rights of existing licensees of VEL (as listed
in Schedule 4), any services or facilities


 


3

















 


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


 


(a)                          reasonably ancillary to the
provision of Communications Services to Customers; or


 


(b)                         equivalent to those ordinarily
provided from time to time by third party providers of services equivalent or
substantially similar to Communications Services and offered in conjunction
with or as part of those Communications Services; or


 


(c)                          offered in conjunction with or
as part of the Communications Services and approved by VEL in advance in
writing (such approval not to be unreasonably withheld, conditioned or
delayed),


 


but
excluding Bundled Services or Partner Services (which are the subject of a
separate grant of rights under this Deed);


 


“Annual Report” means NTL
Incorporated’s financial report to the SEC in respect of each Financial Year on
Form 10-K pursuant to the Securities Exchange Act of 1934 and any
replacement or equivalent report so filed with the SEC;


 


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


 


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


 


(a)                          making the provision of that
network or service possible;


 


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


 


(c)                          supporting the provision of such
other services;


 


“Banking Services” means all and any
services which are currently provided in the ordinary course of business by a
United Kingdom clearing bank or a United States of America money center bank or
which from time to time form the core business of any such bank, including
but not limited to the taking of deposits, the provision of loans (whether
secured or unsecured and including by the subscription for loan stock or other
debt securities), guarantees, performance bonds and letters of credit, the
provision of domestic and international cash transmission and other payment or
clearance facilities, the provision of credit or debit cards, smart cards and
stored value cards and the like, and of all forms of bank account for all
currencies, the provision of custody services, the provision of foreign
currency exchange services and the provision of advice in connection with any
of the foregoing;


 


4

















 


“Base
Service Levels” means the levels of customer
service and complaint handling set out in section 1 of Schedule 3;


 


“Bundled Services” means a package of
products or services incorporating one or more Communications Services offered
together with third party or non “Virgin”-branded Communications Services
and/or products or services reasonably ancillary or complementary to
Communications Services;


 


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


 


“Chief Marketing Officer” means the person
nominated by VEL and employed by a member of the NTL Group pursuant to clause
5.10;


 


“Chosen Names” means the names
agreed in accordance with Part E of Schedule 2;


 


“Commencement
Date”
means the date of the passing of the resolution referred to in clause 2.4 of
this Deed;


 


“Communications Network” means a system or
systems for the conveyance of messages, information or signals serving for the
impartation of anything including Content between persons, between a person and
a thing or between things or for the actuation or control of apparatus, and the
apparatus, 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 connections
using any part of the electromagnetic spectrum (e.g. satellite, digital
terrestrial, analogue terrestrial, DAB, DVB-H, GSM, GPRS, WIMAX, WIFI), and


 


howsoever in each case
as such system, systems or connections may be created, develop or converge
from time to time, whether with a technology or method now in existence or
subsequently developed, created or invented;


 


“Communications Services” means communications
services, or access to such services, consisting in or having as their
principal feature the conveyance of messages, information or signals by means
of a Communications Network. For illustrative purposes only and without
prejudice to the generality of the foregoing, the types of services
contemplated at the Commencement Date include the following:


 


(a)                              internet services (which, for
example, 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 services
which, for example, includes:


 


5

















 


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


 


(ii)                           premium
or subscription-based television services (e.g. access to Film Four and Sky
Sports);


 


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


 


(iv)                       interactive
television services;


 


(v)                          Video on
Demand and Pay per View; or


 


(c)                                  telephone services (which, for
example, includes fixed line, wireless, Mobile Radio Telecommunication
Services, data and text services (including SMS)), and


 


howsoever and in
each case as such services may be:


 


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


 


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


 


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


 


“Consumer Revenues” means the amount of
consumer revenue relating to the Licensed Activities reported in NTL
Incorporated’s statement of operations contained in its Quarterly Report or its
Annual Report, as appropriate;


 


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


 


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


 


“Core Equipment” means any
equipment, device or accessory (whether now in existence or which may from
time to time be created or developed, or as such equipment, devices or
accessories 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 video
recorders (PVRs) for use with the Communications Services, modems, routers and
remote control devices for set top boxes), but excluding, save to the extent
that they fall


 


6

















 


within
sub-paragraph (b) of this definition, television sets, radio sets and
personal computers; or


 


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


 


“Customer” means:


 


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


 


(b)                             in the case of Mobile Radio
Telecommunication Services and/or Roaming Services, means any consumer or
business user who has contracted with the NTL Group for the provision of those
services;


 


“Data Cards” means data communications
cards for use in conjunction with mobile handsets, laptop computers or other
portable computing and communications devices which allow or enable access to
the internet, access to email services, remote access to private computer
networks, fax services, instant messaging and text messaging services and other
communications services through 3G, 2.5G, GPRS, HSCSD or wireless LAN networks
or similar;


 


“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;


 


“Direct
Selling Policy”
means the guidelines relating to selling techniques forming part of the TM
Guidelines as set out in Part 3 of Schedule 8;


 


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


 


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


 


“EPG” means any electronic
programme guide which consists of (a) the listing and/or promotion of some
or 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 for
obtaining access in whole or in part to the programme services (including
Video on Demand and Pay per View) listed or promoted in such guide, and in the
case of both (a) and (b) may include programme services
(including Video on Demand and Pay per View) provided by persons other than the
provider of the guide;


 


7

















 


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


 


“Financial Year” means the period of
twelve months ending on 31st December or such other financial year as NTL
Incorporated shall adopt from time to time;


 


“Fit and Proper Person” means a director who:


 


(a)                              has not at any time
been disqualified by a court from acting as a company director, including a
disqualification made pursuant to the Company Directors Disqualification Act
1986; and


 


(b)                             is not an undischarged
bankrupt or a person in respect of whom a bankruptcy restrictions order is in
force;


 


“Force Majeure Event” means any of the
following:


 


(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 and
acts of civil or military authority, compliance with any law or governmental
order; and


 


(b)                             accidents, breakdown or
malfunction of plant or machinery, computer virus or similar, sabotage or
malicious damage, in each case, to the extent that such event is not within the
reasonable control of a party and where that party has taken reasonable steps
to prevent the occurrence of such event in accordance with current good
industry practice;


 


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


 


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


 


“Insolvency Event” means any of the
following events unless remedied or set aside within thirty (30) days of such
event in respect of a party:-


 


8

















 


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


 


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


 


(c)                                  where either party is unable to
pay its debts within the meaning of section 123 of the Insolvency Act
1986;


 


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


 


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


 


“Licensed Activities” means the activities
described in clause 3 and carried out under the Marks;


 


“Licensed Revenues” is calculated as
follows:


 


(a)                          Consumer Revenues; less


 


(b)                         any revenues accruing to the NTL
Group from activities carried out other than pursuant to the Marks which have
been included in Consumer Revenues; plus


 


(c)                          any other revenues accruing to
the NTL Group from activities carried out pursuant to the Marks which have not
been included in Consumer Revenues;


 


less (to the extent
not already deducted in the calculation of (a), (b) and (c) above):


 


(i)                              value
added tax, sales tax, excise duties and equivalent taxes and duties; and


 


(ii)                           bad debt expense in accordance with
Accounting Standards (save that such deduction shall not exceed 4% of
Licensed Revenues);


 


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


 


“Marks” means the Virgin
Marks and the Names, each as updated from time to time, together with such
other trade mark applications which may be made by VEL after the date of
this Deed in respect of the Licensed Activities and any resulting
registrations;


 


“Minimum Term” means the period of
10 years from the Commencement Date;


 


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


 


9

















 


Telecommunication
Services (for example, mobile handset chargers, mobile telephone cases, in-car
accessories, bluetooth headsets and mobile card readers/writers);


 


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


 


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


 


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


 


“Mobile Interactive Services” means services primarily intended for
use with and primarily promoted for use with Mobile Radio Telecommunication
Services and/or Roaming Services which allow the interaction between Core
Equipment intended to be used in conjunction with Mobile Radio
Telecommunication Services and a remote system, such as voting, polling, gaming
and gambling services and any other similar services with the prior written
consent of VEL (not to be unreasonably withheld, conditioned or delayed) which,
for the purposes of this definition, shall only be reasonably withheld if
either:


 


(a)                      VEL has prior to the request for
consent granted an existing exclusive licence for such services to a third
party; or


 


(b)                     such services would, in VEL’s
reasonable opinion, materially harm or otherwise materially disparage the
reputation of the Marks,


 


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


 


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


 


10

















 


“Names” means (a) the
Licensee Marks; (b) the names set out in Part C of Schedule 2; (c) the
Chosen Names; and (d) any other names comprising of “Virgin” (whether as a
name or in the form of the Virgin Signature) always used in conjunction
with and always in front of any word or words which is or are suitable to
describe or denote the Licensed Activities, such additional word or words to be
approved by VEL in advance in writing (such approval not to be unreasonably
withheld, conditioned or delayed);


 


“NTL Group” means the Licensee
and any undertaking which is a Holding Company of that undertaking or a
Subsidiary of that undertaking or a Subsidiary of such Holding Company;


 


“NTL Incorporated” means the ultimate
Holding Company of the Licensee from time to time or,
in the circumstances described in clause 4.9, shall have the meaning set forth
in that clause;


 


“NTL TV Content” means any television
Content (including a TV Programme Service), the primary purpose of which is
self promotion, advertising of the Licensed Activities or making available
other direct offers for products and services forming part of the Licensed
Activities by means of advertorials, infomercials, commercials and any other
method used by broadcasters to the public with a view of promoting their own
goods or services including barker channels;


 


“Other Email Services” means the provision
of an email address together with an
individual subscriber address facility
to enable email communications including the word “Virgin” to:


 


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


 


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


 


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


 


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


 


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


 


11

















 


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


 


“Other Premium TV Content” means
premium television Content (e.g. a kids channel or a music channel) for which a
recipient of a Communications Service incurs any additional charge (whether
alone or as part of a bundle or package of premium television Content), in
addition to the basic subscription or charge for access to such Communications
Service, and where such premium television Content is equivalent or
substantially similar to any premium television Content provided from time to
time by any third party provider of Communications Services and branded with
that third party provider’s marks;


 


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


 


“Partner Services” means the provision
of access by means of any Communications Service, in conjunction with or as part of
the 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 a
Communications Service of television Content which Customers can select for
viewing for a fee;


 


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


 


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


 


“Permitted Webspace Address” means a URL for
webspace provided to Customers in any form incorporating the Domain Names
or the Chosen Names;


 


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


 


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


 


“Quarterly Report” means NTL
Incorporated’s financial report to the SEC in respect of each Quarter on Form 10-Q
pursuant to the Securities Exchange Act of 1934 and any replacement or
equivalent report so filed with the SEC;


 


“Restricted Content” means:


 


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


 


12

















 


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


 


(c)           video games or PC games;


 


(d)                                 online games of chance
and/or skill;


 


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


 


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


 


“Roaming Services” means services
comprising a facility enabling a user of any mobile communications network
(other than the network that has allocated the user’s international mobile
subscriber identity number or equivalent number) to obtain access to any Mobile
Radio Telecommunication Services;


 


“RPI” means the United
Kingdom retail prices index (all items) as published by the Office for National
Statistics (or by any government department or other body upon which duties in
connection with such index devolve) or other official cost of living index
published in place of that index and which most nearly represents the current
basis of calculation of such index;


 


“Royalties” means the payments
described in clause 4;


 


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


 


“SEC” means the US
Securities and Exchange Commission or its replacement or successor body;


 


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


 


“Service Levels” means the Base
Service Levels, Technical Service Levels and Aspirational Service Levels;


 


“Site” means any of the NTL
Group’s internet sites using the Domain Names;


 


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


 


“Substitute Annual Report” has the meaning given
to it in clause 4.9;


 


“Substitute Quarterly Report” has the meaning given
to 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 this
Deed which is to be a period of thirty (30) years from the Commencement Date
unless terminated earlier in accordance with this Deed;


 


“Territory” means the United
Kingdom of Great Britain and Northern Ireland, the Republic of Ireland, the
Isle 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 of
the Virgin Brand Book, the Little Red Book, the Direct Selling Policy and the
Outsourcing Guidelines supplied to the Licensee by VEL in writing prior to the
Commencement Date and as annexed to this Deed as Schedule 8, as amended or
updated by agreement in writing of the parties from time to time;


 


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


 


“Video on Demand” means the exhibition
through a Communications Service of television Content the scheduling of which
is not pre-determined by the provider, but which a Customer is able to select
at 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 the
terms of this Deed) which has been authorised to use the name “Virgin” or the
initial “V” whether alone or in conjunction with any other word, name or mark
from time to time;


 


“Virgin Group” means:


 


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


 


(b)                         any undertaking which
is 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 the
Individual, or any child or remoter issue of the Individual’s grandparents and
any spouses or such child or remoter issue;


 


(iii)                       the trustee or
trustees for the time being of any settlement made by any person mentioned in (ii) above
acting within that capacity;


 


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


 


14

















 


(v)                        any person acting as
bare nominee for the Individual or any of the persons mentioned in (i) to (iv) inclusive
above;


 


“Virgin Marks” means the registered
trade marks and trade mark applications listed in Part A of Schedule 1
and 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 mark
licence dated 9 August 1999, and amended on 2 July 2004, between VEL
and Virgin Mobile;


 


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


 


“Virgin Net” means Virgin Net Limited;


 


“Virgin Net Licence” means the trade mark
licence 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 registered
trade marks and trade mark applications listed in Schedule 2, Part B,
as updated from time to time; and


 


“Vouchers” means any payment or
replenishment service, facility or method in card and electronic form (including
top up cards, electronic top up and ATM/SMS top up) through which a Customer
can purchase any products or services relating to the Licensed Activities, but
excluding gift tokens or gift
vouchers.


 


1.2                                     The headings in this Deed are
inserted only for the purpose of convenience and shall not affect the
construction of this Deed.


 


1.3                                     The Schedules form part of
this Deed.


 


1.4                                     References to any statute or
statutory provision or order or regulation made thereunder shall include that
statute, provision, order or regulation as amended, modified, re-enacted or
replaced from time to time.


 


1.5                                     Words denoting the singular
shall include the plural and vice versa.


 


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


 


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


 


1.8                                     A person includes any
individual, firm, corporation, unincorporated association, government, state or
agency 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 to
that person’s legal personal representatives and successors.


 


1.10                               A company shall be construed so
as to include any company, corporation or other body corporate wherever and
however incorporated or established.


 


1.11                               Writing shall include any modes
of 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 as
being licensed under this Deed on an “exclusive” basis, it shall mean that only
the 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 Virgin
Company shall not be permitted to utilise such rights.


 


2.                                       ACKNOWLEDGEMENTS
AND CONDITIONALITY


 


2.1                                     The Licensee acknowledges:


 


(a)                          receipt of the TM Guidelines;


 


(b)                         that all rights in the Marks
belong to VEL;


 


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


 


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


 


(e)                          that it and the members of the
NTL Group shall only use the Marks in relation to products and services forming
part of the Licensed Activities.


 


2.2                                     At VEL’s cost (except to the
extent that it specifically falls within the Licensee’s obligations under this
Deed) the Licensee shall do any act and execute and deliver any documents
reasonably required to give effect to clause 2.1.


 


2.3                                     (a)        If at the Commencement Date:


 


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


 


(ii)                           NTL
Group 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 as
are required, mutatis mutandis, so that this
Deed does not apply to Virgin Mobile’s operations until such time as the NTL
Group 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 of
Virgin Mobile Holdings (UK) plc or until such time as the NTL Group gives the
notice provided for in clause 2.3(c) (the “Notice”);


 


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


 


(c)                          NTL Group may give VEL
written notice at any time after the Commencement Date specifying that, with
immediate effect, this Deed shall be effective in respect of Virgin Mobile and,
in which event, the parties shall procure that the Virgin Mobile Licence shall
be terminated on such date. The Notice may be given, in NTL Group’s
discretion, whether or not Virgin Mobile Holdings (UK) plc is wholly-owned
provided that the NTL Group owns more than 50% of the issued ordinary shares of
Virgin Mobile Holdings (UK) plc at the time that NTL Group gives the Notice. The
parties agree that they shall periodically review the situation at least once
every six months in order to consider whether the Virgin Mobile Licence should
be terminated; and


 


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


 


2.4                                    This
Deed shall be conditional upon and shall become effective only if shareholders
of Virgin Mobile Holdings (UK) plc pass an ordinary resolution on a poll
approving this Deed at an extraordinary general meeting convened in accordance
with Note 2 on Rule 16 of the City Code on Takeovers and Mergers in
connection with the proposed acquisition of Virgin Mobile Holdings (UK) plc
when announced by the NTL Group.


 


3.                                       GRANT


 


Exclusive Rights


 


3.1                                     In consideration of the
Royalties and the covenants and undertakings contained in this Deed, VEL hereby
grants to the Licensee and to all members of the NTL Group for the Term with
effect from the Commencement Date the exclusive rights:


 


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


 


(i)                                     the provision of Communications
Services to Customers;


 


17

















 


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


 


(iii)                              the Communications Networks required
for the provision of the Communications Services;


 


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


 


(v)                                the acquisition of sports
Content, movie Content and Other Premium TV Content (and such other genres of
Content 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, bundle
and distribute such Content (or any part or parts thereof) under the Marks
at NTL’s discretion, whether through the Communications Services or any other
similar platform or distribution means not branded with the Marks, whether
provided by the NTL Group or a third party;


 


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


 


(vii)                          the creation, acquisition and
distribution of EPGs, whether through the Communications Services or any other
platform or distribution means not branded with the Marks, whether
provided by the NTL Group or a third party, provided that the exclusive rights
granted under this clause shall not prevent the listing in a third
party-branded EPG of any TV Programme Service or television programme of a
Virgin Company or prevent any Virgin Company from using the Marks in relation
to Teletext or equivalent listing services as part of a TV Programme
Service; and


 


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


 


(b)                         to use the Names as part of
its registered company names and to use the same on headed notepaper and other
corporate materials and communications


 


18

















 


which, in the course
of business, bear the company name and in relation to the non-trading
activities and securities listing of any member of the NTL Group and as may otherwise
be required by law during the Term, provided that when used as a company name
such 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 the
Territory on or in relation to advertisements, sponsorship, promotional
brochures, other materials and magazines (in or on any media) in relation to
the Licensed Activities to the extent of the rights granted exclusively under
this clause 3.1. The parties recognise that there may be incidental
advertising, sponsorship or promotional activities undertaken outside the
Territory by the Licensee, members of the NTL Group or Permitted Third Parties
which are aimed at Customers or potential Customers (except in the case of
Roaming Services) inside the Territory and which relate to the Licensed
Activities provided within the Territory (provided that nothing in this clause
shall prevent other VEL licensees conducting similar activities inside the
Territory under provisions equivalent to those found in this clause 3.1(e));


 


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


 


(g)                         to use the Marks in the
Territory on or in relation to Vouchers in respect of the Licensed Activities
under this clause 3.1; and


 


(h)                         to use the Marks in the
Territory in relation to the provision of consultancy services in connection
with the Licensed Activities relating to Mobile Radio Telecommunication
Services under this clause 3.1 (except those Licensed Activities under clause
3.1(e)).


 


Non-Exclusive Rights (except in
respect of the Names which is exclusive)


 


3.2                                    In consideration of the
Royalties and the covenants and undertakings contained in this Deed, VEL hereby
grants to the Licensee and to all members of the NTL Group for the Term with
effect from the Commencement Date the following non-exclusive rights (except
that this grant is exclusive in relation to the use of the Names in the
Territory 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 than
Restricted Content) and acquisition of Content, together with the rights to
package, bundle and distribute Content in the Territory under


 


19

















 


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


 


(i)                              does
not create the impression that the Licensee is actually the creator of the
Restricted Content or that it is otherwise branded with the Marks;


 


(ii)                           is in
accordance with honest commercial practices and without due cause does not take
unfair advantage of the Marks;


 


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


 


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


 


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


 


(e)                          to use the name “Virgin” as part of
its registered company names and to use the same on headed notepaper and other
corporate materials and communications which, in the course of business, bear
the company name and in relation to the non-trading activities and securities
listing of any member of the NTL Group and as may otherwise be required by
law during the Term, provided that when used as a company name such name is
always followed by the relevant company denotation (e.g. Limited) for the
relevant type of company and jurisdiction;


 


(f)                            to use the Marks on or in
relation to the Site, advertisements, sponsorship, materials, promotional
brochures, other materials, magazines and the physical assets of members of the
NTL Group and other materials used in each case in the ordinary course of
conducting and promoting the Licensed Activities;


 


(g)                         to use the Marks in the
Territory in relation to promotional products (including those in electronic
form) which are incidental to the Licensed Activities provided that they are
normally distributed free by members of the NTL Group in the Territory and not
by way of commercial or retail sale;


 


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


 


(i)                              Other
Equipment, unbranded Mobile Accessories, unbranded Mobile Devices and unbranded
Core Equipment through the Retail Stores and Direct Sales Channels (whether
such Direct Sales Channels are operated by the NTL Group or on its behalf); and


 


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


 


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


 


20

















 


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


 


(j)                             to use the Marks in the
Territory in relation to the following:


 


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


 


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


 


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


 


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


 


(k)                          to use the Marks in the
Territory 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 with
the provisions of the Virgin Money letter agreement set out in Schedule 6
and the prior written consent of VEL (such consent not to be unreasonably
withheld, conditioned or delayed);


 


(l)                             to use the Marks in the
Territory in relation to payment services, facilities and methods for the
purchase by its Customers of its own goods and services and/or third party
goods and services including:


 


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


 


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


 


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


 


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


 


(cc)                                    must not be an electronic
payment service, facility or method capable of being used to pay for a
comprehensive range of third party goods and services unrelated to each other
and 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 the
Territory in relation to Banking Services not set out in clause 3.2(l), subject
to the prior written agreement of Virgin Money Group in


 


21

















 


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


 


(n)                         to use the Marks in the
Territory in accordance with the terms of the Virgin Retail letter agreement
set out in Schedule 7 of this Deed in relation to the sale and supply of
Electronic Entertainment Products and Physical Entertainment Products;


 


(o)                         to use the Marks in the
Territory in relation to the provision of consultancy services relating to
Mobile Radio Telecommunication Services in connection with the Licensed
Activities under this clause 3.2 and those Licensed Activities under clause
3.1(h);


 


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


 


(q)                         without prejudice to clause
3.1(a)(vii) and any other rights granted under this Deed, to use the Marks
in the Territory in relation to the creation, publication and distribution
(including in electronic form) of magazines where the principal or primary
purpose is the listing of TV Programme Services or other similar Communications
Services, provided that the Licensee shall not be permitted to publish any
other printed magazines except as permitted in this Deed;


 


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


 


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


 


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


 


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


 


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


 


(a)                          VEL recognises that members of
the NTL Group may:


 


(i)                                 use the Domain Names and forms
of technology or media now in existence or developed in the future that are or
will be by their nature accessible worldwide, including the internet and
certain TV broadcasts (such as satellite) which have a larger reach or
footprint than can be


 


22

















 


contained by a
territorial grant of rights; and


 


(ii)                              provide remote access to any
services forming part of the Licensed Activities to Customers temporarily
located outside the Territory,


 


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


 


(b)                         the Licensee acknowledges that
VEL may grant other parties rights to use the Virgin Marks (but not the
Chosen Names, the name “Virgin.net” nor the Domain Names other than virginmobile.com
which is non-exclusive) outside the Territory in relation to activities similar
or identical to the Licensed Activities (including Roaming Services) and may grant
such rights using forms of technology or media developed in the future that will
by its nature be accessible world-wide, such that the Virgin Marks may be
accessible to persons within the Territory. The Licensee agrees that the grant
of these rights shall not amount to a breach of VEL’s obligations under this
Deed provided that (save in relation to Roaming Services) VEL does not
authorise these other parties to use the Virgin Marks to solicit orders or
target customers within the Territory for the goods or services that are the
subject of the Licensed Activities where such orders originate from inside the
Territory;


 


(c)                          save as otherwise permitted
under this Deed including clauses 3.2(n) and (t), the NTL Group is not
permitted to use the Marks to brand any music download service (other than
ringtones) without the agreement of such relevant Virgin Company who has an
exclusive licence to use the Virgin Marks in connection with a music download
service, but the Licensee and members of the NTL Group may include a music
download service as a Partner Service or as part of a Bundled Service in
accordance with this Deed;


 


(d)                         the Licensee and members of the
NTL Group shall only use the Marks in the form of the Names and shall not
use the name “Virgin” or the “V” from the Virgin Signature by itself, except in
the following circumstances:


 


(i)                                 those listed in Schedule 5;


 


(ii)                              where there are space
constraints and where the Licensee has sought and obtained VEL’s prior written
consent (not to be unreasonably withheld, conditioned or delayed);


 


(iii)                           where the Licensee has sought
and obtained VEL’s prior written


 


23

















 


consent (not to be
unreasonably 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 materials
relating to the Licensee’s sponsorship of the VFestival; or


 


(v)                              as otherwise permitted by the TM
Guidelines;


 


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


 


(f)                           in standalone physical retail
outlets operated under the Marks the Licensee may not market or supply
Communications 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 members
of the NTL Group) and sold under a third party brand except with the consent of
VEL not to be unreasonably withheld, conditioned or delayed.


 


Additional
provisions relating to Content


 


3.4                                     The following provisions shall
apply in relation to the grant of rights in clauses 3.1(a)(v) to (viii) and
clause 3.2(a):


 


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


 


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


 


(ii)                          acquiring
and/or broadcasting sports and/or movie Content on the TV Programme Service
referred to in clause 3.4(a)(i) above, provided that such broadcast of
sports and/or movie Content is only part of a general entertainment
offering; or


 


(iii)                       including
any non-premium content as part of the TV Programme Service referred to in
clause 3.4(a)(i) above,


 


(b)                         notwithstanding the provisions
of clause 3.4(a), the parties agree as follows:


 


(i)                             VEL
and the Virgin Companies shall not be permitted to own or operate more than
four (4), in aggregate, TV Programme Services as referred to in clause 3.4(a)(i) under
the Marks to be distributed in or targeted at the Territory;


 


(ii)                          if VEL
or any Virgin Company provides any TV Programme Service under the Marks to be
distributed in or targeted at the Territory it shall offer the NTL Group rights
to distribute such TV Programme Service


 


24

















 


within a time period and upon the best terms
offered to any third party, and VEL shall only permit or license any other
person to use the Marks in relation to any TV Programme Service on the
condition that such TV Programme Service is offered for distribution to the NTL
Group by such licensee within a time period and upon the best terms offered to
any third party; and


 


(iii)                       if VEL and
any Virgin Company provides a TV Programme Service under the Marks to be
distributed in or targeted at the Territory it shall only be permitted to
distribute such TV Programme Service through the NTL Group’s Communications
Services or via a third party’s distribution means or platform using such
third party’s brand name (for example, a third party branded television platform or
internet service),


 


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


 


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


 


Limitations on Bundled Services


 


3.5                                     Where members of the NTL Group
are offering Bundled Services, the Licensee shall and shall procure that
members of the NTL Group shall use its or their reasonable endeavours to ensure
that the use of the Marks in relation to the Bundled Services:


 


(a)                          does not create the impression
that any of the Bundled Services are offered by members of the NTL Group on a
standalone basis separate from Communications Services;


 


(b)                         does not create the impression
that the relevant member of the NTL Group is actually the provider (otherwise
as an intermediary or conduit) of the third party or non-“Virgin” branded
elements of the Bundled Services;


 


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


 


(d)                         does not create the impression
that any third party services are branded with the Marks (unless the relevant
provider is a Virgin Company).


 


25

















 


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


 


Limitations on Partner Services


 


3.7                                     Where members of the NTL Group
are providing Partner Services, the Licensee shall and shall procure that
members of the NTL Group shall use its or their reasonable endeavours to ensure
that the use of the Marks in relation to the Partner Services:


 


(a)                         does not create the impression
that the relevant member of NTL Group is actually the provider (otherwise as an
intermediary or conduit) of the Partner Services or any of the goods or
services which are subject of the Partner Services;


 


(b)                        could not reasonably be
considered to result in consumer confusion (regarding who is providing the
Partner Services); and


 


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


 


3.8                                     Notwithstanding the provisions
of clauses 3.5 and 3.7, VEL confirms that in connection with provision of
Bundled Services and Partner Services, where the trade marks and trade names of
third parties appear along with or in association with the Marks, the Licensee
shall be entitled to provide registration and authentication services, billing
and payment services (but not Banking Services unless otherwise permitted in
accordance with this Deed) and customer and technical support using the Marks.


 


Limitations on Co-Branding


 


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


 


(a)                          such trade marks and trade names
are used to identify the products and services being offered or to identify a
trading entity;


 


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


 


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


 


Domain Names and Internet Use


 


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


 


26

















 


Domain Names shall
primarily be used to generate additional traffic to the Site and/or for
specific activities or promotions.


 


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


 


Reservation of VEL’s Rights


 


3.12                              VEL shall not use or license the
use of the Marks, the name “Virgin”, the letter “V” or anything confusingly
similar thereto in the Territory at any time during the Term in relation to
Communications Services but VEL and/or any Virgin Company shall not be
prevented 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 with
reference to the “Virgin” name in the Territory through any third party
Communications Services or Communications Network or to the customers of any
third party Communications Services or Communications Network;


 


(b)                         any non-exclusive rights under
this Deed;


 


(c)                          Other Email Services and Other
Webspace Services;


 


(d)                         Communications Services provided
in the ordinary course of business within premises and locations ordinarily
forming part of the activities licensed by VEL to such Virgin Company
where the provision of such Communications Services is incidental to and a
minor adjunct of their principal business including, retail outlets, health and
fitness centres, hotels, aeroplanes, trains, cars, motorcycles, ships or other
modes or transport, private airport lounges, train station lounges and other
transportation lounges;


 


(e)                          any Content offered by Virgin
Companies, except as set out in clause 3.1(a) (v) to (viii) and
subject to the provisions of clause 3.4;


 


(f)                            internet cafes; or


 


(g)                         sponsorship of any sports
events, tournaments, leagues or teams,


 


provided that:


 


(i)                              all
such use of the Virgin Marks in accordance with this clause, other than in
relation to (g) above, is confined to use in conjunction with, and always
in front of, any word or words which are used to describe or denote the
activities licensed by VEL to the relevant Virgin Company (subject to any
exceptions equivalent to those under clause 3.3(d)); and


 


(ii)                           this is
done in accordance with honest commercial practices and in the


 


27

















 


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


 


Extension of Grant


 


3.13                               VEL shall notify the Licensee if
and when:


 


(a)                              the rights to use the Marks in
the Territory in relation to the creation of the Restricted Content become
available; and/or


 


(b)                             it intends to use or grant a
licence 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 acquire
and/or brand a TV Programme Service with the Marks (to the extent not already
licensed in this Deed),


 


and shall:


 


(i)                              give
the Licensee reasonable details of any proposals submitted by or to the Virgin
Group for the licensing of such rights; and


 


(ii)                           give
the Licensee an opportunity, within a time period and on terms no less
favourable than those given to third parties, to submit a written proposal
relating to the exploitation of those rights by the Licensee on reasonable
commercial terms.


 


The Licensee shall submit any written
business proposal as soon as reasonably practicable and VEL shall consider such
proposal as soon as reasonably practicable and on a good faith basis. VEL
agrees, for a period of sixty (60) days (or such other period as the parties may agree
in good faith) from VEL’s original notice to enter into good faith discussions
with the Licensee and not to grant a licence in respect of those rights to any
other party during such period.


 


No Grant to Third Parties


 


3.14                              VEL agrees that it shall not
during the Term and for a period of twelve (12) months from the date of
termination 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 sum
equivalent to the amount paid to VEL in the last four full quarters for which a
royalty was paid, adjusted to take account of RPI from the date of termination
or expiry of the Deed to the end of the twelve (12) month period following such
termination or expiry):


 


(a)                          use itself nor grant to any
person other than the Licensee the right to use the Marks in the Territory in
relation 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 in
respect of services equivalent to Communications Services in the manner
described in clause 3.12(d));


 


(b)                         use itself nor grant to any
third party the right to use the Chosen Names or the name “Virgin.net” anywhere
in the world;


 


28

















 


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


 


(d)                         use itself nor grant to any
third 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 in
the world; or (ii) any word or words which are identical or colourably
similar to the Names in the Territory; and


 


(e)                          use itself nor grant to any
third party other than the Licensee the right to use the Marks in respect of
the marketing or supply in physical retail outlets of Communications Services
and Core Equipment provided by any third party and sold under that third party
brand (and warrants that it has not granted any such rights prior to the date
of this Deed) in the Territory save that the Licensee acknowledges that Virgin
Retail Limited (or its successors and/or assignees) has been granted as at the
Commencement Date under the VRL Licence as defined in Schedule 7 of this
Deed certain rights to sell third party equipment that may fall within the
definition 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 of
the logo and agree, to the extent that this is reasonably practicable, to a
gradual transition toward use of this logo over time.


 


3.16                              Members of the NTL Group shall
be entitled to do all acts which would otherwise be restricted by the copyright
in the Marks in connection with the carrying on and provision of the Licensed
Activities.


 


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


 


3.18                              The parties acknowledge that,
during the Term, major technological changes and advancements will occur in
relation to the Licensed Activities which the parties are unable to foresee as
at the Commencement Date. As such, the parties declare that it is their common
intention that this Deed is intended to cover such changes and advancements and
to enable the Licensed Activities in respect of which the Marks may be
used to develop over the Term. The parties further acknowledge that the
definitions of “Communications Services” and “Communications Network” provided
for in this Deed are intended to include not only existing communications
services and networks, but also new communications services and networks which
result from innovations, technological developments and discoveries and the
trend towards the convergence of such communications services and networks to
ensure that the NTL Group can effectively compete with new communications
services and networks introduced by others as well as innovate and introduce
new communications services and networks of its own. The parties agree that
this Deed, including the definitions of “Communications Services” and “Communications
Network”, shall be construed accordingly.


 


29





















 


3.19                              Without
prejudice to the provisions of clause 3.18, should either party at any time
during the Term be of the view that this Deed as drafted, including the
definitions of “Communications Services” and “Communications Network”, does not
fully reflect the common intentions of the parties as stated in clause 3.18, it
may notify the other party to that effect and the parties will meet within
14 days to agree in good faith appropriate amendments to this Deed. In the
event that the parties fail to reach agreement on appropriate amendments within
one hundred and eighty (180) days of any notification given under this clause
3.19, either party may refer the matter to dispute resolution in
accordance with clause 14.6.


 


3.20                              For
clarification it is stated that prior to granting this Licence the parties have
signed the letters of agreement annexed in Schedules 6 and 7 to this Deed.


 


4.                                       PAYMENT OF ROYALTIES


 


4.1                                     Except
as set out in clause 4.12 and clause 6.9, and subject to clause 4.13 the
Licensee agrees to pay VEL a royalty the greater of:


 


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


 


(b)                                 two
million one hundred and twenty five thousand pounds (£2,125,000),


 


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


 


4.2                                    The
Licensee shall, within ten (10) Business Days after the date on which NTL
Incorporated 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 by
the chief financial officer of NTL Incorporated, of the total Licensed Revenues
and the Royalties due to VEL in respect of such Quarter.


 


4.3                                    All
amounts payable under this Deed are expressed exclusive of VAT. Each party
shall, to the extent required by law, pay VAT on all sums becoming due from it
to the other party under the provisions of this Deed at the appropriate rate in
force, upon receipt of a valid VAT invoice.


 


4.4                                    VEL
shall be entitled to render an invoice in respect of the Royalties due under clause
4.1 upon receipt of the statement referred to in clause 4.2. The Licensee shall
pay such Royalties within thirty (30) Business Days following receipt by the
Licensee of an appropriate VAT invoice.


 


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


 


30

















 


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


 


4.6                                    All
payments 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’s
bank account or as directed by the Licensee.


 


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


 


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


 


4.9                                    If at
any time NTL Incorporated shall no longer be a registrant reporting under the
Securities Exchange Act of 1934, or NTL Incorporated shall no longer report
Consumer Revenues in its Quarterly Report or Annual Report, the NTL Group shall
provide substitute reports to VEL that include the same information in respect
of Consumer Revenues as would have been included in its Quarterly Report or
Annual 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 clauses
4.2, 4.5 and 4.8. Such Substitute Quarterly Reports in respect of each of the
first three quarters of each Financial Year shall be due within sixty (60) days
of the end of that quarter and the Substitute Annual Report shall be due within
ninety (90) days of the end of the Financial Year. In each such case, Financial
Year shall mean the fiscal year of, and the Substitute Quarterly Reports and
Substitute Annual Reports shall be produced in respect of, a company designated
by NTL Group which shall be the company whose subsidiaries are responsible for
100% of Consumer Revenues and which has the most direct supervisory or
governance role in respect of such subsidiaries, references to NTL Incorporated
in this Deed shall be deemed to refer to such company, and such Substitute
Quarterly Reports Substitute and Annual Reports shall be deemed to be Quarterly
Reports and Annual Reports for the purposes set forth in this Deed.


 


4.10                              In the
event that VEL has reasonable grounds to believe that there is a material error
in the calculation of the Royalties, it shall notify the Licensee in writing
and the parties shall use reasonable endeavours to
resolve any discrepancies raised by VEL in good faith. Any disputes as to the
calculation of Royalties shall be referred to the dispute resolution procedure
set out in clause 14.6. If such dispute has not been resolved and the mediator
appointed pursuant to clause 14.6 decides that a material error may have
been made, VEL shall be entitled to carry out an audit of the NTL Group’s books
of accounts as reasonably necessary to determine whether there has been a
material error in the statements certified under clauses 4.2 and 4.5 or in the
information certified under clause 4.9. Any such audit shall be conducted as
follows:


 


(a)                          upon
the written request of VEL and not more than once in each period of


 


31

















 


twelve months, and only after
NTL Incorporated has published its accounts for any given Financial Year, the
Licensee shall permit one of KPMG Audit plc, Ernst and Young LLP, Deloitte & Touche LLP or
PricewaterhouseCoopers LLP, or their successors in title as appointed by VEL
and agreed by the Licensee (or, failing agreement, such other auditing firm of
international repute as is agreed), to have access during normal business hours
to such records of the NTL Group as are reasonably necessary to determine
whether there has been any material error in calculating the Royalties and
whether there has been an overpayment or underpayment of Royalties pursuant to
this Deed for any Quarter in such Financial Year or for the whole of the
Financial Year in question. In the absence of material error, such accounting
firm shall not be entitled to question the application of the NTL Group’s
judgement in applying the Accounting Standards (or that of their accountants
and auditors);


 


(b)                         the
Licensee, at the cost of VEL, shall and shall procure that relevant members of
the NTL Group will provide such assistance to the accounting firm as is
reasonably necessary in connection with the audit, provided that the Licensee
has received reasonable advance notice of such audit from VEL. Such accounting
firm shall execute a confidentiality undertaking no less strict than the
confidentiality obligations set forth in this Deed in a form reasonably
acceptable to the Licensee and suitable for the purpose of performing the audit
under this clause 4.10. Such accounting firm shall carry out its audit within
two (2) calendar months and report only on matters which bear on whether
the Royalties paid or due to be paid by the Licensee were determined and
accurately calculated in accordance with this Deed. The report shall be
addressed to both VEL and the Licensee;


 


(c)                          these
rights 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 there
was an overpayment or underpayment, the Licensee shall pay the additional
royalties due to VEL or VEL shall return to the Licensee any excess royalties
paid, 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 delivered
to both VEL and the Licensee. The fees and disbursements charged by such
accounting firm shall be paid by VEL unless the accounting firm concludes that
there has been an underpayment by more than five percent (5%) of the royalties
due, in which case the Licensee shall pay its reasonable fees and
disbursements. Neither VEL nor the Licensee shall consult with such accounting
firm in person or orally unless the other parties are given reasonable advance
notice of and the opportunity to participate in such consultation; all
communications made in writing shall be copied to the other party who may respond
to the accounting firm in question with a copy to the other parties; and


 


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


 


32

















 


non-complying party, who shall
reimburse the complying party for its reasonable attorneys’ fees and reasonable
disbursements.


 


4.11                              VEL
and the Licensee shall treat all information subject to review under this
clause 4 in accordance with the confidentiality provisions of this Deed.


 


4.12                              VEL
accepts that the Licensee may not be able to provide the Communications
Services by reference to the Marks (other than the services formerly licensed
pursuant to the Virgin Net Licence and the services licensed pursuant to the
Virgin Mobile Licence) for a period of time after the Commencement Date. Subject
to clause 6.9 and clause 4.13, during that time the Licensee agrees to pay to
VEL a royalty equal to the greater of:


 


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


 


(b)                                 two
million one hundred and twenty five thousand pounds (£2,125,000),


 


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


 


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


 


4.14                              The
Licensee agrees to provide, at the reasonable request of VEL, a monthly revenue
report with sufficient information for the purposes of determining the
royalties due and payable under this Deed (as generally distributed within the
NTL Group to senior management).


 


5.                                       CONDITIONS OF USE


 


5.1                                    The
Licensee acknowledges that the value and reputation of the Marks is such that
they denote high quality status and agrees to and shall procure that relevant
members of the NTL Group shall:


 


(a)                          use
all 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)                         subject
to clause 5.2, use the Marks in accordance with the TM Guidelines; and


 


33

















 


(c)                          use
all reasonable endeavours to apply the Marks to goods and services of a
standard consistent with good industry practice and standards.


 


5.2                                     The
Licensee shall not be obliged to consult VEL as to its manner of use of the
Marks where such use is in accordance with the TM Guidelines. However, the
Licensee may submit designs and/or proposed advertising, marketing or
promotional materials using the Marks to VEL for approval, such approval not to
be unreasonably withheld, conditioned or delayed. Where VEL has not sent (by
courier, post, email or facsimile) to the Licensee at its then usual business
or email address a written response in relation to the designs and/or materials
submitted by the Licensee within five Business Days (or such other period as may be
agreed between the parties) of receipt of such designs and/or materials, VEL
shall be deemed to have approved the designs and/or materials for the purposes
of this clause.


 


5.3                                     In the
event that either party wishes to create any logo incorporating the Marks
specific to the Licensee, then the parties shall work together to create such
logo, provided that the Licensee agrees that VEL shall have the right of final
design approval of such logo in respect of matters such as brand consistency.


 


5.4                                     The
Licensee shall use all reasonable endeavours to comply with the following
conditions of use:


 


(a)                          where
reasonably practicable, and upon request from VEL, the Licensee shall display
and shall procure that the relevant members of the NTL Group shall display a
statement in the following terms:


 


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


 


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


 


(c)                          the
exercise of the rights granted by this Deed to the members of the NTL Group
shall comply in all material respects with all applicable laws and regulations
in force within the Territory save to the extent that such compliance is made
impractical by the action or inaction of VEL;


 


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


 


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


 


5.5                                     During
the 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)                          any
marks 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)                         the
Marks or any marks which are confusingly similar to but not identical with the
Marks (or “Vision” if the Chosen Name is “Virgin Vision”) in relation to any
activities other than the Licensed Activities.


 


5.6                                    In
order to ensure that any relevant member of the NTL Group is complying with the
obligations under this Deed, the Licensee shall, and shall procure that
relevant members of the NTL Group shall, on reasonable written request from
VEL:


 


(a)                          provide
reasonable quantities of free samples of any materials (including all
advertising, marketing and promotional materials) bearing the Marks used in
connection with the Licensed Activities prior to or in the course of their
installation, sale or distribution;


 


(b)                         provide
VEL as soon as practicable with full particulars of proposed advertising
campaigns bearing the Marks used in connection with the Licensed Activities;


 


(c)                          promptly
provide VEL on an aggregate basis with sufficient details of all material
complaints made by customers, distributors, retailers and/or members of the
public (but shall not be obliged to supply personal data or identify
complainants where to do so would be in breach of the Data Protection Act 1998)
relating to the Licensed Activities conducted under the Marks together with
reports on the resolution of such complaints and shall comply with any
reasonable directions or recommendations given by VEL in respect thereof;


 


(d)                         provide
VEL with details of any material claims, litigation, arbitration or
administrative proceedings, investigations or enquiries which are in progress
or threatened in writing against the relevant member of the NTL Group
concerning the Licensed Activities carried out using the Marks. This clause
shall not require any member of the NTL Group to waive or jeopardise its rights
to any privilege in relation to such proceedings, investigations or enquiries;


 


(e)                          meet
with VEL once in each calendar year in order to review the exercise of the
rights granted by this Deed to the members of the NTL Group;


 


(f)                            where
VEL has reasonable grounds to believe that any member of the NTL Group is not
complying with this Deed, VEL (or its nominated representatives) may upon
reasonable notice in writing during business hours, enter the premises of any
member of the NTL Group at which the Licensed Activities are carried out, or
the Marks are otherwise used and have access to all documents which may be
reasonably requested to assess whether the relevant member of the NTL Group is
complying with the obligations under the terms of this Deed provided that:


 


35

















 


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


 


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


 


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


 


(g)                         provide
VEL with the reports referred to in Schedule 3, copies of customer service
scripting, copies of pro-forma letters sent to customers and any brand tracking
studies/reports undertaken or commissioned by the NTL Group.


 


VEL acknowledges and
agrees that the Licensee shall be deemed to have complied with the provisions
of clause 5.6(a) and (b) if the information and materials requested
under such provisions is provided to or made available to the Chief Marketing
Officer.


 


5.7                                     If at
any time the Licensee or any member of the NTL Group fails to comply in any
material respect with the conditions of use or standards of quality and
presentation set out in this clause 5 (other than with respect to Service
Levels), VEL may direct the Licensee or such member of the NTL Group, in
writing, to take such reasonable steps as may be necessary to ensure
compliance with this clause 5 and the Licensee shall procure that the relevant
member of the NTL Group shall, within twenty five (25) days or any such period
as the parties may agree, correct any such non-compliance. In relation to
the TM Guidelines this may include the withdrawal of non-complying
advertising, marketing or promotional materials where reasonably practicable.


 


5.8                                    The
parties shall comply with the obligations set out in Schedule 3 with
respect of the Service Levels.


 


5.9                                    The
Licensee recognises that it is part of a group of companies and businesses
licensed by VEL to use the Marks and agrees that it shall cooperate in Virgin
Group activities and initiatives, including charitable initiatives associated
with Virgin Unite, procurement initiatives, marketing forums, promotions of the
virgin.com website, provided that the NTL Group shall not be required to
participate in any activity or initiative where it considers in its absolute
discretion that such participation may be detrimental to the NTL Group or
its business, operations or other activities. Where any Virgin Company requests
its products or services be accessible through the Communications Services
provided by the NTL Group and/or be included as part of the Partner
Services, then the Licensee shall consider in all good faith such requests on
terms that are no less favourable than those offered to any other third party
where such request does not unreasonably impact on its business. VEL shall use all reasonable efforts to facilitate
activities and initiatives proposed by the Licensee in conjunction with any
Virgin Company and on terms no less favourable than those offered to any other
third party.


 


36

















 


5.10                              VEL,
or any Affiliate of VEL nominated by VEL, shall have the right to appoint a
suitably qualified senior sales and marketing executive for employment as Chief
Marketing Officer of the NTL Group reporting directly to the CEO, COO or to the
senior person in charge of the consumer division of the NTL Group. Such
employment shall commence no earlier than the Commencement Date (and such right
will then continue during the Term) and shall be with the relevant employing
company in the NTL Group upon that company’s usual terms and conditions of
employment and subject to satisfactory references and immigration status. If
the proposed appointee is not approved by that company for employment as a
result of the references or immigration status or if the employee then leaves
the employment of the NTL Group, then VEL, or any Affiliate of VEL nominated by
VEL, shall have a right to appoint an alternative executive. This clause shall
not prevent the relevant NTL Group employing company from terminating such
employment at any time in accordance with such terms and conditions of
employment provided that VEL, or any Affiliate of VEL nominated by VEL, shall
have a right to appoint an alternative executive. The Licensee may recommend
to VEL a suitably qualified senior sales and marketing executive for employment
as Chief Marketing Officer and VEL shall consider such recommendation in good
faith.


 


5.11                              VEL
shall provide reasonable support and guidance to the members of the NTL Group
engaged 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 the
Marks.


 


5.12                              VEL
shall use all reasonable efforts to ensure that the members of the NTL Group
are treated no less favourably than
other Virgin Companies.


 


5.13                              The
parties acknowledge that the NTL Group may not currently comply with all
aspects of the Direct Selling Policy but that, prior to launch of products or
services under the Marks, it will comply with the Direct Selling Policy with
respect to those products or services.


 


6.                                       TRADE MARK PROTECTION


 


6.1                                    The
Licensee acknowledges VEL’s right, title and interest in the Marks (subject to
this Deed) and undertakes not to do and shall procure that the members of the
NTL Group shall not do any act which would jeopardise or invalidate the
registration of the Marks nor to do any act which could give rise to any
application to remove the Marks or which would otherwise prejudice in a
material way VEL’s right, title and interest in the Marks.


 


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


 


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


 


37

















 


additional and available domain
names comprising a new and relevant domain name suffix relating to the Licensed
Activities and containing the Names as are reasonably requested by the
Licensee, and all such domain names shall, when registered, automatically be
deemed “Domain Names” for the purposes of this Deed. The Licensee shall be
responsible for administering sub-domains for which no registration in required
and applying for and maintaining SSL licences (e.g. certificates for secure
websites) in the name of VEL, for which purpose VEL consents to the use of its
name on such applications and registrations and agrees to provide its
reasonable assistance (including, without limitation, information) as the
Licensee may from time to time require for these purposes.


 


6.4                                    VEL
shall take all reasonable steps to ensure that the registrations of the Marks
cover (and, if applicable, are extended to cover) the scope of the Licensed
Activities to the extent that registrations are available in the Territory and
shall accordingly make all such formal trade mark applications in its own name
as are, in its reasonable opinion, necessary (at its cost).


 


6.5                                     VEL
shall:


 


(a)                          use
all reasonable endeavours to
prosecute any pending applications for the Marks to registration as soon as
reasonably practicable hereafter which shall include seeking in good faith to
overcome all oppositions and objections;


 


(b)                         ensure
that the registrations of such of the Marks as are registered are renewed as
and when they fall due for renewal;


 


(c)                          upon
the written reasonable request, and at the expense of the Licensee, apply and
prosecute further trade mark registrations in the Territory which feature the
Marks in the form of the Names, following which such applications and
registrations shall be added to Schedule 2. The Licensee shall have the
right to review and provide comment on any such pending applications, and VEL
shall, in good faith, consider such comments; and


 


(d)                         maintain
and protect the goodwill and reputation of the Marks, provided that VEL shall
not be in breach of this clause 6.5(d) to the extent that diminution of
the goodwill and reputation of the Marks is caused by a breach of this Deed by
the Licensee or a member of the NTL Group.


 


6.6                                    Other
than those additional trade marks and additional domain names requested by the
Licensee in accordance with clauses 6.3 and 6.5(c), the costs of filing,
pursuing and renewing other formal trade mark applications and other any
registrations in the Territory for any of the Marks and the Domain Names under
clause 6 which relate in whole or in part to the Licensed Activities shall
be paid in full and in a timely manner by VEL.


 


6.7                                    The
Licensee shall and shall procure that relevant members of the NTL Group shall,
at the reasonable request and expense of VEL, provide reasonable assistance in
connection with the protection and maintenance by VEL of its rights in and to
the Marks as VEL may from time to time in its reasonable discretion
determine necessary including providing details of sales figures, Customer
numbers, marketing spend, launch dates and dates of first use of the Marks by
the members of the NTL Group.


 


38

















 


6.8                                    Without
prejudice to the rights of the members of the NTL Group under this Deed, the
Licensee shall and shall procure that relevant members of the NTL Group shall
immediately stop using, or as VEL may direct, modify the use of, any Marks
in relation to any part or parts of the Licensed Activities, on receipt of
written notice from VEL that such use infringes or is reasonably likely to
infringe the Intellectual Property Rights of a third party (other than any
Virgin Company) provided always that:


 


(a)                         VEL
gives the Licensee full details of the alleged infringement, together with a
written opinion from competent external and independent legal counsel
specialising in intellectual property law to the effect that such use
constitutes, or is reasonably likely to constitute, an infringement of the
Intellectual Property Rights of a third party; and


 


(b)                        VEL
shall permit the relevant members of the NTL Group to recommence use of the
Marks if, and as soon as reasonably practicable after, VEL settles the matter
with the third party with the effect that use by the members of the NTL Group
is permitted or would no longer amount to an infringement of such third party’s
Intellectual Property Rights,


 


provided that nothing
in this clause 6.8 shall prevent the members of the NTL Group from exercising
any rights they may have against VEL.


 


6.9                                    The
Licensee shall not be required to make any Royalty payments in relation to
those Licensed Activities in respect of which it is unable to use the Marks for
any period during which such use of the Marks by any member of the NTL Group is
suspended under clause 6.8.


 


7.                                       DEALINGS


 


7.1                                     Save
as otherwise specified in this Deed, the rights granted under this Deed are
personal to the Licensee and the other members of the NTL Group and they shall
not delegate, assign, sub-license or sub-contract any of those rights (except
by way of mortgage, charge or security, and only until such time as that funding
shall be repaid notice of which shall be given to VEL) to any third party
without the prior written consent of VEL (such consent not to be unreasonably
withheld or delayed) provided that:


 


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


 


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


 


(ii)                           the Licensee shall procure that, in the event of such assignee ceasing
to be a solvent member of the NTL Group, any such rights and/or obligations
assigned 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 successors
or permitted assignee of the Licensee and the Licensee shall and shall procure
that any such successor or permitted assignee of the Licensee is notified of
the terms of this Deed; and


 


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


 


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


 


(i)                             such third parties agree in writing to be
bound by terms relating to use of the Marks no less onerous than under this
Deed;


 


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


 


(iii)                       for the avoidance of doubt, any authorisation
granted pursuant to this clause 7.1(b) shall terminate immediately on
termination of this Deed,


 


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


 


(d)                         any
rights granted to or enjoyed by a member of the NTL Group shall automatically
cease subject to clauses 9.10 and clause 9.12 and 9.13 on that member ceasing
to be part of the NTL Group; and


 


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


 


7.2                                     In the
event of any assignment by the Licensee in accordance with clause 7.1, the
Licensee shall execute and procure the execution by the assignee of a novation
agreement with VEL (and VEL agrees to execute such novation agreement) so as to
give effect to the transfer and to bind the assignee to all provisions to this
Deed.


 


7.3                                     Save
as otherwise specified in this Deed, the rights granted under this Deed are
personal to VEL and VEL shall not delegate, assign, sub-license or sub-contract
any of those rights including its rights under the Marks (except by way of
mortgage, charge or security, and only until such time as that funding shall be
repaid notice of which shall be given to the Licensee) to any third party
without the prior written


 


40

















 


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


 


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


 


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


 


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


 


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


 


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


 


7.4                                    This
Deed shall be binding on any successors or permitted assignee of the Licensee
and the Licensee shall procure that any such successor or permitted assignee of
the Licensee is notified of the terms of this Deed. This Deed shall be binding
on any successors or permitted assignee of VEL and VEL shall procure that any
such successor or permitted assignee of VEL is notified of the terms of this
Deed.


 


7.5                                     In the
event that VEL:


 


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


 


(b)                             irremediably
fails (with no prospect of mitigating or resolving such failure) to renew any
of the trade mark registrations for the Names VEL acknowledges that it shall
not object to the Licensee seeking to re-file such marks. VEL agrees to notify
the Licensee of any such failure to renew as soon as it discovers such failure
and the Licensee agrees to notify VEL should it become aware of any impending
or missed deadline for renewal.


 


7.6                                     For
the purposes of clause 7.5(a) and (b), VEL hereby irrevocably appoints any
of the


 


41

















 


officers and directors of the
Licensee 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 behalf
in whatever manner required any document or thing lawfully necessary in such form as
the Attorney in his absolute discretion may reasonably deem necessary or
desirable to give effect to the assignment referred to in clause 7.5(a) and
any refiling pursuant to clause 7.5(b) and/or any documents required to
facilitate any such refiling and its prosecution to grant and VEL undertakes to
ratify whatever the Attorney may do in its name or on its behalf in
exercising such powers.


 


8.                                           INDEMNITY, WARRANTIES AND
LIMITATIONS OF LIABILITY


 


Warranties


 


8.1                                     VEL
warrants to the Licensee that:


 


(a)                          it is
a limited company duly organised, existing and in good standing under the laws
of England and resident in the United Kingdom for tax purposes and is
beneficially entitled to the Royalties paid pursuant to clause 4.1 and 4.12 of
this Deed;


 


(b)                         it is
either (as applicable) the owner or registered proprietor of, or applicant for
registration of the Marks and the Domain Names, and that it has the right to
grant the rights granted to the members of the NTL Group under this Deed and it
has not granted and will not grant those or any conflicting rights to any other
person in the Territory during the Term;


 


(c)                          at the
date of this Deed it has paid all current renewal fees necessary to ensure the
continued registration of the Marks and the Domain Names where applicable and
that it, or any third party acting on its behalf in such matters, has a secure
system in place prompting payment of all renewals in a timely manner before
they become due and shall pay all renewal fees as they become due (subject to
clause 7.5);


 


(d)                         it is
not aware of any other rights whose grant under this Deed would be necessary to
enable the members of the NTL Group to carry on the Licensed Activities under
the Marks;


 


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


 


(f)                            it is
not aware of any actual, proposed or threatened claims, litigation or
challenges as to its ownership of the Marks or the Domain Names or claims of
Intellectual Property Rights infringement by third parties in relation to the
use of the rights licensed hereunder; and


 


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


 


(h)                         VEL
owns all such goodwill as exists in the Marks.


 


42

















 


Indemnity and limitations and exclusions of liability


 


8.2                                     The
provisions of the remainder of this clause 8 set out each party’s entire
liability (including any liability for the acts and omissions of its employees
or agents) to the other party in respect of:


 


(a)                          any
breach of its contractual obligations arising under this Deed; and


 


(b)                         any
representation, statement or tortious act or omission including negligence
arising under or in connection with this Deed.


 


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


 


8.4                                     Neither
party excludes or limits liability to the other party for fraud or for death or
personal injury due to its own negligence or its employees’ or agents’
negligence whilst acting in the course of their employment, or any breach of
any obligations implied by Section 12 of the Sale of Goods Act 1979 or Section 2
of the Supply of Goods and Services Act 1982.


 


8.5                                     Subject
to clause 8.4, in respect of any claim arising in respect of an Event of
Default only (but not, for the avoidance of doubt, in respect of any
Intellectual Property Rights claim pursuant to clause 8.6), neither party shall
be liable to the other in respect of any Event of Default for:


 


(a)                          any
loss or damage suffered by the other as a result of a claim or action brought
by a third party (except to the extent that such party is entitled to recover
in respect of such a claim or action under any express term of this Deed); or


 


(b)                         any
special, indirect or consequential loss or damage, even if such loss or damage
was reasonably foreseeable or such party had been advised of the possibility of
the other party incurring the same.


 


8.6                                     Subject
to clause 8.7, VEL agrees to indemnify and hold harmless the Licensee from and
against 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 threatened
claim by a third party against the Licensee that any exercise of the
Intellectual Property Rights licensed to it under this Deed infringes the
Intellectual Property Rights of any third party. The benefit of this indemnity
shall, for the avoidance of doubt, extend to claims made against the NTL Group
by any other Virgin Company conducting similar activities outside the Territory
in respect of the provision by the NTL Group of the Licensed Activities in
accordance with this Deed.


 


8.7                                     Subject
to clause 8.4, the maximum liability of each party during the Term, in
aggregate, in respect of:


 


(a)                          any
and all Events of Default; and/or


 


(b)                         any
and 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 the
name “Virgin” in association or conjunction with the non-”Virgin” part of
the Names),


 


shall be limited to a sum not
exceeding two hundred million pounds sterling (£200,000,000), subject to the
following:


 


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


 


(ii)                                  where
any claim arises in respect of use by the NTL Group of the name “Vision” (if
the Names include “Virgin Vision”), whether such claim is for indemnification
pursuant to clause 8.6 and/or involves a claim by the NTL Group for an Event of
Default by VEL, then VEL’s maximum liability, in aggregate, in respect of any
and all such claims shall be limited to a sum not exceeding thirty million
pounds (£30,000,000).


 


8.8                                     The
monetary 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                                     A
failure by either party to perform its obligations under this Deed shall
not be treated as an Event of Default if and to the extent such failure was
caused wholly or mainly by the other party’s failure to perform any of its
obligations under this Deed.


 


8.10                               Nothing
in this clause shall confer any right or remedy upon a party to which it would
not otherwise be legally entitled.


 


8.11                              The
parties expressly agree that should any limitation or exclusion in this clause
8 be held to be invalid or void under any applicable statute or rule of
law it shall, to that extent, be deemed omitted, but if any party thereby
becomes liable for loss or damage which would otherwise have been excluded,
such liability shall remain subject to the other limitations and provisions set
out herein.


 


8.12                              The
provisions of this clause shall continue to apply notwithstanding the
termination or expiry of this Deed for any reason whatsoever.


 


8.13                              Save
for those expressly set out in this Deed, all warranties, terms, conditions,
undertakings and obligations, whether express or implied, by statute, common
law, trade usage, course of dealing or otherwise are excluded to the maximum
extent legally possible.


 


9.                                       TERMINATION AND EFFECTS OF
TERMINATION


 


9.1                                     The
Deed shall commence on the Commencement Date and shall continue for the Term
unless 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 expire
automatically without need for further notice on expiration of the Term. The
Licensee shall be entitled to renew this Deed following the Term on reasonable
commercial terms in accordance with sub-clauses 9.1(a) to (c) of this
clause 9.1. If the Licensee wishes to renew this Deed:


 


(a)                          it
shall give notice in writing at least twelve (12) months prior to the expiry
date of its intention to renew;


 


(b)                         the
parties shall commence negotiation of the terms for the renewed agreement within
three (3) months of such notice and shall devote such resource as is
required to ensure that the negotiation is completed at least six (6) months
prior to the original expiry date (provided that if the negotiations have not
been completed prior to expiry of the Term this Deed will terminate
automatically); and


 


(c)                          the
parties shall act reasonably and in good faith in the conduct of such
negotiation.


 


9.2                                     In the
event that VEL has reasonable and bona fide grounds to believe that the use (or
lack of use) of the Marks by any member of the NTL Group (including the
Licensee) has been or is reasonably likely to result in a long-term and
material diminution in the value of the Marks including the reputation or
goodwill in the Marks, then:


 


(a)                          VEL
shall serve written notice in accordance with clause 12.1 specifying the same
and the parties shall call a meeting of their senior representatives to discuss
the issues raised;


 


(b)                         the
parties shall agree a plan to resolve the issues raised during a period of
thirty (30) days (“Resolution Plan”) following the written notice referred to
in clause 9.2(a) above;


 


(c)                          if the
parties fail to agree such a Resolution Plan, then each party’s chief executive
officer, chief operating officer or equivalent officer shall meet in a good
faith effort to resolve the outstanding issues and agree a Resolution Plan with
the original thirty (30) day period. In the event of any failure to resolve
such issues and/or agree a Resolution Plan within the original thirty (30) day
period such issues shall be referred to the dispute resolution procedure in
clause 14.6;


 


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


 


(e)                          if the
NTL Group complies with its obligations under the Resolution Plan, then no
further action will be taken by VEL in respect of that particular breach. In
the event that the Resolution Plan fails to substantially remedy the breach or
alleged breach, or there is a new breach, then the procedure in this clause 9.2
shall be repeated; and


 


45

















 


(f)                            if the
NTL Group fails to comply with its obligations under the Resolution Plan within
the agreed timetable (and provided that such failures are not attributable to
any act or omission of VEL) and the use or lack of use of the Marks by any
member of the NTL Group in the reasonable view of VEL remains materially
damaging 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 this
Deed on one hundred and eighty (180) days written notice (provided that any
damage shall cease immediately). If the NTL Group in good faith disputes the
fairness or validity of such notice, then this shall be referred to dispute
resolution in clause 14.6 to the extent that failure to agree a Resolution Plan
in respect of the same had not already been referred to dispute resolution.


 


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


 


(a)                          VEL
shall serve written notice in accordance with clause 12.1 specifying the same
and the parties shall call a meeting of their senior representatives to discuss
the issues raised;


 


(b)                         the
parties shall agree a plan to resolve the issues raised during a period of
sixty (60) days (“Contract Resolution Plan”) following the written notice
referred to in clause 9.3(a) above;


 


(c)                          if the
parties fail to agree such a Contract Resolution Plan, then each party’s chief
executive officer, chief operating officer or equivalent officer shall meet in
a good faith effort to resolve the outstanding issues and agree a Contract
Resolution Plan within the original sixty (60) day period. In the event of any
failure to resolve such issues and/or agree a Contract Resolution Plan within
the original sixty (60) day period such issues shall be referred to the dispute
resolution procedure in clause 14.6;


 


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


 


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


 


(f)                            if the
NTL Group fails to comply with its obligations under the Contract Resolution
Plan within the agreed timetable (and provided that such failures are not
attributable to any act or omission of VEL) and the breach remains a material
breach, on a long term basis, in the reasonable view of VEL or the dispute
resolution process under clause 14.6 has been unsuccessful, then VEL shall be
entitled to terminate this Deed on one hundred and eighty (180) days


 


46

















 


written notice (provided that
any such material breach shall cease immediately). If the NTL Group in good
faith disputes the fairness or validity of such notice, then this shall be
referred to dispute resolution in clause 14.6 to the extent that failure to
agree a Contract Resolution Plan in respect of the same had not already been
referred to dispute resolution.


 


9.4                                     VEL
shall have the right, by giving one hundred and eighty (180) days notice in
writing to the Licensee and/or any relevant party or parties, to terminate this
Deed if:


 


(a)                          the
Licensee or any relevant party suffers an Insolvency Event;


 


(b)                         the
Licensee or any relevant party challenges the validity of or the entitlement of
VEL to use or license the use of any of the Marks (other than where such use or
licence is in breach of the rights and licences granted to the Licensee under
this Deed), except that action by the Licensee under clauses 6 and 8 shall not
be treated as any such challenge; and


 


(c)                          the
Licensee or any relevant party ceases or threatens to cease to use the Marks
and/or carry on the whole or any material part of the Licensed Activities.


 


9.5                                     The
Licensee shall notify VEL if there is a change of Control of the Licensee, or
any Holding Company of the Licensee other than as part of a group
re-organisation or where the shareholders of the Licensee or Holding Company of
the Licensee following a re-organisation remain substantially the same. If any
member of the board of directors of the ultimate Holding Company of the company
acquiring such Control of the Licensee, or the acquirer itself, is not a Fit
and Proper Person then, within thirty (30) days of such notification, VEL shall
notify the Licensee of such fact and its intention to exercise its right to
terminate this Deed under this clause 9.5 unless the Licensee procures the
removal of such director. The Licensee shall have a further thirty (30) days to
procure the removal of such director. In the event that the Licensee fails to
procure such removal, then VEL shall have the right by giving one hundred and
eighty (180) days notice in writing to the Licensee to terminate this Deed.


 


9.6                                     VEL
shall notify the Licensee if there is a change of Control of VEL, or any
Holding Company of VEL other than as part of a group re-organisation or
where the shareholders of VEL or Holding Company of VEL following a
re-organisation remain substantially the same. If any member of the board of
directors of the ultimate Holding Company of the company acquiring such Control
of VEL, or the acquirer itself, is not a Fit and Proper Person then, within
thirty (30) days of such notification, the Licensee shall notify VEL of such
fact and its intention to exercise its right to terminate this Deed under this
clause 9.6 unless VEL procures the removal of such director. VEL shall have a
further thirty (30) days to procure the removal of such director. In the event
that VEL fails to procure such removal, then the Licensee shall have the right
by giving one hundred and eighty (180) days notice in writing to VEL to
terminate this Deed.


 


9.7                                     The
Licensee shall have the right to terminate this Deed:


 


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


 


47

















 


expiry of the Minimum Term; and


 


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


 


9.8                                     In the
event that:


 


(a)                          the
value and reputation of the Marks materially diminishes such that they no
longer denote high quality status, have become generic, have lost their
distinctiveness or no longer represent the Virgin brand values and/or continued
use by the Licensee and/or any member of the NTL Group has been or is likely to
be damaging to the goodwill or reputation of such member of the NTL Group on a
long term basis (other than as a result of any breach of this Deed by the
Licensee or any member of the NTL Group or any third party authorised to use
the Marks by or on behalf of the Licensee). (For the avoidance of doubt the
parties agree that the diminution in value, loss of high quality status, distinctiveness
or change of brand value may be caused by or attributable to the act or
omission of any Virgin Company or any representative thereof or spokesperson
therefor); or


 


(b)                         VEL
directs the Licensee to stop using or materially modify the use of the Marks in
relation to a material part of the Licensed Activities under clause 6.8
and such direction has significant impact on the Licensee’s business or part thereof
or if the Licensee is otherwise prevented by law or by order of a court of
competent jurisdiction from exercising a material part of the rights
granted to it under this Deed for the remainder of the Term; or


 


(c)                          VEL
commits a persistent and material or flagrant and material breach of any term
or condition of this Deed,


 


then:


 


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


 


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


 


(iii)                        if the parties fail to agree such a VEL Resolution Plan, then each
party’s chief executive officer, chief operating officer or equivalent officer
shall meet in a good faith effort to resolve the outstanding issues and agree a
VEL Resolution Plan within the original sixty (60) day period. In the event of
any failure to resolve such issues and/or agree a VEL Resolution Plan within
the original sixty (60) day period such issues shall be referred to the dispute
resolution 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 or
responsibilities allocated to it in such VEL Resolution Plan in order to


 


48

















 


resolve the dispute in good faith, such VEL Resolution Plan to be
implemented within a further period of one hundred and twenty (120) days from
agreement of the VEL Resolution Plan or such other period as may be agreed
in 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 VEL
Resolution Plan substantially fails to remedy the issue then the procedure in
this clause 9.8 shall be repeated; and


 


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


 


9.9                                     In the
event of any change of Control of the Licensee, or any Holding Company of the
Licensee other than as part of a group re-organisation or where the shareholders
of the Licensee or Holding Company of the Licensee following a re-organisation
remain substantially the same, the Licensee shall have the right to terminate
this Deed by giving one year’s written notice to VEL within six months of such
change of Control, provided that if such notice expires at any time during the
Minimum 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 Quarters
between the date of termination of this Deed and the expiry of the Minimum Term
rounded to the nearest whole number;


 


B = the average of the royalty
payments made by the Licensee in respect of the four full Quarters which
immediately preceded the date of termination;


 


i = quarterly effective interest
rate calculated as follows:


 


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


 


g = 2%;


 


r = the weighted average cost of
capital (“WACC”) for the NTL Group to be agreed at the relevant time of change
of control and, in the absence of agreement between the parties, to be
determined by a jointly appointed independent investment bank of international
repute.


 


A worked example of this formula
is set out, for illustrative purposes only, at


 


49

















 


Schedule 9.


 


9.10                                  Upon
expiration of the Term or earlier termination of this Deed for any reason, the
Licensee, and any relevant party or parties, shall have a period of no more
than one hundred and eighty (180) days thereafter, or ninety (90) days in the
case of a member of the NTL Group ceasing to be a member of the NTL Group, to:


 


(a)                          cease
all use of the Marks provided that the Licensee, and any relevant party or
parties, shall immediately cease to use the Marks to acquire any new customers;


 


(b)                         remove
from any establishment or place (including the internet and any websites) all
representations of the Marks including all signs or display material bearing
the Marks where it is reasonably practicable or financially proportionate to
remove 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 which
reproduce or display the Marks or, at the election of VEL, destroy such
products and other materials and provide VEL with satisfactory evidence of
their destruction, provided that the Licensee shall be entitled to sell and/or
distribute to existing Customers only any existing products and/or materials
produced in relation to the Licensed Activities during the one hundred and
eighty (180) day period following termination or expiry; notwithstanding the
foregoing, the Licensee shall have the absolute right to re-brand or otherwise
remove, 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 not
displayed on such products or materials and it is obvious that the Marks were
previously displayed on such products or materials;


 


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


 


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


 


9.11                                   For
the 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 as
soon as reasonably practicable.


 


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


 


50

















 


9.13                                  For
the 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 Licensee
in a form reasonably satisfactory to the Licensee and VEL irrevocably and
severally appoints the Licensee and any person nominated for the purpose by the
Licensee (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 behalf
and as its act and deed to execute such assignment and any other deed,
assurance, agreement, instrument, act or thing which may be required to
give effect to the assignment of the Names in favour of the Licensee, and VEL
covenants with the Licensee to ratify and confirm all such acts or things made,
done or executed by that attorney.


 


9.14                                   Except
as otherwise provided herein, neither party may terminate this Deed
without the written consent of the other.


 


10.                                         INFRINGEMENTS


 


10.1                                  Each
party shall promptly notify the other of any unauthorised use or infringement
or suspected or threatened infringement of the Marks or of any passing off or
of any other act or thing which might materially vitiate or prejudice the
rights of VEL or the members of the NTL Group in and to or under the Marks
respectively that comes to its notice at any time giving reasonable particulars
thereof.


 


10.2                                  Subject
only to clause 10.5 below, VEL shall have the exclusive right in its absolute
discretion and at its expense to take whatever action it believes necessary and
proper in connection with any unauthorised use, infringement, suspected or
threatened infringement, passing off, or other unlawful interference with the
rights of VEL in the Marks save that in taking such action it shall also act in
the interests of the Licensee and other members of the NTL Group to the extent
that to do so does not significantly prejudice VEL and/or VEL’s rights in the
Marks.


 


10.3                                  The
Licensee agrees to provide to VEL all reasonable assistance which VEL may require
in connection with any action it may decide to take in relation to any
unauthorised use, infringement, suspected or threatened infringement, passing
off or other unlawful interference with the rights of VEL (including, without
limitation, bringing or joining in proceedings or lending its name to any
proceedings brought by VEL and providing VEL with details of sales figures,
Customer numbers, marketing spend, launch dates and dates of first use of the
Marks by members of the NTL Group). The Licensee and any other member of the
NTL Group shall be fully indemnified by VEL in respect of all costs and
expenses incurred by the Licensee or any
other member of the NTL Group in providing such assistance save that VEL shall
not be liable under such indemnity:


 


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


 


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


 


10.4                               The
provisions of Section 30(2) of the Trade Marks Act 1994 (as amended,
re-enacted or replaced from time to time) or similar or equivalent legislation
in 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 take
action in respect of any event described in clause 10.2 for a period exceeding
twenty five (25) days, the Licensee shall be entitled to do so, at its own
expense, in its own name and, if appropriate, that of VEL and VEL agrees to
provide the Licensee all reasonable assistance which the Licensee may require
in connection with the action it takes provided always that:


 


(a)                          the
Licensee notifies VEL in writing of its intention to do so;


 


(b)                         the
Licensee shall only be permitted to take such action if failure to do so would
have a material adverse effect on the Licensed Activities carried out under the
Marks;


 


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


 


(d)                         the
Licensee will indemnify VEL from and against all costs and expenses (including,
without limit, disbursements, reasonable legal costs, fees and expenses and
value added tax), actions, proceedings, claims, demands and damages arising
directly from such action; and


 


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


 


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


 


10.6                              The
proportion of the costs and damages recovered in respect of any action pursuant
to clauses 10.2 or 10.5 shall first, reimburse the party who brought the action
in respect of all costs and expenses incurred as a result of bringing the
action and the remainder shall be divided between the parties in such
proportions as is fair and reasonable, reflecting the effect on their
respective businesses and the loss suffered.


 


11.                                 CONFIDENTIALITY


 


11.1                               Each
of the parties shall keep secret and confidential any information which it may obtain
relating to the business of the other.  Such
information shall be treated as proprietary and confidential to the party
imparting the same. Each party hereby


 


52

















 


agrees that it shall use such
information received or procured by it from the other solely for the purposes
of 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 or
indirectly to any third party except:


 


(a)                          with
the prior written consent of the other party;


 


(b)                         to the
extent necessary to comply with any law or the valid order of a court or
tribunal of competent jurisdiction or the rule, regulation or direction of any
governmental or other regulatory authority or agency ( including the rules of
any listing authority or exchange) in which event the relevant party shall so
notify the other as promptly as reasonably practicable (and if possible prior
to making any disclosure) and shall use its reasonable endeavours to seek
confidential treatment of such information;


 


(c)                          to its
auditors, legal advisers and other professional advisers provided that it uses
its reasonable endeavours to procure that such persons maintain such
confidentiality;


 


(d)                         in
order to enforce its rights under this Deed; and


 


(e)                          to any
person with a bona fide and legitimate interest in such information who enters
into a confidentiality agreement including a prospective purchaser of NTL
Incorporated or any part of its business and provided that such person
agrees to use the information only for the purpose of such bona fide and
legitimate interest.


 


11.2                               The
provisions of clause 11.1 shall not apply to:


 


(a)                          any
information in the public domain otherwise than by breach of this Deed;


 


(b)                         information
obtained from a third party who is free to divulge the same;


 


(c)                          information
that was already known to the receiving party prior to disclosure under this
Deed and was not previously acquired by the receiving party from the disclosing
party under an obligation of confidentiality or non-use towards the disclosing
party; or


 


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


 


11.3                              Neither
party nor any representative thereof or spokesperson therefor shall make any
public statement, announcement or press release regarding the other party
without the other party’s prior written consent (not to be unreasonably
withheld, conditioned or delayed), nor make any negative or derogatory public
comments or statements (expressly or by implication) regarding the other party
or any aspect of the relationship between the parties.


 


11.4                              VEL
and the Licensee shall divulge information the subject of this clause only to
those employees who are directly involved in the performance of this Deed and
shall ensure that such employees are aware of and comply with these obligations
as to confidentiality.


 


53

















 


11.5                              Each
party acknowledges and agrees that damages would not be an adequate remedy for
any breach of this clause and that either party shall be entitled to seek the
remedies of injunction, specific performance and other equitable relief for any
threatened or actual breach of this clause.


 


11.6                              The
obligations contained in this clause shall survive the termination or
expiration of this Deed.


 


12.                                 NOTICES


 


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


 


Address
for notices to VEL:


Virgin Enterprises
Limited


120 Campden Hill Road


London


W8 7AR


 


Attention:


Intellectual Property
Department


Fax:  020 7313 2091


 


Address
for notice to the Licensee:


NTL Group Limited


NTL House


Bartley Wood Business
Park


Hook


Hampshire


RG27 9UP


 


Attention:


NTL Legal Department


Fax:  01256 752170


 


12.2                              The
parties may change the address, facsimile number or the name of the person
for whose attention notices are to be addressed by serving a notice on the
other party in accordance with the provisions of this clause.


 


12.3                               All
notices given in accordance with clause 12.1 above shall be deemed to have been
served as follows:


 


(a)                          if
delivered by hand, at the time of delivery;


 


(b)                         if
posted, at the expiration of 3 Business Days after the envelope containing


 


54

















 


the same was delivered into the
custody of the postal authorities; or


 


(c)                          if communicated
by facsimile, at the time of transmission,


 


provided that where,
in the case of delivery by hand or transmission by facsimile, such delivery or
transmission occurs after 6 p.m. on a Business Day or on a day which is
not a Business Day, service shall be deemed to occur at 9 a.m. on the next
following Business Day. References to time in this clause are to local time in
the country of the addressee.


 


12.4                              In
proving such service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered either to the
address shown or into the custody of the postal authorities as a pre-paid first
class letter, or that the facsimile transmission was made after obtaining
in person or by telephone appropriate evidence of the capacity of the addressee
to receive the same, as the case may be.


 


13.                                 FORCE MAJEURE


 


13.1                              No
party shall be deemed in breach or default of this Deed or otherwise liable to
the other party for any failure or delay in performing any of its obligations under
this Deed where and to the extent that the delay or non-performance is due to a
Force Majeure Event, provided that:


 


(a)                          if a
party is prevented or delayed in the performance of any of its obligations
under this Deed by Force Majeure Event that party shall, immediately upon
becoming aware of that fact, give written notice to the other party of the
nature, extent and expected duration of the circumstances giving rise to the
Force Majeure Event;


 


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


 


(c)                          immediately
after the end of the Force Majeure Event the affected party shall give written
notice to the other that the Force Majeure Event has ended and shall resume
performance of its obligations under this Deed; and


 


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


 


55

















 


14.                                 GENERAL


 


No
Breach and Waiver


 


14.1                              No
delay, failure or indulgence by either party to perform any provision of
this Deed shall operate or be construed as a waiver of that party’s powers or
rights 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 a
waiver in respect of any subsequent breach. No single or partial exercise of
any power or right by either party shall preclude any other or further exercise
thereof or the exercise of any such other power or right under this Deed.


 


Modifications


 


14.2                              No
amendment or modification to this Deed will be effective or binding unless it
is in writing, signed by all the parties and specifically states that it is an
amendment to this Deed.


 


Invalidity


 


14.3                              If at
any time any one or more of the provisions (or part of one or more of the
provisions) of this Deed becomes invalid, illegal or unenforceable in any
respect, under any law, the validity, legality and enforceability of the
remaining provisions (or part or parts) shall not in any way be affected
or impaired.


 


Entire
Agreement


 


14.4                              Subject
to clause 2.3 in respect of the Virgin Mobile Licence, this Deed (and the
letter of agreement between the NTL Group and VEL of even date relating to the
Virgin Mobile Licence) sets out the entire agreement and understanding between
VEL and the Licensee and relevant members of the NTL Group in respect of the
use of the Marks by the Licensee and relevant members of the NTL Group and
supersedes all previous representations, understandings, licences or
agreements, whether oral or written, in relation to such use. It is agreed
that:


 


(a)                          no
party has entered into this Deed in reliance upon any representation, warranty
or undertaking of any other party which is not expressly set out or referred to
in this Deed;


 


(b)                         subject
only to clause 14.4 (c) below, no party shall have a claim or remedy in
respect of misrepresentation (whether negligent or otherwise) or untrue
statement made by any other party; and


 


(c)                          this
clause shall not exclude any liability for fraudulent misrepresentation.


 


Independent
Contractors


 


14.5                               Nothing
in this Deed shall create, or be deemed to create, a partnership, a joint
venture, an agency, a fiduciary duty or employment between the parties. The
only relationship created by this Deed is that of independent contractors, and,
except as expressly provided herein, neither party by virtue of this Deed has
authority to transact any business in the name of the other party or on its
behalf or incur any liability for or on behalf of the other party.


 


56

















 


Disputes


 


14.6                              In the
event of any dispute or difference which may arise between the parties in
connection with or arising out of this Deed, directors or other senior
representatives of the parties with authority to settle the dispute will,
within ten (10) Business Days of a written notice from one party to the
other, meet in a good faith effort to resolve the dispute. If the dispute is
not resolved at that meeting, the parties will attempt to settle it by
mediation in accordance with the CEDR Model Mediation Procedure. For the
avoidance 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 before
referring the matter to a mediation under the CEDR Rules. Unless otherwise
agreed by the parties the mediator will be nominated by CEDR. To initiate
the mediation a party must give notice in writing to the other parties to the
dispute requesting mediation. The mediation will begin within thirty (30) days
following receipt of such notice and shall last no more than one (1) day
unless otherwise determined by the mediator. No party may commence any
Court proceedings in respect of any dispute arising out of this Deed until it
has attempted to settle the dispute by mediation and either the mediation has
terminated 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 been
completed provided that nothing in this clause shall be construed as
prohibiting a party from applying to a court for interim injunctive relief at
any time where either party has reasonable cause to do so to avoid damage to
its business or to preserve any right of action it may have.


 


Governing
Law and Jurisdiction


 


14.7                              This
Deed shall be governed by and construed in accordance with English law. Subject
to clause 14.6 each of the parties irrevocably submits to the exclusive
jurisdiction of the Courts of England.


 


Counterparts


 


14.8                              This
Deed may be executed in counterparts, each of which shall be considered an
original, with the same effect as if the parties or their representatives signed
the same instrument.


 


Further
Assurances


 


14.9                              VEL
and the Licensee shall, at their own expense, execute and deliver all such
documents and take or procure the execution of all such documents (in a form reasonably
satisfactory to both parties) as may from time to time be required to give
full effect to this Deed.


 


Third
Party Rights


 


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


 


57

















 


Costs


 


14.11                         Each
party shall bear its own costs in connection with the negotiation, preparation
and implementation of this Deed.


 


Successors


 


14.12                        The
provisions of this Deed shall be binding upon and shall inure for the benefit
of VEL, the Licensee, members of the NTL Group and their respective successors
in title and assignees permitted in accordance with the terms of this Deed.


 


58

















 


IN WITNESS of which
this Deed has been executed as a Deed and has been delivered on the date stated
at 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 - Virgin
Signature


 





 


3

















 


SCHEDULE 2


 


Part A – Virgin
Mobile


 


	
  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 BE
USED IN CONJUNCTION WITH AND CLOSE PROXIMITY TO THE

MARKS 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, product
or service names


 


Virgin.net


Virgin
Broadband


Virgin
Mobile


Virgin
TV


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


Fixed
Line 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 domain
names:


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


 


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


 


Virgin
Vision


Virgin
Media


Virgin
Media Group


Virgin
Communications


 


6

















 


SCHEDULE 3


 


Service Levels


 


1.                                           Base
Service Levels


 


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


 


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


 


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


 


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


 


1.2                                     With regard to
services and/or products provided under the Marks, the Licensee agrees, and
shall procure that relevant members of the NTL Group agree, to use all
reasonable endeavours to follow the TM Guidelines and to uphold Virgin’s
position as “Consumer Champion” and the Virgin brand values of:


 


(a)                           value for money;


 


(b)                          good quality;


 


(c)                           brilliant customer
service;


 


(d)                          innovation;


 


(e)                           competitive challenge;
and


 


(f)                             fun.


 


1.3                                     With regard to
services and/or products provided under the Marks, the Licensee agrees, and
shall procure that relevant members of the NTL Group agree, to use all
reasonable endeavours to have:


 


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


 


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


 


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


 


7

















 


2.                                           Technical
Service Levels:


 


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


 


2.2                                     Broadband


 


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


 


(b)                          Broadband response
time no greater than 50 milliseconds – defined as the mean response time for
traffic originating at the edge of the IP network travelling across the national
infrastructure to any other IP network edge and return to the originating
device, measured in milliseconds. Measured using an UDP test generated by
networks’ performance test devices.


 


2.3                                     Digital TV


 


(a)                           DTV service
availability of broadcast channels of 99% (uptime) – defined as the
availability of all broadcast channels to all customers. Measured from content
acquisition at central headends to distribution from regional headends within
franchises, until a reliable measure of availability of service at the customer’s
equipment is implemented which shall supersede this;


 


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


 


2.4                                     Fixed line telephone


 


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


 


(b)                          Fixed line telephony ‘lost
calls’ of no more than 0.5% (as published by Ofcom) – defined as calls lost
after 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 Mobile
Licence is terminated under clause 2.3 and Virgin Mobile maintains its
relationship with T-Mobile for the provision of Mobile Radio Telecommunication
Services, VEL shall not impose additional technical service levels. However, if
the NTL Group terminates the agreement with T-Mobile then


 


8

















 


the technical service
levels provided to Customers of its Mobile Radio Telecommunication Services
will not be materially lower than those provided through the current agreement
with T-Mobile.


 


3.                                           Aspirational
Service Levels


 


3.1                                    The Licensee
acknowledges that the Licensor wishes all members of the NTL Group to meet the
targets 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 the
Commencement Date, currently measured or reported on this basis by members of
the NTL Group. Therefore, with effect from the Commencement Date, the Licensee
agrees, and shall procure that relevant members of the NTL Group agree, to use
reasonable endeavours to:


 


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


 


(b)                          identify current
levels of performance against the Aspirational Service Levels in sections
3.4(a), (b), (d) and (g) being the base case;


 


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


 


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


 


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


 


3.3                                    The parties
acknowledge that progress toward the Aspirational Service Level targets will be
dependent upon the provision of assistance from VEL.


 


3.4                                    The Aspirational
Service Levels are:


 


(a)                          a customer
satisfaction 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 1,000
customers “how satisfied are you with your experience with Virgin [Chosen
Name]?”;


 


(b)                         an advocacy level of
70% “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 “how
likely are you to recommend Virgin [Chosen Name] to others?;


 


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


 


(d)                         a customer
satisfaction level after complaining to match or better the general Customer
satisfaction level referred to in paragraph 3.4(a) above;


 


9

















 


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


 


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


 


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


 


4.                                           Measurement
and reporting


 


4.1                                     The Licensee agrees to
report the following in connection with the Service Levels described above and
provide VEL with a copy of such report within 10 Business Days of the end of
each measurement period:


 


(a)                           produce a customer
satisfaction report on at least a quarterly basis (to include total number of
customers polled);


 


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


 


(c)                           produce a report
setting out performance against the percentage of calls answered and abandoned
targets on a quarterly basis;


 


(d)                          staff satisfaction
survey to be performed on an annual basis (to include total number of staff
polled); and


 


(e)                           produce a report
setting out performance against Technical Service Levels on a quarterly basis
additionally including the approximate length of any periods of downtime
affecting 2.2(a), 2.3(a) and 2.4(a).


 


5.                                           Failure
to meet Service Levels


 


5.1                                    The parties
acknowledge that the Service Levels are guidelines only and failure to achieve
such Service Levels shall not constitute a breach of this Deed or otherwise
give rise to a right to terminate. However, the parties acknowledge that where
the actual service levels are persistently and significantly lower than those
Base Service Levels and Technical Service Levels identified in sections 1 and 2
above or, in the case of the Aspirational Service Levels, persistently and
significantly lower than those performance levels identified as the base case
under section 3.1(b), VEL may take into account the Licensee’s
performance in respect of the Service Levels as compared with good industry
practice and standards (where reliable and quality data relating to such good
industry practice and standards is available to the parties) together with
other evidence of material breach of this Deed and/or material damage to the
Marks or VEL, in determining whether to exercise its rights pursuant to clauses
9.2 and 9.3.


 


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


 


10

















 


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


 


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


 


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


 


5.5                                    The Base Service
Levels set out in sections 1.1(a) and (b) and 1.3 must be met, unless
otherwise agreed by the parties, before the date on which the Communications
Services are provided by the NTL Group under the Marks (other than the services
formerly licensed pursuant to the Virgin Net Licence and the services licensed
pursuant to the Virgin Mobile Licence).


 


11

















 


SCHEDULE 4


 


Existing rights of
Licensees


 


All rights
are exclusive save as otherwise stated.


 


Virgin.com:


Main website for the Virgin Companies;


 


Virgin Books:


Publishing and distribution of books (branded) and online retailing of
books (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 and
animation; 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 and
chance 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 associated
products;


 


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 the
following equipment, provided that in the case of use of the letter “V” this
shall be limited as applicable to use on a specific button or key on any of the
following:


 


Telephone handsets


 


Telephone displays/screens


 


Remote controls


 


SIM Cards


 


Keyboards


 


Data Cards


 


Head Sets


 


15

















 


SCHEDULE 6


 


Virgin Money letter
agreement


 


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 House

Bartley Wood Business Park

Hook

Hampshire RG27 9UP


 


Date: 3 April 2006


 


Dear Sirs


 


VIRGIN MONEY LETTER


 


Proposed Trade Mark Licence between Virgin
Enterprises Limited (“VEL”) and NTL Group Limited (“NTL”)(the “NTL Licence”)


 


Trade Mark Licence between VEL and Virgin
Money Holdings (UK) Limited (“VMH”)(the “VMH Licence”)


 


Trade Mark Licence between VEL and Virgin
Money Limited (“VML”)(the “VML Licence”)


 


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


 


Whereas:


 


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


 


16

















 


(B)                     Virgin Mobile
currently provides:


 


(i)                           mobile phone handset
insurance to its customers;


 


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


 


(iii)                   Mobile
Electronic Payment Services to subscribers and any other product or service
payment facility where the provision of such services are designed to be used
via terminal equipment and/or a SIM card and which are not Banking Services,


 


(together the “Mobile Services”).


 


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


 


(i)                           warranties on Communications
Equipment;


 


(ii)                        extended warranties on
Communications Equipment;


 


(iii)                     insurance for mobile phone
handsets and other Communications Equipment;


 


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


 


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


 


(a)                       payment or replenishment
services, facilities and methods in card and electronic form (including top up
cards, electronic top up and ATM/SMS top up) through which NTL Group customers
can purchase any products or services relating to its licensed activities on a
pre-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 methods
set out in paragraph B(iii) above, provided that in respect of the payment


 


17

















 


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


 


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


 


(II)               must not be on a credit basis requiring
a 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 a
payment card/mechanism which can be used to pay for goods and services from
unrelated 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 general
use as a debit, credit or prepaid card/mechanism badged with an Open Loop
network such as VISA, MasterCard, AMEX, Electron and Maestro.


 


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


 


DEFINITIONS


 


1.                                      In this
Agreement, the following terms shall have the following meanings:


 


“Banking Services”
means all and any services which are currently provided in the ordinary course
of business by a United Kingdom clearing bank or a United States of America
money center bank or which from time to time form the core business of any such
bank, including but not limited to the taking of deposits, the provision of
loans (whether secured or unsecured and including by the subscription for loan
stock or other debt securities), guarantees, performance bonds and letters of
credit, the provision of domestic and international cash transmission and other
payment or clearance facilities, the provision of credit or debit cards, smart
cards and stored value cards and the like, and of all forms of bank account for
all currencies, the provision of custody services, the provision of foreign
currency exchange services and the provision of advice in connection with any
of the foregoing;


 


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


 


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


 


18

















 


“Communications Equipment” means
Core Equipment, Mobile Devices, Mobile Accessories and Other Equipment as
defined in the NTL Licence from time to time;


 


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


 


“General Insurance” means
general insurance policies, products or services as licensed under the VMH
Licence;


 


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


 


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


 


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


 


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


 


PART ONE


 


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


 


2.                                      For the avoidance
of doubt the activities set out in paragraphs (C)(i) and (ii) will not be
deemed to be General Insurance and do not require a licence from VML and/or VMH
under 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 (as
appropriate) hereby grant to VEL the non-exclusive and royalty free licence back
of 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 the
NTL Licence, provided that the provisions of paragraph 5 shall apply.


 


3.                                      To the extent
that the activities set out in paragraphs (C)(v) and/or (vi) above are Banking
Services, then VML and/or VMH (as appropriate) hereby grant to VEL the
non-exclusive and royalty free licence back of the right to use the VIRGIN
trade marks in relation to such activities, together with the right to
sub-license such rights to the NTL Group under the NTL Licence, provided that
the provisions of paragraph 5 shall apply.


 


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


 


19

















 


(i)                                    nothing
in this Agreement shall prevent the NTL Group from offering or undertaking any
of the activities referred to in paragraph C above or any General Insurance or
any Banking Services to the extent that such activities are not done pursuant
to the VIRGIN trade marks;


 


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


 


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


 


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


 


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


 


PART TWO


 


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


 


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


 


(i)                                    re-tender
the fulfilment of or renew any existing or expired contracts relating to
General Insurance or Banking Services activities; or


 


(ii)                                 engage
the services of a third party for any of such General Insurance or Banking
Services activities,


 


then NTL shall:


 


(a)                                  notify
VMH and VML of such intention and give VMH and/or VML (as appropriate) an
opportunity to submit a written proposal on reasonable terms relating to the
fulfilment of those activities within a time period no less favourable than
that given to all other notified third parties and VMH and/or VML shall submit
any written business proposal as soon as reasonably practicable and NTL shall
consider such proposal as soon as


 


20

















 


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


 


(b)                                 where
it is considering re-tendering or engaging a third party under sub-paragraphs
5(i) and (ii) as a result of any unsolicited third party proposal relating to
the fulfilment of any of those activities set out in paragraphs 2 and 3, give
VMH or VML (as appropriate) a right to match or better the terms of such
proposal within a reasonable time period specified by NTL and NTL shall not
enter into any contract relating to such proposal unless VMH or VML (as
appropriate) has been unable to match or better the  terms of that proposal within the specified
time period.


 


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


 


(i)                                   undertake to work
with NTL in good faith on an exclusive basis for sixty days (or such other
period as the parties may agree) to reach a commercial and operational
agreement on reasonable commercial terms by which VMH and/or VML provide NTL
with a service that provides such activities with use of the VIRGIN trade
marks; or


 


(ii)                                consent in writing to
the use by the NTL Group of the VIRGIN trade marks in respect of such
activities 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 financial
providers or partners for the provision of such activities with the use of the
VIRGIN trade marks.


 


Should a mutually agreeable solution not be determined in accordance
with (i) and (ii) above then NTL shall be free to enter into discussions with
other financial providers or partners for the provision of such activities, but
without the use of the VIRGIN trade marks.


 


7.                                      VMH, VML and NTL
agree to consider in good faith any opportunities to cross market their
respective products and services on terms to be agreed including but not
limited to the opportunity for VMH and VML to offer their banking, investment
and insurance services to the customers of NTL, and NTL to offer its products
and services to customers of VMH and VML.


 


21

















 


8.                                      In the event
that, for any reason, the grant back of rights to VEL by VMH and/or VML (as
appropriate) should terminate, then such rights shall be deemed to be granted
hereunder by VMH and/or VML (as appropriate) directly to the NTL Group. The
Parties shall, at their own expense, execute and deliver all such documents and
take such steps or procure the execution of all such documents (in a form
reasonably satisfactory to the parties) as may, from time to time, be required
to give full effect to this paragraph.


 


PART THREE


 


9.                                      This
Agreement shall come into force on the Commencement Date.


 


10.                               The
parties further acknowledge and agree that, in the event that the NTL Group
does not acquire a majority of the issued ordinary shares in Virgin Mobile (and
thereby does not serve the notice as set out in clause 2.3 of the NTL Licence
or otherwise terminate the Mobile Licence), then this Agreement will be deemed
amended with such changes as are required, mutatis mutandis, so that this
Agreement does not apply to the mobile communications business as carried on by
Virgin Mobile at the Commencement Date. All parties shall co-operate, at their
own expense, to execute and deliver all such documents and take all such steps
or procure the execution of all such documents (in a form reasonably
satisfactory to the parties) as may, from time to time, be required to give
full effect to this paragraph.


 


11.                               The
parties shall keep secret and confidential any information which it may obtain
relating to the business of the other. Such information shall be treated as
proprietary and confidential to the party imparting the same. Each party hereby
agrees that it shall use such information received or procured by it from the
other solely for the purposes of this Agreement and that it shall not at any
time during or after completion, expiry or termination of this Agreement
disclose the same whether directly or indirectly to any third party except with
the prior written consent of the other party.


 


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


 


Please confirm your acceptance of the terms of this letter by signing
where 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 letter
agreement


 


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 Virgin
Enterprises Limited (“VEL”) and NTL Group Limited (“NTL”) (the “NTL Licence”)


 


Trade mark licence between VEL and Virgin
Retail 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 Retail
Group Limited (“VRGL”) (the “Retail Stores Agreement”) dated 1 October 2003 as
amended and restated with effect from 1 April 2004


 


Trade mark licence between VEL and Virgin
Mobile (the “Mobile Licence”) which includes, as an attachment, a letter
agreement between Virgin Mobile, VRL and VRGL dated 2 July 2004 (the “Retail
Letter”)


 


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


 


24

















 


Whereas:


 


(A)          Under
the terms of the VRL Licence, the Virgin Retail Group is permitted by VEL to
use the VIRGIN trade marks in the UK in relation to the sale of music products
and a range of non-music products including, inter
alia, DVDs, games, hi-fi equipment, portable audio, TVs, video
recorders, camcorders, cameras and interactive entertainment products (such as
computer games) within the Virgin Retail Group’s physical stores. The Virgin
Retail Group is not permitted to brand any of the products with the VIRGIN
trade marks. The Virgin Retail Group also currently sells music products, games
and DVDs via the internet.


 


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


 


(C)          Under
the terms of the Retail Letter, Virgin Mobile is permitted to sell Electronic
Entertainment Products through concessions within the Virgin Retail Group’s
stores and through “Virgin Mobile”-branded standalone retail stores, in each
case, either supplied by the Virgin Retail Group or, where the Virgin Retail
Group is unable to supply such Electronic Entertainment Products on Reasonable
Wholesale Terms, obtained from another source. Under the Retail Letter, Virgin
Mobile is also permitted to sell Physical Entertainment Products through the
concessions within Virgin Retail Group’s stores. In relation to the
aforementioned concessions, the parties must also agree the manner in which
Electronic Entertainment Products and/or Physical Entertainment Products are
sold (except to the extent that such sales are covered by the Retail Stores
Agreement) .


 


(D)          The
NTL Group is in the process of acquiring ownership of Virgin Mobile and VEL and
the NTL Group intend to enter into the NTL Licence for the use of the VIRGIN
trade marks in relation to Communications Services (including Mobile Radio
Telecommunication Services) in the UK and the Republic of Ireland. The NTL
Group requires, as part of the NTL Licence, inter
alia, retail rights relating to or arising out of the Communications
Services, including the activities referred to in paragraphs (B) and (C), and
rights 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 of
Ireland.


 


1.             Definitions:
- in this Agreement (including the recitals), the following terms shall have
the 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 or
having as their principal feature the conveyance of messages, information or
signals by means of a communications network. For


 


25

















 


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


 


(a)           internet
services (which, for example, 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 services which, for example, includes:


 


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


 


(ii)           premium
or subscription-based television services (e.g. access to Film Four and Sky
Sports);


 


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


 


(iv)          interactive
television services;


 


(v)           video
on demand and pay per view; or


 


(c)           telephone
services (which, for example, includes fixed line, wireless, Mobile Radio
Telecommunication Services, data and text services (including SMS)), and


 


howsoever and in each case as such services may be:


 


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


 


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


 


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


 


“Core Equipment” means any equipment,
device or accessory (whether now in existence or which may from time to time be
created or developed, or as such equipment, devices or accessories 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 video recorders (PVRs) for use with the Communications
Services, modems, routers and remote


 


26

















 


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


 


(b)                                 has, as an included
feature, the capability to provide, deliver, receive, access or use the
Communications Services provided by the NTL Group (including via a built-in
decoder, receiver or internet protocol connection), provided that the NTL Group
is thereby facilitating access  to its
Communication 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 video
downloads);


 


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


 


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


 


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


 


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


 


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


 


“Physical Entertainment Products” means
physical 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 the
NTL Group, as the case may be, sufficient quantities of products of the same
type and range and equivalent functionality and quality as those specified in
Virgin Mobile’s or NTL Group’s notification and on terms of purchase (including
as to price) which taken as a whole are reasonably


 


27

















 


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


 


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


 


“Virgin Retail Group” means
VRL and VRGL and their subsidiaries.


 


PART ONE


 


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


 


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


 


3.                                       VRL and/or VRGL,
as appropriate, agree that the sale and supply of the branded Core Equipment
through the Retail Stores and/or Direct Sales Channels is not licensed to the
Virgin Retail Group under the VRL Licence, nor is the sale or supply of
Communications Services, and as far as VRL and VRGL are concerned VEL is free
to license the right to use the VIRGIN trade marks in relation to such
activities 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 through
the Direct Sales Channels are not licensed to the Virgin Retail Group under the
VRL Licence and VEL is free to license the right to use the VIRGIN trade marks
in 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 to
offer video on demand services under the VIRGIN trade marks within the Virgin
Retail Group’s physical stores.


 


PART TWO


 


In consideration of the mutual obligations agreed and undertakings
given 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 royalty
free licence to use the VIRGIN trade marks, subject to the provisions of
paragraph 8 below and in conjunction with the rights granted by VEL under the
NTL Licence, in relation to:


 


(a)                                   Physical
Entertainment Products offered for sale in concessions within Virgin Retail
Group’s stores only;


 


(b)                                  Electronic
Entertainment Products offered for sale in Retail Stores, including concessions
within Virgin Retail Group’s stores; and


 


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


 


7.                                      In the event that
the 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 the
Retail Stores Agreement and Retail Letter shall continue in full force and
effect (and, for the avoidance of doubt, shall not be capable of termination in
accordance with clause 19.4 of the Retail Stores Agreement) but shall be deemed
to apply, with such changes as are required, mutatis
mutandis, to enable the NTL Group to take the benefit of the
arrangements set out therein including for the avoidance of doubt but not
limited to the following specific amendments:


 


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


 


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


 


(ii)            “Services” shall
include Communications Services;


 


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


 


(iv)           “Business” shall be
deemed amended accordingly.


 


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


 


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


 


“Connection”
means:


 


29

















 


(a)                                                                         a
person who is not a Customer Return and to whom a VM SIM Card has been issued
or sold by VM through the Stores and who has transmitted or received a Message
over the Network; and


 


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


 


(ii)                                        Payment
of volume bonuses in respect of new RGUs is subject to the following
provisions:


 


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


 


(B)                             No
volume bonus will be payable:


 


(aa)                           unless
and until a Customer registers and remains a Customer beyond any contractual or
statutory “cooling off” period and a person will not be deemed a Customer if
that person exercises any right to cancel the contract or the Services are
terminated for any reason during the “cooling off” period;


 


(bb)                         in
respect of customers who NTL cannot verify as having been introduced via the
Stores; and


 


(cc)                           in
respect of potential customers who are not accepted as customers by NTL; and


 


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


 


30

















 


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


 


(a)                                   re-tender the
fulfilment of or renew any existing or expired supply contracts in respect of
such products; or


 


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


 


then it shall:


 


(i)            notify
the Virgin Retail Group of such intention and give the Virgin Retail Group an
opportunity to submit a written proposal relating to the supply of such
products within a time period no less favourable to that given to all other
notified third parties; and


 


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


 


9.                                      The Virgin Retail
Group recognises that it is part of a group of companies and businesses
licensed by VEL to use the Virgin trade marks and agrees that it shall
cooperate in Virgin Group activities and initiatives with the NTL Group. Where
the NTL Group requests its products or services be accessible through the
Retail Stores provided by VRL then VRL shall consider in all good faith such
requests on terms that are no less favourable than those offered to any other
third party. VEL shall use all
reasonable efforts to facilitate activities and initiatives proposed by the NTL
Group in conjunction with VRL and on terms no less favourable than those
offered to any other third party The Virgin Retail Group and NTL Group agree to
consider in good faith any opportunities to cross market their respective
products and services on terms to be mutually agreed between the parties.


 


10.                                In the event that, for
any 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 by
VRL and/or VRGL, as appropriate, directly to NTL Group.


 


31

















 


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


 


PART THREE


 


11.           This
Agreement shall come into force on the Commencement Date.


 


12.           The
parties further acknowledge and agree that, in the event that NTL does not
acquire a majority of the issued ordinary shares of Virgin Mobile (and thereby
does not serve the notice as set out in clause 2.3 of the NTL Licence or
otherwise terminate the Mobile Licence), then this Agreement will be deemed
amended with such changes as are required, mutatis
mutandis, so that this Agreement does not apply to the Mobile Radio
Telecommunications Services business as carried on by Virgin Mobile at the
Commencement Date. All parties shall co-operate, at their own expense, to
execute and deliver all such documents and take all such steps or procure the
execution of all such documents (in a form reasonably satisfactory to the
parties) as may, from time to time, be required to give full effect to this
paragraph.


 


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


 


Please confirm your acceptance of the terms of this letter by signing
where 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 - OVERALL
BRAND 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, whatever
you’re producing.


 


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


 


3                  Discuss these with your suppliers. This book
is only a guide, and nothing beats talking to your suppliers and testing
things. Ink systems vary and technologies change, and what works in one
situation may need refining next time round. You’ll also notice that the
samples in this book aren’t uniform. That just shows the differences and
difficulties inherent in colour matching. They are, however, the best possible
match we can find.


 


3                  If the material you want to produce isn’t
shown here (it’s impractical to include everything), then talk to your
suppliers to try and match. Virgin Enterprises Ltd may also be able to suggest
other sources of advice (for example other group companies who’ve tackled
something similar) – see inside front cover for their contact details.


 


The glossary


 


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


 


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


 





 


Little Red
Book


Virgin red specifications


 


35

















 


Get reddy!


 


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


 


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


 


Getting it right


 


So if red’s doing a good job
for us, it’s important we support it. That means producing it as accurately and
consistently as possible.


 


Whether it’s company vans or
cola cans, stationery or station signs, the red should be as close to ideal as
possible. While this might initially sound straightforward, in practice it’s
not. Printing and manufacturing techniques vary – printing on paper is
different from painting a plane, and so on.


 


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


 


This guide will help you
achieve accuracy and consistency:


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


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


•                  It suggests who to contact if you need help or
advice.


 


Help and advice


 


Please contact the
Trademarks/Intellectual Property Department of Virgin Enterprises Ltd.


 


Telephone +44 (0)20 7313 2053


Facsimile +44 (0)20 7313 2091


 


Trademarks/Intellectual
Property Department


Virgin Enterprises Ltd


120 Campden Hill Road


LONDON


W8 7AR


 






* Sorry for
all the ‘red’ puns in this book – we decided to leave them in when we proof red
it.


 


	
  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, 5
parts PMS yellow


 


Process
colour:


 


Cyan 0%, Magenta 100%,Yellow
76%, Black 6%


 


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


 


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


 





 


Newspapers


 


Colour work in newspapers is
usually produced differently to conventional litho and it can be hard to
achieve a vibrant red. Also, one newspaper rarely uses the same system as
another, so liaise with each publication as much as possible to avoid dull
results.


 





 


Can printing


 


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


 


A suitable spot colour ink
mix 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 for
Valspar Ink’s Light Red 6R5B12347 used on Virgin Cola cans.


 


2

















 


Vinyls


 


There are three main types of
vinyl, each for particular uses and circumstances.


 


Opaque


 


3M Scotchcal Opaque Film 100
series: Tomato Red 100-13 Avery Fascal Opaque Film: Spicy Red 987 QM


 


Both are acceptable for these
typical uses: general non-illuminated signs and fascias, interior sign
directories, vehicle markings, window graphics.


 





 





 


Translucent


 


3M Scotchcal Translucent Film
3630 series: Red 3630-33


 


Typical uses: high visibility
graphics – day and night, internally illuminated signage, shop fascias etc.


 





 


Reflective


 


3M Scotchlite Plus Reflective
Film 680 series: Red Reflective 680-72


 


Typical uses: vehicle
markings, directional and safety signage.


 





 


Further
advice


 


In some special cases, such
as aviation marking films (which are available on a white base), you may need
to print solid red onto the material. Always match against the Virgin spot red
swatch in this guide, as ink/pigment systems differ between manufacturers.


 


3

















 


Paint


 


Of the several paint
manufacturing standards, our preference is NCS (Natural Colour System).


 


Wherever possible you should
use NCS. However some manufacturers use RAL standards.


 


NCS
reference:


 


S 1085–Y90R


 





 


RAL
reference:


 


3020 Traffic Red


 





 


Please note that the Dulux
Colour Dimensions system has been discontinued and replaced by NCS.


 


Further
advice


 


Sometimes an area you want to
paint may be so big and dominant that the full Virgin red could be just a bit “too
much”. Exactly when’s hard to say, but if you imagine painting an entire reception
area in Virgin red, you can picture it being a touch too vibrant and loud.


 


So, in special cases, you may
want to tone down the red to a more muted, dark or subtle shade, which works
better in its environment. There are several examples of this across group
companies – get in touch with Virgin Enterprises Ltd (see the inside front
cover) for more information.


 


4

















 


Acrylics


 


In most cases, ‘off the
shelf’ products will be fine. There are two main brands:


 


Rohm
Plexiglass:


 


Red 2758


 





 


Ineous
Acrylics (formerly ICI
perspex):


 


Red 440


 





 


Typical uses: moulded
signage, shop fascias etc.


 


Specially-made


 


Depending on quantities and
costs, 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 the
transparency, thickness etc. Basically, what something looks like in the
manufacturer’s factory may not be what it looks like in situ, and you should
check this out early on.


 


Also, check with the
manufacturers that the colour doesn’t fade over time, or with exposure to
sunlight etc.


 


5

















 


Laminates


 


For interior designs, such as
retail shelving, cladding and desktops, you may want to use laminates. Our
recommended material is Formica.


 


Formica
Colour system:


 


4164 Pillarbox Red


 





 


 


6

















 


Websafe (Internet/screen display)


 


Hexadecimal value for
websites and online use: #CC0000


 


RGB value for CD-Roms and
other 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 sizes
reasonable. Non-websafe colours can deteriorate, vary or even disappear at low
resolutions.


 


Fabric


 


Most textile companies are
happy to match to the Virgin red.


 


Some manufacturers may prefer
the NCS or RAL specification (see 03.00 paints). And some may only be able to
supply an off-the-shelf colour, which is obviously the least desirable.


 


The guidance we gave about
avoiding 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 familiar
with the terms and phrases used throughout this book – they’re widely used
throughout the design, printing and manufacturing industries.


 


However you may sometimes
come across something you’re less sure about. This brief glossary gives a few
quick definitions to help you on the way, though talking to your manufacturer/supplier
will 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 meanings
in printing, but the one you need to consider is coated paper. Coated paper has
china clay or similar on it to give a smoother surface – if you imagine looking
at paper under a microscope it’s normally quite rough. On coated paper, ink
sticks to the surface in a more uniform way. So pictures, for example, can
appear better than on uncoated paper.


 


CMYK


 


An acronym of the four
colours (cyan, magenta, yellow, black) that make up a colour created by process
colour.


 


The CMYKmix for Virgin red is
0% 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 a
light sky blue.


 


flexo


 


An abbreviation of
flexography. This printing technique uses flexible rubber or plastic plates.


 


gloss


 


In this context, a shiny
finish. Gloss is the opposite of matt.


 


gravure


 


An abbreviation of
photogravure. This printing technique etches a negative of the image into a
metal plate. This is then applied to ink and paper to produce a positive
imprint. It’s less common than lithography, but is used by some large
magazines, for example.


 


hue


 


Words like hue, tint and
shade are almost, but not quite, the same thing. Hue is the appearance of a
colour 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 (or
historically stone) plate by chemically treating areas with oil and water to
accept or reject ink. This is then applied to paper to produce a positive
imprint. 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 a
bright pinky red.


 


matt


 


Matt is the opposite to
glossy or shiny. Matt finish reflects much less light than gloss, giving a more
even appearance.


 


opaque


 


Something that’s opaque doesn’t
allow light to pass through it, so you can’t “see through it” at all. See also
translucent and transparent later on.


 


8

















 


Pantone


 


The brand name for the
most-widely used series of prepared printing inks. Specifying a pantone number
enables you to choose a colour with reasonable accuracy, though its final
appearance is affected by issues such as whether the paper is gloss or matt,
uncoated or coated and so on. 


 


It’s important you do not
allow printers to substitute pantone 485 for  Virgin red. Though they may claim it’s the
nearest ink to Virgin red, it’s
not. You must insist on the spot colour (6 parts PMS rubine red, 5 parts PMS yellow) instead.


 


PMS


 


PMS is an acronym for Pantone
Matching System, and is basically just another word for a Pantone colour.


 


process
colours


 


Most colours can be created
by mixing together a combination of  process colours. The process palette contains – CMYK (cyan, magenta,yellow, black).


 


The CMYK mix for Virgin red
in 0% cyan, 100% magenta, 76% yellow, 6% black.


 


reflective


 


A substrate that’s reflective
means light neither passes through nor is absorbed.


 


rubine


 


A deep pinky red. Pantone
Rubine Red is used in the Virgin spot red colour formula.


 


saturation


 


A colour that’s saturated is
appearing at its richest, fullest possible strength. It isn’t diluted or
dulled.


 


shade


 


Words like shade, hue and
tint are almost the same thing, but not  quite. Shade either refers to the depth of colour (ie pink is a shadeof red), or is used as a way of
describing small differences between almost identical colours.


 


screen
printing


 


This printing technique uses
a fine mesh to support a stencil, through  which ink is squeezed. It’s commonly used for printing onto fabrics, such
as t-shirts.


 


special
colour


 


See spot colour.


 


spot colour


 


Any colour additional to or
instead of the process colours. If you’re  printing a piece of stationery in red and black, the red would be a spot
colour. If you’re printing a brochure with colour pictures and have the facility to use a fifth colour, you’d
print it in CMYK process colours
plus a Virgin spot red.


 


stock


 


A word used to describe the
type of paper.


 


substrate


 


The substrate is, basically,
the surface onto which you are printing, painting etc. If a substrate is white
or neutral, then it probably won’t affect the appearance of the colour placed
on it. But if it is itself a colour, then obviously it may.


 


You also need to think about
issues such as absorbency/porousness. The simplest example of this is kitchen
paper, which is very absorbent and thus ‘soaks up’ whatever is placed on it – so
a colour’s appearance is affected. Obviously you’re unlikely to be producing
Virgin kitchen paper, but some printing papers are affected by this too. For
example newsprint paper is generally more absorbent than the paper used for
glossy magazines, brochures etc.


 


tint


 


Words like tint, shade and
hue are almost, but not quite, the same thing. Tint refers to the variety of a
colour, especially one made lighter by adding white to it. A colour can be
reproduced at tints starting from 100% (full colour) down towards 5% (virtually
white):


 


Usually, printers etc work in
10% increments:


 


Please note: tints of Virgin
red under 100% can appear pink.


 


translucent


 


Mid way between opaque and
transparent, something that’s translucent allows light to pass through it, but
in a diffused way.


 


transparent


 


Something that’s transparent
allows light to pass through it fully, enabling you to see clearly objects on
the other side. Like a window. Transparent things can be coloured, but still
see-through-able – ie stained glass.


 


uncoated


 


Paper without any china clay
coating. See coated.


 


yellow


 


One of the four colours
(cyan, magenta, yellow, black) that make up CMYK process colours.


 


9

















 


Swatches


 


These swatch pages show both
the Virgin spot red and the 4 colour process Virgin red.


 


Please use these, where
applicable, 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 shade
of red based on an ink called pantone 485.


 


Over time, marketing and
design 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 producing
cola 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 was
decided to stop using pantone 485 and
create a new bespoke Virgin red that, in print, is rich and vibrant. The result
is the red shown in this guide.


 


Colour
specification 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 Virgin
brand is our greatest asset. It unites us all.


 





 


The signature logo
tells customers something is a Virgin business, with all the associations and
aspirations that conveys. The logo is invaluable, in both creative and
commercial terms. It has helped each Virgin company launch their own
personality.


 


While no-one
underestimates the power of the Virgin name, few of us know the legal
boundaries that protect registrations, prevent misuse and disable imposters. As
the Virgin group moves into ever more diverse markets (both what we do and
where we go) these boundaries become ever more important. We must demonstrate a
clear and consistent use of the Virgin logo in order to prevent others from weakening
our name and brand.


 


In practice, this means
that certain legal and trademark issues affect the way Virgin can be used, both
as 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 we
all do - one aim of this book is to enable every Virgin company, from the
smallest to the largest, to share the same knowledge and approach.


 


Many of you will recognise the points this book
talks about. Few are new, and you’re probably already doing most of them as
they arise from ‘best practice’ throughout the group.


 


This book covers using
the Virgin logo, particularly in relation to naming and creating identities for
new companies, brands, products and services.


 


All other areas of
design are excluded from this - those are your prerogative and I’m not trying
to stifle creativity or style. I want to define the boundaries we all have to
work within, explain why these boundaries matter and provide the help and
resources necessary to achieve them.


 


I’ve produced this book
with the Virgin Enterprises Ltd legal team (VEL). Their role is to register
everybody’s trademarks, monitor those registrations and take action against
infringements.


 


What they do can seem a
bit complicated, especially when all you’re interested in is producing an
exciting and effective identity for a new Virgin venture, but there are several
key points worth sharing. Hopefully you’ll find these valuable, relevant and
straightforward.


 


More than anything
else, I want to help you make the most of our brand. It embodies what Virgin is
all about. Let’s all aim to use it in this spirit.


 





 


3

















 


Making our mark 


 


 


How the
Virgin logo was developed.


 





 





 


The original Virgin
Records logo, designed by swords ‘n sorcery poster wizard Roger Dean, was
superceded in the early 1970s by the one we all know.


 


In true urban myth
style, this really was drawn on the back of a napkin (by graphic designer Ray
Kyte).


 


In his autobigraphy,
Richard wrote: “Ray Kyte created the concept and supplied the visual styling
for a signature-style logo which can be interpreted as my personal endorsement,
the ‘V’ forming an expressive tick. Some marketing experts once analysed the
logo and wrote about the upbeat way it rises from left to right. This, of
course, might have been going through Ray’s head when he developed the original
idea.”


 


To begin with, the mark
was the thinner version known as ‘tick’.


 


However this created
some problems, as the skinny lines fill in and disappear at smaller sizes.


 


A bolder and more
robust version was drawn, known as ‘blobby’.


 


This is the version
most group companies now use, with the idea that soon everyone will. See 04.02
for more on making sure you use the correct version.


 





 


4

















 


Why it all matters


 


 


Trademark law is hardly a
sexy subject, and linking it to design can seem like tying a plough to a
racehorse, but it’s vital to the success of everybody in the Virgin group. 


 


In the last five years we’ve
spent 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 lot
of money. 


 


The chief cause of costs is
the fact we constantly come under challenge. Firstly from people who want to
bar or qualify our access to a new market. They are usually acting for
legitimate reasons (competition and so on), but they need responding to
legally. 


 


Secondly, there are people
who’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. Some
of these - like Virginia and Virgin Pizza opposite - might seem small beer, but
others can be tiresomely expensive. One individual has tried to register 37
different Verjam companies: Verjam Group, Verjam Management, Verjam Music,
Verjam Cola and so on. We can chuckle at this, but the danger of customers
being confused as to what is genuine Virgin and what’s not is both real and
growing. Customers’ perception of our quality can be affected if lower-quality
outfits are allowed to trade under ‘Virgin’, or under something that visually
mimics the logo. (And believe us we are talking lower quality: we tasted a
Virgin pizza.) 


 


There are also instances
where we need to come to agreements, for example if we move into a new market
where someone else already uses Virgin. When Virgin Atlantic starting flying to
South Africa, we needed to establish the Virgin brand - which meant settling
with long-established but ‘not us’ outfits like Virgin Health Club Group - so
that we became what people thought of when
they thought of Virgin. 


 


It would be good to reduce
the 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 group
companies not to break the seven deadly sins - explained over the following
pages. That may sound a bit melodramatic, but it’s fairly straightforward. In
essence 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 think
about these issues, then we’re keeping our own house in order - which makes it
easier for VEL to register and protect your trademarks, and also gives us a
stronger case for the defence when we tackle those pesky copyists. It also
gives a halo effect, where we protect and reinforce one another. 


 


The consequences will be that
we’ll safeguard public perception of our quality and save money - the two
things listed at the top of this section as vital to everybody’s success.


 





 


5

















 


The seven deady sins


 


6

















 


When should we use the Virgin
logo? 


 


 


Answer:


Always in main names and
brands. Consult VEL for new names.


 


The Virgin logo is how
customers recognise something’s a Virgin venture - in a sense they regard it as
Richard’s signature. It’s one of our greatest assets: make the most of it.


 


Wherever possible, use the logo
rather than just the word Virgin in type, particularly in the names of
companies and major products and services. If something is launched which is
meant to be Virgin but which doesn’t use the logo, customers may be uncertain
as to its Virgin-ness. For example, it’s arguable that by omitting the logo
from their identity, Virgin Vie caused some consumer doubt: 


 





 


The balance is now being
redressed:


 





 


Using the logo also helps
tighten legal protection. If you use Virgin just as a word, then it gets harder
for us to prove that consumers know for sure what is and isn’t a Branson-backed
venture. In other words, what demonstrates clearly and visually to the person
in the street that Virgin Vie is one of ours and Virgin Pizza ain’t? Answer:
the logo. 


 





 


® and TM


 


In some markets it can
be beneficial to accompany the Virgin logo with the ® symbol. It tells
potential infringers we have a registration for that identity.


 


You can only do this if
you 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 a
criminal offence!


 


There are no such restrictions over TM, so you can use this whenever you believe it’s
of benefit.


 


Name game


 


Trademark licences are
precise and prescriptive about the name(s) that a company can use. Any
alteration or addition needs checking with VEL.


 


Although
customer confusion is the main concern, it’s also worth thinking of other group
companies when brainstorming a brand. With so many things going on throughout
the group, it’s increasingly likely names could have several uses. For example,
one company might want to call its sightseeing tours Virgin View, and another
to open up a chain of opticians called Virgin View. When everyone consults with
VEL, such clashes will be avoided.


 


VEL is more able to
safeguard names that relate either to goods, services or activities - eg Virgin
Trains, Virgin Publishing - or to a key aspect/value of the service - eg Virgin
Direct, Virgin Active.


 





 


There
are three reasons for this: 


1      it
points customers in the right direction 


2      it
reduces possible confusion 


3      it
helps maintain the reputation of each individual company.


 


‘Virgin’ should always come first. So ‘Virgin
View’ 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 of
blobby - being used
by 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 and
straight 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, being
phased out by Radio (slightly thicker V, less space between V and i)


 





 


Bastard son
of tick - being phased
out by Virgin Western. (Our west of England property services company, nothing
to do with John Wayne.)


 





 


8

















 


People might think there’s only one Virgin logo, but a recent audit of
group 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 is
negligible and unimportant: they’re all still clearly the Virgin logo. 


 


But it should matter to us. Firstly we should have enough respect for
our logo to make sure we use the right one. Secondly it looks neater if we’re
all in harmony. And thirdly it helps us see off the copycats by demonstrating
we’re definite about our logo - whereas if we’re doing odd little variations
ourselves it’s easier for imposters to claim the boundaries are vague and up
for grabs. 


 


From a trademark point of view, there’s also the possibility that
variations could drift so far away from the registered version that a new registration
is 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 be
visible? 


 


 


Answer:


All of it. VEL may allow
bleeding or cropping in special pre-approved circumstances.


 


Two of the reasons our
logo works so well are that it’s simple and recognisable. These are both attributes
worth respecting.


 


That means not bleeding
or cropping the logo, 


 





and
not adding bits directly to it.





 


In the past some of these
things have slipped through, but from now on it would be better if they’re
avoided. Again, this helps protect the integrity of our trademark
registrations. Anything that alters the logo in the ways listed above can, in
effect, create a new logo - which could require a new registration. The legal requirement
for this is that our logos should all be ‘substantially the same’.


 


All of the logo should be
visible - you can’t take part of it. However, using the V on its own is
acceptable on condition that it’s always in conjunction with, or in close
proximity to, the Virgin signature. For guidance on this issue please consult
VEL.


 





 


Some particular circumstances
may warrant slight exceptions, if the reasons are good enough. Please contact
VEL at the initial stage of any such idea, so they can advise and assist.


 


For example, the logo bleeds
off the edges of the new Virgin Atlantic tailfin. This was permitted because a
tailfin is an odd and restrictive shape which constrains the logo. Bleeding
enables the logo to appear at a much larger size, greatly increasing the impact
of the design without affecting legibility or Virgin-ness.


 





 


Likewise a cola can, being
curved and three-dimensional, may warrant a large logo which, though it can
never be seen all at once, is acceptable since it maximises our identity on the
shelf. 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 part
of an identity, with the V at least 10mm high. Keep it legible, and keep the
back of the r upright.


 


Proportion 


 


If the Virgin logo is how
customers identify something as a Virgin venture, logic suggests that the logo
should be the main part of the identity. From a registration point of view, it
would be better for us too. 


 


That means the logo shouldn’t
be dominated by other elements:


 





 


In fact if the balance is
borderline, such as in Virgin Limobike, it’s preferable for the logo to be
predominant.


 





 


You can test a design by
reducing the overall identity down to a small size - as small as it might
appear on a business card for example - and check how visible Virgin still is.


 


Size


 


The minimum size of the
logo depends on the environment in which it appears. The rule of thumb is that
it must be at least 10mm from top to bottom of the V.


 





 


Obviously this applies best
to small items such as stationery and business cards. A logo that small on a
poster wouldn’t work, so please increase this minimum in proportion to the
environment. 


 


In some special circumstances
VEL may consent to smaller versions. This would include items with constraints -
for example pens or badges. Please submit proposals for approval, making sure
that the production technique can reproduce the logo accurately (ie there is no
filling in or degradation due to it being so small). 


 


You should also only use the
logo at the correct angle, and don’t rotate or slant it. The correct way up is
when 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, it
might get BA thinking...)


 


11

















 


What colours should we use? 


 


 


Answer:


Red, black and white. Ask
VEL if you want another.


 


The logo should only ever
appear in white, black or red. Please don’t print it in any other colour. 


 


That permits the following
combinations: 


 





 


As much as possible you
should aim to use the logo in these colours. That’s not to say other colours
can’t be used, just that so doing could necessitate a fresh registration -
which costs money.


 


If you do yearn for a
particular background colour please contact VEL to talk it through. They’re happy
to help.


 


Red all about it


 


Always specify the correct
red to your printers/manufacturers.


 


For print items, this is
either a ‘special’:


6 parts PMS rubine red, 5
parts PMS yellow


 


or a four-colour process
equivalent:


0c, 100m, 76y, 6k.


 


Historically pantone 485 was
used, but it had problems in consistency and reproduction. Recently the colour
specified above has been preferred, as it gives a stronger, more consistent and
uniquely Virgin red.


 


VEL has produced a detailed guide to the
Virgin red, including samples and suggested specifications for items such as
fabrics, vinyls and on-screen displays. This will help you work with your
suppliers/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 have
VEL’s prior permission.


 


With all this desktop publishing software around, it’s easy to get
wacky 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 the
logo can move it outside the terms of a registration. That in turn could
involve costs in then extending the registration, and could give more fuel to
challenges that, since we’re doing all kinds of random things, the boundaries
are unclear. 


 


Of course there may be special occasions when it’s creatively desirable
to use one or other of these techniques - though we’ve just taken the mickey
out of it, the Virgin radio ad is actually very effective. If you’ve come up
with a cracker, please show it to VEL - they’ll let you know whether it is or
isn’t on.


 


13

















 


Can we
use 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 other
meanings in everyday language. It’s often tempting to use it in these ways, as
doing so can seem to create a little pun: losing my virginity, virgin on the
ridiculous, flying into virgin territory and so on. Ellipsis seems fun too:
virginsider, virginformation.


 


It would seem rather churlish
to say we’d prefer you not to do these things, but there’s a good reason for
keeping such wordplay to a minimum. Time for a little more legal stuff, I’m
afraid.


 


When it comes to registering
words, there are three basic types:


 


1      invented words such as Sony and Kodak. These
have the most protection, and, equally, are easy to protect.


 


2      normal words which have developed a secondary
meaning when used with certain goods or services - eg Boots (chemists) and
Apple (computers). Virgin comes into this category. There is a need to be
careful and consistent when protecting such words.


 


3      descriptive everyday words such as beautiful
and great, which no-one can trademark as they’re reasonably required by
everyone.


 


Most of the time when you use
Virgin, you’re using it as a type 2 word - Virgin Trains,Virgin
Radio, Virgin Holidays and so on.


 


Phrases like ‘losing my
virginity’ and ‘virgin on the ridiculous’ on the other hand, move the word
towards type 3. This begins to create problems for our registration of the word
Virgin, which depends on our claim that it is type 2. At present, that
registration enables us to stop, for example, British Airways launching a route
they’ve never flown before with the slogan “we’re moving into virgin
territory”.


 


However, the more you use
Virgin as a descriptive everyday word and not as a brand, the more our
protection is weakened. It looks like group companies aren’t supporting our own
claim that Virgin is a type 2 word, and thus dilutes our case for making others
respect it as such.


 


If this all seems a bit
complicated, please get in touch with the VEL team. They’ll explain the issue
more, and advise you if a proposal is a good idea or not. It’s not that you’re
not allowed to have fun with the word, just that it’s preferable if you check
with VEL so they can keep an eye on what’s going on.


 


And yes, Richard is aware
that he himself has used ‘Losing my virginity’. He’s given himself a severe
ticking off. Honestly.


 


14

















 


Virgin and the Internet


 


 


Website
names


 


Do a web search for ‘virgin’
and chances are most of the sites suggested are, um, well, nothing to do with
us.


 


Partly for this reason, but
also to be clear and consistent, we want it to be simple for people to find
Virgin companies on the net. The best way to do this is to negate the need for
searching 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. A
single web address will also give consistency to all advertising, promotional
and other material.


 


For that reason we have
created www.virgin.com


 


We strongly recommend you use
this 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 in
your material, there is no fee.


 


If you prefer customers to
head straight to your site, then it may be possible for you to use a branch
name, for example: www.virgin.com/view You’ll need prior approval fromVEL.


 


If you want to use a totally
different domain name, for example www.virginview.co.uk, then you must get
VEL’s permission, explaining to them why you need such an exception. If they
agree, 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 be
registered in much the same way as trademarks. VEL manage this.


 


To date they have registered
2000 names that incorporate ‘virgin’ in some way. Almost all of these
registrations are protective measures to stop other people using them.


 


15

















 


The steps in launching a new Virgin brand


 


 


Once your
business plan gets the nod...


 


Propose a
name and draft identity.


 


You’re probably going to need graphic
designers. It’s important you pick the right ones.


 


Some designers may look for ways to get away
from the Virgin logo, or be radical with it. If they say: “it’s been used too
much, it spoils the balance of the design, it’s not appropriate for this
venture, look what happens if we do this...” be wary.


 


It’s far better to use designers who recognise
that 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 to
build brands.


 


Make designers aware of the issues in this
book, and include its parameters within your design brief.


 


You can also talk with senior marketing people
at our most high-profile companies. They have years of experience in using the
Virgin logo and in building successful brands with it. They’re available and
happy to give advice and support.


 


Consult VEL
and get the go-ahead.


 


VEL will
approve your proposal from a trademark point of view.


 


They will also arrange for your identity to be
approved creatively.


 


Involve VEL right from the beginning. This way
any potential problems can be resolved at early stages, and designs won’t be
developed 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, they
understand everything in this brand book, so if any of it was meaningless or
just plain dull to you, get in touch and they’ll explain exactly what it means
for your proposal.


 


The Virgin Management Board has ultimate
responsibility over the way you use the brand.


 


Your company board includes a Group non-executive
director, who acts as a representative of the Virgin Management Ltd Board. They
will be able to advise you.


 


VEL will
carry out a trademark search.


 


This involves on-line and other searches through
all registered names and logos, to see if anyone is already using something
that clashes with your suggestion.


 


If there is, then it’s back three spaces....


 


If there isn’t then...


 


You can
refine and then start using the name and identity, while the registration
process continues.


 


VEL will
apply for a registration.


 


From you, they need:


 


•     to know what markets you will
have 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. The
time it takes can vary, from, on average, eight months in the UK, to - for
example -two years in Japan or four years in Bangladesh.


 


Publication
in the Trademark Gazette.


 


If the registration process doesn’t throw up
any problems, then your name and identity will be published in the Trademark
Gazette. This gives the public three months in which to comment.


 


Registration
certificate issued.


 


Any opposition will need legal settlement, but
once a submission is approved unopposed, a trademark certificate will be
issued. VEL hold these on behalf of group companies.


 


The certificate protects your name and your
identity, and stops anybody doing anything similar.


 


16

















 


The key
rules


 


 


Use the
correct version of the logo (‘blobby’). You can get this from Virgin Enterprises
Ltd.


 





 


Size so the
V 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 use
only part of it - ie the V on its own is not allowed.


 





 


Keep the
back of the r upright.


 


In brands
and identities use the logo (not ‘Virgin’ in normal type). The logo should be
the dominant element. Virgin comes first (‘Virgin View’ not ‘View from
Virgin’).


 





 


The mark can
only be: red on white; white on red; black on white; white on black.


 


Use the
right red:


6 parts PMS rubine red,


5 parts PMS yellow


 


or 0c 100m 76y 6k.


 


Please don’t
use 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’s
policy is to help consumers to make a buying choice rather than to sell in an
unsolicited or aggressive manner.


 


In
return, consumers can expect that Virgin will not interrupt them with an
unsolicited attempt to make a sale and that if engaged in a sales conversation
with Virgin that they will not be pressurised, forced or embarrassed into
buying something.


 


Summary


 


1.                Outbound telemarketing: unsolicited telephone calls


Unsolicited
telephone calls to consumers are unacceptable.


The
call must be either:-


•                  Following
up on a previous piece of communication such as DM; or


•                  Following
up on a customer enquiry; or


•                  Contacting
a current customer with a relevant message (but allowing them the option to
refuse further such contact).


2.              Direct promotions: 
selling to people on the street or in store


Interrupting consumers to sell to them face
to face is unacceptable.


The guidelines are:-


•                  Add
value - give them a piece of promotional communication with no strings attached
and without interrupting them unduly; or


•                  Sell
to consumers only in response to an approach made by them (e.g. to a
promotional stand).


3.              Door to door:  knocking on doors


Unsolicited knocking on doors to sell to
consumers is unacceptable.


At home selling is only acceptable if it
either:-


•                  Follows
up on a specific piece of DM detailing the nature, time and reason for the
potential visit. The DM should give the consumer clear and straightforward
opportunities to decline the visit. This should include a telephone number,
email address and website.


•                  Follows
a customer enquiry with a prior appointment; or


•                  It’s
part of a pre-arranged buying party.


4.              SMS, Email and
Direct Mail


Unsolicited DM should ideally be sent to an
opt-in list and the list should by supplied by a member of the Direct Mail
Association (DMA). However opt-out lists may be used subject to compliance
with the Data Protection Act. Unsolicited SMS and emails must be based on an
opt-in in accordance with the Privacy and Electronic Communications (EC
Directive) Regulations 2004. All activity should at least conform to the
Committee 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 link
all of the diverse companies in the group are the brand values (i.e. what people expect of Virgin, no matter
what industry) - which can be described as:


 


•                  value for money


•                  good quality


•                  brilliant customer service


•                  innovation


•                  competitively challenging


•                  fun


 


Virgin has a huge reputation
and with that comes a responsibility to not disappoint people. The image is
strong and people are drawn to it – in the UK Virgin enjoys 100% brand
awareness, it is the third most respected brand, and over 50% of the population
say they use at least one Virgin product regularly(1). This loyalty is driven
by the fact that consumers expect Virgin to give them a better deal, and to
come up with a new and better way of doing things.


 


Historically, Virgin has avoided hard-selling tactics to drive
acquisition (with the notable exception of Virgin Energy). However, as Virgin
grows and diversifies further, there is a requirement to outline some brand
guidelines i.e. what does the brand mean in some every day, commercial
activities?


 


1.                                       Selling
Techniques


 


The key areas of Selling that we will cover in this policy are:


 


1.               Outbound
telemarketing:  unsolicited telephone
calls to consumers


2.               Direct
promotions:  face-to-face selling on the
street 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 and
business-to-business activity.


 


2.                                       Overall
Viewpoint


 


Virgin selling is done in a friendly, peer-to-peer style – i.e. Virgin
helps consumers to make a choice to buy, rather than just “selling” to them. As
such, aggressive selling practices jar with the Virgin brand. Virgin evokes a
sense of freedom, it champions consumer choice, and it is confident and
friendly. Virgin builds products that the consumer needs and wants; it offers
these products to consumers in an imaginative and engaging way - and consumers
come to it of their own free will. Conversely, some forms of direct selling
tend to be the activity of a brand which has no such relationship or rapport
with the consumer. These are the forms of direct selling covered by this
policy.


 






(1) Source: HPI quant research
2002


 


2

















 


3.                                       Outbound
telemarketing:  unsolicited telephone
calls


 


Virgin’s policy is not to do unsolicited outbound telemarketing. Brand
damage is suffered due to the intrusive and unsolicited nature of the outbound
call.


 


The call must
be either:-


 


•                  Following
up on a customer enquiry; or


•                  Following
up on a previous piece of communication such as DM, so long as the original
communication was also not “cold” (see section on DM, email and SMS
below).


•                  [In
all the above instances, if the original data transaction is over 3 months old
then the data must be checked for suppression against the Telephone Preference
Service].


•                  Contacting
a 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 by
the Data Protection Act (e.g. ask for permission or give the consumer a chance
to refuse further such contact).


 


Further guidelines on selling to consumers over the phone are based on
the principles of sensitivity and respect:-


 


•                  Describe
the benefits of the product in a no-nonsense, peer-to-peer friendly way and
allow the customer to make up their own mind about it.


•                  Pursue
the sale if the customer is interested but respect the “no” that a customer
gives – especially an emphatic or repeated “no”.


•                  Get
to 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.


•                  Finish
the call politely and graciously, ensuring that the customer feels positive at
the end of the experience.


•                  Only
use other parts of the Virgin Group as a way in to the conversation (e.g. name
dropping other Virgin successes) with their prior consent.


 


4.                                       Direct
promotions:  selling to people on the
street or in store


 


Virgin’s policy on direct promotions is based on the nature of the
activity. The essence of the policy is to show respect for the consumer so the
guidelines would be:-


 


•                  Add
value and capture consumers’ imagination.


•                  Approach
the activity in an Above The Line sense: 
aim to entice consumers to find out more by attracting them to the
activity, rather than by targeting them personally.


•                  Do
not be aggressive e.g. interrupt them, stop them walking, touch them
physically; persist in talking to them about something they are not interested
in.


•                  Due
to the potentially aggressive nature of face-to-face marketing, do not continue
to press them with marketing messages beyond the first “no”.


 


The following is an acceptable part of marketing activity for a
Virgin product or service: -


 


•                  Distributing
leaflets


 


3

















 


•                  Street
theatre


•                  Roadshow
stands


•                  Engaging
people in a conversation about the brand / product


•                  Sales
promotions which adhere to the CAP code (British Code of Advertising, Sales
Promotion and Direct Marketing).


•                  Recruiting
consumers to take part in market research


 


Some unacceptable examples would be: -


 


•                  Doing
the activity outside, inside or adjacent to other Virgin companies without
their consent


•                  Using
other parts of the Virgin Group as a way in to the conversation (e.g. name
dropping other Virgin successes) without their consent


•                  Approaching
children under the age of 16


•                  Intrusively
stopping people who are obviously not interested


•                  Repeating
a scripted marketing spiel to people who have not expressed any interest


•                  Pressuring
consumers to sign a contract, including the use of marketing ruses to get an
immediate sale:  e.g. VAT free if you
sign now


•                  Street
activity that is overly offensive to passers by


 


5.                                       Door to
door:  knocking on doors


 


Virgin’s policy is not to engage in unsolicited door-to-door direct
selling. It is the most intrusive form of direct selling and therefore
would be the most damaging to the brand reputation. There has been recent
debate 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 parties
such as those organised by Virgin Cosmetics sales reps; and selling which
follows up on a specific piece of DM detailing the nature, time and reason for
the potential visit. The DM should give the consumer clear and straightforward
opportunities to decline the visit. This should include a telephone number,
email address and website.


 


In these instances, the guidelines would be: -


 


•                  Describe
the benefits of the product in a no-nonsense, peer-to-peer friendly way and
allow the customer to make up their own mind about it.


•                  Get
to the point quickly – don’t waste their time.


•                  Don’t
use other parts of the Virgin Group as a way in to the conversation (e.g. name
dropping other Virgin successes) without their prior consent.


•                  Don’t
pressurise consumers to sign a contract, including the use of marketing ruses
to get an immediate sale:  e.g. VAT free
if you sign now


•                  Pursue
the sale if the customer is interested but respect the “no” that a customer
gives – especially an emphatic or repeated “no”.


•                  However,
don’t be afraid to ask for the sale if you think they may want to buy.


•                  No
matter if a sale has been made or not, finish the meeting politely and
graciously, ensuring that the customer feels positive at the end of the
experience.


 


4

















 


6.                                       Email, SMS &
Direct Mail


 


According to the CAP, marketing communications should not be sent
unsolicited to consumers if explicit consent is required (i.e. an “opt in”).
Marketing communications should not be sent to customers who have asked not to
receive them (i.e. and “opt-out”). Opt out’s are sufficient for marketing
direct mail, but opt in’s are required for marketing by email and SMS. The
only exception (known as the “soft opt in”) is if marketers want to market
similar products to their existing customers by email and SMS, as long as an
opportunity 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 can
purchase:  opt-in and opt-out. Opt-in
lists are preferred from a brand point of view as the customer has proactively
chosen to hear from the brand (“warm” contact). Opt-out lists, in which the
consumer receives mail by default unless they proactively opt-out, will
potentially result in cold piece of communication by the brand, so should be
handled sensitively (“cold” contact). Guidelines would be to:-


 


•                  Capture
the imagination of the consumer with the creative execution


•                  Make
it easy for them to refuse further such contact


•                  Do
not 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 of
obtaining data from the consumer, he or she was given the full data protection
disclosure necessary (who is using the data, why, what purposes it will be for
etc.). The best way to ensure that this has happened is to only rent lists from
DMA member list brokers or managers, and to ensure that a DMA approved list
warranty is signed.


 


8.                                       Email and
SMS


 


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 enters
into a conversation by e.g. entering a competition or prize draw.


 


General CAP rules state that promoters and marketers should: -


 


•                  Be
capable of meeting the response for a promotion / demand for the product;


•                  Only
use the word “free” if the product is totally free other than national rate for
a cost of response, delivery and/or travelling to pick up the product;


•                  In
any promotion specify how the consumer can participate, the start date, the
closing date, any proof of purchase requirements, the prizes available,
restrictions, availability & the promoters name and address.


•                  Not
claim consumers have won a prize if they have not or exaggerate consumers’
chances of winning a prize;


•                  In
any prize promotions specify the limit on the number of entries, whether there’s
a cash alternative, when prizewinners will receive their prizes, how winners
will be notified, and when winners’ names will be published.


 


Some further Virgin guidelines on DM, Email and SMS marketing would be:
-


 


5

















 


•                  Be
relevant. The best response / conversion rates and most positive consumer
experience will arise from a message which is relevant to that individual and
which captures their imagination. An intrusive or irrelevant piece of
communication is likely to annoy and alienate them.


 


•                  Avoid
using a premium rate response mechanism such as expensive text or phone call. ICSTIS
(Independent Committee for the Supervision of Standards of Telephone
Information Services) requires all promotions with a telephone response to
quote how much it will cost for the consumer to respond.


 


9.                                       Business-to-Business
Direct Selling


 


In the business-to-business environment, cold telemarketing is not a
preferred or common activity for a Virgin company. However, speculative contact
is part of the business world and businesses are set up to deal with cold
calling so it is not as intrusive or disrespectful as it is when contacting
consumers. However, there still remains the concern that Virgin is therefore
seen to be slightly desperate to get a sale and not displaying the kind of
confidence that people expect from the brand. The policy would be:


 


•                  Only
call to follow up a piece of Direct Mail or email which has been sent to the
business.


•                  Only
call to follow up on a recommendation or to operate within a relationship,
which already exists.


•                  Pursue
the sale if the customer is interested but respect the “no” that a customer
gives – especially an emphatic or repeated “no”.


•                  Describe
the benefits of the product in a no-nonsense, peer-to-peer friendly way and
allow the customer to make up their own mind about it.


•                  Get
to the point quickly – don’t waste their time.


•                  Don’t
be afraid to ask for the sale if you think they may want to buy.


•                  Finish
the call politely and graciously, ensuring that the customer feels positive at
the end of the experience.


•                  Don’t
use other parts of the Virgin Group as a way in to the conversation (e.g. name
dropping other Virgin successes) without their prior consent.


 


10.                                 For further
information, 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 of
Telephone Information Services):


www.icstis.org.uk


 


7

















 


PART 4


 


OFFSHORE OUTSOURCING - OVERALL
BRAND APPROACH


 


•                  Our
ultimate goal is to save money and improve our businesses


 


•                  We
should save as much money as we possibly can, as long as the Virgin brand
reputation and customer service quality are not compromised


 


1.                                       Summary of
brand & customer service issues


 


•                  Customer Service Quality – the quality of calls
witnessed 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 – following
global corporate brands in the goldrush – resulting negative PR coverage, staff
and consumer perceptions


•                  Becoming entirely process driven – losing
the Virgin culture


 


2.                                       Summary of
brand preferred choices on offshore outsourcing


 


•                  Putting
seats offshore as a result of growth or attrition is preferred to making any UK
employees redundant.


 


•                  If
higher cost issues in South Africa could be overcome then SA would be less of a
risk for front line customer service quality, and it also makes sense to
strengthen our ties with a territory we are already investing in.


 


•                  Tapping
into current operations (e.g. Atlantic’s offices in Johannesburg) would allow
us to trial offshore outsourcing underneath the radar of publicity.


 


•                  Creating
our own function that we can control & manage would allow us to stamp
the Virgin culture on an operation, enjoy cost savings from working together &
not giving profit margins to an outsourcer.


 


•                  Outsourcing
operations that support the business rather than the customer service function
would give us the chance to save money without it affecting our customer
service (e.g. accounts payable, IT, payroll).


 


•                  Finding
one common function to outsource together onshore, such as payroll, would give
us the chance to trial group outsourcing for the first time in a bite-sized way
before taking a riskier step (more functions; overseas).


 


8

















 


BRAND GUIDELINES FOR A BEST PRACTICE APPROACH TO OFFSHORE OUTSOURCING


 


1.                                       Management of
the operation


 


The overall approach is to put more effort into the offshore outsourced
operation than we would a UK one. This is to ensure that we don’t lose customer
service quality and to protect the brand reputation.


 


•                  Put
a minimum of one Virgin person on site to manage the operation full time.


•                  Give
all of the staff in the outsourced operation a full induction into Virgin’s way
of doing businesses – including brand, culture and customer service. This
should include an initiation trip around current Virgin businesses in the home
territory for as many people as possible.


•                  Work
with the local community and government to make sure that the benefit to the
economy is not just ring-fenced but truly adding value to the local community
and economy.


 


2.                                       Training and
treatment of local staff


 


The overall approach is to respect the staff in the same way as we
would UK staff. This may require some investment that the local outsourcer
may think is unnecessary but this protects the brand reputation and will
also decrease attrition.


 


•                  Develop
a training programme that is more extensive than anything currently in use in
the UK. Initial and on-going training should include:-


•                              Skills &
software training


•                              Full
immersion into Virgin – brand, personality, customer expectations etc.


•                              Customer
familiarisation – their lifestyle, needs and attitudes, why they buy this
product, how they buy it, how they use it etc.


•                              Conversational
tips & phrases, and teach a level of informality that the local staff
will probably find a bit strange.


•                              Language
training....


•                  Positive
language training is critical, but the key is to be respectful to the staff and
their identities and to be transparent about where we are servicing our
customers from:


•                              Difficult
names can be shortened or real nick-names used, but fake British names should
not be used.


•                              Watching
British TV can be part of the language training but agents should not
pretend to be in the UK watching e.g. Eastenders, Coronation Street.


•                              Agents
should not pretend to be in the UK by quoting the weather.


•                  Work
with local trade & labour experts to develop a pay and benefits
package that is fair and respectful. Not necessarily more than the going rate, but
well thought out, based on the needs and attitudes of the local staff, and
winning their loyalty just as we would UK employee’s.


•                  Put
career paths in place so staff know they can progress with the company.


•                  Treat
staff like our own employees – access to Virgin extranet, Tribe, secondments
around the group, etc.


•                  Organise
job swaps between offshore operation and home country.


 


9

















 


•                  Listen
to, and act upon what staff say in employee forums and focus groups.


•                  Involve
their families


•                  Invest
in the physical environment – the space per staff member, the chairs they sit
on, paint, posters, plants. Invest in plenty of chill-out areas:  relaxing rooms & cafes


•                  Invest
in the safety and security of the staff – transport to work, security guards
etc. where necessary.


 


3.                                       Treatment of UK redundancies


 


•                  Totally
transparent and fair treatment of the staff who are made redundant.


•                  PR
strategy to minimise risk...


 


Please refer to Angela Smith, Group HR Manager, for full strategy.


 


4.                                       PR strategy to
minimise risk


 


The PR strategy will hinge upon the fair treatment of UK staff who are
being made redundant, how we are respecting & benefiting the local
staff and what we are doing to help the local community, as previously covered.


 


•                  Please refer to Group PR
Department for full strategy:  Jackie
McQuillan and Will Whitehorn.


•                  Please
advise Group PR Department in advance of any known planned redundancies.


 


10

















 


SCHEDULE 9


 


Worked Example of Clause
9.9


 


The
purpose of this example is to calculate, in the event of termination of the
Deed 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 by
the Licensee in respect of the four full quarters immediately preceding the
date of termination, grown at a constant rate, g, (defined at 2% annually) and
then discounted using r, the WACC of the NTL Group. For illustrative purposes,
this example uses the following assumptions:


 


•                  g, annual growth rate, as defined in
License Agreement (2%)


 


•                  r, NTL Group WACC, as defined in License
Agreement. Value of r for illustrative purposes (10%)


 


•                  A, number of quarters until the end of
Minimum Term, as defined in License agreement. Value of A for illustrative
purposes (20 quarters)


 


•                  B, average royalty payment over last four
quarters, as defined in License agreement. Value of B for illustrative purposes
(£2.0m)


 


•                  i, quarterly discount rate, calculated as
per formula in License Agreement (1.9%)


 


•                  calculated as follows: { [ [ (0.1 – 0.02)
/ (1.02) ] +1 ] ^ 0.25 } -1 =0.0191


 


The
present value of each quarterly royalty payment is shown below. The net present
value i.e. the amount to be paid by the Licensee to VEL is the sum of present
values of all the quarterly royalty payments. In this particular example, this
amounts to £33m.


 





 


11