Exhibit 10.29

 

PRIVATE AND CONFIDENTIAL

 

 

To:          NTL Incorporated; and

NTL Investment Holdings Limited

909 Third Avenue, Suite 2863

New York, New York 10022

 

Attn:       James F. Mooney, Chairman

 

 

March 2006

 

 

Dear Sirs,

 

Project Vanilla - Commitment Letter

 

Pursuant to paragraph 20 of the commitment letter dated 14 December 2005 from
the Initial MLAs and the Initial Underwriters (as each such term is defined
below) to yourselves (the “Original Commitment Letter”), and by its signature
hereto, each of the parties to this letter hereby agrees to amend and replace
the Original Commitment Letter with this letter, but without prejudice to any
Accession Notice entered in connection with the Original Commitment Letter
(each, an “Existing Accession Notice”) which shall remain in full force and
effect as if entered into in connection with this letter. In accordance with the
provisions of paragraph 20, the Initial MLAs confirm that they have received the
consent of those Underwriters whose commitments aggregate to not less than
 662/3% of the total commitments under the Senior Facilities and those
Underwriters whose commitments aggregate to not less than 50.1% of the total
commitments under the Bridge Facility (in each case, calculated immediately
prior to the date of this letter) to the amendment and restatement of the
Original Commitment Letter by this letter.

 

Each of Deutsche Bank AG, London Branch, J.P. Morgan Plc, The Royal Bank of
Scotland plc and, Goldman Sachs International (each, as “Initial MLA” and,
collectively, the “Initial MLAs”) hereby confirm their commitment to arrange, on
your behalf, certain bank financing described herein, with an international
syndicate of lenders.

 

Each of Deutsche Bank AG, London Branch, JPMorgan Chase Bank, National
Association, The Royal Bank of Scotland plc and, Goldman Sachs Credit Partners
L.P. (each as “Initial Underwriter”, and, collectively the “Initial
Underwriters”) hereby confirm their commitment to underwrite (or procure that
their customary funding affiliate underwrites) the financing described herein on
a certain funds basis described in Appendix A-3 hereto and the terms and
conditions of this Commitment Letter and the detailed terms and conditions set
out in the Appendices attached hereto.

 

By your acceptance of this Commitment Letter and the offer contained herein, you
hereby appoint each of the foregoing institutions as Initial MLAs and Initial
Underwriters, and as Joint Bookrunners as described in Appendix A-3 hereto.

 

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We understand from our discussions with you that you intend to merge (the
“Merger”) with a newly formed, wholly-owned subsidiary of Telewest Global, Inc.,
a Delaware corporation (“Telewest” and, together with its subsidiaries prior to
the consummation of the Merger, the “Telewest Group”), pursuant to an amended
and restated agreement and plan of merger dated 14 December 2005 (as amended by
Amendment No. 1 dated 30 January 2006) between, among others, Telewest, Neptune
Bridge Borrower LLC, a Delaware limited liability company (“Merger Sub”) and NTL
Incorporated, a Delaware corporation (“NTL Inc.”, and together with its
subsidiaries prior to the consummation of the Merger, the “NTL Group”) (the
“Merger Agreement”).

 

We further understand that you intend to acquire the entire issued and to be
issued share capital of Virgin Mobile Holdings (UK) plc (“Virgin Mobile” and
together with its subsidiaries, the “Virgin Mobile Group”) by way of a scheme of
arrangement under Section 425 of the Companies Act 1985 with Virgin Mobile’s
shareholders (the “Virgin Mobile Acquisition”).

 

After giving effect to the Merger and/or the Virgin Mobile Acquisition, as the
case may be, Telewest and its subsidiaries are hereinafter referred to as the
“Group”.

 

You have further advised us that Telewest and NTLIH and certain specified
subsidiaries thereof will together require a total of £5.575 billion (the
“Funding Requirement”) to (i) effect the Merger, (ii) pay the related fees,
costs and expenses incurred in connection with the Merger, (iii) repay in full
the existing senior credit facilities of the NTL Group, (iv) repay in full the
existing senior and second lien credit facilities of the Telewest Group, (v)
effect the Virgin Mobile Acquisition, (vi) repay in full the existing senior
credit facilities of the Virgin Mobile Group, (vii) pay the related fees, costs
and expenses incurred in connection with the Virgin Mobile Acquisition and
(viii) finance the ongoing working capital needs and general corporate
requirements of the UK Group.

 

We are pleased to confirm that, subject to the terms of this letter and of the
attached appendices (each an “Appendix” and together, the “Appendices”) (this
letter, incorporating the Appendices, the “Commitment Letter”), a senior credit
facilities fees letter and a bridge facilities fees letter, each to be entered
into between yourselves and ourselves in connection with the Facilities (the
“Senior Fees Letter” and the “Bridge Fees Letter”, and together with the
Commitment Letter and the Engagement Letter, the “Commitment Documents”), the
Initial MLAs are willing to lead arrange and the Initial Underwriters are
willing to underwrite in the proportions set out below up to 100% of the Debt
Financing (as defined below) portion of the Funding Requirement as set out
below:

 

 

 

Senior Facilities

 

Bridge Facility

 

Deutsche Bank AG, London Branch

 

25

%

30.303

%

JPMorgan Chase Bank, National Association

 

25

%

30.303

%

The Royal Bank of Scotland plc

 

25

%

21.212

%

Goldman Sachs Credit Partners L.P.

 

25

%

18.182

%

 

 

100%

 

100

%

 

in each case (subject to any pro rata reduction following the accession of any
Additional Underwriter in accordance with paragraph 14).

 

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Capitalised terms, unless otherwise defined, shall bear the same meanings as
those ascribed to them in the Appendices.

 

1.             Financing Structure

 

(a)                                  Merger Sub will obtain new senior
subordinated bridge facilities in an aggregate principal amount not less than
£1.8 billion (the “Bridge Facility”) substantially on the terms and conditions
set out in this Commitment Letter and Appendix A-1 (as may be amended in
accordance with paragraph 13 by the terms of Appendix A-5 of this Commitment
Letter);

 

(b)                                 You will engage each of the Mandated Lead
Arrangers as arranger for any take-out financing for the Bridge Facility,
including through issuance of senior notes (the “Notes”) pursuant to and in
accordance with an engagement letter (the “Engagement Letter”) on the terms and
conditions set out in Appendix A-2; and

 

(c)                                  NTLIH or its affiliates will obtain new
senior secured credit facilities in an aggregate principal amount of up to
£3.775 billion, comprising (i) a £3.2 billion tranche A term facility (“Tranche
A”), (ii) a £175 million tranche A1 term facility (“Tranche A1”), (iii) a £300
million tranche B1 term facility (“Tranche B1”) and (iv) a £100 million
revolving working capital facility (“RCF”) (Tranche A, Tranche A1, Tranche B1
and RCF being collectively referred to as the “Senior Facilities” and, together
with the Bridge Facility, the “Debt Financing”) substantially on the terms and
conditions set out in this letter and Appendix A-3 (as may be amended in
accordance with paragraph 13 by the terms of Appendix A-4 of this Commitment
Letter).

 

2.             Conditions of Commitment

 

Our commitment to arrange and underwrite the Debt Financing above and this
Commitment Letter is subject to the following conditions:

 

(a)                                  the negotiation of customary finance
documentation (including without limitation, loan agreements and intercreditor,
guarantee, security and associated documentation for the Debt Financing
(together the “Financing Documentation”)) on terms satisfactory to us (acting
reasonably) and their execution and delivery by you. Each of the parties hereto
shall use its best endeavours to agree the Financing Documentation as soon as
reasonably practicable, each party acting reasonably and in good faith and such
Financing Documentation to be on no less favourable terms to NTL Inc. than the
terms contained in the agreements for the existing facilities of NTL Inc. and
Telewest, taking into account the consolidation of the NTL Group, the Telewest
Group and the Virgin Mobile Group as a result of the Merger and the Virgin
Mobile Acquisition. The Financing Documentation will be drafted by counsel to
the Mandated Lead Arrangers and unless otherwise agreed by NTL Inc., will
incorporate, without limitation, the terms and conditions set out in the
Commitment Documents, but no additional substantive funding conditions; and

 

(b)                                 execution and delivery of the Engagement
Letter, the Senior Fees Letter and the Bridge Fees Letter.

 

3.             Assignments and Amendments

 

You may not assign or transfer any of your rights, or (except as provided in
paragraph 18) be relieved of any of your obligations, under the Commitment
Documents, without the prior written consent of the Mandated Lead Arrangers (and
any purported assignment or transfer without such consent shall be void).

 

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The Mandated Lead Arrangers and Underwriters may assign or transfer all or any
of our respective rights and obligations under this Commitment Letter, the
Senior Fees Letter and/or the Bridge Fees Letter to any of our respective
affiliates that customarily acts as our funding affiliate and subject to the
terms of the Commitment Documents, provided that any such assignment or transfer
shall not be permitted without the prior consent of NTL Inc. if as a result of
such assignment or transfer, you would incur any additional obligation or
liability by way of withholding tax.

 

This Commitment Letter may not be amended or modified and no provision may be
waived except by an instrument in writing signed by the each of the parties
hereto.

 

4.             Clear Market

 

To ensure an orderly and effective syndication of the Debt Financing (which
shall include for these purposes any Alternative Baseball Financing), you agree
that until close of business on the day falling on the earlier of:

 

(a)           the achievement of Successful Syndication (as defined in the
Senior Fees Letter);

 

(b)           six months after the Merger Closing Date; and

 

(c)           the termination of your obligations under paragraph 18,

 

NTL Inc. will procure that no member of the Telewest Group, the NTL Group and,
upon consummation of the Virgin Mobile Acquisition, the Virgin Mobile Group
will, without the prior written consent of the Initial MLAs, issue, arrange,
syndicate, borrow or incur (or attempt or announce publicly an intention to
issue, arrange, syndicate, borrow or incur) any indebtedness (other than the
Debt Financing) in the domestic or international loan, capital or financial
markets (including, but not limited to, the Stand Alone Baseball Financing, any
public or private bond issue, private placement, note issuance, bilateral or
syndicated loan, letter of credit or trade financing facility or other debt
raising arrangement).

 

This provision shall terminate with respect to any Stand Alone Baseball
Financing on the date falling two months after the earlier of (i) the delivery
of a Structure Notice and (ii) consummation of the Virgin Mobile Acquisition.

 

The parties agree that any syndication of the Alternative Baseball Financing
will be conducted after prior consultation between NTL, Inc. and the Initial
MLAs and will be led and co-ordinated by the Initial MLAs.

 

5.             Syndication

 

(a)                                  Subject to the terms of the Commitment
Documents and (after execution) the Financing Documentation:

 

(i)                                     except as otherwise agreed between the
Initial MLAs and NTL Inc., each of the Underwriters, after consultation with
you, shall have the right before or after execution of the Financing
Documentation to syndicate some or all of its participation in the Debt
Financing to other banks or financial institutions with a corresponding
reduction in its commitment; and

 

(ii)                                  no roles or titles (other than as
contemplated by paragraph 14 and contained in any Accession Notice) will be
conferred on any other bank or financial institution in relation to the Debt
Financing (and no payments will be made by you to any other bank or financial
institution for taking a participation in the Debt Financing) without our prior
written consent (such consent not to be unreasonably withheld).

 

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(b)                                 You will co-operate with and assist the
Mandated Lead Arrangers in connection with the syndication of the Debt Financing
in a manner consistent with normal market practice including (but not limited
to) by:

 

(i)                                     subject to there being no obligation to
provide materials if a filing obligation with the US Securities and Exchange
Commission would be required, providing such financial and other information
relating to the Group as the Mandated Lead Arrangers, acting reasonably, may
deem necessary to achieve Successful Syndication (as defined in the Senior Fees
Letter);

 

(ii)                                  in line with normal market practice,
assisting the Mandated Lead Arrangers in the preparation of such materials
relating to the Debt Financing as the Mandated Lead Arrangers shall reasonably
require for the purposes of syndication, containing information regarding the
Debt Financing and the business, assets, financial condition and prospects of
the Group, including without limitation, an information memorandum (in the form
of the information memorandum dated October 2005 but updated to reflect any
changes to the terms of the Debt Financing made since October 2005, the Virgin
Mobile Acquisition and the business, assets, financial condition and prospects
of the Virgin Mobile Group) and bank presentation and other marketing materials
in a form reasonably satisfactory to the Mandated Lead Arrangers (the
“Information Package”) such materials to be prepared by the Mandated Lead
Arrangers and approved by NTL Inc.;

 

(iii)                               allowing attendance by senior management of
the UK Group at one or more bank presentations or meeting with potential lenders
at such times and places as the Mandated Lead Arrangers may agree with you; and

 

(iv)                              using your reasonable efforts to ensure that
the syndication efforts benefit from your existing lending relationships.

 

Without prejudice to the immediately succeeding paragraph, you shall not
however, be required to take any action that would conflict with any law or
other applicable regulation, including the Takeover Code, US Federal securities
laws, the laws of Delaware or be required to provide any disclosures that would
require a filing with the Securities and Exchange Commission, or cause you or
any of your subsidiaries to breach any applicable confidentiality undertaking or
which might prejudice your or any of your subsidiaries’ legal privilege in any
document. You agree that should we ask you to disclose any confidential
information or take any action that would conflict with any applicable
confidentiality undertaking, you will notify us and will use your reasonable
endeavours (which for the avoidance of doubt, shall not require the payment of
money) to obtain the consent of the relevant beneficiary of such confidentiality
undertaking to such action in order to allow such disclosure or action to be
taken.

 

The Borrowers shall be responsible for the accuracy of the information in the
Information Package and will need to represent to the Mandated Lead Arrangers
that, as at the time the Information Package is initially distributed and as at
the signing of the Financing Documentation, if later, the factual information
contained therein (and in any updates) is true, complete and accurate in all
material respects and not misleading in any material respect and that any
financial projections contained in the Information Package have been prepared in
good faith and on the basis of reasonable assumptions as at the time of
preparation. The Information Package will not be independently verified by us or
the Mandated Lead Arrangers and the Borrowers shall be asked to approve the
final version of the Information Package before its distribution to the
prospective participants of the Debt Financing. We shall obtain an undertaking
in your favour from all prospective participants of the Debt Financing

 

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prior to distributing a copy of the Information Package to such participant to
keep the Information Package and all materials delivered to such participant
confidential.

 

(c)                                  To the extent that Successful Syndication
(as defined in the Senior Fees Letter) is achieved prior to the delivery of any
Structure Notice, and thereafter a Structure Notice is delivered in accordance
with the terms of this Commitment Letter, you agree to co-operate and assist the
Initial MLAs with the syndication of Tranche B and Tranche B1 in a manner
consistent with the foregoing terms of this paragraph 5 until such time that
Successful Syndication (as defined in the Senior Fees Letter) has been achieved
(for this purpose, taking into account the additional commitments of the Initial
MLAs under Tranche B).

 

6.             No Front Running

 

(a)                                  Each Mandated Lead Arranger and Underwriter
agrees with each other and with each of you that until close of primary
syndication, as determined by the Initial MLAs, the Mandated Lead Arrangers and
Underwriters shall not, and shall ensure that none of their respective
affiliates will:

 

(i)            undertake any Front Running;

 

(ii)           enter into (or agree to enter into) any agreement, option or
other arrangement with any bank, financial institution or other third party
which may be approached to become a syndicate member, whether legally binding or
not, under which that bank, financial institution or other third party shares
any risk or participates in any exposure of any Mandated Lead Arranger or
Underwriter under the Debt Financing or which relates to the acquisition of any
Facility Interest (whether on an indicative basis, a “when and if issued” basis,
or otherwise); or

 

(iii)          offer or make any payment or other compensation of any kind to
any bank, financial institution or third party for its participation (direct or
indirect) in the Debt Financing or its acquisition of any Facility Interest,

 

except in accordance with the terms of the syndication strategy to be agreed
between the Mandated Lead Arrangers, Joint Bookrunners and the Underwriters.

 

(b)                                 Each Mandated Lead Arranger and Underwriter
represents to each other and to each of you that it has not (i) undertaken any
Front Running, (ii) entered into (or agreed to enter into) any agreement, option
or arrangement described in paragraph (a)(ii) above or (iii) offered or made any
payment or other compensation described in paragraph (a)(iii) above, prior to
the date of this Commitment Letter.

 

(c)                                  For the purposes of the above paragraphs:

 

(i)                                     “Facility Interest” means a legal,
beneficial or economic interest acquired or to be acquired in or in relation to
the Debt Financing, whether as initial lender or by way of assignment, transfer,
novation, sub-participation (whether disclosed, undisclosed, risk or funded) or
any other similar method, other than by way of credit protection or any other
hedging arrangement conducted by an institution in connection with its overall
portfolio hedging strategy; and

 

(ii)                                  “Front Running” means the process of a
Mandated Lead Arranger or Underwriter:

 

(x)                                   communicating with any person which may be
approached to become a syndicate member or disclosing any information
(including, for the avoidance

 

6

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of doubt, the Information Package) to such person, which, in any such case, is
intended to or is reasonably likely to encourage that person to take a Facility
Interest other than as a lender of record in primary syndication or to
discourage that person from taking a Facility Interest as a lender of record in
primary syndication; and/or

 

(y)                                 actually making a price (whether firm or
indicative, either generally or to a specific bank, financial institution or
third party) with a view to buying or selling a Facility Interest.

 

7.             Indemnification

 

NTL Inc. hereby agrees to indemnify and hold harmless each Relevant Person (as
defined in Annex 1 to this Commitment Letter) on the terms and subject to the
conditions set out therein.

 

8.             Confidentiality and Conflicts

 

(a)                                  You will not, without our prior written
consent, disclose the contents of the Commitment Documents or their existence to
any person except:

 

(i)                                     as required by law or to comply with the
rules of any regulatory body or applicable securities exchange to which you or
we are subject (for which purposes, we acknowledge that you may file this
Commitment Letter and the Appendices with the US Securities and Exchange
Commission); or

 

(ii)                                  to any potential transferee, assignee,
additional underwriter or other participant in the commitments hereunder, your
employees and your legal or financial advisers who are made aware of, and either
agree to be bound by, the obligations under this paragraph prior to such
information being disclosed to them or are in any event subject to
confidentiality obligations as a matter of law or professional practice.

 

(b)                                 We will not, without the prior written
consent of the NTL Inc., disclose the contents of the Commitment Documents or
their existence or any information relating to the Debt Financing or the NTL
Group, Telewest Group, the Virgin Mobile Group or the Group which it receives
from you to any person except:

 

(i)                                     as required by law or to comply with the
rules of any regulatory body or applicable securities exchange to which you or
we are subject; or

 

(ii)                                  to any potential transferee, assignee,
additional underwriter or other participant in the commitments hereunder, our
employees and our legal or financial advisers who are made aware of, and either
agree to be bound by, the obligations under this paragraph prior to such
information being disclosed to them or are in any event subject to
confidentiality obligations as a matter of law or professional practice.

 

(c)                                  You acknowledge that the Mandated Lead
Arrangers, the Underwriters, or any of their respective affiliates may be
providing debt financing, equity capital or other services (including corporate
or financial advisory services) to persons with whom you may have conflicting
interests in connection with the Debt Financing or otherwise. Without prejudice
to the generality of paragraph 8(b), the Mandated Lead Arrangers will keep
confidential any information relating to the Debt Financing or the Group which
it receives from you or your advisers from any of its other clients or
customers. You acknowledge that the Mandated Lead Arrangers and the Underwriters
have no obligation to you, to use in connection with the Debt Financing, or to
furnish to you or any of your affiliates or advisers, information obtained from
other clients or customers.

 

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9.             Exclusivity

 

In consideration of our entering into this Commitment Letter you agree that
during the period from the date of your counter-signature of this Commitment
Letter to 2 October 2006:

 

(a)                                  you will negotiate with us in good faith
and on an exclusive basis to finalise and to enter into the Financing
Documentation on terms consistent with those set out in this Commitment Letter
and paragraph 2(a) hereof, as soon as reasonably practicable after the date of
this Commitment Letter;

 

(b)                                 without our prior written consent, you will
not negotiate with any other bank or financial institution any financing of the
Merger or refinancing of any of the Existing Facilities by such bank or
financial institution by debt raised in the domestic or international loan
markets and you will not approach, mandate or appoint any other bank or
financial institution to arrange or underwrite any such financing; and

 

(c)                                  you will not seek to replace the Joint
Bookrunners, the Mandated Lead Arrangers or the Underwriters as the bookrunners,
arrangers and underwriters of the Debt Financing (save as contemplated by
paragraph 18).

 

10.          Delegation

 

Each of the Mandated Lead Arrangers and the Underwriters may employ the services
of any of its affiliates in providing the services contemplated by this
Commitment Letter and reserves the right to allocate, in whole or in part, to
such affiliates the fees payable under this Commitment Letter in such manner as
they and such affiliates may agree in their sole discretion. You acknowledge
that the Mandated Lead Arrangers, the Underwriters and such affiliates may share
with each other any information related to the Group, the Debt Financing or any
of the matters contemplated by the Commitment Documents. Any such affiliate may
rely on this Commitment Letter.

 

11.          Announcement

 

You and we both agree that none of us nor any of our respective affiliates shall
make any announcement relating to the Debt Financing without the prior consent
of the other persons save to the extent that such announcement is required by
law or to comply with the rules of any regulatory body or applicable securities
exchange to which you are subject.

 

12.          Fees and Expenses

 

(a)                                  In consideration of the execution and
delivery of this Commitment Letter and any Accession Notice by the Mandated Lead
Arrangers and the Underwriters, you agree to pay to the Initial MLAs and the
Initial Underwriters the fees and expenses set out in the Senior Fees Letter and
the Bridge Fees Letter (which fees and expenses shall be distributed among the
Mandated Lead Arrangers and Underwriters, at the sole discretion of the Joint
Bookrunners), and to pay to the Arrangers and Underwriters all reasonable third
party costs and expenses incurred by the Mandated Lead Arrangers and
Underwriters, our respective affiliates and advisers including reasonable third
party costs and expenses, legal fees and disbursements incurred by their legal
counsel (White & Case and Simpson Thacher & Bartlett LLP) and all travel and
other reasonable out-of-pocket expenses incurred in connection with (i) the
negotiation, preparation, printing, distribution and execution of the Commitment
Documents and Financing Documentation; (ii) due diligence on the Group; and
(iii) syndication of the Debt Financing.

 

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(b)                                 All payments under the Commitment Documents
shall be made without set-off or counterclaim and free and clear of any
deduction or withholding of or on account of any tax save as required by law.

 

13.          Structure

 

(a)                                  We acknowledge that NTL Inc. is seeking a
private ruling from the US Internal Revenue Service (the “IRS Ruling”) the
effect of which is to permit the cash portion of the purchase price for the
Merger to be financed through borrowings by UK subsidiaries of NTL Inc. without
giving rise to materially adverse tax consequences to NTL Inc., Telewest or
their respective pre- and/or post-Merger shareholders. You shall have the
option, by delivery of written notice (the “Structure Notice”) to the Initial
MLAs (marked in each case for the attention of the persons specified in
paragraph 21) at any time up to the date falling 3 months after the Merger
Closing Date (the “Structuring Completion Date”) to implement the restructuring
of the Debt Financing as set out on the page headed “Second Alternative
(Structure 2) – Final Structure” in the final steps paper agreed between us
prior to the date of this Commitment Letter (the “Steps Paper”) such that:

 

(i)                                     where the Structure Notice is delivered
prior to the Merger Closing Date, the  commitments of each Underwriter under the
Bridge Facility shall be transferred in an amount of at least £1.2 billion into
a corresponding commitment under an incremental tranche of term debt under the
Senior Facilities (“Tranche B”) or where the Structure Notice is delivered after
the Merger Closing Date , the Bridge Facility shall be repaid in an amount of at
least £1.2 billion from a drawing under Tranche B (with commitments to make
Tranche B loans being underwritten pro rata by each Initial MLA under the Bridge
Facility). The terms and conditions for Tranche B, including as applicable where
such terms and conditions relate to Tranche A, Tranche A1, Tranche B1 and the
RCF under the Senior Facilities, shall be those terms and conditions set out in
Appendix A-4 to this Commitment Letter (and shall be in addition to, and to be
read in conjunction with, the terms and conditions of the Senior Facilities set
out in Appendix A-3 to this Commitment Letter); and

 

(ii)                                  the remainder of the commitment or
outstandings under the Bridge Facility shall be replaced by or refinanced with a
high yield bond offering (or bridge facility commitment in anticipation of the
same) by NTL Cable plc. The terms and conditions of such high yield bond
offering (or bridge facility, as the case may be) shall be as set out in the
Engagement Letter or Appendix A-5 to this Commitment Letter (and shall be in
addition to, and to be read in conjunction with, the terms and conditions of the
Bridge Facility set out in Appendix A-1 to this Commitment Letter).

 

(b)                                 The Structure Notice shall be irrevocable
and shall specify the proposed date (the “Structuring Date”) on which the
restructuring is to be effected, which shall be a date falling no later than the
Structuring Completion Date and shall be no less than 4 business days after the
date of the Structure Notice.

 

(c)                                  You further agree:

 

(i)                                     if the Structure Notice is delivered
prior to the Merger Closing Date, to implement each of Steps 1 and 2 set out in
the page headed “Combination of Neptune and Tiger” of the Steps Paper followed
by Steps 3 to 10 set out on the page headed “Post-Combination Restructuring -
Second Alternative (Structure 2)”, culminating in the structure set out on the
page headed “Second Alternative (Structure 2) – Final Structure”, such that all
of those steps are completed on the Merger Closing Date;

 

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(ii)                                  if NTL Inc. receives a negative IRS Ruling
prior to the Merger Closing Date, to implement each of Steps 1 and 2 set out in
the page headed “Combination of Neptune and Tiger” of the Steps Paper followed
by Steps 3 to 8 set out on the page headed “Post-Combination Restructuring –
First Alternative (Structure 1)” of the Steps Paper, culminating in the
structure set out on the page headed “First Alternative (Structure 1) – Final
Structure”, such that all of those steps are completed on the Merger Closing
Date; or

 

(iii)                               if NTL Inc. receives neither a negative nor
a positive IRS Ruling prior to the Merger Closing Date, to implement each of
Steps 1 and 2 set out on the page headed “Combination of Neptune and Tiger” of
the Steps Paper, culminating in the structure set out on the page headed
“Interim Structure After Step 2” such that all of those steps are completed on
the Merger Closing Date, and thereafter:

 

(1)                                  if a negative IRS Ruling is obtained prior
to the Structuring Completion Date, to implement each of Steps 3 to 8 set out on
the page headed “Post-Combination Restructuring - First Alternative (Structure
1)” of the Steps Paper, culminating in the structure set out on the page headed
“First Alternative (Structure 1) – Final Structure”, such that all such steps
are completed on the same business day and in any event by no later than 10
business days after such negative IRS Ruling is received;

 

(2)                                  if a positive IRS Ruling is obtained prior
to the date falling 10 business days prior to the Structuring Completion Date,
at the option of the Borrowers:

 

(A)                              to deliver a Structure Notice and thereafter to
implement each of Steps 3 to 10 set out on the page headed “Post Combination
Restructuring – Second Alternative (Structure 2)” of the Steps Paper,
culminating in the structure set out on the page headed “Second Alternative
(Structure 2) – Final Structure”, such that all such steps are completed on the
same business day and in any event by no later than 10 business days after such
positive IRS Ruling is received; or

 

(B)                                to implement each of Steps 3 to 8 set out on
the page headed “Post-Combination Restructuring - First Alternative (Structure
1)” of the Steps Paper, culminating in the structure set out on the page headed
“First Alternative (Structure 1) – Final Structure”, such that all such steps
are completed on the same business day and in any event by no later than 10
business days after such positive IRS Ruling is received; and

 

(3)                                  if neither a negative nor a positive IRS
Ruling is obtained prior to the date falling 10 business days prior to the
Structuring Completion Date, to implement each of Steps 3 to 8 set out on the
page headed “Post-Combination Restructuring - First Alternative (Structure 1)”
of the Steps Paper, culminating in the structure set out on the page headed
“First Alternative (Structure 1) – Final Structure”, such that all such steps
are completed on the same business day and in any event by no later than the
Structuring Completion Date.

 

(d)                                 At any time after the Structuring Date, (i)
references in the Commitment Documents to the “Debt Financing” shall be
construed as references to the Debt Financing after taking account of the
restructuring effected pursuant to the terms of this paragraph 13 and (ii)
references to the “Senior Facilities” shall mean the Senior Facilities including
Tranche B.

 

10

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14.                               Accession of Additional Underwriters

 

(a)                                  Each of the Initial MLAs and the Initial
Underwriters may, at any time following consultation with you, require that any
one or more additional lenders become party to the Commitment Documents as an
additional underwriter (each, an “Additional Underwriter” and, together with the
Initial Underwriters, the “Underwriters”) by executing an accession notice
substantially in the form of Annex 2 to this Commitment Letter or with such
amendments as the Initial MLAs and Initial Underwriters may agree (an “Accession
Notice”). You agree, promptly upon request by the Initial MLAs, to countersign
any Accession Notice for such purpose and upon your countersignature thereof,
you agree to the roles or titles granted to such Additional Underwriters as
specified in such Accession Notice and to the commitment of each such Additional
Underwriter as an underwriter of the Debt Financing.

 

(b)                                 Upon the execution of an Accession Notice:

 

(i)                                     the relevant Additional Underwriter and
each of the then existing parties to this Commitment Letter will assume such
obligations towards one another and/or acquire such rights against each other as
they would each have assumed or acquired had the relevant Additional Underwriter
been an original party hereto as an Underwriter and the relevant Additional
Underwriter shall become a party to the Commitment Documents as an Underwriter;

 

(ii)                                  the commitments of the Initial
Underwriters (as at the date of the relevant Accession Notice) under the Senior
Facilities and/or the Bridge Facility (as applicable) shall be reduced on a pro
rata basis by an amount which, when aggregated together, is equal to the
commitment of the relevant Additional Underwriter (as specified in the Accession
Notice) under the Senior Facilities and/or the Bridge Facility (as applicable);
and

 

(iii)                               each Additional Underwriter that has,
pursuant to the relevant Accession Notice, been appointed as an additional
mandated lead arranger (each, an “Additional Mandated Lead Arranger” and
together with the Initial MLAs the “Mandated Lead Arrangers”) under the Senior
Facilities or the Bridge Facility, as applicable, shall thereafter be deemed to
be a Mandated Lead Arranger for the purposes of the  Commitment Documents.

 

(c)                                  Each Additional Underwriter that has
executed an Existing Accession Notice may from time to time agree with the
Initial MLAs, NTL Inc. and NTLIH, to amend the terms of such Existing Accession
Notice by executing an amendment and restatement to such Existing Accession
Notice, and the prior consent of any other Arranger, Underwriter or person shall
not be required.

 

15.                               Governing Law and Jurisdiction

 

This Commitment Letter (including the attached Annexes and Appendices, other
than Appendix A-1 and Appendix A-2) shall be governed by and construed in
accordance with English law. Appendices A-1 and A-2 shall be governed by and
construed in accordance with New York law.

 

You and we agree that the courts of England have jurisdiction to settle any
disputes in connection with the Commitment Documents (other than Appendices A-1
and A-2) and accordingly you and we submit to the exclusive jurisdiction of the
English courts and waive any defence of inconvenient forum which may be
available.

 

11

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16.          Third Party Reliance

 

Save as expressly provided otherwise in this Commitment Letter, a person who is
not a party to this Commitment Letter may not rely on it and the terms of the
Contracts (Rights of Third Parties) Act 1999 are excluded. The parties to this
Commitment Letter may amend this Commitment Letter in writing without the
consent of any third party.

 

17.          Survival

 

In any event, the provisions of paragraphs 7, 8, 11, 12,  15, 16, 17 and 18 of
this Commitment Letter shall survive the termination of the obligations of any
of the parties under this Commitment Letter or its expiry.

 

18.          Commitment and Termination

 

(a)                                  The commitments of the Initial MLAs and the
Initial Underwriters under this Commitment Letter will commence upon your
signature, and return of the Commitment Documents and upon such signature the
commitments as set out in the Original Commitment Letter shall terminate, but
without prejudice to paragraph 17 of the Original Commitment Letter.

 

(b)                                 Following your acceptance of this Commitment
Letter as provided in sub-paragraph (a) above, this Commitment Letter shall
terminate on the earlier of:

 

(i)                                     on 2 October 2006, unless the first
drawdown under the Senior Facilities has occurred on or before that date; or

 

(ii)                                  the termination of the Merger Agreement
other than as a result of the Merger being consummated.

 

(c)                                  You may terminate the appointment of any
Mandated Lead Arranger or the commitment of any Underwriter hereunder (by
written notice to the other parties to this Commitment Letter) if such Mandated
Lead Arranger or Underwriter breaches any term of the Commitment Documents
relating to a failure to fund its commitments in accordance with this Commitment
Letter and upon such termination you shall (save as provided in this paragraph
18) have no further obligations to such Mandated Lead Arranger or Underwriter
under the Commitment Documents.

 

(d)                                 You may, on not less than 5 business days
prior written notice to the Initial MLAs, terminate the commitments hereunder
with respect to Tranche A1 and Tranche B1 (in whole but not in part only) if the
Baseball Scheme either fails, is withdrawn, is amended in a manner which would
have the affect of failure to satisfy the initial conditions precedent to the
availability of Tranche A1 and Tranche B1 or a takeover offer under the City
Code is made by the Baseball Bidcos.

 

19.                               Classification

 

We will treat you for the purposes of our respective appointments as lead
arranger and underwriter under this Commitment Letter, as an intermediate
customer within the meaning of and for the purposes of the Financial Services
Authority Handbook of Rules and Guidance (the “Handbook”). In addition, you
agree that you will, at any time upon the request of the Mandated Lead Arrangers
and the Underwriters and in connection with the requirements set out in the
Handbook, provide the Mandated Lead Arrangers and the Underwriters within a
reasonable period after such request, documentation evidencing the existence,
ownership and control of any obligors under the loan documentation in relation
to the Debt Financing.

 

12

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20.          Amendments and Waivers

 

(a)                                  Subject to sub-paragraph (b) hereof, any
provision of the Steps Paper or this Commitment Letter or any of the Annexes or
Appendices hereto may be amended, waived, varied or modified with the agreement
of NTL Inc., the Initial MLAs and those Underwriters whose commitments aggregate
to more than 66 2/3% of the total commitments under the Senior Facilities (with
respect to any matter relating to the Senior Facilities) or 50.1% of the total
commitments under the Bridge Facility (with respect to any matter relating to
the Bridge Facility), as applicable, and any such amendment or waiver will be
binding on all parties hereto.

 

(b)                                 Any amendment, waiver, variation or
modification shall require the consent of each of the Mandated Lead Arrangers
and Underwriters affected thereby, if it results in:

 

(i)            any increase in, or extension of maturity of, any commitment;

 

(ii)                                  any reduction in the Interest Margin, any
changes to the margin ratchet grid or any reduction in the fees payable to the
Mandated Lead Arrangers and the Underwriters or any other amounts payable under
the Commitment Documents;

 

(iii)                               any change in the currency of any payment to
be made to the Mandated Lead Arrangers and the Underwriters under the Commitment
Documents;

 

(iv)                              any amendments, waivers, variations or
modifications to paragraph 13 or to the Steps Paper, unless such amendments,
waivers, variations or modifications do not, in the reasonable opinion of the
Initial MLAs, materially prejudice the interests of the Mandated Lead Arrangers
and Underwriters; or

 

(v)                                 any amendment, variation or modification to
this paragraph.

 

21.          General

 

The offer contained in this Commitment Letter shall remain in effect until close
of business in New York on 3 March 2006 at which time it will expire, unless
written acceptance of each of the Commitment Documents has been received by each
of the Initial MLAs (marked for the attention of Jonathan Bowers (in the case of
Deutsche Bank AG, London Branch), Paul Davis (in the case of J.P. Morgan Plc),
David Vaughan (in the case of The Royal Bank of Scotland plc) and Alison Howe
(in the case of Goldman Sachs International)) from you in accordance with the
instructions set out above.

 

This Commitment Letter may be signed in any number of counterparts, which shall
have the same effect as if the signatures on the counterparts were signatures on
a single copy of this Commitment Letter.

 

The provisions of this Commitment Letter supersede all prior oral and/or written
understandings and agreements related to the Financing and together with the
other Commitment Documents shall (until the execution and delivery of the
Financing Documentation), comprise the entire agreement (in respect of the
matters referred therein) between us.

 

Please indicate your acceptance of this Commitment Letter by countersigning this
Commitment Letter in the space indicated below, whereupon it shall constitute a
binding agreement between us and return it together with the other signed
Commitment Documents to each of the Initial MLAs (marked in each case for the
attention of the relevant person specified above).

 

13

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We look forward to your favourable response to our proposal and to your mandate
to us to proceed with this transaction.

 

Yours faithfully,

 

The Initial MLAs

 

For and on behalf of

DEUTSCHE BANK AG, LONDON BRANCH

 

 

Name:

 

Name:

Title:

 

Title:

 

 

For and on behalf of

J.P. MORGAN PLC

 

 

Name:

Title:

 

 

For and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

 

 

Name:

Title:

 

 

For and on behalf of

GOLDMAN SACHS INTERNATIONAL

 

 

Name:

Title:

 

14

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The Initial Underwriters

 

For and on behalf of

DEUTSCHE BANK AG, LONDON BRANCH

 

 

Name:

 

Name:

Title:

 

Title:

 

 

For and on behalf of

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

Name:

Title:

 

 

For and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

 

 

Name:

Title:

 

 

For and on behalf of

GOLDMAN SACHS CREDIT PARTNERS L.P.

 

 

Name:

Title:

 

15

--------------------------------------------------------------------------------

 

We accept and agree the terms of the foregoing letter.

 

For and on behalf of
NTL INCORPORATED

 

 

Name:

Title:

 

Date:

 

 

For and on behalf of
NTL INVESTMENT HOLDINGS LIMITED

 

 

Name:

Title:

 

Date:

 

16

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ANNEX 1

 

Indemnification

 

1.                                       In the event that any of the Mandated
Lead Arrangers, the Underwriters or any of their respective affiliates or any of
their respective partners, directors, agents, advisers or employees (each a
“Relevant Person”) becomes involved in any capacity in any action, proceeding,
or investigation brought by or against any person, including without limitation
shareholders of the NTL Inc., the Borrowers or any of their respective
subsidiaries arising out of, in connection with or as a result of either the
commitment or any matter referred to in the Commitment Documents, you agree
promptly on request to reimburse the Relevant Person for its reasonable legal
and other expenses (including the reasonable cost of any investigation and
preparation of any defence) arising out of or incurred in connection therewith.
You also agree (provided that in doing so, you and your subsidiaries’ respective
positions are not prejudiced (including by acting contrary to any
confidentiality undertaking or so as to prejudice any legal privilege to which
they are entitled)) to afford reasonable cooperation to each Relevant Person and
to give, so far as you are able to procure the giving of, all such information
and render all such assistance to the Relevant Persons as they may reasonably
request in connection with any such action, proceeding or investigation and not
to take any action which might reasonably be expected to prejudice the position
of a Relevant Person in relation to any such action, proceeding or investigation
without the consent of the Relevant Person concerned (such consent not to be
unreasonably withheld). Notwithstanding the aforesaid, you shall not be liable
for any reimbursement or obliged to give any information or render any
assistance or be precluded from taking any action pursuant to this paragraph, to
the extent that any action, proceeding or investigation arises from the gross
negligence or wilful misconduct of the Relevant Person in performing the
services that are the subject of the Commitment Documents.

 

2.                                       You also agree to indemnify and hold
harmless each Relevant Person from and against any and all losses, liabilities,
claims, damages, and reasonable costs or expenses incurred by such Relevant
Person in connection with or as a result of any action, claim, investigation or
proceeding commenced in relation to its appointments or commitments or any
matter referred to in the Commitment Documents and in particular (without
limitation to the generality of the foregoing) arising out of or in relation to
or in connection with any untrue statement (or alleged untrue statement) of a
material fact contained in any preliminary or final offering materials or
information memorandum prepared in connection with the Debt Financing
(including, without limitation, any preliminary summary of the Debt Financing
prepared by the Mandated Lead Arrangers) or any filings with or submissions to
any governmental or self regulatory authority or agency or securities exchange,
in each case, approved by you or your professional advisers on your behalf, or
caused by an omission (or alleged omission) to state therein a material fact
necessary to make the statements therein in the light of the circumstances under
which they are made, not misleading, except to the extent that any such losses,
liabilities, claims, damages, costs or expenses are the result of gross
negligence or wilful misconduct of the Relevant Person in performing the
services that are the subject of the Commitment Documents.

 

3.                                       You also agree that the Relevant
Persons shall not have any liability including, but not limited to, any direct,
indirect, incidental or consequential damages to you or any person asserting 
claims on your behalf arising out of or in connection with or as a result of
performing the services that are the subject of the Commitment Documents, except
(i) to the extent such liability is the result of gross negligence or wilful
misconduct of the Relevant Person in performing the services that are the
subject of the Commitment Documents or (ii) liability of the Relevant Person to
you resulting from a breach of such Relevant Person’s obligations under the
Commitment Documents.

 

17

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4.                                       Each Relevant Person may rely on the
terms of this Commitment Letter.

 

5.                                       No provision of this Commitment Letter
shall apply so as to exclude any liability of the Relevant Persons which by the
Handbook or other applicable law or regulations cannot be excluded by agreement
with you.

 

18

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ANNEX 2

FORM OF ACCESSION NOTICE

 

This accession notice is entered into on [•] by [name of Institution] (the
“Additional Underwriter”) in favour of each of the parties (as at the date
hereof) to the commitment letter dated [•] February 2006 (which amends and
restates a commitment letter dated 14 December 2005) originally addressed to NTL
Inc. and NTLIH by the Initial MLAs and the Initial Underwriters (the “Commitment
Letter”).

 

1.                                      Terms defined in the Commitment Letter
shall, subject to any contrary indication, have the same meanings in this
accession notice.

 

2.                                      The Additional Underwriter shall be
conferred the title of  [Mandated Lead Arranger] [Joint Lead Arranger][other] in
relation to the Senior Facilities [and [•] in relation to the Bridge Facility]
[and accepts its appointment as [•] under the Engagement Letter] (1)

 

3.                                      [Name of Institution] agrees to commit:

 

(a)           £[•] of the Senior Facilities to be allocated as follows:
(2)            [•]

 

(b)           £[•] of the Bridge Facility] (3).

 

Such underwriting shall reduce pro rata the commitments of the Initial
Underwriters.

 

4.                                      The Additional Underwriter confirms that
it has received a copy of the Commitment Letter together with such other
information as it has required in connection with this transaction and that it
has not relied and will not rely on the Initial MLAs or the Initial Underwriters
to check or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of any such information and further agrees
that it has not relied and will not rely on the Initial MLAs or the Initial
Underwriters to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of the Group.

 

5.                                      The Additional Underwriter undertakes,
upon its becoming party to the Commitment Letter, to perform in accordance with
their terms all those obligations expressed to be undertaken under the
Commitment Letter by a [Mandated Lead Arranger and Underwriter], and agrees that
it shall be bound by the Commitment Letter as if it had been an original party
thereto as a [Mandated Lead Arranger and Underwriter], provided that
notwithstanding the provisions of paragraph 5(a)(i) of the Commitment Letter,
the Additional Underwriter agrees to maintain its commitments under paragraph 3
above until close of primary syndication unless otherwise agreed with the
Initial MLAs.

 

6.                                      None of the Initial MLAs and the Initial
Underwriters make any representation or warranty and assume no responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of the Commitment Letter, any other Commitment Document or other
document relating to it and assume no responsibility for the financial condition
of the Group or for the performance and observance by any member of the Group of
any of its obligations under the Commitment Letter, any Commitment Document or
any other document relating to it and any and all such conditions and
warranties, whether express or implied by Law or otherwise, are excluded.

 

--------------------------------------------------------------------------------

(1) Delete and complete as applicable.

(2) Insert details of allocation.

(3) Complete as applicable.

 

19

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7.                                      Each of the Initial MLAs and the Initial
Underwriters gives notice that nothing in this accession notice or in the
Commitment Letter (or any Commitment Document or other document relating to it)
shall oblige such Initial MLA or such Initial Underwriter (a) to accept a
re-transfer from the Additional Underwriter of the whole or any part of its
rights, benefits and/or obligations under the Commitment Documents transferred
pursuant to this accession notice or (b) to support any losses directly or
indirectly sustained or incurred by the  Additional Underwriter for any reason
whatsoever (including the failure by any member of the Group or any other party
to the Commitment Documents (or any document relating to them) to perform its
obligations under any such document) and the  Additional Underwriter
acknowledges the absence of any such obligation as is referred to in (a) and
(b) above.

 

8.                                      In consideration of execution of this
accession notice by the Additional Underwriter, the Initial MLAs and the Initial
Underwriters agree to pay to the Additional Underwriter the fees as set out in
the additional fees letter made between the Additional Underwriter, the Initial
MLAs and the Initial Underwriters on or about the date hereof.

 

This accession notice may be signed in any number of counterparts, which shall
have the same effect as if the signatures of the counterparts were signatures on
a single copy of this accession notice.

 

This accession notice and the rights, benefits and obligations of the parties
hereunder shall be governed by and construed in accordance with English Law.

 

20

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The Additional Underwriter

 

For and on behalf of

[Name of Additional Underwriter]

 

Name:

 

Title:

 

 

Acknowledged and agreed:

 

The Initial MLAs

 

For and on behalf of

DEUTSCHE BANK AG, LONDON BRANCH

 

Name:

 

Name:

 

 

 

Title:

 

Title:

 

 

For and on behalf of

J.P. MORGAN PLC

 

Name:

 

Title:

 

 

For and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

 

Name:

 

Title:

 

 

For and on behalf of

GOLDMAN SACHS INTERNATIONAL

 

Name:

 

Title:

 

21

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The Initial Underwriters

 

For and on behalf of

DEUTSCHE BANK AG, LONDON BRANCH

 

 

Name:

 

Name:

 

 

 

Title:

 

Title:

 

 

For and on behalf of

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

Name:

 

Title:

 

 

For and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

 

 

Name:

 

Title:

 

 

For and on behalf of

GOLDMAN SACHS CREDIT PARTNERS L.P.

 

 

Name:

 

Title:

 

22

--------------------------------------------------------------------------------

 

Acknowledged and agreed:

 

For and on behalf of

NTL INCORPORATED

 

Name:

 

Title:

 

 

For and on behalf of

NTL INVESTMENTS HOLDINGS LIMITED

 

Name:

 

Title:

 

23

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APPENDIX A-1

 

PROJECT VANILLA

 

Commercial Terms of Proposed Senior Bridge Facility

 

All capitalized terms used herein but not defined herein shall have the meanings
provided in the Commitment Letter.

 

The Borrower:

 

Merger Sub or, following the completion of the Merger, NTL Inc. (the
“Borrower”).

 

 

 

Bridge Facility:

 

£1,800,000,000 (equivalent) senior bridge facility.

 

 

 

Facility Agent(s):

 

J.P. Morgan Europe Limited (the “Agent”).

 

 

 

Lead Arrangers and Joint Bookrunners:

 

Deutsche Bank AG, London Branch, J.P. Morgan plc, The Royal Bank of Scotland plc
and Goldman Sachs International and/or their respective designated affiliates
(the “Arrangers”).

 

 

 

Currency:

 

£, € or US$ in allocations to be determined by the Arrangers; provided, that at
the option of the Borrower, up to 50% of the aggregate principal amount will be
denominated in £.

 

 

 

Bridge Lenders:

 

Subject to “Assignment and Participation of Loans,” the Arrangers or their
affiliated institutions and a syndicate of banking and financial institutions
arranged by the Arranger in consultation with the Borrower, including any
Additional Underwriters in respect of the Bridge Facility (the “Bridge
Lenders”).

 

 

 

Initial Bridge Loans:

 

The Bridge Lenders will make loans (the “Initial Bridge Loans”) to the Borrower
in an aggregate principal amount not to exceed £1,800,000,000 (equivalent).

 

 

 

Availability and Purpose of Initial Bridge Loans:

 

The Initial Bridge Loans will be available for a single drawing simultaneously
with the initial funding under the Senior Facilities and the proceeds thereof
will be used (i) to finance part of the consideration for the Merger, (ii) to
refinance existing indebtedness of the NTL Group and/or the Telewest Group and
(iii) to pay the costs and expenses incurred in connection with the Merger
and/or the Debt Financing.

 

Amounts borrowed under the Bridge Facility and

 

--------------------------------------------------------------------------------

 

 

 

repaid or prepaid may not be reborrowed.

 

 

 

Initial Maturity Date and Exchange of the Initial Bridge Loans:

 

The Initial Bridge Loans will mature on the date falling twelve months (the
“Initial Maturity Date”) after the Merger Closing Date; provided, however, that,
subject to “Conditions to Extension” below, the maturity of the Initial Bridge
Loans will be automatically extended on the Initial Maturity Date until the
tenth anniversary of the Merger Closing Date (the “Extended Maturity Date” and,
such extended maturity loans, the “Extended Term Loans”). The Extended Term
Loans will have the same material terms as the Initial Bridge Loans except as
set forth in this exhibit.

 

 

 

Conditions to Extension:

 

Extension of the maturity of the Initial Bridge Loans is subject to the Borrower
or any significant subsidiary thereof not being subject to bankruptcy or other
insolvency proceedings.

 

 

 

Availability of the Exchange Securities:

 

At any time and from time to time on or after the Initial Maturity Date at the
option of the applicable holder, Extended Term Loans may be exchanged in whole
or in part for long-term exchange notes (the “Exchange Securities”). The
principal amount of any Exchange Security will equal 100% of the aggregate
principal amount (including any accrued interest not required to be paid in
cash) of the Extended Term Loan for which it is exchanged.

 

 

 

 

 

When issued, the Exchange Securities will be governed by an indenture to be
entered into between the Borrower and a trustee that is acceptable to the
Borrower and the Agent and on terms not less favorable to the Borrower than the
terms in NTL Cable plc’s existing high-yield indenture, that contains covenants,
events of default and other provisions that are not less favorable to the
Borrower than the equivalent provisions in NTL Cable plc’s existing high-yield
indenture (with, in the case of covenants and events of default, any baskets and
thresholds to be adjusted to reflect the size and nature of the business of the
Borrower and its subsidiaries) and which complies with the U.S. Trust Indenture
Act.

 

 

 

Guarantees:

 

Guaranteed on a senior basis by Telewest Global, Inc. and, after its formation,
a new intermediate holdco above NTL, Inc. (“Telewest Holdco”) (upon consummation
of the transaction Telewest Global, Inc. will be changing its name to NTL Inc.
and NTL

 

2

--------------------------------------------------------------------------------

 

 

 

Inc. will be changing its name to NTL Holdings Inc. However, for simplicity this
term sheet does not reflect these name changes). After the merger of NTL Inc.
and CCFC, to be guaranteed by DRC.

 

 

 

Collateral:

 

Subject to US tax limitations and, with respect to the Exchange Securities,
subject to limitations in NTL Cable plc’s existing high yield bond covenants,
security over the shares of NTL, Inc., Telewest Holdco, NTL (UK) Group Inc. and
NTL Communications Limited.

 

 

 

Final Maturity Date:

 

The Final Maturity Date of the Exchange Securities and the Extended Term Loans
will be the tenth anniversary of the Merger Closing Date.

 

 

 

Interest Rates

 

As set forth on Annex I hereto.

 

 

 

Ranking:

 

The Initial Bridge Loans, the Extended Term Loans and the Exchange Securities
shall be pari passu with all senior debt of the Borrower.

 

 

 

Mandatory Redemption:

 

To the extent permitted under the Senior Facilities, the Borrower will be
required to prepay Initial Bridge Loans and Extended Term Loans on a pro rata
basis, at par plus accrued and unpaid interest, from the net proceeds (after
deduction of (except in the case of clause (iv) below) among other things,
mandatory repayments and permitted reinvestments under the Senior Facilities)
from

 

 

 

 

 

(i)  except in the case of debt described in clause (iv) below, the incurrence
of any debt by the Borrower or any of its restricted subsidiaries, subject to
agreed exceptions,

 

 

 

 

 

(ii)  the issuance of any equity by the Borrower or any of its subsidiaries,
subject to customary exceptions,

 

 

 

 

 

(iii)  all non-ordinary course asset sales by the Borrower or any of its
subsidiaries (with customary exceptions), or

 

 

 

 

 

(iv)  the issuance of the debt securities for the purpose of refinancing the
Bridge Facility.

 

 

 

 

 

The Borrower will be required to prepay all Initial Bridge Loans and Extended
Term Loans at 100% of par plus accrued and unpaid interest, and offer to
repurchase all the Exchange Securities (and any

 

3

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Extended Term Loans bearing interest at the Fixed Rate (as defined in Annex I))
at 101% of par plus accrued and unpaid interest, upon the occurrence of a change
of control (to be defined in a customary manner).

 

If a Structure Notice is provided after the Merger Closing Date, the Borrower
shall repay the Initial Bridge Loans on the Structure Date (subject to a
contemporaneous borrowing by NTL Cable plc of £600,000,000 under the Alternative
Bridge Facility or the issuance of high yield notes in lieu thereof).

 

 

 

Optional Prepayment of Initial Bridge Loans and Floating Rate Extended Term
Loans:

 

Additionally, the Initial Bridge Loans and Extended Term Loans (other than
Extended Term Loans bearing interest at the Fixed Rate) may be prepaid, in whole
or in part, at the option of the Borrower, at any time at par plus accrued and
unpaid interest, subject in the case of Initial Bridge Loans and such Extended
Term Loans to reimbursement of the Bridge Lenders’ actual redeployment costs in
the case of a prepayment of borrowings other than on the last day of the
relevant interest period).

 

 

 

Optional Prepayment of Exchange Securities and Fixed Rate Extended Term Loans:

 

Each Exchange Security (and any Extended Term Loan bearing interest at the Fixed
Rate) will be callable for five years from the Merger Closing Date (and also
subject to the equity clawback provisions described below) at par plus accrued
interest plus the Applicable Premium (to be defined in a customary manner) and
will be callable thereafter at par plus accrued interest plus a premium equal to
50% of the coupon in effect on the date its interest rate is fixed, which
premium shall decline rateably on each yearly anniversary of the Merger Closing
Date to zero two years before the maturity of the Exchange Securities. The
Exchange Securities (and any Extended Term Loan bearing interest at the Fixed
Rate) will also contain tax redemption provisions not less favorable to the
Borrower than the equivalent provisions in NTL Cable plc’s existing high-yield
indenture.

 

 

 

 

 

On or before the third anniversary of the Merger Closing Date, the Borrower may
redeem, subject to provisions relating to senior indebtedness not less favorable
to the Borrower than the equivalent provisions in NTL Cable plc’s existing
high-yield indenture, up to 35% of the principal amount of the Exchange
Securities at a price equal to par plus the coupon on such Exchange Securities,
together with

 

4

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accrued and unpaid interest, if any, to the redemption date, with the net
proceeds of one or more Equity Offerings (to be defined in a manner not less
favorable to the Borrower than in NTL Cable plc’s existing high-yield indenture)
within 90 days of such Equity Offerings.

 

 

 

Representations and Warranties:

 

Usual for facilities and transactions of this type and substantially identical
to the Senior Facilities.

 

 

 

Conditions to Funding:

 

Equivalent to those for the Senior Facilities (with references to the Facility
Agent therein to be deemed to be references to the Agent) and additionally the
payment of all fees and expenses owing to the Bridge Lenders under the terms of
the Bridge Facility and the Commitment Letter and related fee arrangements.

 

 

 

Affirmative Covenants:

 

In the case of the Initial Bridge Loans and the Extended Term Loans, affirmative
covenants (to be applicable to Telewest Global, Inc. and its subsidiaries)
including as to provision of information, to be substantially identical to the
Senior Facilities.

 

 

 

 

 

In the case of the Exchange Securities, affirmative covenants to be customary
for a high yield indentures.

 

 

 

 

 

In addition, the Borrower will, and will cause its subsidiaries to, use their
respective reasonable best efforts to issue and sell debt securities to
refinance the Bridge Loans (the “Refinancing Securities”) at a time and on terms
to be determined by the Borrower in consultation with the Arrangers.

 

 

 

 

 

In connection with such an offering, the Borrower will (and will cause its
subsidiaries to) (i) prepare an offering memorandum and registration statement
and other materials relating to the Refinancing Securities (or if a shelf
registration is not available, prepare an offering memorandum in customary form
for high yield bond offerings pursuant to Rule 144A/Regulation S, with U.S. SEC
registration rights) (including, in each case, all historical, pro forma and
other financial and other information required under applicable securities laws
giving due regard to the financial condition and prospects of the Borrower and
to the type of information and level of detail of such information that is
reasonably required to market the Refinancing Securities and

 

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specify whether any holders of Refinancing Securities are selling Refinancing
Securities pursuant to such offering memorandum), (ii) satisfy (to the extent
applicable) customary closing conditions and other requirements for such bond
offerings, including delivery of legal opinions and auditors’ comfort letters,
(iii) prepare, participate in and complete the appropriate ratings agency
presentations, (iv) to the extent reasonably requested by the Arrangers, list
the Refinancing Securities on an acceptable stock exchange chosen by the
Borrower and (v) prepare, participate in and complete a “road show” and meetings
with research analysts. The Borrower will also enter into an underwriting
agreement on terms not less favorable to the Borrower than the equivalent
provisions in NTL Cable plc’s most recent underwriting agreement.

 

 

 

Financial Covenants:

 

In the case of the Initial Bridge Loans, financial covenants equivalent to those
for the Senior Facilities, to be tested for the same entities as for the Senior
Facilities; provided, however, that the financial covenant ratios shall be set
by increasing (or decreasing) (versus the agreed base case) the relevant
absolute component amount used in determining the applicable covenant by 10%.

 

 

 

Negative Covenants:

 

In respect of the Initial Bridge Loans, negative covenants equivalent to those
for the Senior Facilities, adjusted to reflect differences in borrowers,
guarantors, ranking, security and structure (but to exclude (i) leverage-based
dividends baskets, (ii) the payment of dividends or fees or the making of loans,
in each case to repay or service Guaranteed Parent Debt (as defined in Appendix
A-3 to the Commitment Letter) and (iii) the payment of dividends or fees or the
making of loans, in each case with the proceeds of any disposal of the “Content
business” or the “NTL — Business Segment” (each as referenced in Appendix A-3 to
the Commitment Letter).

 

 

 

 

 

In respect of Extended Term Loans or Exchange Securities, the following negative
covenants (to be based where applicable on NTL Cable plc’s existing high yield
bond covenants):

 

 

 

 

 

1.             Limitations on indebtedness.

 

6

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2.

Limitations on restricted payments.

 

 

 

 

 

 

3.

Limitations on transactions with affiliates.

 

 

 

 

 

 

4.

Limitations on liens.

 

 

 

 

 

 

5.

Limitations on asset sales.

 

 

 

 

 

 

6.

Limitation on dividends and other payment restrictions affecting restricted
subsidiaries.

 

 

 

 

 

 

7.

Reporting.

 

 

 

 

 

 

8.

Limitations on mergers, consolidations or sales of all or substantially all
assets.

 

 

 

 

 

 

9.

Limitation on permitted business activities.

 

 

 

 

 

 

10.

Anti-layering.

 

 

 

 

 

 

11.

Limitations on guarantees of other indebtedness.

 

 

 

 

 

 

12.

Maintenance of security.

 

 

 

 

 

In addition, the covenants referred to above for the Extended Term Loans and the
Exchange Securities will be keyed to the Telewest Global, Inc. level and
specifically provide for:

•     Incurrence of debt: consolidated ratio test for incurring debt at the
Telewest Global, Inc. level

 

 

 

 

 

•      Anti-layering covenant: no incremental debt can be incurred between NTL
Cable plc and NTL Inc., subject to exceptions to be agreed.

 

 

 

 

 

•      Either (i) NewCorp (the parent company to NTL (UK) Group, Inc. and NTL
Cable plc) or (ii) NTL (UK) Group, Inc., will remain the ultimate holder of 100%
of the shares of the intermediate holding companies.

 

 

 

Events of Default:

 

The Bridge Facility will contain events of default equivalent to those for the
Senior Facilities, subject to customary adjustments for a subordinated facility.

The Exchange Securities will contain events of default customary for high yield
indentures.

 

7

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Securities Demand

 

Upon notice by at least three of the four Arrangers (a “Securities Notice”) at
any time and from time to time following the date that is 6 months after the
Merger Closing Date and prior to the date that is twelve months after the Merger
Closing Date, the Borrower will, after a road show and marketing period
customary for similar offerings (as determined by the Arrangers after
consultation with you and in any event not less than 10 business days), issue
and sell such aggregate principal amount of £/$/€-denominated debt securities
(the “Demand Securities”) as will generate gross proceeds sufficient to
refinance (in whole or in part as determined by the Arrangers in their sole
discretion) the Bridge Facility, in each case upon such terms and conditions as
may be reasonably specified by the Arranger in such Securities Notice; provided,
however, that (i) such Demand Securities will be issued through a registered
public offering or (if a shelf registration is not immediately available) a
private placement for resale pursuant to Rule 144A and/or Regulation S with
standard US SEC registration rights for Rule 144A offerings, (ii) such Demand
Securities will not mature any earlier than six months after the scheduled
maturity of the Senior Facilities (as in effect on the Merger Closing Date) and
will contain such terms, covenants, events of default, subordination provisions,
and redemption provisions, and shall be denominated in such currencies, as are
customary for similar financings as determined by the Arrangers in consultation
with you, (iii) such Demand Securities will bear a fixed rate of interest (or an
equivalent floating rate, based on the swap rate for floating instruments with
the same call protection and taking into account swap costs and other relevant
factors, provided that no more than 30% of the aggregate principal amount of
Demand Securities will bear a floating rate of interest, unless the Borrower
otherwise consents) based on then prevailing market conditions as determined by
the Arrangers; provided, however, that, without your consent, the total interest
rate per annum payable on such Demand Securities shall not exceed 12.5% in
respect of Bridge Loans denominated in Sterling and 11.5% in respect of Bridge
Loans denominated in Euro or Dollars, (iv) no more than £200 million of the
Demand Securities shall be denominated in £, unless the Arrangers decide
otherwise, and (v) all other arrangements with respect to such Demand

 

8

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Securities shall be reasonably satisfactory in all respects to the Arranger in
light of then prevailing market conditions and the financial condition and
prospects of the NTL Group and the Telewest Group at the date of sale of the
Demand Securities.

 

 

 

 

 

Following the issuance of a Securities Notice, the Borrower will assist the
Underwriters in connection with customary marketing efforts for the sale of any
such Demand Securities, including those steps referred to under “Affirmative
Covenants.”

 

 

 

Clean-up Period:

 

Substantially identical to that for the Senior Facilities.

 

 

 

Registration Rights with Respect to Exchange Securities:

 

Standard US SEC shelf and exchange registration rights for Rule 144A offerings.

 

 

 

Voting:

 

Amendments and waivers of the documentation for the Bridge Facility and the
other definitive credit documentation related thereto will require the approval
of Bridge Lenders holding at least a majority of the outstanding Initial Bridge
Loans, Extended Term Loans and Exchange Securities, except that the consent of
each affected Bridge Lender and/or holder of a Exchange Security will be
required for, among other things, (i) reductions of principal and interest rates
and fees, (ii) extensions of the Initial Maturity Date, (iii) additional
restrictions on the right to exchange Extended Term Loans for Exchange
Securities or any amendment of the rate of such exchange or (iv) any amendment
to the Exchange Securities that requires (or would, if any Exchange Securities
were outstanding, require) the approval of all holders of Exchange Securities.

 

 

 

Assignment and Participation of Loans:

 

Subject to the prior approval of the Agent (such approval not to be unreasonably
withheld), the Bridge Lenders will have the right to assign Bridge Loans and
commitments to make Bridge Loans without the consent of the Borrower; provided,
however, that prior to the Merger Closing Date, the consent of the Borrower in
its sole discretion shall be required with respect to (i) any assignment if,
subsequent thereto, the Arrangers would hold, in the aggregate, less than 50.1%
of the commitments to make Initial Bridge Loans or would hold, as a result of
such assignment and the sale of participating interests, beneficially less than
50.1% of the commitments to make Initial Bridge Loans or (ii) any assignment to
any assignee other than an entity

 

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that is a lender under the Senior Facilities.

 

 

 

Right to Transfer Exchange Securities:

 

The holders of the Exchange Securities shall have the absolute and unconditional
right to transfer such Exchange Securities, subject to applicable law.

 

 

 

Yield Protection, Taxes and Other Deductions:

 

The loan documents will contain yield protection provisions customary for
similar transactions, protecting the Bridge Lenders in the event of
unavailability of funding, funding losses, reserve and capital adequacy
requirements.

 

 

 

 

 

All payments to be free and clear of any present or future taxes, withholdings
or other deductions whatsoever. The Bridge Lenders will use reasonable efforts
to minimize to the extent possible any applicable taxes and the Borrower will
indemnify the Bridge Lenders and the Agent for such taxes paid by the Bridge
Lenders or the Agent.

 

 

 

Provisional Funding:

 

As provided in the term sheet applicable to the Senior Facilities.

 

 

 

Permitted Acquisition:

 

As provided in the term sheet applicable to the Senior Facilities.

 

 

 

Content:

 

As provided in the term sheet applicable to the Senior Facilities.

 

 

 

Expenses:

 

Customary provisions.

 

 

 

Governing Law and Forum:

 

With respect to the Initial Bridge Loans, England; with respect to the Extended
Term Loans and Exchange Securities, New York.

 

 

 

Counsel to the Arrangers:

 

Simpson Thacher & Bartlett LLP.

 

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ANNEX I

 

Senior Bridge Facility
Interest Rates

 

Initial Bridge Loans and Extended Term Loans:

 

The Initial Bridge Loans and Extended Term Loans will accrue interest at a rate
per annum equal to three month reserve-adjusted LIBOR/EURIBOR plus the Spread
described below.

 

 

 

 

 

The “Spread” will initially be 600 basis points. If the Initial Bridge Loans are
not repaid in whole within the three-month period following the Merger Closing
Date, the Spread will increase by 50 basis points at the end of such three-month
period and shall increase by an additional 50 basis points at the end of each
three month period thereafter. At any time on or after the Initial Maturity
Date, any Extended Term Loan shall, at the election of the applicable Bridge
Lender, bear interest at a fixed rate per annum equal to the floating rate then
in effect (the “Fixed Rate”).

 

 

 

 

 

Interest on the Initial Bridge Loans and the Extended Term Loans shall be
payable on a quarterly basis in arrears in cash (except as provided below);
provided, however, that at such time as the Extended Term Loan bears interest at
the Fixed Rate, interest shall be payable semi-annually in arrears in cash
(except as provided below).

 

 

 

 

 

Notwithstanding the foregoing, the total interest rate per annum payable shall
not exceed 12.5% in respect of Bridge Loans denominated in Sterling and 11.5% in
respect of Bridge Loans denominated in Euro or Dollars. In no event shall the
interest rate on the Initial Bridge Loans or Extended Term Loans exceed the
highest rate permitted under applicable law.

 

 

 

 

 

Calculation of interest shall be on the basis of actual days elapsed in a year
of 360 days.

 

 

 

Exchange Securities:

 

The Exchange Securities shall bear interest at a fixed rate per annum equal to
the floating rate in effect at the time of exchange of any Extended Term Loan
for such Exchange Securities.

 

 

 

 

 

Interest on the Exchange Securities will be payable semi-annually in arrears.

 

 

 

Default Interest:

 

During the continuance of any payment default under the Bridge Facility, the
applicable interest rate shall increase by 2% per annum.

 

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APPENDIX A-2

 

CONFIDENTIAL

 

To:          NTL Incorporated
                NTL Investment Holdings Limited
                909 Third Avenue, Suite 2863
                New York, New York 10022

Attn :      James F. Mooney, Chairman

3 March 2006

 

Project Vanilla - Notes Engagement Letter

 

Dear Sirs:

 

NTL Incorporated (“NTL Inc.”) and NTL Investment Holdings Limited (“NTL IH” and,
together with NTL Inc. and its other subsidiaries, the “NTL Group”) have advised
Deutsche Bank AG, London Branch, JPMorgan Chase Bank, National Association, The
Royal Bank of Scotland plc and Goldman Sachs Credit Partners L.P. and/or their
respective designated affiliates (the “Arrangers”) that NTL Inc., through an
affiliated company, including Telewest Group, wishes to issue and sell the
Notes, as defined in the Note Term Sheet attached as Exhibit A hereto and
incorporated herein (the “Term Sheet”), either (a) to fund consideration
required to effect the merger, under an amended and restated agreement and plan
of merger, dated 14 December 2005 (as amended by Amendment No. 1 dated 30
January 2006), among Telewest Global, Inc., a Delaware corporation, (“Telewest”
and, together with its subsidiaries, the “Telewest Group”), Neptune Bridge
Borrower LLC, a Delaware limited liability company (“Merger Sub”), and NTL Inc.,
of NTL, Inc. with Merger Sub (the “Merger”) and/or (b) refinance a senior bridge
facility incurred in connection with the Merger, as well as to pay fees and
expenses, in each case on substantially the terms, and subject to the
conditions, set forth in the Term Sheet.  Capitalized terms used but not defined
herein have the meanings assigned to them in the Term Sheet.  In this Engagement
Letter the term “you” shall refer to NTL Inc. and NTL IH collectively.

 

This letter amends and replaces in its entirety the Notes Engagement Letter
dated 14 December 2005 (the “Original Notes Engagement Letter”) (which amended
and replaced the Notes Engagement Letter dated 2 October 2005) but without
prejudice to any Accession Notice entered into in connection with the Original
Notes Engagement Letter (each, an “Existing Accession Notice”), which shall
remain in full force and effect as if entered into in connection with this
letter.  The Arrangers confirm that each of the Underwriters who have executed
an Existing Accession Notice has consented to the amendment and replacement of
the Original Notes Engagement Letter by this letter.

 

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Accordingly, the parties hereto agree as follows:

 

1.             Engagement

 

(a)           NTL Inc. and NTL IH hereby retain the Arrangers, and the Arrangers
agree to act, subject to the terms and conditions of this letter (the
“Engagement Letter”) and as further set forth in the Term Sheet, as the
exclusive book-running lead managing underwriters (the “Book-Running Lead
Managers”) as detailed in the Term Sheet, in connection with the issuance, sale
or resale of the Notes (the “Offering”), with (except as otherwise agreed by the
Arrangers) economic participation commensurate with each Arranger’s
participation in the Bridge Facility (as defined in the Appendix A-1 of the
Commitment Letter to which this Engagement Letter is attached (such Appendix,
the “Bridge Term Sheet”)).  J.P. Morgan Securities Ltd. is authorized and
appointed by NTL Inc. and NTL IH to organize the book building process in
consultation with, and subject to the approval (not to be unreasonably withheld)
of, NTL Group, in connection with the issuance, sale or resale of the Notes.

 

(b)           NTL Inc. and NTL IH has or will retain BNP Paribas and HSBC Bank
plc or their respective affiliates as co-lead managers and Calyon and Fortis
Bank S.A./N.V. or their respective affiliates as co-managers pursuant to the
terms of the Commitment Letter. Such co-managers shall agree to act, subject to
the terms and conditions of this Engagement Letter and in a form agreed with the
Arrangers, as co-managers (in such capacity, the “Co Managers” and, together
with the Book-Running Lead Managers, the “Underwriters”), in connection with the
Offering.

 

Any co-manager or other title awarded in connection with the Offering shall be
subject to the consent of the Arrangers, such consent not to be unreasonably
withheld.  Each of the Arrangers reserves the right not to participate in any
Offering, and the foregoing is not an agreement by any of the Arrangers to
underwrite, place or purchase any Notes or otherwise provide any financing.  In
connection with any Offering in which any Arranger elects to participate, the
issuer of the Notes shall enter into an underwriting agreement, placement agency
agreement or purchase agreement, as applicable, with the Arrangers, which
agreement shall be consistent with this letter agreement and otherwise in a
mutually acceptable form not less favorable to NTL Inc. than the equivalent
provisions in similar agreements most recently entered into by NTL Inc..

 

(c)           In connection with any offering of the Notes, (i) J.P. Morgan
Securities Ltd. or its designated affiliate will appear on the left on the cover
of any offering circular or prospectus and (ii) will (A) act as the
stabilization manager of such offering, (B) establish the schedule for investor
meetings, (C) assist NTL Inc. and NTL IH with the rating agency process and (D)
coordinate pre marketing activity.

 

(d)           In consideration of the entry by the Arrangers into this letter,
each of NTL Inc. and NTL IH agrees that during the period from 2 October 2005 to
the termination of this Engagement Letter in accordance with its terms it will
not, and will cause its affiliates, including the Telewest Group, not to,
initiate, solicit or enter into any discussions or negotiations looking toward
the issuance, offering or sale of the Notes to any third parties, except through
the Arrangers.  In addition, each of NTL Inc. and NTL IH agrees that from 2
October 2005 until the earlier of the termination of this letter agreement or
the closing of the sale of the Notes, it will not offer, sell, contract to sell
or otherwise dispose of any securities substantially similar to the Notes
without the Arrangers’ prior written consent.

 

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(e)           None of NTL Inc., NTL IH or any of their respective affiliates,
including the Telewest Group, will, directly or indirectly (except through the
Arrangers or as otherwise approved by them), sell or offer to sell any of the
Notes or any other high-yield debt instrument (whether in the form of securities
or loans or otherwise), during the term of this Engagement Letter.  Any such
offer, sale or other disposition of Notes or other high-yield debt instrument
during the term of this Engagement Letter will be treated for purposes of
Section 4 hereof as if such sale or disposition were undertaken by the Arrangers
directly (and the Arrangers will be entitled to a cash fee equal to the amount
that would have been payable to them under Section 4 hereof in such
circumstances).

 

(f)            The timing and terms of any Offering of the Notes (other than any
Offering of Demand Securities) will be determined by NTL Inc. acting in
consultation with the Arrangers.  In connection with such an Offering NTL Inc. 
and NTL IH will (and will cause their respective subsidiaries or affiliates to)
(i) prepare a Registration Statement on Form S-3 or similar form, or, at the
option of NTL Inc., prepare an offering memorandum relating to the Notes in
customary form for European high yield bond offerings pursuant to Rule
144A/Regulation S, with U.S. SEC registration rights (including, in each case,
all historical, pro forma and other financial and other information required
under applicable securities laws giving due regard to the financial condition
and prospects of the Group and to the type of information and level of detail of
such information that is reasonably required to market the Notes and specify
whether any holders of Notes are selling Notes pursuant to such offering
memorandum), (ii) satisfy (to the extent applicable) customary closing
conditions and other requirements for such bond offerings, including delivery of
legal opinions and auditors’ comfort letters, (iii) prepare, participate in and
complete the appropriate ratings agency presentations, (iv) to the extent
reasonably requested by the Arranger, list the Notes on the Irish Stock
Exchange, Luxembourg Stock Exchange or another acceptable Western European stock
exchange chosen by NTL Inc. and (v) prepare, participate in and complete a “road
show” and meetings with research analysts.  In connection with any Offering of
the Notes, NTL Inc., NTL IH or the issuer of the Notes, as applicable, will also
enter into an underwriting agreement on terms not less favorable to NTL Inc.
than similar agreements most recently entered into by NTL Inc..

 

(g)           In the event that NTL Inc. elects to proceed with an Alternative
Financing Structure (as described in the Commitment Letter) then this Engagement
Letter shall be construed to refer to the refinancing of the Alternative Bridge
Facility set forth in Appendix A-5 of the Commitment Letter, with modifications
described under “Alternative Structure” in the Term Sheet.

 

2.             Termination

 

This Engagement Letter agreement may be terminated at any time by any of the
Arrangers (with respect to itself) upon written notice thereof to that effect
and by you at any time after the earliest of (i) the first anniversary of the
closing date of the Merger, (ii) receipt by NTL Group of aggregate proceeds of
not less than an amount sufficient to repay in full the Bridge Facility and the
application of such proceeds to repay the Bridge Facility in full (or at the
time of any other repayment in full of the Bridge Facility), and (iii)
termination of the Commitment Letter in accordance with

 

3

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its terms prior to any borrowing under the Debt Financing, in each case upon
prior written notice to that effect to the relevant Underwriter(s).

 

Section 3 (Indemnification) shall terminate and be superseded by the applicable
provisions of the Purchase Agreement (or other definitive documentation), if
any, with respect to claims and other causes of action arising out of the sale
of the Notes purchased pursuant to such Purchase Agreement (or other definitive
documentation) provided that, in the event that a Purchase Agreement with
respect to the Offering of the Notes is entered into, the indemnity provisions
of that agreement shall supersede these in all respects.

 

Upon any termination of this Engagement Letter, the obligations of the parties
hereunder shall terminate, except for their obligations under Section 3
(Indemnification), Section 4 (Fees and Expenses), Section 5 (Confidentiality),
Section 6 (Governing Law) and Section 7 (Method and Manner of Payments) below.

 

3.             Indemnification

 

In consideration of the engagement hereunder, NTL Inc. and NTL IH shall jointly
and severally indemnify, hold harmless and contribute to any losses of each
Underwriter to the extent set forth in Annex A hereto, which provisions are
incorporated by reference herein and constitute a part hereof.

 

4.             Fees and Expenses

 

In consideration of the engagement hereunder, NTL Inc. and NTL IH shall pay the
fees and expenses as set forth in the Term Sheet, which fees and expenses shall
be distributed among the Underwriters, at the sole discretion of the
Book-Running Lead Managers.

 

5.             Confidentiality

 

Each of the Underwriters agrees that it shall use all non-public information
provided to it by or on behalf of you hereunder solely for the purpose of
providing the services that are the subject of this letter agreement and shall
treat confidentially all such information, provided that nothing herein shall
prevent any Underwriter from disclosing any such information  (i) to rating
agencies, (ii) to purchasers or prospective purchasers of the Notes in
connection with an Offering of Notes, (iii) pursuant to the order of any court
or administrative agency or in any pending legal or administrative proceeding
(in which case we agree to promptly notify you to the extent lawfully permitted
to do so), (iv) upon the request or demand of any regulatory authority having
jurisdiction over such Arranger or any of its affiliates, (v) to the extent that
such information becomes publicly available other than by reason of disclosure
by such Underwriter in violation of this letter agreement or becomes available
to such Underwriter or its affiliates from a source that is not known by such
Underwriter to be subject to a confidentiality obligation to you, (vi) to such
Underwriter’s employees, legal counsel, independent auditors and other experts
or agents who need to know such information and are informed of the confidential
nature of such information or (vii) to any of its affiliates (with such
Underwriter being responsible for such affiliate’s compliance with this
paragraph).   This undertaking by

 

4

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each Underwriter shall automatically terminate one year following the
termination of such Underwriter’s engagement hereunder.

 

You agree that you will not disclose this letter agreement, the contents hereof
or the activities of any Underwriter pursuant hereto to any person without the
prior approval of such Underwriter, except that you may disclose this letter
agreement and the contents hereof (i) to your shareholders, directors,
employees, advisors and agents or (ii) as required by law or to comply with the
rules of any regulatory body or applicable securities exchange to which you are
or we are subject.

 

The provisions contained in this paragraph shall remain in full force and effect
notwithstanding the termination of this Engagement Letter.

 

6.             Governing Law and Submission to Jurisdiction

 

This letter agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York.  EACH OF NTL INC. AND NTL IH AND
EACH OF THE UNDERWRITERS IRREVOCABLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY
RELATED TO OR ARISING OUT OF THIS ENGAGEMENT LETTER OR THE PERFORMANCE OF
SERVICES OR OBLIGATIONS HEREUNDER.

 

Each of NTL Inc. and NTL IH and each of the Underwriters irrevocably and
unconditionally submits to the exclusive jurisdiction of any state or federal
court sitting in the County of New York over any suit, action or proceeding
arising out of or relating to this letter agreement.  Service of any process,
summons, notice or document by registered mail addressed to NTL Inc. shall be
effective service of process against NTL Inc. and NTL IH for any suit, action or
proceeding brought in any such court.  Service of process upon NTL Inc. at 909
Third Avenue, Suite 2863, New York, NY 10022 shall be deemed effective service
of process against NTL Inc. and NTL IH for any such action or proceeding.  Each
of NTL Inc. and NTL IH irrevocably and unconditionally waives any objection to
the laying of venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding has been brought in
any such court and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum.  A final judgment in any such suit, action or
proceeding brought in any such court may be enforced in any other courts to
whose jurisdiction NTL Inc. or NTL IH is or may be subject, by suit upon
judgment.

 

7.             Method and Manner of Payments

 

All amounts payable hereunder shall be paid to the Arrangers and the
Underwriters at their respective addresses in London, in each case, free and
clear of, and without any deduction or withholding for or on account of, any
current or future taxes, levies, imposts, duties, charges or other deductions or
withholdings levied in any jurisdiction from or through which payment is made or
where the payor is located unless such deduction or withholding is required by
applicable law, in which event, NTL Inc. and NTL IH will pay additional amounts
so that each such party receives the amount that it would otherwise have
received but for such deduction or withholding.  Each of NTL Inc. and NTL IH
hereby agrees jointly and severally to

 

5

--------------------------------------------------------------------------------

 

indemnify each such party from and against the full amount of any such taxes,
levies, imposts, duties, charges or other deductions or withholdings paid by
them and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such taxes, levies, imposts,
duties, charges or other deductions or withholdings were correctly or legally
asserted.

 

Without limiting the foregoing, all amounts payable to each such party under the
terms of this Engagement Letter will be exclusive of value added tax or any
similar taxes (“VAT”) and all amounts charged by such party or for which any of
them is to be reimbursed will be invoiced together with VAT, where appropriate.

 

8.             Disclosure

 

In connection with their engagement hereunder, the Arrangers shall assist you in
preparing a prospectus, offering memorandum, private placement memorandum or
other document to be used in connection with the Offering.  You shall furnish
the Arrangers with all financial and other information concerning the NTL Group
and the Telewest Group, the Merger, the financing thereof and related matters
(the “Information”) that the Arrangers may reasonably request for inclusion in
any offering document or otherwise.  You represent that (i) the Information,
other than projections, taken as a whole, and the offering document will be
complete and correct in all material respects and will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, (ii) all historical financial data provided to the
Arrangers will be prepared in accordance with Regulation S-X and with generally
accepted accounting principles and practices then in effect in the United
States  and will fairly present in all material respects the financial condition
and operations of the NTL Group and the Telewest Group and (iii) any
projections, financial or otherwise, provided to the Arrangers will be prepared
in good faith with a reasonable basis for the assumptions and the conclusions
reached therein and on a basis consistent with the NTL Group’s or the Telewest
Group’s historical financial data, as applicable; it being understood that
actual results may vary from such projections.  You agree to notify the
Arrangers promptly of any material adverse change, or development that may lead
to any material adverse change, in the business, properties, operations,
financial condition or prospects of the NTL Group or the Telewest Group or
concerning any statement contained in any offering document or in any historical
financial data provided to the Arrangers which is not accurate or which is
incomplete or misleading in any material respect.  Each of the Arrangers may
rely, without independent verification, upon the accuracy and completeness of
the Information and any offering document, and none of the Arrangers assumes any
responsibility therefor.

 

9.             Miscellaneous

 

This Engagement Letter (including the Term Sheet), contains the entire agreement
between the parties relating to the subject matter hereof and supersedes all
oral statements and prior writings with respect thereto.  This Engagement Letter
may not be amended or modified except by a writing executed by each of the
parties hereto.  Section headings herein are for convenience only and are not a
part of this Engagement Letter.  This Engagement Letter agreement is solely for
the benefit of NTL Inc., NTL IH and the Arrangers and Underwriters and, except
as set forth in the

 

6

--------------------------------------------------------------------------------

 

sixth paragraph of this Section 9 and Annex A, no other person shall acquire or
have any rights under or by virtue of this Engagement Letter.

 

If any term, provision, covenant or restriction in this Engagement Letter is
held by a court of competent jurisdiction to be invalid, void or unenforceable
or against public policy, the remainder of the terms, provisions, covenants and
restrictions contained herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.  NTL Inc. and NTL IH and the other
parties hereto shall endeavor in good faith negotiations to replace the invalid,
void or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, void or unenforceable
provisions.

 

Each of NTL Inc. and NTL IH further represents and agrees that no offers or
sales of securities of the same or a similar class as the Notes have been made
or will be made by NTL Inc. or NTL IH or any of their affiliates, including the
Telewest Group, or on its or their behalf which would be integrated with the
offer and sale of the Notes under the doctrine of integration referred to in
Regulation D under the Securities Act of 1933, as amended.  Each of NTL Inc. and
NTL IH acknowledges that each of the Underwriters has been retained solely to
provide the services set forth in this letter agreement.  In rendering such
services, each such Underwriter shall act as an independent contractor, and any
duties of such Underwriter arising out of its engagement hereunder shall be owed
solely to NTL Inc. and NTL IH.

 

NTL Inc. and NTL IH acknowledge that each of the Underwriters is a securities
firm that is engaged in securities trading and brokerage activities, as well as
providing investment banking and financial advisory services.  In the ordinary
course of trading and brokerage activities, each of the Underwriters and their
respective affiliates may at any time hold long or short positions, and may
trade or otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of entities that may be involved in the
transactions contemplated hereby.  Each of the Underwriters recognizes its
responsibility for compliance with federal securities laws in connection with
such activities.

 

In addition, each of the Underwriters and its respective affiliates may from
time to time perform various investment banking, commercial banking and
financial advisory services for other clients and customers who may have
conflicting interests with respect to you or the Offering.  None of the
Underwriters or their respective affiliates will use confidential information
obtained from you pursuant to this engagement or their other relationships with
you in connection with the performance by the Underwriters and their respective
affiliates of services for other companies.  You also acknowledge that the
Underwriters and their respective affiliates have no obligation to use in
connection with this engagement, or to furnish to you, confidential information
obtained from other companies.

 

Furthermore, you acknowledge that each of the Underwriters and its respective
affiliates may have fiduciary or other relationships whereby such Underwriter
and its affiliates may exercise voting power over securities of various persons,
which securities may from time to time include securities of you, potential
purchasers of the Notes or others with interests in respect of the Offering. 
You acknowledge that each of the Underwriters and its respective affiliates may
exercise such powers and otherwise perform their functions in connection with
such fiduciary

 

7

--------------------------------------------------------------------------------

 

or other relationships without regard to such Underwriter’s relationship to you
hereunder.

 

You acknowledge that none of the Underwriters is an advisor as to legal, tax,
accounting or regulatory matters in any jurisdiction.  You shall consult with
your own advisors concerning such matters and shall be responsible for making
your own independent investigation and appraisal of the transactions
contemplated hereby, and none of the Underwriters shall have any responsibility
or liability to you with respect thereto.

 

Each of the Arrangers and the Underwriters reserves the right to employ the
services of certain affiliates (the “Investment Services Affiliates”) in
providing services incidental to the offer and sale of the Notes, and each of
NTL Inc. and NTL IH agrees that, in connection with the provision of such
services, each of the Arrangers and the Underwriters and the Investment Services
Affiliates may share with each other any confidential or other information
relating to NTL Inc. and its subsidiaries and affiliates as from time to time
they may possess; provided that each Investment Services Affiliate agrees in
writing to be bound to the provisions of Section 5 (Confidentiality) hereof.

 

This Engagement Letter may be executed in counterparts, each of which will be
deemed an original, but all of which taken together will constitute one and the
same instrument.

 

Telewest Global, Inc. will accede to this Engagement Letter upon completion of
the Merger.

 

8

--------------------------------------------------------------------------------

 

If the foregoing correctly sets forth our understanding, please indicate NTL
Inc.’s and NTL IH’s acceptance of the terms hereof by signing in the appropriate
space below and returning to us the enclosed duplicate originals hereof,
whereupon this letter shall become a binding agreement between us.

 

Very truly yours,

 

DEUTSCHE BANK AG, LONDON BRANCH

 

 

 

By:

 

 

By:

 

 

 

 

Name:

Name:

 

 

Title:

Title:

 

 

 

 

J.P. MORGAN SECURITIES LTD.

 

 

 

By:

 

 

By:

 

 

 

 

Name:

Name:

 

 

Title:

Title:

 

 

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

 

By:

 

 

By:

 

 

 

 

Name:

Name:

 

 

Title:

Title:

 

 

 

9

--------------------------------------------------------------------------------

 

GOLDMAN SACHS INTERNATIONAL

 

 

 

By:

 

 

By:

 

 

 

 

Name:

Name:

 

 

Title:

Title:

 

 

 

Accepted and agreed to

as of the date first written above,

 

NTL INCORPORATED

 

By:

 

 

 

Name:

 

Title:

 

NTL INVESTMENT HOLDINGS LIMITED

 

By:

 

 

 

Name:

 

Title:

 

10

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Annex A:  Indemnification Provisions

 

Each of NTL Inc. and NTL IH shall jointly and severally indemnify and hold
harmless each of the Arrangers and the Underwriters, their affiliates and their
respective officers, directors, employees, agents, advisors and controlling
persons (the “Indemnified Persons”) from and against any and all losses, claims,
damages, liabilities and expenses, joint or several, to which any such
Indemnified Person may become subject arising out of or in connection with the
transactions contemplated by the letter agreement to which this Annex A is
attached (the “Engagement Letter”), the Notes described therein, the use of any
proceeds of such Notes, or any related transaction, or any claim, litigation,
investigation or proceedings relating to any of the foregoing (“Proceedings”)
regardless of whether any of such Indemnified Persons is a party thereto, and to
reimburse such Indemnified Persons for any reasonable legal or other expenses as
they are incurred in connection with investigating or defending any of the
foregoing; provided, however, that the foregoing indemnification will not, as to
any Indemnified Person, apply to losses, claims, damages, liabilities or
expenses to the extent that they are finally judicially determined by a court of
competent jurisdiction not subject to further appeal to have resulted from the
gross negligence or willful misconduct of such Indemnified Person.  By executing
the Engagement Letter, each of NTL Inc. and NTL IH also (a) agrees not to,
directly or through an affiliate, make any claim against any Indemnified Person
for any special, indirect or consequential damages in respect of any breach or
wrongful conduct (whether the claim therefor is based on contract, tort or duty
imposed by law) in connection with, arising out of or in any way related to the
omission or event occurring in connection therewith, except to the extent such
claims or damages result from the gross negligence or willful misconduct of an
Indemnified Person, and (b) waives, releases, and agrees not to, directly or
through an affiliate, sue upon, any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in NTL Inc.’s or NTL
IH’s favor.

 

If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then each of NTL Inc.
and NTL IH shall contribute jointly and severally to the amount paid or payable
to such Indemnified Person as a result of such loss, claim, damage, liability or
expense in such proportion as is appropriate to reflect not only the relative
benefits received by NTL Inc. and NTL IH, on the one hand, and such Indemnified
Person, on the other hand, as well as any relevant equitable considerations;
provided, however, that to the extent permitted by applicable law, each
Indemnified Person shall not be responsible for amounts in the aggregate which
are in excess of all fees received by such person in connection with this
engagement.  It is hereby agreed that the relative benefits to NTL Inc. and NTL
IH on the one hand and all Indemnified Persons on the other hand shall be deemed
to be in the same proportion as (i) the total value received or proposed to be
received by NTL Inc. and NTL IH pursuant to the transactions contemplated by the
Engagement Letter (whether or not consummated) bears to (ii) the fee actually
paid to Indemnified Persons in connection with such sale.  The indemnity,
reimbursement and contribution obligations of NTL Inc. and NTL IH under this
Annex A shall be in addition to any liability which NTL Inc. and NTL IH may
otherwise have to an Indemnified Person and shall be binding upon and inure to
the benefit of any successors, assigns, heir and personal representatives of NTL
Inc. and NTL IH and any Indemnified Person.

 

11

--------------------------------------------------------------------------------

 

Promptly after receipt by an Indemnified Person of notices of the commencement
of any Proceedings, such Indemnified Person will, if a claim in respect thereof
is to be made against an Indemnifying Party, notify NTL Inc. or NTL IH in
writing of the commencement thereof; provided, however, that the omission to so
notify NTL Inc. or NTL IH will not relieve it from any liability which it may
have hereunder except to the extent it has been materially prejudiced by such
failure.  In case any such Proceedings are brought against any Indemnified
Person and it notifies NTL Inc. or NTL IH of the commencement thereof, NTL Inc.
and NTL IH will be entitled to participate therein, and, to the extent that it
may elect by prior written notice delivered to such Indemnified Person, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnified Person; provided, however, that if the defendants in any such
Proceedings include both such Indemnified Person and NTL Inc. or NTL IH and such
Indemnified Person shall have concluded that there may be legal defenses
available to it which are different from or additional to those available to NTL
Inc. or NTL IH, such Indemnified Person shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such Proceedings on behalf of such Indemnified Person.  Upon receipt
of notice from NTL Inc. or NTL IH to such Indemnified Person of its election so
to assume the defense of such Proceedings and approval by such Indemnified
Person of counsel, NTL Inc. and NTL IH shall not be liable to such Indemnified
Person for expenses incurred by such Indemnified Person in connection with the
defense thereof (other than reasonable costs of investigation) unless (i) such
Indemnified Person shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the preceding
sentence, (ii) NTL Inc. or NTL IH shall not have employed counsel reasonably
satisfactory to such Indemnified Person to represent such Indemnified Person
within a reasonable time after notice of commencement of the Proceedings or
(iii) NTL Inc. or NTL IH shall have authorized in writing the employment of
counsel for such Indemnified Person.

 

Capitalized terms used but not defined in this Annex A have the meanings
assigned to such terms in the Engagement Letter to which this Annex A is
attached.

 

12

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Exhibit A – Note Term Sheet

 

Indicative Term of the Notes

 

Issuer

 

NTL Inc.

Alternative Structure: NTL Cable plc.

 

 

 

Size

 

£1,800 million (equivalent);

Alternative Structure: £600 million (equivalent)

(the “Notes”).

 

 

 

Currency

 

£/$/€

 

 

 

Use of Proceeds

 

To repay the borrowings under the Bridge Facility and related fees and expenses,
if issued on the Closing, or to finance a portion of the purchase price for the
Merger, and to pay related fees and expenses in connection with the Merger.

 

 

 

Ranking

 

Senior obligations of the Issuer.

Structurally subordinated to the Senior Facilities as well as the existing bonds
issued by NTL Cable plc.

Alternative Structure: Structurally subordinated to the Senior Facilities of NTL
Inc. and pari passu with the existing bonds issued by NTL Cable plc.

 

 

 

Guarantees

 

Senior guarantees from NTL Inc., new intermediate holdco above NTL Inc. (when
formed) and DRC (following merger of NTL Inc. and CCFC).

Alternative Structure: Same guarantees as the existing bonds issued by NTL Cable
plc.; senior guarantees from NTL Inc. and new intermediate holdco above NTL Inc.

 

 

 

Security

 

Security, if any, to be agreed upon.

 

 

 

Registration

 

Registered or (if registration not immediately available) 144A/Reg S with
registration rights.

 

 

 

Maturity

 

10 years from the issue date.

 

13

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Call Protection

 

The Notes will be redeemable, at the option of the Issuer, in whole or in part,
at any time on or after the fifth anniversary of the date of issuance, at par
plus accrued interest plus a premium equal to 50% of the coupon, declining
ratably to par on the eighth anniversary of the issuance of the Notes, in each
case, together with accrued and unpaid interest, if any, to the redemption date,
subject to customary provisions relating to senior indebtedness. Prior to such
date, the Notes will be redeemable upon the payment of a “make-whole” premium
calculated consistently with NTL Inc.’s existing high yield indenture.

On or before the third anniversary of the date of issuance of the Notes, the
Issuer may redeem up to 35% of the principal amount of the Notes originally
issued at a price equal to par plus the coupon on the Notes, together with
accrued and unpaid interest, if any, to the redemption date, with the net
proceeds of one or more Equity Offerings (to be defined in a customary manner)
within 120 days of such Equity Offerings.

The Issuer and the Arrangers may jointly decide to offer floating rate
securities, in which case such floating rate notes shall include an agreed
redemption schedule appropriate to floating rate instruments.

 

 

 

Interest Payment

 

Cash pay

 

 

 

Covenants

 

Covenants will consist of high yield covenants no less favorable than those
contained in NTL Inc.’s existing high yield bonds, and specifically:

•     Incurrence of debt: consolidated ratio test from incurring debt at the new
intermediate holdco above NTL Inc.

•     Anti-layering covenant: no incremental debt can be incurred between NTL
Cable plc and NTL Inc., subject to exceptions to be agreed.

•      Obligation of NTL Inc. to remain the ultimate holder of 100% of the
shares of the intermediate holding companies (Alternative Structure: Obligation
of NTL Inc. to remain the ultimate holder of 100% of the shares of the
intermediate holding companies).

 

 

 

Fee

 

1.50%

 

14

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Expenses

 

NTL Inc. will pay its own costs and expenses incurred in connection with the
transaction (including, inter alia, roadshow and printing expenses). The
Underwriters will pay their own costs and expenses incurred in connection with
the transaction.

 

15

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APPENDIX A-3

 

SUMMARY OF PRINCIPAL TERMS & CONDITIONS

 

Ultimate Parent:

 

Telewest Global, Inc., a Delaware corporation (“Telewest”). Upon consummation of
this transaction, Telewest will be changing its name to NTL Inc. and NTL Inc.
will be changing its name to NTL Holdings, Inc., but for simplicity this term
sheet does not reflect these name changes.

 

 

 

 

 

Parent:

 

NTL Cable plc.

 

 

 

 

 

Obligors:

 

The Borrowers and the Guarantors.

 

 

 

 

 

Borrower(s):

 

In the case of Tranche A and the RCF, NTL Investment Holdings Limited (“NTLIH”),
Telewest Communications Networks Limited (“TCN”), and such other borrower as
may be agreed between NTLIH and the Mandated Lead Arrangers.

 

In the case of Tranches A1 and B1, Baseball Cash Bidco (as defined below) and,
at any time after consummation of the Virgin Mobile Acquisition but with respect
to Tranche B1 only, NTL Dover LLC (the “U.S. Borrower”). Borrowings by the U.S.
Borrower shall be limited to 20% of the aggregate principal amount drawn under
the Senior Facilities.

 

 

 

 

 

Guarantors:

 

The Parent, Telewest UK Limited, New UK Limited, New UK2 Limited (together, the
“UK Holdcos”), the Borrowers, each Material Subsidiary and sufficient members of
the UK Group as will account for 80% of the Consolidated Operating Cashflow of
the UK Group (but excluding for these purposes only, the Virgin Mobile Group, in
the event that any Standalone Baseball Financing is raised).

 

 

 

 

 

Baseball Bidcos:

 

NTL Investment Holdings Limited (“Baseball Cash Bidco”).

 

NTL (UK) Group, Inc. (“Baseball Stock Bidco”).

 

 

 

 

 

Material Subsidiaries:

 

A member of the Group whose Operating Cashflow represents at least 5% of the
Consolidated Operating Cashflow of the Group.

 

 

 

 

 

Group:

 

Telewest and its subsidiaries, after giving effect to the Merger and following
the Virgin Mobile Acquisition, to include the Virgin Mobile Group (other than in
the case where the Permitted Acquisition (as defined below) is funded by the
Stand Alone Baseball Financing).

 

 

 

 

 

NTL Group:

 

NTL Incorporated (“NTL Inc.”) and its subsidiaries, prior to the completion of
the Merger.

 

 

 

 

 

Telewest Group:

 

Telewest and its subsidiaries, prior to completion of the Merger.

 

 

 

 

 

Virgin Mobile Group:

 

Virgin Mobile Holdings (UK) plc (“Virgin Mobile”) and its subsidiaries, prior to
the completion of the Virgin Mobile Acquisition.

 

 

 

 

 

UK Group:

 

Except as may be expressly agreed:

 

 

 

 

 

 

 

(a)                        following implementation of Steps 1 to 2 as set out
on the page headed “Combination of Neptune and Tiger” of the Steps Paper,
culminating in the structure set out on the page headed “Interim Structure after
Step 2” of the Steps Paper, NTLIH and its direct and indirect

 

 

1

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subsidiaries and Telewest UK Limited and its direct and indirect subsidiaries;

 

 

 

 

 

 

 

(b)                       following completion of the “First Alternative
(Structure 1) – Final Structure” as described in the Steps Paper, New UK Limited
and its direct and indirect subsidiaries; or

 

 

 

 

 

 

 

(c)                        following completion of the “Second Alternative
(Structure 2) – Final Structure” as described in the Steps Paper, NTLIH and its
direct and indirect subsidiaries,

 

 

 

 

 

 

 

and in each case, following the Virgin Mobile Acquisition, to include the Virgin
Mobile Group (other than in the case where the Permitted Acquisition (as defined
below) is funded by the Stand Alone Baseball Financing).

 

 

 

 

 

Facilities:

 

The senior credit facilities (the “Senior Facilities”) will comprise four
tranches with final maturities as follows:

 

(a)                        £3,200,000,000 5-year amortising Senior Term Loan A
Facility (“Tranche A”) to be denominated in £;

 

(b)                       £175,000,000 5-year amortising Senior Term Loan A1
Facility (“Tranche A1”) to be denominated in £;

 

(c)                        £300,000,000 6½ year bullet repayment Senior Term
Loan B1 Facility (“Tranche B1”) to be denominated in £ and $; and

 

(d)                       £100,000,000 5-year Multicurrency Revolving Working
Capital Facility (“RCF”) to be denominated in £, $and €.

 

 

 

 

 

Purpose:

 

(a)                        Tranche A: to repay in full all amounts outstanding
under each of the Existing Vanilla Facilities at closing of the Merger (the
“Merger Closing”);

 

 

 

 

 

 

 

(b)                       RCF: to finance the ongoing working capital needs and
general corporate requirements of the UK Group and to include a performance bond
facility (in a maximum amount to be agreed) with an acceptable fronting bank
and/or alternative arrangements to be agreed; and

 

(c)                        Tranches A1 and B1: to firstly (i) finance or
refinance the cash consideration for the Virgin Mobile Acquisition (including
payments to holders of options in respect of shares in Virgin Mobile who
exercise or surrender their options in connection with the Baseball Scheme), and
following discharge of the cash consideration in full, to (ii) pay the related
fees, costs and expenses in connection therewith in full, and (iii) refinance in
full the Existing Virgin Facilities on or after the closing of the Virgin Mobile
Acquisition (the “Virgin Mobile Acquisition Closing”).

 

 

 

 

 

Initial MLAs and Initial Underwriters:

 

Deutsche Bank AG, London Branch, J.P. Morgan Plc, The Royal Bank of Scotland plc
and Goldman Sachs International and/or their respective designated affiliates
(the “Initial MLAs”).

 

Deutsche Bank AG, London Branch, JPMorgan Chase Bank, National Association, The
Royal Bank of Scotland plc and Goldman Sachs Credit Partners L.P. and/or their
respective designated affiliates (the “Initial  Underwriters”).

 

 

2

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Joint Bookrunners:

 

Deutsche Bank AG, London Branch, J.P. Morgan Plc, The Royal Bank of Scotland plc
and Goldman Sachs International and/or their respective designated affiliates
(the “Joint Bookrunners”).

 

 

 

 

 

Agent and Security Trustee:

 

Deutsche Bank AG, London Branch (the “Agent” or “Security Trustee”, as the
context may require).

 

 

 

 

 

Lenders:

 

The Initial Underwriters, any Additional Underwriters and a group of banks,
financial institutions (including CDOs or similar structured institutions) and
other persons to be determined by the Mandated Lead Arrangers (the “Lenders”)
after prior consultation with NTL Inc.

 

 

 

 

 

Instructing Group:

 

Lenders whose commitments equal or exceed 662/3% of the total commitments.

 

 

 

 

 

Existing Vanilla Facilities:

 

Each of (i) the existing £2.425 billion senior facilities agreement of NTLIH
dated 13 April 2004; (ii) the existing £1.55 billion senior facilities agreement
of TCN and Telewest Global Finance LLC (“Telewest LLC”) dated 21 December 2004;
(iii) the existing £250 million second lien facility agreement of TCN and
Telewest LLC dated 21 December 2004; and (iv) the existing £130 million senior
secured facilities of Flextech Broadband Limited and Flextech Broadcasting
Limited dated 10 May 2005.

 

 

 

 

 

Existing Virgin Facilities:

 

The existing £350 million senior facilities agreement of Virgin Mobile dated 2
July 2004.

 

 

 

 

 

Existing Facilities:

 

The Existing Vanilla Facilities and the Existing Virgin Facilities.

 

 

 

 

 

Vanilla Certain Funds:

 

After signing of the Senior Facilities Agreement, Tranche A will be made
available for a period (the “Vanilla Certain Funds Period”) until the earlier of
(i) the end of the Merger Availability Period and (ii) the date of the Merger
Closing (the “Merger Closing Date”) (including repayment of all the Existing
Vanilla Facilities) subject only to:

 

 

 

 

 

 

 

(i)                           satisfaction of the conditions precedent under
“Initial Vanilla Conditions Precedent” below; and

 

(ii)                        there being no payment or insolvency Event of
Default with respect to NTL Inc., NTLIH, TCN or Merger Sub (other than an
insolvency event caused by the occurrence or potential occurrence of another
Event of Default) or an Event of Default arising as a result of a
misrepresentation by NTL Inc., NTLIH, TCN or Merger Sub in respect of its
powers, status and authority, or any breaches by NTLIH or TCN of its negative
pledge covenants which materially affects the Lenders’ security (taken as a
whole).

 

 

 

 

 

Baseball Certain Funds:

 

After signing of the Senior Facilities Agreement, Tranches A1 and B1 will be
made available for a period (the “Baseball Certain Funds Period”) until the
earlier of (i) the date on which the Baseball Scheme proposal fails or is
withdrawn, (ii) 30 September 2006 or (iii) the date which is 30 days after the
Effective Date (being the date on which the Court Order approving the Baseball
Scheme is filed with the Registrar of Companies pursuant to section 425 of the
Companies Act 1985) (the “Virgin Mobile Acquisition Closing Date”) subject only
to:

 

(i)                           satisfaction of the conditions precedent under
“Initial Baseball

 

 

3

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Conditions Precedent” below;

 

(ii)                        there being no payment or insolvency Event of
Default with respect to Baseball Cash Bidco (other than an insolvency event
caused by the occurrence or potential occurrence of another Event of Default),
or an Event of Default arising as a result of a misrepresentation by Baseball
Cash Bidco in respect of its powers, status and authority (but only with respect
to Baseball Cash Bidco and with respect to the provisions of the Senior
Facilities Agreement that relate to Tranche A1 and Tranche B1, but not
otherwise), or breach of covenant by Baseball Cash Bidco with respect to the
negative pledge which materially affects the Lenders’ security (taken as a
whole) or the covenants set out in paragraphs (a), (b), (c), (d), (g), (h) and
(j) of the section entitled “Baseball Scheme Undertakings” below; and

 

(iii)                     it not being unlawful for a Lender to make any advance
under Tranches A1 and B1.

 

For these purposes:

 

“Baseball Scheme” means the scheme of arrangement under section 425 of the
Companies Act 1985 to be proposed by Virgin Mobile to its shareholders, details
of which will be set out in the Baseball Scheme Circular and which are
consistent with the terms of the Baseball Press Release.

 

“Baseball Scheme Circular” means the circular to the shareholders of Virgin
Mobile setting out the proposals for the Baseball Scheme pursuant to which the
Baseball Bidcos will acquire all of the issued and to be issued share capital of
Virgin Mobile not already owned by the Baseball Bidcos.

 

 

 

 

 

Initial Vanilla  Conditions Precedent:

 

The conditions precedent to be completed to the satisfaction of the Agent prior
to the availability of Tranche A and the RCF will be the following:

 

(i)                           evidence that Merger Sub has entered into the
Bridge Facility and that all conditions precedent thereto have been satisfied or
waived, the proceeds of which will be used to fund in part the consideration
required under the Merger Agreement, including any transaction fees and expenses
in connection therewith;

 

(ii)                        the Financing Documentation prepared in accordance
with paragraph 2(a) of the Commitment Letter duly executed by you;

 

 

 

 

 

 

 

(iii)                     certified copies of customary corporate documentation
for each Borrower and each Guarantor and receipt of relevant customary legal
opinions from Lenders’ or Borrowers’ counsel (as is customary in the
jurisdiction of incorporation of the relevant Borrowers and Guarantors) in each
case in a form acceptable to the Mandated Lead Arrangers acting reasonably (it
being acknowledged that opinions and documents in connection with the existing
financings of NTLIH and TCN will be a form acceptable for these purposes); or

 

(iv)                    the execution of the Merger Agreement (in the
form previously approved by the Mandated Lead Arrangers) by the parties thereto.
Merger Sub and NTL Inc. becoming obliged to file the certification of merger
with

 

 

4

--------------------------------------------------------------------------------

 

 

 

the Secretary of State of Delaware and Telewest to file a charter amendment as
set forth in Section 2.01(b) of the Merger Agreement and no amendments to or
waivers under (excluding any waiver of or as contemplated by Section 9.02(g) of
the Merger Agreement) being granted under the Merger Agreement which in the
opinion of an Instructing Group (acting reasonably) are material and adverse to
the financing under the any of the Senior Facilities Agreement and/or the Bridge
Facility Agreement.

 

 

 

 

 

Initial Vanilla Condition Subsequent

 

It shall be a condition subsequent to the first drawdown under Tranche A and the
RCF that immediately after such drawdown, Merger Sub and NTL file the
certification of merger with the Secretary of State of Delaware and Telewest
files the charter amendment as set forth in Section 2.01(b) of the Merger
Agreement.

 

 

 

 

 

Initial Baseball Conditions Precedent:

 

The conditions precedent to the availability of Tranches A1 and B1 will be the
following:

 

(i)                           certified copies of the Baseball Press Release,
the executed implementation agreement between NTLIH, the Baseball Bidcos and
Virgin Mobile in respect of the Baseball Scheme (in the form approved by the
Initial MLAs on or before signing of the Senior Facilities Agreement), the
Baseball Scheme Circular and the resolutions passed at each of the Court
meetings and the extraordinary general meeting , (the “Baseball Scheme
Documents”);

 

(ii)                        the order of the Court confirming the sanctioning of
the Baseball Scheme as required by section 425 of the Companies Act 1985 (the
“Court Order”);

 

(iii)                     certified copies of customary corporate documentation
for Baseball Cash Bidco and receipt of relevant customary legal opinions from
counsel to the Lenders (or counsel to Baseball Cash Bidco, if customary in the
jurisdiction of incorporation of Baseball Cash Bidco) (in each case in the
form agreed by the Initial MLAs on or before signing of the Senior Facilities
Agreement);

 

(iv)                    the certificate of the Registrar of Companies confirming
registration of the Court Order;

 

 

 

 

 

 

 

(v)                       evidence that the agreed fees payable on or prior to
utilisation of Tranches A1 and B1 by Baseball Cash Bidco in respect of Tranches
A1 and B1 have been paid or will be paid on first drawdown of Tranches A1 and
B1;

 

 

 

 

 

 

 

(vi)                    a certificate of Baseball Cash Bidco confirming that
none of the events specified in paragraphs (ii) and (iii) under the
section ”Baseball Certain Funds” above have occurred and is continuing; and

 

 

 

 

 

 

 

(vii)                 the Merger having been consummated .

 

 

 

 

 

 

 

For these purposes:

 

“Baseball Press Release” means the announcement (in the form agreed with the
Initial MLAs on or before signing of the Senior Facilities Agreement) in
accordance with Rule 2.5 of the City Code on Takeovers and Mergers in

 

 

5

--------------------------------------------------------------------------------

 

 

 

respect of the Baseball Scheme by the Baseball Bidcos of all of the issued and
to be issued share capital of Virgin Mobile not already owned by the Baseball
Bidcos.

 

 

 

 

 

Further Conditions precedent:

 

Other than in respect of the initial drawdown, the Lenders will only be obliged
to comply with their obligations (except as described above) to make advances
under each of the Senior Facilities if on the date of the utilisation request
and on each proposed utilisation date:

 

(i)                           in the case of a rollover loan, an Instructing
Group has not instructed the Agent to block such rollover on account of an event
of default which is continuing or would result from the proposed loan and in the
case of any other loan, no default is continuing or would result from the
proposed loan; and

 

(ii)                        in the case of a loan which is not a rollover loan,
the Repeating Representations (which Repeating Representations shall be subject
to the principles described in “General Provisions” below) to be made by each
Obligor are true in all material respects.

 

 

 

 

 

Availability and Drawdown:

 

Tranche A: available during the period (the “Merger  Availability Period”) from
2 October 2005 to the earlier of (i) 2 October 2006 or (ii) the Merger Closing
Date, to be drawn in full at the Merger Closing Date.

 

Tranches A1 and B1: available during the period (the “Virgin Mobile Acquisition
Availability Period”) from the date of the Commitment Letter to the earlier of
(i) 30 September 2006 or (ii) the Virgin Mobile Acquisition Closing Date, to be
drawn in full on the Virgin Mobile Acquisition Closing Date.

 

RCF: available on a fully revolving basis until one month before the RCF final
maturity date. RCF may not be utilised unless Tranche A has been or will on the
same date be utilised in full. No clean-down of the RCF shall be required.

 

 

 

 

 

Interest Rate:

 

The rate of interest payable for each interest period shall be the aggregate,
per annum, of:

 

 

 

 

 

 

 

(i)                           the applicable Interest Margin; plus

 

(ii)                        the relevant LIBOR; plus

 

(iii)                     (if applicable) the cost of complying with any
applicable reserve requirements.

 

Usual interest provisions shall apply, including default interest which shall be
1.00% above the then applicable Interest Margin level.

 

 

 

 

 

Interest Periods:

 

1, 2, 3 or 6 months or any other period agreed between the Borrower(s) (or NTL
Inc.) and the Lenders in respect of the relevant Tranche.

 

 

 

 

 

Interest Margin:

 

Tranche A/ RCF                                 1.625% per annum from the Merger
Closing Date, for a period of three months and thereafter subject to the Margin
Ratchet provisions.

 

 

 

 

 

 

 

Tranche A1                                                         1.625% per
annum from the date of first drawdown under Tranche A1 for a period of 3 months
and thereafter, subject to the Margin Ratchet provisions.

 

 

6

--------------------------------------------------------------------------------

 

 

 

Tranche B1                                                           2.250% per
annum from the date of first drawdown under Tranche B1.

 

 

 

 

 

Margin Ratchet:

 

The Interest Margin for Tranches A and A1 and the RCF shall be subject to the
following margin ratchet based upon the Leverage Ratio:

 

 

 

 

 

 

 

 

Leverage Ratio

 

Margin

 

 

 

Less than

3.00 : 1

 

 

1.000

%

 

 

Greater than or equal to

3.00 : 1

but less than 3.40 : 1

 

1.125

%

 

 

Greater than or equal to

3.40 : 1

but less than 3.80 : 1

 

1.250

%

 

 

Greater than or equal to

3.80 : 1

but less than 4.20 : 1

 

1.375

%

 

 

Greater than or equal to

4.20 : 1

but less than 4.50 : 1

 

1.500

%

 

 

Greater than or equal to

4.50 : 1

but less than 4.80 : 1

 

1.625

%

 

 

Greater than or equal to

4.80 : 1

but less than 5.00 : 1

 

1.875

%

 

 

Greater than or equal to

5.00

 

 

2.000

%

 

 

 

There will be no time period restrictions (other than the first quarter after
Closing) for adjustments in the Margin Ratchet and no limitations on the number
of step-downs in the Margin Ratchet that can apply in any quarter.

 

 

 

 

 

 

 

Upon an Event of Default which is continuing, the Interest Margin for each of
the RCF and Tranches A and A1 shall immediately revert to 2.00% per annum until
such time that the Event of Default has been remedied or waived.

 

 

 

 

 

Commitment Fee:

 

Commitment fee which is the lower of 50% of the RCF Interest Margin or 0.75% per
annum of the aggregate undrawn portion of the RCF, payable from the Merger
Closing Date from day to day during the availability period of the RCF, payable
from the date of first drawdown under Tranche A of the Senior Facilities
Agreement from day to day during the availability period of the RCF, (such fee
being due and payable in arrear on the last day of each successive period of
three months which ends during such period).

 

 

 

 

 

Calculations:

 

All calculations of interest and commitment fees will be based on the actual
number of days elapsed and a year of 365 days (or a year of 360 days where
applicable).

 

 

 

 

 

Repayment:

 

Tranches A and A1 - In accordance with the following repayment schedule:

 

 

 

 

 

 

Amount Repayable

 

 

 

Repayment Date

 

Tranche A

 

Tranche A1

 

 

 

30 September 2007

 

£

225 million

 

£

12 million

 

 

 

31 March 2008

 

£

225 million

 

£

12 million

 

 

 

30 September 2008

 

£

225 million

 

£

12 million

 

 

 

31 March 2009

 

£

250 million

 

£

15 million

 

 

 

30 September 2009

 

£

450 million

 

£

25 million

 

 

 

31 March 2010

 

£

500 million

 

£

27 million

 

 

 

30 September 2010

 

£

550 million

 

£

30 million

 

 

 

Final Maturity Date

 

£

775 million

 

£

42 million

 

 

7

--------------------------------------------------------------------------------

 

 

 

Tranche B1 – Repayment in full on its final maturity date.

 

 

 

 

 

 

 

RCF – Repayment on the final day of each interest period and any amounts then
outstanding will be repaid in full on its final maturity date.

 

 

 

 

 

Prepayments:

 

Voluntary prepayments:

 

 

 

 

 

 

 

Voluntary prepayments of Tranches A and A1 will be permitted in whole or in
part without penalty or premium on terms customary in transactions of this
nature.

 

 

 

 

 

 

 

Voluntary prepayments of Tranche B1 will be permitted in whole or in part on
terms customary in transaction of this nature, subject to a 1.00% prepayment
premium during the first 18 months from the Merger Closing Date (or the
Structuring Date, whichever is later). Tranche B1 Lenders have the option during
such period to decline prepayment in which case those proceeds shall prepay
Tranches A and A1 on a pro rata basis and thereafter, all voluntary prepayments
may be made without premium or penalty and shall be applied pro rata across
Tranches A, A1 and B1.

 

 

 

 

 

 

 

Mandatory prepayments:

 

 

 

 

 

 

 

Mandatory prepayment of all outstandings and cancellation of all commitments
under the Senior Facilities will be required upon the occurrence of a change of
control (to be defined).

 

 

 

 

 

 

 

Mandatory prepayment is also required in respect of net proceeds received from:

 

 

 

 

 

 

 

(i)                                     disposals; or

 

 

 

 

 

 

 

(ii)                                  insurance claims,

 

 

 

 

 

 

 

subject to minimum thresholds and customary exceptions including standard
re-investment provisions to be agreed.

 

 

 

 

 

 

 

Cash sweep:

 

 

 

 

 

 

 

A percentage of excess cashflow in any financial year (commencing with the
financial year ended 31 December 2006) which is in excess of £25 million shall
be applied in pre-payment of the Senior Facilities. Such percentage shall be by
reference to the Leverage Ratio as follows:

 

 

 

 

Leverage Ratio

 

Applicable percentage%

 

 

 

Greater than

4.00 : 1

 

 

50

%

 

 

Greater than or equal to

3.0 : 1

but less than 4.00 : 1

 

25

%

 

 

Less than

3.0 : 1

 

 

0

%

 

 

 

Payments of the cash sweep shall be made within 10 Business Days of the filing
by Telewest of its audited financial statements, provided that any such payment
may be deferred by a period of up to 30 days if the management of Telewest,
acting reasonably and in good faith, are able to demonstrate to the

 

 

8

--------------------------------------------------------------------------------

 

 

 

satisfaction of the Facility Agent (acting reasonably) that the cash reserves of
the Group would be reduced temporarily by such payment to below £200 million
(for this purposes disregarding any availability under the RCF).

 

 

 

 

 

 

 

Required amortisations of Tranches A and A1 in any financial year shall be
deducted in calculating excess cashflow.

 

 

 

 

 

 

 

Application:

 

 

 

 

 

 

 

Application of prepayments against Tranches A, A1 and B1 (pro rata), then RCF.

 

 

 

 

 

 

 

Tranche B1 Lenders have the option to decline prepayment during the first 18
months in which case those proceeds shall prepay Tranches A and A1 (pro rata).

 

 

 

 

 

 

 

Any prepayment of Tranches A or A1 will be applied pro-rata against the Tranche
A or Tranche A1 repayment instalments, as applicable, provided each Borrower
may elect to apply any mandatory or voluntary prepayment against the next four
Tranche A and/or Tranche A1 repayment instalments in chronological order of
maturity and, thereafter against the remaining instalments pro rata.

 

 

 

 

 

 

 

Debt Proceeds:

 

 

 

 

 

 

 

On the issue of any indebtedness by Telewest or any of its subsidiaries (subject
to a de minimis threshold of £10 million per debt issuance), each Borrower will
prepay or procure the prepayment of an amount of the Tranche A, Tranche A1 and
Tranche B1 advances (pro rata) (and thereafter RCF advances) equal to 50% of the
net cash proceeds of the issue, save that such mandatory prepayment will not
apply to (i) debt used to fund acquisitions or capital expenditures (in each
case, provided that such acquisitions or capital expenditures are permitted by
the terms of the Senior Facilities), (ii) any refinancing of the Bridge Facility
by way of bond issuance, (iii) any refinancing following delivery of a Structure
Notice by way of Tranche B proceeds and the Alternative Bridge Facility,
(iv) the raising of any “daylight loans” referred to in the Steps Paper, (v) any
net cash proceeds of any debt issuance expressly contemplated in the Steps
Paper, (vi) as specified under the Holdco Debt referred to below, (vii) the
proceeds of any Stand Alone Baseball Financing or any Alternative Baseball
Financing and (viii) other agreed exceptions.

 

 

9

--------------------------------------------------------------------------------

 

 

 

Equity Proceeds

 

 

 

 

 

 

 

On the issue of new equity by Telewest or any of its subsidiaries, each Borrower
will (subject to a de minimis threshold of £10 million per equity issuance)
prepay or procure the prepayment of an amount of the Tranche A, Tranche A1 and
Tranche B1 advances (pro rata) (and thereafter RCF advances) equal to a variable
percentage of the net cash proceeds of the issue such percentage to be
calculated by reference to the Leverage Ratio as follows:

 

 

 

 

 

 

 

Leverage Ratio

 

Applicable percentage%

 

 

Greater than 3.5 : 1

 

50

%

 

Greater than 3.0 : 1 but less than or equal to 3.5 : 1

 

25

%

 

Less than or equal to 3.0 : 1

 

0

%

 

 

 

save that such mandatory prepayment will not apply to the (i) net cash proceeds
of any equity issuance which are contributed into the UK Group and are invested
in assets required by the group business, within 180 days of receipt thereof,
(ii) any net cash proceeds of any equity issuance expressly contemplated in the
Steps Paper, (iii) any proceeds of new equity issued by the Ultimate Parent and
applied for the purposes set out in the paragraph entitled “Equity Cure Right”
below and (iv) any proceeds of new equity issued by the Ultimate Parent and
applied for the purposes set out in part (d)(iii) of “Non-Financial
Undertakings” below.

 

 

 

 

 

Cancellation:

 

Any amount of Tranche A not drawn down on the Merger Closing Date shall
automatically be cancelled on that date.

 

Any amount of Tranches A1 or B1 not drawn down at the end of the Virgin Mobile
Acquisition Availability Period shall automatically be cancelled on that date.

 

Usual restrictions relating to the cancellation of working capital facilities in
respect of cancellation of any undrawn portion of RCF by the Borrowers. Any
amount of RCF commitments which are cancelled may not be reinstated.

 

 

 

 

 

Finance Documentation:

 

The Senior Facilities will be documented in a loan agreement (the “Senior
Facilities Agreement”) which will set out the Conditions Precedent to drawing
specified above and include, without limitation, provisions in respect of market
disruption, increased costs, Representations and Warranties, Undertakings and
Events of Default, in each case, conventional for lending of this kind and to
reflect this Term Sheet but subject always to the principles specified in
“General Provisions” below. Documentation will include a Bridge Facility
Agreement, an intercreditor agreement (the “Intercreditor Agreement”) to which,
amongst other things, the Bridge Facility will be subject and which will
subordinate certain intercompany loans and certain shareholder loans to the
Senior Facilities and govern their interrelationship, and all relevant guarantee
and security documentation.

 

 

 

 

 

 

 

Principal provisions of the Senior Facilities Agreement will include, inter
alia, the following:

 

 

 

 

 

Financial Undertakings:

 

Financial covenants tested quarterly on a rolling 12 month basis, in accordance

 

 

10

--------------------------------------------------------------------------------

 

 

 

with US GAAP as follows:

 

 

 

 

 

 

 

(i)                           Total Net Debt/Consolidated Operating Cashflow
(the “Leverage Ratio”;

 

 

 

 

 

 

 

(ii)                        Consolidated Operating Cashflow/Consolidated Net
Interest (the “Interest Cover Ratio”); and

 

 

 

 

 

 

 

(iii)                     Consolidated Cashflow/Consolidated Debt Service (the
“Debt Service Cover Ratio”),

 

 

 

 

 

 

 

commencing at the end of the third full financial quarter after the Merger
Closing Date and as further set out in Annex 1 to this Appendix A-3.

 

 

 

 

 

 

 

Financial covenant definitions are to be agreed and will be tested with
reference to the consolidated financial statements of the Group. Notwithstanding
the above, financial covenants shall be tested half yearly on a rolling 12
months basis at such time and for as long as total net leverage ratio is 4.25:1
or lower.

 

 

 

 

 

 

 

Restructuring charges determined in accordance with FAS 146 may be added back to
Consolidated Operating Cashflow in an amount of up to £50 million for the
financial year during which the Merger Closing Date occurs (or £60 million in
the event that the Virgin Mobile Acquisition also occurs during such financial
year (other than pursuant to a Stand Alone Baseball Financing)) (“Year 1”) and
up to £50 million in the following financial year (or £60 million in the event
that the Virgin Mobile Acquisition has occurred during such financial year or
during Year 1 (in either case, other than pursuant to a Stand Alone Baseball
Financing)) (“Year 2”) provided that any unutilised amounts from Year 1 may be
carried forward to Year 2 and any unutilised amounts from Year 2 (including, for
the avoidance of doubt, any amounts rolled over from Year 1) may be carried
forward and added back to Consolidated Operating Cashflow in the period from the
end of Year 2 to the third anniversary of the Merger Closing Date.

 

 

 

 

 

Equity Cure Right

 

If on any testing date, any of the financial covenants set out in paragraphs
(i), (ii) or (iii) of “Financial Undertakings” above are not satisfied, then the
Company may, at its option, cure such breach by procuring that the proceeds of
any new equity raised by the Ultimate Parent be contributed into the UK Group
and either (a) applied towards the prepayment of the Senior Facilities or
(b) added back to Consolidated Operating Cashflow, in each case, in an amount
which, if such test(s) were to be recalculated giving effect to such application
or add-back, such test(s) would have been satisfied. The foregoing equity cure
rights shall be subject to the following conditions:

 

 

 

 

 

 

 

(i)                           subject as provided in (ii) below, such equity
cure right may not be used more than three occasions over the life of the Senior
Facilities;

 

 

 

 

 

 

 

(ii)                        in the case of the add-back to Consolidated
Operating Cashflow, such equity cure right may only be used on one occasion over
the life of the Senior Facilities, and in an amount not exceeding £100 million;

 

 

 

 

 

 

 

(iii)                     in the case of the add-back to Consolidated Operating
Cashflow, such add-back may not be rolled forward or be taken into account on
any subsequent testing date; and

 

 

 

 

 

 

 

(iv)                    such equity cure right may not be used for any two
consecutive quarters.

 

 

11

--------------------------------------------------------------------------------

 

 

 

Any proceeds of new equity which are contributed into the UK Group for the
purposes specified above, shall thereafter be retained within the UK Group.

 

 

 

 

 

Clean-up Periods

 

The covenants and events of default will be qualified during the relevant
Clean-up Period. During the relevant Clean-up Period, any breach of covenant
under (c) (Negative Pledge), (d) (No Merger), (f) (Indebtedness), (e) (Loans),
(h) (No finance leasing/hire purchase), (l) (Joint Ventures), (m) (Arm’s Length
Transactions), (p) (Pension Schemes), (q) (Hedging), and event of default under
(b) (Cross-default), or any breach of representations or warranties, in each
case where it arises with respect to Telewest or any of its subsidiaries or
Virgin Mobile or any of its subsidiaries, as the case may be, shall not
constitute an Event of Default, drawstop or allow acceleration, provided that
such breach or default (i) is capable of being remedied within the period and
the Parent or NTLIH (or in the case of the Virgin Mobile Acquisition, either of
the Baseball Bidcos) is taking appropriate steps to cure it and further,
(ii) does not have a material adverse effect, (iii) was not procured by the
Parent or by NTLIH (or in the case of the Virgin Mobile Acquisition, either of
the Baseball Bidcos) and/or (iv) does not exist at the end of the relevant
Clean-up Period.

 

 

 

 

 

 

 

“Clean-up Period” shall mean:

 

 

 

 

 

 

 

(a)                        with respect to Telewest or any of its subsidiaries,
the period from the Merger Closing Date to the date falling 4½ months
thereafter; or

 

 

 

 

 

 

 

(b)                       with respect to Virgin Mobile or any of its
subsidiaries, the period from the Virgin Mobile Acquisition Closing Date, to the
date falling 4½ months thereafter.

 

 

 

 

 

Representations and Warranties:

 

Usual for transactions of this nature and subject to the principles specified in
“General Provisions” below (subject to any additional materiality carve outs and
other additional exceptions, in each case as may be agreed and subject to
matters disclosed in a disclosure letter, the representations and warranties
will be as follows (only certain of which will be repeated):

 

 

 

 

 

 

 

(a)                        due incorporation;

 

 

 

 

 

 

 

(b)                       compliance with corporate formalities;

 

 

 

 

 

 

 

(c)                        legal validity;

 

 

 

 

 

 

 

(d)                       no material adverse change;

 

 

 

 

 

 

 

(e)                        no event of default (f)no winding up;

 

 

 

 

 

 

 

(g)                       accuracy of Information Package and due diligence
reports;

 

 

 

 

 

 

 

(h)                       accuracy of Group structure chart;

 

 

 

 

 

 

 

(i)                           all necessary licences /authorisations /consents
obtained;

 

 

 

 

 

 

 

(j)                           Finance Documentation does not conflict with
constitutional documents /laws/other documents;

 

 

 

 

 

 

 

(k)                        Finance Documentation not to trigger any mandatory
prepayment under documents governing existing indebtedness, save as specifically
contemplated by the Finance Documentation;

 

 

 

 

 

 

 

(l)                           basis of preparation of latest accounts, that the
latest accounts give a true and fair view and reasonableness of projections
contained in the

 

 

12

--------------------------------------------------------------------------------

 

 

 

agreed base case model;

 

 

 

 

 

 

 

(m)                     no material adverse tax liability;

 

 

 

 

 

 

 

(n)                       ownership of or right to use assets;

 

 

 

 

 

 

 

(o)                       ownership of or right to use all intellectual property
rights;

 

 

 

 

 

 

 

(p)                       no material litigation;

 

 

 

 

 

 

 

(q)                       adequate insurances in respect of each member of UK
Group;

 

 

 

 

 

 

 

(r)                          centre of main interests;

 

 

 

 

 

 

 

(s)                        no outstanding indebtedness or encumbrances, save as
permitted (to include agreed list of permitted indebtedness and encumbrances);

 

 

 

 

 

 

 

(t)                          compliance with applicable pensions laws;

 

 

 

 

 

 

 

(u)                       no purchase or carrying of Regulation U margin stock
and no violation of Regulations T, U or X;

 

 

 

 

 

 

 

(v)                       all material terms and conditions of the Merger and
the Virgin Mobile Acquisition are set out in the Merger Agreement or the
Baseball Scheme Documents (as applicable) and in respect of which there have
been no amendments, variations or waivers;

 

 

 

 

 

 

 

(w)                     compliance with environmental law and necessary
environmental approvals; and

 

 

 

 

 

 

 

(x)                         at least pari passu ranking with senior unsecured
obligations.

 

 

 

 

 

Non-Financial Undertakings:

 

Usual for transactions of this nature to be given by each Obligor and in
relation to each member of the UK Group (unless otherwise agreed) and summarised
as follows:

 

 

 

 

 

 

 

(a)                        NTLIH to deliver:

 

 

 

 

 

 

 

(i)                           annual audited consolidated financial statements
of the Ultimate Parent and its subsidiaries or as agreed otherwise by the
Mandated Lead Arrangers together with pro forma financial statements for the UK
Group which have been extracted therefrom;

 

 

 

(ii)                        quarterly unaudited consolidated financial
statements of the Ultimate Parent and its subsidiaries together with commentary
consistent with MD&A disclosure and together with pro forma financial statements
for the UK Group which have been extracted therefrom;

 

 

 

 

 

 

 

(iii)                     to the extent required by any Lender to enable it to
comply with any law or any requirement of any central bank or other fiscal,
monetary or other authority, each Borrower’s most recent annual financial
statements; and

 

 

 

 

 

 

 

(iv)                    no later than 30 days after the beginning of each
financial year, the annual budget for the UK Group for that year (in a form to
be agreed),

 

 

 

 

 

 

 

in the case of (i) and (ii) accompanied by compliance certificates and
comparisons to the financial projections and budget to which the statements
relate and within agreed time periods.

 

 

 

 

 

 

 

(b)                       All financial reporting to be on the basis of agreed
accounting principles, consistently applied.

 

 

 

 

 

 

 

(c)                        Subject to (i) the security granted in respect of any
Alternative Baseball

 

 

13

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Financing, and (ii) a general basket of £300 million (of which up to £250
million may be secured over assets which are not subject to any security in
favour of the Security Agent) and other exceptions to be agreed, it will not
create or permit to subsist any encumbrance on its business, assets or
undertaking other than those arising under the Financing Documentation or
specifically permitted in the Financing Documentation to be agreed.

 

 

 

 

 

 

 

(d)        Subject to (i) the provisions under the section ”Permitted
Acquisition” below, (ii) a general basket of £300 million, (iii) other
acquisitions funded from the proceeds of new equity issued by the Ultimate
Parent and contributed into the UK Group, subject to customary conditions and
(iv) other exceptions to be agreed, it will not merge with or acquire any
businesses, assets, shares or investments.

 

 

 

 

 

 

 

(e)                        Subject to (i) a general basket of £75 million and
(ii) other exceptions to be agreed, it will not make any loans except
intra-group loans (where both the group creditor and the group debtor are
Obligors or where the lender is a non-Obligor and the loan is subordinated), the
extension of trade credit on normal commercial terms or loans given as part of a
cash pooling or set-off arrangement or other cash management arrangement.

 

 

 

 

 

 

 

(f)                          Subject to (i) the provisions under the
section ”Permitted Acquisition”, (ii) a general basket of £300 million (less any
portion of the general basket utilised under sub-paragraph (h) below) and
(iii) other exceptions to be agreed, it will not incur or permit to remain
outstanding loans or other financial indebtedness or guarantee third parties’
liabilities for financial indebtedness except for certain exceptions to be
agreed including without limitation the existing senior unsecured high yield
notes of the Parent and the guarantee thereof (the “Existing Notes”), the Bridge
Facility and any permitted refinancing thereof or as otherwise provided under
the Holdco Debt referred to below.

 

 

 

 

 

 

 

(g)                       Subject to (i) an annual general basket of 12.5% of UK
Group consolidated revenues, (ii) an annual basket of 3.75% of UK Group
consolidated revenues for outsourcing and (iii) other exceptions to be agreed,
it will not sell, transfer, lease, or otherwise dispose of any of its assets
without the consent of the Instructing Group.

 

 

 

 

 

 

 

(h)                       Subject to a general basket of £150 million and any
existing finance leasing arrangements, no finance leasing/hire purchase or
similar arrangements.

 

 

 

 

 

 

 

(i)                           It will not make any substantial change in the
general nature of its business.

 

 

 

 

 

 

 

(j)                           It will not redeem, repurchase, defease, retire or
repay any of its share capital unless held by an Obligor and subject to other
exceptions to be agreed.

 

 

 

 

 

 

 

(k)                        Restriction on declaration or payment of dividends or
fees or repayment of principal of, or payment of interest on, loans by any
member of the UK Group provided that (1) if no Event of Default has occurred or
is continuing, such payments shall be permitted to be made by members of the UK
Group at any time after 1 January 2006 for the purposes of facilitating the
payment of dividends by Telewest to its shareholders in

 

 

14

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an amount of up to £10 million per annum at any time plus, with effect from 1
January 2007, an additional amount per annum such that the aggregate dividend
payment made in any financial year shall not exceed the limits set out in the
table below, determined at the time the dividend is declared by reference to the
Leverage Ratio calculated on a pro forma basis after giving effect to such
payment as follows:

 

 

 

 

 

 

 

 

Leverage Ratio

 

Amount

 

 

 

 

 

 

 

 

 

Greater than 3.5 : 1 but less than or equal to 4.5 : 1

 

£

25 million

 

 

 

Greater than 3.0 : 1 but less than or equal to 3.5 : 1

 

£

50 million

 

 

 

Less than or equal to 3.0 : 1

 

No limit

 

 

 

 

and (2) subject to the Intercreditor Agreement, such payments shall be permitted
to service the Existing Notes, the Bridge Facility and any permitted refinancing
thereof and other agreed exceptions (including as specified under the Holdco
Debt referred to below). Carve-out to allow UK Group to service upstream
corporate expenses as follows:

 

 

 

 

 

 

 

 

Period

 

Amount

 

 

 

 

 

 

 

 

 

From the Merger Closing Date to the first anniversary of the Merger Closing Date

 

Up to £50m

 

 

 

From the first anniversary of Merger Closing Date to the second anniversary of
Merger Closing Date

 

Up to £50m

 

 

 

Thereafter in each anniversary year on a 12 month basis

 

Up to £35m

 

 

 

 

Dividends may also be made from the proceeds of any disposal of the Content
Business (subject to the provisions set out in the paragraph entitled “Content”
below) and from the proceeds of any disposal of the “NTL — Business Segment”
(subject to the provisions set out in the paragraph entitled “Permitted Joint
Venture” below)

 

 

 

 

 

 

 

(l)                           Subject to (i) the provisions under the
section ”Permitted Joint Venture” below, (ii) a general basket of 3.25% of
Consolidated UK Group Revenues (to be defined) and (iii) other exceptions to be
agreed, limitation on investments in/loans to joint ventures.

 

 

 

 

 

 

 

(m)                     All material transactions entered into between Obligors
on the one hand and other members of the Group on the other will be on arms’
length terms, save for transactions with other Obligors and other agreed
exceptions.

 

 

 

 

 

 

 

(n)                       It will not agree to any amendments to documents
relating to the subordination and/or intercreditor terms in the Bridge Facility
(or in any documentation relating to any permitted refinancing thereof) or the
Existing Notes unless permitted in the Intercreditor Agreement.

 

 

 

 

 

 

 

(o)                       It will not agree to any amendments to the
constitutional documents of a member of the UK Group whose shares are secured in
favour of the Lenders and which would have a material adverse effect on the

 

 

15

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Lenders’ interests under the relevant security.

 

 

 

 

 

 

 

(p)                       Pension schemes operated by members of the UK Group
will be funded in all material respects based on reasonable actuarial
assumptions and will be maintained and operated in all respects in conformity
with the requirements of applicable law save to the extent that a failure to
fund could not be reasonably expected to have a material adverse effect.

 

 

 

 

 

 

 

(q)                       It will not enter into hedging or treasury
transactions other than in accordance with the agreed hedging strategy set out
below or non-speculative transactions entered in the ordinary course of business
to hedge actual or anticipated exposures.

 

 

 

 

 

 

 

(r)                          It will obtain and comply with all environmental
law/licences and rectify material breaches of environmental law save to the
extent that a failure to so obtain, comply or rectify, as the case may be, could
not be reasonably expected to have a material adverse effect.

 

 

 

 

 

 

 

(s)                        Its obligations under the Senior Facilities will rank
at least pari passu with its other unsecured unsubordinated obligations.

 

 

 

 

 

 

 

(t)                          It will comply with all laws and maintain all
necessary licences, authorisations, and consents save where failure to comply
could not reasonably be expected to have a material adverse effect.

 

 

 

 

 

 

 

(u)                       It will maintain and protect all material intellectual
property rights save where failure to maintain or protect could not reasonably
be expected to have a material adverse effect.

 

 

 

 

 

 

 

(v)                       Following any event of default, it will provide access
and assistance to the Agent and its professional advisors.

 

 

 

(w)                     It will assist the Mandated Lead Arrangers with the
preparation of a syndication information memorandum and assist generally with
syndication including management presentations.

 

 

 

 

 

 

 

(x)                         It will not make any amendments, variations or
waivers of provisions of the Bridge Facility, the Notes, the Acquisition
Documents and the constitutional documents of any member of the Group.

 

 

 

 

 

 

 

(y)                       Holding company and similar restrictions in relation
to each of the UK Holdcos.

 

 

 

 

 

 

 

(z)                         It will implement each of the steps required for
consummation of the Merger and/or the Virgin Mobile Acquisition (as applicable)
and reorganization of the Group in accordance with the Steps Paper and within
timeframes described paragraph 13 of in the Commitment Letter.

 

 

 

 

 

Adjustments to Covenants:

 

It is acknowledged that the threshold and basket levels contained herein do not
reflect the addition of the Virgin Mobile Group to the UK Group and accordingly
any threshold and basket levels that relate to the relative size of the group
will be negotiated in good faith between the Company and the Initial MLAs to
reflect the enlarged group following consummation of the Virgin Mobile
Acquisition (except to the extent that the Virgin Mobile Acquisition is funded
by the Stand Alone Baseball Financing).

 

 

 

 

 

BASEBALL SCHEME UNDERTAKINGS:

 

OTHER THAN WITH THE CONSENT OF THE MAJORITY BASEBALL LENDERS (AS DEFINED BELOW),
ACTING REASONABLY (WHICH CONSENT SHALL BE DEEMED TO HAVE BEEN GIVEN IF

 

 

16

--------------------------------------------------------------------------------

 

 

 

not given or refused within 48 hours of request) the Baseball Bidcos shall
comply with each of the following covenants:

 

 

 

 

 

 

 

(a)                        the Baseball Scheme Circular shall be on
substantially the terms set out in the Baseball Press Release, other than with
respect to any amendments which could not reasonably be expected to be
materially prejudicial to the interests of the Lenders;

 

 

 

 

 

 

 

(b)                       no amendments shall be made to the form of the
implementation agreement prior to the date of the Senior Facilities Agreement,
other than with respect to any amendments which could not reasonably be expected
to be materially prejudicial to the interests of the Lenders;

 

 

 

 

 

 

 

(c)                        the Baseball Scheme Circular shall be posted within
28 days of issuance of the Baseball Press Release, or if later, as soon as
practicable after the date on which the Court convenes a meeting of the
shareholders of Virgin Mobile to consider the Baseball Scheme;

 

 

 

 

 

 

 

(d)                       compliance with all applicable laws and regulations
(including, without limitation, the Companies Act 1985, the Financial Services
and Markets Act 2000, the Takeover Code (subject to any applicable waivers by
the Takeover Panel) and the Listing Rules of the Financial Services Authority
(as applicable);

 

 

 

 

 

 

 

(e)                        keeping the Agent informed of the material
developments of the Baseball Scheme and the Virgin Mobile Acquisition and
notifying the Agent of any circumstances which may lead to withdrawal of the
Baseball Scheme or the Virgin Mobile Acquisition;

 

 

 

 

 

 

 

(f)                          supplying the Agent with any material updated
financial information on the Virgin Mobile Group, and such other information
relevant to the Baseball Scheme and the Virgin Mobile Acquisition as the Agent
may reasonably request (including without limitation, copies of any press or
public announcements and any material documents or statements issued by the
Takeover Panel or any regulatory authority in connection with the Baseball
Scheme or the Virgin Mobile Acquisition);

 

 

 

 

 

 

 

(g)                       not to increase the cash price per share under the
cash only option at which the Virgin Mobile Acquisition is being made;

 

 

 

 

 

 

 

(h)                       not to waive or amend any condition to the Baseball
Scheme as set out in the Scheme Documents, except in any case where such
amendment or waiver:

 

 

 

 

 

 

 

(i)                            could not reasonably be expected to be materially
prejudicial to the interests of the Lenders; or

 

 

 

 

 

 

 

(ii)                         is required by the Takeover Panel, the City Code,
the rules or requirements of any stock exchange with jurisdiction over Baseball
Cash Bidco or any other applicable law or regulation;

 

 

 

 

 

 

 

(i)                           not making any public statements relating to the
financing of the Virgin Mobile Acquisition unless required to do so by the City
Code or Takeover Panel, any applicable stock exchange or any applicable
governmental or other regulatory authority;

 

 

 

 

 

 

 

(j)                           ensuring that neither of the Baseball Bidcos, nor
(using all reasonable

 

 

17

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ENDEAVOURS) ANY PERSON ACTING IN CONCERT (AS DEFINED IN TAKEOVER CODE) WITH
THEM, SHALL BE OBLIGED TO MAKE AN OFFER TO SHAREHOLDERS OF VIRGIN MOBILE UNDER
RULE 9 OF THE TAKEOVER CODE;

 

 

 

 

 

 

 

(K)        PROCURING THAT AS SOON AS REASONABLY POSSIBLE AFTER THE EFFECTIVE
DATE, VIRGIN MOBILE IS DELISTED AND RE-REGISTERED AS A PRIVATE COMPANY; AND

 

 

 

 

 

 

 

(L)         PROCURING THE DELIVERY OF GUARANTEES AND SECURITY FROM VIRGIN MOBILE
AND MEMBERS OF THE VIRGIN MOBILE GROUP (TOGETHER WITH COMPLIANCE WITH THE
WHITEWASH PROCEDURE), CONSISTENT WITH THE REQUIREMENTS SET OUT IN THE
SECTION ENTITLED “GUARANTORS” ABOVE, AS SOON AS PRACTICABLE FOLLOWING THE VIRGIN
MOBILE ACQUISITION CLOSING DATE, AND IN ANY EVENT, BY NO LATER THAN 90 DAYS
FOLLOWING THE VIRGIN MOBILE ACQUISITION CLOSING DATE .

 

 

 

 

 

 

 

For these purposes “Majority Baseball Lenders” means those Lenders who together
represent not less than 662/3 % of the aggregate commitments under Tranches A1
and B1.

 

 

 

 

 

Certain Funds Protection:

 

None of the Lenders, the Agent and the Security Agent shall:

 

 

 

 

 

 

 

(i)                           have the right to prevent or limit the making of
any drawdown under Tranche A1 or Tranche B1 whether by cancellation, rescission
or termination of Tranche A1 and/or Tranche B1 or otherwise (including by
invoking any conditions precedent other than the Initial Baseball Conditions
Precedent);

 

 

 

 

 

 

 

(ii)                        make or enforce any claims that it may have under
the Financing Documentation if the effect of such claim or enforcement would
prevent or limit the making of any drawdown under Tranche A1 or Tranche B1
during the Baseball Certain Funds Period;

 

 

 

 

 

 

 

(iii)                     exercise any right of set-off, counterclaim or similar
right or remedy if to do so would prevent or limit the making of any drawdown
under Tranche A1 or Tranche B1 during the Baseball Certain Funds Period; or

 

 

 

 

 

 

 

(iv)                    cancel or declare either Tranche A1 or Tranche B1 due
and payable or payable on demand, in either case during the Baseball Certain
Funds Period,

 

 

 

 

 

 

 

in each case, unless any of the exceptions (i), (ii) or (iii) in the
section entitled “Baseball Certain Funds” has occurred and is continuing.

 

 

18

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Events of Default:

 

Usual for facilities of this nature and subject to the principles specified in
“General Provisions” below and to such additional customary grace periods and
additional exceptions as may be agreed, the events of default shall be as
follows:

 

 

 

 

 

 

 

(a)                        non-payment (1 business day grace period for
principal payments not paid as a result of technical/administrative delay, 3
business day grace period for interest payments, 5 business day grace period for
amounts other than principal or interest);

 

 

 

 

 

 

 

(b)                       cross default in respect of Financial Indebtedness of
any member of the Group (subject to a threshold of £35 million);

 

 

 

 

 

 

 

(c)                        material adverse change in (i) the business, assets,
or financial condition of the Obligors (as a whole); or (ii) any Obligor’s
ability to perform its payment or other material obligations under the Finance
Documentation (taking into account any resources which are available to it from
any other member of the Group);

 

 

 

 

 

 

 

(d)                       insolvency and related matters with respect to
Telewest, each UK Holdco and any Obligor that is a Material Subsidiary;

 

(e)                        breach of other obligations, subject to a cure period
where appropriate;

 

(f)                          material misrepresentation, subject to a cure
period where appropriate;

                                               

 

 

 

 

 

 

(g)                       breach of Intercreditor Agreement by a member of the
Group;

 

(h)                       any Borrower is not or ceases to be a direct wholly
owned subsidiary of New UK Ltd or an indirect wholly owned subsidiary of
Telewest;

 

(i)                           invalidity or illegality of any Financing
Documentation;

 

 

 

 

 

 

 

(j)         revocation of licence or regulatory authorisation to the extent it
is required, without replacement of the same which would have a material adverse
effect; and

 

(k)        litigation which is reasonably likely to be adversely determined and
which if adversely determined would have a material adverse effect.

 

 

 

 

 

Hedging:

 

The Borrowers shall be required to implement the following hedging in respect of
the Debt Financing:

 

(a)                        interest rate hedging (or debt that is fixed rate,
for which purposes, outstanding advances under the Bridge Facility shall be
deemed to constitute fixed rate debt prior to the issuance of exchange notes
thereunder or the issuance of Notes pursuant to the Engagement Letter) in
respect of not less than 66 2/3% of the aggregate principal amount of the Senior
Facilities and the Bridge Facility (or the Notes issued pursuant to the
Engagement Letter, provided that for this purpose, the principal amount of any
fixed rate Notes shall be included in the calculation of such minimum hedging
requirement) and the Existing Notes which are fixed rate, for a period of not
less than 3 years from the Merger Closing Date;

 

(b)                       currency rate hedging in respect of 100% of the
principal amount of the Senior Facilities which are denominated in Euro or US
Dollars (if applicable), for a period of not less than 3 years from the Merger

 

 

19

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Closing Date;

 

(c)                        currency rate hedging in respect of 100% of the
interest portion applicable to the principal amount of the Senior Facilities
which are denominated in Euro or US Dollars (if applicable), for a period of not
less than 3 years from the Merger Closing Date; and 

 

(d)                       currency rate hedging in respect of 100% of the coupon
payable on the Notes issued pursuant to the Engagement Letter and under the
Existing Notes, for a period up the applicable first call date in respect of
such notes.

 

The foregoing hedging arrangements shall be required to be implemented within 6
months of the Merger Closing Date other than:

 

(1)                        in the case of hedging required under paragraph
(a) above, those hedging arrangements relating to Tranche A1 and Tranche B1,
which shall be required to be implemented within 6 months of the Virgin Mobile
Acquisition Closing Date; and

 

(2)                        in the case of hedging required under paragraph
(d) above, those hedging arrangements relating to the Notes to be issued
pursuant to the Engagement Letter, which shall be required to be implemented
within 6 months of the date of issuance of such Notes.

 

The Senior Facilities will provide that all obligations in respect of hedging
the interest or currency risk on the loans as well as hedging currency risk
associated with the Notes shall be secured pari passu with the Senior
Facilities.

 

 

 

 

 

Security:

 

To the extent legally possible and provided no material adverse tax consequences
arise as a result thereof (the Obligors to take all reasonable steps to overcome
any prohibition or adverse tax consequence) first ranking security over:

 

(a)                        The shares of each UK Holdco;

 

(b)                       The shares of each member of the UK Group with agreed
exceptions (including no security from companies which do not have to be
guarantors under the 80% Consolidated Operating Cashflow test);

 

(c)                        All or substantially all of the assets of each member
of the UK Group (present and future) with agreed exceptions (including no
security from companies which do not have to be guarantors under the 80%
Consolidated Operating Cashflow test); and

 

(d)                       Intercompany loans lent into any member of the UK
Group, subject to flexibility to allow Permitted Restructurings (to be defined).

 

Assignment/ transferability:

 

The Lenders may assign or transfer their rights provided that any such
assignment or transfer does not result in a participation of more than zero but
less than £5 million (or its equivalent in $or €) save that an assignment or
transfer may be made to or by a trust, fund or other non-bank entity which
participates in the institutional market which would result in such entity
holding

 

 

20

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an aggregate participation of at least £1 million (or $1 million or €1 million),
provided further that:

 

 

 

 

 

 

 

(a)                        prior consultation of NTLIH is sought for any
transfer prior to the achievement of a Successful Syndication;

 

 

 

 

 

 

 

(b)                       prior consent of NTLIH is received after the
achievement of a Successful Syndication (other than in respect of an assignment
by a lender to its affiliate which is a qualifying lender or, in respect of an
assignment or transfer to any third party at any time after the occurrence of a
Major Event of Default (to be defined) which is continuing), such consent not to
be unreasonably withheld and to be deemed to have been given if not declined in
writing within 10 Business Days of a written request by any Lender to NTLIH; and

 

 

 

 

 

 

 

(c)                        if the transferee is a non-UK bank lender, it must
provide NTLIH with evidence of the same.

 

 

 

 

 

 

 

With respect to matters requiring unanimous consent, where Lenders representing
no less than a percentage to be agreed of the outstanding amount consent to such
matter, NTLIH may request that any dissenting Lender assigns or transfers its
rights under the Senior Facilities Agreement (other than any rights and
obligations it may have in its capacity as a Hedge Counterparty) at par to an
assignee or transferee as specified by NTLIH.

 

 

 

 

 

Amendments:

 

The terms of the Senior Finance Documents shall be amended as shall be
reasonably necessary to take account of any Alternative Baseball Financing
having been put in place.

 

 

 

 

 

Costs and Expenses:

 

All reasonable third party professional fees (including legal fees and any value
added tax thereon) and out-of-pocket expenses incurred in the negotiation,
preparation, printing, execution and perfection of all related documentation and
in syndication by the Mandated Lead Arrangers and the Agent at any time in
relation to the Senior Facilities will be for the account of NTLIH.

 

 

 

 

 

General Provisions:

 

The detailed provisions relating to the sections above headed “Prepayments”,
“Finance Documentation”, “Financial Undertakings”, “Representations and
Warranties”, “Non-Financial Undertakings”, “Events of Default” and “Security”
and where otherwise expressly stated (including but not limited to baskets,
carve-outs, exceptions, thresholds and testing levels and covenant levels),
unless equivalent terms are expressly stated therein, shall not be any less
favourable to NTLIH than the equivalent provisions in the Existing Facilities
taking into account the consolidation of the NTL Group and the Telewest Group as
a result of the Merger.

 

 

 

 

 

Provisional Funding:

 

Notwithstanding anything in the Commitment Documents, Telewest (or a newly
incorporated wholly-owned subsidiary of Telewest) shall be permitted to incur
indebtedness in an amount not to exceed the equity value of the Telewest Group.
The proceeds from such indebtedness will be contributed to subsidiaries of
Telewest to enable the purchase of the historical Telewest business by NTL
legacy subsidiaries as part of an internal reorganisation of subsidiaries of
Telewest in accordance with the Steps Paper. Such indebtedness will be repaid on
the same day of borrowing.

 

 

 

 

 

Content:

 

Notwithstanding anything herein to the contrary, the UK Group shall have the
ability to sell all or part of its Content business and contribute or otherwise
create and participate in a joint venture with respect to Content, provided that

 

 

21

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the Borrowers will continue to be in compliance with the financial covenants in
the Senior Facilities Agreement, giving pro-forma effect to such transaction.
Definitive documentation is to reflect consideration for the interplay between
the treatment of Content and other covenants and provisions in the Senior
Facilities Agreement.

 

The cash proceeds of any disposal of the Content business shall be applied as
follows:

 

(a)                        the first £200 million shall be retained by the UK
Group and, provided that no Event of Default has occurred or would arise as a
result of such payment, may be applied towards the making of dividends or
distributions outside of the UK Group; and

 

(b)                       a percentage of the remainder shall be applied in
mandatory prepayment of the Senior Facilities, such percentage being determined
in accordance with the Leverage Ratio as at the time of such disposal, in
accordance with the following table:

 

 

 

 

 

 

 

Leverage Ratio

 

Percentage

 

 

 

Greater than 4.0:1

 

50

%

 

 

Greater than 3.0:1 but less than or equal to 4.0:1

 

25

%

 

 

Less than or equal to 3.0 : 1

 

0

%

 

 

 

 

 

 

 

(c)        any cash proceeds which are not distributed in accordance with
(a) above or required to be applied in accordance with (b) above, to be retained
within the UK Group and applied towards the Group business.

 

 

 

 

 

Permitted Joint Venture:

 

The UK Group may enter into a joint venture or partnership in relation to the
“NTL – Business Segment” subject to the consent of the Majority Lenders having
been obtained.

 

The cash proceeds of any disposal of the “NTL – Business Segment” shall be
applied as follows:

 

(a)                        subject to the Leverage Ratio at the time of disposal
being less than 4.0:1, the first £200 million may be retained by the UK Group
and, provided that no Event of Default has occurred or would arise as a result
of such payment, may be applied towards the making of dividends or distributions
outside of the UK Group; and

 

(b)                       the remainder shall be retained within the UK Group
and applied towards the Group business.

 

 

 

 

 

Permitted Acquisition:

 

Any member of the UK Group shall be permitted to acquire not less than 71% of
the total issued share capital of Virgin Mobile (the “Permitted Acquisition”)
provided that (a) the UK Group will continue to be in compliance with the
financial covenants set out in the Senior Facilities Agreement after giving
pro-forma effect to such acquisition and (b) the total cash payment for such
acquisition (including the assumption of debt) does not exceed £500 million. 

 

Notwithstanding anything herein to the contrary, any member of the Virgin Mobile
Group shall be entitled at its option to incur indebtedness (“Stand Alone
Baseball Financing”) pursuant to a separate “ring fenced” financing in

 

 

22

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lieu of utilising Tranches A1 and B1 or for the purposes of refinancing in full
any amounts drawn under the Debt Financing which was used by Baseball Cash Bidco
to complete the Virgin Mobile Acquisition (including without limitation, any
prepayment penalties, make-whole payments, accrued interest and break costs
relating thereto) (collectively, the “Total Baseball Debt”), provided that:

 

(a)                        the aggregate amount of such indebtedness does not
exceed £500 million;

 

(b)                       the proceeds of such financing are applied towards the
purposes specified in paragraph (c) under the section headed “Purpose” above or
towards refinancing the Total Baseball Debt;

 

(c)                        the annual interest expense of such financing is no
greater than the interest expense under the Total Baseball Debt (or an
equivalent principal amount thereof) which is prepaid using the proceeds thereof
or which is subsequently cancelled as a result thereof;

 

(d)                       the UK Group continues to be in compliance with the
covenants in the Senior Facilities Agreement;

 

(e)                        no creditor in respect of the Stand Alone Baseball
Financing shall have any recourse to any member of the UK Group;

 

(f)                          the Stand Alone Baseball Financing may benefit from
guarantees and first priority security over the assets of the Virgin Mobile
Group but not the UK Group;

 

(g)                       following consummation of the Stand Alone Baseball
Financing, any transactions between the UK Group and the Virgin Mobile Group
shall be on arms length terms; and

 

(h)                       the Stand Alone Baseball Financing must be completed
by 31 December 2006.

 

In the event that any member of the Virgin Mobile Group has granted any
guarantees and/or security for the Senior Facilities, such member(s) of the
Virgin Mobile Group shall be released from any such guarantees and/or security.

 

 

 

 

 

Alternative Baseball Financing

 

In the event that the commitments of the Lenders to fund Tranche A1 and Tranche
B1 are terminated and cancelled pursuant to paragraph 18(d) of the Commitment
Letter, at NTLIH’s option, it or the Baseball Bidcos shall be permitted to
introduce by way of one or more new tranches under the Senior Facilities
Agreement or to raise by way of Guaranteed Parent Debt, an amount of up to £500
million (the “Alternative Baseball Financing”) for the purposes of financing the
Permitted Acquisition, provided that the Initial MLAs shall have been given a
right of first refusal in relation to any such Alternative Baseball Financing.
The Senior Facilities Agreement shall be amended and restated to give effect to
any such changes.

 

 

 

 

 

Holdco Debt:

 

The incurrence of Financial Indebtedness by the Ultimate Parent or any of its
subsidiaries (other than a member of the UK Group) (the “Bank Holdcos”) shall be
prohibited unless the Ultimate Parent is able to demonstrate by reference to the
most recently delivered quarterly information of the Group that the Leverage
Ratio (adjusted to take into account the Financial Indebtedness in question and
any other Financial Indebtedness raised by the Bank Holdcos or

 

 

23

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any member of the UK Group since the date of such quarterly information) is not
more than 4.25 : 1 for the period of four consecutive financial quarters ending
on the last day of the financial quarter in respect of which such quarterly
information was delivered (such Financial Indebtedness so incurred, “Holdco
Debt”). There shall be no mandatory prepayment obligation in respect of the
proceeds of any Holdco Debt. Except as provided below, there shall be no
requirement that proceeds of any Holdco Debt be contributed to the UK Group.

 

Members of the UK Group may guarantee any Holdco Debt provided that (i) the
proceeds of the relevant Holdco Debt have been contributed to the UK Group by
way of equity or subordinated funding and (ii) the relevant Holdco Debt is
guaranteed on a subordinated, unsecured basis and subject to the same
intercreditor arrangements (including as to release of such guarantees) as under
the Existing Notes (any Holdco Debt so guaranteed, “Guaranteed Parent Debt”).

 

So long as no Event of Default has occurred and is continuing, the UK Group
shall be entitled to pay dividends or fees or repay principal of, or pay
interest on, loans or make loans to the Bank Holdcos to service the Guaranteed
Parent Debt.

 

Any Guaranteed Parent Debt shall be treated as part of the UK Group debt for the
purposes of the financial covenants referred to above.

 

 

 

 

 

Governing Law/ Jurisdiction:

 

English law and the Courts of England.

 

 

 

 

 

Taxes:

 

All payments by the Obligors will be made free and clear of all taxes or other
deductions or withholdings save to the extent required by law. Standard gross-up
provisions to apply (to include no gross-up in respect of treaty lenders which
have not complied with all procedural formalities to allow them to be paid
without withholding).

 

 

 

 

 

Set-off:

 

Payments by the Obligors will be made free from set-off or counterclaim.

 

 

 

 

 

Counsel to the Mandated Lead Arrangers:

 

White & Case LLP

 

 

24

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ANNEX 1 TO APPENDIX A-3

 

Financial Covenants

 

 

Testing Date

 

Leverage Ratio

 

Interest Coverage
Ratio

 

Debt Service Cover
Ratio

 

31 December 2006

 

5.45 : 1

 

2.30 : 1

 

1 : 1

 

31 March 2007

 

5.25 : 1

 

2.35 : 1

 

1 : 1

 

30 June 2007

 

5.00 : 1

 

2.50 : 1

 

1 : 1

 

30 September 2007

 

4.70 : 1

 

2.65 : 1

 

1 : 1

 

31 December 2007

 

4.50 : 1

 

2.80 : 1

 

1 : 1

 

31 March 2008

 

4.00 : 1

 

3.00 : 1

 

1 : 1

 

30 June 2008

 

4.00 : 1

 

3.00 : 1

 

1 : 1

 

30 September 2008

 

3.70 : 1

 

3.30 : 1

 

1 : 1

 

31 December 2008

 

3.70 : 1

 

3.30 : 1

 

1 : 1

 

31 March 2009

 

3.40 : 1

 

3.60 : 1

 

1 : 1

 

30 June 2009

 

3.40 : 1

 

3.60 : 1

 

1 : 1

 

30 September 2009

 

3.00 : 1

 

4.00 : 1

 

1 : 1

 

31 December 2009

 

3.00 : 1

 

4.00 : 1

 

1 : 1

 

31 March 2010

 

2.75 : 1

 

4.25 : 1

 

1 : 1

 

30 June 2010

 

2.75 : 1

 

4.25 : 1

 

1 : 1

 

30 September 2010

 

2.50 : 1

 

4.50 :1

 

1 : 1

 

31 December 2010

 

2.50 : 1

 

4.50 :1

 

1 : 1

 

31 March 2011

 

2.25 : 1

 

4.50 :1

 

1 : 1

 

30 June 2011

 

2.25 : 1

 

4.50 :1

 

1 : 1

 

30 September 2011

 

2.00 : 1

 

4.50 :1

 

1 : 1

 

31 December 2011

 

2.00 : 1

 

4.50 :1

 

1 : 1

 

 

25

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APPENDIX A-4

 

TRANCHE B - SUMMARY OF PRINCIPAL TERMS & CONDITIONS(1)

 

Borrower:

 

If the Structuring Notice is provided after the Merger Closing Date, NTLIH and
the US Borrower. If the Structuring Notice is provided prior to the Merger
Closing Date, Tranche B will be initially borrowed by Merger Sub and immediately
refinanced with a second identical drawing of Tranche B by the Borrowers
(including the US Borrower). Borrowings by the US Borrower shall be limited to
20% of the aggregate principal amount drawn under the Senior Facilities.

 

 

 

 

 

Guarantors:

 

As for the Senior Facilities described in Appendix A-3. However, NTLIH shall
only be obliged to use its best endeavours to procure, within 90 days from the
Merger Closing Date or completion of the steps set out in the Steps Paper,
culminating in the structure set out on the page ”Second Alternative (Structure
2) – Final Structure”, whichever is later,  the delivery of guarantees and
security in respect of Tranche B from members of the Telewest Group providing
guarantees and security under the Senior Facilities (including for the avoidance
of doubt, any Material Subsidiary) to the extent such guarantees and/or security
can be lawfully given.

 

 

 

 

 

Facility:

 

As for the Senior Facilities detailed in Appendix A-3 (provided that Tranche B1
may be denominated in £, $ and €) and £1,200,000,000 6½ year bullet repayment
Senior Term Loan B Facility (“Tranche B”) to be denominated in £, $ and €.

 

 

 

 

 

Purpose:

 

As for the Senior Facilities described in Appendix A-3.

 

 

 

 

 

Availability and Drawdown:

 

As for Tranche A, provided that, where the Structuring Date occurs after
Closing, Tranche B to be drawn within 4 business days of receipt by the Mandated
Lead Arrangers of the Structure Notice.

 

 

 

 

 

Repayment:

 

Repayment in one amount on its final maturity date.

 

 

 

 

 

Interest Margin:

 

Tranche A/ RCF                                 1.875% per annum from the Merger
Closing Date for a period of three months, subject to the margin ratchet below.

 

 

 

 

 

 

 

Tranche A1                                                         1.875% per
annum from the date of first drawdown under Tranche A1 for a period of 3 months
and thereafter, subject to the margin ratchet below.

 

 

 

 

 

 

 

Tranche B and B1                         2.25% per annum

 

 

 

 

 

Margin Ratchet:

 

Tranches A and A1 and the RCF shall be subject to the following margin ratchet
based upon the Leverage Ratio: 

 

 

 

 

Leverage Ratio

 

Margin

 

 

 

Less than

3.00 : 1

 

 

1.250

%

 

 

Greater than or equal to

3.00 : 1

but less than 3.40 : 1

 

1.375

%

 

--------------------------------------------------------------------------------

(1)                                  Terms are as for the Senior Facilities as
set out in Appendix A-3 to the Commitment Letter except as otherwise specified.

26

--------------------------------------------------------------------------------

 

 

 

Greater than or equal to

3.40 : 1

but less than 3.80 : 1

 

1.500

%

 

 

Greater than or equal to

3.80 : 1

but less than 4.20 : 1

 

1.625

%

 

 

Greater than or equal to

4.20 : 1

but less than 4.50 : 1

 

1.750

%

 

 

Greater than or equal to

4.50 : 1

but less than 4.80 : 1

 

1.875

%

 

 

Greater than or equal to

4.80 : 1

but less than 5.00 : 1

 

2.125

%

 

 

Greater than or equal to

5.00 : 1

 

 

2.250

%

 

 

 

There will be no time period restrictions (other than the first quarter after
Closing) for adjustments in the Margin Ratchet and no limitations on the number
of step-downs in the Margin Ratchet that can apply in any quarter.

 

 

 

 

 

 

 

Upon an Event of Default which is continuing, the Interest Margin for each of
the RCF, Tranche A and Tranche A1 shall immediately revert to 2.25% per annum
until such time as the Event of Default has been remedied or waived.

 

 

 

 

 

Voluntary Prepayment:

 

Voluntary prepayments of Tranche B will be permitted in whole or in part on
terms customary in transactions of this nature, subject to a 1.00% prepayment
premium during the first 18 months from the Merger Closing Date (or the
Structuring Date, whichever is later). Tranche B Lenders shall have the option
during such period to decline prepayment in which case those proceeds shall
prepay the Lenders under Tranches A and A1 and any non-declining Lenders under
Tranche B or Tranche B1 (pro rata). Thereafter prepayments made without premium
or penalty and applied pro rata across Tranches A, A1, B and B1.

 

 

 

 

 

Mandatory Prepayments:

 

Application of prepayments against Tranches A, A1, B and B1 (pro rata), then
RCF. Tranche B Lenders have the option to decline prepayment during the first 18
months from the Merger Closing Date (or the Structuring Date, whichever is
later) in which case those proceeds shall prepay the Lenders under Tranches A
and A1 and any non-declining Lenders under Tranche B or Tranche B1 (pro rata).

 

 

 

 

 

Cancellation:

 

Any amount of Tranche B not drawn down on the Structuring Date shall
automatically be cancelled on that date.

 

 

 

 

 

Security:

 

As for the other Senior Facilities described in Appendix A-3.

 

 

 

 

 

 

 

Tranche B will rank pari passu with the other Senior Facilities in all respects.

 

 

27

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APPENDIX A-5

 

ALTERNATIVE STRUCTURE - SUMMARY OF PRINCIPAL TERMS & CONDITIONS(2)

 

The Borrower:

 

If the Structure Notice is given prior to the Merger Closing Date, the
Alternative Bridge Facility will be borrowed initially by Merger Sub and then
immediately repaid (on an intra-day basis) from the proceeds of a second drawing
in an identical amount under the Alternative Bridge Facility, by NTL Cable plc.
If the Structure Notice is given after the Merger Closing Date, the Alternative
Bridge Facility will be borrowed by NTL Cable plc. “Alternative Bridge Facility”
shall thereafter refer to the facility drawn by NTL Cable plc and “Borrower”
shall refer to NTL Cable plc.

 

 

 

 

 

Bridge Facility:

 

£600,000,000 (the “Alternative Bridge Facility”).

 

 

 

 

 

Purpose:

 

As the Senior Bridge Facility described in Appendix A-1 to the Commitment Letter
(the “Senior  Bridge Facility”).

 

 

 

 

 

Availability and Drawdown:

 

As for the Senior Bridge Facility, provided that, if the Merger Closing Date
shall have occurred, the Alternative Bridge Facility shall only be available
until the date falling 3 months after the Merger Closing Date and shall be drawn
within 4 business days of receipt by the Mandated Lead Arrangers of the
Structure Notice.

 

Conditions as for the Senior Bridge Facility, except that, if drawn after the
Merger Closing Date, subject to the additional condition that the Arrangers are
satisfied that once funded, the proceeds of the £600,000,000 drawn by NTL Cable
plc. under the Alternative Bridge Facility and the £1,200,000,000 drawn under
the Tranche B of the Senior Facilities, will be immediately used to repay (on an
intra-day basis)  the Initial Bridge Loans borrowed by Merger Sub.

 

 

 

 

 

Fees:

 

As in the Bridge Fees Letter referring to the Senior Bridge Facility.

 

 

 

 

 

Interest Margin:

 

As with the Senior Bridge Facility (including step-ups), except that the
starting margin shall be 500 basis points. To the extent that the Alternative
Bridge Facility is funded after the Merger Closing Date, the interest rate
applicable on the Bridge Loans under the Alternative Bridge Loans shall be the
rate that would have applied on the relevant date had the Alternative Bridge
Facility been drawn on the Merger Closing Date.

 

 

 

 

 

Caps:

 

As in the Senior Bridge Facility.

 

 

 

 

 

Collateral and Guarantees:

 

Subject to US tax limitations, guarantees as for the existing bonds issued by
NTL Cable plc. Security over the shares of NTL Inc., NTL (UK) Group, Inc. and
NTL Communications Limited. Subject to an intercreditor agreement, same security
as for Senior Facilities, on a second ranking basis (but not on the Exchange
Notes) to the extent legally permitted.

 

 

--------------------------------------------------------------------------------

(2)                                  Terms are as for the Senior Bridge Facility
except as otherwise specified.

 

28

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