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PRIVATE AND CONFIDENTIAL

Confidentiality Agreement

PRIVATE AND CONFIDENTIAL

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This Confidentiality Agreement involves

NTL INC

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Title: PRIVATE AND CONFIDENTIAL
Governing Law: New York     Date: 12/15/2005
Industry: Broadcasting and Cable TV     Sector: Services

PRIVATE AND CONFIDENTIAL

, Parties: ntl inc
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Exhibit 2.2

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

 

14 December 2005

Dear Sirs,

Project Vanilla - Commitment 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.

This Commitment Letter amends and replaces in its entirety the commitment letter made between each of the Initial MLAs, the Initial Underwriters and yourselves dated 2 October 2005 (the “ Original Commitment Letter ”).

We understand from our discussions with you that you intend to merge (the “ Acquisition ”) 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 Acquisition, the “ Telewest Group ”), pursuant to an amended and restated agreement and plan of merger to be made 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 Acquisition, the “ NTL Group ”), in the form attached hereto (the “ Merger Agreement ”). After giving effect to the Acquisition, 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 £5.1 billion (the “ Funding Requirement ”) to (i) effect the Acquisition, (ii) pay the related fees, costs and expenses in connection therewith, (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, and (v) 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 ”), we are willing to lead arrange and 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).

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 (as may be amended by the terms of Appendix A-5 of this Commitment Letter, the “ Bridge Facility ”) substantially on the terms and conditions set out in this Commitment Letter and Appendix A-1;

 

 

(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 £3.3 billion, substantially on the terms and conditions set out in this letter and Appendix A-3 (as may be amended by the terms of Appendix A-4 of this Commitment Letter, the “ Senior Facilities ” and, together with the Bridge Facility, the “ Debt Financing ”) .

 

 

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

 

 

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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 and the Telewest Group as a result of the 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).

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 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, you agree that until close of business on the day falling on the earlier of:

(a)

the achievement of Successful Syndication;

 

 

(b)

six months after Closing; and

 

 

(c)

the termination of your obligations under paragraph 18,

 

 

NTL Inc. will procure that no member of the Telewest Group and the NTL Group will, without our prior written consent, issue, arrange, syndicate, borrow or incur (or attempt or announce publicly an intention to issue, arrange, syndicate, borrow or incur) any indebtedness in the domestic or international loan, capital or financial markets (including, but not limited to, 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).

5.

Syndication

 

 

 

(a)

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

 

 

 

 

(i)      

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

 

 

 

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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).

 

 

 

 

(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;

 

 

 

 

(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, updating the information memorandum dated October 2005 (including, at your option, by way of delivery of the most recently prepared proxy statement) 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

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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 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.

 

 

(d)      

For the purposes of the Commitment Documents, “ Successful Syndication ” means the date on which the commitments of each of the Initial Underwriters has been reduced to a hold level of £350 million (or its equivalent) or less in aggregate principal amount across all tranches of the Senior Facilities and “ First Stage Syndication ” means the date on which the commitments of each of the Initial Underwriters has been reduced to a level of £450 million (or its equivalent) or less in aggregate principal amount across all tranches of the Senior Facilities.

 

 

(e)      

To the extent that Successful Syndication 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 in a manner consistent with the foregoing terms of this paragraph 5 until such time that Successful Syndication 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 the case of sub-paragraphs (ii) and (iii) above, as between the Initial MLAs and any Additional Underwriter for the purposes of First Stage Syndication or otherwise, in accordance with the terms of the syndication strategy to be agreed between the Mandated Lead Arrangers 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

 

 

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any payment or other compensation described in paragraph (a)(iii) above, prior to the date of this Commitment Letter (other than, with respect to sub-paragraphs (ii) and (iii) as between the Initial MLAs and any Additional Underwriter as part of the First Stage Syndication).

 

 

(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 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 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

 

 

 

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(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.

 

 

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)      

you will not negotiate with any other bank or financial institution any financing of the Acquisition 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 Mandated Lead Arrangers or the Underwriters as the lead 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.

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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, and to pay to the Mandated Lead 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.

 

 

(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 Acquisition 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-Acquisition 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 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 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 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 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).

 

 

 

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(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 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 Closing Date;

 

 

 

 

(ii)      

if NTL Inc. receives a negative IRS Ruling prior to the 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 1 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 Closing Date; or

 

 

 

 

(iii)      

if NTL Inc. receives neither a negative nor a positive IRS Ruling prior to the 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 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 10 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

 

 

 

 

 

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(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.

 

 

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 this Commitment Letter 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 this Commitment Letter.

 

 

 

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.

-10-


 

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.

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 14 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.

 

 

 

 

(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.

 

 

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.

 

 

20.

Amendments and Waivers

 

 

-11-


 

(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 14 December 2005 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).

-12-


 

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

 

/s/ JONATHAN BOWERS

 

/s/ DAVID WOOD

 

 


 

 


 

 

Name:

JONATHAN BOWERS

Name:

DAVID WOOD

 

Title:

Director

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
J.P. MORGAN PLC

 

 

 

 

 

 

 

 

 

/s/ PAUL DAVIS

 

 

 

 


 

 

 

 

Name:

PAUL DAVIS

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ KIERAN RYAN

 

 

 

 


 

 

 

 

Name:

KIERAN RYAN

 

 

 

Title:

Senior Director, Loan Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
GOLDMAN SACHS INTERNATIONAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ ALISON HOWE

 

 

 

 


 

 

 

 

Name:

ALISON HOWE

 

 

 

Title:

Executive Director

 

 

 

 

 

 

 

-13-


 

The Initial Underwriters

For and on behalf of
DEUTSCHE BANK AG, LONDON BRANCH

 

/s/ JONATHAN BOWERS

 

/s/ DAVID WOOD

 

 


 

 


 

 

Name:

JONATHAN BOWERS

Name:

DAVID WOOD

 

Title:

Director

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
J.P. MORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ PAUL DAVIS

 

 

 

 


 

 

 

 

Name:

PAUL DAVIS

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
THE ROYAL BANK OF SCOTLAND PLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ KIERAN RYAN

 

 

 

 


 

 

 

 

Name:

KIERAN RYAN

 

 

 

Title:

Senior Director, Loan Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

For and on behalf of
GOLDMAN SACHS CREDIT PARTNERS L.P.,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ ALISON HOWE

 

 

 

 


 

 

 

 

Name:

ALISON HOWE

 

 

 

Title:

Executive Director

 

 

 

 

-14-


 

We accept and agree the terms of the foregoing letter.

For and on behalf of

NTL INCORPORATED

 

 

 

 

 

/s/ JAMES F. MOONEY

 


 

Name:

JAMES F. MOONEY

Title:

Chairman

 

 

Date:

14 December 2005

 

 

For and on behalf of
NTL INVESTMENT HOLDINGS LIMITED

 

 

 

 

 

/s/ R.C. GALE

 


 

Name:

R.C. GALE

Title:

Director

 

 

Date:

14 December 2005

 

-15-


 

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.

 

 

-16-


 

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.

 

 

-17-


 

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 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 ] 1 .

 

 

3.      

[ Name of Institution ] agrees to underwrite (a) £[] of the Senior Facilities to be allocated on a pro rata basis across each of the Senior Facilities; [and (b) £[] of the Bridge Facility] 2 . 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 [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].

 

 

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.

 

 

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

 

 

 


 

1 Delete and complete as applicable.

 

2 Complete as applicable.


-18-


 

 

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 Underwriter 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 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.

-19-


 

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:

The Initial Underwriters

For and on behalf of
DEUTSCHE BANK AG, LONDON BRANCH

Name:

Name:

Title:

Title:


-20-


 

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:

Acknowledged and agreed:

For and on behalf of
NTL INCORPORATED

Name:

Title:

For and on behalf of
NTL INVESTMENTS HOLDINGS LIMITED

Name:
Title:

-21-


 

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 Acquisition, NTL Inc. (the “ Borrower ”).

 

 

 

Bridge Facility:

 

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

 

 

 

Administrative Agent(s):

 

[TBD] (the “ Agent ”).

 

 

 

Lead Arrangers and Book Runners:

 

As described in the Commitment Letter (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 (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 Acquisition, (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 Acquisition 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

 

The Initial Bridge Loans will mature on the date falling twelve months (the “ Initial Maturity Date ”) after the Closing Date; provided, however, that,

 


 

2

Loans:

 

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 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, [new intermediate holdco] above NTL, Inc. (upon consummation of the transaction Telewest Global, Inc. will be changing its name to NTL Inc. and NTL 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.

 


 

3

Collateral:

 

Subject to US tax limitations, security over the shares of NTL, Inc., 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 Closing.

 

 

 

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 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 Closing Date, the Borrower shall repay the Initial Bridge

 


 

4

 

 

Loans on the Structure Date (subject to a contemporaneous borrowing by NTL Cable plc of £600,000,000 under the Alternative Bridge Facility).

 

 

 

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 Gilt/LIBOR/EURIBOR 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 Closing (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 Closing 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 Closing, 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 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

 

Usual for facilities and transactions of this type and

 


 

5

Warranties:

 

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 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

 


 

6

 

 

 

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 any differences in borrowers, guarantors, ranking, security and structure (but to exclude the paymen


 
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