AGREEMENT AND PLAN OF MERGER dated as of October 2, 2005 among TELEWEST GLOBAL, INC., NTL INCORPORATED and MERGER SUB INC.

     (xi) any agreement that provides for (A) the provision by one or more Third Parties of telephony, data or other services to end users through the network of the Company and its Subsidiaries, (B) the right of one or more Third Parties to use the facilities of the network of the Company and its Subsidiaries, or (C) the provision by, or supply to, the Company or any of the Subsidiaries of network capacity, dark fiber, leased lines or indefeasible rights of use, in each case, that materially and adversely affects the capacity of the network of the Company and its Subsidiaries;

     (xii) (A) any agreement between any member of the UKTV Group, on the one hand, and the Company or any of its Subsidiaries (other than the UKTV Group), on the other hand, and (B) to the Knowledge of the Company, any agreement between any member of the UKTV Group, on the one hand, and BBC Worldwide Limited or any of its Affiliates (other than any member of the UKTV Group), on the other hand, in each case, that is not on arms-length terms; or

     (xiii) any other agreement, commitment, arrangement or plan required to be filed by the Company pursuant to Item 601(b)(10) of Regulation S-K of the SEC, or that is otherwise material to the Company and its Subsidiaries, taken as whole.

     (b) Each agreement, contract, plan, lease, arrangement or commitment (i) disclosed in Section 4.20(a) of the Company Disclosure Schedule, or (ii) which would have been required to be disclosed in Section 4.20(a) of the Company Disclosure Schedule if it had existed on the date of this Agreement (each, a “Company Material Contract”) is in full force and effect and no notice to terminate, in whole or part, any of the same has been served (nor, to the Knowledge of the Company, has there been any indication that any such notice of termination will be served), none of the Company, any of its Subsidiaries or, to the Knowledge of the Company, any other party thereto is in default or breach in any material respect under the terms of any Company Material Contract, and, to the Knowledge of the Company, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute any event of default thereunder, other than, with respect to Company Material Contracts described in clause (ii) of the definition thereof, such exceptions, individually or in the aggregate, as would not reasonably be expected to be material. True, accurate and complete copies of each such Company Material Contract in existence as of the date hereof have been made available by the Company to Parent prior to the date hereof.

     (c) To the Knowledge of the Company (without inquiry), (i) each of the Senior Programme License Agreements are in full force and effect in all material respects and no notice to terminate, in whole or part, any of the same has been served (nor has there been any indication that any such notice of termination will be served), (ii) no party thereto is in default or breach in any material respect under the terms of any such agreement, (iii) no event or circumstance has

36

occurred that, with notice or lapse of time or both, would constitute such an event of default thereunder and (iv) true, accurate and complete copies of each such Senior Programme License Agreement in existence as of the date hereof have been made available by the Company to Parent prior to the date hereof.

     Section 4.21. Intellectual Property. Except as, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect (a) the Company and each of its Subsidiaries owns, or is licensed to use (in each case, free and clear of any Liens), all Intellectual Property Rights used in or necessary for the conduct of its business as currently conducted, (b) the use of any Intellectual Property Rights by the Company and its Subsidiaries does not infringe on or otherwise violate the rights of any Person and is in accordance with any applicable license pursuant to which the Company or any Subsidiary acquired the right to use any Intellectual Property Rights, (c) to the Knowledge of the Company, no Person is challenging, infringing on or otherwise violating any right of the Company or any of its Subsidiaries with respect to any Intellectual Property Rights owned by and/or licensed to the Company or its Subsidiaries, and (d) neither the Company nor any of its Subsidiaries has received any written notice or otherwise has Knowledge of any pending claim, order or proceeding with respect to any Intellectual Property Rights used by the Company and its Subsidiaries and to its Knowledge no Intellectual Property Rights owned and/or licensed by the Company or its Subsidiaries is being used or enforced in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of such Intellectual Property.

     Section 4.22. Properties and Assets. With such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) the Company or one of its Subsidiaries holds good title to (or a valid leasehold interest in) each Company Facility Property free and clear of all Liens (other than Permitted Liens) and (b) the Company and its Subsidiaries own, lease or hold all properties, assets and rights (including all rights of way, easements and related rights) reasonably necessary to conduct the business of the Company and its Subsidiaries as currently conducted in all material respects).

     Section 4.23. Insurance. All material insurance policies covering the properties, assets, employees and operations of the Company and its Subsidiaries (including policies providing property, casualty, liability and workers’ compensation coverage) (collectively, the “Company Insurance Policies”) and all renewals thereof are in full force and effect and not voidable. With such exceptions as would not be material, all premiums due in respect of the Company Insurance Policies have been paid by the Company or one of its Subsidiaries and the Company or one of its Subsidiaries, as the case may be, are otherwise in compliance with the terms of such policies. The Company or one of its Subsidiaries carries customary levels of third party insurance or self insurance (in customary ratios thereof) with respect to all reasonable insurable risks of the businesses conducted by the Company and its Subsidiaries.

37

     Section 4.24. Restructuring. To the Knowledge of the Company, (i) neither the Company nor any of its Subsidiaries has any remaining material liabilities or obligations for which an adequate reserve has not been made on the Company Balance Sheet in connection with the transfer to the Company and its Subsidiaries of all of the right, title and interest previously held by Telewest Communications plc in all of the assets which were the subject of the Transfer Agreement, dated as of July 13, 2004, among the Company, Telewest Communications plc and Telewest UK Limited, including pursuant to any indemnity provided in connection therewith, and (ii) all of the transactions, actions and other steps described in the documents set forth in Section 4.24(ii) of the Company Disclosure Schedule were actually completed in all material respects in the manner and order described therein.

     Section 4.25. Insolvency. Except in connection with the winding-up, striking-off or dissolution of any non-operating Subsidiary, neither the Company nor any of its Subsidiaries has taken any action nor have any other steps been taken or legal proceedings started or, to the Knowledge of the Company, are any threatened, against any of the Company and its Subsidiaries for its winding-up, striking-off or dissolution or for it to enter into any arrangement with or composition for the benefit of creditors (including any moratorium prior to a voluntary arrangement), or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of such Person or any of its properties, revenues or other assets, including the filing of any administration application, notice of intention to appoint an administrator or notice of appointment of an administrator or for the occurrence of any event in a jurisdiction outside England and Wales or Scotland of any form of insolvency proceeding or event similar or analogous to any of those referred to in this Section 4.25.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT

     Except as set forth in the Parent Disclosure Schedule delivered to Company on the date of this Agreement (the “Parent Disclosure Schedule”), Parent represents and warrants to the Company that:

     Section 5.01. Corporate Existence and Power. Each of Parent and Merger Subsidiary is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all Governmental Authorizations required to carry on its business as now conducted, except for those Governmental Authorizations the absence of which would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Parent is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so

38

qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Prior to the date hereof, Parent has made available to the Company true and complete copies of the certificate of incorporation and bylaws of Parent and Merger Subsidiary as currently in effect. Since the date of its incorporation, Merger Subsidiary has not engaged in any activities other than in connection with or as contemplated by this Agreement.

     Section 5.02. Corporate Authorization. (a) The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby are within the corporate powers of Parent and Merger Subsidiary and, except for obtaining the Parent Stockholder Approval and the adoption of this Agreement by the sole stockholder of Merger Subsidiary, have been duly authorized by all necessary corporate action on the part of Parent and Merger Subsidiary. The affirmative vote of the holders of a majority of the total votes cast in person or by proxy at the Parent Stockholder Meeting in favor of the issuance of Parent Stock in the Merger (the “Parent Stockholder Approval”) is the only vote of the holders of any of Parent’s capital stock necessary in connection with the consummation of the Merger. This Agreement constitutes a valid and binding agreement of each of Parent and Merger Subsidiary, enforceable against each of Parent and Merger Subsidiary in accordance with its terms, except (i) as the same may be limited by applicable bankruptcy, insolvency, moratorium or similar laws of general application relating to or affecting creditors’ rights, and (ii) for the limitations imposed by general principles of equity.

     (b) At a meeting duly called and held, Parent’s Board of Directors has (i) determined that this Agreement and the transactions contemplated hereby are fair to and in the best interests of Parent’s stockholders (other than any affiliates of the Company), (ii) approved and adopted this Agreement and the transactions contemplated hereby, and (iii) resolved to recommend approval of the issuance of Parent Stock in the Merger by its stockholders (other than any affiliates of the Company) (such recommendation, the “Parent Board Recommendation”).

     Section 5.03. Governmental Authorization. The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which Parent is qualified to do business, (ii) the appropriate notifications, filings and communications pursuant to (x) the merger control provisions of the Enterprise Act and (y) the Irish Competition Act, (iii) compliance with any applicable requirements of the 1933 Act, the 1934 Act, and any other applicable securities laws, (iv) the appropriate applications, filings and notices to, and approval of, the NASD and NASDAQ, and (v) any actions or

39

filings the failure of which to take or make would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 5.04. Non-contravention. The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby do not and will not (i) contravene, conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of Parent or Merger Subsidiary, or (ii)(A) contravene, conflict with, or result in any violation or breach of any provision of the comparable organizational documents of any of its Significant Subsidiaries including the memorandum and the articles of association of any such Subsidiary registered in England and Wales or Scotland or (B) contravene, conflict with, or result in any violation or breach of any provision of the comparable organizational documents of any of its Subsidiaries other than its Significant Subsidiaries (including the memorandum and the articles of association of any such Subsidiary registered in England and Wales or Scotland), (iii) assuming compliance with the matters referred to in Section 5.03, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law, (iv) assuming compliance with the matters referred to in Section 5.03, require any consent or other action by any Person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which Parent or any of its Subsidiaries is entitled under (A) any provision of any agreement or other instrument binding upon Parent or any of its Subsidiaries, or (B) any Governmental Authorization held by, affecting, or relating in any way to, the assets or business of Parent and its Subsidiaries, or (v) result in the creation or imposition of any Lien on any asset of Parent or any of its Subsidiaries, with only those exceptions in the case of each of clauses (ii)(B) and (iii)-(v) as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect (which term shall be interpreted, for purposes of this Section 5.04, without clause (iv) in the definition thereof).

     Section 5.05. Capitalization. (a) The authorized capital stock of Parent consists of 400,000,000 shares of Parent Stock and 5,000,000 shares of preferred stock, par value $0.01 per share (of which 1,000,000 shares have been designated as Series A Junior Participating Preferred Stock and reserved for issuance upon exercise of the Parent Rights). As of the close of business on September 23, 2005, there were outstanding (i) 85,074,536 shares of Parent Stock (not including any treasury shares or restricted shares), (ii) the Parent Rights (which have not separated from the Parent Stock), (iii) no shares of preferred stock of Parent, (iv) 3,240,940 treasury shares of Parent Stock, (v) stock options to purchase an aggregate of 2,883,912 shares of Parent Stock (of which options to purchase an aggregate of 825,397 shares of Parent Stock were exercisable at a weighted average exercise price of $24.53 per share), (vi) warrants to purchase an aggregate of 8,745,799 shares of Parent Stock at an exercise price of $262.93 per share, and

40

(vii) 67,629 restricted shares of Parent Stock. All outstanding shares of capital stock of Parent have been duly authorized and validly issued and are fully paid and nonassessable. As of the date hereof, no Subsidiary of the Parent owns any shares of capital stock of the Company. A true and complete copy of the Parent Rights Agreement as in effect as of the date hereof has been made available to Parent prior to the date hereof. As of the date hereof, the Parent is not a party to any voting agreement with respect to the voting of Parent Stock.

     (b) Except as set forth in this Section 5.05 and for changes since September 23, 2005 resulting from the exercise of stock options or the grant of stock based compensation to directors or employees or from the issuance of stock in connection with a merger, other acquisition or business combination or other transaction permitted by Section 7.01(b)(iv)(D), there are no outstanding (i) shares of capital stock of, or other voting securities or ownership interests in, Parent, (ii) securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock of, or other voting securities or ownership interests in, Parent, (iii) options or other rights to acquire from Parent or any Subsidiary of Parent, or other obligation of Parent or any Subsidiary of Parent to issue, any capital stock of, or other voting securities or ownership interests in, or any securities convertible into or exchangeable for, capital stock of, or other voting securities or ownership interests in, Parent, or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, Parent. There are no outstanding obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the securities referred to in clauses (i)-(iv) above.

     (c) The shares of Parent Stock to be issued as part of the Merger Consideration have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will have been validly issued and will be fully paid and nonassessable and the issuance thereof is not subject to any preemptive or other similar right.

     Section 5.06. Subsidiaries. (a) Each Subsidiary of Parent is a company or other business entity duly incorporated or organized (as applicable), validly existing and (to the extent applicable) in good standing under the laws of its jurisdiction of organization, has all corporate (or other organizational) powers and all Governmental Authorizations required to carry on its business as now conducted, with such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Each such Subsidiary is duly qualified to do business as a foreign business entity and is (to the extent applicable) in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing (to the extent applicable) would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse

41

Effect. There are no Significant Subsidiaries of Parent which are not wholly owned by the Parent.

     (b) All of the outstanding shares of capital stock of, or other voting securities or ownership interests in, each Subsidiary of Parent is owned by Parent, directly or indirectly, free and clear of any Lien (other than Parent Permitted Liens) and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests) and, in the case of shares in Subsidiaries which are incorporated in England and Wales or Scotland, are fully paid and have been validly allotted. There are no outstanding (i) securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock of, or other voting securities or ownership interests in, any Subsidiary of Parent, (ii) options or other rights to acquire from Parent or any Subsidiary of Parent, or other obligation of Parent or any Subsidiary of Parent to issue, any capital stock of, or other voting securities or ownership interests in, or any securities convertible into or exchangeable for, capital stock of, or other voting securities or ownership interests in, any Subsidiary of Parent, or (iii) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, any Subsidiary of Parent (the items in clauses (i), (ii) and (iii) being referred to collectively as the “Parent Subsidiary Securities”). There are no outstanding obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent Subsidiary Securities.

     (c) There are no joint venture agreements to which Parent or any Subsidiary of Parent is a party that is material to Parent and its Subsidiaries, taken as a whole.

     Section 5.07. SEC Filings and the Sarbanes-Oxley Act. (a) Parent has made available to the Company true, accurate and complete copies of (i) Parent’s annual report on Form 10-K for its fiscal years ended December 31, 2004, (ii) Parent’s quarterly reports on Form 10-Q for its fiscal quarters ended March 31, 2005 and June 30, 2005, (iii) its proxy or information statements relating to meetings of, or actions taken without a meeting by, the stockholders of Parent held (or actions taken without a meeting by such stockholders) since December 31, 2003, and (iv) all of its other reports, statements, schedules, registration statements and other documents filed with (or furnished on Form 8-K to) the SEC since December 31, 2003 (the documents referred to in clauses (i)-(iv) above, collectively, the “Parent SEC Documents”).

     (b) As of the date it was filed with (or furnished on Form 8-K to) the SEC, each Parent SEC Document complied, and each such Parent SEC Document filed (or furnished on Form 8-K) subsequent to the date hereof will comply, as to

42

form in all material respects with the applicable requirements of the 1933 Act and the 1934 Act, as the case may be.

     (c) As of the date it was filed with (or furnished on Form 8-K to) the SEC (or, if amended or superseded by a document prior to the date hereof, on the date such document was filed with (or furnished on Form 8-K to) the SEC), each Parent SEC Document filed pursuant to the 1934 Act did not, and each such Parent SEC Document filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

     (d) Each Parent SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such registration statement or amendment became effective, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

     (e) Parent is in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act, and (ii) the applicable listing and corporate governance rules and regulations of NASDAQ.

     (f) Parent has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to Parent, including its consolidated Subsidiaries, is made known to Parent’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared. Such disclosure controls and procedures are effective in timely alerting Parent’s principal executive officer and principal financial officer to material information required to be included in Parent’s periodic reports required under the 1934 Act.

     (g) Parent maintains internal control over financial reporting (as defined in Rule 13a-under the Exchange Act). Such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Parent, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Parent are being made only in accordance with authorizations of management and directors of Parent, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Parent’s assets that could have a

43

material effect on its financial statements. Prior to the date hereof (or, with respect to evaluations first made after the date hereof, promptly after the date of such evaluations), Parent has disclosed, based on the most recent evaluation of its chief executive officer and its chief financial officer, to Parent’s auditors and the audit committee of Parent’s board of directors (A) any significant deficiencies in the design or operation of its internal controls over financial reporting that are reasonably likely to adversely affect Parent’s ability to record, process, summarize and report financial information and has identified for Parent’s auditors and audit committee of Parent’s board of directors any material weaknesses in internal control over financial reporting and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s internal control over financial reporting. Prior to the date hereof (or, with respect to disclosures or communications first made after the date hereof, promptly after they are made), Parent has made available to the Company (i) a summary of any such disclosure made by management to Parent’s auditors and audit committee since December 31, 2004 and (ii) any material communication since December 31, 2004 made by management or Parent’s auditors to the audit committee required or contemplated by the listing standards of NASDAQ, the audit committee’s charter or professional standards of the Public Company Accounting Oversight Board.

     Section 5.08. Financial Statements. The audited consolidated financial statements and unaudited consolidated interim financial statements included in the Parent SEC Documents fairly present, in conformity with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto), the consolidated financial position of Parent and its Subsidiaries (or the “Predecessor Company” as defined in the Parent SEC Documents, as the case may be) as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements, which adjustments are not, individually or in the aggregate, material).

     Section 5.09. Information Supplied. (a) The information to be supplied by or on behalf of Parent for inclusion or incorporation by reference in the Registration Statement shall not (i) at the time the Registration Statement is filed with the SEC, (ii) at any time it is amended or supplemented, or (iii) at the time it is declared effective by the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

     (b) The information to be supplied by or on behalf of Parent for inclusion or incorporation by reference in the Joint Proxy Statement/Prospectus shall not (i) at the time the Joint Proxy Statement/Prospectus is filed with the SEC, (ii) at the time it is mailed to the stockholders of the Company and Parent, (iii) at the time of the Company Stockholder Meeting and the Parent Stockholder Meeting, or (iv) at the Effective Time, contain any untrue statement of a material

44

fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

     (c) The information to be supplied by or on behalf of Parent for inclusion or incorporation by reference in the Schedule 13E-3 shall not (i) at the time the Schedule 13E-3 and/or the Joint Proxy Statement/Prospectus is filed with the SEC, (ii) at the time the Joint Proxy Statement/Prospectus is mailed to the stockholders of the Company and Parent, (iii) at the time of the Company Stockholder Meeting and the Parent Stockholder Meeting, or (iv) at any time the Schedule 13E-3 and/or the Joint Proxy Statement/Prospectus is amended or supplemented, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

     Section 5.10. Absence of Certain Changes. Since the Parent Balance Sheet Date, the business of Parent and its Subsidiaries has been conducted in the ordinary course consistent with past practices and there has not been:

     (a) any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect;

     (b) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of capital stock of Parent, or any repurchase, redemption or other acquisition by Parent or any of its Subsidiaries of any shares of capital stock of, or other voting securities or ownership interests in, Parent or any of its Subsidiaries; or

     (c) any change in any method of accounting or accounting practice by Parent or any of its Subsidiaries, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the 1934 Act.

     Section 5.11. No Undisclosed Material Liabilities. There are no liabilities or obligations of Parent or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a liability or obligation, other than:

     (a) liabilities or obligations disclosed and provided for in the Parent Balance Sheet or in any notes thereto;

     (b) liabilities or obligations incurred in the ordinary course of business since the Parent Balance Sheet Date in amounts consistent with past practices; and

45

     (c) liabilities or obligations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.

     Section 5.12. Compliance with Laws. (a) Parent and each of its Subsidiaries is, and since December 31, 2002 has been, in compliance with all Governmental Authorizations and all Applicable Laws, except for failures to comply that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. To the Knowledge of Parent as of the date hereof, neither Parent nor any of its Subsidiaries is under investigation with respect to or has been threatened to be charged with or given notice of any material violation of any material Governmental Authorization or any material Applicable Law.

     (b) To the Knowledge of Parent, each material Governmental Authorization of Parent and its Subsidiaries is in full force and effect in all material respects.

     Section 5.13. Litigation. There is no action, suit, investigation or proceeding pending against, or, to the Knowledge of Parent, threatened against or affecting, Parent, any of its Subsidiaries, any present or former officer, director or employee of Parent or any of its Subsidiaries in their respective capacities as such, before any arbitrator or before or by any Governmental Authority (but excluding investigations or proceedings in connection with the Merger that are described in Section 9.01(c) or Section 9.02(c) or any subsequent appeals therefrom) that would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or that, as of the date hereof, in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Merger or any of the other transactions contemplated hereby. Neither Parent nor any of its Subsidiaries is subject to any order, writ, judgment, award, injunction or decree of any arbitrator or Governmental Authority (other than arising as a consequence of the circumstances described in Section 9.01(c) or Section 9.02(c) or any subsequent appeals therefrom) that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

     Section 5.14. Finders’ Fees. Except for Goldman, Sachs & Co. and Evercore Financial Advisors L.L.C. (together, the “Parent Financial Advisors”), whose fees will be paid by Parent, and except as contemplated by the Commitment Letters or otherwise in connection with the Financing, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Parent who is entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

     Section 5.15. Opinion of Financial Advisor. Parent has received the separate opinions of each of the Parent Financial Advisors, each a financial advisor to Parent, to the effect that, as of the date of this Agreement, the Merger Consideration is fair to Parent from a financial point of view.

46

     Section 5.16. Company Securities. Neither Parent nor any of its Subsidiaries owns any Company Securities.

     Section 5.17. Financing. (a) Parent has received and accepted and agreed to a commitment letter dated October 2, 2005 (as it may be amended consistent with the terms of this Agreement, the “Commitment Letter”) from the lenders party thereto (collectively, the “Lenders”) pursuant to which such Lenders have agreed to lend, subject to and on the terms and conditions set forth therein, an aggregate amount equal to £5,100,000,000 to Parent to finance the payment of a portion of the aggregate cash component of the Merger Consideration. The financing to be provided under the Commitment Letter or under any alternative arrangements made by Parent is referred to herein as the “Financing”. The Commitment Letter contains all the conditions precedent to the obligations of the Lenders to make the Financing available to Parent on the terms contained therein and a true and complete copy of the Commitment Letter, as of the date hereof, has been provided to the Company prior to the date hereof.

     (b) Subject to its terms and conditions, the aggregate proceeds of the Financing, when funded in accordance with the Commitment Letter, together with Parent’s cash on hand and other sources of immediately available funds shall enable Parent at the Effective Time to pay in full the aggregate cash component of the Merger Consideration pursuant to Article 2, and all related fees and expenses incurred in connection with the Merger and the financing required in connection with the Merger.

     (c) As of the date of this Agreement, the Commitment Letter is a valid and binding obligation of Parent and is in full force and effect and no event within the direct control of Parent or Merger Subsidiary has occurred which, with or without notice, lapse of time or both, would reasonably be expected to constitute a default or breach or an incurable failure to satisfy a condition precedent on the part of Parent or Merger Subsidiary under the terms and conditions of the Commitment Letter, other than any such default or breach that has been waived by the Lenders or otherwise cured in a timely manner by Parent or Merger Subsidiary to the satisfaction of the Lenders. As of the date of this Agreement, Parent or Merger Subsidiary has paid in full any and all commitment fees or other fees required to be paid pursuant to the terms of the Commitment Letters on or before the date of this Agreement.

ARTICLE 6
COVENANTS OF THE COMPANY

     The Company agrees as set forth below; provided, however, it is understood and agreed by the parties hereto that, insofar as the covenants contained in this Article 6 apply to Subsidiaries of the Company that are members of the UKTV Group, the Company shall not be obligated to take or refrain from

47

taking such action, as the case may be, to the extent it lacks the right to do so or if such action would result in a breach of the fiduciary duties of the Company or its Subsidiaries or those of its representatives on the board of directors or other governing body of any member of the UKTV Group:

     Section 6.01. Conduct of the Company. From the date hereof until the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course and in material compliance with all material Applicable Laws and all material Governmental Authorizations, and (A) use its reasonable best efforts to (i) preserve intact its business organization and relationships with Third Parties, (ii) maintain in effect all material Company Communications Licenses and all other material Governmental Authorizations, and (iii) subject to Section 6.04, renew any such Company Communications License or other Governmental Authorization which would otherwise expire prior to the Effective Time, and (B) not to terminate any employees of the Company or any of its Subsidiaries other than in the ordinary course of business consistent with past practices, it being agreed that terminations for cause shall be deemed within the ordinary course of business consistent with past practices. Without limiting the generality of the foregoing, from the date hereof until the Effective Time, except (1) as expressly contemplated by this Agreement or Section 6.01 of the Company Disclosure Schedule, or (2) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any of its Subsidiaries to:

     (a) adopt or propose any change to its certificate of incorporation or bylaws or other organizational documents (including, in relation to any Subsidiaries incorporated in England and Wales or Scotland, its memorandum and articles of association);

     (b) (i) split, combine or reclassify any shares of its capital stock, (ii) amend any term or alter any rights of any of its outstanding equity securities, (iii) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of its capital stock or other securities, or (iv) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any of its securities or any securities of any of its Subsidiaries, other than the cancellation of Company Stock Options in connection with the exercise thereof;

     (c) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization, engage in or implement any intercompany reorganization or restructuring involving the shares, liabilities (including inter-company liabilities) or all or a significant portion of a business of the Company or any or its Subsidiaries (including any such reorganization or restructuring of the Flextech Group or any part thereof), or propose any resolution for its winding-up, striking-off or dissolution or apply to any court for an administration order or the appointment of a receiver, trustee or similar officer of the relevant entity or any or

48

all of the assets of such entity or commence any negotiations to enter into any arrangement with or composition for the benefit of creditors (including any moratorium prior to a voluntary arrangement);

     (d) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such capital stock or any such convertible securities, other than (i) the issuance of any shares of Company Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the present terms of such options, and (ii) the granting of Company Stock Options or awards under the Company Long-Term Incentive Plan in each case, in accordance with Section 6.01(d)(ii) of the Company Disclosure Schedule;

     (e) incur any capital expenditures or any obligations or liabilities in connection therewith, except for (i) those contemplated by the capital expenditure budget for the fiscal year 2005, which capital expenditure budget has been made available to Parent prior to the date hereof, (ii) those contemplated by the capital expenditure budget for the fiscal year 2006, which budget will be prepared by the Company in good faith and will be provided to Parent promptly after it is prepared and (iii) any unbudgeted capital expenditures relating to the fiscal year 2005 or 2006, as the case may be, not to exceed, in the aggregate, 5% of the aggregate budgeted amount set forth in the budget for such fiscal year referred to in clause (i) or (ii) above, as applicable;

     (f) except for capital expenditures (which shall be governed by Section 6.01(e)), acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material amount of assets or any business or undertaking, other than (i) the acquisitions set forth in Section 4.20(a)(vi) of the Company Disclosure Schedule, (ii) assets used in the ordinary course of business of the Company and its Subsidiaries in a manner that is consistent with past practices, and (iii) acquisitions, excluding those acquisitions set forth in clauses (i) and (ii) of this Section 6.01(f), not exceeding £10,000,000 in the aggregate;

     (g) sell, lease, assign, license or otherwise dispose of any of its properties or assets that are material to the Company, any of its Significant Subsidiaries, or Subsidiaries included in the Flextech Group, individually or in the aggregate, other than (i) pursuant to the current terms and conditions of agreements in effect as of the date hereof (which agreements are set forth in Section 4.20(a)(vi) of the Company Disclosure Schedule), (ii) finance leases entered into in connection with capital expenditures permitted pursuant to Section 6.01(e), or (iii) in the ordinary course of business consistent with past practices;

     (h) (A) create, incur, assume or guarantee any indebtedness for borrowed money or modify any of the terms of such outstanding indebtedness other than (i) as otherwise permitted by Section 6.01(e), (ii) any such indebtedness among the Company and its wholly owned Subsidiaries or among

49

the Company’s wholly owned Subsidiaries, or (iii) additional amounts which may be made available under the existing revolving credit facilities of the Company or its Subsidiaries not to exceed £30,000,000 in the aggregate, or (B) enter into or replace any agreement relating to any interest rate or currency hedging, swaps, caps, floors, or option agreement other than interest rate swaps on customary commercial terms not to exceed £25,000,000 of notional debt in the aggregate;

     (i) create or incur any Lien on any material asset other than (i) any immaterial Lien incurred in the ordinary course of business consistent with past practices, (ii) in connection with finance leases as permitted pursuant to Section 6.01(e) or (iii) other Liens not to exceed £5,000,000 in the aggregate;

     (j) make any loan, advance or investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person other than (i) investments in its wholly owned Subsidiaries made in the ordinary course of business consistent with past practices or (ii) pursuant to the current terms and conditions of agreements in effect as of the date hereof (which agreements are set forth in Section 4.20(a)(vii) of the Company Disclosure Schedule) or entered into by the Company in compliance with this Agreement;

     (k) (i) other than in the ordinary course of business or as permitted by this Agreement, enter into, terminate, renew, amend or modify in any material respect, or fail to enforce any material provision of, any Company Material Contract or (ii) enter into, terminate, renew, amend or modify in any material respect, or fail to enforce any material provision of, any Company Material Contract referred to in Section 4.20(a)(iii) or 4.20(a)(iv) (except that, for the purposes of this clause (k)(ii), the first and second threshold contained in each such section shall be deemed to be £10,000,000 and £30,000,000, respectively) or Section 4.20(a)(v), 4.20(a)(vi), 4.20(a)(vii) (other than amendments in the ordinary course of business), 4.20(a)(viii), 4.20(a)(xi), 4.20(a)(xii) (but only if such Company Material Contract is material) or 4.20(a)(xiii);

     (l) terminate, renew, suspend, abrogate, amend or modify in any material respect any material Governmental Authorization (except in respect of any renewal of any such Governmental Authorization pursuant to clause (ii) of the first sentence of this Section 6.01 or pursuant to Section 6.04);

     (m) (i) increase the amount of compensation, bonus or other benefits payable to any current or former director, officer or employee of the Company or its Subsidiaries, except, with respect to employees with annual base salaries of less than £75,000 (such employees, the “Excepted Employees”), in the ordinary course of business consistent with past practices, (ii) grant any severance or termination pay or benefits (or increase the amount of such pay or benefits, or extend the notice periods for termination) to any current or former director, officer or employee of the Company or any of its Subsidiaries, except any such grants that the Company is required to make pursuant to any agreement in effect

50

as of the date hereof and disclosed on Section 4.17(a) of the Company Disclosure Schedule, or so required by Applicable Law, and, with respect to Excepted Employees, in the ordinary course of business consistent with past practices, (iii) establish, pay, agree to grant or increase any special bonus, stay bonus, retention bonus or any similar benefit under any plan, agreement, award or arrangement, (iv) enter into any new employment, severance, change in control, tax gross-up, deferred compensation or other similar agreement or arrangement (or amend any such existing agreement), except with respect to employment agreements with any employee with an annual base salary of less than £75,000 hired after the date hereof, in the ordinary course of business consistent with past practices, (v) hire any employee with an annual base salary in excess of £75,000, (vi) except as required by Applicable Law, enter into or amend in any material respect any collective bargaining agreement or other contract with any labor union or organization, (vii) except as required by Applicable Law, establish, adopt, amend or terminate any Company Employee Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it had been in existence as of the date of this Agreement, or (viii) enter into or amend any agreement, contract or arrangement with any current or former director, officer, employee, or independent contractor or commit to provide any payment or any benefit to any such individual that would have been required to be disclosed on Section 4.17(e) of the Company Disclosure Schedule if any such commitment existed on or before the date of this Agreement;

     (n) change the Company’s method of accounting or accounting principles or practice, except for any such change required by reason of a change in GAAP or by Regulation S-X under the 1934 Act, as approved by its independent public accountants;

     (o) make any material Tax election other than in the ordinary course of business; provided, however, that in no event shall the Company or any Subsidiary make any election for U.S. federal income tax purposes (including under Treas. Reg. § 301.7701 -3) with respect to the Company or any Subsidiary without the prior written consent of Parent;

     (p) settle, or propose to settle, any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole;

     (q) except as required by Applicable Law (including applicable must-carry laws) or as contemplated in the business plan attached as Section 6.01(q) of the Company Disclosure Schedule add or voluntarily delete any channels, or change its channel lineup, or commit to do any of the foregoing in the future;

     (r) launch any new channels, except as necessary to comply with any requirement of any Governmental Authority, in accordance with pending

51

agreements in effect as of the date hereof, or as contemplated in the business plan attached as Section 6.01(q) of the Company Disclosure Schedule;

     (s) convert any billing systems or any material portion thereof;

     (t) take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Section 9.02(a) or Section 9.02(e) not being satisfied; or

     (u) agree or commit to do any of the foregoing;

provided, however, that nothing in this Section 6.01 shall prevent the Company from taking any action necessary to bring awards issued under any Company Employee Plan outstanding as of the date hereof into compliance with, or to exempt such awards from, Section 409A of the Code (whether by amendment to or termination of any such award or otherwise), including any payments in cash or the issuance of shares of Company Stock or other awards under any Company Employee Plan so long as such payments or issuances (or combination of payments and issuances) are on terms that (i) are substantially equivalent with respect to the economics and vesting schedule of the applicable award outstanding as of the date hereof, and (ii) do not result in any additional liability to Parent, the Company or any of their respective Subsidiaries. As soon as practicable after taking any such permitted action with respect to outstanding awards, the Company agrees to notify Parent of its actions.

     Section 6.02. Company Stockholder Meeting; Proxy Material. The Company shall cause a meeting of its stockholders (the “Company Stockholder Meeting”) to be duly called and held as soon as reasonably practicable for the purpose of obtaining the Company Stockholder Approval. Subject to its fiduciary duties, the Board of Directors of the Company shall recommend the approval and adoption of this Agreement by the Company’s stockholders; provided, however, that any withdrawal of, any modification or qualification in a manner adverse to Parent of the Company Board Recommendation, or any recommendation of an Acquisition Proposal (each such action, an “Adverse Company Recommendation Change”), shall give Parent the right to terminate this Agreement as set forth in Section 10.01(c)(i) of this Agreement. In connection with such meeting, the Company shall (i) mail the Joint Proxy Statement/ Prospectus to the Company’s stockholders as promptly as practicable after the Registration Statement is declared effective under the 1933 Act and, if necessary in order to comply with applicable securities laws, after the Joint Proxy Statement/Prospectus shall have been so mailed, promptly circulate amended, supplemental or supplemented proxy material, and, if required in connection therewith, resolicit proxies, (ii) subject to its fiduciary duties under Applicable Law, use its reasonable best efforts to secure the Company Stockholder Approval, and (iii) otherwise comply with all legal requirements applicable to such meeting. Without limiting the generality of the foregoing, and notwithstanding anything in this agreement that may be deemed to be to the contrary, but subject to Section

52

10.01 hereof, this Agreement shall be submitted to the Company’s stockholders at the Company Stockholder Meeting whether or not (A) an Adverse Company Recommendation Change shall have occurred, and/or (B) any Acquisition Proposal shall have been publicly proposed or announced or otherwise submitted to the Company or any of its advisors.

     Section 6.03. No Solicitation; Other Offers. The Company agrees that neither it nor any of its Subsidiaries nor any of the officers and directors of it or its Subsidiaries shall, and that it shall cause its and its Subsidiaries’ employees, agents and representatives (including any investment banker, attorney, accountant or other advisor retained by it or any of its Subsidiaries for services provided in connection with the transactions contemplated by this Agreement whether as of the date hereof or any time hereafter) (collectively, “Representatives”) not to, directly or indirectly, initiate, solicit or knowingly encourage or facilitate any Acquisition Proposal. The Company further agrees that neither it nor any of its Subsidiaries nor any of the officers and directors of it or its Subsidiaries shall, and that it shall cause its and its Subsidiaries’ employees, agents and Representatives not to, directly or indirectly, (i) engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any Person relating to an Acquisition Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Acquisition Proposal, (ii) amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries (unless Parent’s obligations under the standstill provisions contained in the Confidentiality Agreement dated May 27, 2005 between the Company and Parent (the “Confidentiality Agreement”) are simultaneously waived), (iii) approve any transaction under, or any Third Party becoming an “interested stockholder” under, Section 203 of the Delaware Law, (iv) amend or grant any waiver or release or approve any transaction or redeem any Company Rights under the Company Rights Agreement, (v) make any Adverse Company Recommendation Change in connection with an Acquisition Proposal or (vi) enter into any definitive agreement with respect to an Acquisition Proposal; provided, however, that nothing contained in this Agreement shall prevent the Company or its Board of Directors from (1) complying with its disclosure obligations under Sections 14d-9 and 14e-2(a) of the Exchange Act with regard to an Acquisition Proposal; provided, however, that if such disclosure constitutes an Adverse Company Recommendation Change, Parent shall have the right to terminate this Agreement as set forth in Section 10.01(c)(i) of this Agreement; and (2) at any time prior to, but not after, the time this Agreement is adopted by the Company Stockholder Approval, (A) providing information in response to a request therefor by a Person who has made an unsolicited bona fide written Acquisition Proposal if the Board of Directors of the Company receives from the Person so requesting such information, prior to the provision of any such information, an executed confidentiality agreement on terms no less favorable to the Company than those contained in the Confidentiality Agreement (provided that, such executed confidentiality agreement may contain less favorable standstill provisions as long

53

as Parent’s obligations under the standstill provisions contained in the Confidentiality Agreement are simultaneously waived); (B) engaging in any negotiations or discussions with any Person who has made an unsolicited bona fide written Acquisition Proposal if the Board of Directors of the Company receives from such Person, prior thereto, an executed confidentiality agreement as described in the immediately preceding clause (A); or (C) recommending or making any Adverse Company Recommendation Change in connection with such an unsolicited bona fide written Acquisition Proposal to the stockholders of the Company, if and only to the extent that, (x) in each such case referred to in clause (A), (B) or (C) above, the Board of Directors of the Company determines in good faith after consultation with outside legal counsel that such action is necessary in order for its directors to comply with their respective fiduciary duties, (y) in each case referred to in clause (B) or (C) above, the Board of Directors of the Company determines in good faith (after consultation with its financial advisor and its outside legal counsel) that such Acquisition Proposal, if accepted, is reasonably likely to be consummated, taking into account all legal, financial and regulatory aspects of the proposal, the likelihood of obtaining financing, and the Person making the proposal, and if consummated, would result in a transaction more favorable to the Company’s stockholders from a financial point of view than the transaction contemplated by this Agreement taking into account any change proposed by Parent; and (z) in the case of clause (C), Parent shall have had written notice of the Company’s intention to take the action referred to in clause (C) at least 20 Business Days prior to the taking of such action by the Company (which notice shall have attached the most current version of the agreement relating to the Acquisition Proposal in question and a summary of any other material terms relating thereto) and Parent shall, and shall cause its Representatives to, during such 20 Business Day period, negotiate in good faith with Parent with respect to any changes Parent may wish to make with respect to its proposal; provided, that any more favorable Acquisition Proposal referred to in clause (B) or (C) above must constitute an Acquisition Proposal that involves the acquisition, directly or indirectly, of 50% or more of the voting power of the Company Stock or the assets of the Company and its Subsidiaries taken as a whole (any such more favorable Acquisition Proposal is referred to in this Agreement as a “Superior Proposal”). The Company agrees that it will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person conducted heretofore with respect to any Acquisition Proposal, including any discussions or negotiations with respect to the possible sale of the Flextech Group. The Company agrees that it will take the necessary steps to promptly inform the individuals or entities referred to in the first sentence of this Section 6.03 of the obligations undertaken in this Section 6.03. The Company agrees that it will notify Parent promptly, but in any event within 48 hours if any proposals or offers referred to in this Section 6.03 are received by, any such information is requested from, or any such discussions or negotiations are sought to be initiated or continued with, it or any of its Representatives indicating, in connection with such notice, the name of such Person and the material terms and conditions of any proposals or offers and thereafter shall keep Parent informed on a current basis, and, in any event, within 24 hours of any changes in the status, the terms and any other material details of any such proposals or offers, including whether any such proposal has been

54

withdrawn or rejected. The Company also agrees to provide any information to Parent that it is providing to another Person pursuant to this Section 6.03 at substantially the same time it provides it to such other Person. The Company agrees promptly, but in any event, within five days after the date of this Agreement, to request the return or destruction of all information and materials provided prior to the date of this Agreement by it, its Affiliates or their respective Representatives (and any information derived therefrom) with respect to the consideration or making of any Acquisition Proposal (including with respect to the possible sale of the Flextech Group) and the Company shall otherwise use its reasonable best efforts to enforce any confidentiality agreement relating thereto.

     Section 6.04. License Expirations. The Company shall, and shall cause its Subsidiaries to, use reasonable best efforts to ensure that all Company Communications Licenses remain in full force and effect in the ordinary course of business. Upon reasonable prior notice, the Company shall, and shall cause its Subsidiaries to, allow representatives of Parent to attend meetings and hearings before applicable Governmental Entities in connection with any proposed modifications or amendments to any Company Communications License or other Governmental Authorization.

     Section 6.05. Affiliates. Prior to the date of the Company Stockholder Meeting, the Company shall deliver to Parent a letter identifying all known Persons who, in the opinion of the Company, as of the time of the Company Stockholder Meeting, may be deemed affiliates of the Company under Rule 145 of the 1933 Act ( a “Company Rule 145 Affiliate”). The Company shall use its reasonable best efforts to obtain a written agreement from each Company Rule 145 Affiliate as soon as practicable and, in any event, at least 30 days prior to the Effective Time, substantially in the form of Exhibit B hereto.

     Section 6.06. Company Board Of Directors. On the Closing Date, the Company shall cause to be delivered to Parent duly executed resignations, effective as of the Effective Time, of each member of the Board of Directors of the Company and shall take such other action as is necessary to accomplish the foregoing.

     Section 6.07. Cooperation. (a) Upon the request of Parent, the Company shall, and shall cause its Subsidiaries to, assist and cooperate with Parent in connection with (A) any proposed (i) sale of all or a substantial portion of the Company’s and/or any of its Subsidiaries’ ownership interest in, or all or a substantial portion of the assets of, the Flextech Group, to, or (ii) entry into a joint venture or other business combination transaction relating to the Flextech Group with, in either case, one or more Third Parties (any such proposed or potential Third Party, a “Flextech Transaction Party”) and on such terms and conditions as Parent shall determine (any transactions contemplated by clause (i) or (ii) above, a “Flextech Transaction”), provided that, (1) Parent shall consult with the Company and give reasonable consideration to the views of the Company as to the manner of effecting any Flextech Transaction or the process relating thereto,

55

which Parent shall, in each case, have the right to direct, (2) representatives of the Company shall be permitted to participate fully in any negotiations with a Flextech Transaction Party, (3) Parent shall, promptly upon receipt of appropriate invoices therefore, reimburse the Company and its Subsidiaries and the members of the Flextech Group for their reasonable out of pocket costs in complying with this Section 6.07(a)(A) and (4) no obligation of the Company or any of its Subsidiaries under any agreement or instrument with respect to any Flextech Transaction (other than this Agreement) shall be effective until the Effective Time and none of the Company or any of its Subsidiaries shall have any obligation or liability under any such agreement or instrument prior to the Effective Time, (B) any Flextech Group Restructuring, provided that, the Company shall not be obligated to undertake any action as part of any such restructuring if such action would result in any significant cost or detriment to the Company or any of its Subsidiaries unless Parent agrees to compensate the Company or the relevant Subsidiaries for such cost or detriment in the event that this Agreement is terminated, and (C) obtaining the Waiver, the process in relation to which Parent shall have the right to direct, (it being agreed that neither the Company nor any of its Subsidiaries will, without the prior written consent of Parent, pay any consideration, or undertake any obligation or liability, to BBC Worldwide Limited or any of its Affiliates in connection with the Waiver).

     (b) Without limiting the generality of the foregoing, the Company shall, and shall cause its Subsidiaries to, (A) in connection with any Flextech Transaction, (i) give to any such Flextech Transaction Party, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of the Company and its Subsidiaries relating to the Flextech Group, (ii) furnish to any such Flextech Transaction Party, its counsel, financial advisors, auditors, and other authorized representatives such financial and operating data and other information with respect to the Flextech Group as such Persons may reasonably request, and (iii) assist in taking or making any action by or in respect of, or filing with, any Governmental Authority, and obtaining any actions, consents, approvals or waivers required to be obtained, in each case, as customarily required in connection with the consummation of any Flextech Transaction, and (B) in connection with any of the transactions contemplated by this Agreement (including without limitation for the purpose of obtaining finance for any such transaction), promptly upon Parent’s request, provide to Parent, each Subsidiary of Parent and/or Ernst & Young LLP (or any other advisers appointed by Parent for such purpose) all assistance, information and access required by any of them in connection with the preparation for or implementation of any financial assistance whitewash procedure (in accordance with sections 155 to 158 of the U.K. Companies Act 1985) required to be undertaken by Sit-up Limited or any other Subsidiary of the Company to enable it to give financial assistance in connection with any such transaction (the “Whitewash Procedure”), including: (1) providing them with all accounting and financial information and records requested by them in relation to any such company; (2) preparing and providing to them all reports, analyses and other

56

materials reasonably required by them in relation to any such company; and (3) providing them with access to the appropriate personnel of any such company. In addition, with effect from and subject to the occurrence of the Closing Date, the Company shall, if so directed by Parent, (i) cause the directors of any such company required to undertake the Whitewash Procedure to resign, and shall cause individuals nominated by Parent to be appointed as the directors of each such company in their place; and (ii) cause the auditors of each such company required to undertake the Whitewash Procedure to resign and shall cause Ernst & Young, LLP (or any other firm of accountants nominated by Parent for such purpose) to be appointed as the auditors in their place.

     (c) Notwithstanding anything to the contrary contained herein, the assistance and cooperation contemplated by Sections 6.07(a) and 6.07(b) above shall not require the Company or its Subsidiaries to take any action that unreasonably interferes with the business operations of the Company and its Subsidiaries (including the Flextech Group). Parent shall not take any action in connection with a Flextech Transaction or the Flextech Group Restructuring that would reasonably be expected to adversely affect in any material respect the Flextech Group or the Company’s interest therein if the Merger is not consummated.

     (d) The Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to assist and cooperate with Parent in Parent’s efforts to obtain the private letter ruling, closing agreement or similar document described in Section 9.02(g)(i), including by giving such representations as Parent may reasonably request.

     (e) After the date hereof and prior to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to assist and cooperate with Parent and its Subsidiaries such that Parent is able to comply, on a timely basis after the Effective Time (without regard to grace periods thereunder with respect to acquisitions), with the applicable provisions under the Sarbanes-Oxley Act and the 1934 Act, including those regarding the reliability of the combined company’s financial reporting and the preparation of the combined company’s financial statements for external purposes (including Sections 302 and 404 of the Sarbanes-Oxley Act and Rules 13a-14 and 15d-14 of the 1934 Act); provided that, the foregoing shall not require the Company or its Subsidiaries to take any action that unreasonably interferes with the business operations of the Company and its Subsidiaries or incur any unreimbursed out-of-pocket expense.

     (f) The Company agrees that (i) upon the receipt of a written request from Parent, it will promptly withdraw, and/or cause its Subsidiaries to withdraw, the request filed by the Company and/or its Subsidiaries with the Internal Revenue Service under § ###-###-#### of the Procedure and Administration Regulations on September 1, 2005, and (ii) upon the receipt of a written request from Parent, it will seek permission from the Internal Revenue Service to revoke

57

any election made or purportedly made by the Company or any of its Subsidiaries under Section 108(b)(5) of the Code.

ARTICLE 7
COVENANTS OF PARENT

     Parent agrees that:

     Section 7.01. Conduct of Parent. From the date hereof until the Effective Time, Parent shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course and in material compliance with all material Applicable Laws and material Governmental Authorizations, and use its reasonable best efforts to (i) preserve intact its business organization and relationships with Third Parties, and (ii) keep available the services of its officers and key employees. Without limiting the generality of the foregoing, from the date hereof until the Effective Time, except (A) as expressly contemplated by this Agreement or set forth in Section 7.01 of the Parent Disclosure Schedule, or (B) as the Company may approve in writing (such approval not to be unreasonably withheld or delayed):

     (a) Parent shall not adopt or propose any change in its certificate of incorporation or bylaws;

     (b) Parent shall not (i) declare, set aside or pay any dividend or make other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of its capital stock, (ii) make any tender or exchange offer for Parent Stock at a premium to the then-existing market price of such Parent Stock, (iii) split, combine or reclassify any shares of its capital stock, or (iv) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock, other than (A) the issuance of any shares of Parent Stock upon the exercise of stock options in accordance with their present terms, (B) issuances pursuant to the exercise of warrants outstanding on the date hereof, (C) the granting (or any subsequent exercise thereof) of options to acquire shares of Parent Stock or restricted shares of Parent Stock in the ordinary course of business (which shall include grants pursuant to Parent’s existing stock option plans and long-term incentive plans), and (D) issuances of stock or grants of stock options (or other stock-based compensation) in connection with any merger, acquisition or other business combination, or other material transaction that, in any such case, does not require any approval of Parent’s stockholders, provided that, for the sake of clarity, neither this Section 7.01(b) nor Section 7.01(f) shall preclude Parent or any of its Subsidiaries from entering into any agreement with respect to any transaction referred to in Section 7.01(b)(D) (regardless of whether or not the issuance of stock in connection therewith would require the approval of Parent’s stockholders) as long as the record date for any vote of Parent’s stockholders required in connection therewith occurs after the Effective Time;

58

     (c) Parent shall not adopt any plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or propose any resolution for its winding-up, striking-off or dissolution or apply to any court for an administration order or the appointment of a receiver, trustee or similar officer or commence any negotiations to enter into any arrangement with or composition for the benefit of creditors (including any moratorium prior to a voluntary arrangement);

     (d) Parent shall not, and shall not permit any of its Subsidiaries to, enter into any transaction that would reasonably be expected to materially delay the completion of the Merger;

     (e) Parent shall not, and shall not permit any of its Subsidiaries to, take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Section 9.03(a) or Section 9.03(b) not being satisfied; and

    (f) Parent shall not agree or commit to do any of the foregoing.

     Section 7.02. Obligations of Merger Subsidiary. Parent shall take all action necessary to cause Merger Subsidiary to perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement.

     Section 7.03. Director and Officer Liability. Parent hereby agrees to do, or to cause the Surviving Corporation, and the Surviving Corporation hereby agrees, to do the following:

     (a) For six years after the Effective Time, Parent shall indemnify and hold harmless to the fullest extent permitted under Applicable Law the present and former officers and directors of the Company (each, an “Indemnified Person”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities (collectively, “Costs”) incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to acts or omissions by such Indemnified Person in their capacity as a director or officer of the Company occurring at or prior to the Effective Time (collectively, “Claims”) (and Parent shall also advance reasonable expenses as incurred to the fullest extent permitted by Applicable Law in connection with any Claims against an Indemnified Person provided that the Person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Person is not entitled to indemnification). In the event any Claim or Claims are asserted or made within such six year period, all rights to indemnification in respect of any such claim or claims shall continue until final disposition of any and all such claims.

     (b) For six years after the Effective Time, the Surviving Corporation shall provide officers’ and directors’ liability insurance with an insurer with a

59

Standard & Poor’s rating of at least A (or an equivalent rating from AM Best), or Parent shall purchase from an insurer with a Standard & Poor’s rating of at least A (or an equivalent rating from AM Best), a “tail policy”, in each case, in respect of acts or omissions occurring prior to the Effective Time covering each such Indemnified Person currently covered by the Company’s officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date hereof (which policy has been provided by the Company to Parent); provided that, if the aggregate annual premiums for such insurance during such period shall exceed £6,000,000, then the Surviving Corporation shall provide a policy with the best coverage as shall then be available at £6,000,000 per annum.

     (c) The rights of each Indemnified Person under this Section 7.03 shall be in addition to any rights to indemnification and exculpation of personal liability that such Person may have under Delaware Law or any other Applicable Law, or any agreement of any Indemnified Person with the Company or any of its Subsidiaries. These rights shall survive consummation of the Merger and are intended to benefit, and shall be enforceable by, each Indemnified Person.

     (d) Any Indemnified Person wishing to claim indemnification under this Section 7.03, upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify Parent thereof, but the failure to so notify shall not relieve Parent or the Surviving Corporation of any liability it may have to such Indemnified Party except to the extent such failure prejudices Parent or the Surviving Corporation. In the event of any such claim, action, suit, proceeding or investigation (whether arising before or after the Effective Time), (i) Parent or the Surviving Corporation, as the case may be, shall have the right to assume the defense thereof and Parent or the Surviving Corporation, as the case may be, shall not be liable to such Indemnified Person for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof, except that if Parent or the Surviving Corporation elects not to assume such defense or counsel for the Indemnified Person advises the Indemnified Person in good faith that there are issues that raise conflicts of interest between Parent and the Indemnified Person that make such assumption unadvisable, the Indemnified Person may retain counsel, reasonably satisfactory to the Surviving Corporation or Parent, as the case may be, and such party shall pay the reasonable legal expenses of such Indemnified Person promptly as statements therefor are received, (ii) the Indemnified Person will cooperate in the defense of any such matter, and (iii) the Surviving Corporation or Parent, as the case may be, shall not be liable for any settlement effected without its prior written consent; provided that, the Surviving Corporation or Parent, as the case may be, shall not have any obligation hereunder to any Indemnified Person when and if a court of competent jurisdiction shall ultimately determine, and such determination shall have become final, that the indemnification of such Indemnified Person in the manner contemplated hereby is prohibited by Applicable Law.

60

     (e) If Parent or the Surviving Corporation or any of their respective successors (i) shall consolidate with or merge into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then, and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume all of the obligations set forth in this Section 7.03.

     Section 7.04. Parent Stockholder Meeting; Proxy Material. Subject to its fiduciary duties, Parent shall cause a meeting of its stockholders (the “Parent Stockholder Meeting”) to be duly called and held as soon as reasonably practicable for the purposes of obtaining the Parent Stockholder Approval. Subject to its fiduciary duties, the Board of Directors of Parent shall recommend the Parent Stockholder Approval, and shall not withdraw or modify in a manner adverse to the Company such recommendation. In connection with the Parent Stockholder Meeting, Parent shall (i) mail the Joint Proxy Statement/Prospectus to Parent’s stockholders as promptly as practicable after the Registration Statement is declared effective under the 1933 Act and, if necessary in order to comply with applicable securities laws, after the Joint Proxy Statement/Prospectus shall have been so mailed, promptly circulate amended, supplemental or supplemented proxy material, and, if required in connection therewith, resolicit proxies, (ii) subject to its fiduciary duties under Applicable Law and subject to the foregoing, use reasonable best efforts to secure the Parent Stockholder Approval, and (iii) otherwise comply with all legal requirements applicable to such meeting.

     Section 7.05. Quotation of Stock. Parent shall use reasonable best efforts to cause the shares of Parent Stock to be issued in connection with the Merger to be to be approved for quotation on NASDAQ, subject to official notice of issuance.

     Section 7.06. Parent Board Of Directors; Certain Members of Management. Prior to the Effective Time, Parent shall take all necessary action to appoint to the Board of Directors of Parent Mr. Anthony Stenham and one additional member of the Company’s Board of Directors selected by Parent with the approval of the Company’s Board of Directors, not to be unreasonably withheld or delayed (or, if either one of them is unable or unwilling to serve in that capacity, such other individual as may be reasonably acceptable to Parent and the Company) subject, in the case of Mr. Stenham, to him agreeing with Parent, on terms mutually satisfactory to him and Parent, his terms for service as Deputy Chairman, which Parent agrees to negotiate in good faith. In addition, Parent will appoint, or cause to be appointed, those individuals set forth in Section 7.06 of the Parent Disclosure Schedule to the positions set forth in such Section of the Parent Disclosure Schedule subject to such individuals agreeing with Parent, on terms mutually satisfactory to Parent and such individuals, terms of employment, which Parent agrees to negotiate in good faith.

61

     Section 7.07. Company Employees. (a) Parent agrees that it will comply with Applicable Law with respect to the rights of the employees of the Company and its Subsidiaries with respect to their employment with the Company or its any of its Subsidiaries.

     (b) Parent will cause any employee benefit plans which the employees of the Company and its Subsidiaries are eligible to participate in after the Effective Time, other than any plan in which any such employee participated prior to the Effective Time (a “Prior Plan”), to take into account for purposes of eligibility, vesting and benefit accrual thereunder, except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or to the extent it would result in a duplication of benefits, service by employees of the Company and its Subsidiaries as if such service were with Parent, to the extent that such service was recognized under any analogous Prior Plan.

ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY

     The parties hereto agree that:

     Section 8.01. Reasonable Best Efforts. (a) Subject to the terms and conditions of this Agreement, the Company and Parent shall use (and shall cause their respective Subsidiaries to use) their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable on its part under this Agreement and under Applicable Law to consummate and make effective as promptly as practicable the Merger and the other transactions contemplated by this Agreement, including (i) preparing and filing as promptly as practicable with any Governmental Authority or other third party all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, and (ii) obtaining as promptly as practicable and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations necessary or advisable to be obtained from any Governmental Authority or other Person in connection with the Merger or any other transaction contemplated by this Agreement, including the Company License Consents.

     (b) In furtherance and not in limitation of the foregoing, each of Parent and the Company shall (A) assist, consult and cooperate with each other in preparing and making (i) appropriate submissions and filings to the OFT, OFCOM or the Competition Commission or any other appropriate Governmental Authority in respect of the condition set forth in Section 9.01(c), (ii) appropriate submissions and notifications to OFCOM and any other appropriate Governmental Authority in respect of any License Consents, (iii) within one month of the date hereof, a joint notification to the Irish Competition Authority of the of the transactions contemplated by this Agreement pursuant to the Irish

62

Competition Act and any other filings, submissions or notifications to the Irish Competition Authority or Irish Minister for Enterprise Trade and Employment (the “Minister”) in respect of the condition set forth in Section 9.02(c) , and (iv) all other comparable filings or submissions which the parties hereto reasonably agree are necessary or advisable, in each case, as promptly as practicable, (B) as promptly as practicable, supply any non-privileged additional information and documentary material that may be requested pursuant to any such filing or submission, (C) promptly use its reasonable best efforts to avoid the entry of, or vacate or remove (including by appeal, if available), as the case may be, any permanent, preliminary or temporary injunction or other order, decree, decision, determination or judgment by any Governmental Authority with competent jurisdiction over the transactions contemplated hereby that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by this Agreement, including the defense through litigation on the merits of any claim asserted before a Governmental Antitrust Authority seeking to delay, restrain, prevent, enjoin, or otherwise prohibit consummation of the Merger, and (D) take all other actions reasonably necessary to secure the satisfaction of the conditions set forth in Section 9.01(c) and Section 9.02(c).

     (c) The Company and Parent shall (A) cooperate with one another in (i) determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the Merger or the consummation of the other transactions contemplated by this Agreement, (ii) taking, and seeking promptly to obtain, any such actions, consents, approvals or waivers, and (iii) making any such filings or notifications, or furnishing information required in connection therewith, and (B) consult with each other with respect to the preparation of, and each shall have the right to review in advance, any written submissions made to any Governmental Antitrust Authority by either Parent or the Company in connection with the Merger and each agrees not to attend any meeting or teleconference with any Governmental Antitrust Authority relating to the Merger without giving representatives of the other both reasonable notice of that meeting or teleconference and unless expressly refused by the Governmental Antitrust Authority a reasonable opportunity to attend such meeting or teleconference.

     (d) Notwithstanding anything to the contrary contained in this Agreement, the parties hereby agree and acknowledge that neither this Section 8.01 nor the “reasonable best efforts” standard shall require, or be construed to require, other than as set forth in the proviso below, Parent or the Company or any of their respective Subsidiaries or other Affiliates, in order to obtain any approvals, consents, registrations, permits, authorizations, and other confirmations to be obtained from any Governmental Authority or Governmental Antitrust Authority or otherwise to satisfy the condition set forth in Section 9.01(c), to:

     (i) offer the OFT undertakings in lieu of a reference pursuant to Section 73 of the Enterprise Act (other than following a remittal of the

63

Merger back to the OFT for reconsideration pursuant to Section 120(5) of the Enterprise Act); or

     (ii) offer the U.K. Secretary of State undertakings in lieu of a reference pursuant to paragraph 3 of Schedule 7 of the Enterprise Act (other than following a remittal of the Merger back to the U.K. Secretary of State for reconsideration pursuant to Section 120(5) of the Enterprise Act); or

     (iii) appeal any decision by the OFT or the U.K. Secretary of State to refer the Merger or the other transactions contemplated by this Agreement to the Competition Commission; or

     (iv) (A) sell, lease, license, transfer, dispose of, divest or otherwise encumber, or hold separate pending any such action, or (B) propose, negotiate or offer to effect, or consent or commit to, any such sale, leasing, licensing, transfer, disposal, divestiture or other encumbrance, or holding separate, before or after the Effective Time, of any assets, licenses, operations, rights, businesses or interest therein of Parent, the Company or the Surviving Corporation (or any of their respective Subsidiaries or other Affiliates); or

     (v) take or agree to take any action or agree or consent to any limitations or restrictions on freedom of actions with respect to, or its ability to retain, or make changes in, any such assets, licenses, operations, rights, product lines, businesses or interest therein of Parent, the Company or the Surviving Corporation (or any of their respective Subsidiaries or other Affiliates),

unless, in the case of all such requirements described in clauses (iv) and (v) above, such requirements would not, individually or in the aggregate with all other such requirements, reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect, in each case, without regard to clause (b) and clause (iv) (insofar as such clause (iv) relates to any matter contemplated by clause (iv) or (v) above) of each such definition (a “Regulatory Material Adverse Effect”); provided, however, that Parent can compel the Company to take any of the actions referred to above (or agree to take such actions) if such actions are only effective after the Effective Time. For purposes of this Agreement, a Regulatory Material Adverse Effect shall in any event be deemed to arise if an obligation is imposed on, or a binding undertaking is sought from, Parent and/or the Company by any Governmental Authority or Governmental Antitrust Authority requiring Parent and/or the Company to (i) offer access by Third Parties to the network infrastructure of Parent or Company (or any of their respective Subsidiaries or other Affiliates) to enable those Third Parties or any other Third Parties to offer or provide products and/or services to customers connected directly to that network infrastructure, or (ii) sell, transfer, dispose of or divest, or hold separate all or a significant portion of, the Flextech

64

Group, excluding for this purpose sit-up Limited; provided that Parent can compel the Company to take any of the actions referred to above (or agree to take such actions) if such actions are only effective after the Effective Time.

     Section 8.02. U.S. Disclosure Filings. (a) As soon as practicable following the date of this Agreement, the Company and Parent shall prepare and file with the SEC the Joint Proxy Statement/Prospectus and Parent shall, in cooperation with the Company, prepare and file with the SEC the Registration Statement, in which the Joint Proxy Statement/Prospectus will be included as the Company’s proxy statement and Parent’s proxy statement and prospectus. Each of the Company and Parent shall use reasonable best efforts to have the Registration Statement declared effective under the 1933 Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the Merger. Concurrently with the filing of the Registration Statement, each of the Company, Parent and Merger Subsidiary shall jointly prepare and file with the SEC and shall use reasonable best efforts to cause their respective Affiliates engaging in the transactions contemplated by this Agreement to file with the SEC, the Schedule 13E-3. All U.S. Disclosure Filings shall comply as to form in all material respects with the provisions of the 1933 Act and the 1934 Act, as applicable.

     (b) Each of Parent and the Company shall provide the other party and its counsel with (i) any comments or other communications, whether written or oral, that such party or its counsel may receive from time to time from the SEC or its staff with respect to any U.S. Disclosure Filing, promptly after receipt of those comments or other communications and (ii) a reasonable opportunity to participate in the response to those comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating in any discussions or meetings with the SEC.

     (c) No amendment or supplement to any of the Registration Statement, Joint Proxy Statement/Prospectus or Schedule 13E-3, will be made by the Company or Parent without the approval of the other party, which will not be unreasonably withheld or delayed, except as may be required by Applicable Law; provided that, with respect to documents filed by the Company or Parent which are incorporated by reference in any of the aforementioned U.S. Disclosure Filings, this right of approval shall apply only with respect to information relating to the other party or its business, financial condition or results of operations.

     (d) Each of Parent and the Company shall advise the other party and its counsel, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the shares of Parent Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of any of the U.S. Disclosure Filings or comments thereon and responses thereto or requests by the SEC for additional information. If, at any time prior to the Effective Time, the

65

Company or Parent discover any information relating to either party, or any of their respective Affiliates, officers or directors, that should be set forth in an amendment or supplement to any of the U.S. Disclosure Filings, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other parties and the parties will cooperate with each other in order to promptly file with the SEC and, to the extent required by Applicable Law, disseminate to the stockholders of the Company and Parent, an appropriate amendment or supplement describing such information.

     (e) Parent shall take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified or to file a general consent to service of process) required to be taken under foreign or state securities or Blue Sky laws in connection with the issuance of Parent Stock in the Merger and the Company shall furnish all information concerning the Company and the holders of Company Common Stock as may be reasonably requested in connection with any such action.

     Section 8.03. Public Announcements. Parent and the Company shall consult with each other before issuing any press release, making any other public statement or scheduling any press conference or conference call with investors or analysts, in each case, with respect to this Agreement or the transactions contemplated hereby and, except as may be required by Applicable Law or any listing agreement with or rule of any national securities exchange or association, shall not issue any such press release, make any such other public statement or schedule any such press conference or conference call before such consultation. Parent and the Company hereby agree that the initial press release with respect to the Merger shall be a joint press release and Parent and the Company will cooperate in drafting such release and disseminating it in a timely manner.

     Section 8.04. Further Assurances. At and after the Effective Time, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of the Company or Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Subsidiary, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

     Section 8.05. Access to Information. (a) From the date hereof until the Effective Time and subject to Applicable Law and the Confidentiality Agreement, the Company and Parent shall upon reasonable notice, (i) give to the other party, its counsel, financial advisors, auditors and other authorized representatives reasonable access during normal business hours to the offices, properties, books

66

and records of such party and its Subsidiaries (including access to perform physical examinations), (ii) furnish to the other party, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information as such Persons may reasonably request, and (iii) instruct its employees, counsel, financial advisors, auditors and other authorized representatives to cooperate with the other party in its investigation. Any investigation pursuant to this Section 8.05 shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the other party. No information or knowledge obtained in any investigation pursuant to this Section 8.05 shall affect or be deemed to modify any representation or warranty made by any party hereunder.

     Section 8.06. Notices of Certain Events. Each of the Company and Parent shall promptly notify the other of:

     (a) any notice or other communication from (i) any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement and/or (ii) BBC Worldwide Limited or any of its Affiliates relating to the Merger or the other transactions contemplated by this Agreement;

     (b) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement;

     (c) any actions, suits, claims, investigations or proceedings commenced or, to its Knowledge, threatened against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries or Parent and any of its Subsidiaries, as the case may be, that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to any Section of this Agreement, or that relate to the consummation of the transactions contemplated by this Agreement;

     (d) any inaccuracy of any representation or warranty contained in this Agreement at any time during the term hereof that could reasonably be expected to cause the condition set forth in Section 9.02(a)(ii) or Section 9.03(a)(ii) not to be satisfied;

     (e) any occurrence or non-occurrence of any event, the occurrence or non-occurrence of which, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect or a Parent Material Adverse Effect; and

     (f) any failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder;

provided, however that, the delivery of any notice pursuant to this Section 8.06 shall not limit or otherwise affect the remedies available hereunder to the party

67

receiving such notice or constitute an admission that any event communicated is material or could give rise to a Company Material Adverse Effect or Parent Material Adverse Effect.

     Section 8.07. Financing. Parent and Merger Subsidiary shall use their reasonable best efforts to obtain the proceeds of the Financing on the terms and conditions described in the Commitment Letter, including using reasonable best efforts to (i) negotiate definitive agreements with respect to the Financing consistent with the terms and conditions contained therein, and (ii) satisfy on a timely basis all conditions in such definitive agreements the satisfaction of which are within the control of Parent or Merger Subsidiary. Parent and Merger Subsidiary shall use their reasonable best efforts to comply with their respective obligations, and enforce their respective rights, under the Commitment Letter. Parent shall give the Company prompt notice of any material breach by any party to the Commitment Letter of which Parent has become aware or any termination of the Commitment Letter. Parent shall not permit any amendment or modification to, or any waiver of any material provision or remedy under, the Commitment Letter if such amendment, modification or waiver materially increases the conditionality or materially delays the Financing. The Company shall assist and cooperate with Parent and Merger Subsidiary in connection with their efforts to obtain the proceeds of the Financing, including providing, in accordance with the terms of Section 8.05, reasonably required information relating to the Company and its Subsidiaries to the financial institution or institutions providing the Financing and executing and delivering, and causing such Subsidiaries to execute and deliver, customary certificates, legal opinions (which may be reasoned, if counsel reasonably believes it cannot give the opinion otherwise) or other documents and instruments relating to guarantees, the pledge of collateral and other matters ancillary to the Financing as may be reasonably requested by Parent in connection with the Financing; provided that, no obligation of the Company or any of its Subsidiaries under any such certificate, document or instrument shall be effective until the Effective Time and none of the Company or any of its Subsidiaries shall be required to pay any commitment or other similar fee or incur any other liability or unreimbursed out-of-pocket expense in connection with the Financing prior to the Effective Time.

     Section 8.08. Section 16 Matters. Prior to the Effective Time, Parent and the Company shall take all such steps as may be required (to the extent permitted under applicable law) to cause any dispositions of Company Stock (including derivative securities with respect to Company Stock) or acquisitions of Parent Stock (including derivative securities with respect to Parent Stock) resulting from the transactions contemplated by Article 2 of this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the 1934 Act with respect to the Company, or will become subject to such reporting requirements with respect to Parent, to be exempt under Rule 16b-3 promulgated under the 1934 Act.

68

Section 8.09. Accountants' Letters. (a) Parent shall use reasonable best efforts to cause to be delivered to the Company two letters from Parent's independent public accountants, one dated approximately the date on which the Registration Statement shall be declared effective and one dated as of the Closing Date, each addressed to Parent and the Company, in form reasonably satisfactory to the Company and customary in scope for comfort letters delivered by independent public accountants in connection with registration statements similar to the Registration Statement.

     (b) The Company shall use reasonable best efforts to cause to be delivered to Parent two letters from the Company's independent public accountants, one dated approximately the date on which the Registration Statement shall be declared effective and one dated as of the Closing Date, each addressed to the Company and Parent, in form reasonably satisfactory to Parent and customary in scope for comfort letters delivered by independent public accountants in connection with registration statements similar to the Registration Statement

     Section 8.10. Stockholder Meetings. Parent and the Company shall use their reasonable best efforts to hold the Parent Stockholder Meeting and the Company Stockholder Meeting on the same date and at the same time.

ARTICLE 9
CONDITIONS TO THE MERGER

     Section 9.01. Conditions to the Obligations of Each Party. The obligations of the Company, Parent and Merger Subsidiary to consummate the Merger are subject to the satisfaction of the following conditions:

     (a) Each of the Company Stockholder Approval and the Parent Stockholder Approval shall have been obtained.

     (b) No court or other Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Applicable Law that prohibits the consummation of the Merger.

     (c) (i) (A)OFT shall have either confirmed to Parent and/or Merger Subsidiary in writing that it does not intend to refer the Merger to the Competition Commission pursuant to Section 33(1) of the Enterprise Act, other than in the circumstances of Section 33(2)(b) of the Enterprise Act, or the OFT shall have accepted undertakings from Parent in lieu of a reference pursuant to Section 73 of the Enterprise Act, and (B) if the condition set forth in Section 9.01(c)(i)(A) is satisfied and the condition in this Section 9.01(c)(i)(B) has not been waived by Parent, either (x) the period specified in Rule 26 of the Competition Appeal Tribunal Rules 2003 for making any application under Section 120(1) of the Enterprise Act shall have expired without any such application having being

69

made, (y) in the event that such application has been made the Competition Appeal Tribunal shall have rejected such application pursuant to Rule 10 of the Competition Appeal Tribunal Rules 2003 or dismissed such application pursuant to Section 120(5) of the Enterprise Act, or the application shall have been withdrawn pursuant to Rule 12 of the Competition Appeal Tribunal Rules 2003, or (z) in the event that such application has been made and the OFT’s decision in relation to the Merger is quashed in whole or in part and remitted back to the OFT under Section 120(5) of the Enterprise Act, the OFT’s subsequent decision in relation to the Merger satisfies the condition set forth in Section 9.01(c)(i)(A) (without any need to satisfy the condition in Section 9.01(c)(i)(B)); or

     (ii) (A) in the event that the U.K. Secretary of State serves an intervention notice pursuant to Section 42(2) of the Enterprise Act, the U.K. Secretary of State (x) shall have confirmed to Parent and/or Merger Subsidiary in writing that the U.K. Secretary of State does not intend to refer the Merger to the Competition Commission pursuant to Section 45 of the Enterprise Act, other than in the circumstances of Section 56(1) of the Enterprise Act, or (y) shall have accepted undertakings in lieu of a reference pursuant to Paragraph 3 of Schedule 7 of the Enterprise Act, and (B) if the condition set forth in Section 9.01(c)(ii)(A) is satisfied and the condition in this Section 9.01(c)(ii)(B) has not been waived by Parent, either (x) the period specified in Rule 26 of the Competition Appeal Tribunal Rules 2003 for making any application under Section 120(1) of the Enterprise Act shall have expired without any such application having being made, (y) in the event that such application has been made the Competition Appeal Tribunal shall have rejected such application pursuant to Rule 10 of the Competition Appeal Tribunal Rules 2003 or dismissed such application pursuant to Section 120(5) of the Enterprise Act, or the application shall have been withdrawn pursuant to Rule 12 of the Competition Appeal Tribunal Rules 2003, or (z) in the event that such application has been made and the Secretary of State's decision in relation to the Merger is quashed in whole or in part and remitted back to the Secretary of State under Section 120(5) of the Enterprise Act, the Secretary of State’s subsequent decision in relation to the Merger satisfies the condition set forth in Section 9.01(c)(ii)(A) (without any need to satisfy the condition in this Section 9.01(c)(ii)(B)); or

     (iii) in the event of a reference of the Merger by the OFT to the Competition Commission pursuant to Section 33(1) of the Enterprise Act or a deemed reference by the OFT to the Competition Commission pursuant to Section 56(3) of the Enterprise Act, then (A) the Competition Commission shall have decided that the Merger shall not be expected to

70

result in a substantial lessening of competition pursuant to Section 36(1) of the Enterprise Act, (B) the Competition Commission shall have accepted undertakings from Parent pursuant to Section 82(1) of the Enterprise Act, or (C) the Competition Commission shall have made an order pursuant to Section 84(1) of the Enterprise Act which would not reasonably be expected to give rise to a Regulatory Material Adverse Effect; or

     (iv) in the event of a reference of the Merger by the U.K. Secretary of State to the Competition Commission pursuant to Section 45 of the Enterprise Act, then (A) the U.K. Secretary of State shall have confirmed in writing to Parent and/or Merger Subsidiary a decision that he shall not make an adverse public interest finding pursuant to Section 54(2) of the Enterprise Act, (B) the U.K. Secretary of State shall have made no finding at all pursuant to Section 54(2) of the Enterprise Act in circumstances where the reference was made pursuant to Section 45(3) or 45(5) of the Enterprise Act, (C) the U.K. Secretary of State shall have made no finding at all pursuant to Section 54(2) of the Enterprise Act in circumstances where the reference was made pursuant to Section 45(2) or 45(4) of the Enterprise Act and subsequently the Competition Commission shall have (x) concluded that the Merger shall not be expected to result in a substantial lessening of competition pursuant to Section 36(1) of the Enterprise Act, (y) accepted undertakings from Parent pursuant to Section 82(1) of the Enterprise Act, or (z) made an order pursuant to Section 84(1) of the Enterprise Act which would not reasonably be expected to give rise to a Regulatory Material Adverse Effect, or (D) in the event that the U.K. Secretary of State makes an adverse public interest finding pursuant to Section 54(2), then (x) the U.K. Secretary of State shall have accepted undertakings from Parent pursuant to Paragraph 9 of Schedule 7 of the Enterprise Act, or (y) the U.K. Secretary of State shall have made an order pursuant to Paragraph 11 of Schedule 7 of the Enterprise Act which would not reasonably be expected to give rise to a Regulatory Material Adverse Effect.

     (d) The Registration Statement shall have been declared effective, no stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings for that purpose shall have been initiated by the SEC and not concluded or withdrawn.

     (e) The shares of Parent Stock to be issued in the Merger shall have been approved for quotation on NASDAQ, subject to official notice of issuance.

     Section 9.02. Conditions to the Obligations of Parent and Merger Subsidiary. The obligations of Parent and Merger Subsidiary to consummate the Merger are subject to the satisfaction or waiver by Parent (to the extent permitted by applicable law) of the following further conditions:

     (a) (i) The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time, (ii) the representations and warranties of the Company contained in this Agreement (A) that are qualified by materiality or Company Material Adverse

71