SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-26840
Telewest Communications plc
(Exact Name of Registrant as Specified in its Charter)
England and Wales N.A.
(State of Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Genesis Business Park
Albert Drive, Woking,
Surrey, GU21 5RW
United Kingdom
(Address of Principal Executive Offices)
Telephone number: 011-44-1483-750-900
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ] .
At May 15, 1998, 927,567,600 ordinary shares of 10p each were
outstanding.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
TELEWEST COMMUNICATIONS PLC
US GAAP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
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3 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED
MARCH 31, MARCH 31, MARCH 31,
1998 1998 1997
($) (POUND) (POUND)
<S> <C> <C> <C>
TURNOVER
Cable television 74,068 44,180 38,101
Telephony - residential 81,203 48,436 39,674
Telephony - business 22,636 13,502 9,287
Other (including(pound)697 and(pound)377 in 1998 and 7,219 4,306 3,328
1997, respectively, from related parties)
------------------ ------------------ -----------------
185,126 110,424 90,390
------------------ ------------------ -----------------
OPERATING COSTS AND EXPENSES
Programming (including(pound)2,718 and(pound)3,248 in (42,343) (25,257) (23,198)
1998 and 1997, respectively, to related parties)
Telephony (23,808) (14,201) (14,379)
Selling, general, and administrative (75,790) (45,207) (45,529)
(including (pound)219 and(pound)341 in 1998 and 1997,
respectively, to related parties)
Depreciation (78,333) (46,724) (37,456)
Amortisation of goodwill (11,063) (6,599) (6,594)
------------------ ------------------ -----------------
(231,337) (137,988) (127,156)
------------------ ------------------ -----------------
------------------ ------------------ -----------------
OPERATING LOSS (46,211) (27,564) (36,766)
------------------ ------------------ -----------------
OTHER INCOME / (EXPENSE)
Interest income (including(pound)578 and(pound)415 in 1,888 1,126 2,362
1998 and 1997, respectively, from related
parties)
Interest expense (71,622) (42,721) (30,314)
Foreign exchange gains / (losses), net 11,115 6,630 (24,127)
Share of net losses of affiliates (11,239) (6,704) (4,978)
Gain on disposal of assets 857 511 121
Minority interest in profits of (44) (26) (117)
consolidated subsidiaries, net
------------------ ------------------ -----------------
LOSS BEFORE INCOME TAXES (115,256) (68,748) (93,819)
------------------ ------------------ -----------------
Income tax credit / (expense) 34 20 (64)
NET LOSS (115,222) (68,728) (93,883)
================== ================== =================
BASIC AND DILUTED LOSS PER ORDINARY SHARE (PENCE) (0.12) (0.07) (0.10)
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements.
<PAGE>
TELEWEST COMMUNICATIONS PLC
US GAAP
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, except share data)
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UNAUDITED UNAUDITED
MARCH 31, 1998 MARCH 31, 1998 DECEMBER 31, 1997
($) (pound) (pound)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents 73,556 43,875 29,582
Trade receivables (net of allowance for
doubtful accounts of (pound)8,097 in 1998 and(pound)6,507 71,434 42,609 36,627
in 1997)
Other receivables 46,377 27,663 26,207
Prepaid expenses 17,013 10,148 7,625
Investments in affiliates , accounted for under
the equity method, and related receivables 87,726 52,327 59,707
Other investments, at cost 43,029 25,666 25,666
Property and equipment ( less accumulated
depreciation of(pound)528,846 in 1998 and(pound)481,451 in
1997) 2,858,277 1,704,907 1,705,520
Goodwill (less accumulated amortization
of (pound)70,895 in 1998 and (pound)64,301 in 1997) 770,035 459,311 465,905
Other assets ( less accumulated amortization of
(pound)12,054 in 1998 and(pound)10,140 in 1997) 81,827 48,808 56,513
=================== ================== ==================
TOTAL ASSETS 4,049,274 2,415,314 2,413,352
=================== ================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 55,920 33,355 26,710
Other liabilities 313,322 186,891 198,664
Debt 2,428,947 1,448,820 1,373,054
Capital lease obligations 126,676 75,560 75,534
------------------- ------------------ ------------------
TOTAL LIABILITIES 2,924,865 1,744,626 1,673,962
------------------- ------------------ ------------------
MINORITY INTERESTS 1,117 666 640
------------------- ------------------ ------------------
SHAREHOLDERS' EQUITY
Convertible preference shares, 10 pence par value;
661,000,000 shares authorized, and 496,066,708 83,166 49,607 49,607
shares issued and outstanding
Ordinary shares, 10 pence par value;
2,010,000,000 shares authorized, and 927,567,600 155,507 92,757 92,757
shares issued and outstanding
Additional paid-in capital 2,234,585 1,332,887 1,332,887
Accumulated deficit (1,346,712) (803,288) (734,560)
------------------- ------------------ ------------------
1,126,546 671,963 740,691
Ordinary shares held in trust for the
Telewest Restricted Share Scheme (3,254) (1,941) (1,941)
------------------- ------------------ ------------------
TOTAL SHAREHOLDERS' EQUITY 1,123,292 670,022 738,750
------------------- ------------------ ------------------
=================== ================== ==================
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,049,274 2,415,314 2,413,352
=================== ================== ==================
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements.
<PAGE>
TELEWEST COMMUNICATIONS PLC
US GAAP
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
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3 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED
MARCH 31, 1998 MARCH 31, 1998 MARCH 31, 1997
($) (pound) (pound)
<S> <C> <C> <C>
CASH FLOWS BEFORE OPERATING ACTIVITIES
Net loss (115,222) (68,728) (93,883)
Adjustments to reconcile net loss to net cash
provided by / (used in ) operating activities :
Depreciation 78,333 46,724 37,456
Amortization of goodwill 11,055 6,594 6,594
Amortization of deferred financing costs and
issue discount on senior discount debentures 40,145 23,946 18,276
Unrealized (loss) / gain on foreign currency
translation (11,107) (6,625) 23,794
Share of net losses of affiliates 11,239 6,704 4,978
Gain on disposal of assets (857) (511) (121)
Minority interests in profits 44 26 117
Change in operating assets and liabilities :
Change in receivables (7,754) (4,625) (11,553)
Change in prepaid expenses (4,230) (2,523) 167
Change in accounts payable 9,710 5,792 (15,034)
Change in other liabilities (18,125) (10,811) 7,976
------------------ ------------------ ------------------
NET CASH USED IN OPERATING ACTIVITIES (6,769) (4,037) (21,233)
------------------ ------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for property and equipment (82,727) (49,345) (92,619)
Additional investments in and loans to
affiliates (3,692) (2,202) (8,505)
Proceeds from disposals of assets 5,346 3,188 999
------------------ ------------------ ------------------
NET CASH USED IN INVESTING ACTIVITIES (81,073) (48,359) (100,125)
------------------ ------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for credit facility arrangement (9,891) (5,900) 0
costs
Proceeds from borrowings 125,737 75,000 150,000
Repayment of borrowings (18) (10) 0
Capital element of finance lease repayments (4,024) (2,401) (1,020)
------------------ ------------------ ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 111,804 66,689 148,980
------------------ ------------------ ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 23,962 14,293 27,622
Effect of exchange rate changes on cash and
cash equivalents - - 64
------------------ ------------------ ------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
49,594 29,582 79,116
------------------ ------------------ ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD
73,556 43,875 106,802
================== ================== ==================
</TABLE>
See accompanying notes to the unaudited condensed consolidated financial
statements.
<PAGE>
TELEWEST COMMUNICATIONS PLC
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The unaudited condensed consolidated financial statements of Telewest
Communications plc ("the Company") and its majority owned subsidiaries
(collectively, the "Telewest Group") have been prepared in accordance
with United States ("US") generally accepted accounting principles and
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to those rules and regulations.
The economic environment in which the Company operates is the United
Kingdom ("UK") and hence its reporting currency is Pounds Sterling
("(pound)"). Merely for convenience, the unaudited condensed
consolidated financial statements contain translations of certain
Pounds Sterling amounts into US Dollars at $1.6765 per (pound)1.00, the
Noon Buying Rate of the Federal Reserve Bank of New York on March 31,
1998. The presentation of the US Dollar amounts should not be construed
as a representation that the Pounds Sterling amounts could be so
converted into US Dollars at the rate indicated or at any other rate.
2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS
The condensed consolidated financial statements as of and for the
periods ended March 31, 1997 and 1998 are unaudited; however, in the
opinion of the management, such statements include all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation of the results of operations for the interim periods
presented. The results of operations for any interim period are not
necessarily indicative of the results of the full year. The unaudited
condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997 filed with the Securities and Exchange
Commission (the "1997 Annual Report").
3. NEW ACCOUNTING STANDARDS APPLICABLE TO THE COMPANY
EARNINGS PER SHARE
As noted in the 1997 Annual Report, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 128, AEarnings per
Share@, effective December 3, 1997. This Statement required that all
prior-period earnings per share calculations including interim
financial statements be restated to conform with the provisions of this
statement. Basic and diluted loss per ordinary share is based on the
weighted average number of ordinary shares outstanding of 927,567,600
for the three month periods ended March 31, 1998 and 1997.
COMPREHENSIVE INCOME
The Company adopted SFAS No. 130 AReporting Comprehensive Income@ with
effect from January 1, 1998. Reclassification of financial statements
for earlier periods for comparative purposes is required. SFAS No. 130
establishes standards for the reporting and presentation of
comprehensive income in financial statements. Comprehensive income
encompasses all changes in shareholders' equity except those arising
from transactions with owners. There is no difference between
comprehensive loss and net loss for the three month periods ended March
31, 1998 and 1997.
<PAGE>
TELEWEST COMMUNICATIONS PLC
US GAAP
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. ACCOUNTING POLICIES - FINANCIAL INSTRUMENTS
The Company uses foreign currency option contracts which permit, but do
not require, the Company to exchange foreign currencies at a future
date with another party at a contracted exchange rate. The Company also
enters into combined foreign currency and interest rate swap contracts
("Foreign Currency Swaps"). Such contracts are used to hedge against
adverse changes in foreign currency exchange rates associated with
certain obligations denominated in foreign currency.
The foreign currency option and the Foreign Currency Swaps are recorded
on the balance sheet in "other assets" or "other liabilities" at their
fair value at the reporting period, with changes in their fair value
during the reporting period being reported as part of the foreign
exchange gain or loss in the consolidated statement of operations. Such
gains and losses are offset against foreign exchange gains and losses
on the obligations denominated in foreign currencies which have been
hedged.
Interest rate swap agreements which are used to manage interest rate
risk on the Company's borrowings are accounted for using the accruals
method. Net income or expense resulting from the differential between
exchanging floating and fixed rate interest payments is recorded on an
accruals basis.
The Company (through a directly wholly owned subsidiary) entered into
certain delayed starting interest rate swap agreements in order to
manage interest rate risk on the Senior Secured Facility. The interest
rate swaps convert floating rate interest payable on drawdowns under
the facility to fixed interest rate payments in the range of 7.835% -
7.975%. The swap agreements, which commenced in early 1997, have a
five-year maturity and a notional principal amount which adjusts
upwards on a semi-annual basis to a maximum of (pound)750 million. As
at March 31, 1998, the aggregate notional principal amount of the swaps
was (pound)500 million, and the total drawdown under the facility was
(pound)567.5 million.
5. DEPRECIATION
In 1997, the treatment of activation costs was reviewed. With effect
from January 1, 1997, activation labour was reclassified from 'Cable
and Ducting' to 'Electronics' to be consistent with the classification
of activation materials, with activation labour now depreciated over 8
years rather than 20 years. The effect of this revision was accounted
for in the second half of 1997, however, had the revision been
accounted for with effect from the beginning of the first quarter of
1997, depreciation expense for the three months ended March 31, 1997
would have increased by approximately (pound)2.6 million.
6. COMMITMENTS AND CONTINGENCIES
The Company is party to various legal proceedings in the ordinary
course of business which it does not believe will result, in aggregate,
in a material adverse effect on its financial position and its
operating results.
7. SUBSEQUENT EVENTS
Following the announcement of the proposed acquisition by NTL
Incorporated ("NTL") of Comcast UK Cable Partners Limited ("Comcast"),
the Company initiated the process governing the exercise of its
pre-emption rights in respect of Comcast's 27.45% interest in
Birmingham Cable. In addition, the Company intends to initiate the
process governing the exercise of its pre-emption rights in respect of
Comcast's 50% interest in Cable London if NTL's proposed acquisition of
Comcast is completed. In the event the Company decides to proceed with
the acquisition of Comcast's interest in Birmingham Cable and /or Cable
London, additional financing would be required. There can be no
assurance that such funding will be available on terms that are
satisfactory to the Company.
On April 15, 1998 it was announced that Telewest and General Cable had
agreed terms of a proposed merger to be achieved by way of a
recommended offer by Telewest for General Cable shares.
On April 24, 1998 SJ Davidson resigned as Chief Executive of the
Company.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The financial information contained in this Report on Form 10-Q is prepared in
accordance with US GAAP. In accordance with UK securities regulations, the
Company also prepares consolidated financial statements in accordance with UK
GAAP. The UK GAAP consolidated financial statements for the period covered by
this Report are contained in Exhibit 99 to this Report.
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the financial review contained in
the 1997 Annual Report.
SAFE HARBOR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: The discussion and analysis below includes certain forward looking
statements that involve risks and uncertainties that could lead to actual
results that are significantly different from those anticipated by the Company.
These risks and uncertainties relate to, among other things, the extent consumer
preference develops for cable television over other methods of providing in-home
entertainment and for the Company as a viable alternative to BT and others as a
provider of telephony service; the ability of the Company to penetrate markets
and respond to changes or increases in competition (including the introduction
of digital services by BSkyB or other operators) and adverse changes in
government regulation; the ability of the Company to manage growth and
expansion; the ability of the Company to improve operating efficiencies
(including through cost reductions); the ability of the Company to construct its
network in a cost-efficient and timely manner; the ability of the Company to
raise additional financing if there is material adverse change in the Company's
anticipated revenues or expenses or to finance new initiatives; the extent
programming is available at reasonable costs; adverse changes in the price of
telephony interconnection; disruptions in supply of services and equipment; the
ability of the Company to exercise its pre-emption rights with respect to
Birmingham Cable and Cable London; and the performance of affiliated companies
(which are not controlled by the Company).
SUMMARY OF OPERATIONS (THREE MONTH PERIOD ENDED MARCH 31, 1997 AND 1998)
The Company's consolidated revenue increased by (pound)20.0 million or 22.2%
from (pound)90.4 million in the three month period ended March 31, 1997 to
(pound)110.4 million in the three month period ended March 31, 1998, primarily
due to the larger customer base created by the Company's continuing network
construction.
CABLE TELEVISION REVENUE
Cable television revenue increased by (pound)6.1 million or 16.0% from
(pound)38.1 million in the three months ended March 31, 1997 to (pound)44.2
million in the three months ended March 31, 1998. The increase was primarily
attributable to a 14.3% increase (from 533,648 to 609,866) in the average number
of customers in the three month period ended March 31, 1998, compared to the
corresponding period in 1997. The increase in the average number of customers
results primarily from an increase in the number of homes passed and marketed
from 2,439,377 at March 31, 1997 to 2,794,836 at March 31, 1998.
Penetration improved slightly from 22.0% at December 31, 1997 to 22.1% at March
31, 1998 compared to a slight decrease from 22.6% as at December 31, 1996 to
22.2% as at March 31, 1997. Churn increased from 34.3% in the three month period
ended March 31, 1997 to 37.2% in the three month period ended March 31, 1998 and
from 32.6% in the twelve-month period ended March 31, 1997 to 34.8% in the
twelve month period ended March 31, 1998. This increase in churn was due in part
to customer service related problems resulting from the Company's restructuring
and redundancy program and the cable television price increases implemented from
November 1,1997.
Average monthly revenue per cable television customer increased by 0.6% from
(pound)23.57 in the three month period ended March 31, 1997 to (pound)23.72 in
the three month period ended March 31, 1998 due to the expansion of pay per view
events, a decrease in promotional discounts offered by the Company and price
increases implemented from November 1, 1997.
<PAGE>
TELEPHONY REVENUE
Telephony revenue increased by (pound)12.9 million or 26.5% from (pound)49.0
million in the three month period ended March 31, 1997 to (pound)61.9 million in
the three month period ended March 31,1998.
Residential telephony revenue increased by (pound)8.8 million or 22.1% from
(pound)39.7 million in the three month period ended March 31, 1997 to
(pound)48.4 million in the three month period ended March 31,1998. Business
telephony revenue increased by (pound)4.2 million or 45.4% from (pound)9.3
million in the three months ended March 31, 1997 to (pound)13.5 million in the
three months ended March 31, 1998.
The increase in residential telephony revenue in the three month period ended
March 31, 1998 compared to the corresponding period ended March 31, 1997 was
primarily due to a 30.5% increase (from 651,035 to 849,271) in the average
number of residential lines, which was partially offset by a decrease in the
average monthly revenue per residential line of 6.0%, from (pound)20.31 in the
three month period ended March 31, 1997 to (pound)19.10 in the three month
period ended March 31, 1998. The increase in the average number of residential
lines results primarily from an increase in the number of homes passed and
marketed (from 2,377,511 at March 31, 1997 to 2,760,826 at March 31, 1998) and
from increased penetration. The decrease in the average monthly revenue per line
was mainly attributable to price reductions in per minute call charges in
response to price cutting by BT, the Company's main competitor in residential
telephony. The Company intends to continue to reduce per minute call tariffs as
necessary to compete effectively and to seek to mitigate the revenue impact of
these reductions through higher line rentals, increased call volumes, and sales
of value added services such as call waiting and voice messaging.
Residential telephony penetration increased from 29.7% at December 31, 1997 to
30.1% at March 31, 1998 and from 27.5% at December 31, 1996 to 28.2 % at March
31,1997. Churn increased from 19.8% in the three months ended March 31, 1997 to
21.7% in the three months ended March 31, 1998 and from 19.5% in the
twelve-month period ended March 31, 1997 to 20.5% in the twelve months ended
March 31, 1998.
The increase in business telephony revenue in the three month period ended March
31, 1998 compared to the corresponding period ended March 31, 1997 was
attributable to a 48.3% increase (from 70,871 to 105,125) in the average number
of business telephony lines. This increase was partially offset by a decrease in
the average monthly revenue per business line, which decreased by 2.0% from
(pound)43.68 in the three month period ended March 31, 1997 to (pound)42.81 in
the three month period ended March 31, 1998. The increase in the average number
of business telephony lines was attributable to a 20.4% increase in the number
of business premises passed and marketed (from 107,491 at March 31, 1997 to
129,375 at March 31, 1998) and to an increased focus on marketing services to
larger businesses which generally purchase more lines. The decrease in the
average monthly revenue per line was mainly attributable to price reductions in
per minute call charges and increased volume discounts, together with increased
sales of Centrex, a business telecommunications product which provides more
lines to customers but which has a lower average monthly revenue per line.
Other revenue increased by 29.4% from (pound)3.3 million in the three month
period ended March 31, 1997 to (pound)4.3 million in the three month period
ended March 31, 1998 and is derived primarily from management services provided
to affiliated companies, internet sales, cable publications and network
management services provided to other operators, and advertising sales.
OPERATING COSTS AND EXPENSES
The Company's consolidated operating costs and expenses (which include direct
costs of programming and interconnection; selling, general and administrative
expenses; depreciation expense and amortization expense) increased by 8.5% from
(pound)127.2 million in the three month period ended March 31, 1997 to
(pound)138.0 million in the three month period ended March 31, 1998.
Programming fees are the largest component of the Company's operating costs in
providing cable television services. The Company obtains most of its programming
under contracts which provide for payments based upon the number of subscribers.
As a percentage of cable television revenues, programming costs decreased from
61% in the three month period ended March 31, 1997 to 57% in the three month
period ended March 31, 1998, resulting from the negotiation of more favourable
contract terms.
<PAGE>
Interconnection charges are the largest component of the Company's telephony
operating costs in providing telephony services. As a percentage of telephony
revenue, telephony operating costs decreased from 29% in the three month period
ended March 31, 1997 to 23% for the three month period ended March 31, 1998.
Interconnection charges in 1998 were reduced by the continuing reduction in
interconnection charges in the UK telephony market, a growing percentage of
interconnection charges handled within the Telewest network and by credits
relating to interconnection charges from earlier periods, which have been
recalculated based on the final agreed rates applicable for that period.
Selling, general and administrative expenses, which include, among other items,
salary and marketing costs, decreased as a percentage of revenue from 50% in the
three month period ended March 31, 1997 to 41% for the corresponding period in
1998. The improvement is largely due to the rapid growth in revenues and
continued reduction in support costs per customer as the Company benefits from
the economies of scales resulting from its enlarged operations. Total labor and
overhead costs capitalized in the three month period ended March 31, 1998 were
(pound)15.3 million, compared to (pound)19.5 million for the corresponding
period in 1997. The Company expects that its selling, general and administrative
expenses will continue to decline as a percentage of revenue, as revenues
increase and the efficiency gains from its fixed cost base are increasingly
exploited, and the full year benefits of a restructuring and redundancy program,
completed at the end of 1997, take effect.
Depreciation expense increased 24.7% from (pound)37.5 million in the three month
period ended March 31, 1997 to (pound)46.7 million in the three month period
ended March 31, 1998. With effect from January 1, 1997, activation labour was
reclassified from 'Cable and Ducting' to 'Electronics' to be consistent with the
classification of activation materials, with activation labour now depreciated
over 8 years rather than 20 years. Although the effect of this revision was
accounted for in the second half of 1997, had the revision been accounted for
with effect from the beginning of the first quarter of 1997, depreciation
expense for the three months ended March 31, 1997 would have increased by
approximately (pound)2.6 million.
Amortization expense remained stable at(pound)6.6 million in both the three
month periods to March 31, 1997 and March 31, 1998.
OTHER INCOME/(EXPENSE)
The Company's share of the net losses of its affiliated companies accounted for
under the equity method, principally Birmingham Cable Corporation Limited and
Cable London plc, was (pound)5.0 million and (pound)6.7 million for the three
month periods ended March 31, 1997 and 1998, respectively.
Financial expenses, net, consist primarily of interest expense of (pound)42.7
million for the three month period ended March 31, 1998, ((pound)30.3 million
for the three month period ended March 31,1997) and foreign exchange gain of
(pound)6.6 million for the three month period ended March 31, 1998, ((pound)24.1
million foreign exchange loss for the three month period ended March 31, 1997)
offset in part by interest income earned on short-term investments and loans to
affiliated companies of (pound)1.1 million for the three month period ended
March 31, 1998 ((pound)2.4 million for the three month period ended March 31,
1997). Interest expense increased by (pound)12.4 million in the three month
period ended March 31, 1998, primarily as a result of the interest expense on
higher outstanding borrowings relating to the Senior Secured Facility (as
defined below) entered into in May 1996 and higher accrued interest expense on
the Senior Discount Debentures (as defined below) issued by the Company in
October 1995. The foreign exchange gains and losses arise principally from the
re-translation of the US Dollar denominated debentures to Pounds Sterling using
the March 31, 1998 exchange rate and marking the associated hedging instruments
to their market value at March 31, 1998. It is the Company's policy to hedge
non-Sterling denominated borrowings to reduce or eliminate exchange rate
exposure.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
On May 22, 1996 the Company entered into a (pound)1.2 billion senior secured
credit facility with a syndicate of banks (the "Senior Secured Facility"). The
Senior Secured Facility is being used to finance the capital expenditure,
working capital requirements and other permitted related activities for the
construction and operation of the wholly owned telephony and television
franchises of the Company; to fund the payment of cash interest on the Senior
Debentures and Senior Discount Debentures; to fund the repayment of existing
secured borrowings of the Company in respect of the London South and South West
Regional Franchise Areas; to fund loans to or investments in affiliated
companies; to fund the acquisition and subsequent construction of local delivery
operators/franchises; and to refinance advances and the payment of interest,
fees and expenses in respect of the Senior Secured Facility.
In connection with the restructuring of the Company's activities, including the
slow down of construction activity, the terms of the Senior Secured Facility
were amended in the first quarter of 1998. The amount of the Senior Secured
Facility has been reduced to (pound)1.0 billion and the Company entered into a
second secured facility (the "Second Secured Facility") of (pound)100 million
with certain of the banks that are party to the Senior Secured Facility. In
addition, certain changes were made to the financial covenants to accommodate
the Company's anticipated cashflows. The repayment dates for tranche A have been
accelerated by three months as described below.
The Senior Secured Facility is divided into two tranches, the first ("tranche
A") is available on a revolving basis for up to (pound)300 million, reduced to
(pound)100 million by March 31, 1998, with full repayment by September 30, 1998.
The second tranche ("tranche B") is available on a revolving basis concurrently
with tranche A for an amount up to 6.5 times the trailing, rolling six month
annualized consolidated net operating cash flow, gradually reducing throughout
the period of the facility to 4 times by January 1, 2000. Thereafter, the amount
outstanding under the facility converts to a term loan amortizing over 5 years.
The aggregate drawing at any time under both tranches cannot exceed (pound)1.0
billion. Borrowings under the Senior Secured Facility are secured by assets,
including the partnership interests and shares of subsidiaries of the Company,
and bear interest at 2.25% above LIBOR for tranche A and between 0.5% and 1.875%
above LIBOR (depending on the ratio of borrowings to the trailing, rolling six
month annualized consolidated net operating cash flow) for tranche B. The
Company's ability to borrow under the Senior Secured Facility is subject to,
among other things, its compliance with the financial and other covenants and
borrowing conditions contained therein, and the failure to comply with such
covenants could result in all such amounts outstanding under the facility
becoming due and payable. At March 31, 1998 (pound)20 million was drawn down
under tranche A and (pound)547.5 million was drawn down under tranche B.
The Second Secured Facility is available from July 1, 1999 to June 30, 2001.
Advances under the Second Secured Facility may be drawn only if the Senior
Secured Facility has been drawn down to the fullest extent possible at the
relevant time. The Second Secured Facility is available on a revolving basis to
provide an aggregate amount under the Senior Secured Facility and the Second
Secured Facility equal to up to 6 times the trailing, rolling six month
annualized consolidated net operating cash flow through December 31, 1999,
gradually reducing thereafter throughout the period of the facility to 4.5 times
by January 1, 2001. On June 30, 2001, the amount outstanding under the Second
Secured Facility converts to a term loan amortizing over 5 years. Borrowings
under the Second Secured Facility bear interest at a rate equal to LIBOR plus a
margin that increases during the period of the facility from 3.5% per annum
through December 31, 1999, 4.5% per annum from December 31, 1999 through June
30, 2000 and to 5.5% per annum from June 30, 2000 to June 30, 2006. The
provisions as to prepayment, covenants and events of default in respect of the
Second Secured Facility are substantially similar to those for the Senior
Secured Facility.
The Company has entered into certain delayed-starting interest rate swap
agreements in order to manage interest rate risk on the Senior Secured Facility.
The interest rate swaps convert floating rate interest payable on drawdowns
under the facility to fixed interest rate payments in the range of 7.835% -
7.975%. The swap agreements, which commenced in early 1997, have a five-year
maturity and a notional principal amount which adjusts upwards on a semi-annual
basis to a maximum of (pound)750 million. As at March 31, 1998, the aggregate
notional principal amount of the swaps was (pound)500 million.
On October 3, 1995, the Company raised (pound)734 million through the issue of
$300 million principal amount of 9 5/8% Senior Debentures due 2006 (the "Senior
Debentures") and $1,536 million principal amount at maturity of 11% Senior
Discount Debentures due 2007 (the "Senior Discount Debentures"). Interest on the
Senior Debentures is payable semi-annually and commenced on April 1, 1996.
Interest on the Senior Discount Debentures will be payable semi-annually
commencing on April 1, 2001. The proceeds of the issue were used by the Company
to fund general working capital, capital expenditures, additional investments in
affiliated companies, to repay a credit facility entered into by a direct wholly
owned subsidiary and to purchase the currency hedge arrangements described
below.
<PAGE>
The Company's hedge instruments relating to the debentures are a combined
foreign currency and interest rate swap ("Foreign Currency Swap") and a foreign
currency option. The Foreign Currency Swap fully hedges against adverse exchange
rate fluctuations on the principal amount of the Senior Debentures and the
associated interest payments. The foreign currency option provides protection
against exchange rate fluctuations on the Senior Discount Debentures below a
rate of $1.452:(pound)1, and allows the Company to benefit from positive
exchange rate movements. Both hedging instruments provide protection up to
October 1, 2000, the early redemption date of the Senior Debentures and the
Senior Discount Debentures.
The Company's results may be materially influenced by future exchange rate
movements, due to the requirement that the hedge instruments are marked to their
market value at the end of the financial period and the US Dollar denominated
debentures are re-translated to Pounds Sterling using the period end exchange
rate.
The Company incurred a net cash outflow from operating activities of (pound)4.0
million in the three month period ended March 31, 1998 compared with a net cash
outflow of (pound)21.2 million in the three month period ended March 31, 1997.
The Company incurred a net cash outflow from investing activities of
(pound)100.1 million and (pound)48.4 million in the three month periods ended
March 31, 1997 and 1998, respectively. The Company's principal investing
activities continue to be the construction of the network, although at a reduced
rate, and the provision of funding to the Affiliated Companies.
Cash provided by financing activities amounted to 149.0 million and (pound)66.7
million in the three month periods ended March 31, 1997 and 1998, respectively.
Cash provided by financing activities principally related to the drawdown of
(pound)150.0 million under the Senior Secured Facility in the three month period
ended March 31, 1997, and to the drawdown of (pound)75 million under the Senior
Secured Facility in the three month period ended March 31, 1998.
At March 31, 1998, the construction of the Company's broadband network had
passed approximately 75.4% of the homes in its owned and operated franchise
areas compared to 68% of homes in its owned and operated franchises at March 31,
1997. Total capital expenditure in the three month period ended March 31, 1998
was (pound)48.8 million, substantially lower than in the three month period
ended March 31, 1997((pound)111.5 million), due to the Company reducing the pace
of its network construction and its expenditure on certain discretionary capital
projects.
The Company is obligated under the terms of its telecommunications licences to
construct its network to pass a specified number of premises by prescribed
dates. If such milestones are not met, the Company may be subject to enforcement
action from regulatory authorities which, if not complied with, could result in
revocation of the Company's telecommunications licences. As a consequence of its
intention to reduce the pace of its network construction, the Company has
negotiated with the Director General appropriate modifications to its current
milestone obligations. Formal amendments to licences are expected by the end of
May 1998.
Cash and deposit balances at March 31, 1998 were (pound)43.9 million.
The Company currently expects that the anticipated funding requirements (after
taking into account current cash and deposit balances and anticipated revenues)
required to substantially complete the construction of the owned and operated
network, to fund the Company's operations, to upgrade older portions of the
network, and to pay interest on the Company's debt will be provided by the
Senior Secured Facility and the Second Secured Facility. There can be no
assurance that the Company will not elect to use alternative funding sources or
that the Company's actual funding requirements will be in line with
expectations.
Following the announcement of the proposed acquisition by NTL Incorporated
("NTL") of Comcast UK Cable Partners Limited ("Comcast"), the Company initiated
the process governing the exercise of its pre-emption rights in respect of
Comcast's 27.45% interest in Birmingham Cable. In addition, the Company intends
to initiate the process governing the exercise of its pre-emption rights in
respect of Comcast's 50% interest in Cable London if NTL's proposed acquisition
of Comcast is completed. In the event the Company decides to proceed with the
acquisition of Comcast's interest in Birmingham Cable and /or Cable London,
additional financing would be required. There can be no assurance that such
funding will be available on terms that are satisfactory to the Company.
<PAGE>
On April 15, 1998 it was announced that Telewest and General Cable had agreed
terms of a proposed merger to be achieved by way of a recommended offer by
Telewest for General Cable shares.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
<PAGE>
PART II. OTHER INFORMATION
ITEM 1 ---- LEGAL PROCEEDINGS
None
ITEM 2 ---- CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3 ---- DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 ---- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 ---- OTHER INFORMATION
None
ITEM 6 ---- EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
10.59 ---- Loan Agreement, by and among Telewest Communications
Networks Limited, as borrower, The Bank of New York, CIBC Wood
Gundy plc, Chase Investment Bank Limited, NatWest Markets and
The Toronto-Dominion Bank, as arrangers, and CIBC Wood Gundy
plc, as agent and security trustee, dated as of May 22, 1996,
as amended pursuant to amendments dated as of May 31, 1996,
August 2, 1996, September 11, 1996 and March 27, 1998.
10.62 ---- Loan Agreement, by and among Telewest Communications
Networks Limited, as borrower, The Bank of New York, CIBC Wood
Gundy plc, Chase Manhattan plc, Greenwich NatWest and The
Toronto-Dominion Bank, as arrangers, and The Toronto-Dominion
Bank, as agent and security trustee, dated as of March 27,
1998.
10.63 ---- Letter, dated as of April 24, 1998, between Stephen Davidson
and Telewest CGL.
27 ---- Telewest Communications plc financial data schedule.
99 ---- Telewest Communications plc Press Release issued on May
7, 1998 with respect to results of operations for the three
month period ended March 31, 1998 (including unaudited
consolidated financial statements prepared in accordance with
UK GAAP).
b. Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TELEWEST COMMUNICATIONS PLC
By: /S/ CHARLES J BURDICK
---------------------------------
Name: Charles J Burdick
Title: Group Finance Director
(duly authorized signatory
and principal financial officer)
May 15, 1998
<PAGE>
EXHIBITS
EXHIBIT
10.59 ---- Loan Agreement, by and among Telewest Communications
Networks Limited, as borrower, The Bank of New York, CIBC Wood
Gundy plc, Chase Investment Bank Limited, NatWest Markets and
The Toronto-Dominion Bank, as arrangers, and CIBC Wood Gundy
plc, as agent and security trustee, dated as of May 22, 1996,
as amended pursuant to amendments dated as of May 31, 1996,
August 2, 1996, September 11, 1996 and March 27, 1998.
10.62 ---- Loan Agreement, by and among Telewest Communications
Networks Limited, as borrower, The Bank of New York, CIBC Wood
Gundy plc, Chase Manhattan plc, Greenwich NatWest and The
Toronto-Dominion Bank, as arrangers, and The Toronto-Dominion
Bank, as agent and security trustee, dated as of March 27,
1998.
10.63 ---- Letter, dated as of April 24, 1998, between Stephen Davidson
and Telewest CGL.
27 ---- Telewest Communications plc financial data schedule.
99 ---- Telewest Communications plc Press Release issued on May 7,
1998 with respect to results of operations for the three month
period ended March 31, 1998 (including unaudited consolidated
financial statements prepared in accordance with UK GAAP).
EXHIBIT 10.59
CONFORMED COPY
DATED 22 MAY 1996
LOAN AGREEMENT
for a
(pound)1,200,000,000 Credit Facility
to
TELEWEST COMMUNICATIONS NETWORKS LIMITED
THE BANK OF NEW YORK
CIBC WOOD GUNDY PLC
CHASE INVESTMENT BANK LIMITED
NATWEST MARKETS
and
THE TORONTO-DOMINION BANK
ARRANGERS
CIBC WOOD GUNDY PLC
AGENT
CIBC WOOD GUNDY PLC
SECURITY TRUSTEE
AS AMENDED PURSUANT TO AN AMENDMENT AGREEMENT DATED 31 MAY 1996,
A SECOND AMENDMENT AGREEMENT DATED 2 AUGUST 1996,
A THIRD AMENDMENT LETTER DATED 11 SEPTEMBER 1996
AND A FOURTH AMENDMENT AGREEMENT DATED 27 MARCH 1998
<PAGE>
CONTENTS
PURPOSE AND DEFINITIONS...............................................1
THE FACILITY.........................................................26
CONDITIONS...........................................................27
REVOLVING ADVANCES...................................................27
INTEREST AND INTEREST PERIODS; ALTERNATIVE INTEREST RATES............33
REPAYMENT, PREPAYMENT AND CANCELLATION...............................36
FEES AND EXPENSES....................................................39
PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS........................41
REPRESENTATIONS AND WARRANTIES.......................................44
POSITIVE COVENANTS...................................................54
NEGATIVE COVENANTS...................................................63
FINANCIAL COVENANTS..................................................66
EVENTS OF DEFAULT....................................................71
INDEMNITIES..........................................................77
UNLAWFULNESS AND INCREASED COSTS; MITIGATION........................78
SET-OFF AND PRO RATA PAYMENTS........................................81
ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES.........................82
<PAGE>
ARRANGERS, AGENT AND REFERENCE BANKS.................................85
NOTICES AND OTHER MATTERS............................................89
LEASE FINANCING AND PARI PASSU BORROWINGS............................91
GOVERNING LAW AND JURISDICTION.......................................91
<PAGE>
SCHEDULE 1
Part A The Original Charging Subsidiaries
Part B The Original Charging Partnerships
Part C The Original Non-Charging Subsidiaries
Part D The Banks and their Commitments
SCHEDULE 2
Part A Form of Drawdown Notice
Part B Form of Rollover Notice
Part C Form of Conversion Notice
SCHEDULE 3
Documents and evidence required as conditions precedent
SCHEDULE 4
Calculation of Additional Cost
SCHEDULE 5
Form of Substitution Certificate
SCHEDULE 6
Form of Compliance Certificate to be issued by an Authorised Officer
of the Borrower
SCHEDULE 7
Form of Deed of Subordination
SCHEDULE 8
Existing Encumbrances
SCHEDULE 9
The Licences
SCHEDULE 10
Principal Agreements
<PAGE>
THIS AGREEMENT is dated 22 May, 1996
BETWEEN:
(1) TELEWEST COMMUNICATIONS NETWORKS LIMITED as Borrower;
(2) THE SUBSIDIARIES OF THE BORROWER set out in part A of Schedule 1;
(3) THE ASSOCIATED PARTNERSHIPS OF THE BORROWER set out in part B of Schedule 1;
(4) THE BANK OF NEW YORK, CIBC WOOD GUNDY PLC, CHASE INVESTMENT BANK
LIMITED, NATWEST MARKETS (a division of NATIONAL WESTMINSTER BANK PLC)
and THE TORONTO-DOMINION BANK as Arrangers;
(5) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set
out in Part D of Schedule 1;
(6) CIBC WOOD GUNDY PLC as Agent; and
(7) CIBC WOOD GUNDY PLC as Security Trustee.
IT IS AGREED as follows:
<PAGE>
PURPOSE AND DEFINITIONS
PURPOSE
(a) This Agreement sets out the terms and conditions upon and subject
to which all of the Banks agree, according to their several
obligations, to make available to the Borrower a credit facility
of up to(pound)1,000,000,000 to be used (i) to assist in the
financing of the capital expenditure, working capital
requirements and other permitted related activities for the
construction and operation of all the (directly or indirectly)
wholly-owned (save for minority interests approved prior to the
date hereof) cable telephony and television franchises of the
Borrower, (ii) to fund the loans to Telewest referred to in
paragraph (v) of the definition of Permitted Investments, (iii)
to make payments of interest to Telewest on loans made to the
Borrower by Telewest in order to enable Telewest to pay
equivalent cash interest on the Senior Securities and/or to pay
the costs and expenses of Telewest (up to a maximum of the amount
set out in paragraph (b)(i) of the definition of Permitted
Payments), (iv) to assist in the financing of capital expenditure
incurred or to be incurred in relation to the construction of and
investment in the National Network as projected in the Long Range
Plan, (v) to make loans to TCN Entities in order to facilitate
the purposes set out in (i) to (iv) (inclusive) above, (vi) to
repay Advances under Tranche A or Tranche B or to pay interest,
fees and expenses relating to the facility granted pursuant to
this Agreement and/or (vii) to repay from time to time advances
made by Telewest under the 1997 Telewest Letter Agreement.
<PAGE>
(b) The credit facility referred to above shall not be utilised for
either the purchase of and/or bid for any Local Delivery
Operator".
1.2 DEFINITIONS
In this Agreement, unless the context otherwise requires:
"1996 BUDGET" means the budget for the TCN Group for the period commencing on 1
January 1996 and ending on 31 December 1996 in the agreed form;
"1997 TELEWEST LETTER AGREEMENT" means the letter agreement dated 11 September
1997 between Telewest and the Borrower regulating the provision by Telewest to
the Borrower of a (pound)50,000,000 uncommitted revolving on-demand credit
facility;
"ADDITIONAL COST" means in relation to any period a percentage calculated for
such period at an annual rate determined by the application of the formula set
out in Schedule 4;
"ADVANCE" means a Revolving Advance or a Term Advance (as applicable);
"AFFILIATE" means each of Birmingham Cable Corporation Limited (no. 2170379),
Cable London plc (no. 1794264) and The Cable Corporation Limited (no. 2075227)
for so long as the Telewest does not materially reduce its direct or indirect
voting or economic interest in such company;
"AGENT" means CIBC Wood Gundy plc of Cottons Centre, Cottons Lane, London SE1
2QL or such other person as may be appointed agent for the Banks pursuant to
clause 18.11;
"AGREED BASE CASE" means the base case financial and operational projections for
the TCN Group produced by the Borrower dated 12 April 1996;
"ANNUAL BUDGET" means a budget in respect of the TCN Group for each financial
year containing information of the same type and to the same level of detail as
the 1996 Budget or containing such other information or to such other level of
detail as has, at the relevant time, been approved in writing by the Agent
acting on the instructions of the Majority Banks;
"ARRANGERS" means The Bank of New York of 46 Berkeley Street, London W1X 6AA,
CIBC Wood Gundy plc of Cottons Centre, Cottons Lane, London SE1 2QL, Chase
Investment Bank Limited of 125 London Wall, London EC2Y 5AJ, Natwest Markets (a
division of National Westminster Bank Plc) of 135 Bishopsgate, London EC2M 3UR
and The Toronto-Dominion Bank of Triton Court, 14/18 Finsbury Square, London
EC2A 1DB;
"ASSIGNEE" has the meaning ascribed thereto in clause 17.3;
"ASSOCIATED COMPANY" has the meaning attributed thereto in Section 416 of the
Income and Corporation Taxes Act 1988;
"ASSOCIATED PARTNERSHIP" means, in relation to a company, a partnership that is
controlled by that company, or by that company and one or more of its Associated
Companies together, and a company shall be regarded as having control of a
partnership for those purposes if (directly or indirectly, including through
intermediate Associated Partnerships) it possesses, is entitled to, or is
entitled to acquire:
<PAGE>
(a) more than 50% of the assets of the partnership; or
(b) more than 50% of the income of the partnership
or if it (directly or indirectly, including through intermediate Associated
Partnerships) is able to direct how the affairs of the partnership are
conducted;
"AUTHORISED OFFICER" means that officer or officers of the Borrower authorised
to sign Compliance Certificates, Drawdown Notices, Rollover Notices, Conversion
Notices and any other notices, requests or confirmations referred to in this
Agreement or relating to the facility granted pursuant to this Agreement;
"AVON LICENCES" means those licences of TCN Entities details of which are set
out in part A of schedule 9;
"BANKING DAY" means a day (other than Saturday or Sunday) on which dealings in
Sterling deposits are carried on in the London Interbank Market and (if payment
is required to be made on such day) on which banks are open for business in
London;
"BANKS" means the banks and financial institutions listed in Part D of schedule
1 and includes their successors in title, Assignees and Substitutes;
"BOND AND FLOATING CHARGES" means the bond and floating charges, in the agreed
form, to be entered into by each Original Charging Subsidiary which is
incorporated in Scotland;
"BORROWED MONEY" means Indebtedness (including, for the avoidance of doubt, but
without double counting, any guarantees of such Indebtedness) in respect of (i)
money borrowed or raised and debit balances at banks, (ii) any bond, note, loan
stock, debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than on a
non-recourse basis), (v) payments for assets or services acquired which are
deferred for a period of 90 days or more after the relevant assets or services
were supplied, (vi) hire purchase contracts, (vii) rental payments under Finance
Leases, (viii) guarantees, bonds, standby letters of credit or other instruments
issued in connection with the performance of contracts and (ix) any other
transaction (including without limitation forward sale or purchase agreements
and issues of redeemable shares) having the commercial effect of a borrowing or
raising of money entered into for the purpose of financing a person's
operational or capital requirements provided that in making any calculation of
Borrowed Money under this Agreement no Indebtedness shall be taken into account
more than once;
"BORROWER" means Telewest Communications Networks Limited (formerly Mintdrive
Limited) (No. 3071086) whose registered office is at Unit 1, Genesis Business
Park, Albert Drive, Woking, Surrey GU21 5RW;
"BORROWER/TELEWEST TRANSFER AGREEMENTS" means the agreements entered into
between the Borrower and Telewest pursuant to which the Borrower has acquired
from Telewest the shares in Telewest Communications and SBCC in consideration
for which the Borrower has issued shares to Telewest;
<PAGE>
"BT INTER-CONNECT AGREEMENTS" means the agreements referred to in part A of
Schedule 10;
"CABLE INTERNET" means any arrangements put in place between, inter alia,
members of the TCN Group and others for the development and provision of
internet services via the Cable Systems; "CABLE SYSTEMS" means the
telecommunications and television systems constructed or to be constructed in
the areas covered by the Licences and includes any part of any such system and
all modifications, substitutions, replacements, renewals and extensions made to
such systems;
"CHARGING PARTNERSHIPS" means the Original Charging Partnerships and any other
partnership which may from time to time accede to this Agreement and any
relevant Security Documents pursuant to a Supplemental Deed;
"CHARGING SUBSIDIARIES" means the Original Charging Subsidiaries and any other
company which may from time to time accede to this Agreement and any relevant
Security Documents pursuant to a Supplemental Deed;
"COMMITMENT" means in relation to a Bank the amount set opposite its name in
Part D of schedule 1 or, as the case may be, in any relevant Substitution
Certificate, as amended by any relevant term of this Agreement;
"COMPLIANCE CERTIFICATE" means either (i) a certificate substantially in the
form set out in schedule 6A in relation to the compliance (or otherwise) with
the undertakings in clause 12 issued by an Authorised Officer in relation to
Quarterly Management Accounts or (ii) a certificate substantially in the form
set out in Schedule 6B in relation to the compliance (or otherwise) with the
undertakings in clause 12 issued by the auditors of the TCN Group in relation to
annual financial statements;
"CONSOLIDATED ANNUALISED TCN GROUP NET OPERATING CASH FLOW" means, for the TCN
Group, twice the aggregate of the Consolidated TCN Group Net Operating Cash Flow
in respect of the relevant Six Month Period for the TCN Group;
"CONSOLIDATED ANNUALISED TELEWEST GROUP NET OPERATING CASH FLOW" means, for the
Telewest Group, twice the aggregate of the Consolidated Telewest Group Net
Operating Cash Flow in respect of the relevant Six Month Period for Telewest
Group;
"CONSOLIDATED TCN GROUP NET OPERATING CASH FLOW" means, in respect of each Six
Month Period, the Net Income of the TCN Group (plus any depreciation,
amortisation, other non-cash expenses and non-cash taxes, interest or other
charges in respect of Borrowed Money) but excluding:
(i) all sums constituting Management Fees accrued in
respect of such Six Month Period to any member of the
TCN Group by any Restricted Person;
(ii) any extraordinary income (except to the extent that
the same is used to meet a related extraordinary
expense), net of any Taxes paid or payable in respect
of such income, of the TCN Group during such Six
Month Period;
(iii) any interest income, net of any Taxes paid or payable
in respect of such income, of the TCN Group for such
Six Month Period;
<PAGE>
(iv) any profits or losses attributable to the interest of
the TCN Group in any undertaking (as defined in
section 259 Companies Act 1985) which is not a
subsidiary undertaking (as defined in section 258
Companies Act 1985) of the Borrower;
all as determined in accordance with GAAP used in the preparation of and as
shown in the financial statements, Monthly Management Accounts or Quarterly
Management Accounts in respect of periods within such Six Month Period prepared
and delivered to the Agent pursuant to clause 10.1(f), clause 10.1(g) or clause
10.1(h) (as the case may be);
"CONSOLIDATED TELEWEST GROUP NET OPERATING CASH FLOW" means, in respect of each
Six Month Period, the Net Income of the Telewest Group (plus any depreciation,
amortisation, other non-cash expenses and non-cash taxes, interest or other
charges in respect of Borrowed Money) but excluding:
(i) any extraordinary income (except to the extent that
the same is used to meet a related extraordinary
expense), net of any Taxes paid or payable in respect
of such income, of the Telewest Group during such Six
Month period;
(ii) any interest income, net of any Taxes paid or payable
in respect of such income, of the Telewest Group for
such Six Month Period;
(iii) to the extent included within Net Income any profits
or losses attributable to the interest of the
Telewest Group in any undertaking (as defined in
section 259 Companies Act 1985) which is not a
subsidiary undertaking (as defined in section 258
Companies Act 1985) of the Borrower;
all as determined in accordance with GAAP used in the preparation of and as
shown in the financial statements, Monthly Management Accounts or Quarterly
Management Accounts in respect of periods within such Six Month Period prepared
and delivered to the Agent pursuant to clause 10.1(f), clause 10.1(g) or clause
10.1(h) (as the case may be);
"CONTRIBUTION" means in relation to a Bank the principal amount of the Loan
owing to such Bank at any relevant time;
"CONVERSION DATE" means the date, as specified in the relevant Conversion
Notice, on which any Revolving Advance made under Tranche A is to be converted
to a Revolving Advance under Tranche B, or vice versa, in each case in
accordance with the terms of this Agreement;
"CONVERSION NOTICE" means a notice substantially in the form of Schedule 2C;
"COTSWOLD LICENCES" means those licences of members of the TCN Group details of
which are set out in Part B of schedule 9;
"COX" means Cox Communications, Inc. a company incorporated in Delaware whose
principal place of business is 1400 Lake Hearn Drive, Atlanta, Georgia, 30319,
USA;
<PAGE>
"DEBENTURE" means the composite guarantee and debenture and/or several guarantee
and debentures entered into or to be entered into by the Borrower and each other
TCN Entity in favour of the Security Trustee in the agreed form;
"DEED OF SUBORDINATION" means a deed of subordination to be entered into between
Telewest and the Security Trustee pursuant to the terms of this Agreement,
substantially in the form of schedule 7 or on terms having substantially the
same commercial effect as the form of schedule 7;
"DEFAULT" means any Event of Default or any event or circumstance which with (i)
the giving of any notice referred to in this Agreement, (ii) the lapse of any
period of time referred to in this Agreement or (iii) the satisfaction of any
other condition referred to in this Agreement (or any combination of (i), (ii)
and (iii) above) would constitute an Event of Default;
"DISCLOSURE LETTER" means the letter of even date from the Borrower to the
Agent;
"DRAWDOWN DATE" means the date being a Banking Day on which an Advance is or is
to be drawn down;
"DRAWDOWN NOTICE" means a notice substantially in the form of schedule 2A;
"EARNINGS" means all monies whatsoever from time to time due or payable to any
member of the TCN Group arising out of the use or operation of the Cable Systems
including (but without limiting the generality of the foregoing) all revenues or
other payments due from Subscribers, damages for breach (or payments for
variation or termination) of any Subscriber's Agreement and any sums recoverable
from the insurers of the Cable Systems for loss of use or damage to such
systems;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating), pledge,
lien, hypothecation, assignment, assignation, trust arrangement or security
interest of any kind securing any obligation of any person or any other type of
preferential arrangement (including without limitation title transfer and/or
retention arrangements having similar effect);
"ENVIRONMENTAL CLAIM" means any claim, notice of violation, prosecution, demand,
action, official warning, abatement or other order (condition or otherwise),
relating to Environmental Matters and any notification or order requiring
compliance with the terms of any Environmental Licence or Environmental Law;
"ENVIRONMENTAL LAWS" includes all or any laws, statutes, regulations, treaties,
and judgments of any governmental authority or agency or any regulatory body in
any jurisdiction in which any member of the TCN Group is formed or carries on
business or the European Community relating to Environmental Matters applicable
to any member of the TCN Group and/or construction, installation and operation
of cable television and telecommunications systems in the TCN Franchises and/or
any other activities from time to time carried on by any member of the TCN Group
and/or the occupation or use of any property owned, leased or occupied by any
member of the TCN Group;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent or
other approval required at any time by any Environmental Law (but excluding, for
the avoidance of doubt, planning permission, listed building consent and
building regulation approvals) for the construction, installation and operation
of cable television and telecommunications systems in the TCN Franchises and/or
any other activities from time to time carried on by any member of the TCN
Group;
<PAGE>
"ENVIRONMENTAL MATTERS" means: (i) any generation, deposit, disposal, keeping,
treatment, transportation, transmission, handling or manufacture of any waste
(as defined in the Environmental Protection Act 1990) or any Relevant Substance;
(ii) nuisance, noise, defective premises, health and safety at work or
elsewhere; and (iii) the pollution, conservation or protection of the
environment (both natural and built) or of man or any living organism supported
by the environment (both natural and built);
"EVENT OF DEFAULT" means any of the events or circumstances described in clause
13.1;
"EXCESS CASH FLOW" means the Consolidated TCN Group Net Operating Cash Flow for
the relevant Six Month Period, as shown in the relevant Compliance Certificate
less (i) any Total TCN Group Cash Paying Debt Interest Charges accrued during
such Six Month Period, (ii) cash repayments and/or prepayments of any Borrowed
Money of the TCN Group made during such Six Month Period and (iii) capital
expenditure of the TCN Group whether or not incurred to the extent that the same
is included in the Annual Budget for such Six Month Period as delivered to the
Agent under this Agreement;
"FACILITY DEBT INTEREST CHARGES" means, in relation to any period, the total
amount of all interest, fees and commissions accruing in respect of the facility
granted pursuant to this Agreement during such period;
"FINANCE LEASE" means a lease treated as a finance lease pursuant to applicable
accounting standards (including at the date of this Agreement, Statement of
Standard Accounting Practice 21);
"GAAP" means generally accepted accounting principles and practices in the
United Kingdom;
"IMMATERIAL GROUP ENTITY" means any member of the TCN Group other than the
Borrower which (i) is dormant for the purposes of section 250(3) of the
Companies Act 1985 and (ii)(a) does not trade, (b) has no interest, legal or
beneficial, in the Licences, the Cable Systems, the Earnings, the Principal
Agreements, the share capital of any other member of the TCN Group which is not
an Immaterial Group Entity or any other assets used in the business of the TCN
Group and (c) is solvent (within the meaning of Section 123 of the Insolvency
Act 1986 or otherwise);
"INDEBTEDNESS" means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent;
"INDEMNITY" means an indemnity issued or to be issued by any TCN Entity in
favour of a bank in relation to a bond issued by such bank in favour of any
regulatory body or other person pursuant to any Telecommunications and Cable
Laws;
"INFORMATION MEMORANDUM" means the information memorandum prepared in relation
to the Borrower and the facility granted pursuant to this Agreement and
distributed to certain banks during April 1996;
"INTELLECTUAL PROPERTY RIGHTS" means any patent, trade mark, service mark,
registered design, trade name or copyright required to carry on the business of
constructing, installing or operating cable television and telecommunication
systems in the TCN Franchises and such other business as may be permitted by the
terms of this Agreement and which is carried on at the relevant time;
<PAGE>
"INTEREST PAYMENT DATE" means the last day of an Interest Period (and, in the
case of an Interest Period of more than six months, the dates falling at six
monthly intervals from the commencement of such Interest Period);
"INTEREST PERIOD" means, in relation to any Advance or the Loan, each period for
calculation of interest in respect of such Advance or the Loan ascertained in
accordance with clauses 5.5, 5.6 and 5.7;
"LIBOR" means, in relation to a particular period the arithmetic mean (expressed
as a percentage rounded upwards if necessary to the nearest four decimal places)
of the rates respectively quoted to the Agent by each of the Reference Banks at
the request of the Agent as such Reference Bank's offered rate for deposits of
Sterling in an amount approximately equal to the amount in relation to which
LIBOR is to be determined for a period equivalent to such period to prime banks
in the London Interbank Market at or about 11.00 a.m. on the first day of such
period;
"LICENCES" means the Cotswold Licences, the South East Licences, the North East
Licences, the London South Licences, the Avon Licences, the Scotland Licences,
the SBCC Licences and, if applicable, any other licences issued to TCN Entities
under any Telecommunications and Cable Laws;
"LOAN" means the aggregate principal amount owing to the Banks under this
Agreement at any relevant time;
"LOCAL DELIVERY OPERATOR" means a person holding a licence to operate a cable
telephony and/or cable television system under a Telecommunications and Cable
Law in respect of a prescribed geographical area or any person in relation to
which such person is a wholly-owned (directly or indirectly) Subsidiary;
"LONDON SOUTH/AVON FACILITY" means the (pound)190,000,000 loan facility granted
pursuant to a loan agreement dated 4 October 1993 (as amended) between, among
others, London South Cable Partnership and Avon Cable Limited Partnership as
borrowers and The Toronto-Dominion Bank as agent;
"LONDON SOUTH LICENCES" means those licences of members of the TCN Group details
of which are set out in part C of schedule 9;
"LONG RANGE PLAN" means the operational projections for the Telewest Group and
the TCN Group dated 10 December 1997 and the quarterly financing forecast dated
2 February 1998;
"MAJORITY BANKS" means Banks the aggregate of whose Contributions at any
relevant time exceeds 66_ per cent. of the Loan or, if no Advance is then
outstanding, the aggregate of whose Commitments exceeds 66_ per cent.
of the total of the Commitments of all of the Banks;
"MANAGEMENT FEES" means any management, consultancy or similar fees payable by
any TCN Entity to any Restricted Person or by any Restricted Person to any TCN
Entity, as applicable;
"MARGIN" shall be calculated in accordance with clause 5.2 or 5.3 (as
applicable) provided that, for the purposes of clause 5.8, "MARGIN" shall be
calculated in accordance with clause 5.3 (unless the relevant outstanding sum
was outstanding under Tranche A in which event the Margin shall be calculated in
accordance with clause 5.2);
<PAGE>
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the ability of the
TCN Entities (taken as a whole) to perform all or any of their respective
obligations under or otherwise comply with the terms of this Agreement or any of
the Security Documents;
"MATERIAL FINANCIAL ADVERSE EFFECT" means a material adverse effect on the
ability of the TCN Entities (taken as a whole) to perform all or any of their
respective payment obligations under this Agreement or any of the Security
Documents;
"MAXIMUM FORECASTED DEBT REQUIREMENT" means, in relation to any TCN Entities or
assets which have been acquired by the TCN Group under paragraph (vi) of the
definition of Permitted Investments, the maximum amount, estimated by the
Borrower in good faith and set out in the relevant investment analysis, that
such TCN Entities (taken as a whole) will be required to raise as Borrowed Money
(together with the amount of Borrowed Money that will be required to be raised,
in the case of an acquisition of assets) in order to comply with the
requirements of any Licences or Necessary Authorisations issued to such TCN
Entities (or comprising such assets) or such investment analysis (whichever is
the higher);
"MONTH" means a period beginning in one calendar month and ending in the next
calendar month on the day numerically corresponding to the day of the calendar
month on which it started,provided that (i) if the period started on the last
Banking Day in a calendar month or if there is no such numerically corresponding
day, it shall end on the last Banking Day in such next calendar month and (ii)
if such numerically corresponding day is not a Banking Day, the period shall end
on the next following Banking Day in the same calendar month but if there is no
such Banking Day it shall end on the preceding Banking Day and "months" and
"monthly" shall be construed accordingly;
"MONTHLY MANAGEMENT ACCOUNTS" means the monthly management accounts of the TCN
Group to be delivered (or which may be delivered) to the Agent pursuant to
clause 10.1(h) in the agreed form or containing information of the same type as
is required by such form;
"NATIONAL NETWORK" means the telecommunications systems together with all
associated cables, hardware and software, constructed or to be constructed in
accordance with or as permitted under the National Network Licence;
"NATIONAL NETWORK LICENCE" means the public telecommunications operating licence
granted by the Secretary of State for Trade and Industry to Telewest under the
Telecommunications Act 1984 on 14 January 1997;
"NECESSARY AUTHORISATIONS" means all approvals, authorisations and licences
(other than the Licences) from, all rights granted by and all filings,
registrations and agreements with any person including, without limitation, any
government or other regulatory authority necessary in order to enable each
member of the TCN Group to construct, maintain and operate the Cable Systems and
to carry on such other business as may be permitted by the terms of this
Agreement and which is carried on at the relevant time;
<PAGE>
"NET INCOME" means, (i) in relation to the TCN Group for any period, the net
profit after Taxes of the TCN Group arising out of the use or operation of the
Cable Systems for such period (excluding, if included, the net profit after
Taxes of Cable Guide Limited), and (ii) in relation to the Telewest Group for
any period, the net profit after Taxes of the Telewest Group for such period, in
each case as determined in accordance with GAAP used in the preparation of and
as shown in the financial statements, Monthly Management Accounts or Quarterly
Management Accounts in respect of such period prepared and delivered to the
Agent pursuant to clause 10.1(f), 10.1(g) or 10.1(h);
"NETWORK SERVICE CENTRE" means the arrangements effected pursuant to the
agreement dated 16 May 1994 and expressed to take effect from 1 January 1993
between, inter alia, Telewest Communications Group Limited, United Artists
Communications (North East) Partnership, United Artists Communications
(Cotswolds) Venture and United Artists Communications (South East) Partnership
together with any agreements to similar effect entered into from time to time
between, inter alia, members of the TCN Group and others;
"NON-GUARANTEED COMPUTER LEASE" means any Finance Lease of computer equipment in
respect of which no guarantee has been issued pursuant to this Agreement;
"NON-GUARANTEED LEASE" means any Finance Lease in respect of which (i) no
guarantee has been issued pursuant to this Agreement and (ii) in the case of a
Non-Guaranteed Switch Lease, a Step-in Rights Agreement has been executed;
"NON-GUARANTEED SWITCH LEASE" means any Finance Lease of switch equipment and
software in respect of which (i) no guarantee has been issued pursuant to this
Agreement and (ii) a Step-in Rights Agreement has been executed;
"NON-GUARANTEED VEHICLE LEASE" means any Finance Lease of vehicles in respect of
which no guarantee has been issued pursuant to this Agreement;
"NORTH EAST LICENCES" means those licences of members of the TCN Group details
of which are set out in part D of schedule 9;
"NORTEL STEP-IN RIGHTS AGREEMENT" means the agreement of such name to be entered
into between Nortel Limited, United Artists Communications (North East)
Partnership, United Artists Communications (South East) Partnership, United
Artists Communications (Cotswolds) Venture, London South Cable Partnership,
United Artists Communications (Scotland) Venture, Avon Cable Joint Venture and
the Security Trustee, in the agreed form;
"ORIGINAL CHARGING PARTNERSHIPS" means those partnerships whose names and
principal places of business are set out in part B of schedule 1;
"ORIGINAL CHARGING SUBSIDIARIES" means those companies whose names and
registered numbers are set out in part A of schedule 1;
"ORIGINAL NON-CHARGING SUBSIDIARIES" means those companies whose names and
registered numbers are set out in part C of schedule 1;
<PAGE>
"PERMITTED BORROWINGS" means:
(i) any Borrowed Money arising hereunder or under the
Security Documents;
(ii) any Borrowed Money approved by the Agent (acting on
the instruction of the Majority Banks);
(iii) any Borrowed Money included within Permitted
Intra-TCN Group Transactions or
Permitted Guarantees;
(iv) any Borrowed Money arising under the interest rate
protection arrangements referred to in clause
10.1(aa) or clause 11.1(i);
(v) any Borrowed Money arising under:
(a) Non-Guaranteed Switch Leases in aggregate
not exceeding (pound)120,000,000;
(b) Non-Guaranteed Vehicle Leases in aggregate
not exceeding (pound)50,000,000;
(c) Non-Guaranteed Computer Leases in aggregate
not exceeding (pound)20,000,000;
(d) any Borrowed Money arising under
Non-Guaranteed Leases (not falling within
(a), (b) or (c) above) in aggregate not
exceeding (pound)20,000,000;
Provided that the aggregate of all Borrowed Money
falling within this paragraph (v) shall not at any
time exceed (pound)140,000,000;
(vi) Subordinated Debt which is the subject of a Deed of
Subordination;
(vii) any Borrowed Money outstanding to any bank (which has a
credit rating from Standard & Poor's Corporation or
Moody's Investors Service Inc. of A (or its equivalent)
or better) with whom members of the TCN Group have a
cash management arrangement in place provided that (a)
the aggregate net amounts of Borrowed Money outstanding
to all such banks (after taking account of deposits made
by members of the TCN Group with the relevant banks)
does not exceed(pound)5,000,000 or the excess
above(pound)5,000,000 would not otherwise be prohibited
under this Agreement, (b) the net balance with each such
bank is in credit at least once in any 30 day period and
(c) the average (over any 365 day period) of the
aggregate of the net amount of Borrowed Money
outstanding to all such banks (after taking account of
deposits made by members of the TCN Group with the
relevant banks) does not exceed (pound)2,500,000;
(viii) any Borrowed Money arising under Indemnities not
exceeding (pound)250,000 for each TCN Franchise;
<PAGE>
(ix) after the end of the Revolving Period, any Borrowed
Money not within paragraphs (i) to (viii) above provided
that:
(a) such Borrowed Money is incurred after the end of
the Revolving Period;
(b) no Default has occurred and is continuing at the
date of the incurrence of such Borrowed Money;
and
(c) on the two Quarter Days immediately preceding
the incurrence of such Borrowed Money (as shown
in the relevant Compliance Certificates),
immediately after the incurrence of such
Borrowed Money and at all times thereafter Total
TCN Group Debt is less than 3 times Consolidated
Annualised TCN Group Net Operating Cash Flow;
(x) any Borrowed Money arising under or in respect of the
Second Secured Facility in a maximum principal amount of
up to (pound)100,000,000; and
(xi) any Borrowed Money not within paragraphs (i) to (x)
above and not exceeding at any time in aggregate
(pound)15,000,000;
"PERMITTED DISPOSALS" means:
(i) the application of cash in (a) the acquisition of assets
or services in the ordinary course of business, or the
making of loans in the ordinary course of business not,
in any such case, prohibited by the terms of this
Agreement or any Security Document, (b) the repayment of
Permitted Borrowings and the servicing thereof provided
that the same is not prohibited or otherwise restricted
by the terms of this Agreement or (c) the payment of
moneys by the Borrower to Telewest to the extent
permitted by the terms of this Agreement;
(ii) any disposals approved by the Agent (acting on the
instructions of the Majority Banks);
(iii) the placing of deposits with banks (which have a credit
rating from Standard & Poor's Corporation or Moody's
Investor Service Inc. of A (or its equivalent) or
better) not in contravention of the terms of this
Agreement or any Security Document;
(iv) the sale of property or other assets (but excluding any
ownership interest in any of the TCN Entities) on bona
fide arms length commercial terms in the ordinary course
of business to the extent that the net proceeds of sale
are applied forthwith after such sale in the acquisition
of assets of a similar nature and approximately equal
value to be used in the business of constructing,
installing or operating cable television and
telecommunications systems in the areas covered by the
Licences or any directly related business reasonably
considered to be financially beneficial to such
business;
<PAGE>
(v) the disposal of property or other assets (but excluding
any ownership interest in any of the TCN Entities) on
bona fide arms length commercial terms in the ordinary
course of business in consideration for the acquisition
of assets of a similar nature and approximately equal
value to be used in the business of constructing,
installing or operating cable television and
telecommunications systems in the areas covered by the
Licences or any directly related business reasonably
considered to be financially beneficial to such
business;
(vi) the disposal, for full market value, of any interest
rate or currency swap or other hedging instrument no
longer required for the purpose for which it was
originally entered into;
(vii) disposals within Permitted Intra-TCN Group Transactions;
(viii) the disposal of assets pursuant to any sale and
leaseback transactions which are permitted by and fall
within paragraph (v) of the definition of Permitted
Borrowings or as is permitted by the Banks pursuant to
Clause 20.1;
(ix) the disposal of any share (or other securities or any
interest therein) in (a) any Affiliate or (b) Cable
Guide Limited (registered no: 2025654); and
(x) disposals of assets on bona fide arm's length commercial
terms by a member of the TCN Group (other than any
disposals referred to in paragraphs (i) to (ix)
(inclusive) above) where such assets are obsolete or no
longer required for the purposes of such member of the
TCN Group's business;
"PERMITTED ENCUMBRANCES" means:
(i) any Encumbrance arising hereunder or under any of the
Security Documents;
(ii) any Encumbrance existing at the date hereof and set out
in parts I or II of Schedule 8 together with the
proposed Encumbrance set out in part III of Schedule 8;
(iii) any Encumbrance which the Agent, acting on the
instructions of the Majority Banks, has at any time in
writing agreed shall be a Permitted Encumbrance;
(iv) any Encumbrance arising in the ordinary course of
business by operation of law;
(v) any Encumbrance in favour of any bank incurred in
relation to any cash management or interest netting
arrangements;
(vi) rights of set-off arising in the normal course of
business;
(vii) any retention of title of goods supplied to any member
of the TCN Group where such retention is agreed in the
ordinary course of its trading activities and on
customary terms provided that the purchase price
relating to such goods is required to be paid within 120
days of the date on which the relevant goods are
supplied;
<PAGE>
(viii) (for the avoidance of doubt) any Encumbrance arising
under Finance Leases where the title to the relevant
assets does not vest in any member of the TCN Group to
the extent amounts outstanding under such Finance Leases
fall under paragraph (v) of the definition of Permitted
Borrowings;
(ix) any Encumbrance (a "NEW ENCUMBRANCE") created by any
member of the TCN Group in substitution for any
Encumbrance referred to in paragraph (ii) above (an
"EXISTING ENCUMBRANCE") provided that (i) such Existing
Encumbrance is irrevocably and unconditionally
discharged no later than the time of creation of the New
Encumbrance, (ii) the New Encumbrance relates only to
the same assets as the Existing Encumbrance, (iii) the
Indebtedness secured by the New Encumbrance does not
exceed the Indebtedness secured by the Existing
Encumbrance and (iv) if required by the Agent, before
such New Encumbrance is entered into, the beneficiary
thereof enters into a priorities arrangement with the
Agent and all of the Banks in form and substance
satisfactory to the Agent;
(x) any Encumbrance arising due to the provision of any
services or operations provided by any member of the TCN
Group whereby a member of the TCN Group agrees to hold
assets and equipment on trust for the benefit of the
users thereof provided that (a) the aggregate book value
of the assets and equipment held in such an arrangement
does not at any time exceed (a) in the case of the
Network Service Centre,(pound)25,000,000, (b) in the
case of Cable Internet,(pound)15,000,000 and (c) in the
case of any such arrangement (including the Network
Service Centre and/or Cable Internet),(pound)10,000,000
and (b) such users are persons engaged in a similar
business to that of the TCN Group;
(xi) any Encumbrance granted as security for the obligations
of TCN Entities under or in respect of the Second
Security Facility provided that an Encumbrance ranking
in priority to such Encumbrance has been or is
contemporaneously with the granting thereof granted as
security for the amounts owed to any of the
Beneficiaries (as defined in the Debenture); and
(xii) any Encumbrance not within paragraphs (i) to (xi) above
and securing Indebtedness in aggregate not exceeding
(pound)10,000,000 and where the assets the subject of
such Encumbrance have an aggregate book value not
exceeding (pound)15,000,000;
"PERMITTED GUARANTEES" means:
(i) any guarantees or indemnities arising hereunder or under
the Security Documents;
(ii) any guarantees or indemnities approved by the Agent
(acting on the instructions of the Majority Banks);
<PAGE>
(iii) any guarantees or indemnities included within Permitted
Intra-TCN Group Transactions;
(iv) any guarantees or indemnities included within Permitted
Borrowings;
(v) any guarantees or indemnities given by any TCN Entity in
respect of the liabilities of any other TCN Entity under
or in respect of the Second Secured Facility provided
that a guarantee or indemnity has been or is
contemporaneously with the granting thereof granted by
such TCN Entity in respect of the amounts owed to any of
the Beneficiaries (as defined in the Debenture); and
(vi) any guarantees or indemnities not included in paragraphs
(i) to (v) (inclusive) above provided that the maximum
liability thereunder (actual or contingent) when
aggregated with amounts outstanding as Borrowed Money
permitted by virtue of paragraph (x) of the definition
of Permitted Borrowings do not exceed in aggregate
(pound)15,000,000;
"PERMITTED INTRA-TCN GROUP TRANSACTIONS" means:
(i) loans made by a member of the TCN Group to a TCN Entity;
(ii) any transaction approved as a Permitted Intra-TCN Group
Transaction by the Agent (acting on the instructions of
the Majority Banks);
(iii) the payment or declaration of any dividend, return on
capital, repayment of capital contributions or other
distributions by any member of the TCN Group to a
shareholder which is a TCN Entity;
(iv) the purchase, acquisition, sale or disposal of assets or
revenues (including, without limitation, the acquisition
of any business or interest therein) by a TCN Entity
from or, as the case may be, to another TCN Entity
provided such assets or revenues remain charged to the
Security Trustee pursuant to a Security Document;
(v) the purchase, subscription for, or other acquisition of
any share (or other securities or any interest therein)
in any TCN Entity by any other TCN Entity provided such
shares are charged to the Security Trustee pursuant to a
Security Document;
(vi) the subscription for shares in any company on its
formation or the purchase of shares in any company which
has not at any time carried on any business (other than
that associated with its formation or any necessary
administrative activities) provided that (a) such shares
are charged to the Security Trustee pursuant to a
Security Document and (b) promptly upon such
subscription or purchase being completed such company
becomes a TCN Entity pursuant to the provisions of this
Agreement; and
<PAGE>
(vii) in relation to the ordinary course of trading, the
giving by any TCN Entity of any guarantee, bond or
indemnity in respect of the liabilities or obligations
of any other TCN Entity;
"PERMITTED INVESTMENTS" means:
(i) any transaction included within Permitted Disposals;
(ii) any transaction included within Permitted Intra-TCN
Group Transactions;
(iii) any investments approved by the Agent (acting on the
instructions of the Majority Banks);
(iv) any loans to or investments in Affiliates not exceeding
in aggregate (pound)18,000,000 at any time after the
date hereof but on or before 31 December 1997;
(v) any loans to Telewest representing any amount realised
under paragraph (ix)(a) of "Permitted Disposals" and any
acquisition of or investment in, or any acquisition of
assets falling within paragraph (ii) of clause 11.1(g)
of any person which is not a TCN Entity by a TCN Entity
provided that (a) such person is engaged in or such
assets are required for the business of (or a similar
business to that of) the TCN Group, (b) at the relevant
time, no Default has occurred and is continuing or would
result from the making of any such loan, acquisition or
investment and (c) the amount of any such loans together
with the aggregate consideration paid for all
investments or acquisitions falling within this
paragraph (v) does not exceed the aggregate net
consideration received in respect of disposals falling
within paragraph (ix)(a) of the definition of Permitted
Disposals;
(vi) on or after 1 January 1997, (a) any acquisition of the
entire ownership interest in, or (b) any acquisition of
assets falling within paragraph (ii) of clause 11.1(g)
of, any person which is not a TCN Entity in each case by
a TCN Entity provided that:
(1) the consideration payable for such
acquisition is satisfied entirely by (i) the
issue to the vendor of shares in Telewest
and/or (ii) the payment of cash to the
vendor provided that, for the purposes of
funding such payment, Subordinated Debt
which is the subject of a Deed of
Subordination has been lent to a TCN Entity
and/or Telewest has subscribed in cash for
equity share capital in the Borrower (which
share capital is charged to the Security
Trustee pursuant in accordance with Clause
11.1(f)) in an aggregate amount which is not
less than the amount of such consideration
and is applied in satisfaction of such
consideration;
<PAGE>
(2) in the case of sub-paragraph (a) above, such
person becomes a TCN Entity
contemporaneously with the making of such
acquisition or investment or, in the case of
sub-paragraph (b) above, such assets are
charged (or become subject to a charge) to
the Security Trustee pursuant to a Security
Document contemporaneously with the
acquisition thereof;
(3) the Borrower has delivered to the Agent an
investment analysis prepared by the Borrower
which shows that, immediately after making
such acquisition or investment:
(A) the Maximum Forecasted Debt Requirement
arising as a result of all such
acquisitions or investments (together
with the aggregate consideration paid or
payable (other than by (i) the issue to
the relevant vendor of shares in
Telewest or (ii) the payment to the
relevant vendor of all or part of the
proceeds of issue of any shares in
Telewest (and, in either case, the
consequential issue of shares and/or the
creation of Subordinated Debt by the
Borrower to Telewest)) in respect of all
such acquisitions or investments) will
not exceed(pound)120,000,000; and
(B) the Maximum Forecasted Debt Requirement
arising as a result of all such
acquisitions or investments will not
exceed (pound)40,000,000 in each of
financial years 1997 and 1998 and
(pound)80,000,000 in any subsequent
financial year of the Borrower; and
(4) in the case of sub-paragraph (a) above such
person is a Local Delivery Operator or in
the case of paragraph (b) above such assets
consist of all or substantially all of the
assets of a Local Delivery Operator
including all licences issued to such Local
Delivery Operator under the relevant
Telecommunications and Cable Laws;
(vii) any transaction not within paragraphs (i) to (vi)
(inclusive) above which would otherwise be prohibited
under clause 11.1(g) where the value of the aggregate
net consideration (in cash or otherwise) paid by members
of the TCN Group in any financial year of the Borrower
does not exceed (pound)1,000,000 (provided that if any
such amount is not used in any financial year it may be
carried forward and used in subsequent financial years);
"PERMITTED PAYMENTS" means any payments or transfers of assets (including Value
Added Tax thereon, if applicable):
(a) to any Restricted Person in relation to transactions carried out on
bona fide arm's length commercial terms in the ordinary course of
business;
<PAGE>
(b) (1) by the Borrower to Telewest (whether by way of (in the case of (i),
(ii) or (iv) below) dividend, other distribution, loan or interest
payable on Subordinated Debt or (2) (in the case of (iii) below) rental
payments by the relevant TCN Entity to Telewest in respect of a
sub-Finance Lease entered into between such parties in relation to the
relevant Telewest Lease) where such payment is to be used (and is so
used within a reasonable time) to fund:
(i) costs and expenses of Telewest incurred in relation to the TCN
Group of up to:
(1) in respect of the period from the date hereof to 31
December, 1996,(pound)1,000,000; and
(2) in respect of each financial year thereafter,
(pound)2,000,000;
(ii) the payment by Telewest of cash interest on the Senior
Securities then due or due within five Banking Days;
(iii) the payment of rental due on any Telewest Lease; or
(iv) the repayment of any advances made by Telewest under the 1997
Telewest Facility Agreement (subject to no event or
circumstance having occurred which is continuing and which
constitutes a Default),
provided that (1) no Default has occurred and is continuing or would
result from the making of any payment under this paragraph (b) and (2)
in the case of any rental payment, Telewest directs that such payment
be made to (and such payment is made to) the lessor under the
corresponding Telewest Lease to be applied in or towards discharging
Telewest's rental obligations under such Telewest Lease, and
(c) consisting of dividends or other distributions or the payment of
interest on or the repayment of Subordinated Debt made to any
Restricted Person after the end of the Revolving Period provided that:
(i) on the two Quarter Days immediately preceding the
making of any such payment (adjusted as if such
payment had then been made) and immediately after
such payment the ratio of each of (A) Total TCN Group
Debt to Consolidated Annualised TCN Group Net
Operating Cash Flow and (B) Total Telewest Group Debt
to Consolidated Annualised Telewest Group Net
Operating Cash Flow in each case does not exceed 3.0
times; and
(ii) no Default has occurred and is continuing or would
result from the making of any payment under this
paragraph (c);
"PLEDGE AND SECURITY AGREEMENTS" means each of the pledge and security
agreements to be entered into in favour of the Security Trustee by each of the
partners in each of the Charging Partnerships formed in the State of Colorado in
substantially the agreed form;
"PRINCIPAL AGREEMENTS" means the Sky Standard Cable Operator Agreements and the
BT Inter-Connect Agreements together with any agreements replacing any of the
same;
<PAGE>
"PRO-FORMA TOTAL TCN GROUP DEBT SERVICE" means the aggregate of (i) the total
forecast amount of interest (calculated by reference to the rate of interest in
effect in relation to the relevant Borrowed Money of the TCN Group on the date
on which the calculation falls to be made, adjusted to take account of any
interest rate hedging arrangements) and any other charges (other than expenses
and any one-off fees paid otherwise than in lieu of interest or discount)
payable in respect of Borrowed Money of the TCN Group in respect of the twelve
months immediately following the date on which the relevant calculation under
this Agreement falls to be made and (ii) the principal amount of any Borrowed
Money of the TCN Group due to be repaid in accordance with the terms of such
Borrowed Money during such period;
"PRO-FORMA TOTAL TELEWEST GROUP DEBT SERVICE" means the aggregate of (i) the
total forecast amount of interest (calculated by reference to the rate of
interest in effect in relation to the relevant Borrowed Money of the Telewest
Group on the date on which the calculation falls to be made, adjusted to take
account of any interest rate hedging arrangements) and any other charges (other
than expenses and any one-off fees paid otherwise than in lieu of interest or
discount) payable in respect of Borrowed Money of the Telewest Group in respect
of the twelve months immediately following the date on which the relevant
calculation under this Agreement falls to be made and (ii) the principal amount
of any Borrowed Money of the Telewest Group due to be repaid in accordance with
the terms of such Borrowed Money during such period;
"QUALIFYING BANK" means a person which falls within the definition of "bank" for
the purposes of section 840A of the Income and Corporation Taxes Act 1988, which
is beneficially entitled to any interest payable to it under this Agreement and
any other Security Document to which it is a party and which is within the
charge to corporation tax as respects such interest but so that if such Act is
amended or repealed, this definition shall be amended in such manner as the
Agent, after consultation with the Borrower, shall determine to be necessary in
order to define persons of the relevant equivalent category to whom the Borrower
may make payments hereunder without any obligation to make deduction or
withholding thereof;
"QUARTER DAYS" means 31st March, 30th June, 30th September and 31st December in
any year;
"QUARTERLY MANAGEMENT ACCOUNTS" means the quarterly management accounts of the
Telewest Group or the TCN Group (as the case may be) to be delivered to the
Agent pursuant to clause 11.1(g) in the agreed form or containing information of
the same type as is required by such form;
"QUARTERLY PERIOD" means each period of approximately three months commencing on
the day after a Quarter Day and ending on the next following Quarter Day;
"RBL STEP-IN RIGHTS AGREEMENT" means the agreement of such name to be entered
into between RB Leasing (March) Limited, Telewest, United Artists Communications
(North East) Partnership, United Artists Communications (South East)
Partnership, United Artists Communications (Cotswolds) Venture, London South
Cable Partnership, Scotcable (Motherwell) Limited, Kingdom Cablevision Limited,
Tayside Cable Systems Limited, Avon Cable Joint Venture and the Security Trustee
in form and substance reasonably satisfactory to the Borrower and the Agent;
<PAGE>
"REFERENCE BANKS" means the principal London offices of The Bank of New York,
Canadian Imperial Bank of Commerce, The Chase Manhattan Bank, N.A., National
Westminster Bank Plc and The Toronto-Dominion Bank and/or any other Bank
appointed as such pursuant to clause 18.12;
"REGION" means each of the geographical regions into which the business of the
TCN Group is divided at any relevant time for management accounting purposes,
being at the date of this Agreement, (i) London South, (ii) South West, (iii)
Scotland, (iv) South East, (v) North East, (vi) the North West and (vii) the
Midlands and being as from 1 January 1998, (a) London and South East, (b)
Scotland and North East, (c) Midlands and South West and (d) North West;
"REIMBURSEMENT AGREEMENT" means the agreement of such name to be entered into
between each of Original Charging Partnerships and the Borrower in the agreed
form;
"RELEVANT REVOLVING PERIOD" means the Tranche A Revolving Period or the Tranche
B Revolving Period, as applicable;
"RELEVANT SUBSTANCE" means (i) any radioactive emissions, (ii) electricity and
any electrical or electromagnetic emissions and (iii) any substance whatsoever
(whether in a solid or liquid form or in the form of a gas or vapour and whether
alone or in combination with any other substance) which is capable of causing
harm to man or any other living organism supported by the environment (both
natural and built), or damaging the environment (both natural and built) or
public health or welfare;
"RESTRICTED PAYMENT" means (a) any direct or indirect distribution, dividend,
loan or other payment (whether in cash, property, securities or otherwise) by
any member of the TCN Group (including, without limitation, any payment on
account of the share capital of the Borrower or capital stock or other
securities of the Borrower) or any interest thereon, (b) any transfer of any
assets by any member of the TCN Group and (c) any payment (whether in cash,
property, securities or otherwise) of principal of, or interest on, Subordinated
Debt, in each case to any Restricted Person;
"RESTRICTED PERSON" means any member of the Telewest Group other than (i) the
TCN Entities and (ii) Cable Guide Limited (registered no: 2025654);
"REVOLVING ADVANCE" means an Advance made during the Revolving Period;
"REVOLVING FACILITY" means the revolving loan facility granted to the Borrower
pursuant to this Agreement;
"REVOLVING PERIOD" means the period from (and including) the date hereof to (and
including) 31 December 2000;
"ROLLOVER NOTICE" means a notice substantially in the form of Schedule 2B;
"SBC" means SBC International Inc. of 2 Read's Way, Suite 222, Corporate
Commons, Newcastle, Delaware 19720, USA;
"SBCC" means SBC CableComms (UK) Limited (No. 2795350);
<PAGE>
"SBCC LICENCES" means those licences of members of the TCN Group details of
which are set out in part G of schedule 9;
"SCOTLAND FACILITY" means the (pound)195,000,000 loan facility granted pursuant
to a loan agreement dated 13 June 1994 (as amended) between, among others,
Telewest Scotland Holdings Limited as borrower and Canadian Imperial Bank of
Commerce as agent;
"SCOTLAND LICENCES" means those licences of members of the TCN Group details of
which are set out in part E of schedule 9;
"SCOTTISH SECURITY DOCUMENTS" means the Bond and Floating Charges, the Standard
Securities, and the Share Pledges;
"SECOND SECURED FACILITY" means the loan facility of up to (pound)100,000,000
granted or to be granted to the Borrower under and in accordance with the Second
Secured Facility Agreement;
"SECOND SECURED FACILITY AGREEMENT" means the agreement for the Second Secured
Facility entered into or to be entered into between the Borrower as borrower,
the Arrangers as arrangers, The Toronto-Dominion Bank as agent and certain banks
and financial institutions;
"SECURITY DOCUMENTS" means the Debenture, the Deed of Subordination, the Pledge
and Security Agreements, the Telewest Assignment, the Reimbursement Agreement,
the Scottish Security Documents, the RBL Step-in Rights Agreement, the Nortel
Step-in Rights Agreement, any other Step-in Rights Agreement, the Security Trust
Deed, any Supplemental Deed and all other mortgages, charges, guarantees,
indemnities and other instruments from time to time entered into in favour of
the Agent, the Security Trustee and/or the Banks by way of guarantee or other
assurance of and/or security for amounts owed to any of the Beneficiaries (as
defined or to be defined in the Debenture);
"SECURITY TRUST DEED" means the security trust deed to be entered into between
the Borrower, Telewest, the Original Charging Subsidiaries, the Original
Charging Partnerships, the Arrangers, the Banks, the Bond Providers referred to
therein, the Interest Rate Beneficiaries referred to therein, the Agent and the
Security Trustee;
"SECURITY TRUSTEE" means CIBC Wood Gundy plc of Cottons Centre, Cottons Lane,
London SE1 2QL and/or such other person as may be appointed as security trustee
pursuant to any Security Document (as the context requires);
"SENIOR SECURITIES" means the $300,000,000 95/8% senior debentures due 2006 and
$1,536,413,000 11% senior discount debentures due 2007 issued by Telewest on 3
October 1995;
"SHARE PLEDGES" means the share pledges to be entered into by certain Original
Charging Subsidiaries over the shares in those members of the TCN Group
incorporated in Scotland (other than those which are Original Non-Charging
Subsidiaries) in the agreed form;
"SIX MONTH PERIOD" means each period of six months ending on the last day of a
calendar month;
"SKY STANDARD CABLE OPERATOR AGREEMENTS" means the agreements referred to in
part B of Schedule 10;
<PAGE>
"SOUTH EAST LICENCES" means those licences of members of the TCN Group details
of which are set out in part F of schedule 9;
"STANDARD SECURITY" means the second ranking standard security to be entered
into by Scotcable (Motherwell) Limited in relation to Block 7, Goldie Road,
Bothwell Park Industrial Estate, Uddingston;
"STEP-IN RIGHTS AGREEMENT" means, in relation to any Non-Guaranteed Switch
Lease, a step-in rights agreement between the lessor, the lessee and the
Security Trustee, in substantially the form, mutatis mutandis (with such
amendments as the Security Trustee may approve) as the Nortel Step-in Rights
Agreement;
"STERLING" and "(POUND)" mean the lawful currency for the time being of the
United Kingdom and in respect of all payments to be made under this Agreement in
Sterling means immediately available, freely transferable cleared funds;
"SUBSCRIBER" means a person who has entered into an agreement (which has not
expired or been terminated) (a "SUBSCRIBER'S AGREEMENT") with a TCN Entity to be
provided with services by a TCN Entity through the operation of the Cable
Systems;
"SUBORDINATED DEBT" means, at any relevant time, all Indebtedness of the TCN
Entities owed to a Restricted Person;
"SUBSIDIARY" of a person means (a) any company or entity directly or indirectly
controlled by such person, for which purpose "control" means either ownership of
more than 50 per cent. of the voting share capital (or equivalent right of
ownership) of such company or entity or power to direct its policies and
management whether by contract or otherwise or the right to receive more than 50
per cent. of any distributions (of whatever nature) made in respect of the share
capital or other ownership interests of such company or entity and (b) in the
case of a company incorporated in England and Wales or Scotland, a Subsidiary
Undertaking;
"SUBSIDIARY UNDERTAKING" has the meaning given to such term in section 258
Companies Act 1985;
"SUBSTITUTE" has the meaning ascribed thereto in clause 17.4;
"SUBSTITUTION CERTIFICATE" means a certificate substantially in the form of
schedule 5;
"SUPPLEMENTAL DEED" means a deed supplemental to this Agreement, the Debenture
and certain of the other Security Documents executed, inter alios, by a
Subsidiary or Associated Partnership of the Borrower in the form of schedule 4
to the Debenture or in such other form as is agreed between the Agent and the
Borrower whereby such Subsidiary or Associated Partnership becomes a party to
this Agreement and any relevant Security Document as a Charging Subsidiary or
Charging Partnership, as the case may be;
"TAXES" includes all present and future taxes, levies, imposts, duties, fees or
charges of a similar nature together with interest thereon and penalties in
respect thereof and "Taxation" shall be construed accordingly;
<PAGE>
"TCI" means Tele-Communications, Inc. whose principal place of business is at
Terrace Tower II, 5619, DTC Parkway Englewood, Colorado, U.S.A.;
"TCN ENTITIES" means the Borrower, each Original Charging Subsidiary and each
Original Charging Partnership together with any company or partnership which is
or becomes a party to this Agreement and the relevant Security Documents
pursuant to clause 10.1(x);
"TCN FRANCHISES" means those areas in which the TCN Group is permitted to
operate cable television and cable telecommunications systems pursuant to the
Licences;
"TCN GROUP" means the Borrower, all its Subsidiaries and all its Associated
Partnerships from time to time;
"TELECOMMUNICATIONS AND CABLE LAWS" means the Telecommunications Act 1984, the
Cable and Broadcasting Act 1984, the Broadcasting Act 1990 and all other laws,
statutes, regulations and judgements relating to telecommunications or cable
television applicable to any member of the TCN Group, and/or the business
carried on by, any member of the TCN Group (for the avoidance of doubt, not
including laws, statutes, regulations or judgments relating solely to consumer
credit, data protection or intellectual property);
"TELEWEST" means Telewest Communications plc (No. 2983307);
"TELEWEST ASSIGNMENT" means the assignment by way of security to be entered into
by Telewest of Telewest's rights in and to the Subordinated Debt in the agreed
form;
"TELEWEST COMMUNICATIONS" means Telewest Communications Cable Limited (No.
2883742);
"TELEWEST GROUP" means Telewest, all its Subsidiaries and all its Associated
Partnerships;
"TELEWEST LEASE" means a Finance Lease of tangible and/or intangible assets by
Telewest where such assets are the subject of a sub-Finance Lease between
Telewest and a member of the TCN Group;
"TELEWEST/TCN LOAN AGREEMENT" means the loan agreement dated 21 May 1996
pursuant to which Telewest has made a loan to the Borrower in an amount of
(pound)399,739,534.58;
"TERM" means, in relation to a Revolving Advance, the period for which such
Revolving Advance is or is to be made, as specified in the Drawdown Notice or
Rollover Notice for such Revolving Advance, or as otherwise determined in
accordance with the provisions hereof;
"TERM ADVANCE" means, after the end of the Revolving Period, the advance deemed
to be made pursuant to clause 4.15 and any advance resulting from the division
and/or consolidation of any Term Advance in accordance with clause 4.15;
"TERM DATE" means, in relation to a Revolving Advance, the last day of the Term
of such Revolving Advance;
"TERM PERIOD" means the period from (and including) 1 January 2001 to (and
including) 31 December 2005;
<PAGE>
"TERM REPAYMENT DATE" means each of the dates referred to in clause 6.2;
"TOTAL COMMITMENTS" means at any relevant time the total of the Commitments of
all the Banks at such time;
"TOTAL TCN GROUP CASH PAYING DEBT" means that part of Total TCN Group Debt in
respect of which interest and any other charges (except expenses and any one-off
fees paid otherwise than in lieu of interest or discount) is currently paid or
payable;
"TOTAL TCN GROUP CASH PAYING DEBT INTEREST CHARGES" means, in relation to any
period, the total amount of all interest, fees and commissions accruing in
respect of Total TCN Group Cash Paying Debt during such period;
"TOTAL TCN GROUP DEBT" means the aggregate consolidated amount of all Borrowed
Money of the TCN Group less the amount of the loan made by Telewest to the
Borrower dated 21 May 1996 pursuant to the Telewest/TCN Loan Agreement;
"TOTAL TELEWEST GROUP CASH PAYING DEBT" means that part of Telewest Group Debt
in respect of which interest and any other charges (except expenses and any
one-off fees paid otherwise than in lieu of interest or discount) is currently
paid or payable;
"TOTAL TELEWEST GROUP CASH PAYING DEBT INTEREST CHARGES" means, in relation to
any period, the total amount of all interest, fees and commissions accruing in
respect of Total Telewest Group Cash Paying Debt during such period;
"TOTAL TELEWEST GROUP DEBT" means the aggregate consolidated amount of all
Borrowed Money of the Telewest Group;
"TRANCHE A" means that part of the Facility made available to the Borrower under
this Agreement which is referred to herein as such;
"TRANCHE A LOAN" means the aggregate principal amount of all Revolving Advances
made under Tranche A which are, at the relevant time, outstanding under Tranche
A;
"TRANCHE A REVOLVING PERIOD" means the period from (and including) the date
hereof to (and including) 30 September 1998;
"TRANCHE B" means that part of the Facility made available to the Borrower under
this Agreement which is referred to herein as such;
"TRANCHE B LOAN" means, at any time during the Revolving Period, the aggregate
principal amount of all Revolving Advances made under Tranche B which are, at
the relevant time, outstanding under Tranche B and, at any time after the
Tranche B Revolving Period, the aggregate principal amount of all Term Advances
outstanding under Tranche B;
"TRANCHE B REVOLVING PERIOD" means the period from (and including) 1 July 1996
to (and including) 31 December 2000;
<PAGE>
"ULTIMATE SHAREHOLDERS" means US WEST, TCI, Cox and SBC and "Ultimate
Shareholder" means any one of them; and
"US WEST" means US WEST, Inc. whose principal place of business is at 7800 East
Orchard Road, Englewood, Colorado 80111, U.S.A.
1.3 HEADINGS
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.
1.4 CONSTRUCTION OF CERTAIN TERMS
In this Agreement, unless the context otherwise requires:
(a) reference to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement
and references to this Agreement include its schedules;
(b) reference to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this
Agreement, that provision or that document as in force for the
time being and as from time to time amended in accordance with
the terms thereof, or, as the case may be, with the agreement
of the relevant parties and (where such consent is, by the
terms of this Agreement or the relevant document required to
be obtained as a condition to such amendment being permitted)
the prior written consent of the Agent, all of the Banks or
the Majority Banks (as the case may be);
(c) reference to a "regulation" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any
self-regulatory or other national or supra-national authority;
(d) words importing the plural shall include the singular and vice versa;
(e) reference to a time of day are to London time;
(f) references to a person shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any agency
thereof and that person's successors in title;
(g) reference to a document "in the agreed form" means in the form
of a draft of such document initialled by way of
identification by the Agent and the Borrower;
(h) references to a "guarantee" include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or services as a
<PAGE>
consequence of a default by any other person to pay any
Indebtedness and "guaranteed" shall be construed accordingly;
(i) reference to "set-off" includes retention, compensation and
the balancing of accounts under Scots law;
(j) references to any enactment shall be deemed to include
reference to such enactment as re-enacted, amended or
extended; and
(k) references to "business" in relation to any member of the TCN
Group mean the construction, installation, operation and
utilisation of cable television and/or telecommunications
systems in the TCN Franchises and/or any business directly
related thereto and reasonably considered to be financially
beneficial to such business, and references to "ordinary
course of business" in relation to any member of the TCN Group
shall be similarly construed.
1.5 MAJORITY BANKS
Where this Agreement provides for any matter to be determined by reference to
the opinion of the Majority Banks or to be subject to the consent or request of
the Majority Banks or for any action to be taken on the instructions of the
Majority Banks, such opinion, consent, request or instructions shall (as between
the Banks) only be regarded as having been validly given or issued by the
Majority Banks if all of the Banks shall have received appropriate prior notice
of the matter on which such opinion, consent, request or instructions are
required to be obtained and the relevant majority of Banks shall have given or
issued such opinion, consent, request or instructions but the Borrower and each
other TCN Entity shall be entitled (and bound) to assume that such notice shall
have been duly received by each Bank and that the relevant majority shall have
been obtained to constitute Majority Banks whether or not this is in fact the
case.
1.6 AGENT'S OPINION
Where this Agreement provides for the Agent's opinion to determine whether any
matter would or is reasonably likely to have a Material Financial Adverse
Effect, a Material Adverse Effect and/or a material adverse effect, as the case
may be, the Agent shall act in accordance with the instructions of the Majority
Banks (acting reasonably) in making such determination.
1.7 BANK COMMITMENTS
For the purpose of the definition of "Majority Banks" in clause 1.2 and of
clause 18.10 references to the Commitment of a Bank shall, if the Total
Commitments have, at any relevant time, been reduced to zero, be deemed to be a
reference to the Commitment of that Bank immediately prior to such reduction to
zero.
<PAGE>
2. THE FACILITY
2.1 AMOUNT
The Banks, relying upon each of the representations and warranties in clause 9
and in the Security Documents, agree to lend to the Borrower by way of Advances
upon and subject to the terms of this Agreement the principal sum of up to
(pound)1,200,000,000. The obligation of each Bank under this Agreement shall be
to contribute that proportion of each Advance which, as at the Drawdown Date of
such Advance, its Commitment bears to the Total Commitments.
2.2 OBLIGATIONS SEVERAL
The obligations of each Bank under this Agreement are several; the failure of
any Bank to perform such obligations shall not relieve any other Bank, the
Arrangers, the Agent, the Security Trustee or any TCN Entity of any of their
respective obligations or liabilities under this Agreement nor shall the Agent,
the Arrangers or the Security Trustee be responsible for the obligations of any
Bank (except for its own obligations, if any, as a Bank) nor shall any Bank be
responsible for the obligations of any other Bank under this Agreement.
2.3 INTERESTS SEVERAL
Notwithstanding any other term of this Agreement (but without prejudice to the
provisions of this Agreement relating to or requiring action by the Majority
Banks) the interests of the Agent, the Arrangers, the Security Trustee and the
Banks are several and the amount due to the Agent (for its own account), to each
Arranger, to the Security Trustee and to each Bank is a separate and independent
debt. The Agent, each Arranger, the Security Trustee and each Bank shall have
the right to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for the Agent, any Arranger, the Security Trustee or any
Bank (as the case may be) to be joined as an additional party in any proceedings
for this purpose.
3. CONDITIONS
3.1 DOCUMENTS AND EVIDENCE
The obligations of each Bank to make its Commitment available shall be subject
to the condition that the Agent, or its duly authorised representative, shall
have received the documents and evidence specified in schedule 3 in form and
substance satisfactory to all of the Banks not later than three Banking Days
before the day on which the Drawdown Notice in respect of the first Advance is
given. The Agent shall notify the Banks of receipt of such Drawdown Notice and
whether or not the form and substance of such documents are satisfactory to the
Agent.
3.2 GENERAL CONDITIONS PRECEDENT
The obligation of each Bank to contribute to any Advance is subject to the
further conditions that at the time of the giving of a Drawdown Notice for, and
at the time of the making of, such Advance:
<PAGE>
(a) the representations and warranties referred to in clause 9.3,
including those deemed to be made by the Borrower pursuant to
such clause, being (subject as provided in clause 9.3) true
and correct as of each such time as if each was made with
respect to the facts and circumstances existing at such time;
and
(b) no Default shall have occurred and be continuing which has not
been remedied or expressly waived or would result from the
making of such Advance.
3.3 WAIVER OF CONDITIONS PRECEDENT
The conditions specified in this clause 3 are inserted solely for the benefit of
the Banks and may be waived on their behalf in whole or in part and with or
without conditions by the Agent acting on the instructions of all of the Banks
in respect of the first Advance and on the instructions of the Majority Banks in
respect of subsequent Advances without prejudicing the right of the Agent acting
on such instructions to require fulfilment of such conditions in whole or in
part in respect of any other Advance.
4. REVOLVING ADVANCES
TRANCHE A AND TRANCHE B
Subject to the terms and conditions of this Agreement, Revolving Advances may be
made, at the option of the Borrower, under either Tranche A or Tranche B.
4.2 MAXIMUM TRANCHE A OUTSTANDINGS
The aggregate principal amount of Revolving Advances outstanding under Tranche A
on any day falling within the period set out in column (1) below shall not
exceed the amount set out against such period in column (2) below and no
Revolving Advance shall be made under Tranche A if, following the making of such
Revolving Advance, such limit would be exceeded:
(1) (2)
PERIOD MAXIMUM AGGREGATE PRINCIPAL
AMOUNT OF REVOLVING ADVANCES
UNDER TRANCHE A
up to (but excluding) 31 March 1998 (pound)300,000,000
from (and including) 31 March 1998 to
(and including) 30 September 1998 (pound)100,000,000
thereafter
nil
<PAGE>
MAXIMUM TRANCHE B OUTSTANDINGS
The aggregate principal amount of Revolving Advances outstanding under Tranche B
on any day falling within the period set out in column (1) below shall not
exceed the amount calculated by multiplying Consolidated Annualised TCN Group
Net Operating Cash Flow (determined by reference to the most recently delivered
Monthly Management Accounts) at such time by the number set out against such
period in column (2) below and no Revolving Advances shall be made under Tranche
B if, following the making of such Revolving Advance, such limit would be
exceeded:
(1) (2)
PERIOD MULTIPLE OF CONSOLIDATED
ANNUALISED TCN GROUP NET
OPERATING CASH FLOW
from 1 July, 1996 to (and including) 31 6.5
December, 1998
from (but excluding) 31 December, 1998 to (and 6.0
including) 30 June, 1999
from (but excluding) 30 June, 1999 to (and 5.0
including) 31 December, 1999
from (but excluding) 31 December, 1999 to (and 4.0
including) 31 December, 2000
4.4 MAXIMUM AGGREGATE OUTSTANDING ADVANCES
The aggregate principal amount of the Loan shall not at any time exceed
(pound)1,200,000,000 and no RevoLVIng Advance shall be made under this Agreement
if, following the making of such Revolving Advance, such limit would be
exceeded.
4.5 DRAWDOWN
Subject to the terms and conditions of this Agreement a Revolving Advance will
be made to the Borrower following receipt by the Agent from the Borrower of a
Drawdown Notice signed by an Authorised Officer not later than 10 a.m. on the
second Banking Day before the proposed Drawdown Date. A Drawdown Notice shall be
effective on actual receipt by the Agent and, once given, shall, subject as
provided in clause 5.10(a), be irrevocable. No Drawdown Notice may be given in
respect of an amount which is the subject of a notice received by the Agent
under clause 6.9.
<PAGE>
4.6 ROLLOVER
Subject to the terms and conditions of this Agreement, if the Borrower wishes to
draw a Revolving Advance under Tranche A or Tranche B on any day (the "RELEVANT
DAY") of an amount of not more than the amount of a Revolving Advance which is
due to be repaid on the Relevant Day in accordance with clause 4.13, the
Borrower shall not be obliged to serve a Drawdown Notice in relation to such new
Revolving Advance but may serve a Rollover Notice signed by an Authorised
Officer specifying the amount of the new Revolving Advance and the Term thereof
and whether such new Revolving Advance is to be made under Tranche A or Tranche
B. A Rollover Notice shall be effective on actual receipt by the Agent (which
must be no later than 10 a.m. on the second Banking Day before the Relevant Day)
and, once given, shall, subject as provided in clause 5.10(a), be irrevocable.
No Rollover Notice may be given in respect of an amount which is the subject of
a notice received by the Agent under clause 6.9.
4.7 NO ROLLOVER NOTICE
If the Agent does not receive a Rollover Notice from the Borrower in accordance
with clause 4.6 in respect of a new Revolving Advance under either Tranche A or
Tranche B to be made on the Term Date of a Revolving Advance outstanding to the
Borrower then, subject to the terms and conditions of this Agreement (including
without limitation clauses 4.2, 4.3 and 4.4), a Revolving Advance of an amount
equal to the amount of the Revolving Advance due to be repaid shall be made to
the Borrower under Tranche A, if the Revolving Advance due to be repaid was
outstanding under Tranche A, or under Tranche B, if the Revolving Advance due to
be repaid was outstanding under Tranche B on such Term Date for a Term of one
month or such other period as shall comply with clause 4.10 unless the amount of
such Revolving Advance is the subject of a notice received by the Agent under
clause 6.9.
4.8 CONVERSION TO TRANCHE A
The Borrower may at any time during the Tranche A Revolving Period convert all
or any of the outstanding Revolving Advances made to the Borrower under Tranche
B so that such Revolving Advances are outstanding under Tranche A, in each case
with effect from the relevant Conversion Date, following receipt by the Agent of
a Conversion Notice signed by an Authorised Officer not later than 10 a.m. on
the second Banking Day before the proposed Conversion Date. A Conversion Notice
under this clause 4.8 shall be effective on actual receipt by the Agent and once
given shall be irrevocable. Each Conversion Notice given under this clause 4.8
shall contain a confirmation that, on the relevant Conversion Date, the Borrower
will be in compliance with the provisions of clause 4.2, having taken into
account such conversion. No Tranche B Advance may be converted to a Tranche A
Advance if either (i) such Tranche B Advance became a Tranche B Advance as a
result of conversion from a Tranche A Advance during the then current Interest
Period or (ii) the most recent conversion of a Tranche B Advance to a Tranche A
Advance took place within one month prior to the date of the proposed conversion
(but this proviso (ii) shall not restrict the conversion of more than one
Tranche B Advance to a Tranche A Advance on any one day).
4.9 CONVERSION TO TRANCHE B
The Borrower may at any time during the Tranche A Revolving Period convert all
or any of the outstanding Revolving Advances made to the Borrower under Tranche
A so that such Revolving Advances are outstanding under Tranche B with effect
<PAGE>
from the relevant Conversion Date, following receipt by the Agent of a
Conversion Notice signed by an Authorised Officer not later than 10 a.m. on the
second Banking Day before the proposed Conversion Date. A Conversion Notice
under this clause 4.9 shall be effective on actual receipt by the Agent and once
given shall be irrevocable. Each Conversion Notice under this clause 4.9 shall
contain a confirmation that, on the relevant Conversion Date, the Borrower will
be in compliance with the provisions of clause 4.3, having taken into account
such conversion. No Tranche A Advance may be converted to a Tranche B Advance if
either (i) such Tranche A Advance became a Tranche A Advance as a result of
conversion from a Tranche B Advance during the then current Interest Period or
(ii) the most recent conversion of a Tranche A Advance to a Tranche B Advance
took place within one month prior to the date of the proposed conversion (but
this proviso (ii) shall not restrict the conversion of more than one Tranche A
Advance to a Tranche B Advance on any one day).
4.10 TERM AND AMOUNT OF REVOLVING ADVANCES
(a) Revolving Advances may be made only on Banking Days falling
within, in the case of Revolving Advances made under Tranche A,
the Tranche A Revolving Period or, in the case of Revolving
Advances made under Tranche B, the Tranche B Revolving Period,
and may be borrowed only for a Term of one month or two, three
or six months or (with the prior agreement of all of the Banks)
any other period in any such case ending not later than the last
day of the Relevant Revolving Period Provided that any Revolving
Advances made less than one month prior to the last day of the
Relevant Revolving Period may only be borrowed for the period up
to and ending on such date;
(b) each Revolving Advance shall be of either (i) (pound)10,000,000
or any larger sum which IS an integral multiple of
(pound)5,000,000 or (ii) the remaining available facility under
Tranche A or Tranche B (as applicable);
(c) no Revolving Advance may be drawn down under Tranche A and no
Revolving Advance drawn down under Tranche B may be converted to
Tranche A on any day if the making of such Revolving Advance or
such conversion would cause the limits contained in either
clause 4.2 or clause 4.4 to be exceeded;
(d) no Revolving Advance may be drawn down under Tranche B and no
Revolving Advance drawn down under Tranche A may be converted to
Tranche B on any day if the making of such Revolving Advance or
such conversion would cause the limits contained in either
clause 4.3 or clause 4.4 to be exceeded; and
(e) no Revolving Advance may be drawn down if, as a result, there
would be more than eight Revolving Advances then outstanding.
4.11 NOTIFICATION TO BANKS
On the date of receipt of a Drawdown Notice or a Rollover Notice complying with
the terms of this Agreement or if a Revolving Advance is otherwise to be made in
accordance with clause 4.7 the Agent shall notify each Bank thereof, of the date
on which such Revolving Advance is to be made, the Term thereof, whether such
Revolving Advance is to be made under Tranche A or Tranche B. Subject to the
provisions of clauses 3 and 4.13, on the date for the making of the relevant
Revolving Advance each of the Banks shall make available to the Agent its
portion of such Revolving Advance in accordance with clause 8.2. On the date of
receipt of a Conversion Notice complying with the terms of this Agreement the
Agent shall notify each Bank thereof and of the Conversion Date and whether
under Tranche A or Tranche B and the amount which is the subject of such
Conversion Notice.
<PAGE>
4.12
TERMINATION OF COMMITMENTS
Any part of the Commitments undrawn and uncancelled in respect of Tranche B at
the end of the Tranche B Revolving Period or, in respect of Tranche A at the end
of the Tranche A Revolving Period, shall thereupon be automatically reduced to
zero.
4.13 REPAYMENT OF REVOLVING ADVANCES
The Borrower agrees to repay each Revolving Advance in respect of which the Term
Date is before the last day of the Relevant Revolving Period on such Term Date.
If a Revolving Advance (the "NEW REVOLVING ADVANCE") is to be made to the
Borrower on a day on which another Revolving Advance made to the Borrower (the
"MATURING REVOLVING ADVANCE") is due to be repaid then, subject to the terms of
this Agreement and so long as the conditions referred to in clause 3.2 shall
have been satisfied in relation to the new Revolving Advance, (i) the maturing
Revolving Advance shall be deemed to have been repaid on its Term Date either in
whole (if the new Revolving Advance is equal to or greater than the maturing
Revolving Advance) or in part (if the new Revolving Advance is less than the
maturing Revolving Advance) and the Borrower shall only be obliged to repay the
principal amount by which the maturing Revolving Advance exceeds the new
Revolving Advance and (ii) to the extent that the maturing Revolving Advance is
so deemed to have been repaid, the principal amount of the new Revolving Advance
to be made on such date shall be deemed to have been credited to the account of
the Borrower by the Agent on behalf of the Banks in accordance with the terms of
this Agreement and the Banks shall only be obliged to make available to the
Borrower pursuant to clause 4.11 a principal amount (if any) equal to the amount
by which the new Revolving Advance exceeds the maturing Revolving Advance.
4.14 CONVERSION TO A TERM LOAN
On the last day of the Tranche B Revolving Period the revolving credit facility
made available under Tranche B shall convert to a term loan and all outstanding
Revolving Advances the Term Date of which is the last day of the Revolving
Period shall be consolidated with any other such Revolving Advances into the
Loan and be repaid in accordance with clause 6.
4.15 TERM ADVANCES
Following the consolidation referred to in clause 4.14, all Revolving Advances
shall be deemed to have been repaid and the Loan shall be deemed to be a Term
Advance for the purposes of this Agreement. The Borrower may by notice received
by the Agent not later than 10 a.m. on the second Banking Day before the
beginning of each Interest Period in respect of a Term Advance specify that such
Term Advance shall be divided into more than one Term Advance, or consolidated
with any other Term Advance outstanding in respect of the Loan in respect of
which the then current Interest Period ends on the same day as the current
Interest Period in respect of such Term Advance. No more than 12 Term Advances
may be outstanding under this Agreement at any time. If more than one Term
Advance is outstanding in respect of the Loan each such Term Advance shall be
either (pound)10,000,000 or any larger sum which is an integral multiple of
(pound)5,000,000 or the balance of the Loan.
<PAGE>
5. INTEREST AND INTEREST PERIODS; ALTERNATIVE INTEREST RATES
5.1 NORMAL INTEREST RATES
The Borrower agrees to pay interest on each Advance in respect of each Interest
Period relating thereto on each Interest Payment Date at the rate per annum
determined by the Agent to be the aggregate of (a) the applicable Margin, (b)
the Additional Cost and (c) LIBOR.
5.2 TRANCHE A MARGIN
The Margin in relation to any Revolving Advance made under Tranche A shall be
2.25 per cent. per annum.
5.3 TRANCHE B MARGIN
The Margin in relation to any Revolving Advance made under Tranche B and any
Term Advance shall (subject to the proviso below) be the rate set out in column
(1) below against the ratio of Total TCN Group Cash Paying Debt to Consolidated
Annualised TCN Group Net Operating Cash Flow set out in column (2) below as
shown in the most recently delivered Monthly Management Accounts (or, after the
end of the Revolving Period, the most recently delivered Quarterly Management
Accounts or Monthly Management Accounts) of the TCN Group delivered to the Agent
under this Agreement prior to the first day of the relevant Interest Period:
<TABLE>
<CAPTION>
(1) (2)
RATE (PER CENT. RATIO OF TOTAL TCN GROUP CASH PAYING DEBT TO
PER ANNUM) CONSOLIDATED ANNUALISED TCN GROUP NET OPERATING CASH
FLOW
<S> <C>
1.875 greater than or equal to 6.0
1.500 less than 6.0 but greater than or equal to 4.5
1.000 less than 4.5 but greater than or equal to 3.0
0.500 less than 3.0
</TABLE>
provided that if on the first day of the relevant Interest Period the Borrower
has failed to deliver any relevant financial statements then due under this
Agreement within the time period for the Borrower so to deliver such financial
statements, then the Margin for such Advance during such Interest Period shall
from (and including) the last day upon which such financial statements were due
to (but excluding) the date of delivery of such financial statements be 1.875
per cent. per annum.
<PAGE>
5.4 Conversion Margin
In respect of any Interest Period during which a Revolving Advance is converted
from Tranche A to Tranche B (or vice versa) the Margin for that part of the
Interest Period that the Revolving Advance was outstanding under Tranche A shall
be determined in accordance with clause 5.2 and the Margin for that part of the
Interest Period that the Revolving Advance was outstanding under Tranche B was
outstanding shall be determined in accordance with clause 5.3.
5.5 Interest Periods
The Interest Period in relation to each Revolving Advance shall be of a duration
equal to the Term of such Revolving Advance. Interest Periods in respect of Term
Advances shall be of a duration determined in accordance with clauses 5.6 and
5.7.
5.6 Selection of Interest Periods for Term Advances
The Borrower may by notice received by the Agent not later than 11 a.m. on the
second Banking Day before the beginning of each Interest Period in respect of a
Term Advance specify whether such Interest Period shall have a duration of one
month or two, three or six months or (with the prior agreement of all of the
Banks) any other period.
5.7 Determination of Interest Periods for Term Advances
Every Interest Period in respect of a Term Advance shall be of the duration
specified by the Borrower pursuant to clause 5.6 but so that:
(a) the initial Interest Period in respect of each Term Advance will
commence on the last day of the Tranche B Revolving Period and each
subsequent Interest Period in respect of such Term Advance will
commence forthwith upon the expiry of the previous Interest Period in
respect of such Term Advance;
(b) Interest Periods in respect of Term Advances of an aggregate amount at
least equal to the amount of the Loan to be repaid on any Term
Repayment Date shall end on such date; and
(c) if the Borrower fails to specify the duration of an Interest Period in
accordance with the provisions of clause 5.6 and this clause 5.7 such
Interest Period shall, subject to this clause 5.7, have a duration of
one month.
5.8 Default interest
If the Borrower fails to pay any sum (including, without limitation, any sum
payable pursuant to this clause 5.8) on its due date for payment under this
Agreement the Borrower agrees to pay interest on such sum from the due date up
to the date of actual payment (as well after as before judgment) at a rate
determined by the Agent pursuant to this clause 5.8. The period beginning on
such due date and ending on such date of payment shall be divided into
successive periods of not more than three months as selected by the Agent (after
consultation with the Banks) each of which (other than the first, which shall
commence on such due date) shall commence on the last day of the preceding such
period. The rate of interest applicable to each such period shall be the
aggregate (as determined by the Agent) of (a) one per cent. per annum, (b) the
<PAGE>
Margin, (c) the Additional Cost and (d) LIBOR, provided that if such unpaid sum
is all or part of an Advance which shall have become due and payable prior to
the last day of the then current Interest Period relating thereto, the first
such period selected by the Agent shall end on the last day of such Interest
Period and interest shall be payable on such unpaid sum during such period at a
rate one per cent. above the rate applicable thereto immediately before it
became due. Default interest under this clause 5.8 shall be due and payable on
the last day of each period determined by the Agent pursuant to this clause 5.8
or, if earlier, on the date on which the sum in respect of which such default
interest is accruing shall actually be paid. If, for the reasons specified in
clause 5.10(a)(i) or (ii), the Agent is unable to determine a rate in accordance
with the foregoing provisions of this clause 5.8 each Bank shall promptly notify
the Agent of the cost of funds to such Bank and interest on any sum not paid on
its due date for payment shall be calculated for each Bank at a rate determined
by the Agent to be one per cent. per annum above the aggregate of the Margin and
the cost of funds (including Additional Cost) to such Bank.
5.9 Notification of Interest Periods and interest rate
The Agent shall notify the Borrower and the Banks promptly of the amount of each
Term Advance, the duration of each Interest Period or other period for the
calculation of interest (or, as the case may be, default interest) and of each
rate of interest determined by it under this clause 5.
5.10 Market disruption; non-availability
(a) If and whenever, at any time prior to the commencement of any Interest
Period:
(i) the Agent shall have determined (which determination shall,
in the absence of manifest error, be conclusive), that
adequate and fair means do not exist for ascertaining LIBOR
during such Interest Period; or
(ii) none or only one of the Reference Banks supplies the Agent
with a quotation for calculating LIBOR; or
(iii)the Agent shall have received notification from Banks with
Contributions aggregating not less than one-third of the
Loan that deposits in Sterling are not available to such
Banks in the London Interbank Market in the ordinary course
of business in sufficient amounts to fund their
contributions to the relevant Advance for such Interest
Period or that LIBOR does not accurately reflect the cost to
such Banks of obtaining such deposits;
the Agent shall forthwith give notice (a "Determination Notice")
thereof to the Borrower and to each of the Banks. A Determination
Notice shall contain particulars of the relevant circumstances giving
rise to its issue. After the giving of any Determination Notice the
undrawn amount of the Commitments of all of the Banks shall not be
borrowed until notice to the contrary is given to the Borrower by the
Agent.
(b) During the period of 10 days after any Determination
Notice has been given by the Agent under clause 5.10(a), (i)
if the Borrower so requires, the Borrower and the Agent and
each affected Bank shall enter into negotiations with a view
to agreeing a substitute basis for determining the rates of
<PAGE>
interest from time to time applicable to the Advances
thereafter and any such substitute basis that is agreed shall
take effect in accordance with its terms; and (ii) if no
substitute basis has been agreed between the Borrower, the
Agent and each affected Bank pursuant to paragraph (i) above,
each affected Bank shall certify a substitute basis for
funding its contribution to the relevant Advance. Such
substitute basis may (without limitation) include alternative
interest periods, alternative currencies or alternative rates
of interest but shall include a margin above the cost of funds
including Additional Cost, if any, to such Bank equivalent to
the Margin for the relevant Interest Period determined in
accordance with clauses 5.2 and 5.3 (as applicable).
Each substitute basis so agreed in accordance with (i) or,
failing such agreement, certified in accordance with (ii) shall be
binding upon the Borrower, the Agent and (in the case of (i)) each
Bank and (in the case of (ii)) each affected Bank and shall take
effect in accordance with its terms from the date specified in the
Determination Notice.
5.11 Reference Bank quotations
If any Reference Bank is unable or otherwise fails to furnish a quotation for
the purpose of calculating LIBOR the interest rate shall be determined, subject
to clause 5.10, on the basis of the quotations furnished by the remaining
Reference Banks.
6. Repayment, prepayment and cancellation Repayment,
prepayment and cancellation
6.1 Repayment of the Tranche A Loan
The Borrower agrees to repay the outstanding amount of the Tranche A Loan on or
before 30 September 1998.
6.2 Repayment of the Tranche B Loan
The Borrower agrees to repay the Tranche B Loan in instalments on each date
specified in column (1) below and in the proportion of the Tranche B Loan
outstanding at the end of the Tranche B Revolving Period specified opposite the
relevant date in column (2) below.
(1) (2)
Date Proportion
31 December 2001 5.00%
31 March 2002 5.00%
30 June 2002 5.00%
30 September 2002 5.00%
31 December 2002 5.00%
31 March 2003 6.25%
30 June 2003 6.25%
30 September 2003 6.25%
31 December 2003 6.25%
31 March 2004 6.25%
30 June 2004 6.25%
30 September 2004 6.25%
31 December 2004 6.25%
31 March 2005 6.25%
30 June 2005 6.25%
30 September 2005 6.25%
31 December 2005 6.25%
<PAGE>
6.3 Voluntary prepayment
The Borrower may prepay any Advance in whole or in part (being oe10,000,000 or
any larger sum which is an integral multiple of oe5,000,000) at any time.
6.4 Additional voluntary prepayment
The Borrower may also prepay (in whole but not in part only), without premium or
penalty, but without prejudice to its obligations under clauses 5.10, 8.7 and
15.2:
(a) the Contribution of any Bank to which the Borrower shall have become
obliged to pay additional amounts under clause 8.7 or 15.2;
(b) any Bank's Contribution to which a substitute basis applies by virtue
of clause 5.10(b); or
(c) the Contribution of any Bank if it is or becomes contrary to any law
or regulation for that Bank to contribute to Advances or to maintain
its Commitment or fund or maintain its Contribution.
Upon any notice of such prepayment being given, the Commitment of the relevant
Bank shall be reduced to zero.
6.5 Mandatory Prepayment
(a) The Borrower shall apply, or procure the application of,
50 per cent. of Excess Cash Flow (if any) in respect of each
of the Six Month Periods of the Borrower ending on 30 June and
31 December in each year (commencing with the Six Month Period
ending 30 June 2001) in prepayment of the Loan provided that
the firstoe10,000,000 which the Borrower would, but for this
proviso, have been obliged so to apply or procure the
application of may be retained by the Borrower (but without
prejudice to the operation of this clause 6.5(a) in respect of
all other relevant amounts).
(b) Each prepayment to be made under paragraph (a) above shall:
(i) be made on Interest Payment Dates falling after the date upon
which the Quarterly Management Accounts in respect of the
Quarterly Period ending on the last day of the relevant Six Month
Period are delivered to the Agent pursuant to clause 10.1(g),
beginning with the first such date and continuing until the
<PAGE>
prepayment obligation under paragraph (a) above in respect of
such Six Month Period has been satisfied; and
(ii) if on any Interest Payment Date upon which an amount of
Excess Cash Flow is to be applied in prepayment of the Loan:
(1) such amount is less than the amount of the
Advances whose Interest Period ends on such date, the
Borrower may select against which Advance or Advances the
prepayment is to be made and the proportion of the relevant
amount to be prepaid on each Advance but shall ensure that
the full amount of such Excess Cash Flow required to be
applied is so applied in prepayment;
(2) such amount is equal to or greater than the amount
of the Advances whose Interest Period ends on such date, the
Borrower shall prepay each such Advance on such date.
(c) The Borrower's obligations under paragraphs (a) and (b)
above shall cease in respect of the relevant Six Month Period
and all future Six Month Periods if, in respect of each of two
consecutive Six Month Periods, Total TCN Group Debt on the
last day of the relevant Six Month Period is less than 3.5
times Consolidated Annualised TCN Group Net Operating Cashflow
calculated by reference to such Six Month Period, each as
demonstrated in the Compliance Certificate for the Quarterly
Period ending on the last day of the relevant Six Month
Period.
(d) If the Compliance Certificate for one Quarterly Period
demonstrates that Total TCN Group Debt on the relevant Quarter
Day is less than 3.5 times Consolidated Annualised TCN Group
Net Operating Cashflow calculated by reference to the Six
Month Period ending on such Quarter Day, then the Borrower's
obligations under paragraphs (a) and (b) above shall be
suspended until the delivery of the Quarterly Management
Accounts for the subsequent Quarterly Period (the "Subsequent
Accounts") are delivered. If the Compliance Certificate in
respect of that subsequent Quarterly Period also demonstrates
that Total TCN Group Debt on the relevant Quarter Day is less
than 3.5 times Consolidated Annualised TCN Group Net Operating
Cashflow calculated by reference to the Six Month Period
ending on such subsequent Quarter Day then such suspended
obligations shall be extinguished; if not, then such suspended
obligations shall take effect as of the date of delivery of
the Subsequent Accounts but otherwise in accordance with
paragraphs (a) and (b) above.
6.6 Application of prepayments to repayment instalments
Any amounts prepaid pursuant to this Agreement in respect of the Tranche B Loan
after the end of the Tranche B Revolving Period shall be applied against the
repayment instalments calculated pursuant to clause 6.2 pro rata to such
instalments.
6.7 Amounts payable on prepayment
Any prepayment under this Agreement shall be made together with: (a) accrued
interest to the date of prepayment (calculated, in the case of any prepayment of
a Bank's Contribution pursuant to clause 6.4(b), and in respect of the period
during which the relevant substitute basis has applied by virtue of clause
<PAGE>
5.10(b), at a rate per annum equal to the rate certified by such Bank in
accordance with clause 5.10(b)); (b) any additional amount payable under clause
8.7 or 15.2; and (c) all other sums payable by the Borrower to the relevant Bank
or the Banks (as the case may be) under this Agreement including, without
limitation, any accrued commitment commission payable under clause 7.1(c) and
any amounts payable under clause 14.
6.8 Notice of prepayment
No prepayment may be effected unless the Borrower shall have given the Agent at
least two Banking Days' notice of its intention to make such prepayment. Every
notice of prepayment shall be effective only on actual receipt by the Agent,
shall be irrevocable and shall oblige the Borrower to make such prepayment on
the date specified. No amount prepaid after the end of the Tranche B Revolving
Period may be reborrowed. The Borrower may not prepay the Loan or any part
thereof save as expressly provided in this Agreement.
6.9 Cancellation of Commitments
The Borrower may at any time by notice to the Agent (effective only on actual
receipt) cancel with effect from a date not less than two Banking Days after the
receipt by the Agent of such notice the whole or any part (being oe10,000,000 or
any larger sum which is an integral multiple of oe5,000,000) of the total of the
Commitments of all of the Banks which is not then outstanding or requested in a
Drawdown Notice in respect of which an Advance has not then been made. Any such
notice of cancellation, once given, shall be irrevocable and upon such
cancellation taking effect the Commitment of each of the Banks shall be reduced
proportionately.
7. Fees and expenses Fees and expenses
7.1 Fees
The Borrower agrees to pay to the Agent whether or not any part of the
Commitments is ever advanced:
(a) Front end fee
on the earlier of (i) the date of the first Revolving Advance
and (ii) the date falling 7 days after the date of this Agreement, for
the account of the Arrangers, an up-front fee of an amount agreed
between the Borrower and the Arrangers and set out in a letter of even
date herewith;
(b) Agency fee
on the earlier of (i) the date of the first Advance and (ii) the
date falling 7 days after the date of this Agreement and on each
anniversary of the date of this Agreement until all moneys owing under
this Agreement have been paid in full, for the account of the Agent,
an agency fee of an amount agreed between the Borrower and the Agent
and set out in a letter of even date herewith; and
<PAGE>
(c) Commitment commission
in arrears on each Quarter Day after the date of this Agreement
and on the last day of the Revolving Period, for the account of each
Bank, commitment commission computed from the date of this Agreement
at the rate of 0.35 per cent. per annum on the daily undrawn and
uncancelled amount of such Bank's Commitment provided that commitment
commission shall cease to be payable to any Bank which shall be in
breach of its obligation to make Revolving Advances under this
Agreement with effect from the date of such breach and for so long as
such breach is continuing.
7.2 Expenses
The Borrower agrees to pay to the Agent within 30 days from the date on which
the Agent makes demand on the Borrower for payment of the same:
(a) all reasonable out-of-pocket expenses (including legal,
other professional, printing and out-of-pocket expenses)
incurred by the Agent, the Arrangers and the Security Trustee
in connection with the negotiation, preparation (including
reasonable due diligence), syndication and execution of this
Agreement and the Security Documents and of any amendment or
extension of or the granting of any waiver or consent under
this Agreement or any Security Document together with interest
at the rate referred to in clause 5.8 from the date falling 30
days after the date of demand for payment of such expenses to
the date of payment (as well after as before judgment); and
(b) all expenses (including legal and out-of-pocket expenses)
incurred by the Agent, the Arrangers, the Security Trustee and
the Banks or any of them in contemplation of, or otherwise in
connection with, the enforcement of, or preservation of any
rights under, this Agreement or any Security Document, or
otherwise in respect of the moneys owing under this Agreement,
together with interest at the rate referred to in clause 5.8
from the date falling 30 days after the date of demand for
payment of such expenses to the date of payment (as well after
as before judgment).
7.3 Value Added Tax
All fees and expenses payable pursuant to this clause 7 shall be paid together
with Value Added Tax (if any) properly chargeable thereon.
7.4 Stamp and other duties
The Borrower agrees (i) to pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by the Agent, the
Arrangers, the Security Trustee and the Banks) imposed on or in connection with
this Agreement, any Security Document or the Loan and (ii) to indemnify the
Agent, the Arrangers, the Security Trustee and the Banks against any liability
arising by reason of any delay or omission by the Borrower to pay such duties or
taxes.
<PAGE>
8. Payments and Taxes; accounts and calculations Payments and Taxes; accounts
and calculations
8.1 No set-off or counterclaim; distribution to the
Banks
All payments to be made by the Borrower under this Agreement shall be made in
full, without any set-off or counterclaim whatsoever and, subject as provided in
clause 8.7, free and clear of any deductions or withholdings, in Sterling on the
due date to the account of the Agent at such bank in London as the Agent may
from time to time specify for this purpose. Save as otherwise expressly provided
by this Agreement such payments shall be for the account of the Banks and the
Agent shall forthwith distribute such payments in like funds as are received by
the Agent to the Banks rateably in accordance with their Commitments and/or
Contributions, as the case may be.
8.2 Payments by the Banks
All sums to be advanced by the Banks to the Borrower under this Agreement shall
be remitted in Sterling on the date of the relevant Advance to the account of
the Agent at such bank in London as the Agent may have notified to the Banks and
shall be paid by the Agent on such date in like funds as are received by the
Agent to the account of the Borrower specified in the relevant Drawdown Notice.
8.3 Agent may assume receipt
Where any sum is to be paid under this Agreement to the Agent for the account of
another person, the Agent may assume that the payment will be made when due and
may (but shall not be obliged to) make such sum available to the person so
entitled. If it proves to be the case that such payment was not made to the
Agent, then the person to whom such sum was so made available shall on request
refund such sum to the Agent together with interest thereon sufficient to
compensate the Agent for the cost of making available such sum up to the date of
such repayment and the person by whom such sum was payable shall indemnify the
Agent for any and all loss or expense which the Agent may sustain or incur as a
consequence of such sum not having been paid on its due date.
8.4 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day which is
not a Banking Day, the due date for payment shall be extended to the next
following Banking Day unless such Banking Day falls in the next calendar month
in which case payment shall be made on the immediately preceding Banking Day. If
any date or day specifically referred to in this Agreement (being a date for the
making of any payment under this Agreement) is not a Banking Day all references
thereto shall be deemed to be references to the immediately preceding Banking
Day.
8.5 Calculations
All interest and other payments of an annual nature under this Agreement or to
be calculated on an annual basis shall accrue from day to day and be calculated
on the basis of actual days elapsed and a 365 day year.
<PAGE>
8.6 Certificates conclusive
Any certificate or determination of the Agent, any Arranger, the Security
Trustee or any Bank as to any rate of interest or any amount payable under this
Agreement shall, in the absence of manifest error, be conclusive and binding on
each TCN Entity and (in the case of a certificate or determination by the Agent)
on the Banks.
8.7 Grossing-up for Taxes
If at any time the Borrower is required to make any deduction or withholding in
respect of Taxes from any payment due under this Agreement for the account of
any Bank, any Arranger, the Security Trustee or the Agent (or if the Agent is
required to make any such deduction or withholding from a payment to any
Arranger, the Security Trustee or a Bank), the sum due from the Borrower in
respect of such payment shall, subject to clause 8.8, be increased to the extent
necessary to ensure that, after the making of such deduction or withholding,
each Bank, any Arranger, the Security Trustee and the Agent receives on the due
date for such payment (and retains, free from any liability in respect of such
deduction or withholding) a net sum equal to the sum which it would have
received had no such deduction or withholding been required to be made and the
Borrower shall indemnify each Bank, each Arranger, the Security Trustee and the
Agent against any losses or costs incurred by any of them by reason of any
failure of the Borrower to make any such deduction or withholding or by reason
of any increased payment not being made on the due date for such payment. The
Borrower shall promptly deliver to the Agent copies of (or, where required,
originals of) any receipts, certificates or other proof evidencing the amounts
(if any) paid or payable in respect of any deduction or withholding as
aforesaid.
8.8 Qualifying Banks
Each Bank agrees promptly to notify the Borrower if it ceases to be a Qualifying
Bank. If any Bank is not or ceases to be a Qualifying Bank, then (save in
circumstances where such Bank has ceased to be a Qualifying Bank by reason of
any change in any law, directive or regulation or in its application or
interpretation, in each case taking effect after the date of this Agreement) the
Borrower shall not be liable to pay to that bank under clause 8.7 any sum in
excess of the sum it would have been obliged to pay if that Bank had been, or
had not ceased to be, a Qualifying Bank.
8.9 Claw-back of Tax benefit
If following any such deduction or withholding as is referred to in clause 8.7
from any payment by the Borrower, the Agent, any Arranger, the Security Trustee
or any Bank shall receive or be granted a credit against or remission for any
taxes payable by it, the Agent, any Arranger, the Security Trustee or such Bank
shall, subject to the Borrower having made any increased payment in accordance
with clause 8.7 and to the extent that the Agent, such Arranger, the Security
Trustee or such Bank can do so without prejudicing the retention of the amount
of such credit or remission and without prejudice to the right of the Agent,
such Arranger, the Security Trustee or such Bank to obtain any other relief or
allowance which may be available to it, reimburse the Borrower with such amount
as the Agent, such Arranger, the Security Trustee or such Bank shall in its
absolute discretion certify to be the proportion of such credit or remission as
will leave the Agent, such Arranger, the Security Trustee or such Bank (after
such reimbursement) in no worse position than it would have been in had there
been no such deduction or withholding from the payment by the Borrower as
<PAGE>
aforesaid. Such reimbursement shall be made forthwith upon the Agent, such
Arranger, the Security Trustee or such Bank certifying that the amount of such
credit or remission has been received by it provided that the Agent, the
relevant Arranger, the Security Trustee or the relevant Bank shall not
unreasonably delay before so certifying. Nothing contained in this Agreement
shall oblige the Agent, any Arranger, the Security Trustee or any Bank to
disclose to the Borrower, any other TCN Entity or any other person any
information regarding its tax affairs or tax computations or interfere with the
right of the Agent, such Arranger, the Security Trustee or such Bank to arrange
its tax affairs in whatever manner it thinks fit and, in particular, none of the
Agent, the Arrangers, the Security Trustee or the Banks shall be under any
obligation to claim relief from its corporate profits, tax liability or similar
tax liabilities in respect of such tax in priority to any other claims, reliefs,
credits or deductions available to it. Without prejudice to the generality of
the foregoing, none of the Borrower or any other TCN Entity shall by virtue of
this clause 8.9, be entitled to enquire about the Agent's, any Arranger's, the
Security Trustee's or any Bank's tax affairs.
8.10 Bank accounts
Each Bank shall maintain, in accordance with its usual practices, an account or
accounts evidencing the amounts from time to time lent by, owing to and paid to
it under this Agreement. The Agent shall maintain a control account showing the
Loan and other sums owing by the Borrower under this Agreement and all payments
in respect thereof made by the Borrower from time to time. The control account
shall be prima facie evidence as to the amount from time to time owing by the
Borrower under this Agreement.
8.11 Partial payments
If, on any date on which a payment is due to be made by the Borrower under this
Agreement, the amount received by the Agent from the Borrower falls short of the
total amount of the payment due to be made by the Borrower on such date then,
without prejudice to any rights or remedies available to the Agent and the Banks
under this Agreement, the Agent shall apply the amount actually received from
the Borrower in or towards discharge of the obligations of the Borrower under
this Agreement in the following order, notwithstanding any appropriation made,
or purported to be made, by the Borrower:
(a) first, in or towards payment to the Arrangers, of any portion of the
front end fee payable under clause 7.1(a) which shall have become due
but remains unpaid;
(b) secondly, in or towards payment to the Agent, the Arrangers, the
Security Trustee and the Banks, on a pro rata basis, of any unpaid
fees, costs and expenses of the Agent, the Arrangers, the Security
Trustee and the Banks under this Agreement and any portion of the
agency fee payable under clause 7.1(b) which shall have become due but
remains unpaid;
(c) thirdly, in or towards payment to the Banks, on a pro rata basis, of
any accrued commitment commission payable under clause 7.1(c) which
shall have become due but remains unpaid;
(d) fourthly, in or towards payment to the Banks, on a pro rata basis, of
any accrued interest in respect of the Tranche A Loan which shall have
become due but remains unpaid;
<PAGE>
(e) fifthly, in or towards payment to the Banks, on a pro rata basis, of
any accrued interest on the Tranche B Loan which shall have become due
but remains unpaid;
(f) sixthly, in or towards payment to the Banks, on a pro rata basis, of
any principal of the Tranche A Loan which shall have become due but
remains unpaid;
(g) seventhly, in or towards payment to the Banks, on a pro rata basis, of
any principal of the Tranche B Loan which shall have become due but
remains unpaid;
(h) eighthly, in or towards payment of any other sum which shall have
become due but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro rata basis).
The order of application set out in this clause 8.11 may be varied by the Agent
if all Banks so direct.
9. Representations and warranties Representations
and warranties
9.1 Repeated representations and warranties
Each TCN Entity severally represents and warrants in respect of itself and, in
the case of the Borrower, each other member of the TCN Group to each of the
Banks, the Arrangers, the Security Trustee and the Agent that:
(a) Due incorporation of the Borrower and the Charging
Subsidiaries
the Borrower, each Charging Subsidiary and each other Subsidiary
of the Borrower are duly incorporated and validly existing under the
laws of the respective countries of their incorporation as limited
liability companies and have power to carry on their respective
business as they are now being and hereafter proposed to be conducted
and to own their respective property and other assets;
(b) Power of the Borrower and each Charging Subsidiary
the Borrower and each Charging Subsidiary have all requisite
power to execute, deliver and perform their respective obligations
under this Agreement and the Security Documents to which they are
party including, in the case of the Borrower to borrow the
Commitments; compliance has been made with all necessary requirements
and all necessary corporate, shareholder or other action has been
taken by the Borrower and each Charging Subsidiary to authorise the
execution, delivery and performance of this Agreement and the Security
Documents to which they are a party; no limitation on the powers of
the Borrower to borrow will be exceeded as a result of borrowings
under this Agreement and notwithstanding the generality of the
foregoing, each Charging Subsidiary (where necessary) has amended its
Articles of Association to permit:
(i) any transfer of its shares in favour of the Security
Trustee (or its nominee) pursuant to any Security Document;
and
<PAGE>
(ii) any transfer of its shares where such transfer is duly
executed by the Security Trustee (or its nominee) pursuant
to any power of sale under any Security Document;
(c) Due formation of Charging Partnerships
each Charging Partnership is a general or limited partnership
duly formed, validly existing and in good standing under the laws of
the State of Colorado or England and having other TCN Entities (being
in the case of the Charging Partnerships formed in the State of
Colorado, the TCN Entities that have executed or are expected to
execute the Pledge and Security Agreements) as its only partners
(there being no outstanding rights to acquire further interests
therein) and has provided to the Agent a true, correct and complete
copy of the partnership agreement pursuant to which it was formed and
currently exists, as amended to date. Each Charging Partnership has
the power and authority to own its properties and to carry out its
business as it is now being and is hereafter proposed to be conducted.
Each Charging Partnership is duly qualified, validly existing and in
good standing and authorised to do business in each jurisdiction in
which the character of its properties or the nature of its business
requires such qualification or authorisation;
(d) Power of the Charging Partnerships
each Charging Partnership has all requisite power to execute,
deliver and perform its obligations under this Agreement and the
Security Documents to which it is a party, compliance has been made
with all necessary requirements and all necessary action has been
taken to authorise the execution, delivery and performance by each
Charging Partnership of this Agreement and the Security Documents to
which it is a party; no resolution (other than resolutions that have
already been adopted) is required pursuant to the terms of any
partnership agreement forming any Charging Partnership to authorise
the execution, delivery and performance by it of this Agreement and
the Security Documents to which it is a party;
(e) Binding Obligations
this Agreement constitutes valid and legally binding obligations
of each TCN Entity enforceable in accordance with its terms subject to
the qualifications contained in the legal opinions referred to in
Schedule 3 which relate to this Agreement. The Security Documents to
which they are a party constitute valid and legally binding
obligations of each TCN Entity enforceable in accordance with their
respective terms subject to the qualifications contained in the legal
opinions referred to in Schedule 3 which relate to the relevant
Security Document and for this purpose any statement contained in the
qualifications to any such legal opinion that no opinion is given or
expressed in relation to any particular matter shall be deemed to be a
qualification of such opinion as regards such matter;
<PAGE>
(f) No conflict with other obligations
the execution and delivery of, the performance of their
respective obligations under, and compliance with the provisions of,
this Agreement by each TCN Entity and the Security Documents to which
they are a party by each TCN Entity will not (i) contravene in any
material respect any existing applicable law, statue, rule or
regulation or any judgment, decree or permit to which any TCN Entity
is subject, (ii) (in the case of the Borrower and each Charging
Subsidiary) contravene or conflict with any provision of the
Memorandum and Articles of Association of the Borrower or any Charging
Subsidiary, (iii) (in the case of each Charging Partnership)
contravene or conflict with any provision of the partnership agreement
of any Charging Partnership, (iv) breach in any material respect any
term of the Licences or the Necessary Authorisations, (v) conflict
with in any material respect, or result in any breach of any of the
terms of, or constitute a default under any agreement (including any
partnership agreements) to which any TCN Entity is a party or is
subject or by which it or any of its property is bound or (vi) result
in the creation or imposition of or oblige any TCN Entity, any
Subsidiary or Associated Partnership of the Borrower or any of their
respective Associated Companies or Associated Partnerships to create
any Encumbrance (other than those created by the Security Documents)
on any TCN Entity, any Subsidiary or Associated Partnership of the
Borrower's or any of their respective Associated Companies' or
Associated Partnerships' undertakings, assets, rights or revenues;
(g) No litigation
save as disclosed in the Disclosure Letter, no litigation,
arbitration or administrative proceeding is taking place, pending or,
to the knowledge of the officers of any TCN Entity (as the case may
be), threatened against any TCN Entity or Telewest which (if adversely
determined) would or is reasonably likely, in the opinion of the
Agent, to have a Material Adverse Effect;
(h) Financial statements
(i) the audited financial statements of the Telewest Group,
the TCN Group and the Borrower in respect of the financial
year ended on 31 December 1995 as delivered to the Agent have
been prepared in accordance with GAAP which principles have
(save, in relation to any repetition of this warranty pursuant
to this Agreement, where the Borrower is permitted to prepare
financial statements on a New Basis and is not required to
prepare financial statements on the Original Basis (each as
defined in clause 10.1(i))) been consistently applied and
present fairly and accurately the financial position of each
such entity as at such date and the results of the operations
of each such entity respectively for the financial year ended
on such date and, as at such date, no such entity had any
significant liabilities (contingent or otherwise) nor any
significant unrealised or anticipated losses, which, in any
such case, are not disclosed by, or reserved against in, such
financial statements;
(ii) the pro forma consolidated financial projections for the
financial years ending 31 December 1996 to 31 December 2006
inclusive for the TCN Group and the operating statistics
<PAGE>
projections for each Region for such financial years, and the
Agreed Base Case have been prepared based upon historical
financial information and upon the assumptions set forth therein,
which assumptions were reasonable both when made and are
reasonable on the date hereof;
(i)
No filing required
it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any
of the Security Documents that any of them or any other instrument be
notarised, filed, recorded, registered or enrolled in any court or
public office (save for (i) the registration of the Debenture, the
Pledge and Security Agreements, the Telewest Assignment and the
Scottish Security Documents pursuant to Section 395 or 410 Companies
Act 1985 and, in the case of (1) the Debenture, pursuant to the Land
Registration Act 1925 and the Land Charges Act 1925 and regulations
made thereunder and (2) the Standard Securities, the recording thereof
in the Register of Sasines or registration thereof in the Land
Register for Scotland (as appropriate) and (ii) the filing of UCC- 1
Financing Statements and continuation statements with respect to the
Pledge and Security Agreements pursuant to the Colorado Uniform
Commercial Code);
(j) Choice of law
the choice by each TCN Entity of English law to govern this
Agreement and the Security Documents to which they are a party (other
than the Pledge and Security Agreements and the Reimbursement
Agreement, under which Colorado law is to govern and the Scottish
Security Documents, under which Scots law is to govern) and the
submission by such TCN Entity to the jurisdiction of the English
courts, are valid and binding subject to the qualifications contained
in the legal opinions referred to in Schedule 3 which relate to this
Agreement or the Security Documents and for this purpose any statement
contained in the qualifications to any such legal opinion that no
opinion is given or expressed in relation to any particular matter
shall be deemed to be a qualification of such opinion as regards such
matter;
(k) Legal and beneficial owners
save as disclosed in the Disclosure Letter and subject to any
Permitted Encumbrances, the TCN Entities are the legal and beneficial
owners of and have good and marketable title to all their respective
properties and other material assets free from any Encumbrances;
(l) No material adverse change
there has been no adverse change in the financial position of
the TCN Group from that set forth in the financial statements referred
to in clause 9.1(h)(i) and there has been no adverse change in the
operations or business prospects of the TCN Group from that set forth
in such financial statements which, in either case, would or is
reasonably likely, in the opinion of the Agent, to have a Material
Financial Adverse Effect;
<PAGE>
(m)
Solvency
after giving effect to the transactions contemplated hereby,
the Revolving Advances to be made hereunder and the application of the
proceeds thereof, and taking into account the execution, delivery and
effectiveness of the Reimbursement Agreement, (i) on a pro forma
basis, the fair value and the present fair saleable value of each
Associated Partnership's assets will exceed that Associated
Partnership's stated liabilities and identified contingent
liabilities, (ii) each Associated Partnership will have the ability to
pay its debts as they become absolute or mature, and (iii) the capital
or assets remaining in each Associated Partnership after consummation
of the transactions contemplated hereby will not be unreasonably small
to conduct that Associated Partnership's business as it is now
conducted and is proposed to be conducted during the term hereof;
(n) Compliance with Environmental Laws and Licences
each member of the TCN Group:
(i) complies and has at all times complied with all Environmental
Laws and Environmental Licences and all other laws, regulations
and judgments (other than Telecommunications and Cable Laws) the
breach of which would or is reasonably likely to have a Material
Financial Adverse Effect; and
(ii) has obtained and maintains in full force and effect all
Environmental Licences, and there are no facts or circumstances
entitling any such Environmental Licences to be revoked,
suspended, amended, varied, withdrawn or not renewed where such
revocation, suspension, amendment, variation, withdrawal or
non-renewal, would or is reasonably likely to have a Material
Financial Adverse Effect;
(o) Environmental Claim
no Environmental Claim is pending or has been made or threatened
against any member of the TCN Group or any of their respective
officers or any occupier of any property owned or leased by any member
of the TCN Group and no member of the TCN Group has any reason to
believe that it or, in the case of the Borrower, any of its
Subsidiaries or Associated Partnerships has or is likely to have any
liability in relation to Environmental Matters which would or is
reasonably likely to have a Material Financial Adverse Effect;
(p) Deposit of Relevant Substance
to the best of its knowledge and belief, no Relevant Substance
has been deposited, disposed of, kept, treated, imported, exported,
transported, processed, manufactured, used, collected, sorted or
produced at any time, or is present in the environment (whether or not
on property owned, leased, occupied or controlled by any member of the
TCN Group) in circumstances which are likely to result in an
Environmental Claim against any member of the TCN Group which would,
or is reasonably likely to have a Material Financial Adverse Effect;
<PAGE>
(q) Disclosure of inspection results
full details have been given to the Agent of any inspections,
investigations, studies, audits, tests, reviews or other analyses in
relation to Environmental Matters relating to any member of the TCN
Group or to the best of the knowledge of any member of the TCN Group
(as the case may be) any property now owned, leased or occupied by any
member of the TCN Group and of all Environmental Licences which
disclose any matters which would or would be reasonably likely to have
a Material Financial Adverse Effect;
(r) Intellectual Property Rights
(i) the Intellectual Property Rights owned by each member of the TCN
Group are free from any Encumbrance (save for those created or to
be created by or pursuant to the Security Documents) and any
other rights or interests in favour of third parties;
(ii) the Intellectual Property Rights owned by each member of the TCN
Group are all the Intellectual Property Rights required by them
in order to carry on, maintain and operate in all material
respects their respective businesses, properties and assets and
no member of the TCN Group in carrying on its business infringes
any Intellectual Property Rights of any third party where any
action taken by such third party in respect of any such
infringement would or is reasonably likely to have a Material
Financial Adverse Effect; and
(iii)no Intellectual Property Rights owned by each member of the TCN
Group are being infringed, nor is there any threatened
infringement of any such Intellectual Property Rights which, in
either case would or is reasonably likely to have a Material
Financial Adverse Effect; and
(s) Copyright matters
save as disclosed in the Disclosure Letter, each member of the
TCN Group has obtained all consents and taken all other action
required in connection with the secondary transmission by it of any
broadcast television signals and no member of the TCN Group has any
knowledge, nor is it aware of any claim, that it is or may be liable
to any person for any copyright infringement of any nature whatsoever
as a result of the operation of its business which liability in the
opinion of the Agent would or is reasonably likely to have a Material
Financial Adverse Effect.
<PAGE>
9.2 Further Representations and Warranties
Each TCN Entity severally further represents and warrants in respect of itself
and, in the case of the Borrower, each other member of the TCN Group to each of
the Banks, the Arrangers, the Security Trustee and the Agent that:
(a) Principal Agreements
save as disclosed in the Disclosure Letter (i) the Principal
Agreements which have been entered into on or prior to the date of
this Agreement are in full force and effect and (ii) to the best of
its knowledge and belief after due enquiry, (1) no party is in breach
of the terms thereof, (2) there is no dispute subsisting between the
parties thereto and (3) no amendments have been made thereto (save for
any amendments thereto referred to in Schedule 10 to this Agreement);
(b) Licences and Necessary Authorisations
the Licences are in full force and effect and each TCN Entity
(as the case may be) is in compliance in all material respects with
all provisions thereof. Save as set out in the Disclosure Letter, each
TCN Entity has secured all the Necessary Authorisations, all such
Necessary Authorisations are in full force and effect and each TCN
Entity is in compliance in all material respects with all provisions
thereof. To the best of the knowledge of the TCN Entity, neither the
Licences nor any of the Necessary Authorisations are the subject of
any pending or threatened attack or revocation;
(c) Consents obtained
every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public bodies or
authorities or courts (other than the Licences and the Necessary
Authorisations) required by each TCN Entity to authorise, or required
by each TCN Entity in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of this
Agreement and the Security Documents to which they are a party or the
performance by each TCN Entity of their respective obligations under
this Agreement and the Security Documents (other than (i) the
registration of the Debenture, the Pledge Security Agreements, the
Telewest Assignment and the Scottish Security Documents pursuant to
Section 395 or 410 of the Companies Act 1985 and, in the case of (1)
the Debenture, pursuant to the Land Registration Act 1925 and the Land
Charges Act 1925 and regulations made thereunder and (2) the Standard
Securities, the recording thereof in the Register of Sasines or
registration thereof in the Land Register for Scotland (as
appropriate) and (ii) the filing of UCC- 1 Financing Statements with
respect to the Pledge and Security Agreements pursuant to the Colorado
Uniform Commercial Code) has been obtained or made and is in full
force and effect and there has been no material default in the
observance of the conditions or restrictions (if any) imposed in, or
in connection with, any of the same;
<PAGE>
(d)
Contractual commitments
no dividends of the Borrower or repayments of the capital
contributions made by Telewest to the Borrower or any other rights or
benefits have been declared, made or paid by the Borrower and no
member of the TCN Group has entered into any contractual commitments
of a material nature (other than (i) the Principal Agreements, (ii)
for the purpose of carrying out the business of constructing,
installing and operating cable television and telecommunications
systems in the TCN Franchises or such other business as is permitted
by the terms of this Agreement or (iii) contractual commitments
arising pursuant to or constituting Permitted Borrowings, Permitted
Disposals, Permitted Guarantees, Permitted Intra-TCN Group
Transactions, Permitted Investments or Permitted Encumbrances);
(e) No withholding Taxes
as at the date of this Agreement, on the basis that all of the
Banks are Qualifying Banks, no Taxes are imposed by withholding or
otherwise on any payment to be made to the Agent, the Arrangers, the
Security Trustee or the Banks by any TCN Entity under this Agreement
or any Security Document to which any of them is a party or are
imposed on or by virtue of the execution or delivery by any TCN Entity
of this Agreement or any Security Document to which any of them is a
party or any document or instrument to be executed or delivered under
this Agreement or any such Security Document (other than stamp duty
payable on any Security Document);
(f) Telecommunications and Cable Laws
each member of the TCN Group complies and has at all times
complied in all material respects with all Telecommunications and
Cable Laws but excluding, for these purposes only, breaches of
Telecommunications and Cable Laws which have been expressly waived by
the relevant regulatory authority;
(g) No Default
no Default has occurred and is continuing which
has not been expressly waived;
(h) Information Memorandum
subject to the next paragraph, to the best of the Borrower's
knowledge and belief after due enquiry, as at the date of the
Information Memorandum the factual information contained in the
Information Memorandum was true and accurate in all material respects
and not misleading in any material respect and the Information
Memorandum does not omit any material facts; all reasonable enquiries
have been made by the Borrower to verify the facts and statements
contained therein; all opinions, projections and forecasts contained
therein and the assumptions on which such opinions, projections and
forecasts were based were arrived at after due and careful
consideration and enquiry and represent the views of the Borrower as
at the date of the Information Memorandum; there are no material facts
or circumstances which have not been disclosed to the Arrangers prior
to the date hereof the omission of which would make any material
factual information contained in the Information Memorandum inaccurate
or misleading in any material respect either as at the date of the
Information Memorandum or as at the date of this Agreement or any of
the opinions, projections and forecasts contained in the Information
Memorandum (and the assumptions on which such opinions, projections
and forecasts were made) misleading in any material respect either as
at the date of the Information Memorandum or as the date of this
Agreement.
<PAGE>
No warranty or representation is made in respect of (i) any
information, facts, statements, opinions, projections, forecasts,
demographic statistics or circumstances relating to the cable and
telecommunications industry as a whole ("Information"), (ii) any
person other than Telewest, the Borrower and members of the TCN Group
or (iii) any Information which is in the public domain or which is
identified in the Information Memorandum as having been obtained from
or made by a source, or being those of a person, other than the
Borrower, any other member of the TCN Group or Telewest;
(i) Carry on business solely in UK
each of the TCN Entities (i) does not employ any employees in
the State of Colorado or elsewhere in the United States of America and
(ii) carries on business solely in, and its principal places of
business, books and records and the property (other than the interests
in the Original Charging Partnerships) subject to the Security
Documents are located in, the United Kingdom (except that, in the case
of any Charging Partnership formed in the State of Colorado, if it
maintains an office in the United States of America, it maintains such
office in the State of Colorado). Control and management of each of
the TCN Entities takes place outside the United States of America; and
(j) Immaterial Group Entities
each member of the TCN Group (other than Cable Guide Limited
(registered no. 2025654)) which is not an Immaterial Group Entity is a
party to this Agreement and each Original Non-Charging Subsidiary
(other than Cable Guide Limited) is an Immaterial
Group Entity.
<PAGE>
9.3 Repetition
The representations and warranties in clause 9.1 (and so that (i) the
representation and warranty in clause 9.1(h)(i) shall for this purpose refer to
the then latest audited financial statements of the Borrower or the latest
consolidated financial statements of the TCN Group or the Telewest Group (as
applicable) verified by the auditors of the TCN Group and delivered to the Agent
under clause 10.1, (ii) the representation and warranty contained in clause
9.1(h)(ii) shall for this purpose refer to the then latest pro forma
consolidated financial projections of the TCN Group and the then latest
operating statistics projections for each Region and shall not include a
representation or warranty as to the Agreed Base Case, and (iii) the
representation and warranty in clause 9.1(l) shall for this purpose refer to the
latest audited financial statements of the TCN Group delivered to the Agent
under clause 10.1) shall be deemed to be repeated by each TCN Entity in respect
of itself on and as of each Interest Payment Date and the date on which each
Advance is made under this Agreement. Additionally, the Borrower shall be deemed
to represent and warrant as at each such date in respect of the then latest
audited and/or verified financial statements delivered to the Agent under clause
10.1(f) that (A) such financial statements have been prepared in accordance with
GAAP which have been consistently applied (save as provided for in Clause
10.1(i)) and present fairly and accurately the financial position of the
Borrower and the consolidated financial position of the TCN Group and the
Telewest Group respectively as at the dates to which such financial statements
were made up and the results of the operations of the Borrower and the
consolidated results of the operations of the TCN Group and the Telewest Group
respectively for the financial year ended on such date and that as at such date,
neither the Borrower nor any member of the TCN Group nor the Telewest Group had
any significant liabilities (contingent or otherwise) which are not disclosed
by, or reserved against in, such financial statements (or the notes thereto) and
neither the TCN Group nor the Telewest Group had any unrealised or anticipated
losses and (B) there has been no adverse change in the financial position of the
Borrower or the consolidated financial position of the TCN Group or the Telewest
Group from that set forth in the latest set of financial statements delivered
pursuant to clause 10.1(f) and there has been no adverse change in the
operations or business prospects of the Borrower or the TCN Group or the
Telewest Group from that set forth in such financial statements which, in either
case, would or is reasonably likely to have a Material Financial Adverse Effect.
10. Positive covenants Positive covenants
10.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the Banks,
each of the Arrangers, the Security Trustee and the Agent that they will
from the date of this Agreement and so long as any monies are owing under
this Agreement or any part of the Commitments remains outstanding:
(a) Notice of Default, etc.
promptly inform the Agent of (i) any occurrence of which it
becomes aware which would or is reasonably likely to have a Material
Adverse Effect (ii) any Default and any potential breach of any of the
undertakings set out in clause 12 forthwith upon becoming aware
thereof and will from time to time, if so requested by the Agent,
confirm to the Agent in writing that, save as otherwise stated in such
confirmation, no Default has occurred and is continuing, (iii) any
<PAGE>
lapse, suspension or termination of or refusal by any person to renew
or extend any Licence or Necessary Authorisation or any breach of any
Licence or Necessary Authorisation where any such breach would or is
reasonably likely to have a Material Adverse Effect, (iv) (to the
extent known to any TCN Entity) the commencement of all proceedings
and investigations by or before any governmental body and all actions
and proceedings in any court or before any arbitrator where any such
proceedings, investigations or actions would, if adversely determined,
have a Material Adverse Effect (v) any application of which it becomes
aware for any other licence or franchise agreement by means of cable
television systems (including satellite master antennae television
systems and multi-point microwave distribution systems) with respect
to the territory covered by the Licences where any such application,
if successful, would or is reasonably likely to have a Material
Adverse Effect and (vi) any breach of any Telecommunications and Cable
Laws by any member of the TCN Group which would or is reasonably
likely to have a Material Adverse Effect;
(b) Consents and authorisations
obtain or cause to be obtained (i) every consent, authorisation,
licence (other than a Licence or a renewal or extension thereof) or
approval of, or registration with or declaration to, governmental or
public bodies or authorities or courts and (ii) every notarisation,
filing, recording, registration or enrolment in any court or public
office in the United Kingdom (in any such case) required by any TCN
Entity or Telewest to authorise the execution, delivery, validity,
enforceability or admissibility in evidence of this Agreement and the
Security Documents or the performance by any TCN Entity or Telewest of
their respective obligations under this Agreement and the Security
Documents to which they are a party;
(c) Licences
(i) obtain or cause to be obtained every Licence and ensure
that (A) where there are any Subscribers within the relevant
TCN Franchise subscribing for services covered by a Licence,
(1) such Licence is not revoked, cancelled, suspended,
withdrawn, terminated, expires or otherwise ceases to be in
full force and effect unless the same is, prior to or
contemporaneously with such event, renewed or replaced and (2)
none of the DTI, ITC, OFTEL nor any other relevant authority
issues any notice in respect of any TCN Franchise informing
any TCN Entity that it has or will (whether or not following
the failure to satisfy certain conditions) revoke, cancel,
suspend, withdraw, terminate or not permit the renewal of such
Licence (whether or not such notice gives any TCN Entity a
period within which to remedy the matter which gave rise to
such notice) and (B) such Licence is not modified and no TCN
Entity commits any breach of the terms or conditions thereof
(including, without limitation, any failure to meet the
milestones referred to therein) where any such modification,
breach or failure would or is reasonably likely, in the
opinion of the Agent, to have a Material Financial Adverse
Effect;
<PAGE>
(ii) apply to extend or renew each Licence no later than 12
months before the date on which the same is scheduled to
expire and take all steps required by Telecommunications and
Cable Laws and all other steps reasonably necessary to
effect the extension or renewal of the same for a period
extending at least 24 months after the scheduled final
repayment date of the Tranche B Loan;
(d) Necessary Authorisations
obtain or cause to be obtained every Necessary Authorisation and
ensure that (i) none of the Necessary Authorisations is revoked,
cancelled, suspended, withdrawn, terminated, expires and is not
renewed or otherwise ceases to be in full force and effect and (ii) no
Necessary Authorisation is modified and no TCN Entity commits any
breach of the terms or conditions of any Necessary Authorisation
which, in the case of any of the actions or events referred to in
either (i) or (ii), would or is reasonably likely, in the opinion of
the Agent, to have a Material Adverse Effect;
(e) Business of the Borrower and the Charging Subsidiaries
in the case of the Charging Subsidiaries and Charging
Partnerships, engage in the business of acting as the holder of shares
and/or partnership interests in other TCN Entities and/or the business
of constructing, installing, operating and utilising cable television
and telecommunications systems in the TCN Franchises and in no other
activities save for any directly related business reasonably
considered to be financially beneficial to such business; in the case
of the Borrower engage in the business of acting as the holding
company of its Subsidiaries and Associated Partnerships (which shall
include the raising of Permitted Borrowings and the onlending of such
Borrowed Money to TCN Entities or to Telewest in accordance with the
provisions of this Agreement) and in no other activities;
(f) Financial statements
prepare financial statements of the Borrower and consolidated
financial statements of the Telewest Group and the TCN Group in
accordance with GAAP and cause such financial statements to be
reported on by their respective auditors and deliver to the Agent
sufficient copies of the same for distribution to all of the Banks as
soon as practicable but not later than 180 days after the end of the
financial year to which they relate;
(g) Quarterly Management Accounts
in respect of each Quarterly Period, prepare unaudited
consolidated Quarterly Management Accounts for the TCN Group and the
Telewest Group in each case containing information of the same type
and to the same level of detail as in the format agreed with the
Arrangers (including, without limitation, a profit and loss account,
balance sheet, cash flow statement and, in relation to each Region, a
summary of operating statistics in the agreed form and, in the case of
the last Quarterly Period of each financial year, a profit and loss
account, balance sheet and cash flow statement for that financial year
in the agreed form) or omitting any such information or detail or
containing such other information or to such other level of detail or
containing such other information or to such other level of detail as
may, from time to time, be approved by the Agent (acting on the
instructions of the Majority Banks) in writing and deliver a copy of
the same to the Agent for distribution to all of the Banks as soon as
practicable but not later than 30 days (in the case of the last
Quarterly Period of each financial year, 50 days) after the Quarterly
Period to which they relate;
<PAGE>
(h)
Monthly Management Accounts
in respect of each calendar month ending during the Revolving
Period (and in respect of each calendar month after the end of the
Revolving Period for which the Borrower so chooses), prepare unaudited
consolidated Monthly Management Accounts for the TCN Group in each
case containing information of the same type and to the same level of
detail as in the format agreed with the Arrangers (including, without
limitation, a profit and loss account, balance sheet and cash flow
statement) or omitting any such information or detail or containing
such other information or to such other level of detail or containing
such other information or to such other level of detail as may, from
time to time, be approved by the Agent (acting on the instructions of
the Majority Banks) in writing and deliver a copy of the same to the
Agent for distribution to all of the Banks as soon as practicable but
not later than 30 days (in the case of the last calendar month of each
financial year 50 days) after the calendar month to which they relate;
(i) Change in basis of accounts
the Borrower shall ensure that all financial statements
delivered under Clause 10.1(f) are prepared in accordance with GAAP
and in accordance with the accounting principles and practices used in
the preparation of the financial statements referred to in clause
9.1(h)(i) and the 1996 Budget (the "Original Basis") consistently
applied in respect of each financial year unless to do so would be
inconsistent with then current GAAP (the "New Basis"). If the
preparation of financial statements on the Original Basis is contrary
to New Basis then the Borrower shall promptly notify the Agent in
writing of the relevant change and (at the option of the Borrower)
shall either (1) prepare and deliver to the Agent audited financial
statements on both the Original Basis and the New Basis (or shall
prepare and deliver financial statements on the New Basis only but
shall also prepare and deliver an audited reconciliation statement (a
"Reconciliation Statement") showing those adjustments necessary in
order to reconcile the financial statements produced on the New Basis
to the Original Basis) or (2) request the Agent to enter into good
faith negotiations for such amendment (if any) as are necessary to the
covenants contained in Clause 12.1 and any other provisions of this
Agreement affected by such change, in which event the Agent will enter
into such negotiations for a period of not more than 28 days. If
agreement is reached between the Borrower and the Agent (acting on the
instructions of the Majority Banks) within such period as to the
amendment of any such covenants or provisions, then the parties hereto
will enter into such documentation and take such other steps as are
required to put such amendments into effect following which the
Borrower shall then be obliged to produce financial statements on the
New Basis only. If no such agreement is reached then the Borrower
shall be obliged to prepare and deliver financial statements on both
the Original Basis and the New Basis (or shall prepare and deliver
audited financial statements on the New Basis accompanied by a
Reconciliation Statement).
Where the Borrower is under an obligation to deliver financial
statements under clause 10.1(f) on both the Original Basis and the New
Basis (or on the New Basis but accompanied by a Reconciliation
Statement), Monthly Management Accounts and Quarterly Management
Accounts shall also be delivered on both bases or on the New Basis but
accompanied by a Reconciliation Statement.
<PAGE>
All financial statements, Quarterly Management Accounts, Monthly
Management Accounts and Reconciliation Statements delivered pursuant
to this clause 10.1(i) shall be delivered within the relevant time
period set out in clause 10.1.
The provisions of this clause 10.1(i) shall also apply, mutatis
mutandis, to the preparation and delivery of the Annual Budget under
clause 10.1(j)(a)(iii);
(j) Delivery of reports
deliver to the Agent, for distribution to the Banks (in the case
of a Compliance Certificate issued by the auditors of the TCN Group)
sufficient copies for all of the Banks or (in any other case):
(a) each of the following documents, in each case at the
time of issue thereof or (in the case of the Compliance
Certificates referred to in (ii) below) together with the
financial statements prepared in respect of each financial year
and Quarterly Management Accounts prepared in respect of each
Quarterly Period pursuant to clause 10.1(g) in respect of the
financial period to which such Compliance Certificate relates:
(i) every document issued by the Borrower to its shareholders
(in their capacity as a shareholder) or issued by the
Borrower or any of its Subsidiaries or Associated
Partnerships to its creditors generally;
(ii) a Compliance Certificate stating that the Borrower and each
other member of the TCN Group as at the last day of the
financial period to which such financial statements or
Quarterly Management Accounts relate were in compliance with
the relevant covenants and undertakings in clause 12 (or if
it was not in compliance indicating the extent of the
breach);
(iii)an Annual Budget for each financial year for the TCN Group
no later than 45 days after the beginning of such financial
year; and
(iv) no later than 90 days after the end of each financial year,
revised financial projections and revised projections for
operating statistics in relation to the TCN Group containing
information of the same type and to the same level of detail
as the base case financial projections and operating
statistics projections contained in the Agreed Base Case,
such projections to extend to at least the earlier of (a)
ten years from the end of such financial year and (b) 31
December 2007 and to contain details of the assumptions on
the basis of which such projections have been prepared and
an explanation of any discrepancies from the most recently
delivered financial projections and projections for
operating statistics delivered under this sub-paragraph
<PAGE>
(j)(iv) (or, in the case of the first such financial
projections, from the base case financial projections or
operating statistics projections (as the case may be)
contained in the Agreed Base Case); and
(b) sufficient copies for all of the Banks of every
document or announcement issued by Telewest to its shareholders
generally or made available by Telewest to the public where any
such document or announcement relates to the financial position
or prospects of Telewest;
(k) Financial Year End
maintain a financial year end of 31 December
for each TCN Entity;
(l) Authorised Officers
ensure that any new or replacement Authorised Officer has
provided the Agent with evidence satisfactory to it of such new
officer(s)' authority and a specimen of his or their signature(s)
prior to signing any Compliance Certificates, Drawdown Notices,
Rollover Notices, Conversion Notices or any other notices, requests or
confirmations referred to in this Agreement or relating to the
facility granted pursuant to this Agreement;
(m) Auditors
ensure that KPMG Peat Marwick is appointed as auditors of each
TCN Entity and not change such appointment without appointing a major
firm of recognised international standing and repute;
(n) Provision of Further Information
notify the Agent of any change to the business of any TCN Entity
where due to such change such business would thereafter be carried on
in a different Region providing details of such change as soon as
practicable after making such change and provide the Agent with a copy
of (i) each Principal Agreement entered into after the date of this
Agreement and (ii) any material report, notice or other communication
relating to the Licences, the Necessary Authorisations and such
financial and other information concerning each TCN Entity and their
respective affairs as the Agent or any Bank (acting through the Agent)
may from time to time reasonably require;
(o) Insurance
maintain insurance cover in accordance with the terms and
conditions of the Security Documents and ensure that such insurance
cover is governed by English law;
<PAGE>
(p) Inspection
permit representatives of the Agent or any of the Banks upon
three Banking Days' prior written notice to the Borrower and after
having made arrangements with the Borrower so to do to (a) visit and
inspect the properties of any TCN Entity during normal business hours,
(b) inspect and make extracts from and copies of its books and records
and (c) discuss with its principal officers and auditors, its
business, assets, liabilities, financial position, results of
operations and business prospects;
(q) Notification of Environmental Claim and Expenditure
promptly on becoming aware of it inform the Agent of any
Environmental Claim which has been made or threatened against any
member of the TCN Group or any occupier of any property owned or
leased by any member of the TCN Group or any requirement by any
Environmental Licence or applicable Environmental Laws for any member
of the TCN Group to make any investment or incur any expenditure in
excess of oe500,000 in aggregate in any calendar year or to take or
desist from taking any action which would or is reasonably likely, if
substantiated, to have a Material Financial Adverse Effect;
(r) Delivery of Environmental Licences and other information
promptly on receipt provide the Agent with copies of all
material Environmental Licences and the terms and conditions thereof
and any material amendments thereto;
(s) Compliance with laws and regulations
comply with the terms and conditions of all laws (other than
Telecommunications and Cable Laws, the Licences and the Necessary
Authorisations including any milestone requirements in respect
thereof), regulations, agreements, licences and concessions including,
without limitation, all Environmental Laws and all Environmental
Licences if the failure to comply therewith, would or is reasonably
likely, in the opinion of the Agent, to have a Material Financial
Adverse Effect;
(t) Relevant Substance
notify the Agent forthwith upon becoming aware of any Relevant
Substance at or brought on to any property owned, leased or occupied
by any member of the TCN Group which is likely to give rise to an
Environmental Claim which would or is reasonably likely to have a
Material Financial Adverse Effect and take or procure the taking of
all necessary action to deal with, remedy or remove from such property
or prevent the incursion of (as the case may be) that Relevant
Substance in order to prevent such an Environmental Claim and in a
manner that complies with all requirements of Environmental Law;
<PAGE>
(u) Taxes
file or cause to be filed all tax returns required to be filed
in all jurisdictions in which it is situated or carries on business or
is otherwise subject to Taxation and will pay all Taxes shown to be
due and payable on such returns or any assessments made against it
within the period stipulated for such payment (other than those being
contested in good faith and where such payment may be lawfully
withheld);
(v) Cost capitalisation policy
maintain a cost capitalisation policy consistent with the cost
capitalisation policy used in the preparation of the financial
statements referred to in clause 9.1(h)(i) or such other cost
capitalisation policy as may be approved by the auditors and the Agent
(acting on the instructions of the Majority Banks) from time to time;
(w) Use of Proceeds
ensure that the Borrower uses the Loan
exclusively for the purposes specified in clause
1.1;
(x) New TCN Entities
it will and will procure that each Subsidiary or Associated
Partnership that is or becomes a member of the TCN Group (other than
an Immaterial Group Entity unless such Immaterial Group Entity no
longer complies with the definition of Immaterial Group Entity) and
which is not already a party to this Agreement promptly upon such
Subsidiary or Associated Partnership becoming a member of the TCN
Group, executes and delivers a Supplemental Deed and provides the
Agent with such evidence as it may reasonably request as to the power
and authority of such party to enter into such Supplemental Deed and
that such Supplemental Deed constitutes (subject to any qualifications
contained in any legal opinions delivered in connection therewith and
reasonably acceptable to the Majority Banks and for this purpose any
statement contained in the qualification to any such legal opinion
that no opinion is given or expressed in relation to any particular
matter shall be deemed to be a qualification of such opinion as
regards such matter) valid and legally binding obligations of such
party enforceable in accordance with its terms. The parties hereto
agree that upon the execution and delivery of such Supplemental Deed
by all parties thereto such Subsidiary or Associated Partnership shall
become a party to this Agreement as a TCN Entity and a party to each
relevant Security Document as a chargor;
(y) Maintain Operating Capacity
ensure that the TCN Group will maintain:
(i) managerial, subscriber and technical services from time to
time sufficient, in the reasonable opinion of the Borrower
to meet the projected demand from Subscribers for cable
television and telephony services at that time; and
<PAGE>
(ii) switch capacity from time to time sufficient, based on the
projections most recently delivered under Clause
10.1(j)(a)(iv) (or, if none, the projections contained in
the Agreed Base Case), to meet the projected demand from
Subscribers for cable telephony services at that time;
(z) Reimbursement Agreement
comply with their respective obligations under the Reimbursement
Agreement and not assign or transfer all or any part of their
respective rights and/or obligations under the Reimbursement Agreement
or amend, vary or waive all or any of the provisions of the
Reimbursement Agreement; and
(aa) Agreed Hedging Programme
as from the first Drawdown Date, maintain interest rate hedging
with a Bank in accordance with the following principles:
(i) Fixed Rate (not including the Margin): In respect of hedging
outstandings at any time, no more than 2% over the swap
yield curve for the relevant time at the date of entry into
the hedging instrument first entered into in respect of
outstandings at such future date;
(ii) Period: Minimum of 3 years hence at any time;
(iii)Notional Principal Amount: At any time no less than 50% of
the forecasted amount of the Loan from time to time
outstanding over the following 3 year period as set out in
the Agreed Base Case.
11. Negative Covenants Negative Covenants
11.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the Banks, each of
the Arrangers, the Security Trustee and the Agent from the date of this
Agreement and so long as any monies are owing under this Agreement or any of the
Commitments remain outstanding that, without the prior written consent of the
Agent acting on the instructions of the Majority Banks:
(a) Negative Pledge
they will not permit any Encumbrance (other than Permitted
Encumbrances) by any member of the TCN Group to subsist, arise or be
created or extended over all or any part of their respective present
or future undertakings, assets, rights or revenues to secure or prefer
any present or future Indebtedness of any member of the TCN Group or
any other person;
<PAGE>
(b) No Merger
they will procure that no member of the TCN
Group merges or consolidates with any other company
or person;
(c) Disposals
they will procure that no TCN Entity sells, transfers, leases,
lends or otherwise disposes of or ceases to exercise control over the
whole or any part of their present or future undertakings, assets,
rights or revenues whether by one or a series of transactions related
or not other than Permitted Disposals, provided that in the case of
any Permitted Intra-TCN Group Transaction which involves any asset of
any nature being transferred by any means whatsoever (directly or
indirectly) by the Borrower, an Original Charging Subsidiary or an
Original Charging Partnership to another TCN Entity (not being the
Borrower, an Original Charging Subsidiary or an Original Charging
Partnership), the relevant transfer must be made expressly subject to
the security interests granted under the Security Documents;
(d) Borrowed Money
they will procure that no member of the TCN Group creates,
assumes, incurs or otherwise permits to be outstanding any Borrowed
Money other than Permitted Borrowings;
(e) Guarantees
they will procure that no member of the TCN Group incurs any
obligations or assumes any liability under any guarantee other than
Permitted Guarantees;
(f) Issue of Shares
neither the Borrower nor any other member of the TCN Group
issues any shares of any class provided that the Borrower may issue
shares to Telewest and any member of the Group may issue shares to any
TCN Entity provided that such shares are charged in favour of the
Security Trustee pursuant to the terms of a Security Document and
there is delivered at the same time to the Security Trustee the
relevant share certificates and blank stock transfer forms in respect
thereof;
(g) Investments
they will procure that no member of the TCN Group (i) makes any
loan or advance to, or enters into any transaction having the effect
of lending money with, any person or otherwise acquires for a
consideration any document evidencing Indebtedness, capital stock or
other securities of any person or (ii) acquires all or any substantial
part of the assets, property or business of any other person or any
assets that constitute a division or operating unit of the business of
any other person or creates or acquires any Subsidiary or Associated
Partnership other than in the case of any of (i) and (ii) above,
Permitted Investments;
<PAGE>
(h) Capital Expenditure
they will procure that no member of the TCN Group incurs any
capital expenditure other than (a) in relation to the business of
constructing, installing, operating and utilising cable television and
telecommunications systems in the area permitted by the Licences or
any directly related business reasonably considered to be financially
beneficial thereto or (b) in Permitted Investments provided that no
capital expenditure may be incurred or Permitted Investment made in
relation to Telewest (Worcester) Limited (No. 0247098) until such time
as licences are issued to such Company pursuant to both the
Broadcasting Act 1990 and the Telecommunications Act 1984 in relation
to a cable television and telecommunications system;
(i) Swaps and Hedging
they will procure that no member of the TCN Group enters into
any interest rate or currency swaps or other hedging arrangements
other than in the case of a TCN Entity (i) directly relating to the
risk management of any Borrowed Money permitted to subsist by the
terms of this Agreement or (ii) forward foreign exchange contracts
entered into in the normal course of business in relation to future
liabilities of such TCN Entity incurred in relation to the
construction, maintenance or operation of the Cable Systems up to an
aggregate notional principal amount at any time outstanding of (in
respect of all such contracts entered into by TCN Entities)
oe80,000,000, for a period not in excess of 15 months and having an
average life not in excess of nine months;
(j) Change of Business
they will procure that the TCN Group (taken as a whole) does not
change the nature of the business carried on by it in any material
respect from that carried on at the date of this Agreement and that no
TCN Entity ceases to carry on a business where any such cessation
would or is reasonably likely to have a Material Adverse Effect;
(k) Memoranda and Articles of Association; Partnership
Agreements
the Borrower will not, and will procure that no Charging
Subsidiary amends its Memorandum or Articles of Association in any way
which would restrict the ability of the Security Trustee to exercise
its rights under the Security Documents in respect of the shares in
such company and no Charging Partnership will amend its partnership
agreement in any way which would restrict or impair the ability of the
Security Trustee to exercise its rights under the Pledge and Security
Agreements in respect of the partnership interests in such partnership
or otherwise as may be limited or prohibited under the Pledge and
Security Arrangements;
(l) Restricted Payments
they will procure that no member of the TCN Group makes any
Restricted Payment other than Permitted Payments;
<PAGE>
(m) Services to Restricted Persons, TCI and US WEST
they will procure that no TCN Entity enters into any contractual
or other arrangements with a Restricted Person or any of the Ultimate
Shareholders or any of their Subsidiaries or Associated Partnerships
other than on bona fide arms length commercial terms in the ordinary
course of trading or contractual arrangements between Telewest and the
Borrower regulating any Subordinated Debt which is the subject of a
Deed of Subordination, provided that, for the avoidance of doubt, no
TCN Entity shall be entitled to pay any amount to any Restricted
Person pursuant to any contractual or other arrangement referred to in
this clause 11.1(m) unless such payment is a Permitted Payment;
(n) Liabilities of Restricted Persons
they will procure that no Restricted Person has outstanding any
liabilities to any TCN Entity which, when aggregated with the
liabilities of that Restricted Person to each other TCN Entity and of
each other Restricted Person to each TCN Entity, exceeds oe100,000.
In this clause 11.1(n) "liabilities" of a Restricted Person to a
TCN Entity shall mean liabilities incurred after the date hereof and
shall include, without limitation, (i) any liabilities of that TCN
Entity to a third party entered into on behalf of that Restricted
Person and (ii) any payments made by that TCN Entity on behalf of that
Restricted Person, in either case where such liabilities or payments
have not been discharged or reimbursed but shall exclude any
liabilities of a Restricted Person to a TCN Entity which are a
Permitted Investment by that TCN Entity in that Restricted Person; and
(o) No Carrying on Business in United States
None of the TCN Entities (i) shall employ any employees in the
State of Colorado or elsewhere in the United States and (ii) shall
carry on any business or maintain its principal places of business,
books and records and the property subject to the Security Documents
in the United States. Control and management of each of the TCN
Entities shall take place outside the United States of America.
12. Financial Covenants Financial Covenants
12.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the Banks, the
Arrangers, the Security Trustee and the Agent:
(a) Minimum Consolidated TCN Group Net Operating Cash Flow
to ensure that from (and including) the date hereof to (but
excluding) the second consecutive Quarter Day (as shown in the
relevant Compliance Certificates) upon which Total TCN Group Debt is
equal to or less than five times Consolidated Annualised TCN Group Net
<PAGE>
Operating Cash Flow (i) on each Quarter Day as shown in the relevant
Compliance Certificate and (ii) on the last day of each financial year
as shown in the relevant Compliance Certificate, the amount of
Consolidated TCN Group Net Operating Cash Flow for the preceding Six
Month Period shall not be less than:
Date Covenant (pound)000s
---- --------------------
31 March 1998 40,000
30 June 1998 46,000
30 September 1998 54,000
31 December 1998 64,000
31 March 1999 71,000
30 June 1999 74,000
30 September 1999 84,000
31 December 1999 98,000
31 March 2000 110,000
30 June 2000 118,000
30 September 2000 129,000
31 December 2000 147,000
31 March 2001 180,800
30 June 2001 204,800
30 September 2001 213,500
31 December 2001 230,900
31 March 2002 260,700
30 June 2002 286,400
30 September 2002 295,200
31 December 2002 304,000
31 March 2003 325,400
30 June 2003 348,800
30 September 2003 359,600
31 December 2003 370,400
31 March 2004 391,100
30 June 2004 413,800
30 September 2004 426,600
31 December 2004 439,400
31 March 2005 451,500
30 June 2005 465,300
30 September 2005 479,700
31 December 2005 494,100
(b) Tranche B Loan/Consolidated Annualised TCN Group Net
Operating Cash Flow
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below the ratio
of the Tranche B Loan to Consolidated Annualised TCN Group Net
Operating Cash Flow calculated by reference to the Six Month Period
ending on such day (as shown in the relevant Compliance Certificate)
shall not exceed the number set out against such period in column (2)
below
<PAGE>
(1) (2)
Period Ratio
from 1 July 1996 to (and 6.5
including) 31 December, 1998
from 1 January 1999 to (and 6.0
including) 30 June, 1999
from 1 July 1999 to (and 5.0
including) 31 December, 1999
from 1 January 2000 to (and 4.0
including) 31 December 2000
thereafter 3.5
(c) Facility Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below the ratio
of Consolidated TCN Group Net Operating Cash Flow in respect of the
Six Month Period ending on such day to Facility Debt Interest Charges
for such Six Month Period shall not be less than the number set out
against such period in column (2) below
(1) (2)
Period Ratio
from 1 January 1997 to (and 1.20:1
including) 31 December 1997
from 1 January 1998 to (and 1.50:1
including) 31 December 1998
from 1 January 1999 to (and 2.00:1
including) 31 December 1999
from 1 January 2000 to (and 2.50:1
including) 30 June 2000
from 1 July 2000 to (and 3.00:1
including) 31 December 2000
from 1 January 2001 onwards 4.00:1
<PAGE>
12.(jjjjj) TCN Group Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below, the ratio
of Consolidated TCN Group Net Operating Cash Flow in respect of the
Six Month Period ending on such day to Total TCN Group Cash Paying
Debt Interest Charges during such Six Month Period shall not be less
than the number set out against such period in column (2) below
(1) (2)
Date Ratio
1 January 1998 - 30 June 1998 1.00:1
1 July 1998 - 31 December 1998 1.20:1
1 January 1999 - 30 June 1999 1.25:1
1 July 1999 - 31 December 1999 1.35:1
1 January 2000 - 31 March 2000 1.50:1
1 April 2000 - 30 September 2001 1.75:1
1 October 2001 - 31 March 2002 2.00:1
1 April 2002 - 30 June 2002 2.25:1
1 July 2002 - 31 December 2002 2.50:1
1 January 2003 - 31 March 2003 2.75:1
1 April 2003 onwards 3.00:1
(d) Telewest Group Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below the ratio
of Consolidated Telewest Group Net Operating Cash Flow in respect of
the Six Month Period ending on such day to Total Telewest Group Cash
Paying Debt Interest Charges during such Six Month Period shall not be
less than the number set out against such period in column (2) below
(1) (2)
Period Ratio
from 1 January 1998 to (and 1.00:1
including) 31 December 1998
from 1 January 1999 to (and 1.25:1
including) 31 December 1999
from 1 January 2000 onwards 1.50:1
<PAGE>
(e)
Pro-Forma Total Telewest Group Debt Service Cover
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below, the ratio
of Consolidated Annualised Telewest Group Net Operating Cash Flow
calculated by reference to the Six Month Period ending on such day to
Proforma Total Telewest Group Debt Service (as shown in the relevant
Compliance Certificate) shall not be less than the number set out
against such period in column (2) below:
(1) (2)
Date Ratio
1 January 1999 - 31 December 2001 1.00 :1
1 January 2002 - 31 December 2002 1.20 :1
1 January 2003 - 31 December 2003 1.40 :1
1 January 2004 onwards 1.50 : 1
(f) Pro-forma Total TCN Group Debt Service Cover
to ensure that (i) on each Quarter Day falling within the period
set out in column (1) below and (ii) on the last day of each financial
year falling within the period set out in column (1) below, the ratio
of Consolidated Annualised TCN Group Net Operating Cash Flow
calculated by reference to the Six Month Period ending on such day to
Proforma Total TCN Group Debt Service (as shown in the relevant
Compliance Certificate) shall not be less than the number set out
against such period in column (2) below:
(1) (2)
Period Ratio
1 April 2000 - 31 December 2001 1.00 : 1
1 January 2002 - 31 December 2002 1.20 : 1
1 January 2003 - 31 December 2003 1.40 : 1
1 January 2004 onwards 1.50 : 1
12.2 Auditors certificate
If at any time the Majority Banks do not consider (acting reasonably) that any
figure set out in any Compliance Certificate issued by any Authorised Officer is
correct, they shall be entitled within 30 days of the date of the delivery of
such Compliance Certificate to the Agent pursuant to clause 10.1 to call for a
certificate from the Borrower's auditors as to such figure. For such purposes
the Borrower's auditors shall act as independent experts and not as arbiters and
every such certificate shall be addressed to the Agent (on behalf of the Banks)
and be at the expense of the Borrower. The Majority Banks may only call for one
<PAGE>
such certificate in any calendar year. If the Majority Banks call for such a
certificate all calculations under this Agreement by reference to the relevant
figure shall (i) until the Borrower's auditors deliver the relevant certificate
under this clause 12.2 be made by reference to the figure set out in the
relevant Compliance Certificate delivered to the Agent under this Agreement and
(ii) following the delivery by the Borrower's auditors of a certificate under
this clause 12.2 be made by reference to such certificate and the Borrower
undertakes forthwith to take all action, including, without limitation, the
prepayment of all or part of the Loan so as to procure that all action taken on
the basis of the relevant Compliance Certificate which on the basis of such
auditors certificate would not have been permitted is reversed.
13. Events of Default Events of
Default
13.1 Events of Default
Each of the following events and circumstances is an Event of Default (whether
or not caused by any reason outside the control of any TCN Entity):
(a) Non-payment
(i) any principal amount due and payable under this Agreement is
not paid on the due date or (ii) an amount of interest due and payable
under this Agreement is not paid within 3 Banking Days of the due date
or (iii) any other sum due and payable under this Agreement is not
paid within 5 Banking Days of the due date, and, in each such case, in
the manner stipulated in this Agreement; or
(b) Breach of certain obligations
(i) any TCN Entity or Telewest commits any breach of the
undertakings contained in clauses 10.1(a), (c)(i)(A) and (B), (e)
and (k), 11.1(a), (b), (c), (f), (g), (h), (i), (j), (k) and (l),
and 12.1; or
(ii) any TCN Entity commits any breach of the undertakings
contained in clauses 11.1(d) and (e) and, in respect of any such
breach where the principal amount of the relevant Borrowed Money
or guarantee does not exceed oe1,000,000, such breach is not
remedied within five Banking Days of such breach; or
(c) Breach of other obligations
any TCN Entity or Telewest commits any breach of or omits to
observe any of the obligations or undertakings expressed to be assumed
by them under this Agreement (other than failure to pay any sum when
due or any breach of the undertakings referred to in (b)) above or any
of the Security Documents and, in respect of any such breach or
omission which in the opinion of the Majority Banks is capable of
remedy, such remedial action as the Majority Banks shall require is
not carried out within 28 days of the Agent notifying the Borrower of
such default and of such remedial action; or
<PAGE>
(d) Misrepresentation
any representation or warranty made or deemed to be made or
repeated by or in respect of any TCN Entity or Telewest in or pursuant
to this Agreement or the Security Documents or in any notice,
certificate or statement referred to in or delivered under this
Agreement or the Security Documents is or proves to have been
incorrect or misleading in any material respect on the date on which
it was made or deemed to be made or repeated; or
(e) Challenge to security
any Security Document is not or ceases to be effective (unless
by reason of the Banks' or the Security Trustee's failure to file any
required UCC Statements in the United States) or any TCN Entity or
Telewest shall in any way challenge, or any proceedings shall in any
way be brought to challenge (and in the case of a proceeding brought
by someone other than any TCN Entity or Telewest shall continue
unstayed for 30 days) the prior status of the charges created by the
Security Documents or the validity or enforceability of the Security
Documents Provided that the creation or existence of the Permitted
Encumbrances shall not be deemed to be a challenge to the prior status
of such charges for the purposes of this clause 13.1(e); or
(f) Cross-default
(i) Borrowed Money of any member of the TCN Group or Telewest
(which, in aggregate and including for these purposes any Borrowed
Money referred to in clause 13.1(f)(ii) below, exceeds oe7,500,000) is
not paid when due (or within any applicable grace period expressly
contained in the agreement relating to such Borrowed Money in its
original terms) or becomes due or (ii) any creditor of any member of
the TCN Group, or Telewest becomes entitled to declare any such
Borrowed Money in excess of oe7,500,000 (in aggregate) due and payable
prior to the date when it would otherwise have become due; or
(g) Hedging Default
an event entitling the relevant counterparty to terminate any
arrangements in relation to interest rate hedging permitted pursuant
to clause 11.1(i) or any other interest rate or currency swap or other
hedging arrangements entered into by any member of the TCN Group
occurs and the aggregate notional principal amounts of the swaps or
other hedging arrangements entitled to be so terminated exceeds
oe25,000,000; or
(h) Appointment of receivers and managers
(i) any administrative or other receiver is appointed of any
member of the TCN Group (other than an Immaterial Group Entity), or
Telewest or any part of their respective assets and/or undertakings or
(ii) any other legal proceedings are taken which are not irrevocably
discharged or withdrawn within 28 days of the commencement thereof to
enforce any Encumbrance over all or any part of the assets of any
member of the TCN Group or Telewest; or
<PAGE>
(i) Insolvency
any member of the TCN Group (other than an Immaterial Group
Entity) or Telewest is deemed unable to pay its debts within the
meaning of sections 123(1)(e) or (2) of the Insolvency Act 1986 or any
member of the TCN Group, (other than an Immaterial Group Entity) or
Telewest otherwise becomes insolvent or stops or suspends making
payments (whether of principal or interest) with respect to all or any
class of its debts or is unable or announces an intention so to do or
admits inability to pay its debts as they fall due; or
(j) Legal process
any judgment or order made against any member of the TCN Group
(other than an Immaterial Group Entity) or Telewest is not stayed or
complied with within 28 days or a creditor attaches or takes
possession of, or a distress, execution, sequestration, diligence
(other than on the dependence of an action) or other process is levied
or enforced upon or sued out against, any material part of the
undertaking, assets, rights or revenues of any member of the TCN Group
(other than an Immaterial Group Entity) or Telewest and is not
discharged within 28 days; or
(k) Compositions
any steps are taken or negotiations commenced, by any member of
the TCN Group (other than an Immaterial Group Entity) or Telewest or
by their respective creditors with a view to proposing any kind of
composition, compromise or arrangement involving such company and any
group or class of its creditors generally; or
(l) Winding-up
(i) any member of the TCN Group (other than an Immaterial Group
Entity) or Telewest takes any action or any legal proceedings are
started (not being action or proceedings which can be demonstrated to
the satisfaction of the Agent by providing an opinion of a leading
firm of London solicitors to that effect, is frivolous, vexatious or
an abuse of the process of the court or relates to a claim to which
such person has a good defence and which is being vigorously contested
by such body) for any member of the TCN Group (other than an
Immaterial Group Entity) or Telewest to be adjudicated or found
bankrupt or insolvent (other than for the purpose of an amalgamation
or reconstruction previously approved in writing by the Agent acting
on the instructions of the Majority Banks) or (ii) an order is made or
resolution passed for the winding-up of any other member of the TCN
Group (other than an Immaterial Group Entity) or Telewest or a notice
is issued convening a meeting for the purpose of passing any such
resolution; or
<PAGE>
(m) Administration
any petition is presented or other step is taken for the purpose
of the appointment of an administrator of any member of the TCN Group
(other than an Immaterial Group Entity) or Telewest or an
administration order is made in relation to any member of the TCN
Group (other than an Immaterial Group Entity) or Telewest; or
(n) Analogous proceedings
there occurs, in relation to any member of the TCN Group (other
than an Immaterial Group Entity) or Telewest in any country or
territory in which any of them carries on business or to the
jurisdiction of which courts any part of their respective assets is
subject, any event which, in the reasonable opinion of the Agent,
appears in that country or territory to correspond with, or have an
effect equivalent or similar to, any of those mentioned in clauses
13.1(h) to (m) inclusive or any member of the TCN Group or Telewest
(subject always to equivalent grace periods and de minimis amounts as
are referred to in such clauses being exceeded) otherwise becomes
subject, in any such country or territory, to the operation of any law
relating to insolvency, bankruptcy or liquidation; or
(o) Change of control of Telewest
at any time prior to the second consecutive Quarter Day in
respect of which the relevant Compliance Certificates demonstrate that
each of the ratios of (A) Total TCN Group Debt to Consolidated
Annualised TCN Group Net Operating Cash Flow and (B) Total Telewest
Group Debt to Consolidated Annualised Telewest Group Net Operating
Cash Flow is less than or equal to 3.0 times, either:
(i) TCI and US WEST (directly or indirectly) cease to hold
at least (1) if TCI or US WEST have at any time disposed of any
of their voting or economic interest in Telewest Group to any
third party (not being TCI, US WEST or any entity controlled,
directly or indirectly, by either of them or by both of them
together) 40 per cent. or (2) otherwise, 30 per cent. of the
voting and economic interest in Telewest; or
(ii) any person or persons acting together in concert
(other than, for these purposes, TCI, US WEST, SBC and/or Cox
and/or any entities controlled, directly or indirectly, by any of
them or by any two or more of them together or which controls any
one or more of them) acquire either (1) a greater voting or
economic interest in Telewest than TCI and US WEST (together, and
directly or indirectly) or (2) 40 per cent. of the voting and
economic interest in Telewest.
For these purposes persons "acting together in concert" means
persons who pursuant to an agreement or understanding (whether formal
or informal) actively co-operate together with a view to acquiring all
or any part of the voting and economic interest in Telewest and those
persons who are presumed to be acting in concert for the purposes of
the City Code on Take-overs and Mergers shall also be deemed to be
acting in concert for these purposes; or
<PAGE>
(p) Change of control of the Borrower or any Charging Subsidiary or
Charging Partnerships
(i) any Charging Subsidiary (other than an Immaterial Group
Entity and United Artists Communications (London South)
Limited) ceases to be a wholly owned and controlled
Subsidiary of the Borrower or any Charging Partnership
ceases to have as its sole partners members of the TCN
Group; or
(ii) the Borrower ceases to be a wholly owned Subsidiary of
Telewest; or
(q) Principal Agreements
(i) any Principal Agreement is terminated, suspended, revoked
or cancelled or otherwise ceases to be in full force and
effect unless services of a similar nature to those provided
pursuant to such Principal Agreement are at all times provided
to the TCN Group on similar commercial terms or on terms no
less beneficial to the relevant member of the TCN Group save
where any such services are provided on more onerous terms to
the relevant member of the TCN Group due to the mandatory
requirements of OFTEL, the Office of Fair Trading, the
Department of Trade and Industry, the European Commission or
any other regulatory body and any such termination,
suspension, revocation, cancellation or cessation would have a
Material Financial Adverse Effect; or
(ii) any alteration or variation is made to any term of any
Principal Agreement which would have a Material Financial
Adverse Effect; or
(iii)any party breaches any term of or repudiates any of its
obligations under any of the Principal Agreements where such
breach or repudiation would have a Material Financial
Adverse Effect; or
(r) Unlawfulness
it becomes unlawful at any time for the Borrower, any TCN Entity
or Telewest to perform any of their respective material (in the
opinion of the Majority Banks) obligations under this Agreement or the
Security Documents or any of the material (in the opinion of the
Majority Banks) obligations of any TCN Entity or Telewest under this
Agreement and the Security Documents becomes unenforceable in any way
or there ceases to be a first priority charge over the relevant
property or assets of the Borrower, any TCN Entity or Telewest as
intended and created by the Security Documents save for Permitted
Encumbrances; or
<PAGE>
(s)
Environmental matters
as a result of any Environmental Law: (a) the Agent, any of the
Arrangers, the Security Trustee or any of the Banks becomes, in the
opinion of the Agent, subject to a material obligation (actual or
contingent, in the case of any contingent obligation, being one which,
at the relevant time, would be likely to arise) in relation to any
Relevant Substance on or from any property, owned, occupied or leased
by any member of the TCN Group or Telewest; or (b) the rights and
claims of the Agent, any of the Arrangers, the Security Trustee, or
any of the Banks under this Agreement or any of the Security Documents
become subordinated to the claims and rights of any competent agency
of the United Kingdom or the European Community; or
(t) Telecommunications and Cable Laws
any TCN Entity fails to comply with any term or condition of any
Telecommunications and Cable Law where such non-compliance would or is
reasonably likely to have a Material Adverse Effect, in the opinion of
the Agent; or
(u) Repudiation
any TCN Entity or Telewest repudiates this Agreement or any
Security Document to which it is a party or does or causes or permits
to be done any act or thing evidencing an intention to repudiate this
Agreement or any such Security Document; or
(v) Seizure
all or a material part of the undertakings, assets, rights or
revenues of or shares or other ownership interests in the TCN Group
(taken as a whole) or Telewest are seized, nationalised, expropriated
or compulsorily acquired by or under the authority of any government;
or
(w) Material events
any other event occurs or circumstances arise which in the
opinion of the Agent acting on the instructions of the Majority Banks
is likely materially adversely to affect the ability of the TCN Group
(taken as a whole) to fulfil all or any of its obligations under this
Agreement or any Security Document.
13.2 Acceleration
(A) If at any time or during any period, (i) Telewest or any member of the
TCN Group (other than an Immaterial Group Entity) shall reside or have a
domicile, a place of business or a property in the United States (to the
extent that such residence, domicile, place of business or property is
sufficient for a person to become a "debtor" under section 109(a) of the
U.S. Federal Bankruptcy Code) and (ii) an Event of Default specified in
clauses 13.1(h) to (n) shall have occurred and be continuing in respect
of Telewest or any such member of the TCN Group, as applicable, in
furtherance of which Event of Default an order for relief with respect
to Telewest or such member of the TCN Group, as applicable, shall
<PAGE>
actually be (or shall be deemed to have been) entered under the U.S.
Federal Bankruptcy Code, then the obligation of each Bank to make its
Commitment available shall be automatically terminated and the Loan and
all interest and commitment commission accrued and all other sums
payable under this Agreement immediately shall become due and payable.
(B) At any time after the happening of any Event of Default (other than in
the circumstances set out in sub-clause (A) above), so long as the same
is continuing, the Agent may, and if so requested by the Majority Banks
shall, without prejudice to any other rights of the Banks, by notice to
the Borrower declare that:
(a) the obligation of each Bank to make its Commitment available shall be
terminated, whereupon the Commitments shall be reduced to zero
forthwith; and/or
(b) the Loan and all interest and commitment commission accrued and all
other sums payable under this Agreement have become due and payable,
whereupon the same shall, immediately, or on demand or otherwise in
accordance with the terms of such notice, become due and payable;
and/or
(c) it and/or the Security Trustee shall exercise any of the rights
granted to the Agent, the Security Trustee or the Banks under the
Security Documents.
13.3 On demand basis
If, pursuant to clause 13.2(B)(b), the Agent declares the Loan to be due and
payable on demand then, at any time thereafter, the Agent may (and, if so
instructed by the Majority Banks, shall) by written notice to the Borrower: (a)
call for repayment of the Loan on such date as may be specified in such notice
whereupon the Loan shall become due and payable on the date so specified
together with all interest and commitment commission accrued and all other sums
payable under this Agreement or (b) withdraw such declaration with effect from
the date specified in such notice.
Indemnities Indemnities
14.1 Miscellaneous Indemnities
The Borrower shall on demand indemnify each Bank, each Arranger, the Security
Trustee and the Agent, without prejudice to any of their other rights under this
Agreement, against any loss (including in the case of (a) or (b) below loss of
Margin) or expense which such Bank, such Arranger, the Security Trustee or the
Agent shall certify as sustained or incurred by it as a consequence of:
(a) any default in payment by the Borrower of any sum under
this Agreement when due;
(b) the occurrence of any other Event of Default;
(c) any repayment or prepayment of the Loan or part thereof being made
under clause 6 or 15.1 otherwise than on the last day of an Interest
Period relating to the part of the Loan repaid or prepaid; or
<PAGE>
(d) any Advance not being made for any reason (excluding any default by
the Agent or any Bank) after a Drawdown Notice has been given,
including, but not limited to, any loss or expense sustained or incurred by such
Bank in maintaining or funding its Contribution or any part thereof or in
liquidating or reemploying deposits from third parties acquired or contracted
for to fund its Contribution or any part thereof or any other amount owing to
such Bank.
14.2 Currency Indemnity
If any sum due from the Borrower under this Agreement or any order or judgment
given or made in relation hereto has to be converted from the currency (the
"first currency") in which the same is payable under this Agreement or under
such order or judgment into another currency (the "second currency") for the
purpose of (a) making or filing a claim or proof against the Borrower, (b)
obtaining an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to this Agreement, the Borrower
agrees to indemnify and hold harmless the Agent, each Arranger, the Security
Trustee, and each Bank from and against any loss suffered as a result of any
difference between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and (ii) the
rate or rates of exchange at which the Agent, such Arranger, the Security
Trustee or such Bank may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
Any amount due from the Borrower under this clause 14.2 shall be due as a
separate debt and shall not be affected by judgment being obtained for any other
sums due under or in respect of this Agreement and the term "rate of exchange"
includes any premium and costs of exchange payable in connection with the
purchase of the first currency with the second currency.
14.3 Environmental Indemnity
The Borrower agrees to indemnify on demand each Bank, each Arranger, the
Security Trustee and the Agent, and their respective officers, employees, agents
and delegates (together the "Indemnified Parties") in respect of which each
Bank, each Arranger, the Security Trustee and the Agent holds this indemnity on
trust, without prejudice to any of their other rights under this Agreement,
against any loss, liability, action, claim, demand, cost, expense, fine or other
outgoing whatsoever whether in contract, tort, delict or otherwise and whether
arising at common law, in equity or by statute which the relevant Indemnified
Party shall certify as sustained or incurred by it at any time as a consequence
of, or relating to, or arising directly or indirectly out of, an Environmental
Claims made or asserted against such Indemnified Party which would not have
arisen if this Agreement had not been executed and which was not caused by the
negligence or wilful default of the relevant Indemnified Party.
15. Unlawfulness and Increased Costs; Mitigation
Unlawfulness and Increased Costs; Mitigation
15.1 Unlawfulness
If it is or becomes contrary to any law or regulation for any Bank to contribute
to Advances or to maintain its Commitment or fund or maintain its Contribution,
such Bank shall promptly, through the Agent, notify the Borrower whereupon (a)
such Bank's Commitment shall be reduced to zero and (b) the Borrower shall be
<PAGE>
obliged to prepay the Contribution of such Bank on the earlier of (i) the date
falling 30 days after the date of receipt by the Borrower of the relevant notice
pursuant to this clause or (ii) the latest date permitted by the relevant law or
regulation. Without prejudice to the reduction of such Bank's Commitment to zero
or the obligations of the Borrower to make such repayment, the Borrower, the
Agent and such Bank shall negotiate for a period not exceeding 14 days with a
view to such Bank making available its Commitment and/or funding or maintaining
its Contribution in whole or in part in a manner which is not unlawful.
15.2 Increased Costs
If the result of any change in, or in the interpretation or application of, or
the introduction of, any law or regulation, request or requirement (whether or
not having the force of law, but, if not having the force of law, with which the
relevant Bank or, as the case may be, its holding company habitually complies)
including, without limitation, those relating to Taxation, capital adequacy,
liquidity, reserve assets, cash ratio deposits and special deposits is to:
(a) subject any Bank to Taxes or change the basis of Taxation
of any Bank with respect to any payment under this Agreement
(other than Taxes or Taxation on the overall net income,
profits or gains of such Bank imposed in the jurisdiction in
which its principal or lending office under this Agreement is
located and other than Taxes currently payable by such Bank on
amounts received by it under this Agreement but only to the
extent so payable at the date hereof); and/or
(b) increase the cost to, or impose an additional cost on, any Bank or its
holding company in making or keeping available all or part of such
Bank's Commitment or maintaining or funding such Bank's Contribution;
and/or
(c) reduce the amount payable or the effective return to any Bank under
this Agreement; and/or
(d) reduce any Bank's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Bank's obligations
under this Agreement; and/or
(e) require any Bank or its holding company to make any additional payment
or forego (to a greater extent than at the date hereof) a return
calculated by reference to or on any amount received or receivable by
such Bank under this Agreement; and/or
(f) require any Bank or its holding company to incur or sustain a loss
(including a loss of future potential profits) additional to that
incurred or sustained at the date hereof by reason of being obliged to
deduct a greater part of such Bank's Commitment or Contribution from
its capital for regulatory purposes, than is required to be deducted
at the date hereof,
then and in each such case (but subject to clauses 15.3 and 15.4):
<PAGE>
(i) such Bank shall notify the Borrower through the Agent in writing
of such event promptly upon its becoming aware of the same; and
(ii) the Borrower agrees to pay on demand, made at any time, whether
or not such Bank's Contribution has been repaid, to the Agent for
the account of such Bank the amount which such Bank specifies (in
a certificate setting forth the basis of the computation of such
amount but not including any matters which such Bank or its
holding company regards as confidential) is required to
compensate such Bank and/or (if and to the extent that, such
holding company has passed the cost of the same on to such Bank)
its holding company for such liability to Taxes, increased or
additional cost, reduction, payment or foregone return.
15.3 Exceptions
Nothing in this clause shall entitle any Bank to compensation for any such
increased cost, reduction, payment or foregone return (a) to the extent that the
same is taken into account in calculating the Additional Cost or (b) to the
extent that the same is the subject of an additional payment under clause 8.7.
15.4 Further Exception
Nothing in this clause shall entitle any Bank to compensation for any such
increased cost, reduction, payment or foregone return which arises as a
consequence of any law or regulation implementing the proposals as currently
drafted for international convergence of capital measurement and capital
standards published by the Basle Committee on Banking Regulations and
Supervisory Practices in July 1988.
15.5 Mitigation
If, in respect of any Bank, circumstances arise which would, or would upon the
giving of notice, result in:
(a) the Borrower being required to make an increased payment to such Bank
pursuant to clause 8.7;
(b) the reduction of such Bank's Commitment to zero or the Borrower being
required to prepay such Bank's Contribution pursuant to clause 15.1;
or
(c) the Borrower being required to make a payment to such Bank to
compensate such Bank for an increased cost, reduction, payment or
foregone return pursuant to clause 15.2(ii),
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under clauses 8 and 15, such Bank shall, in
consultation with the Agent, endeavour to take such reasonable steps as may be
open to it to mitigate or remove such circumstances including (without
limitation) the transfer of its rights and obligations under this Agreement to
another bank or financial institution acceptable to the Borrower or a change of
lending office of such Bank to one acceptable to the Borrower unless, in either
case, to do so might (in the opinion of such Bank) be prejudicial to such Bank
or be in conflict with such Bank's general banking policies or involve such Bank
in expense or an increased administration burden.
<PAGE>
16. Set-off and Pro Rata Payments Set-off and Pro
Rata Payments
16.1 Set-off
The Borrower authorises each Bank to apply any credit balance to which the
Borrower is then entitled on any account of the Borrower with such Bank at any
of its branches in or towards satisfaction of any sum then due and payable from
the Borrower to such Bank under this Agreement. For this purpose each Bank is
authorised to purchase with the moneys standing to the credit of such account
such other currencies as may be necessary to effect such application. No Bank
shall be obliged to exercise any right given to it by this clause. Each Bank
shall notify the Agent and the Borrower forthwith upon the exercise or purported
exercise of any right of set-off giving full details in relation thereto and the
Agent shall inform the other Banks.
16.2 Pro Rata Payments
(a) If at any time any Bank (the "Recovering Bank") receives
or recovers any amount owing to it by the Borrower under this
Agreement by direct payment, set-off or in any manner (but
excluding any recoveries by virtue of any cash management or
interest netting arrangements operated by any Bank in its
capacity as a provider of day to day banking services to the
TCN Group to the extent that such arrangements are permitted
by this Agreement) other than by payment through the Agent
pursuant to clause 8.1 or 8.11 (not being a payment received
from an Assignee, a Substitute or a Sub-Participant), the
Recovering Bank shall, within two Banking Days of such receipt
or recovery (a "Relevant Receipt") notify the Agent of the
amount of the Relevant Receipt. If the Relevant Receipt
exceeds the amount which the Recovering Bank would have
received if the Relevant Receipt had been received by the
Agent and distributed pursuant to clause 8.1 or 8.11 (as the
case may be) then:
(i) within two Banking Days of demand by the Agent, the
Recovering Bank shall pay to the Agent an amount equal to
the excess;
(ii) the Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the Borrower
and shall distribute the same to the Banks (other than the
Recovering Bank) in accordance with clause 8.11; and
(iii)as between the Borrower and the Recovering Bank the excess
amount so re-distributed shall be treated as not having been
paid but the obligations of the Borrower to the other Banks
shall, to the extent of the amounts so re-distributed to
them, be treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank's pro rata share of the amount which has to
be refunded by the Recovering Bank.
<PAGE>
(c) Each Bank shall on request supply to the Agent such information as the
Agent may from time to time request for the purpose of this clause
16.2.
(d) Notwithstanding the foregoing provisions of this clause
16.2 no Recovering Bank shall be obliged to share any Relevant
Receipt which it receives or recovers pursuant to legal
proceedings taken by it to recover any sums owing to it under
this Agreement with any other party which has a legal right
to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its
rights in the same or another court (unless the proceedings
instituted by the Recovering Bank are instituted by it without
prior notice having been given to such party through the
Agent).
16.3 No Release
For the avoidance of doubt it is hereby declared that failure by any Recovering
Bank to comply with the provisions of clause 16.2 shall not release any other
Recovering Bank from any of its obligations or liabilities under clause 16.2.
16.4 No Charge
The provisions of this clause 16 shall not, and shall not be construed so as to,
constitute a charge by a Bank over all or any part of a sum received or
recovered by it in the circumstances mentioned in clause 16.2.
17. Assignment, Substitution and Lending Offices
Assignment, Substitution and Lending Offices
17.1 Benefit and Burden
This Agreement shall be binding upon, and enure for the benefit of, the Banks,
the Arrangers, the Agent, the Security Trustee, the TCN Entities and their
respective successors.
17.2 No Assignment by Borrower
None of the TCN Entities may assign or transfer any of its rights or obligations
under this Agreement.
17.3 Assignment by Banks
Each Bank (an "Assignor Bank") may assign all or any part of its rights in
respect of its Contribution to any Qualifying Bank (an "Assignee") with the
prior written consent of the Borrower (which shall not be unreasonably withheld
or delayed) provided that no such consent is necessary if such Assignee is a
wholly owned Subsidiary of such Assignor Bank or a person of whom such Assignor
Bank is a wholly owned Subsidiary. No Bank may assign all or any part of its
rights in respect of its Contribution to any person which is not a Qualifying
Bank.
<PAGE>
17.4 Substitution
Each Bank (a "Transferor Bank") may transfer, by way of novation, all or any
part of its rights, benefits and/or obligations under this Agreement and the
Security Trust Deed to any Qualifying Bank (a "Substitute") with the prior
written consent of the Borrower (which shall not be unreasonably withheld or
delayed) provided that no such consent is necessary if such Substitute is a
wholly-owned Subsidiary (being a Qualifying Bank) of such Transferor Bank or a
person (being a Qualifying Bank) of whom such Transferor Bank is a wholly-owned
Subsidiary if any such transfer would not give rise to any obligation to make
any payment on the part of the Borrower which it would not have had to make at
such time but for such transfer. Any such novation shall be effected upon five
Banking Days' prior notice by delivery to the Agent of a duly completed
Substitution Certificate duly executed by such Bank, the Substitute and the
Agent (for itself, the Arrangers, the Security Trustee, the Borrower, the
Charging Subsidiaries and the other Banks). On the effective date specified in a
Substitution Certificate so executed and delivered, to the extent that they are
expressed in such Substitution Certificate to be the subject of the novation
effected pursuant to this clause 17.4:
(a) the existing parties to this Agreement and the Bank party to the
relevant Substitution Certificate shall be released from their
respective obligations towards one another under this Agreement and
the Security Trust Deed ("discharged obligations") and their
respective rights against one another under this Agreement
("discharged rights") shall be cancelled;
(b) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than the Bank party to such Substitution Certificate) shall assume
obligations towards each other which differ from the discharged
obligations only insofar as they are owed to or assumed by such
Substitute instead of to or by such Bank;
(c) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than the Bank party to such Substitution Certificate) shall acquire
rights against each other which differ from the discharged rights only
insofar as they are exercisable by or against such Substitute instead
of by or against such Bank,
and on the date upon which such novation takes effect (where such novation takes
place after 19 July 1996) the Substitute shall pay to the Agent for its own
account a fee of oe500. The Agent shall promptly notify the Borrower of the
receipt by it of any Substitution Certificate and deliver a copy thereof to the
Borrower.
17.5 Reliance on Substitution Certificate
The Agent, the Banks, the Arrangers, the Security Trustee and each TCN Entity
shall be fully entitled to rely on any Substitution Certificate delivered to the
Agent in accordance with the foregoing provisions of this clause 17 which is
complete and regular on its face as regards its contents and purportedly signed
on behalf of the relevant Bank and the Substitute and none of the Agent, the
Banks, the Arrangers, the Security Trustee or each TCN Entity shall have any
liability or responsibility to any party as a consequence of placing reliance on
and acting in accordance with any such Substitute Certificate if it proves to be
the case that the same was not authentic or duly authorised.
<PAGE>
17.6 Authorisation of Agent
Each TCN Entity, each Arranger, the Security Trustee and each Bank irrevocably
authorises the Agent to counter-sign each Substitution Certificate on its behalf
without any further consent of, or consultation with such TCN Entity, such
Arranger, the Security Trustee or such Bank except, in the case of the Borrower,
the consent required pursuant to clause 17.3 or 17.4.
17.7 Construction of certain references
If any Bank assigns all or any part of its rights or novates all or any part of
its rights, benefits and obligations as provided in clause 17.3 or 17.4 all
relevant references in this Agreement to such Bank shall thereafter be construed
as a reference to such Bank and/or its Assignee or Substitute (as the case may
be) to the extent of their respective interests.
17.8 Lending offices
Each Bank shall lend through its office at the address specified in Schedule 1
or, as the case may be, in any relevant Substitution Certificate or through any
other office located in the United Kingdom of such Bank selected from time to
time by such Bank through which such Bank wishes to lend for the purposes of
this Agreement. If the office through which a Bank is lending is changed
pursuant to this clause 17.8, such Bank shall notify the Agent promptly of such
change.
17.9 Disclosure of information
Save as permitted pursuant to the terms of this Agreement or the relevant
Security Document any information furnished pursuant to this Agreement or any
Security Document to which the Borrower or any other TCN Entity (as the case may
be) is a party to the Agent, the Arranger, the Security Trustee or the Banks
shall be kept confidential by the recipient and the Agent, the Arrangers, the
Security Trustee and the Banks, save that the provisions of this clause 17.9
shall not apply:
(a) to any information already known to the recipient;
(b) to any information subsequently received by the recipient which it
would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise than
as a result of a breach by any person of this clause 17.9 or of any
confidentiality undertaking entered into pursuant to clause 17.11; and
(d) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court or order or request of any
governmental agency with whose instructions the recipient habitually
complies.
<PAGE>
17.10 Sub-participation
No Bank may enter into any sub-participation arrangements in relation to all or
any part of its rights and obligations under this Agreement with any person
without the consent of the Borrower and the Agent.
17.11 Confidentiality undertaking
Any Bank, the Security Trustee, any Arranger or the Agent may, having obtained
the prior consent of the Borrower (such consent not to be unreasonably withheld)
disclose to a prospective Assignee or Substitute or to any other person who may
propose entering into contractual relations with such Bank, the Security
Trustee, any Arranger or the Agent in relation to this Agreement or any Security
Document any information referred to in clause 17.9 subject to the prospective
Assignee or Substitute or other person first entering into a confidentiality
undertaking with the Borrower and the other TCN Entities in substantially the
same terms as clause 17.9 and this clause 17.11.
18. Arrangers, Agent and Reference Banks Arrangers,
Agent and Reference Banks
18.1 Appointment of Agent
Each Bank irrevocably appoints the Agent as its agent for the purposes of this
Agreement and any relevant Security Document and authorises the Agent (whether
or not by or through employees or agents) to take such action on such Bank's
behalf and to exercise such rights, remedies, powers and discretions as are
specifically delegated to the Agent by this Agreement and/or any relevant
Security Document, together with such powers and discretions as are reasonably
incidental thereto. None of the Agent, the Arrangers or the Security Trustee
shall, however, have any duties, obligations or liabilities to the Banks beyond
those expressly stated in this Agreement and/or the Security Documents.
18.2 Amendments to this Agreement
(a) Subject to clause 18.2(b) and save where otherwise
provided in this Agreement, the Agent may, with the consent of
the Majority Banks (or if and to the extent expressly
authorised by the other provision of this Agreement), amend,
modify or otherwise vary or waive breaches of, or defaults
under, or otherwise excuse performance of, any provision of
this Agreement or any other Security Document entered into in
favour of the Agent. Any such action so authorised and
effected by the Agent shall be promptly notified to the Banks
by the Agent and shall be binding on all of the Banks.
(b) Except with the prior written consent of all of the
Banks, the Agent shall not have authority on behalf of the
Banks (A) to agree with any TCN Entity any amendment to this
Agreement or to grant waivers in respect of breaches of or
defaults under this Agreement or to excuse performance of this
Agreement which would (i) reduce the Margin, (ii) extend the
due date or reduce the amount of any payment of principal,
interest or other amount payable under this Agreement, (iii)
change the currency in which any amount is payable under this
Agreement, (iv) increase any Bank's Commitment, (v) change the
definition of "Majority Banks" in clause 1.2, change clauses
3.3, 4.2, 4.3, 4.4, 15.2, 16.2 or 17.2, (vi) change this
clause 18.2, (B) to release any asset of whatever nature that
<PAGE>
is subject to a Security Document unless such release is to
permit the disposal or other dealing with such asset in
accordance with the terms of this Agreement or the relevant
Security Document or (C) to release any TCN Entity (other than
an Immaterial Group Entity) from all of its obligations under
this Agreement and the Security Documents.
(c) Each TCN Entity (other than the Borrower) irrevocably appoints the
Borrower to act on its behalf as its agent in relation to this
Agreement and any amendment agreement relating hereto and irrevocably
authorises the Borrower to execute on its behalf any amendments to
this Agreement without further reference to or the consent of such TCN
Entity and to give any waivers, consents and notices in relation to
this Agreement and any amendment agreement relating hereto and to take
any other action in relation to this Agreement and any amendment
agreement relating hereto.
18.3 Rights of Agent, Security Trustee and each Arranger
as Bank; no partnership
With respect to its own Commitment and Contribution (if any) the Agent, the
Security Trustee and each Arranger shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though it were not
performing the duties and functions delegated to it under this Agreement and/or
the Security Documents and the term "Banks" shall, unless the context clearly
otherwise indicates, include the Agent, the Security Trustee, each Arranger in
its individual capacity as a Bank. This Agreement shall not and shall not be
construed so as to constitute a partnership between the parties or any of them.
18.4 No liability of the Arrangers, the Security Trustee
and Agent
None of the Arrangers, the Security Trustee or the Agent shall:
(a) be obliged to request any certificate or opinion under
clause 10 or 12 or to make any enquiry as to the use of the
proceeds of the Loan unless (in the case of the Agent) so
required in writing by any Bank, in which case the Agent shall
promptly make the appropriate request of the Borrower, or be
obliged to make any enquiry as to any default by the Borrower
in the performance or observance of any of the provisions of
this Agreement or as to the existence of a Default unless (in
the case of the Agent) the Agent has actual knowledge thereof
or has been notified in writing thereof by a Bank, in which
case the Agent shall promptly notify the Banks of the relevant
event or circumstance; or
(b) be liable to any Bank for any action taken or omitted under or in
connection with this Agreement or the Loan unless caused by their or
its gross negligence or wilful misconduct.
For the purpose of this clause 18 neither the Agent nor the Security Trustee
shall be treated as having actual knowledge of any matter of which the corporate
finance or any other division outside the corporate lending or loan
administration departments of the person for the time being acting as the Agent
or the Security Trustee, as the case may be, may become aware in the context of
corporate finance or advisory activities from time to time undertaken by the
Agent or the Security Trustee, as the case may be, for any TCN Entity, Telewest,
any Affiliate, any Ultimate Shareholder or any of their respective Subsidiaries,
Associated Partnerships or Affiliates.
<PAGE>
18.5 Agent's duty to notify and take action
The Agent shall:
(a) promptly notify each Bank of the contents of each notice, certificate
or other document received by the Agent from the Borrower under or
pursuant to clause 11 and provide each Bank with a copy of each set of
financial statements, Monthly Management Accounts or Quarterly
Management Accounts delivered to the Agent under clause 10.1(f), (g)
or (h); and
(b) (subject to its being indemnified to its satisfaction) take such
action or, as the case may be, refrain from taking such action with
respect to any Default of which the Agent has actual knowledge as the
Majority Banks or Banks (as the case may be) may reasonably direct.
18.6 Identity of the Banks
The Agent may deem and treat (a) each Bank as the person entitled to the benefit
of the Contribution of such Bank for all purposes of this Agreement unless and
until a notice of assignment of such Bank's Contribution or any part thereof or
a Substitution Certificate shall have been filed with the Agent, and (b) the
office set opposite the name of each Bank in Part D of Schedule 1 or, as the
case may be, in any relevant Substitution Certificate as such Bank's lending
office unless and until a written notice of change of lending office shall have
been received by the Agent; and the Agent may act upon any such notice unless
and until the same is superseded by a further such notice.
18.7 Non-reliance on the Arrangers, the Security Trustee
or the Agent
Each Bank acknowledges that it has not relied on any statement, opinion,
forecast or other representation made by the Arrangers, the Security Trustee or
the Agent to induce it to enter into this Agreement an that it has made and will
continue to make, without reliance on the Agent, the Arrangers or the Security
Trustee and based on such documents as it considers appropriate, its own
appraisal of the creditworthiness of each TCN Entity and Telewest and its own
independent investigation of the financial condition and affairs of each TCN
Entity and Telewest in connection with the making and continuation of the Loan
under this Agreement. None of the Arrangers, the Security Trustee or the Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Bank with any credit or other information with respect to
any TCN Entity or Telewest, whether coming into their or its possession before
the making of any Advance or at any time or times thereafter, other than (in the
case of the Agent) as provided in clause 18.5(a).
18.8 No Responsibility on Arrangers, Security Trustee or Agent
for Borrower's, etc. performance
None of the Arrangers, the Security Trustee or the Agent shall have any
responsibility to any Bank on account of the failure of any TCN Entity or
Telewest, to perform their respective obligations under this Agreement or the
Security Documents or for the financial condition of any TCN Entity or Telewest,
or for the completeness or accuracy of any statements, representations or
warranties in this Agreement, the Security Documents or any document delivered
<PAGE>
under this Agreement, the Security Documents or for the execution,
effectiveness, adequacy, genuineness, validity, enforceability or admissibility
in evidence of this Agreement or the Security Documents or of any certificate,
report or other document executed or delivered under this Agreement or the
Security Documents or otherwise in connection with the Loan or its negotiation
or for acting (or, as the case may be, refraining from acting) in accordance
with the instructions of the Majority Banks or all of the Banks (as the case may
be). The Arrangers, the Security Trustee and the Agent shall be entitled to rely
on any communication, instrument or document believed by them or it to be
genuine and correct and to have been signed or sent by the proper person and
shall be entitled to rely as to legal or other professional matters on opinions
and statements of any legal or other professional advisers selected or approved
by them or it.
18.9 Other dealings
The Arrangers, the Security Trustee and the Agent may, without any liability to
account to the Banks, accept deposits from, lend money to, and generally engage
in any kind of banking or trust business with, each TCN Entity, Telewest or any
of their respective Subsidiaries, Associated Partnerships or Affiliates or any
of the Banks as if they or it were not an Arranger, the Security Trustee or the
Agent (as the case may be).
18.10 Reimbursement and indemnity by Banks
Each Bank shall reimburse the Arrangers, the Security Trustee and the Agent
(rateably in accordance with such Bank's Commitment, at any time before the
making of the first Advance or if no Advance is then outstanding, or
Contribution, at any other time) to the extent that such Arranger, the Security
Trustee or the Agent is not reimbursed by the Borrower, for the charges and
expenses incurred by such Arranger, the Security Trustee and the Agent in
connection with the negotiation, preparation, syndication and execution of this
Agreement and/or in contemplation of, or otherwise in connection with, the
enforcement of, or the preservation of any rights under, or in carrying out its
duties under, this Agreement and/or the Security Documents including (in each
case) the fees and expenses of legal or other professional advisers. Each Bank
shall indemnify the Agent and the Security Trustee (rateably in accordance with
such Bank's Commitment, at any time before the making of the first Advance or if
no Advance is then outstanding, or Contribution, at any other time) against all
liabilities, damages, costs and claims whatsoever incurred by the Agent or the
Security Trustee (as the case may be) in connection with this Agreement and/or
the Security Documents or any document or report referred to in this Agreement
or the performance of its duties under this Agreement and/or the Security
Documents or any action taken or omitted by the Agent or the Security Trustee
(as the case may be) under this Agreement and/or the Security Documents, unless
such liabilities, damages, costs or claims arise from the Agent's or the
Security Trustee's (as the case may be) own gross negligence or wilful
misconduct.
18.11 Retirement of Agent
(a) The Agent may retire from its appointment as Agent under this
Agreement and/or the relevant Security Documents having given to the
Borrower and each of the Banks not less than 30 days' notice of its
intention to do so, provided that no such retirement shall take effect
unless there has been appointed by the Banks (after consultation with
the Borrower) as a successor agent:
(i) a Bank; or
<PAGE>
(ii) any other reputable and experienced financial institution
with offices in London nominated and accepted by the
Majority Banks and to which the Borrower has given its
consent (such consent not to be unreasonably withheld or
delayed); or, failing such nomination;
(iii)any reputable and experienced bank or financial institution
with offices in London nominated by the Agent and to which
the Borrower has given its consent (such consent not to be
unreasonably withheld or delayed).
(b) All of the Banks (other than the Agent, in its capacity
as a Bank) may, having given to the Agent not less than 30
days' notice of the intention to do so, remove the Agent from
its appointment as such under the Agreement. The removal
shall automatically be of effect on the expiry of the notice
save, where the Banks (other than the Agent, in its capacity
as a Bank) shall have failed to appoint a successor agent
falling within the requirements of clause 18.11(a) (i) or
(ii), in which case the removal shall be deferred until such
appointment is made. The Banks (other than the Agent, in its
capacity as a Bank) shall immediately notify the Agent in
writing of their making such appointment.
(c) Upon any such successor as aforesaid being appointed, the
retiring Agent shall be discharged from any further obligation
under this Agreement and/or the relevant Security Documents
and its successor and each of the other parties to this
Agreement and/or the relevant Security Documents shall have
the same rights and obligations among themselves as they would
have had if such successor had been a party to this Agreement
and/or the relevant Security Documents in place of the
retiring Agent.
18.12 Change of Reference Banks
If (a) the whole of the Contribution (if any) of any Reference Bank is prepaid,
(b) the Commitment (if any) of any Reference Bank is reduced to zero in
accordance with clause 6.4 or 15.1, (c) a Reference Bank assigns and/or novates
the whole of its rights and obligations (if any) as a Bank under this Agreement
or (d) any Reference Bank ceases to provide quotations to the Agent for the
purposes of determining LIBOR, the Agent may, acting on the instructions of the
Majority Banks, terminate the appointment of such Reference Bank and after
consultation with the Borrower appoint another Bank to replace such Reference
Bank.
18.13 Security Documents
Each Bank acknowledges and agrees to the terms and conditions of the Security
Documents and the Security Trustee and the Banks agree that the Banks will,
subject to the terms of the Security Trust Deed, be entitled to all the rights
and subject to the liabilities and obligations of the Banks (and, if applicable,
the Bond Providers and/or Interest Rate Beneficiaries (as defined therein))
under the Debenture and any other Security Document entered into by the Security
Trustee for the benefit of the Banks and, if applicable, the Bond Providers
and/or Interest Rate Beneficiaries.
<PAGE>
19. Notices and other matters Notices and
other matters
19.1 Notices
Every notice, request, demand or other communication under this Agreement shall,
if addressed to the Borrower, be copied to Telewest and, if addressed to any
other TCN Entity, be copied to the Borrower and Telewest, and shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if applicable and available), telex or telefax (confirmed in
the case of a telefax, by first-class prepaid letter (airmail if
available));
(b) be deemed to have been received, subject as otherwise
provided in this Agreement, in the case of a letter, when
delivered personally or 3 days (7 days in the case of a letter
posted from one country to another) after it has been put into
the post and, in the case of a telex or telefax, at the time
of despatch with, in the case of telex, confirmed answerback
of the addressee appearing at the beginning and end of the
transmission or it the case of a telefax, with confirmation by
the sender's facsimile machine that the message has been
received at the correct facsimile number (provided that if the
date of delivery or despatch is not a business day in the
country of the addressee or if the time of despatch of any
telex or telefax is after the close of business in the country
of the addressee it shall be deemed to have been received at
the opening of business on the next such business day); and
(c) be sent:
(i) to the Borrower and each other TCN Entity at:
c/o Telewest Communications plc
Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
Telefax: 01483 750901
Attention: Vice-President - Treasury
(ii) to the Agent and the Security Trustee at:
Cottons Centre
Cottons Lane
London SE1 2QL
Telex: 888229 - CIBC G
Telefax: 0171 234 6433
Attention: Supervisor, Banking Services
<PAGE>
(iii)to each Arranger and each Bank at its address, telex number
or telefax number specified in Part D of Schedule 1 or in
any relevant Substitution Certificate,
or to such other address, telex number or telefax number as is
notified by the Borrower, a TCN Entity, the Agent, an Arranger, the
Security Trustee or a Bank (as the case may be) to the other parties
to this Agreement.
19.2 Notices through the Agent
Every notice, request, demand or other communication under this Agreement to be
given by any TCN Entity to any other party shall be given to the Agent for
onward transmission as appropriate and to be given to any TCN Entity shall
(except as otherwise provided in this Agreement) be given by the Agent.
19.3 No implied waivers, remedies cumulative
No failure or delay on the part of the Agent, the Arrangers, the Security
Trustee, the Banks or any of them to exercise any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by the Agent, the Arrangers, the Security Trustee, the Banks or
any of them of any power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy. The remedies
provided in this Agreement are cumulative and are not exclusive of any remedies
provided by law.
20. Lease Financing and Pari Passu BorrowingsLease Financing
and Pari Passu Borrowings
20.1 Lease Financing
Each Bank, the Security Trustee, the Arrangers and the Agent acknowledges that
the Borrower or a TCN Entity may wish to enter into Finance Leases from time to
time. Accordingly the parties hereto agree that they will negotiate in good
faith should the relevant TCN Entity wish to use the facility granted pursuant
to this Agreement by way of guarantees or letters of credit in favour of the
lessors in respect of such Finance Leases in order to agree arrangements
satisfactory to all parties. If, no later than 30 June, 1997, any Finance Lease
is entered into by a TCN Entity which is supported by guarantees or letters of
credit given under the facility granted pursuant to this Agreement (and the
mandate therefor has been awarded to the prospective lessor no later than 31
January, 1997) which does not, in the opinion of each Bank (acting reasonably),
require such Bank to assume any greater credit or other risk or any onerous
obligations, then any such arrangements shall not involve the payment of a fee
to any of the Banks, the Arrangers, the Agent or the Security Trustee and each
Bank, the Security Trustee, each of the Arrangers and the Agent undertakes to
act reasonably to agree any relevant documentation.
20.2 Pari Passu Borrowings
Each Bank, the Security Trustee, the Arrangers and the Agent agrees that any
lender of any Borrowed Money within paragraph (ix) of Permitted Borrowings shall
be entitled to share in the security constituted by the Security Documents on a
pari passu basis with the Banks and agrees to enter into such supplemental
documentation (at the cost of the Borrower) as may reasonably be required in
order to effect the same.
<PAGE>
21. Governing law and jurisdiction Governing law and
jurisdiction
21.1 Law
This Agreement is governed by and shall be construed in accordance with English
law.
21.2 Submission to jurisdiction
Each TCN Entity agrees for the benefit of the Agent, the Arrangers, the Security
Trustee and the Banks that any legal action or proceedings in connection with
this Agreement against any TCN Entity or any of their respective assets may be
brought in the English courts. Each TCN Entity irrevocably and unconditionally
submit to the jurisdiction of such courts and in the case of TCN Entities which
are not incorporated or organised under the laws of England, irrevocably
designate, appoint and empower Legibus Secretaries Limited at present of 200
Aldersgate Street, London EC1A 4JJ to receive for them and on their behalf,
service of process issued out of the English courts in any legal action or
proceedings arising out of or in connection with this Agreement. The submission
to such jurisdiction shall not (and shall not be construed so as to) limit the
right of the Agent, the Arrangers, the Security Trustee or the Banks to take
proceedings against any TCN Entity to enforce any judgment obtained in any court
referred to in this clause 21.2 in any jurisdiction in which any of the assets
of any TCN Entity are situated, nor shall the taking of proceedings in any one
or more jurisdiction referred to in this clause 21.2 preclude the taking of
proceedings in any other such jurisdiction, whether concurrently or not.
21.3 Inconvenient forum
Each TCN Entity irrevocably waives any objection they may have now or hereafter
to the laying of venue of any action or proceeding in any court or jurisdiction
referred to in clause 21.2 and any claim they may have now or hereafter that any
action or proceeding brought in such courts or jurisdiction has been brought in
an inconvenient forum.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
<PAGE>
SCHEDULE 1
Part A
The Original Charging Subsidiaries
(1) (2)
COMPANY NAME COMPANY NUMBER
Telewest Communications Group 2514287
Limited
Telewest Communications Cable 2883742
Limited
Telewest Holdings Limited 2982404
Telewest Parliamentary Holdings 251 4316
Limited
Theseus No 1 Limited 2994027
Theseus No. 2 Limited 2994061
The Cable Equipment Store Limited 2693805
United Artists Communications 1743081
(Cotswolds) Limited
United Artists Communications 2318746
(Nominees) Limited
United Artists Communications (North 2378214
East) Limited
United Artists Communications (South 2270764
East) Limited
United Artists Communications (South 2270763
Thames Estuary) Limited
United Artists Communications 2407676
(Tyneside) Limited
SBC CableComms (UK) Limited 2795350
Southwestern Bell International 2378768
Holdings Limited
Midlands Cable Communications 1882074
Limited
Telford Telecommunications Limited 2389377
North West Cable Communications 2321124
Limited
Cable Communications Wigan Limited 2451112
Cable Communications (Central 1737862
Lancashire) Limited
Cable Communications Liverpool 1615567
Limited
Cable Communications (St. Helens & 2466599
Knowsley) Limited
Telewest (Motherwell) Limited SC150057
United Artists Communications 1697437
(London South) Limited
United Artists Communications (Avon) 2271287
Limited
<PAGE>
Tayside Cable Systems Limited SC096816
Kingdom Cablevision Limited SC119523
Scotcable (Motherwell) Limited SC121617
Scotcable (Cumbernauld) Limited SC121614
Scotcable (Dumbarton) Limited SC121700
Cable North (Forth District) SC122481
Limited
United Artists Communications SC80891
(Scotland) Limited
Telewest Scotland Holdings Limited SC150058
Telewest Communications (Internet) 03141035
Limited
Telewest Southport Limited 03085912
Crystal Palace Radio Limited 01459745
Avon Cable Investments Limited 2487110
Telewest (Worcester) Limited 02475098
<PAGE>
Part B
The Original Charging Partnerships
(1) (2)
PARTNERSHIP NAME PRINCIPAL PLACE OF BUSINESS
Cotswolds Cable Limited Concord House,
Partnership Staverton Technology Park,
Staverton,
Cheltenham,
Gloucestershire GL51 6TQ
Estuaries Cable Limited Communications House,
Partnership Scimitar Park,
Courtauld Park,
Basildon,
Essex SS1 1ND
TCI/US WEST Cable Communications Genesis Business Park,
Group Albert Drive,
Woking,
Surrey GU21 5RW
Tyneside Cable Limited Partnership Communications House,
1 Duke's Way West,
Team Valley,
Gateshead,
County Durham NE11 6EG
United Artists Communications Communications House,
(North East) Partnership 1 Duke's Way West,
Team Valley,
Gateshead,
County Durham NE11 6EG
United Artists Communications Communications House,
(South East) Partnership Scimitar Park,
Courtauld Park, Basildon,
Essex SS1 1ND
London South Cable Partnership Communications Centre, 5
Factory Lane,
Croydon, Surrey
Avon Cable Limited Partnership 700 Waterside Drive, Aztec
West,
Almondsbury, Bristol BS12 4ST
Edinburgh Cable Limited 1 South Gyle Crescent Lane,
Partnership Edinburgh, EH2 9EG
United Cable (London South) Communications Centre,
Limited Partnership 5 Factory Lane, Croydon,
Surrey
<PAGE>
Avon Cable Joint Venture 700 Waterside Drive, Aztec
West,
Almondsbury, Bristol BS12 4ST
London South Joint Venture Communications Centre,
5 Factory Lane, Croydon,
Surrey
United Artists Communications Network Centre,
(Cotswolds) Venture Staverton Technology Park,
Staverton,
Cheltenham, Gloucestershire
GL51 6TQ
United Artists Communications 1 South Gyle Crescent Lane,
(Scotland) Venture Edinburgh, EH2 9EG
<PAGE>
Part C
The Original Non-Charging Subsidiaries
(1) (2)
COMPANY NAME COMPANY NUMBER
Cable Communications Telecomm Limited 02423585
Cable Communications Limited 01860121
Cable Communications (Fylde & Wyre) 02935056
Limited
Telewest Share Trust Limited 02472760
Telewest Trustees Limited 03071066
Crystalvision Productions Limited 01947225
Capital City Cablevision Limited SC80665
Edinburgh Cablevision Limited SC078895
Hieronymous Limited SC80135
Cable Communications South East 03006851
Staffordshire Limited
Cable Communications Shrewsbury Limited 03039816
Perth Cable Television Limited SC032627
Dundee Cable and Satellite Limited SC093114
Cable Guide Limited 02025654
<PAGE>
Part D
The Banks and their Commitments
Name Address and telex and Commitment
facsimile numbers (pound)
The Bank of New York 46 Berkeley Street 240,000,000
Company, Inc. London
W1X 6AA
Tel: 0171 322 6017
Fax: 0171 322 6032
Attention:Loans
Administration
Canadian Imperial Cottons Centre 240,000,000
Bank of Commerce Cottons Lane
London SE1 2QL
Tel: 0171 234 6000
Fax: 0171 234 6433
Attention:Supervisor,
Banking Services
Chemical Bank Trinity Tower 240,000,000
9 Thomas More Street
London E1 9YT
Tel: 0171 777 2170
Fax: 0171 777 2114
Attention:Julian Pitt,
Asset Finance
National Westminster 135 Bishopsgate 240,000,000
Bank Plc London EC2M 3UR
Tel: 0171 375 5085
Fax: 0171 375 5820
Telex: 882121
Attention:Portfolio
Management
The Toronto-Dominion Triton Court 240,000,000
Bank 14/18 Finsbury Square
London EC2A 1DB
Tel: 0171 920 0272
Fax: 0171 638 2551
Telex: 886142
Attention:Manager,
Corporate
Services
1,200,000,000
-------------
<PAGE>
SCHEDULE 2
Part A
Form of Drawdown Notice
To: CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services [Date]
(pound)1,200,000,000 Loan Facility
Loan Agreement dated 22 May, 1996
(as from time to time amended, varied, extended, restated
or replaced the "Loan Agreement")
1. We refer to the above Loan Agreement and hereby give you notice that we
wish to draw a Revolving Advance under Tranche [A]/[B] of oe[ ] on [ ] and
select a Term for such Revolving Advance of [ ] months. The funds should be
credited to [name and number of account] with [bank in London].
2. We confirm that:
(i) no event or circumstance has occurred and is continuing
which constitutes a Default;
(ii) the representations and warranties referred to in clause 9.3
including those deemed to be made by the Borrower pursuant to
such clause are (subject as provided in clause 9.3) true and
correct at the date hereof as if each was made with respect to
the facts and circumstances existing at the date hereof;
(iii)the borrowing to be effected by such Revolving Advance will be
within our powers, has been validly authorised by appropriate
action and will not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or otherwise) to be
exceeded; and
(iv) [if drawdown is to be used to fund an acquisition or
investment within (vi) of "Permitted Investments"] the
investment/acquisition towards which the proceeds of this
drawdown will be applied satisfies the requirements of paragraph
(vi) of the definition of Permitted Investments.
3. We confirm that Consolidated Annualised TCN Group Net Operating Cash Flow
in the most recently delivered Monthly Management Accounts was [ ].
<PAGE>
4. We further confirm that the ratio of the Tranche B Loan (including, for
these purposes, the amount of the Advance the subject of this notice) to
Consolidated Annualised TCN Group Net Operating Cash Flow as calculated
from the most recently delivered Monthly Management Accounts delivered to
the Agent under this Agreement was [ ].
Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein.
For and on behalf of
Telewest Communications Networks Limited
..................................................
Authorised Officer
<PAGE>
SCHEDULE 2
Part B
Form of Rollover Notice
To: CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services [Date]
(pound)1,200,000,000 Loan Facility
Loan Agreement dated 22 May, 1996
(as from time amended, varied, extended, restated
or replaced the "Loan Agreement")
We refer to the above Loan Agreement and hereby give you notice that we wish to
draw a Revolving Advance of oe[ ] on [ ] under Tranche [A/B] and select a Term
for such Revolving Advance of [ ] months. The funds should be applied in
repayment [in part] of the Revolving Advance of oe[ ] which falls due to be
repaid on the same day in accordance with clause 4.13 of the Loan Agreement.
Words and expressions defined in the Loan Agreement shall have the same meanings
when used herein.
For and on behalf of
Telewest Communications Networks Limited
...........................
Authorised Officer
<PAGE>
SCHEDULE 2
Part C
Form of Conversion Notice
To: CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services [Date]
(pound)1,200,000,000 Loan Facility
Loan Agreement dated 22 May, 1996
(as from time amended, varied, extended, restated
or replaced the "Loan Agreement")
We refer to the Revolving Advance made to us of oe[ ] on [ ] with a Term of [ ]
under Tranche [A]/[B]. Words and expressions defined in the Loan Agreement shall
have the same meanings when used herein.
We hereby give you notice that we wish to convert such Revolving Advance to a
Revolving Advance under Tranche [A/B] with effect from [ ] (the "Conversion
Date").
We confirm that:
(iv) no event or circumstance has occurred and is continuing
which constitutes a Default;
(v) the representations and warranties referred to in clause 9.3
including those deemed to be made by the Borrower pursuant to
such clause are (subject as provided in clause 9.3) true and
correct at the date hereof as if each was made with respect to
the facts and circumstances existing at the date hereof; and
(vi) the borrowing effected by such Revolving Advance is within our
powers, has been validly authorised by appropriate action and
will not cause any limit on our borrowings (whether imposed by
statute, regulation, agreement or otherwise) to be exceeded.
<PAGE>
We confirm that as at the Conversion Date we will be in compliance with clause
4.2 and clause 4.3 of the Loan Agreement.
For and on behalf of
Telewest Communications Networks Limited
...................................
Authorised Officer
<PAGE>
SCHEDULE 3
Documents and evidence required as conditions precedent
(b) Copies, certified as true, complete and up-to-date copies by the Company
Secretary of the Borrower, of the Memorandum and Articles of Association
of the Borrower.
(c) A copy certified as a true copy by the Company Secretary of Resolutions
of the Board of Directors of the Borrower evidencing approval of this
Agreement and any Security Document to which it is a party and
authorising its appropriate officers to execute and deliver this
Agreement, each Security Document to which it is a party and to give all
notices and take all other action required by the Borrower under this
Agreement and each Security Document to which it is a party.
(d) A copy, certified as a true copy by the Company Secretary, of
Resolutions of the Board of Directors of Telewest evidencing approval of
the Deed of Subordination, the Telewest Assignment and the RBL Step-In
Rights Agreement and authorising its appropriate officers to execute and
deliver the Deed of Subordination, the Telewest Assignment and the RBL
Step-In Rights Agreement and to give all notices and to take all action
required by it under the Deed of Subordination, the Telewest Assignment
and the RBL Step-In Rights Agreement.
(e) Specimen signatures, authenticated by the relevant Company Secretary, of
the persons authorised in the Resolutions of the Board of Directors
referred to in paragraphs (b) and (c) above.
(f) Copies, certified as true copies by the relevant duly authorised officer
from Legibus Secretaries Limited as agents for receipt of service of
process referred to in this Agreement and/or the Security Documents of
acknowledgment of appointment as such.
(g) The Deed of Subordination, the Telewest Assignment and the RBL Step-in
Rights Agreement having been duly executed and delivered by Telewest.
(h) The Security Documents having been duly executed and delivered by the
Borrower and the other applicable TCN Entities.
(i) A notice in the form attached to the Debenture having been given to each
insurer of all or any of the material assets of the Borrower and each
TCN Entity and the same having been agreed and accepted by each relevant
insurer.
(j) Copies, certified as true copies by the Company Secretary of the
Borrower, of each Principal Agreement, the Licences, and each
inter-connect agreement entered into between Mercury Communications
Limited and members of the TCN Group together with a certificate from
the Company Secretary of the Borrower confirming that such documents are
in full force and effect.
(k) Confirmation from Alexander & Alexander that all the assets of the
Borrower and each other TCN Entity are insured in accordance with the
provisions of this Agreement and the Debenture.
<PAGE>
(l) An opinion of Norton Rose, solicitors to the Agent, dated no earlier than
15 days prior to the date of this Agreement.
(m) A letter, addressed to the Agent and the Banks, from KPMG Peat Marwick
stating that in KPMG Peat Marwick's opinion the financial projections and
underlying accounting assumptions of the Agreed Base Case delivered to the
Arrangers prior to the date of this Agreement are reasonable.
(n) A copy of the budget of the TCN Group for the period commencing on 1
January 1996 and ending on 31 December 1996.
(o) A copy, certified as a true copy by a Director of the Borrower, of the
Agreed Base Case.
(p) A letter from KPMG Peat Marwick confirming that any borrowing limit set out
in Telewest's Articles of Association will not be exceeded by the borrowing
by the Borrower of all the Commitments.
(q) A letter from a director of Telewest confirming that as of the first
Drawdown Date there has been no change in the financial position of the TCN
Group which would result in KPMG Peat Marwick's letter being incorrect if
taken as at the first Drawdown Date.
(r) Copies, certified as true, complete and up-to-date copies by the relevant
Company Secretary or Partnership Secretary of the certificate of
incorporation and Memorandum and Articles of Association of each Original
Charging Subsidiary or Partnership Agreement of each Original Charging
Partnership incorporating any amendments thereto reasonably required by the
Agent to ensure each Original Charging Subsidiary or Original Charging
Partnership can comply with the terms of this Agreement and the Security
Documents.
(s) A copy certified as a true copy by the Company Secretary of Resolutions of
the Board of Directors of each Original Charging Subsidiary and by a
Partnership Secretary of Resolutions of the Partners of each Original
Charging Partnership evidencing approval of this Agreement, and any
Security Document to which it is a party and authorising its appropriate
officers to execute and deliver this Agreement and the Security Documents
to which it is a party and to give all notices and take all other action
required by each such Original Charging Subsidiary or, as the case may be,
such Original Charging Partnership under this Agreement and each Security
Document to which it is a party together with a copy of the resolutions of
the authorised representative of each General Partner of each Charging
Partnership evidencing approval of this Agreement and any Security Document
to which it is a party certified as a true copy by a responsible officer of
such General Partner and certifying as to the authority of such authorised
representative.
(t) Specimen signatures certified by the relevant Company Secretary or
Partnership Secretary of the persons authorised by the resolutions referred
to in paragraph (r) above.
(u) Save where the relevant shares are registered in the name of the Security
Trustee or its nominee, share certificates (together with any relevant
declarations of trust and copies, certified as true copies by the relevant
Company Secretaries of resolutions of the Boards of Directors of the
relevant legal owners authorising the execution and delivery of such
declarations of trust and duly executed stamped stock transfer forms but
with the name of the transferee left blank) in respect of the entire issued
share capital of the Original Charging Subsidiaries.
<PAGE>
(v) Opinions of legal counsel to the Agent in the jurisdiction of incorporation
or formation of each Original Charging Subsidiary and each Original
Charging Partnership dated no earlier than 15 days prior to the date hereof
including an opinion from Morrison & Foerster together with an opinion from
Sherman and Howard L.L.C., special legal counsel to the Borrower in Denver,
Colorado, dated no earlier than 15 days prior to the date hereof.
(w) A Pledge and Security Agreement with respect to each of the Original
Charging Partnerships organised under the laws of one of the United States
of America in each case duly executed and delivered by each and every of
the partners in such Original Charging Partnership.
(x) Certificates of valid existence by the appropriate State in relation to
each of the Original Charging Partnerships that is a limited partnership
and is organised under the laws of one of the United States of America.
(y) Evidence of release of all Encumbrances listed in Part I of Schedule 8.
(z) Certified copies of notices from the relevant Borrowers to the relevant
Agents cancelling the London South/Avon and Scotland Facilities.
(aa) Receipt of all regulatory consents and letters (in the agreed form) and the
effecting of all registrations required in connection with this Agreement
and the Security Documents, including letters from the ITC, OFTEL and the
DTI.
(bb) Confirmation from an authorised officer of the Borrower that a minimum of
oe1,750,000,000 of equity and/or subordinated shareholder loans has been
injected into the TCN Group (for these purposes including predecessor
businesses).
(cc) Confirmation from an authorised officer of the Borrower that no member of
The Telewest Group is in default under any existing financing arrangements
including the Senior Securities.
(dd) A UCC-1 financing statement executed by each of the partners in each of the
Original Charging Partnerships that is organised under the laws of one of
the United States of America with respect to their respective pledges under
the Pledge and Security Agreements.
(ee) Certified copy of each Borrower/Telewest Transfer Agreement.
(ff) Certified copies of those charges detailed at Part II of Schedule 8 and
underlying loan documentation, together with a notice to each party secured
by an existing encumbrance, such notice to be in a form agreed between the
Borrower and the Agent, and any acknowledgements of such notices which the
Borrower has, using its reasonable endeavours, been able to procure.
(gg) Certified copies of Telewest/TCN Group loan documentation and details of
all amounts outstanding thereunder.
<PAGE>
(hh) Confirmation from the Company Secretary of the Borrower that there are no
outstanding Encumbrances or Borrowings other than Permitted
Encumbrances/Permitted Borrowings.
(ii) Title documents to all properties to be charged under the Debenture which
are valued at over oe500,000 (other than those subject to a Prior Charge
(as defined in the Debenture) where the prior Chargee has or is entitled to
the title documents).
(jj) Disclosure Letter.
(kk) Evidence that interest rate hedging arrangements in accordance with Clause
10.1(aa) of this Agreement have been put in place, effective as of the
first Drawdown Date.
<PAGE>
SCHEDULE 4
Calculation of Additional Cost
22. The Additional Cost for any period is calculated in accordance with the
following formula:
where on the day of application of the formula:
B is the percentage of the Agent's eligible liabilities which the Bank
of England then requires the Agent to hold on a non-interest-bearing
deposit account in accordance with its cash ratio requirements;
Y is the percentage rate at which Sterling deposits are offered by the
Agent to leading banks in the London interbank market at or about 11
a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result of the
requirements of the Bank of England) the Agent maintains as secured
money with members of the London Discount Market Association or in
certain marketable or callable securities approved by the Bank of
England;
X is the percentage rate at which secured Sterling investments may be
placed by the Agent with members of the London Discount Market
Association at or about 11 a.m. on that day for the relevant period
or, if greater, the rate at which Sterling bills of exchange (of a
tenor equal to the duration of the relevant period) eligible for
rediscounting at the Bank of England can be discounted in the London
Discount Market at or about 11 a.m. on that day;
S is the percentage of the Agent's eligible liabilities which the Bank
of England requires the Agent to place as a special deposit; and
Z is the interest rate expressed as a percentage per annum allowed by
the Bank of England on special deposits.
23. For the purposes of this Schedule 4:
23.1 "eligible liabilities" and "special deposits" have the meanings given
to them at the time of application of the formula by the Bank of
England; and
23.2 "relevant period" in relation to each period for which Additional Cost
falls to be calculated means:
<PAGE>
(a) if it is 3 months or less, that period; or
(b) if it is more than 3 months, 3 months.
24. In the application of the formula, B, Y, L, X, S and Z are included in the
formula as percentages, e.g. if B = 0.5 per cent. and Y = 15 per cent. BY
is calculated as 0.5 x 15.
25. The formula is applied on the first day of each relevant period. Each
amount is rounded up (if necessary) to the nearest four decimal places.
26. If the Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Agent (after consultation with
all of the Banks) shall notify the Borrower of the manner in which the
Additional Cost will subsequently be calculated. The manner of calculation
so notified by the Agent shall, in the absence of manifest error, be
binding on all the parties.
<PAGE>
SCHEDULE 5
Form of Substitution Certificate
Banks are advised not to employ Substitution Certificates or otherwise to assign
or transfer interests in the Agreement without first ensuring that the
transaction complies with all applicable laws and regulations, including the
Financial Services Act 1986 and regulations made thereunder.
To: CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services
[Date]
Substitution Certificate
This Substitution Certificate relates to a Loan Agreement (as from time to time
amended, varied, extended, restated or replaced (the "Agreement") dated 22 May,
1996 between Telewest Communications Networks Limited as Borrower (1), the
Subsidiaries of the Borrower whose respective names and registered numbers are
set out in part A of Schedule 1 thereto, (2), the Associated Partnerships of the
Borrower whose respective names and principal places of business are set out in
part B of Schedule 1 thereto, (3), the Arrangers (4), the banks and financial
institutions whose respective names and addresses are set out in Part D of
Schedule 1 thereto as Banks (5), the Agent (6) and the Security Trustee (7).
Terms defined in the Agreement shall have the same meaning in this Substitution
Certificate.
27. [Existing Bank] (the "Existing Bank") (a) confirms the
accuracy of the summary of its participation in the Agreement
set out in the Schedule hereto; and (b) requests [Substitute
Bank] (the "Substitute") to accept by way of novation the
portion of such participation specified in the schedule hereto
by countersigning and delivering this Substitution Certificate
to the Agent at its address for the service of notices
specified in the Agreement.
28. The Substitute hereby requests the Agent (on behalf of
itself, the Arrangers, the Security Trustee, the Borrower, the
other TCN Entities, the Banks, the Bond Providers (as defined
in the Security Trust Deed and the Interest Rate Beneficiaries
(as defined in the Security Trust Deed)) to accept this
Substitution Certificate as being delivered to the Agent
pursuant to and for the purposes of clause 17.4 of the
Agreement, so as to take effect in accordance with the
respective terms thereof on [date of transfer] (the "Effective
Date") or on such later date as may be determined in
accordance with the terms thereof.
29. The Agent (on behalf of itself, the Arrangers, the
Security Trustee, the Borrower, the other TCN Entities, the
Banks, the Bond Providers (as defined in the Security Trust
<PAGE>
Deed and the Interest Rate Beneficiaries (as defined in the
Security Trust Deed)) confirms the novation effected by this
Substitution Certificate pursuant to and for the purposes of
clause 17.4 of the Agreement so as to take effect in
accordance with the terms thereof.
30. The Substitute confirms:
30.1 that it has received a copy of the Agreement, the Security Documents
and all other documentation and information required by it in
connection with the transactions contemplated by this Substitution
Certificate;
30.2 that it has made and will continue to make its own assessment of the
validity, enforceability and sufficiency of this Agreement and the
Security Documents and the Substitution Certificate and has not relied
and will not rely on the Existing Bank, any Arranger, the Security
Trustee, any other Bank or the Agent or any statements made by any of
them in that respect;
30.3 that it has made and will continue to make its own credit assessment
of the Borrower, each other TCN Entity and Telewest and has not relied
and will not rely on the Existing Bank, any Arranger, the Security
Trustee, any other Bank or any statements made by any of them in that
respect;
30.4 accordingly, none of the Existing Bank, any Arranger, the Security
Trustee, any other Bank or the Agent shall have any liability or
responsibility to the Substitute in respect of any of the foregoing
matters; and
30.5 it is a Qualifying Bank.
31. Execution of this Substitution Certificate by the Substitute constitutes
its representation to the Existing Bank and all other parties to the
Agreement and the Security Trust Deed that it has power to become party to
the Agreement and the Security Trust Deed as a Bank on the terms herein and
therein set out and has taken all necessary steps to authorise execution
and delivery of this Substitution Certificate.
32. The Existing Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Agreement or the Security Documents or
any document relating thereto and assumes no responsibility for the
financial condition of the Borrower, each other TCN Entity and Telewest or
any other party to the Agreement or the Security Documents or for the
performance and observance by the Borrower, each other TCN Entity and
Telewest or any other such party of any of its obligations under the
Agreement or the Security Documents or any document relating thereto and
any and all such conditions and warranties, whether express or implied by
law or otherwise, are hereby excluded.
33. The Substitute hereby undertakes to the Existing Bank, the Borrower, the
other TCN Entities, the Arrangers, the Security Trustee, the other Banks,
the Bond Providers, the Interest Rate Beneficiaries and the Agent that it
will perform in accordance with their terms all those obligations which by
the respective terms of the Agreement and the Security Documents will be
assumed by it after acceptance of this Substitution Certificate by the
Agent.
<PAGE>
34. This Substitution Certificate and the rights and obligations of the parties
hereunder are governed by and shall be construed in accordance with English
law.
Note: This Substitution Certificate is not a security,
bond, note, debenture, investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
<PAGE>
The Schedule
Amount of Next Interest Portion novated
Contribution Payment Date(s) (oe)
Tranche A Advance(s)
Tranche B Revolving
Advance(s)
Tranche B Term
Advance(s)
Amount of Commitment Portion novated (oe)
Administrative Details of Substitute
Lending office:
Account for payments:
Telephone:
Telex:
Fax:
Attention:
[Existing Bank] [Substitute]
By: By:
Date: Date:
The Agent
By:
Date:
on its own behalf and on behalf of the Borrower, the other TCN Entities, the
Arrangers, the Security Trustee, the Bond Providers, the Interest Rate
Beneficiaries and the Banks.
<PAGE>
SCHEDULE 6
Part A
Form of Compliance Certificate to be issued by an
Authorised Officer of the Borrower
CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services
[Date]
Dear Sirs
Telewest Communications Networks Limited
(pound)1,200,000,000 Loan Facility, Loan Agreement dated 22 May, 1996
(as from time to time amended, varied, extended, restated or replaced
(the "Loan Agreement")
We refer to the Loan Agreement and deliver this Certificate in respect of the
Quarterly Period ended [ ] pursuant to clause 10.1(j)(a)(ii) thereof. Terms
defined in the Loan Agreement shall have the same meaning when used in this
Certificate. Net Operating Cashflow shall herein be defined as "NOCF".
We confirm that on or as of the last day of the Quarterly Period ending [ ]:
35. Consolidated TCN Group Net Operating Cashflow for the Six Month Period
ended [ ] was [ ].
36. **Consolidated Annualised TCN Group NOCF for the Six Month Period ended [
], was [ ].
37. **Total TCN Group Debt as at [ ] was [ ].
38. **Tranche B Loan as at [ ] was [ ].
39. ***Facility Debt Interest Charges for the Six Month Period ended [ ] was [
].
40. ****Total TCN Group Cash Paying Debt Interest Charges for the Six Month
Period ended [ ] was [ ].
41. ****Consolidated Telewest Group NOCF for the Six Month Period ended [ ] was
[ ].
<PAGE>
42. ****Total Telewest Group Cash Paying Debt Interest Charges for the Six
Month Period ended [ ] was [ ].
43. *****On the basis of projections provided by Telewest management, Pro-forma
Total Telewest Group Debt Service for the twelve months commencing [ ] is [
].
44. ******On the basis of projections provided by Telewest management, Proforma
Total TCN Group Debt Service for the twelve months commencing [ ].
Based on the above, we confirm that on [ ]:
(1) *Actual Consolidated TCN Group NOCF divided by Consolidated TCN Group NOCF
as set out in the Agreed Base Case was [ %].
(2) **Tranche B Loan divided by Consolidated Annualised TCN Group NOCF was [
x].
(3) ***Consolidated TCN Group NOCF divided by Facility Debt Interest Charges
was [ x].
(4) ****Consolidated TCN Group NOCF divided by Total TCN Group Cash Paying Debt
Interest Charges was [ x].
(5) ****Consolidated Telewest Group NOCF divided by Total Telewest Group Cash
Paying Debt Interest Charges was [ x].
(6) *****Consolidated Annualised Telewest Group NOCF divided by Proforma Total
Telewest Group Debt Service was [ x].
(7) ******Consolidated Annualised TCN Group NOCF divided by Proforma Total TCN
Group Debt Service was [ x].
Based on the above, we confirm that the Borrower was in compliance with the
undertakings set out in clause 12.1(a) to (g) as at [ ].
We also confirm that the representations and warranties referred to in clause
9.3 including those deemed to be made by the Borrower pursuant to such clause
are (subject as provided in clause 9.3) true and correct at the date hereof as
if each was made with respect to the facts and circumstances existing at the
date hereof.
For and on behalf of
Telewest Communications
Networks Limited
..........................................................
Authorised Officer
<PAGE>
* To be reported until Total TCN Group Debt: Consolidated Annualised TCN
Group NOCF is equal to or less than 5.0x for two consecutive quarters
** To be reported with effect from 30 September 1996
*** To be reported with effect from 31 March 1997
**** To be reported with effect from 31 March 1998
***** To be reported with effect from 31 March 1999
****** To be reported with effect from 31 June 2000
<PAGE>
Part B
Form of Compliance Certificate to be issued by the
Auditors of the TCN Group
CIBC Wood Gundy plc
Cottons Centre
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services
Dear Sirs
Telewest Communications Networks Limited
(pound)1,200,000,000 Loan Facility, Loan Agreement dated 22 May, 1996
as from time to time amended, varied, extended, restated or replaced
(the "Loan Agreement")
We refer to the Loan Agreement and, in accordance with our instructions, deliver
this Certificate in respect of the financial year ended 31 December [ ] pursuant
to clause 10.1(j)(a)(ii) thereof. Terms defined in the Loan Agreement shall have
the same meaning when used in this Certificate. Net Operating CashFlow shall be
defined as "NOCF".
On the basis of the consolidated audited accounts of the Borrower and Telewest
for the financial year ended 31 December [ ] and on the basis of unaudited
management accounts for the six month period ended 30 June [ ], we confirm that:
45. Consolidated TCN Group Net Operating Cashflow for the Six Month Period
ended [ ] was [ ].
46. **Consolidated Annualised TCN Group NOCF for the Six Month Period ended [
], was [ ].
47. **Total TCN Group Debt as at [ ] was [ ].
48. **Tranche B Loan as at [ ] was [ ].
49. ***Facility Debt Interest Charges for the Six Month Period ended [ ] was [
].
50. ****Total TCN Group Cash Paying Debt Interest Charges for the Six Month
Period ended 31 December [ ] was [ ].
51. ****Consolidated Telewest Group NOCF for the Six Month Period ended [ ] was
[ ].
<PAGE>
52. ****Total Telewest Group Cash Paying Debt Interest
Charges for the Six Month Period ended [ ] was [
].
53. *****On the basis of projections provided by Telewest management, Pro-forma
Total Telewest Group Debt Service for the twelve months commencing [ ] is [
].
54. ******On the basis of projections provided by Telewest management, Proforma
Total TCN Group Debt Service for the twelve months commencing [ ].
Based on the above, we confirm that on [ ]:
(a) *Actual Consolidated TCN Group NOCF divided by Consolidated TCN Group NOCF
as set out in the Agreed Base Case was [ %].
(b) **Tranche B Loan divided by Consolidated Annualised TCN Group NOCF was [
x].
(c) ***Consolidated TCN Group NOCF divided by Facility Debt Interest Charges
was [ x].
(d) ****Consolidated TCN Group NOCF divided by Total TCN Group Cash Paying Debt
Interest Charges was [ x].
(e) ****Consolidated Telewest Group NOCF divided by Total Telewest Group Cash
Paying Debt Interest Charges was [ x].
(f) *****Consolidated Annualised Telewest Group NOCF divided by Proforma Total
Telewest Group Debt Service was [ x].
(g) ******Consolidated Annualised TCN Group NOCF divided by Proforma Total TCN
Group Debt Service was [ x].
Based on the above, we confirm that the Borrower was in compliance with the
undertakings set out in clause 12.1(a) to (g) as at [ ].
For and on behalf of
..........................................................
Auditors
* To be reported until Total TCN Group Debt: Consolidated Annualised TCN
Group NOCF is equal to or less than 5.0x for two consecutive quarters
** To be reported with effect from 31 December 1996
*** To be reported with effect from 31 December 1997
**** To be reported with effect from 31 December 1998
***** To be reported with effect from 31 December 1999
****** To be reported with effect from 31 December 2000
<PAGE>
SCHEDULE 7
Form of Deed of Subordination
DATED 22 May 1996
TELEWEST COMMUNICATIONS PLC
and
CIBC WOOD GUNDY PLC
as Security Trustee
---------------------------------------------
DEED OF SUBORDINATION
---------------------------------------------
<PAGE>
THIS DEED OF SUBORDINATION is dated 22 May, 1996 and made
BETWEEN:
(1) TELEWEST COMMUNICATIONS PLC (Company No. 2983307) whose registered office
is at Genesis Business Park, Albert Drive, Woking, Surrey GU21 5RW (the
"Creditor"); and
(2) CIBC WOOD GUNDY PLC of Cottons Centre, Cottons Lane, London SE1 2QL in its
capacity as Security Trustee for the Beneficiaries (as defined below) (in
this capacity, the "Security Trustee").
WHEREAS
55. By an agreement dated 22 May, 1996 (as from time amended, varied, extended,
restated or replaced the "Loan Agreement") and made between Telewest
Communications Networks Limited as Borrower (1), certain Subsidiaries of
the Borrower (2), certain Associated Partnerships of the Borrower (3), the
Arrangers (4), the banks and financial institutions whose names and
addresses are set out in Part D of Schedule 1 thereto, (5) the Agent (6)
and the Security Trustee (7), the Banks agreed, upon and subject to the
terms and conditions of the Loan Agreement, to make available to the
Borrower a revolving credit facility converting to a reducing term loan of
up tooe1,200,000,000.
56. The execution of this Deed is one of the conditions precedent to the
obligation of each Bank to make its Commitment available under the Loan
Agreement.
NOW IT IS AGREED as follows:
57. Interpretation
57.1 Definitions
In this Deed, unless the context otherwise requires:
"Beneficiaries" has the meaning ascribed thereto in the Security Trust Deed;
"Collateral Instruments" means the Security Documents, any guarantees and any
other documents or instruments (including, without limitation, any other
document or instrument creating or evidencing a mortgage, charge (whether fixed
or floating), pledge, lien, hypothecation, assignment, trust arrangement or
security interest of any kind) which contain or evidence an obligation (with or
without security) to pay, discharge or be responsible directly or indirectly for
any of the Secured Liabilities under or pursuant to the Loan Agreement;
"Incapacity" means in relation to a person the death, bankruptcy, insolvency,
liquidation, dissolution, winding-up, administration, receivership,
amalgamation, reconstruction or other incapacity of that person whatsoever (and,
in the case of a partnership, includes the termination or change in the
composition of such partnership);
<PAGE>
"Insolvency Event" means, in relation to the Borrower or any of its Subsidiaries
or Associated Partnerships (other than any Immaterial Group Entities) any of the
events or circumstances described in clause 13.1(h) to (n) inclusive of the Loan
Agreement;
"Insolvency Proceedings" means winding-up, dissolution, liquidation,
receivership, administration, voluntary arrangements, proceedings under Title 11
of the United States Bankruptcy Code or any proceedings in any jurisdiction
which correspond with or have an effect equivalent to any of the same;
"Liabilities" means all obligations and liabilities whatsoever, whether express
or implied, whether as principal or surety, whether present or future, actual or
contingent, whether joint or several, in whatever style, name or form and in
whatever currency denominated;
"Permitted Amounts" means all amounts which the Borrower or
any of its Subsidiaries are permitted to pay pursuant to
Clauses 11.1(l), (m) and (n) of the Loan Agreement;
"Secured Liabilities" means all obligations, present, future or contingent,
joint or several, of any TCN Entity pursuant to the Loan Agreement and/or any
Security Document; and
"Security Provider" means any person who has or may at any time hereafter enter
into a Collateral Instrument.
57.2 Defined Expressions
Unless the context requires or unless otherwise defined in this Deed, words and
expressions defined in the Loan Agreement shall have the same meaning when used
in this Deed (including its Recitals).
57.3 Headings
Clause headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this Deed.
57.4 Construction of certain terms
In this Deed, unless the context otherwise requires:
(a) references to clauses are to be construed as references to the clauses of
this Deed;
(b) reference to (or to any specified provision of) this Deed or any other
document shall be construed as references to this Deed, that provision or
that document as in force for the time being and as amended in accordance
with the terms thereof or, as the case may be, with the agreement of the
relevant parties and (where such consent is, by the terms of this Deed or
the relevant document, required to be obtained as a condition to such
amendment being permitted) the prior written consent of the Agent, the
Security Trustee, all of the Banks, the Majority Banks or the Beneficiaries
(as the case may be);
(c) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not having
the force of law) of any agency, authority, central bank or government
department or any self-regulatory or other national or supra-national
authority;
<PAGE>
(d) words importing the plural shall include the singular and vice versa;
(e) references to a time of day are to London time;
(f) references to a person shall be construed as including references to an
individual, firm, company, corporation, unincorporated body of persons or
any State or any agency thereof;
(g) reference to "set-off" includes retention, compensation and balancing of
accounts under Scots law;
(h) references to a "guarantee" include references to an indemnity or other
assurance against financial loss including, without limitation, an
obligation to purchase assets as a consequence of default by any other
person to pay any Indebtedness and "guaranteed" shall be construed
accordingly; and
(i) references to any enactment shall be deemed to include references to such
enactment as replaced, amended or reenacted from time to time.
57.5 Effect as a deed
This Deed is intended to take effect as a deed notwithstanding that the Security
Trustee and/or the Creditor may have executed it under hand only.
57.6 Successors and assigns
The expressions "Beneficiary", "Security Trustee", "Borrower", "TCN Entity",
"Agent", "Arranger", "Bank", "Security Provider" and "Creditor" include, where
the context admits, their respective successors, permitted assigns, in the case
of the Banks, their Assignees and Substitutes, in the case of the Security
Trustee such other person as may from time to time be appointed as Security
Trustee for the Beneficiaries pursuant to the terms of the Security Trust Deed
and, in the case of the Agent, such other person as may from time to time be
appointed as Agent pursuant to clause 18.11 of the Loan Agreement.
58. Restricted Payments
The Creditor undertakes with the Security Trustee that so long as any of the
Secured Liabilities remain outstanding:
(a) it will not, and will procure that none of its Subsidiaries or Associated
Partnerships (which are not TCN Entities) demand, take, accept or receive,
by set-off or in any other manner, any Restricted Payment other than a
Permitted Amount;
(b) it will not, and will procure that none of its Subsidiaries or Associated
Partnerships (which are not TCN Entities) take, accept, receive or permit
to exist any Encumbrance over all or any part of the present or future
undertakings, assets, rights or revenues of any member of the TCN Group to
secure any Restricted Payment;
<PAGE>
(c) it will not, and will procure that none of its Subsidiaries, or Associated
Partnerships (which are not TCN Entities) assign, transfer, create any
Encumbrance over or otherwise dispose of any Restricted Payment other than
a Permitted Amount; and
(d) it will not, and will procure that none of its Subsidiaries or Associated
Partnerships (which are not TCN Entities) commence any proceedings against
any member of the TCN Group in respect of any Restricted Payment,
(including, without limitation, any action or step with a view to
winding-up any member of the TCN Group).
59. Subordination
59.1 Insolvency Events
Upon an Insolvency Event occurring in respect of any TCN Entity:
(a) the claims of the Creditor in respect of any Restricted Payment owed by
that TCN Entity other than any Permitted Amounts shall be postponed in all
respects to the Secured Liabilities;
(b) the Creditor shall not, unless otherwise directed by the
Security Trustee, prove in any Insolvency Proceedings for any
Restricted Payment, other than the Permitted Amounts until the
Secured Liabilities have first been irrevocably paid or
discharged in full (and for all purposes any payment or
distribution of assets (whether in cash, property, securities
or otherwise) received by the Security Trustee or any of the
Beneficiaries shall only be taken to discharge the Secured
Liabilities to the extent of the actual amount received);
(c) if the Creditor is directed by the Security Trustee to
prove in any Insolvency Proceedings for all or any part of any
Restricted Payment, other than any Permitted Amounts then it
shall act in accordance with such directions and shall procure
that any resultant payment or distribution of assets (whether
in cash, property, securities or otherwise) shall be made by
the liquidator of any member of the TCN Group or, as the case
may be, any other person making the payment or distribution of
assets (whether in cash, property, securities or otherwise) to
the Security Trustee to the extent necessary to repay all the
Secured Liabilities in full; and
(d) the Creditor hereby irrevocably authorises and directs the Security Trustee
to submit any proof and/or to instruct the relevant liquidator or other
person to make any payment or distribution of assets (whether in cash,
property, securities or otherwise) in accordance with the foregoing.
59.2 Payments contrary to this Deed
In the event of:
(a) any payment or distribution of assets (whether in cash, property,
securities or otherwise) being made to or right of set-off being exercised
by the Creditor contrary to the provisions of this Deed; or
<PAGE>
(b) any payment or distribution of assets (whether in cash, property,
securities or otherwise) being made by a liquidator or any other person to
the Creditor rather than to the Security Trustee as required by clause 3.1,
the Creditor shall forthwith pay to the Security Trustee an amount equal to the
payment or distribution of assets (whether in cash, property, securities or
otherwise) which shall have been so received by it up to an aggregate amount
equal to the Secured Liabilities or, as the case may be, in the case of set-off,
an amount equal to the sum set-off up to an aggregate amount equal to the
Secured Liabilities and, until such payment to the Security Trustee, the
Creditor will hold such sums on trust for the Security Trustee (provided that,
for the avoidance of doubt, this clause 3.2 shall not oblige the Creditor to
create any Encumbrance in favour of the Security Trustee over such money or
other property) and any sums so paid to the Security Trustee shall be applied in
accordance with the terms of the Security Trust Deed.
59.3 Subrogation
If the Secured Liabilities are partially paid out of any proceeds received in
respect of or on account of any Restricted Payment, the Creditor will not be
subrogated to the Secured Liabilities so paid (or any Collateral Instrument)
until the Secured Liabilities have been irrevocably paid in full.
60. Continuing Obligations
60.1 Continuing obligations
The obligations of the Creditor hereunder shall be continuing obligations and
shall be and remain fully effective until this Deed is terminated following the
discharge in full of the Secured Liabilities notwithstanding any intermediate
reduction or settlement of the Secured Liabilities or any part thereof and
notwithstanding any increase in or variation of the Secured Liabilities or any
variation, extension or supplement to the Loan Agreement or any Security
Documents. This Deed shall terminate immediately upon the discharge in full of
the Secured Liabilities and no Beneficiary being under any obligation to permit
any Secured Liabilities to become outstanding.
60.2 Statements of accounts
Any statement of account of any TCN Entity, signed as correct by an officer of
the Security Trustee, showing the amount of the Secured Liabilities shall be
prima facie evidence of the amount of the Secured Liabilities.
60.3 Continuing security and other matters
This Deed shall:
(a) secure the ultimate balance from time to time of the Secured Liabilities
and shall be a continuing security, notwithstanding any settlement of
account or other matter whatsoever;
(b) be in addition to any present or future Collateral Instrument, right or
remedy held by or available to the Security Trustee, the Beneficiaries or
any of them; and
<PAGE>
(c) not be in any prejudiced by the existence of any such Collateral
Instrument, rights or remedies or by the same becoming wholly or in part
void, voidable or unenforceable on any ground whatsoever or by the Security
Trustee, the Beneficiaries or any of them dealing with, exchanging, varying
or failing to perfect or enforce any of the same or giving time for payment
or indulgence or compounding with the Borrower or any Security Provider.
60.4 Liability unconditional
The liability of the Creditor shall not be affected, discharged or reduced by
reason of:
(a) the Incapacity or any change in the name, style or
constitution of the Borrower or any other Security Provider;
(b) the Security Trustee, the Beneficiaries or any of them granting any time,
indulgence or concession to, or compounding with, discharging, releasing or
varying the liability of, the Borrower or any other Security Provider or
renewing, determining, varying or increasing any accommodation, facility or
transaction or otherwise dealing with the same in any manner whatsoever or
concurring in, accepting or varying any compromise, arrangement or
settlement or omitting to claim or enforce payment from the Borrower or any
other Security Provider; or
(c) any act or omission which but for this provision might operate to exonerate
the Creditor.
60.5 Collateral Instruments
None of the Beneficiaries or the Security Trustee shall be obliged to make any
claim or demand on the Borrower or any other Security Provider or to resort to
any Collateral Instrument or other means of payment now or hereafter held by or
available to them or it before enforcing this Deed and no action taken or
omitted by the Security Trustee or any Beneficiary in connection with any such
Collateral Instrument or other means of payment shall discharge, reduce,
prejudice or affect the liability of the Creditor under this Deed nor shall the
Security Trustee or any Beneficiary be obliged to account for any money or other
property received or recovered in consequence of any enforcement or realisation
of any such Collateral Instrument or other means of payment.
60.6 Suspense accounts
Any money received in connection with this Deed (whether before or after any
Incapacity of the Borrower, any other Security Provider or the Creditor) may be
placed to the credit of an interest bearing suspense account with a view to
preserving the rights of the Security Trustee and each Beneficiary to prove for
the whole of their respective claims against the Borrower or any other person
liable or may be applied in or towards satisfaction of such of the Secured
Liabilities as the Security Trustee may from time to time determine in
accordance with the terms of the Security Trust Deed (which determination shall,
save in the case of manifest error, be conclusive). Interest shall accrue on
monies from time to time standing to the credit of any suspense account at the
rate agreed between the Security Trustee and the Creditor at the relevant time
or, failing such agreement, the Security Trustee's overnight deposit rate from
time to time and shall be credited to such suspense account or may be applied in
or towards satisfaction of such of the Secured Liabilities as the Security
Trustee may from time to time determine in accordance with the terms of the
Security Trust Deed (which determination shall, save in the case of manifest
error, be conclusive).
<PAGE>
60.7 Settlements conditional
Any release, discharge or settlement between the Creditor and the Security
Trustee or any of the Beneficiaries shall be conditional upon no security,
disposition or payment to the Security Trustee, or any of the Beneficiaries by
the Borrower or any other person liable being void, set aside or ordered to be
refunded pursuant to any enactment or law relating to bankruptcy, liquidation,
administration or insolvency or for any other reason whatsoever and if such
condition shall not be fulfilled the Security Trustee shall be entitled to
enforce this Deed subsequently as if such release, discharge or settlement had
not occurred and any such payment had not been made.
60.8 Retention of this Deed
Notwithstanding any other provision of this Deed, this Deed shall not be
released, the Security Trustee shall be entitled to retain this Deed and all the
provisions of this Deed shall remain in full force and effect until the
irrevocable payment or discharge in full of all the Secured Liabilities.
Following the irrevocable payment or discharge in full of all the Secured
Liabilities, the Security Trustee shall forthwith release this Deed (and to
effect or evidence such release shall execute such documents (at the cost of the
Creditor) as the Creditor may reasonably require) and deliver this Deed,
together with such documents, to the Creditor.
61. Representations and Warranties
61.1 Representation and warranties
The Creditor represents and warrants to the Security Trustee that:
(a) Due Incorporation
it is duly incorporated, validly existing as a limited liability company
and has all requisite corporate power and authority to own its property and
other assets and to carry on its business as it is now being conducted and
is authorised to do business in each jurisdiction where such qualification
or authorisation is required, except where the failure to so qualify, to be
so authorised or to be in good standing would not have a material adverse
effect on the ability of the Creditor to perform any of its obligations
under this Deed;
(b) Power of the Creditor
the Creditor has all requisite power to execute, deliver and perform its
obligations under this Deed and compliance has been made with all necessary
requirements and all necessary action has been taken to authorise the
execution, delivery and performance of the same;
<PAGE>
(c)
Binding obligations
this Deed constitutes valid and legally binding obligations of the Creditor
enforceable in accordance with its terms subject to the qualifications
contained in the legal opinions referred to in schedule 3 to the Loan
Agreement which relate to this Deed and for this purpose any statement
contained in the qualifications to any such legal opinion which relate to
this Deed that no opinion is given or expressed in relation to any
particular matter shall be deemed to be a qualification of such opinion as
regards such matter;
(d) No conflict with other obligations
the execution and delivery of, the performance of its obligations under,
and compliance with the provisions of, this Deed by the Creditor, will not
(i) contravene any existing applicable law, statute, rule or regulation or
any judgment, decree or permit to which the Creditor is subject except
where such contravention would not or would not be likely to have a
material adverse effect on the ability of the Creditor to perform any of
its obligations under or otherwise to comply with the terms of this Deed,
(ii) contravene or conflict with any provision of the Memorandum and
Articles of Association of the Creditor, (iii) breach any term of the
Licences or the Necessary Authorisations, (iv) conflict with, or result in
any breach of any of the terms of, or constitute a default under, any
agreement to which the Creditor is a party or is subject or by which it or
any of its property is bound except where such breach or default would not
or would not be likely to have a material adverse effect on the ability of
the Creditor to perform any of its obligations under or otherwise to comply
with the terms of this Deed or (v) result in the creation or imposition of
or oblige the Creditor to create any Encumbrance (other than those created
by the Security Documents) on any of the Creditor's material undertakings,
assets, rights or revenues;
(e) No litigation
no litigation, arbitration or administrative proceeding is taking place,
pending or, to the knowledge of the officers of the Creditor threatened
against the Creditor which would or is reasonably likely to have a material
adverse effect on the ability of the Creditor to fulfil its obligations
under this Deed;
(f) No filing required
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of this Deed that this Deed or any other
instrument be notarised, filed, recorded, registered or enrolled in any
court or public office in the United Kingdom or that any stamp,
registration or similar tax or charge be paid in the United Kingdom on or
in relation to this Deed;
(g) Choice of law
the choice by the Creditor of English law to govern this
Deed is valid and binding;
<PAGE>
(h)
Consents obtained
every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts
required by the Creditor (i) to authorise the execution and delivery of
this Deed or the performance by the Creditor of its obligations under this
Deed or (ii) to ensure the validity, enforceability or admissibility in
evidence of this Deed or the performance by the Creditor of its obligations
under this Deed has been obtained or made and is in full force and effect
and there has been no material default in the observance of the conditions
or restrictions (if any) imposed in, or in connection with, any of the same
which would, in any such case, adversely affect the execution, delivery,
validity, enforceability or admissibility in evidence of this Deed or the
performance by the Creditor of its obligations under this Deed.
61.2 Repetition
The representations and warranties in clause 5.1 shall be deemed to be repeated
by the Creditor in respect of itself and its Subsidiaries on and as of each
Interest Payment Date and the date on which each Revolving Advance is made under
the Loan Agreement.
62. Covenants
62.1 Covenants by Telewest
The Creditor hereby undertakes with the Security Trustee that from the date of
this Deed and so long as any of the Secured Obligations remain outstanding or
any Beneficiary remains under any commitment to any TCN Entity:
(a) New Debt
all Borrowed Money incurred or assumed by the Creditor after the date of
the Loan Agreement (herein "New Debt") will have a contractual maturity
date falling not earlier than 1 January 2007 (and will be on terms which
would not reasonably be considered by the Agent (acting on the instructions
of the Majority Banks) to be materially more onerous than the terms
currently applying to existing Senior Securities) except for:
(i) Finance Leases where the asset in question has been sub-Finance Leased
by Telewest to a TCN Entity and such sub-Finance Lease falls within
paragraph (v) of the definition of Permitted Borrowings;
(ii) Borrowed Money where (a) the lender is a TCN Entity and (b) the
relevant payment by the TCN Entity in question is a Permitted Payment;
(iii)Borrowed Money comprising a guarantee or indemnity of any obligations
of a TCN Entity;
(iv) Borrowed Money resulting from a refinancing of any Borrowed Money of
the Creditor outstanding at the date hereof provided that the
principal amount thereof is not increased, the term thereof is not
decreased and the terms and conditions thereof taken as a whole
(taking into account the pricing, covenants (unless Telewest shall
have entered into covenants in substantially the same form with or for
the benefit of the Banks) and term) are not materially more onerous
than the terms applying to the existing Borrowed Money;
<PAGE>
(v) any hedging entered into (1) in compliance with paragraph (g) below,
(2) in connection with any Borrowed Money falling within paragraph
(iv) of this clause 6.1(a) or (3) in connection with any Borrowed
Money having a contractual maturity date falling not earlier than 1
January 2007;
(vi) Borrowed Money comprising a guarantee or indemnity issued or to be
issued by the Creditor in favour of a bank in relation to a bond
issued by such bank in favour of any regulatory body or other person
pursuant to any Telecommunications and Cable Laws in an aggregate
amount not exceeding oe1,250,000; and
(vii) any Borrowed Money not within sub- paragraphs (i) to (vi) (inclusive)
above and not exceeding in aggregate oe5,000,000;
(b) Rolling Gateway
the Creditor will not incur or assume any Borrowed Money after the date
hereof (other than Borrowed Money referred to in paragraphs (i) to (v) of
clause 6.1(a)) unless at the time of incurring or assuming the same and
immediately following such incurrence or assumption the ratio of Total
Telewest Group Debt to Consolidated Annualised Telewest Group Net Operating
Cash Flow is equal to or less than 4.0:1;
(c) Change to Senior Securities
to ensure that there is no change to the terms and conditions of the Senior
Securities which would reasonably be considered to be materially adverse by
the Agent (acting on the instructions of the Majority Banks);
(d) Nature of Acquisitions
not to make any acquisitions of any companies or businesses other than
those engaged in the cable/telecommunications business, any television
and/or licensing business or any programming guide or telephone directory
business.
The above prohibition will cease and shall have no further effect on the
first occasion upon which the ratio of Total Telewest Group Debt to
Consolidated Annualised Telewest Group Operating Cash Flow is or is less
than 5 to 1;
(e) Adequacy of finance
to ensure that for a period of at least 18 months following the acquisition
by any Restricted Person of a cable television and/or telecommunications
franchise adequate monies are available to the relevant Restricted Person
to finance the working capital and capital expenditure requirements of such
franchise;
<PAGE>
(f) Financial Information
to provide to the Agent copies of all circulars, statements and other
information about the Creditor at the time that the same is made generally
available by the Creditor to the public or to the shareholders of the
Creditor, including, without limitation, Forms 10K and 10Q (and any
equivalent replacement thereof) for the Telewest Group;
(g) Hedging
to maintain foreign exchange arrangements in relation to the Senior
Securities which cap the Sterling amount of the liabilities under the
Senior Securities at no more than the maximum sterling amount payable under
the hedging arrangements in place at the date hereof in relation to the
Senior Securities;
(h) Borrower to be wholly-owned
to ensure that the Borrower remains its wholly-owned and
controlled Subsidiary.
63. Benefit of this Deed
63.1 Benefit and burden
This Deed shall be binding upon the Creditor and its successors in title and
shall enure for the benefit of the Security Trustee (and any successor Security
Trustee appointed pursuant to the provisions of the Security Trust Deed) and
their respective successors for the benefit of the Beneficiaries in accordance
with the provisions of the Security Trust Deed.
63.2 Changes in constitution or reorganisation of Banks
For the avoidance of doubt and without prejudice to the provisions of clause
7.1, this Deed shall remain binding on the Creditor notwithstanding any change
in the constitution of the Security Trustee or any of the Beneficiaries or their
or its absorption in, or amalgamation with, or the acquisition of all or part of
their or its undertaking or assets by, any other person, or any reconstruction
or reorganisation of any kind, to the intent that this Deed shall remain valid
and effective in all respects in favour of the Security Trustee (and any
successor Security Trustee appointed pursuant to the provisions of the Security
Trust Deed and their respective successors in title) as trustee for the
Beneficiaries and any assignee, transferee or other successor in title of a
Beneficiary.
63.3 No assignment by the Creditor
The Creditor may not assign or transfer any of its rights or obligations under
this Deed.
63.4 The Security Trust Deed
The Creditor and the Security Trustee hereby acknowledge that the covenants of
the Creditor contained in this Deed and the rights constituted by this Deed and
all moneys, property and assets paid to, or held, received or recovered by the
Security Trustee pursuant to or in connection with this Deed are held by the
Security Trustee subject to and on the terms of the trusts declared in the
Security Trust Deed.
<PAGE>
64. Notices and Other Matters
64.1 Notices
Every notice, request, demand or other communication under this Deed shall be
given in accordance with clause 19.1(a) and (b) of the Loan Agreement and shall
be sent to the Creditor at its address set out above (facsimile number: 01483
750901) or to the Security Trustee at its address or telex or facsimile number
set out in clause 19.1(c)(ii) of the Loan Agreement or to such other address or
such telex or facsimile number as is notified by one party to this Deed to the
other.
64.2 No implied waivers, remedies cumulative
No failure or delay on the part of the Security Trustee or the Beneficiaries (or
any of them) to exercise any power, right or remedy under this Deed shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Security Trustee or the Beneficiaries (or any of them) of any power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy. The remedies provided in this Deed are cumulative
and are not exclusive of any remedies provided by law.
64.3 Other Collateral Instruments
The Creditor agrees to be bound by this Deed notwithstanding that any other
person intended to execute or to be bound by any Collateral Instrument may not
do so or may not be effectively bound and notwithstanding that such other
Collateral Instrument may be determined or be or become invalid or unenforceable
against any other person, whether or not the deficiency is known to the Security
Trustee or any of the Beneficiaries.
64.4 Severability
Each of the provisions of this Deed is severable and distinct from one another
and if at any time one or more of such provisions is or becomes illegal, invalid
or unenforceable under any applicable law the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
65. Law and Jurisdiction
65.1 Governing Law
This Deed is governed by and shall be construed in accordance with English law.
<PAGE>
IN WITNESS whereof the parties to this Deed have caused this Deed to be duly
executed on the date first above written.
EXECUTED by
Telewest COMMUNICATIONS plc
By:
.............................
Director
..............................
Director/Secretary
Signed for and on behalf of )
CIBC Wood Gundy PLC )
by: )
<PAGE>
SCHEDULE 8
Existing Encumbrances
Part I
Company Encumbrance
66. Theseus No. 1 Limited (i) Partnership Interest
Accession Agreement dated 21st November, 1994 with
The Toronto-Dominion Bank relating to a Pledge and
Security Agreement dated 4 October, 1993 relating
to a pledge of partnership interest in Avon Cable
Limited Partnership or London South Cable
Partnership in favour of The Toronto-Dominion
Bank.
66.1 Partnership Interest Accession Agreement
dated 21st November, 1994 with Canadian
Imperial Bank of Commerce relating to a Pledge
and Security Agreement dated 13 June, 1994
relating to a pledge of partnership interest
in Edinburgh Cable Limited Partnership.
66.2 Deed of Adherence dated 21st November, 1994
with The Toronto-Dominion Bank.
66.3 Deed of Adherence dated 21st November, 1994
with Canadian Imperial Bank of Commerce.
66.4 Deed of Subordination dated 21st November,
1994 with The Toronto-Dominion Bank.
66.5 Deed of Subordination dated 21st November,
1994 with Canadian Imperial Bank of Commerce.
67. Theseus No. 2 Limited (i) Partnership Interest
Accession Agreement dated 21st November, 1994 with
The Toronto-Dominion Bank relating to a Pledge and
Security Agreement dated 4 October, 1993 relating
to a pledge of partnership interest in Avon Cable
Limited Partnership or London South Cable
Partnership in favour of The Toronto-Dominion
Bank.
<PAGE>
67.1 Partnership Interest Accession Agreement
dated 21st November, 1994 with Canadian
Imperial Bank of Commerce relating to a Pledg
and Security Agreement dated 13 June, 1994
relating to a pledge of partnership interest
in Edinburgh Cable Limited Partnership.
67.2 Deed of Adherence dated 21st November, 1994
with The Toronto-Dominion Bank.
67.3 Deed of Adherence dated 21st November, 1994
with Canadian Imperial Bank of Commerce.
67.4 Deed of Subordination dated 21st November,
1994 with The Toronto-Dominion Bank.
67.5 Deed of Subordination dated 21st November,
1994 with Canadian Imperial Bank of Commerce.
68. Telewest Holdings Limited (i) Pledge over shares
in Telewest Scotland Holdings Limited dated 23 May
and 13 June 1994 in favour of Canadian Imperial
Bank of Commerce assigned by TCI/US WEST Cable
Communications Inc. to Telewest Holdings Limited.
68.1 Assignation of share pledge dated 21st
November, 1994 with Canadian Imperial Bank of
Commerce.
68.2 Mortgage of Shares dated 21st November, 1994
with The Toronto-Dominion Bank.
68.3 Deed of Subordination dated 21st November,
1994 in favour of The Toronto-Dominion Bank.
68.4 Deed of Subordination dated 21st November,
1994 in favour of Canadian Imperial Bank of
Commerce.
<PAGE>
69. United Artists Communications
(Nominees) Limited
(xv) Mortgage of Shares dated 4th October,
1993 with The Toronto-Dominion Bank.
(ii) Charge over Shares dated 4 October, 1993
in United Artists Communications (Avon)
Limited in favour of The
Toronto-Dominion Bank.
(iii) Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank.
70. London South Cable Partnership (i)
Debenture dated 4 October, 1993 in
favour of The Toronto-Dominion Bank.
71. Avon Cable Limited Partnership (i)
Debenture dated 4 October, 1993 in
favour of The Toronto-Dominion Bank.
72. United Artists Communications (i)
Debenture dated 4 October, 1993 in
favour of (London South) Limited The
Toronto-Dominion Bank.
(ii) Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank.
73. United Artists Communications (i)
Debenture dated 4 October, 1993 in
favour of Communications (Avon) Limited
The Toronto-Dominion Bank.
(ii) Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank.
74. TCI/US WEST Cable (i) Charge over Shares
dated 4 October, 1993 in United Artists
Communications (Avon) Limited in favour
of The Toronto- Dominion Bank.
(ii) Pledge and Security Agreement dated 4
October, 1993 with The Toronto-Dominion
Bank.
<PAGE>
(iii) Deed of Subordination dated 4 October,
1993 with The Toronto-Bank (as partner
of Avon Cable Limited Partnership).
(iv) Pledge and Security Agreement dated 13
June, 1994 in favour of Canadian
Imperial Bank of Commerce.
(v) Deed of Subordination dated 13 June,
1994 with Canadian Imperial Bank of
Commerce.
75. The Cable Equipment Store Limited (i)
Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank.
75.1 Mortgage of Shares dated 4 October, 1993
with The Toronto-Dominion Bank.
75.2 Deed of Subordination dated 13 June,
1994 with Canadian Imperial Bank of
Commerce.
76. Avon Cable Investments Limited (i)
Pledge and Security Agreement dated 4
October, 1993 with The Toronto-Dominion
Bank.
(ii) Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank (as
partner of Avon Cable Limited
Partnership).
(iii) Legal Mortgage dated 25 February, 1994
with The Toronto-Dominion Bank.
(iv) Debenture dated 4 October, 1993 with The
Toronto-Dominion Bank.
77. Crystal Palace Radio Limited (i) Pledge
and Security Agreement dated 4 October,
1993 with The Toronto-Dominion Bank.
(ii) Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank (as
partner of London South Cable
Partnership).
<PAGE>
(iii) Debenture dated 8 March, 1990 in favour
of The Toronto-Dominion Bank.
(iv) Debenture dated 4 October, 1993 in
favour of The Toronto-Dominion Bank.
(v) Mortgage of Shares dated 6 April, 1994
in favour of The Toronto-Dominion Bank.
78. United Cable (London South) (i) Pledge
and Security Agreement dated 4 October
Limited Partnership 1993 with The
Toronto- Dominion Bank.
78.1 Deed of Subordination dated 4 October,
1993 with The Toronto-Dominion Bank (as
partner of London South Cable
Partnership).
78.2 Mortgage of Shares dated 6 April, 1994
in favour of The Toronto-Dominion Bank.
79. Telewest Communications (i) Deed of
Subordination dated 4 October, 1993 with
The Toronto-Dominion Bank.
(ii) Deed of Subordination dated 13 June,
1994 with Canadian Imperial Bank of
Commerce.
80. Edinburgh Cable Limited Partnership (i)
Guarantee and Debenture dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
81. Telewest Scotland Holdings Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
(iii) Pledge over shares dated 21 September
and 12 October 1994 in Tayside Cable
Systems Limited, Kingdom Cablevision
Limited, Scotcable (Motherwell) Limited,
Scotcable (Cumbernauld) Limited,
Scotcable (Dumbarton) Limited, Cable
North (Forth District) Limited in favour
of Canadian Imperial Bank of Commerce.
<PAGE>
(iv) Pledge over shares dated 21 September
and 12 October, 1994 in United Artists
Communications (Scotland) Limited in
favour of Canadian Imperial Bank of
Commerce.
82. Tayside Cable Systems Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
(iii) Standard Security dated 13 June, 1994
and recorded 24 June, 1994 in relation
to the property at Speygate/Canal
Street, Perth.
(iv) Pledge of shares in Dundee Cable and
Satellite Limited and Perth Cable
Television Limited dated 23 May and 13
June, 1994 in favour of Canadian
Imperial Bank of Commerce.
83. Kingdom Cablevision Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
84. Scotcable (Motherwell) Limited (i)
Debenture 13 June, 1994 in favour of
Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
85. Dundee Cable and Satellite Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
<PAGE>
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
86. Perth Cable Television Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
87. Scotcable (Cumbernauld) Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
88. Scotcable (Dumbarton) Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
89. Cable North (Forth District) Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
90. United Artists Communications (i)
Debenture dated 13 June, 1994 in favour
of (Scotland) Limited Canadian Imperial
Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
<PAGE>
(iii) Standard Securities dated 13 June, 1994
and recorded 24 June, 1994 in relation
to properties at 1 South Gyle Crescent
Lane, Edinburgh and 4 Bankhead Avenue,
Glenrothes.
(iv) Pledge of shares in Capital City
Cablevision Limited, Edinburgh
Cablevision Limited and Hieronymous
Limited dated 23 May and 13 June, 1994
in favour of Canadian Imperial Bank of
Commerce.
91. Capital City Cablevision Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
92. Edinburgh Cablevision Limited (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
93. Hieronymous Limited (i) Debenture dated
13 June, 1994 in favour of Canadian
Imperial Bank of Commerce.
(ii) Bond and floating charge dated 13 June,
1994 in favour of Canadian Imperial Bank
of Commerce.
94. Edinburgh Cable Limited Partnership (i)
Debenture dated 13 June, 1994 in favour
of Canadian Imperial Bank of Commerce as
partner of the partnership created by
the Edinburgh Cable Joint Venture
Agreement.
<PAGE>
Part II
Company/Partnership Encumbrance
95. United Artists Communications (i)
Mortgage of deposited moneys dated 21st
(South East) Limited January, 1994 with
Electricity Supply Nominees Limited.
95.1 Deed of Variation and Further Charge
dated 26th June, 1995 with Electricity
Supply Nominees Limited.
96. United Artists Communications (i) Legal
charge dated 9 October, 1991 in favour
(Avon) Limited of Barclays Bank Plc over
Units 550 and 700 Aztec West,
Almondsbury.
97. United Artists Communications (i) Deed
of Charge over Credit Balance dated 3
(North East) Limited March, 1993 in
favour of Barclays Bank Plc.
98. United Artists Communications (i)
Mortgage dated 29 August, 1986 in favour
of (London South) Limited Singer &
Friedlander Limited over Communications
House, Croydon.
(ii) Mortgage dated 23 March, 1992 in favour
of National Westminster Bank Plc over
Shannon Commercial Centre, New Malden.
99. Avon Cable Partnership (i) Mortgage
dated 4 October, 1993 in favour of
Barclays Bank Plc over Unit 7 Hawkfield
Business Park, Whitchurch.
100. Telewest Holdings Limited (i) Mortgage
of Shares in Cable London PLC dated 29
September, 1995 with Canadian Imperial
Bank of Commerce.
<PAGE>
Part III
Company/Partnership Encumbrance
A. Scotcable (Motherwell) Limited Standard Security granted or to be
granted over premises at Bothwell Park
Industrial Estate, Uddingston in favour
of British Linen Bank Limited
<PAGE>
SCHEDULE 9
Part A
The Avon Licences
Telecommunications Act 1984 Licence:
Licence Holder Licence Area Date of Grant
- -------------- ------------ -------------
Telewest Avon 05.12.89
Communications (South
West) Limited
Broadcasting Act 1990 - Local Delivery Licence:
Licence Holder Licence Licence Date of Grant
- -------------- No. Area -------------
--- ----
Telewest LDS005 Avon 16.10.91
Communications (South
West) Limited
Licence Holder Licence Licence Date of Grant
- -------------- No. Area -------------
--- ----
Telewest LDS 037 Taunton 2.9.97
Communications and
(Taunton and Bridgewa
Bridgewater) Limited ter
Part B
The Cotswolds Licences
Telecommunications Act 1984 Licence:
Licence Holder Licence Area Date of Grant
-------------- ------------ -------------
Telewest Communications Cheltenham and 26.08.88
(Cotswolds) Limited Gloucester
<PAGE>
Broadcasting Act 1990 - Local Delivery Licence:
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest LDS009 Cheltenham and 16.10.91
Communications Gloucester
(Cotswolds)
Limited
Part C
The London South Licences
Telecommunications Act 1984 Licence:
Licence Holder Licence Area Date Of Grant
- -------------- ------------ -------------
Telewest Croydon 14.01.94
Communications Kingston and 08.05.90
(London South) Richmond 23.01.90
Limited Merton and Sutton
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service
Licences:
Licence Holder Licence Licence Date of Grant
- -------------- No. Area -------------
--- ----
Telewest PDSL021 Merton and 15.03.90
Communications Sutton
(London South) PDSL109 Kingston 03.12.90
Limited and
Richmond
Broadcasting Act 1990 - Local Delivery Licence:
Licence Holder Licence Licence Date of Grant
- -------------- No. Area -------------
--- ----
Telewest LDS002 Croydon 16.10.91
Communications
(London South)
Limited
<PAGE>
Part D
The North East Licences
Telecommunications Act 1984 Licence:
Licence Holder L****************** 18.01.90
*******************
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Motherwell, Hamilton
and East Kilbride
<PAGE>
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service
Licences:
Licence Holder Licence No. Licence Area Date of Grant
- -------------- ----------- ------------ -------------
Telewest PDSL 115 Cumbernauld 03.12.90
Communications and Monkland
(Cumbernauld)
Limited
Telewest PDSL 117 Dumbarton 03.12.90
Communications
(Dumbarton)
Limited
Telewest PDSL 069 Dundee 03.12.90
Communications PDSL 113 Perth 03.12.90
(Dundee & Perth)
Limited
Telewest PDSL 101 Falkirk and 03.12.90
Communications Livingstone
(Falkirk)
Limited
Telewest PDSL 064 Glenrothes and 03.12.90
Communications Kirkcaldy
(Glenrothes)
Limited
Telewest PDSL 116 Motherwell, 03.12.90
Communications Hamilton and
(Motherwell) East Kilbride
Limited
Broadcasting Act 1990 - Local Delivery Licence:
Licence Holder Licence No. Licence Area Date of Grant
- -------------- ----------- ------------ -------------
Telewest LDS 008 Edinburgh 16.10.91
Communications
(Scotland) Limited
Licence Holder Licence No. Licence Area Date of Grant
- -------------- ----------- ------------ -------------
Telewest LDS 038 East 29.7.97
Communications (East Lothian
Lothian and Fife)
Limited
<PAGE>
Part F
The South East Licences
Telecommunications Act 1984 Licences:
Licence Holder Licence Area Date of Grant
-------------- ------------ -------------
Telewest Communications Basildon, 14.11.90
(South East) Limited Brentwood and
Chelmsford
Telewest Communications Chatham, 30.11.90
(South Thames Estuary) Gillingham,
Limited Gravesend,
Maidstone,
Northfleet,
Rochester and
Sittingbourne
Broadcasting Act 1990 - Local Delivery Licences:
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest LDS006 Basildon, 16.10.91
Communications Brentwood and
(South East) Chelmsford
Limited
Telewest LDS007 Chatham, 16.10.91
Communications Gillingham,
(South Thames Gravesend,
Estuary) Limited Maidstone,
Northfleet,
Rochester and
Sittingbourne
<PAGE>
Part G
The Midlands and North West Licences
Telecommunications Act 1984 Licences:
Licence Holder Licence Area Date of Grant
-------------- ------------ -------------
Telewest Communications Merseyside 14.10.89
(Liverpool) Limited
Telewest Communications North Liverpool 30.11.90
(Liverpool) Limited and Sefton
Telewest Communications St Helens and 08.12.90
(St Helens & Knowsley) Knowsley
Limited
Telewest Communications Wigan 14.11.90
(Wigan) Limited
Telewest Communications Central Lancashire 14.10.89
(Central Lancashire)
Limited
Telewest Communications Telford 12.04.91
(Telford) Limited
Telewest Communications Black Country 25.01.91
(Midlands) Limited
Telewest Communications Southport 19.12.96
(Southport) Limited
Telewest Communications Fylde and Wyre 19.12.96
(Fylde and Wyre)
Limited
Telewest Communications Worcester 25.9.93
(Worcester) Limited
<PAGE>
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service
Licences:
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest PDSL 007 Merseyside 14.09.84
Communications
(Liverpool)
Limited
Telewest PDSL 077 North 03.12.90
Communications Liverpool and
(Liverpool) Sefton
Limited
Telewest PDSL 076 St. Helens and 03.12.90
Communications Knowsley
(St Helens &
Knowsley)
Limited
Telewest PDSL 105 Wigan 03.12.90
Communications
(Wigan) Limited
Telewest PDSL 016 Central 17.10.89
Communications Lancashire
(Central
Lancashire)
Limited
Telewest PDSL 132 Telford 03.12.90
Telecommunicatio
ns (Telford)
Limited
Telewest PDSL 131 Black Country 03.12.90
Communications
(Midlands)
Limited
Telewest PDSL 129 Worcester 31.12.90
Communications
(Worcester)
Limited
Broadcasting Act 1990 - Local Delivery Licence:
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest LDS 011 Fylde and Wyre 16.12.94
Communications
(Fylde & Wyre)
Limited
<PAGE>
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest LDS 029 Southport 19.1.98
Communications
(Southport)
Limited
Part H
The National Licence
Telecommunications Act 1984 Licence
Licence Holder Licence No. Licence Area Date of Grant
-------------- ----------- ------------ -------------
Telewest - Out of Area 14.1.97
Communications
plc
<PAGE>
SCHEDULE 10
Principal Agreements
Part A
BT Interconnection Agreements
(i) First Supplemental Agreement dated 18 August 1997 between (1) Various
Operators (Telewest) and (2) British Telecommunications Plc;
(ii) Network Charge Control Supplementary Agreement dated 20 October 1997
between (1) Telewest Group and (2) British Telecommunications Plc;
(iii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Central Lancashire) Limited and (2) British
Telecommunications Plc relating to the Preston franchise;
(iv) Interconnection Agreement dated 26 July 1996 between (1) Telewest
Communications (Cotswolds) Limited and (2) British Telecommunications
Plc relating to the Cheltenham and Gloucester franchise;
(v) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Cumbernauld) Limited and (2) British
Telecommunications Plc;
(vi) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dumbarton) Limited and (2) British Telecommunications
Plc;
(vii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dundee & Perth) Limited and (2) British
Telecommunications Plc relating to the Dundee and Broughty Ferry
franchise;
(viii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Scotland) Limited and (2) British Telecommunications
Plc relating to the Edinburgh franchise;
(ix) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Falkirk) Limited and (2) British Telecommunications
Plc relating to the Falkirk and West Lothian franchise;
(x) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Glenrothes) Limited and (2) British Telecommunications
Plc relating to the Glenrothes, Kirkcaldy and Leven franchise;
(xi) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Liverpool) Limited and (2) British Telecommunications
Plc relating to the Liverpool South franchise;
(xii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Liverpool) Limited and (2) British Telecommunications
Plc relating to the Liverpool North, Sefton and Bootle franchise;
(xiii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Croydon franchise;
(xiv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Kingston and Richmond
franchise;
<PAGE>
(xv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Merton and Sutton franchise;
(xvi) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Midlands) Limited and (2) British Telecommunications
Plc relating to the Dudley, Wolverhampton and Black Country
franchises;
(xvii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Motherwell) Limited and (2) British Telecommunications
Plc relating to the Motherwell and Hamilton franchise;
(xviii) Interconnection Agreement dated 1 September 1996 between (1) Telewest
Communications (North East) Limited and (2) British Telecommunications
Plc relating to the Newcastle and Gateshead franchise;
(xix) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dundee & Perth) Limited and (2) British
Telecommunications Plc relating to the Perth and Scone franchise;
(xx) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (South Thames Estuary) Limited and (2) British
Telecommunications Plc relating to the Gravesend and Rochester
franchise;
(xxi) Interconnection Agreement dated 26 July 1996 between (1) Telewest
Communications (South West) Limited and (2) British Telecommunications
Plc relating to the Bristol, Bath and Weston franchise;
(xxii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (South East) Limited and (2) British Telecommunications
Plc relating to Basildon and Southend franchise;
(xxiii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (St Helens & Knowsley) Limited and (2) British
Telecommunications Plc;
(xxiv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Telford) Limited and (2) British Telecommunications
Plc;
(xxv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Wigan) Limited and (2) British Telecommunications Plc;
(xxvi) Multiple Systems Operator Agreement dated 23 December 1996 between (1)
British Telecommunications Plc and (2) SBC CableComms (UK) Limited
(renamed Telewest Communications (Midlands and North West) Limited);
(xxvii) Interconnection Agreement dated 15 January 1997 between (1) Telewest
Communications plc and (2) British Telecomunications Plc amending
(i)-(xxvi) above.
<PAGE>
Part B
Sky Standard Cable Operator Agreements
(i) Standard Cable Operator Agreement dated 25 February 1993 made between Sky
Television Plc, British Sky Broadcasting Limited, Telewest Communications
Group Limited and certain other companies party thereto;
(ii) Standard Cable Operator Agreement dated 30 April 1995 made between British
Sky Broadcasting Limited, British Sky Broadcasting Group Plc, Telewest
Communications plc and the other companies party thereto as amended by all
or any of the following:
(a) letter from Telewest to BSkyB dated 27 June 1995,
(b) letter to British Sky Broadcasting Limited and British Sky
Broadcasting Group Plc from Telewest Communications plc
dated 25 May 1995, and
(c) undated letter from British Sky Broadcasting Limited and
British Sky Broadcasting Group Plc to Telewest
Communications Plc; and
(iii)Unsigned/undated agreement between British Sky Broadcasting Limited, Sky
Television Limited, SBC Cablecomms UK and certain other companies party
thereto.
<PAGE>
The Borrower
SIGNED for and on behalf of )
Telewest COMMUNICATIONS ) STEPHEN DAVIDSON
NETWORKS LIMITED )
The Original Charging Subsidiaries
SIGNED for and on behalf of each of
TELEWEST COMMUNICATIONS GROUP LIMITED
TELEWEST COMMUNICATIONS CABLE LIMITED
TELEWEST HOLDINGS LIMITED
TELEWEST PARLIAMENTARY HOLDINGS LIMITED
THESEUS NO. 1 LIMITED
THESEUS NO. 2 LIMITED
THE CABLE EQUIPMENT STORE LIMITED
UNITED ARTISTS COMMUNICATIONS (COTSWOLDS)
LIMITED UNITED ARTISTS COMMUNICATIONS (NOMINEES) LIMITED
UNITED ARTISTS COMMUNICATIONS (NORTH EAST) LIMITED
UNITED ARTISTS COMMUNICATIONS (SOUTH EAST)LIMITED
UNITED ARTISTS COMMUNICATIONS (SOUTH THAMES ESTUARY) LIMITED
UNITED ARTISTS COMMUNICATIONS (TYNESIDE) LIMITED
SBC CABLECOMMS (UK) LIMITED
SOUTHWESTERN BELL INTERNATIONAL HOLDINGS LIMITED
MIDLANDS CABLE COMMUNICATIONS LIMITED
TELFORD TELECOMMUNICATIONS LIMITED
NORTHWEST CABLE COMMUNICATIONS LIMITED
CABLE COMMUNICATIONS WIGAN LIMITED
CABLE COMMUNICATIONS (CENTRAL LANCASHIRE) LIMITED
CABLE COMMUNICATIONS LIVERPOOL LIMITED
CABLE COMMUNICATIONS (ST. HELENS & KNOWSLEY) LIMITED
TELEWEST (MOTHERWELL) LIMITED
UNITED ARTISTS COMMUNICATIONS (LONDON SOUTH) LIMITED
UNITED ARTISTS COMMUNICATIONS (AVON) LIMITED
TAYSIDE CABLE SYSTEMS LIMITED KINGDOM CABLEVISION LIMITED
SCOTCABLE (MOTHERWELL) LIMITED
SCOTCABLE (CUMBERNAULD) LIMITED
SCOTCABLE (DUMBARTON) LIMITED
CABLE NORTH (FORTH DISTRICT) LIMITED
UNITED ARTISTS COMMUNICATIONS (SCOTLAND) LIMITED
TELEWEST SCOTLAND HOLDINGS LIMITED
TELEWEST COMMUNICATIONS (INTERNET) LIMITED
TELEWEST SOUTHPORT LIMITED CRYSTAL PALACE RADIO LIMITED
AVON CABLE INVESTMENTS LIMITED TELEWEST (WORCESTER) LIMITED
by: STEPHEN DAVIDSON
<PAGE>
The Original Charging Partnerships
SIGNED for and on behalf of each of
COTSWOLDS CABLE LIMITED PARTNERSHIP
ESTUARIES CABLE LIMITED PARTNERSHIP
TYNESIDE CABLE LIMITED PARTNERSHIP
EDINBURGH CABLE LIMITED PARTNERSHIP
AVON CABLE LIMITED PARTNERSHIP
UNITED CABLE (LONDON SOUTH) LIMITED PARTNERSHIP
TCI/US WEST CABLE COMMUNICATIONS GROUP
by their general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by their general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
LONDON SOUTH CABLE PARTNERSHIP
by its managing partner
UNITED CABLE (LONDON SOUTH) LIMITED PARTNERSHIP
by its general partner
THESEUS NO.1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO.2 LIMITED: STEPHEN DAVIDSON
<PAGE>
SIGNED for and on behalf of the partners of
UNITED ARTISTS COMMUNICATIONS
(SOUTH EAST) PARTNERSHIP by the following:
Signed for and on behalf of
ESTUARIES CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(SOUTH EAST) LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(SOUTH THAMES ESTUARY) LIMITED: STEPHEN DAVIDSON
SIGNED for and on behalf of the partners of
UNITED ARTISTS COMMUNICATIONS
(NORTH EAST) PARTNERSHIP by the following:
Signed for and on behalf of
TYNESIDE CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(NORTH EAST) LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(TYNESIDE) LIMITED: STEPHEN DAVIDSON
<PAGE>
SIGNED for and on behalf of the partners of
AVON CABLE JOINT VENTURE
by the following:
Signed for and on behalf of
AVON CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(AVON) LIMITED: STEPHEN DAVIDSON
SIGNED for and on behalf of the partners of
LONDON SOUTH JOINT VENTURE
by the following:
Signed for and on behalf of
LONDON SOUTH CABLE PARTNERSHIP
by its managing partner
UNITED CABLE (LONDON SOUTH)
LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed for and on behalf of
UNITED ARTISTS COMMUNICATIONS
(LONDON SOUTH) LIMITED: STEPHEN DAVIDSON
SIGNED for and on behalf of the partners of
UNITED ARTISTS COMMUNICATIONS
(COTSWOLDS) VENTURE
by the following:
Signed for and on behalf of
COTSWOLDS CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed by
UNITED ARTISTS COMMUNICATIONS
(COTSWOLDS) LIMITED: STEPHEN DAVIDSON
<PAGE>
SIGNED for and on behalf of
UNITED ARTISTS COMMUNICATIONS
(SCOTLAND) VENTURE
by the following:
Signed by
EDINBURGH CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: STEPHEN DAVIDSON
and by its general partner
THESEUS NO. 2 LIMITED: STEPHEN DAVIDSON
Signed for and on behalf of
UNITED ARTISTS COMMUNICATIONS
(SCOTLAND) LIMITED: STEPHEN DAVIDSON
The Arrangers
SIGNED for and on behalf of
THE BANK OF NEW YORK
by:
JAMES LEE
attorney-in-fact
SIGNED for and on behalf of
CIBC WOOD GUNDY PLC
by:
NINA TRIANTIS
SIGNED for and on behalf of
CHASE INVESTMENT BANK LIMITED
by:
CHERYL BOUCHER
SIGNED for and on behalf of
NATWEST MARKETS
by:
PHILIP G. WALKER
<PAGE>
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by:
HOWARD BAKER
The Banks and Financial Institutions
SIGNED for and on behalf of
THE BANK OF NEW YORK, COMPANY INC.
by:
JAMES LEE
attorney-in-fact
SIGNED for and on behalf of
CANADIAN IMPERIAL BANK
OF COMMERCE
by:
NINA TRIANTIS
SIGNED for and on behalf of
CHEMICAL BANK
by:
CHERYL BOUCHER
SIGNED for and on behalf of
NATIONAL WESTMINSTER
BANK PLC
by:
PHILIP G. WALKER
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by:
HOWARD BAKER
<PAGE>
The Agent
SIGNED for and on behalf of
CIBC WOOD GUNDY PLC
by:
NINA TRIANTIS
The Security Trustee
SIGNED for and on behalf of
CIBC WOOD GUNDY PLC
by:
NINA TRIANTIS
EXHIBIT 10.62
CONFORMED COPY
DATED 27TH MARCH 1998
- --------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS NETWORKS LIMITED
BORROWER
THE BANK OF NEW YORK
CIBC WOOD GUNDY PLC
CHASE MANHATTAN PLC
GREENWICH NATWEST
AND
THE TORONTO-DOMINION BANK
ARRANGERS
THE TORONTO-DOMINION BANK
AGENT
THE TORONTO-DOMINION BANK
SECURITY TRUSTEE
LOAN AGREEMENT
FOR A
(POUND)100,000,000 CREDIT FACILITY
AS AMENDED PURSUANT TO AN AMENDMENT AGREEMENT
DATED 7TH APRIL 1998
NORTON ROSE
London
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
CLAUSE HEADING PAGE NO
<S> <C> <C>
1 Purpose and Definitions.......................................................................1
2 The Facility.................................................................................28
3 Conditions...................................................................................29
4 Revolving Advances...........................................................................30
5 Interest and Interest Periods; alternative interest rates....................................33
6 Repayment, prepayment and cancellation.......................................................36
7 Fees and expenses............................................................................40
8 Payments and Taxes; accounts and calculations................................................41
9 Representations and warranties...............................................................46
10 Positive covenants...........................................................................56
11 Negative Covenants...........................................................................65
12 Financial covenants..........................................................................69
13 Events of Default............................................................................75
14 Indemnities..................................................................................82
15 Unlawfulness and Increased Costs; Mitigation................................................83
16 Set-off and Pro Rata Payments................................................................86
17 Assignment, Substitution and Lending Offices.................................................87
18 Arrangers, Agent and Reference Banks.........................................................90
19 Notices and other matters....................................................................96
20 Governing law and jurisdiction...............................................................97
SCHEDULE
1 Part A - The Original Charging Subsidiaries..................................................99
Part B - The Original Charging Partnerships.................................................102
Part C - The Original Non-Charging Subsidiaries.............................................104
<PAGE>
Part D - The Banks and their Commitments....................................................105
2 Part A - Form of Drawdown Notice...........................................................108
Part B - Form of Rollover Notice............................................................110
3 Documents and evidence required as conditions precedent.....................................111
4 Calculation of Additional Cost..............................................................114
5 Form of Substitution Certificate............................................................116
6 Part A - Form of Compliance Certificate to be issued by an Authorised Officer of the Borrower120
Part B - Form of Compliance Certificate to be issued by the Auditors of the TCN Group.......122
7 Form of Deed of Subordination...............................................................124
8 Encumbrances................................................................................140
9 Part A - The Avon Licences..................................................................141
Part B - The Cotswolds Licences.............................................................141
Part C - The London South Licences..........................................................142
Part D - The North East Licences............................................................143
Part E - The Scotland Licences..............................................................143
Part F - The South East Licences............................................................146
Part G - The SBCC Licences..................................................................147
Part H - The National Network Licence.......................................................150
10 Principal Agreements........................................................................151
Part A - BT Interconnect Agreements.........................................................151
Part B - Sky Standard Cable Operator Agreements.............................................154
</TABLE>
<PAGE>
THIS AGREEMENT is dated 27th March, 1998
BETWEEN:
(1) TELEWEST COMMUNICATIONS NETWORKS LIMITED as Borrower;
(2) THE SUBSIDIARIES OF THE BORROWER set out in part A of Schedule 1;
(3) THE ASSOCIATED PARTNERSHIPS OF THE BORROWER set out in part B of Schedule 1;
(4) THE BANK OF NEW YORK, CIBC WOOD GUNDY PLC, CHASE MANHATTAN PLC,
GREENWICH NATWEST (a division of NATIONAL WESTMINSTER BANK PLC) and THE
TORONTO-DOMINION BANK as Arrangers;
(5) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set
out in Part D of Schedule 1;
(6) THE TORONTO-DOMINION BANK as Agent; and
(7) THE TORONTO-DOMINION BANK as Security Trustee.
IT IS AGREED as follows:
1 PURPOSE AND DEFINITIONS
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to
which all of the Banks agree, according to their several obligations,
to make available to the Borrower a revolving credit facility of up to
(pound)100,000,000 to be used (i) to assist in the financing of the
capital expenditure, working capital requirements and other permitted
related activities for the construction and operation of all the
(directly or indirectly) wholly-owned (save for minority interests
approved prior to the date hereof) cable telephony and television
franchises of the Borrower, (ii) to fund the loans to Telewest referred
to in paragraph (e) of the definition of Permitted Investments, (iii)
to make payments of interest to Telewest on loans made to the Borrower
by Telewest in order to enable Telewest to pay equivalent cash interest
on the Senior Securities and/or to pay the costs and expenses of
Telewest (up to a maximum of the amount set out in paragraph (b)(i) of
the definition of Permitted Payments), (iv) to make loans to TCN
Entities in order to facilitate the purposes set out in (i) to (iii)
above, (v) to repay Advances or to pay interest, fees and expenses
relating to the facility granted pursuant to this Agreement and/or (vi)
to repay from time to time advances made by Telewest under the 1997
Telewest Letter Agreement.
<PAGE>
1.2 Definitions
In this Agreement, unless the context otherwise requires:
"1997 TELEWEST LETTER AGREEMENT" means the letter agreement dated 11
September 1997 between Telewest and the Borrower regulating the
provision by Telewest to the Borrower of a (pound)50,000,000
uncommitted revolving on-demand credit facility;
"1998 BUDGET" means the budget for the TCN Group for the period
commencing on 1 January 1998 and ending on 31 December 1998 in the
agreed form;
"ACCEDING TCN ENTITIES" means Cable Adnet Limited, Telewest
Communications (Taunton & Bridgwater) Limited and Telewest
Communications Services Limited;
"ADDITIONAL COST" means in relation to any period a percentage
calculated for such period at an annual rate determined by the
application of the formula set out in Schedule 4;
"ADVANCE" means a Revolving Advance or a Term Advance (as applicable);
"AFFILIATE" means each of Birmingham Cable Corporation Limited (no.
2170379), Cable London plc (no. 1794264) and The Cable Corporation
Limited (no. 2075227) for so long as Telewest does not materially
reduce its direct or indirect voting or economic interest in such
company;
"AGENT" means The Toronto-Dominion Bank of Triton Court, 14-18 Finsbury
Square, London EC2A 1DB or such other person as may be appointed agent
for the Banks pursuant to clause 18.11;
"ANNUAL BUDGET" means a budget in respect of the TCN Group for each
financial year containing information of the same type and to the same
level of detail as the 1998 Budget or containing such other information
or to such other level of detail as has, at the relevant time, been
approved in writing by the Agent acting on the instructions of the
Majority Banks;
"ARRANGERS" means The Bank of New York of 46 Berkeley Street, London
W1X 6AA, CIBC Wood Gundy plc of Cottons Centre, Cottons Lane, London
SE1 2QL, Chase Manhattan plc of 125 London Wall, London EC2Y 5AJ,
Greenwich Natwest (a division of National Westminster Bank Plc) of 135
Bishopsgate, London EC2M 3UR and The Toronto-Dominion Bank of Triton
Court, 14/18 Finsbury Square, London EC2A 1DB;
"ASSIGNEE" has the meaning ascribed thereto in clause 17.3;
"ASSOCIATED COMPANY" has the meaning attributed thereto in Section 416
of the Income and Corporation Taxes Act 1988;
<PAGE>
"ASSOCIATED PARTNERSHIP" means, in relation to a company, a partnership
that is controlled by that company, or by that company and one or more
of its Associated Companies together, and a company shall be regarded
as having control of a partnership for those purposes if (directly or
indirectly, including through intermediate Associated Partnerships) it
possesses, is entitled to, or is entitled to acquire:
(a) more than 50% of the assets of the partnership; or
(b) more than 50% of the income of the partnership
or if it (directly or indirectly, including through intermediate
Associated Partnerships) is able to direct how the affairs of the
partnership are conducted;
"AUTHORISED OFFICER" means that officer or officers of the Borrower
authorised to sign Compliance Certificates, Drawdown Notices, Rollover
Notices and any other notices, requests or confirmations referred to in
this Agreement or relating to the facility granted pursuant to this
Agreement;
"AVON LICENCES" means those licences of TCN Entities details of which
are set out in part A of schedule 9;
"BANKING DAY" means a day (other than Saturday or Sunday) on which
dealings in Sterling deposits are carried on in the London Interbank
Market and (if payment is required to be made on such day) on which
banks are open for business in London;
"BANKS" means the banks and financial institutions listed in Part D of
schedule 1 and includes their successors in title, Assignees and
Substitutes;
"BOND AND FLOATING CHARGES" means the second ranking bond and floating
charges, in the agreed form, to be entered into by each Original
Charging Subsidiary which is incorporated in Scotland;
"BORROWED MONEY" means Indebtedness (including, for the avoidance of
doubt, but without double counting, any guarantees of such
Indebtedness) in respect of (i) money borrowed or raised and debit
balances at banks, (ii) any bond, note, loan stock, debenture or
similar debt instrument, (iii) acceptance or documentary credit
facilities, (iv) receivables sold or discounted (otherwise than on a
non-recourse basis), (v) payments for assets or services acquired which
are deferred for a period of 90 days or more after the relevant assets
or services were supplied, (vi) hire purchase contracts, (vii) rental
payments under Finance Leases, (viii) guarantees, bonds, standby
letters of credit or other instruments issued in connection with the
performance of contracts and (ix) any other transaction (including
without limitation forward sale or purchase agreements and issues of
redeemable shares) having the commercial effect of a borrowing or
raising of money entered into for the purpose of financing a person's
operational or capital requirements provided that in making any
calculation of Borrowed Money under this Agreement no Indebtedness
shall be taken into account more than once;
<PAGE>
"BORROWER" means Telewest Communications Networks Limited (formerly
Mintdrive Limited) (No. 3071086) whose registered office is at Unit 1,
Genesis Business Park, Albert Drive, Woking, Surrey GU21 5RW;
"BT INTER-CONNECT AGREEMENTS" means the agreements referred to in part
A of Schedule 10;
"CABLE INTERNET" means any arrangements put in place between, inter
alia, members of the TCN Group and others for the development and
provision of internet services via the Cable Systems;
"CABLE SYSTEMS" means the telecommunications and television systems
constructed or to be constructed in the areas covered by the Licences
and includes any part of any such system and all modifications,
substitutions, replacements, renewals and extensions made to such
systems;
"CHARGING PARTNERSHIPS" means the Original Charging Partnerships and
any other partnership which may from time to time accede to this
Agreement and any relevant Security Documents pursuant to a
Supplemental Deed;
"CHARGING SUBSIDIARIES" means the Original Charging Subsidiaries and
any other company which may from time to time accede to this Agreement
and any relevant Security Documents pursuant to a Supplemental Deed;
"COMMITMENT" means in relation to a Bank the amount set opposite its
name in Part D of schedule 1 or, as the case may be, in any relevant
Substitution Certificate, as amended by any relevant term of this
Agreement;
"COMPLIANCE CERTIFICATE" means either (i) a certificate substantially
in the form set out in schedule 6A in relation to the compliance (or
otherwise) with the undertakings in clause 12 issued by an Authorised
Officer in relation to Quarterly Management Accounts or (ii) a
certificate substantially in the form set out in Schedule 6B in
relation to the compliance (or otherwise) with the undertakings in
clause 12 issued by the auditors of the TCN Group in relation to annual
financial statements;
"CONSOLIDATED ANNUALISED TCN GROUP NET OPERATING CASH FLOW" means, for
the TCN Group, twice the aggregate of the Consolidated TCN Group Net
Operating Cash Flow in respect of the relevant Six Month Period for the
TCN Group;
"CONSOLIDATED ANNUALISED TELEWEST GROUP NET OPERATING CASH FLOW" means,
for the Telewest Group, twice the aggregate of the Consolidated
Telewest Group Net Operating Cash Flow in respect of the relevant Six
Month Period for Telewest Group;
<PAGE>
"CONSOLIDATED TCN GROUP NET OPERATING CASH FLOW" means, in respect of
each Six Month Period, the Net Income of the TCN Group (plus any
depreciation, amortisation, other non-cash expenses and non-cash taxes,
interest or other charges in respect of Borrowed Money) but excluding:
(a) all sums constituting Management Fees accrued in respect of
such Six Month Period to any member of the TCN Group by any
Restricted Person;
(b) any extraordinary income (except to the extent that the same
is used to meet a related extraordinary expense), net of any
Taxes paid or payable in respect of such income, of the TCN
Group during such Six Month Period;
(c) any interest income, net of any Taxes paid or payable in
respect of such income, of the TCN Group for such Six Month
Period;
(d) any profits or losses attributable to the interest of the TCN
Group in any undertaking (as defined in section 259 Companies
Act 1985) which is not a subsidiary undertaking (as defined in
section 258 Companies Act 1985) of the Borrower;
all as determined in accordance with GAAP used in the preparation of
and as shown in the financial statements, Monthly Management Accounts
or Quarterly Management Accounts in respect of periods within such Six
Month Period prepared and delivered to the Agent pursuant to clause
10.1(f), clause 10.1(g) or clause 10.1(h) (as the case may be);
"CONSOLIDATED TELEWEST GROUP NET OPERATING CASH FLOW" means, in respect
of each Six Month Period, the Net Income of the Telewest Group (plus
any depreciation, amortisation, other non-cash expenses and non-cash
taxes, interest or other charges in respect of Borrowed Money) but
excluding:
(i) any extraordinary income (except to the extent that the same
is used to meet a related extraordinary expense), net of any
Taxes paid or payable in respect of such income, of the
Telewest Group during such Six Month period;
(ii) any interest income, net of any Taxes paid or payable in
respect of such income, of the Telewest Group for such Six
Month Period;
(iii) to the extent included within Net Income any profits or losses
attributable to the interest of the Telewest Group in any
undertaking (as defined in section 259 Companies Act 1985)
which is not a subsidiary undertaking (as defined in section
258 Companies Act 1985) of the Borrower;
all as determined in accordance with GAAP used in the preparation of
and as shown in the financial statements, Monthly Management Accounts
or Quarterly Management Accounts in respect of periods within such Six
Month Period prepared and delivered to the Agent pursuant to clause
10.1(f), clause 10.1(g) or clause 10.1(h) (as the case may be);
<PAGE>
"CONTRIBUTION" means in relation to a Bank the principal amount of the
Loan owing to such Bank at any relevant time;
"COTSWOLD LICENCES" means those licences of members of the TCN Group
details of which are set out in Part B of schedule 9;
"COX" means Cox Communications, Inc. a company incorporated in Delaware
whose principal place of business is 1400 Lake Hearn Drive, Atlanta,
Georgia, 30319, USA;
"DEBENTURE" means the second ranking composite guarantee and debenture
and/or several guarantee and debentures entered into or to be entered
into by the Borrower and each other TCN Entity in favour of the
Security Trustee in the agreed form;
"DEED OF SUBORDINATION" means a deed of subordination to be entered
into between Telewest and the Security Trustee pursuant to the terms of
this Agreement, substantially in the form of schedule 7 or on terms
having substantially the same commercial effect as the form of schedule
7;
"DEFAULT" means any Event of Default or any event or circumstance which
with (i) the giving of any notice referred to in this Agreement, (ii)
the lapse of any period of time referred to in this Agreement or (iii)
the satisfaction of any other condition referred to in this Agreement
(or any combination of (i), (ii) and (iii) above) would constitute an
Event of Default;
"DRAWDOWN DATE" means the date being a Banking Day on which an Advance
is or is to be drawn down;
"DRAWDOWN NOTICE" means a notice substantially in the form of schedule
2A;
"EARNINGS" means all monies whatsoever from time to time due or payable
to any member of the TCN Group arising out of the use or operation of
the Cable Systems including (but without limiting the generality of the
foregoing) all revenues or other payments due from Subscribers, damages
for breach (or payments for variation or termination) of any
Subscriber's Agreement and any sums recoverable from the insurers of
the Cable Systems for loss of use or damage to such systems;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, assignation, trust arrangement
or security interest of any kind securing any obligation of any person
or any other type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having similar
effect);
"ENVIRONMENTAL CLAIM" means any claim, notice of violation,
prosecution, demand, action, official warning, abatement or other order
<PAGE>
(condition or otherwise), relating to Environmental Matters and any
notification or order requiring compliance with the terms of any
Environmental Licence or Environmental Law;
"ENVIRONMENTAL LAWS" includes all or any laws, statutes, regulations,
treaties, and judgments of any governmental authority or agency or any
regulatory body in any jurisdiction in which any member of the TCN
Group is formed or carries on business or the European Community
relating to Environmental Matters applicable to any member of the TCN
Group and/or construction, installation and operation of cable
television and telecommunications systems in the TCN Franchises and/or
any other activities from time to time carried on by any member of the
TCN Group and/or the occupation or use of any property owned, leased or
occupied by any member of the TCN Group;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation,
consent or other approval required at any time by any Environmental Law
(but excluding, for the avoidance of doubt, planning permission, listed
building consent and building regulation approvals) for the
construction, installation and operation of cable television and
telecommunications systems in the TCN Franchises and/or any other
activities from time to time carried on by any member of the TCN Group;
"ENVIRONMENTAL MATTERS" means: (i) any generation, deposit, disposal,
keeping, treatment, transportation, transmission, handling or
manufacture of any waste (as defined in the Environmental Protection
Act 1990) or any Relevant Substance; (ii) nuisance, noise, defective
premises, health and safety at work or elsewhere; and (iii) the
pollution, conservation or protection of the environment (both natural
and built) or of man or any living organism supported by the
environment (both natural and built);
"EVENT OF DEFAULT" means any of the events or circumstances described
in clause 13.1;
"EXCESS CASH FLOW" means the Consolidated TCN Group Net Operating Cash
Flow for the relevant Six Month Period, as shown in the relevant
Compliance Certificate less (i) any Total TCN Group Cash Paying Debt
Interest Charges accrued during such Six Month Period, (ii) cash
repayments and/or prepayments of any Borrowed Money of the TCN Group
made during such Six Month Period and (iii) capital expenditure of the
TCN Group whether or not incurred to the extent that the same is
included in the Annual Budget for such Six Month Period as delivered to
the Agent under this Agreement;
"FINANCE LEASE" means a lease treated as a finance lease pursuant to
applicable accounting standards (including at the date of this
Agreement, Statement of Standard Accounting Practice 21);
"GAAP" means generally accepted accounting principles and practices in
the United Kingdom;
<PAGE>
"IMMATERIAL GROUP ENTITY" means any member of the TCN Group other than
the Borrower which (i) is dormant for the purposes of section 250(3) of
the Companies Act 1985 and (ii)(a) does not trade, (b) has no interest,
legal or beneficial, in the Licences, the Cable Systems, the Earnings,
the Principal Agreements, the share capital of any other member of the
TCN Group which is not an Immaterial Group Entity or any other assets
used in the business of the TCN Group and (c) is solvent (within the
meaning of Section 123 of the Insolvency Act 1986 or otherwise);
"INDEBTEDNESS" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"INDEMNITY" means an indemnity issued or to be issued by any TCN Entity
in favour of a bank in relation to a bond issued by such bank in favour
of any regulatory body or other person pursuant to any
Telecommunications and Cable Laws;
"INTELLECTUAL PROPERTY RIGHTS" means any patent, trade mark, service
mark, registered design, trade name or copyright required to carry on
the business of constructing, installing or operating cable television
and telecommunication systems in the TCN Franchises and such other
business as may be permitted by the terms of this Agreement and which
is carried on at the relevant time;
"INTEREST PAYMENT DATE" means the last day of an Interest Period (and,
in the case of an Interest Period of more than six months, the dates
falling at six monthly intervals from the commencement of such Interest
Period);
"INTEREST PERIOD" means, in relation to any Advance or the Loan, each
period for calculation of interest in respect of such Advance or the
Loan ascertained in accordance with clauses 5.3, 5.4 and 5.5;
"LIBOR" means, in relation to a particular period the arithmetic mean
(expressed as a percentage rounded upwards if necessary to the nearest
four decimal places) of the rates respectively quoted to the Agent by
each of the Reference Banks at the request of the Agent as such
Reference Bank's offered rate for deposits of Sterling in an amount
approximately equal to the amount in relation to which LIBOR is to be
determined for a period equivalent to such period to prime banks in the
London Interbank Market at or about 11.00 a.m. on the first day of such
period;
"LICENCES" means the Cotswold Licences, the South East Licences, the
North East Licences, the London South Licences, the Avon Licences, the
Scotland Licences, the SBCC Licences, the National Network Licence and,
if applicable, any other licences issued to any of the TCN Entities
under any Telecommunications and Cable Laws;
"LOAN" means the aggregate principal amount owing to the Banks under
this Agreement at any relevant time;
<PAGE>
"LOCAL DELIVERY OPERATOR" means a person holding a licence to operate a
cable telephony and/or cable television system under a
Telecommunications and Cable Law in respect of a prescribed
geographical area or any person in relation to which such person is a
wholly owned (directly or indirectly) Subsidiary;
"LONDON SOUTH LICENCES" means those licences of members of the TCN
Group details of which are set out in part C of schedule 9;
"LONG RANGE PLAN" means the operational projections for the Telewest
Group and the TCN Group dated 10 December 1997 and the quarterly
financing forecast dated 2 February 1998;
"MAJORITY BANKS" means Banks the aggregate of whose Contributions at
any relevant time exceeds 662/3 per cent. of the Loan or, if no Advance
is then outstanding, the aggregate of whose Commitments exceeds 662/3
per cent. of the total of the Commitments of all of the Banks;
"MANAGEMENT FEES" means any management, consultancy or similar fees
payable by any TCN Entity to any Restricted Person or by any Restricted
Person to any TCN Entity, as applicable;
"MARGIN" shall be calculated in accordance with clause 5.2;
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
ability of the TCN Entities (taken as a whole) to perform all or any of
their respective obligations under or otherwise comply with the terms
of this Agreement or any of the Security Documents;
"MAXIMUM FORECASTED DEBT REQUIREMENT" means, in relation to any TCN
Entities or assets which have been acquired by the TCN Group under
paragraph (d) of the definition of Permitted Investments, the maximum
amount, estimated by the Borrower in good faith and set out in the
relevant investment analysis, that such TCN Entities (taken as a whole)
will be required to raise as Borrowed Money (together with the amount
of Borrowed Money that will be required to be raised, in the case of an
acquisition of assets) in order to comply with the requirements of any
Licences or Necessary Authorisations issued to such TCN Entities (or
comprising such assets) or such investment analysis (whichever is the
higher);
"MATERIAL FINANCIAL ADVERSE EFFECT" means a material adverse effect on
the ability of the TCN Entities (taken as a whole) to perform all or
any of their respective payment obligations under this Agreement or any
of the Security Documents;
"MONTH" means a period beginning in one calendar month and ending in
the next calendar month on the day numerically corresponding to the day
<PAGE>
of the calendar month on which it started, provided that (i) if the
period started on the last Banking Day in a calendar month or if there
is no such numerically corresponding day, it shall end on the last
Banking Day in such next calendar month and (ii) if such numerically
corresponding day is not a Banking Day, the period shall end on the
next following Banking Day in the same calendar month but if there is
no such Banking Day it shall end on the preceding Banking Day and
"months" and "monthly" shall be construed accordingly;
"MONTHLY MANAGEMENT ACCOUNTS" means the monthly management accounts of
the TCN Group to be delivered (or which may be delivered) to the Agent
pursuant to clause 10.1(h) in the agreed form or containing information
of the same type as is required by such form;
"NATIONAL NETWORK" means the telecommunications systems, together with
all associated cables, hardware and software constructed or to be
constructed in accordance with or permitted under the National Network
Licence;
"NATIONAL NETWORK LICENCE" means the public telecommunications
operating licence granted by the Secretary of State for Trade and
Industry to Telewest under the Telecommunications Act 1984 on 14
January 1997 (details of which are set out in part H of schedule 9);
"NECESSARY AUTHORISATIONS" means all approvals, authorisations and
licences (other than the Licences) from, all rights granted by and all
filings, registrations and agreements with any person including,
without limitation, any government or other regulatory authority
necessary in order to enable each member of the TCN Group to construct,
maintain and operate the Cable Systems and to carry on such other
business as may be permitted by the terms of this Agreement and which
is carried on at the relevant time;
"NET INCOME" means, (i) in relation to the TCN Group for any period,
the net profit after Taxes of the TCN Group arising out of the use or
operation of the Cable Systems for such period (excluding, if included,
the net profit after Taxes of Cable Guide Limited), and (ii) in
relation to the Telewest Group for any period, the net profit after
Taxes of the Telewest Group for such period, in each case as determined
in accordance with GAAP used in the preparation of and as shown in the
financial statements, Monthly Management Accounts or Quarterly
Management Accounts in respect of such period prepared and delivered to
the Agent pursuant to clause 10.1(f), 10.1(g) or 10.1(h);
"NETWORK SERVICE CENTRE" means the arrangements effected pursuant to
the agreement dated 16 May 1994 and expressed to take effect from 1
January 1993 between, inter alia, Telewest Communications Group
Limited, United Artists Communications (North East) Partnership, United
Artists Communications (Cotswolds) Venture and United Artists
Communications (South East) Partnership together with any agreements to
similar effect entered into from time to time between, inter alia,
members of the TCN Group and others;
"NON-GUARANTEED COMPUTER LEASE" means any Finance Lease of computer
equipment in respect of which no guarantee has been issued pursuant to
this Agreement;
"NON-GUARANTEED LEASE" means any Finance Lease in respect of which no
guarantee has been issued pursuant to this Agreement;
<PAGE>
"NON-GUARANTEED SWITCH LEASE" means any Finance Lease of switch
equipment and software in respect of which no guarantee has been issued
pursuant to this Agreement;
"NON-GUARANTEED VEHICLE LEASE" means any Finance Lease of vehicles in
respect of which no guarantee has been issued pursuant to this
Agreement;
"NORTH EAST LICENCES" means those licences of members of the TCN Group
details of which are set out in part D of schedule 9;
"ORIGINAL CHARGING PARTNERSHIPS" means those partnerships whose names
and principal places of business are set out in part B of schedule 1;
"ORIGINAL CHARGING SUBSIDIARIES" means those companies whose names and
registered numbers are set out in part A of schedule 1;
"ORIGINAL NON-CHARGING SUBSIDIARIES" means those companies whose names
and registered numbers are set out in part C of schedule 1;
"PERMITTED BORROWINGS" means:
(a) any Borrowed Money arising hereunder or under the Security
Documents;
(b) any Borrowed Money arising under or in respect of the Senior Loan
Agreement in a maximum principal amount of (pound)1,000,000,000;
(c) any Borrowed Money approved by the Agent (acting on the
instruction of the Majority Banks);
(d) any Borrowed Money included within Permitted Intra-TCN Group
Transactions or Permitted Guarantees;
(e) any Borrowed Money arising under the interest rate protection
arrangements referred to in clause 11.1(i);
(f) any Borrowed Money arising under:
(i) Non-Guaranteed Switch Leases in aggregate not exceeding
(pound)120,000,000;
(ii) Non-Guaranteed Vehicle Leases in aggregate not exceeding
(pound)50,000,000;
(iii) Non-Guaranteed Computer Leases in aggregate not exceeding
(pound)20,000,000;
<PAGE>
(iv) any Borrowed Money arising under Non-Guaranteed Leases (not
falling within (a), (b) or (c) above) in aggregate not
exceeding (pound)20,000,000;
Provided that the aggregate of all Borrowed Money falling within this
paragraph (f) shall not at any time exceed (pound)140,000,000;
(g) Subordinated Debt which is the subject of a Deed of
Subordination;
(h) any Borrowed Money outstanding to any bank (which has a credit
rating from Standard & Poor's Corporation or Moody's Investors
Service Inc. of A (or its equivalent) or better) with whom
members of the TCN Group have a cash management arrangement in
place provided that (i) the aggregate net amounts of Borrowed
Money outstanding to all such banks (after taking account of
deposits made by members of the TCN Group with the relevant
banks) does not exceed(pound)5,000,000 or the excess
above(pound)5,000,000 would not otherwise be prohibited under
this Agreement, (ii) the net balance with each such bank is in
credit at least once in any 30 day period and (iii) the average
(over any 365 day period) of the aggregate of the net amount of
Borrowed Money outstanding to all such banks (after taking
account of deposits made by members of the TCN Group with the
relevant banks) does not exceed(pound)2,500,000;
(i) any Borrowed Money arising under Indemnities not exceeding
(pound)250,000 for each TCN Franchise;
(j) after the end of the Revolving Period, any Borrowed Money not
within paragraphs (a) to (i) above provided that:
(i) such Borrowed Money is incurred after the end of the
Revolving Period;
(ii) no Default has occurred and is continuing at the date of the
incurrence of such Borrowed Money; and
(iii) on the two Quarter Days immediately preceding the
incurrence of such Borrowed Money (as shown in the relevant
Compliance Certificates), immediately after the incurrence
of such Borrowed Money and at all times thereafter Total TCN
Group Debt is less than 3 times Consolidated Annualised TCN
Group Net Operating Cash Flow; and
(k) any Borrowed Money not within paragraphs (a) to (j) above and not
exceeding at any time in aggregate (pound)15,000,000;
"PERMITTED DISPOSALS" means:
(a) the application of cash in (i) the acquisition of assets or
services in the ordinary course of business, or the making of
loans in the ordinary course of business not, in any such case,
prohibited by the terms of this Agreement or any Security
<PAGE>
Document, (ii) the repayment of Permitted Borrowings and the
servicing thereof provided that the same is not prohibited or
otherwise restricted by the terms of this Agreement or (iii) the
payment of moneys by the Borrower to Telewest to the extent
permitted by the terms of this Agreement;
(b) any disposals approved by the Agent (acting on the instructions
of the Majority Banks);
(c) the placing of deposits with banks (which have a credit rating
from Standard & Poor's Corporation or Moody's Investor Service
Inc. of A (or its equivalent) or better) not in contravention of
the terms of this Agreement or any Security Document;
(d) the sale of property or other assets (but excluding any ownership
interest in any of the TCN Entities) on bona fide arms length
commercial terms in the ordinary course of business to the extent
that the net proceeds of sale are applied forthwith after such
sale in the acquisition of assets of a similar nature and
approximately equal value to be used in the business of
constructing, installing or operating cable television and
telecommunications systems in the areas covered by the Licences
or any directly related business reasonably considered to be
financially beneficial to such business;
(e) the disposal of property or other assets (but excluding any
ownership interest in any of the TCN Entities) on bona fide arms
length commercial terms in the ordinary course of business in
consideration for the acquisition of assets of a similar nature
and approximately equal value to be used in the business of
constructing, installing or operating cable television and
telecommunications systems in the areas covered by the Licences
or any directly related business reasonably considered to be
financially beneficial to such business;
(f) the disposal, for full market value, of any interest rate or
currency swap or other hedging instrument no longer required for
the purpose for which it was originally entered into;
(g) disposals within Permitted Intra-TCN Group Transactions;
(h) the disposal of assets pursuant to any sale and leaseback
transactions which are permitted by and fall within paragraph (e)
of the definition of Permitted Borrowings or as is permitted by
the Banks pursuant to Clause 20.1;
(i) the disposal of any share (or other securities or any interest
therein) in (i) any Affiliate or (ii) Cable Guide Limited
(registered no: 2025654); and
(j) disposals of assets on bona fide arm's length commercial terms by
a member of the TCN Group (other than any disposals referred to
in paragraphs (a) to (i) (inclusive) above) where such assets are
obsolete or no longer required for the purposes of such member of
the TCN Group's business;
<PAGE>
"PERMITTED ENCUMBRANCES" means:
(a) any Encumbrance arising hereunder or under any of the Security
Documents;
(b) any Encumbrance arising under any of the Senior Security
Documents (i) as at the date hereof, or (ii) arising at a later
date, if second ranking security over the property which is the
subject of the Encumbrance has been granted concurrently in
favour of the Security Trustee;
(c) any Encumbrance existing at the date hereof and set out in
Schedule 8;
(d) any Encumbrance which the Agent, acting on the instructions of
the Majority Banks, has at any time in writing agreed shall be a
Permitted Encumbrance;
(e) any Encumbrance arising in the ordinary course of business by
operation of law;
(f) any Encumbrance in favour of any bank incurred in relation to any
cash management or interest netting arrangements;
(g) rights of set-off arising in the normal course of business;
(h) any retention of title of goods supplied to any member of the TCN
Group where such retention is agreed in the ordinary course of
its trading activities and on customary terms provided that the
purchase price relating to such goods is required to be paid
within 120 days of the date on which the relevant goods are
supplied;
(i) (for the avoidance of doubt) any Encumbrance arising under
Finance Leases where the title to the relevant assets does not
vest in any member of the TCN Group to the extent amounts
outstanding under such Finance Leases fall under paragraph (f) of
the definition of Permitted Borrowings;
(j) any Encumbrance (a "NEW ENCUMBRANCE") created by any member of
the TCN Group in substitution for any Encumbrance referred to in
paragraph (ii) above (an "EXISTING ENCUMBRANCE") provided that
(i) such Existing Encumbrance is irrevocably and unconditionally
discharged no later than the time of creation of the New
Encumbrance, (ii) the New Encumbrance relates only to the same
assets as the Existing Encumbrance, (iii) the Indebtedness
secured by the New Encumbrance does not exceed the Indebtedness
secured by the Existing Encumbrance and (iv) if required by the
Agent, before such New Encumbrance is entered into, the
beneficiary thereof enters into a priorities arrangement with the
Agent and all of the Banks in form and substance satisfactory to
the Agent;
<PAGE>
(k) any Encumbrance arising due to the provision of any services or
operations provided by any member of the TCN Group whereby a
member of the TCN Group agrees to hold assets and equipment on
trust for the benefit of the users thereof provided that (i) the
aggregate book value of the assets and equipment held in such an
arrangement does not at any time exceed (a) in the case of the
Network Service Centre,(pound)25,000,000, (b) in the case of
Cable Internet,(pound)15,000,000 and (c) in the case of any such
arrangement (including the Network Service Centre and/or Cable
Internet),(pound)10,000,000 and (ii) such users are persons
engaged in a similar business to that of the TCN Group; and
(l) any Encumbrance not within paragraphs (a) to (k) above and
securing Indebtedness in aggregate not exceeding
(pound)10,000,000 and where the assets the subject of such
Encumbrance have an aggregate book value not exceeding
(pound)15,000,000;
"PERMITTED GUARANTEES" means:
(a) any guarantees or indemnities arising hereunder or under the
Security Documents;
(b) any guarantees or indemnities arising under any of the Senior
Security Documents (i) as at the date hereof, or (ii) arising at
a later date, if similar guarantees or indemnities by the same
entities, as the case may be, are given concurrently in
connection herewith to the Security Trustee;
(c) any guarantees or indemnities approved by the Agent (acting on
the instructions of the Majority Banks);
(d) any guarantees or indemnities included within Permitted Intra-TCN
Group Transactions;
(e) any guarantees or indemnities included within Permitted
Borrowings; and
(f) any guarantees or indemnities not included in paragraphs (a) to
(e) (inclusive) above provided that the maximum liability
thereunder (actual or contingent) when aggregated with amounts
outstanding as Borrowed Money permitted by virtue of paragraph
(k) of the definition of Permitted Borrowings do not exceed in
aggregate (pound)15,000,000;
"PERMITTED INTRA-TCN GROUP TRANSACTIONS" means:
(a) loans made by a member of the TCN Group to a TCN Entity;
(b) any transaction approved as a Permitted Intra-TCN Group
Transaction by the Agent (acting on the instructions of the
Majority Banks);
<PAGE>
(c) the payment or declaration of any dividend, return on capital,
repayment of capital contributions or other distributions by any
member of the TCN Group to a shareholder which is a TCN Entity;
(d) the purchase, acquisition, sale or disposal of assets or revenues
(including, without limitation, the acquisition of any business
or interest therein) by a TCN Entity from or, as the case may be,
to another TCN Entity provided such assets or revenues remain
charged to the Security Trustee pursuant to a Security Document;
(e) the purchase, subscription for, or other acquisition of any share
(or other securities or any interest therein) in any TCN Entity
by any other TCN Entity provided such shares are charged to the
Security Trustee pursuant to a Security Document;
(f) the subscription for shares in any company on its formation or
the purchase of shares in any company which has not at any time
carried on any business (other than that associated with its
formation or any necessary administrative activities) provided
that (i) such shares are charged to the Security Trustee pursuant
to a Security Document and (ii) promptly upon such subscription
or purchase being completed such company becomes a TCN Entity
pursuant to the provisions of this Agreement; and
(g) in relation to the ordinary course of trading, the giving by any
TCN Entity of any guarantee, bond or indemnity in respect of the
liabilities or obligations of any other TCN Entity;
"PERMITTED INVESTMENTS" means:
(a) any transaction included within Permitted Disposals;
(b) any transaction included within Permitted Intra-TCN Group
Transactions;
(c) any investments approved by the Agent (acting on the instructions
of the Majority Banks);
(d) on or after 1 January 1997, (i) any acquisition of the entire
ownership interest in, or (ii) any acquisition of assets falling
within paragraph (ii) of clause 11.1(g) of, any person which is
not a TCN Entity in each case by a TCN Entity provided that:
(aa) the consideration payable for such acquisition is satisfied
entirely by (A) the issue to the vendor of shares in
Telewest and/or (B) the payment of cash to the vendor
provided that, for the purposes of funding such payment,
Subordinated Debt which is the subject of a Deed of
Subordination has been lent to the relevant TCN Entity
and/or Telewest has subscribed in cash for equity share
capital in the Borrower (which share capital is charged to
the Security Trustee in accordance with clause 11.1(f)) in
<PAGE>
an aggregate amount which is not less than the amount of
such consideration and is applied in satisfaction of such
consideration and provided further that any such
Subordinated Debt or cash subscription for equity is not
funded (directly or indirectly) by any proceeds from any
raising of equity finance or Borrowed Money by Telewest
after the date hereof;
(bb) in the case of sub-paragraph (i) above, such person becomes
a TCN Entity contemporaneously with the making of such
acquisition or investment or, in the case of sub-paragraph
(ii) above, such assets are charged (or become subject to a
charge) to the Security Trustee pursuant to a Security
Document contemporaneously with the acquisition thereof;
(cc) the Borrower has delivered to the Agent an investment
analysis prepared by the Borrower which shows that,
immediately after making such acquisition or investment:
(A) the Maximum Forecasted Debt Requirement arising as a
result of all such acquisitions or investments
(together with the aggregate consideration paid or
payable (other than by (I) the issue to the relevant
vendor of shares in Telewest or (II) the payment to the
relevant vendor of all or part of the proceeds of issue
of any shares in Telewest (and, in either case, the
consequential issue of shares and/or the creation of
Subordinated Debt by the Borrower to Telewest)) in
respect of all such acquisitions or investments) will
not exceed (pound)120,000,000; and
(B) the Maximum Forecasted Debt Requirement arising as a
result of all such acquisitions or investments will not
exceed (pound)40,000,000 in each of financial years
1997 and 1998 and (pound)80,000,000 in any subsequent
financial year of the Borrower; and
(dd) in the case of sub-paragraph (i) above such person is a
Local Delivery Operator or in the case of paragraph (ii)
above such assets consist of all or substantially all of the
assets of a Local Delivery Operator including all licences
issued to such Local Delivery Operator under the relevant
Telecommunications and Cable Laws;
(e) any loans to Telewest representing any amount realised under
paragraph (i)(i) of "Permitted Disposals" and any acquisition of
or investment in, or any acquisition of assets falling within
paragraph (ii) of clause 11.1(g) of any person which is not a TCN
Entity by a TCN Entity provided that (a) such person is engaged
in or such assets are required for the business of (or a similar
<PAGE>
business to that of) the TCN Group, (b) at the relevant time, no
Default has occurred and is continuing or would result from the
making of any such loan, acquisition or investment and (c) the
amount of any such loans together with the aggregate
consideration paid for all investments or acquisitions falling
within this paragraph (e) does not exceed the aggregate net
consideration received in respect of disposals falling within
paragraph (i)(i) of the definition of Permitted Disposals;
(f) any transaction not within paragraphs (a) to (e) (inclusive)
above which would otherwise be prohibited under clause 11.1(g)
where the value of the aggregate net consideration (in cash or
otherwise) paid by members of the TCN Group in any financial year
of the Borrower does not exceed (pound)1,000,000 (provided that
if any such amount is not used in any financial year it may be
carried forward and used in subsequent financial years);
"PERMITTED PAYMENTS" means any payments or transfers of assets
(including Value Added Tax thereon, if applicable):
(a) to any Restricted Person in relation to transactions carried out
on bona fide arm's length commercial terms in the ordinary course
of business;
(b) by the Borrower to Telewest (whether by way of (1) (in the case
of (i) or (ii) or (iv) below) dividend, other distribution, loan
or interest payable on Subordinated Debt or (2) (in the case of
(iii) below) rental payments by the relevant TCN Entity to
Telewest in respect of a sub-Finance Lease entered into between
such parties in relation to the relevant Telewest Lease) where
such payment is to be used (and is so used within a reasonable
time) to fund:
(i) costs and expenses of Telewest incurred in relation to the
TCN Group of up to (pound)2,000,000 in respect of each
financial year;
(ii) the payment by Telewest of cash interest on the Senior
Securities then due or due within five Banking Days;
(iii) the payment of rental due on any Telewest Lease;
(iv) the repayment of any advances made by Telewest under the
1997 Telewest Facility Agreement (subject to no event or
circumstance having occurred which is continuing and which
constitutes a Default),
provided that (1) no Default has occurred and is continuing or would
result from the making of any payment under this paragraph (b) and (2)
in the case of any rental payment, Telewest directs that such payment
be made to (and such payment is made to) the lessor under the
corresponding Telewest Lease to be applied in or towards discharging
Telewest's rental obligations under such Telewest Lease, and
<PAGE>
(c) consisting of dividends or other distributions or the payment of
interest on or the repayment of Subordinated Debt made to any
Restricted Person after the end of the Revolving Period provided
that:
(i) on the two Quarter Days immediately preceding the making of
any such payment (adjusted as if such payment had then been
made) and immediately after such payment the ratio of each
of (A) Total TCN Group Debt to Consolidated Annualised TCN
Group Net Operating Cash Flow and (B) Total Telewest Group
Debt to Consolidated Annualised Telewest Group Net Operating
Cash Flow in each case does not exceed 3.0 times; and
(ii) no Default has occurred and is continuing or would result
from the making of any payment under this paragraph (c);
"PLEDGE AND SECURITY AGREEMENTS" means each of the second ranking
pledge and security agreements to be entered into in favour of the
Security Trustee by each of the partners in each of the Charging
Partnerships formed in the State of Colorado in substantially the
agreed form;
"PRINCIPAL AGREEMENTS" means the Sky Standard Cable Operator Agreements
and the BT Inter-Connect Agreements together with any agreements
replacing any of the same;
"PRO-FORMA TOTAL TCN GROUP DEBT SERVICE" means the aggregate of (i) the
total forecast amount of interest (calculated by reference to the rate
of interest in effect in relation to the relevant Borrowed Money of the
TCN Group on the date on which the calculation falls to be made,
adjusted to take account of any interest rate hedging arrangements) and
any other charges (other than expenses and any one-off fees paid
otherwise than in lieu of interest or discount) payable in respect of
Borrowed Money of the TCN Group in respect of the twelve months
immediately following the date on which the relevant calculation under
this Agreement falls to be made and (ii) the principal amount of any
Borrowed Money of the TCN Group due to be repaid in accordance with the
terms of such Borrowed Money during such period;
"PRO-FORMA TOTAL TELEWEST GROUP DEBT SERVICE" means the aggregate of
(i) the total forecast amount of interest (calculated by reference to
the rate of interest in effect in relation to the relevant Borrowed
Money of the Telewest Group on the date on which the calculation falls
to be made, adjusted to take account of any interest rate hedging
arrangements) and any other charges (other than expenses and any
one-off fees paid otherwise than in lieu of interest or discount)
payable in respect of Borrowed Money of the Telewest Group in respect
of the twelve months immediately following the date on which the
relevant calculation under this Agreement falls to be made and (ii) the
principal amount of any Borrowed Money of the Telewest Group due to be
repaid in accordance with the terms of such Borrowed Money during such
period;
<PAGE>
"QUALIFYING BANK" means:
(a) a person which falls within the definition of "bank" for the
purposes of section 840A of the Income and Corporation Taxes Act
1988, which is beneficially entitled to any interest payable to
it under this Agreement and any other Security Document to which
it is a party and which is within the charge to corporation tax
as respects such interest but so that if such Act is amended or
repealed, this definition shall be amended in such manner as the
Agent, after consultation with the Borrower, shall determine to
be necessary in order to define persons of the relevant
equivalent category to whom the Borrower may make payments
hereunder without any obligation to make deduction or withholding
thereof; or
(b) a person, being a bank or financial institution (whether
incorporated in the United Kingdom or elsewhere), which, by
virtue of the provisions of a double taxation agreement between
the United Kingdom and the country of residence of that person is
entitled to exemption from Taxes on interest and is, subject only
to a prior direction given to the Borrower by the United Kingdom
Inland Revenue pursuant to an application by that person without
the Borrower incurring any additional expense or suffering any
significant additional administrative burden, eligible to have
payments made to it by the Borrower under this Agreement without
any deduction or withholding in respect of Taxes, and for this
purpose "double taxation agreement" means any convention or
agreement between the government of the United Kingdom and any
other government for the avoidance of double taxation and the
prevention of fiscal evasion with respect to Taxes on income and
capital gains;
"QUARTER DAYS" means 31st March, 30th June, 30th September and 31st
December in any year;
"QUARTERLY MANAGEMENT ACCOUNTS" means the quarterly management accounts
of the Telewest Group or the TCN Group (as the case may be) to be
delivered to the Agent pursuant to clause 11.1(g) in the agreed form or
containing information of the same type as is required by such form;
"QUARTERLY PERIOD" means each period of approximately three months
commencing on the day after a Quarter Day and ending on the next
following Quarter Day;
"REFERENCE BANKS" means the principal London offices of The Bank of New
York, Canadian Imperial Bank of Commerce, The Chase Manhattan Bank,
N.A., National Westminster Bank Plc and The Toronto-Dominion Bank
and/or any other Bank appointed as such pursuant to clause 18.12;
"REGION" means each of the geographical regions into which the business
of the TCN Group is divided at any relevant time for management
accounting purposes, being at the date of this Agreement, (i) London
and South East, (ii) Scotland and North East, (iii) Midlands and South
West and (iv) North West;
<PAGE>
"REIMBURSEMENT AGREEMENT" means the agreement of such name to be
entered into between each of Original Charging Partnerships and the
Borrower in the agreed form;
"RELEVANT SUBSTANCE" means (i) any radioactive emissions, (ii)
electricity and any electrical or electromagnetic emissions and (iii)
any substance whatsoever (whether in a solid or liquid form or in the
form of a gas or vapour and whether alone or in combination with any
other substance) which is capable of causing harm to man or any other
living organism supported by the environment (both natural and built),
or damaging the environment (both natural and built) or public health
or welfare;
"REPAYMENT DATE" means, subject to clause 8.4, 30 June 2006;
"RESTRICTED PAYMENT" means (a) any direct or indirect distribution,
dividend, loan or other payment (whether in cash, property, securities
or otherwise) by any member of the TCN Group (including, without
limitation, any payment on account of the share capital of the Borrower
or capital stock or other securities of the Borrower) or any interest
thereon, (b) any transfer of any assets by any member of the TCN Group
and (c) any payment (whether in cash, property, securities or
otherwise) of principal of, or interest on, Subordinated Debt, in each
case to any Restricted Person;
"RESTRICTED PERSON" means any member of the Telewest Group other than
(i) the TCN Entities and (ii) Cable Guide Limited (registered no:
2025654);
"REVOLVING ADVANCE" means an Advance made during the Revolving Period;
"REVOLVING PERIOD" means the period from (and including) 1 July 1999 to
(and including) 30 June 2001;
"ROLLOVER NOTICE" means a notice substantially in the form of Schedule
2B;
"SBC" means SBC International Inc. of 2 Read's Way, Suite 222,
Corporate Commons, Newcastle, Delaware 19720, USA;
"SBCC" means SBC CableComms (UK) Limited (No. 2795350);
"SBCC LICENCES" means those licences of members of the TCN Group
details of which are set out in part G of schedule 9;
"SCOTLAND LICENCES" means those licences of members of the TCN Group
details of which are set out in part E of schedule 9;
"SCOTTISH SECURITY DOCUMENTS" means the Bond and Floating Charges, the
Standard Securities, and the Share Pledges;
"SECURITY DOCUMENTS" means the Debenture, the Deed of Subordination,
the Pledge and Security Agreements, the Telewest Loan Assignment, the
Telewest National Network Licence Assignment, the Reimbursement
Agreement, the Scottish Security Documents, the Share Charge, the
Security Trust Deed, any Supplemental Deed and all other mortgages,
charges, guarantees, indemnities and other instruments from time to
time entered into in favour of the Agent, the Security Trustee and/or
the Banks by way of guarantee or other assurance of and/or security for
amounts owed to any of the Beneficiaries (as defined or to be defined
in the Debenture);
<PAGE>
"SECURITY TRUST DEED" means the security trust deed to be entered into
between the Borrower, Telewest, the Original Charging Subsidiaries, the
Original Charging Partnerships, the Arrangers, the Banks, the Agent and
the Security Trustee;
"SECURITY TRUSTEE" means The Toronto-Dominion Bank, Triton Court, 14-18
Finsbury Square, London EC2A 1DB and/or such other person as may be
appointed as security trustee pursuant to any Security Document (as the
context requires);
"SENIOR AGENT" means the agent under the Senior Loan Agreement (being,
at the date of this Agreement, CIBC Wood Gundy plc of Cottons Centre,
Cottons Lane, London SE1 2QL);
"SENIOR BANKS" means the banks and financial institutions listed in
Part D of Schedule 1 of the Senior Loan Agreement and includes their
successors in title, assignees and substitutes;
"SENIOR FACILITY DEBT INTEREST CHARGES" means, in relation to any
period, the total amount of all interest, fees and commissions accruing
in respect of the facility granted pursuant to the Senior Loan
Agreement during such period;
"SENIOR LOAN" means the (pound)1.2 billion facility provided under the
Senior Loan Agreement which is to be reduced to (pound)1 billion at the
date hereof pursuant to the Senior Loan Amendment;
"SENIOR LOAN AGREEMENT" means the Loan Agreement dated 22nd May 1996
made between (1) Telewest Communications Networks Limited (2) the
Subsidiaries of Telewest Communications Networks Limited set out in
part A of Schedule 1 therein, (3) the Associated Partnerships of
Telewest Communications Network Limited set out in part B of schedule 1
therein, (4) The Bank of New York, CIBC Wood Gundy plc, Chase
Investment Bank Limited, Natwest Markets and The Toronto-Dominion Bank
as Arrangers (5) The Banks and financial institutions whose names and
addresses are set out in Part D of schedule 1 therein, (6) CIBC Wood
Gundy plc as agent; and (7) CIBC Wood Gundy plc as security trustee as
amended;
"SENIOR LOAN AMENDMENT AGREEMENT" means an amendment agreement relating
to the Senior Loan Agreement in the agreed form;
<PAGE>
"SENIOR SECURITIES" means the $300,000,000 95/8% senior debentures due
2006 and $1,536,413,000 11% senior discount debentures due 2007 issued
by Telewest on 3 October 1995;
"SENIOR SECURITY DOCUMENTS" shall have the meaning ascribed to
"Security Documents" in the Senior Loan Agreement;
"SENIOR TRANCHE B LOAN" means the portion of the Senior Loan
categorised as Tranche B under the Senior Loan Agreement;
"SHARE CHARGE" means the second ranking share charge to be entered into
by Telewest over its shares in the Borrower in the agreed form;
"SHARE PLEDGES" means the second ranking share pledges to be entered
into by certain Original Charging Subsidiaries over the shares in those
members of the TCN Group incorporated in Scotland (other than those
which are Original Non-Charging Subsidiaries) in the agreed form;
"SIX MONTH PERIOD" means each period of six months ending on the last
day of a calendar month;
"SKY STANDARD CABLE OPERATOR AGREEMENTS" means the agreements referred
to in part B of Schedule 10;
"SOUTH EAST LICENCES" means those licences of members of the TCN Group
details of which are set out in part F of schedule 9;
"STANDARD SECURITY" means the second ranking standard security to be
entered into by Scotcable (Motherwell) Limited in relation to Block 7,
Goldie Road, Bothwell Park Industrial Estate, Uddingston;
"STERLING" and "(pound)" mean the lawful currency for the time being of
the United Kingdom and in respect of all payments to be made under this
Agreement in Sterling means immediately available, freely transferable
cleared funds;
"SUBSCRIBER" means a person who has entered into an agreement (which
has not expired or been terminated) (a "SUBSCRIBER'S AGREEMENT") with a
TCN Entity to be provided with services by a TCN Entity through the
operation of the Cable Systems;
"SUBORDINATED DEBT" means, at any relevant time, all Indebtedness of
the TCN Entities owed to a Restricted Person;
"SUBSIDIARY" of a person means (a) any company or entity directly or
indirectly controlled by such person, for which purpose "control" means
either ownership of more than 50 per cent. of the voting share capital
(or equivalent right of ownership) of such company or entity or power
to direct its policies and management whether by contract or otherwise
or the right to receive more than 50 per cent. of any distributions (of
whatever nature) made in respect of the share capital or other
ownership interests of such company or entity and (b) in the case of a
company incorporated in England and Wales or Scotland, a Subsidiary
Undertaking;
<PAGE>
"SUBSIDIARY UNDERTAKING" has the meaning given to such term in section
258 Companies Act 1985;
"SUBSTITUTE" has the meaning ascribed thereto in clause 17.4;
"SUBSTITUTION CERTIFICATE" means a certificate substantially in the
form of schedule 5;
"SUPPLEMENTAL DEED" means a deed supplemental to this Agreement, the
Debenture and certain of the other Security Documents executed, inter
alios, by a Subsidiary or Associated Partnership of the Borrower in the
form of schedule 4 to the Debenture or in such other form as is agreed
between the Agent and the Borrower whereby such Subsidiary or
Associated Partnership becomes a party to this Agreement and any
relevant Security Document as a Charging Subsidiary or Charging
Partnership, as the case may be;
"SURPLUS CASH FLOW" means Excess Cash Flow less any amounts applied in
prepayment in accordance with clause 6.5(a) of the Senior Loan
Agreement;
"TAXES" includes all present and future taxes, levies, imposts, duties,
fees or charges of a similar nature together with interest thereon and
penalties in respect thereof and "Taxation" shall be construed
accordingly;
"TCI" means Tele-Communications, Inc. whose principal place of business
is at Terrace Tower II, 5619, DTC Parkway Englewood, Colorado, U.S.A.;
"TCN ENTITIES" means the Borrower, each Original Charging Subsidiary
and each Original Charging Partnership together with any company or
partnership which is or becomes a party to this Agreement and the
relevant Security Documents pursuant to clause 10.1(x);
"TCN FRANCHISES" means those areas in which the TCN Group is permitted
to operate cable television and cable telecommunications systems
pursuant to the Licences;
"TCN GROUP" means the Borrower, all its Subsidiaries and all its
Associated Partnerships from time to time;
"TELECOMMUNICATIONS AND CABLE LAWS" means the Telecommunications Act
1984, the Cable and Broadcasting Act 1984, the Broadcasting Act 1990
and all other laws, statutes, regulations and judgements relating to
telecommunications or cable television applicable to any member of the
TCN Group, and/or the business carried on by, any member of the TCN
Group (for the avoidance of doubt, not including laws, statutes,
regulations or judgments relating solely to consumer credit, data
protection or intellectual property);
"TELEWEST" means Telewest Communications plc (No. 2983307);
<PAGE>
"TELEWEST LOAN ASSIGNMENT" means the second ranking assignment by way
of security to be entered into by Telewest of Telewest's rights in and
to the Subordinated Debt in the agreed form;
"TELEWEST NATIONAL NETWORK LICENCE ASSIGNMENT" means the second ranking
assignment by way of security to be entered into by Telewest of
Telewest's rights in and to the National Network Licence in the agreed
form;
"TELEWEST COMMUNICATIONS" means Telewest Communications Cable Limited
(No. 2883742);
"TELEWEST GROUP" means Telewest, all its Subsidiaries and all its
Associated Partnerships;
"TELEWEST LEASE" means a Finance Lease of tangible and/or intangible
assets by Telewest where such assets are the subject of a sub-Finance
Lease between Telewest and a member of the TCN Group;
"TELEWEST/TCN LOAN AGREEMENT" means the loan agreement dated 21 May
1996 pursuant to which Telewest has made a loan to the Borrower in an
amount of (pound)399,739,534.58;
"TERM" means, in relation to a Revolving Advance, the period for which
such Revolving Advance is or is to be made, as specified in the
Drawdown Notice or Rollover Notice for such Revolving Advance, or as
otherwise determined in accordance with the provisions hereof;
"TERM ADVANCE" means, after the end of the Revolving Period, the
advance deemed to be made pursuant to clause 4.12 and any advance
resulting from the division and/or consolidation of any Term Advance in
accordance with clause 4.12;
"TERM DATE" means, in relation to a Revolving Advance, the last day of
the Term of such Revolving Advance;
"TERM PERIOD" means the period from (and including) 1 July, 2001 to
(and including) 30 June 2006;
"TERM REPAYMENT DATE" means each of the dates referred to in clause
6.2;
"TOTAL COMMITMENTS" means at any relevant time the total of the
Commitments of all the Banks at such time;
"TOTAL TCN GROUP CASH PAYING DEBT" means that part of Total TCN Group
Debt in respect of which interest and any other charges (except
expenses and any one-off fees paid otherwise than in lieu of interest
or discount) is currently paid or payable;
<PAGE>
"TOTAL TCN GROUP CASH PAYING DEBT INTEREST CHARGES" means, in relation
to any period, the total amount of all interest, fees and commissions
accruing in respect of Total TCN Group Cash Paying Debt during such
period;
"TOTAL TCN GROUP DEBT" means the aggregate consolidated amount of all
Borrowed Money of the TCN Group less the amount of the loan made by
Telewest to the Borrower dated 21 May 1996 pursuant to the Telewest/TCN
Loan Agreement;
"TOTAL TCN SECURED DEBT" means the aggregate consolidated amount of all
Borrowed Money of the TCN Group under the Senior Loan Agreement and
this Agreement;
"TOTAL TELEWEST GROUP CASH PAYING DEBT" means that part of Telewest
Group Debt in respect of which interest and any other charges (except
expenses and any one-off fees paid otherwise than in lieu of interest
or discount) is currently paid or payable;
"TOTAL TELEWEST GROUP CASH PAYING DEBT INTEREST CHARGES" means, in
relation to any period, the total amount of all interest, fees and
commissions accruing in respect of Total Telewest Group Cash Paying
Debt during such period;
"TOTAL TELEWEST GROUP DEBT" means the aggregate consolidated amount of
all Borrowed Money of the Telewest Group;
"ULTIMATE SHAREHOLDERS" means US WEST, TCI, Cox and SBC and "Ultimate
Shareholder" means any one of them; and
"US WEST" means US WEST, Inc. whose principal place of business is at
7800 East Orchard Road, Englewood, Colorado 80111, U.S.A.
1.3 Headings
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
In this Agreement, unless the context otherwise requires:
(a) reference to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement
and references to this Agreement include its schedules;
(b) reference to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this
Agreement, that provision or that document as in force for the
time being and as from time to time amended in accordance with
the terms thereof, or, as the case may be, with the agreement of
the relevant parties and (where such consent is, by the terms of
this Agreement or the relevant document required to be obtained
as a condition to such amendment being permitted) the prior
written consent of the Agent, all of the Banks or the Majority
Banks (as the case may be);
<PAGE>
(c) reference to a "regulation" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any
self-regulatory or other national or supra-national authority;
(d) words importing the plural shall include the singular and vice
versa;
(e) reference to a time of day are to London time;
(f) references to a person shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any agency
thereof and that person's successors in title;
(g) reference to a document "in the agreed form" means in the form
of a draft of such document initialled by way of identification
by the Agent and the Borrower or, where no such draft is so
initialled, in the form to be agreed between the Borrower and
the Agent and both such parties hereby agree to negotiate in
good faith to agree such form;
(h) references to a "guarantee" include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or services as a
consequence of a default by any other person to pay any
Indebtedness and "guaranteed" shall be construed accordingly;
(i) reference to "set-off" includes retention, compensation and the
balancing of accounts under Scots law;
(j) references to any enactment shall be deemed to include reference
to such enactment as re-enacted, amended or extended; and
(k) references to "business" in relation to any member of the TCN
Group mean the construction, installation, operation and
utilisation of cable television and/or telecommunications
systems in the TCN Franchises and/or any business directly
related thereto and reasonably considered to be financially
beneficial to such business, and references to "ordinary course
of business" in relation to any member of the TCN Group shall be
similarly construed.
1.5 Majority Banks
Where this Agreement provides for any matter to be determined by
reference to the opinion of the Majority Banks or to be subject to the
consent or request of the Majority Banks or for any action to be taken
<PAGE>
on the instructions of the Majority Banks, such opinion, consent,
request or instructions shall (as between the Banks) only be regarded
as having been validly given or issued by the Majority Banks if all of
the Banks shall have received appropriate prior notice of the matter on
which such opinion, consent, request or instructions are required to be
obtained and the relevant majority of Banks shall have given or issued
such opinion, consent, request or instructions but the Borrower and
each other TCN Entity shall be entitled (and bound) to assume that such
notice shall have been duly received by each Bank and that the relevant
majority shall have been obtained to constitute Majority Banks whether
or not this is in fact the case.
1.6 Agent's Opinion
Where this Agreement provides for the Agent's opinion to determine
whether any matter would or is reasonably likely to have a Material
Financial Adverse Effect, a Material Adverse Effect and/or a material
adverse effect, as the case may be, the Agent shall act in accordance
with the instructions of the Majority Banks (acting reasonably) in
making such determination.
1.7 Bank Commitments
For the purpose of the definition of "Majority Banks" in clause 1.2 and
of clause 18.10 references to the Commitment of a Bank shall, if the
Total Commitments have, at any relevant time, been reduced to zero, be
deemed to be a reference to the Commitment of that Bank immediately
prior to such reduction to zero.
2 THE FACILITY
2.1 Amount
The Banks, relying upon each of the representations and warranties in
clause 9 and in the Security Documents, agree to lend to the Borrower
by way of Advances upon and subject to the terms of this Agreement the
principal sum of up to (pound)100,000,000. The obligation of each Bank
under this Agreement shall be to contribute that proportion of each
Advance which, as at the Drawdown Date of such Advance, its Commitment
bears to the Total Commitments.
2.2 Obligations several
The obligations of each Bank under this Agreement are several; the
failure of any Bank to perform such obligations shall not relieve any
other Bank, the Arrangers, the Agent, the Security Trustee or any TCN
Entity of any of their respective obligations or liabilities under this
Agreement nor shall the Agent, the Arrangers or the Security Trustee be
responsible for the obligations of any Bank (except for its own
obligations, if any, as a Bank) nor shall any Bank be responsible for
the obligations of any other Bank under this Agreement.
2.3 Interests several
Notwithstanding any other term of this Agreement (but without prejudice
to the provisions of this Agreement relating to or requiring action by
the Majority Banks) the interests of the Agent, the Arrangers, the
Security Trustee and the Banks are several and the amount due to the
<PAGE>
Agent (for its own account), to each Arranger, to the Security Trustee
and to each Bank is a separate and independent debt. The Agent, each
Arranger, the Security Trustee and each Bank shall have the right to
protect and enforce its rights arising out of this Agreement and it
shall not be necessary for the Agent, any Arranger, the Security
Trustee or any Bank (as the case may be) to be joined as an additional
party in any proceedings for this purpose.
3 CONDITIONS
3.1 Documents and evidence
The obligations of each Bank to make its Commitment available shall be
subject to the conditions that the Agent, or its duly authorised
representative, shall have received the documents and evidence
specified in schedule 3 in form and substance satisfactory to all of
the Banks not later than three Banking Days before the day on which the
Drawdown Notice in respect of the first Advance is given. The Agent
shall notify the Banks of receipt of such Drawdown Notice and whether
or not the form and substance of such documents are satisfactory to the
Agent.
3.2 General conditions precedent
The obligation of each Bank to contribute to any Advance is subject to
the further conditions that at the time of the giving of a Drawdown
Notice for, and at the time of the making of, such Advance:
(a) the representations and warranties referred to in clause 9.3,
including those deemed to be made by the Borrower pursuant to
such clause, being (subject as provided in clause 9.3) true and
correct as of each such time as if each was made with respect to
the facts and circumstances existing at such time; and
(b) no Default shall have occurred and be continuing which has not
been remedied or expressly waived or would result from the
making of such Advance.
3.3 Waiver of conditions precedent
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in
part and with or without conditions by the Agent acting on the
instructions of all of the Banks in respect of the first Advance and on
the instructions of the Majority Banks in respect of subsequent
Advances without prejudicing the right of the Agent acting on such
instructions to require fulfilment of such conditions in whole or in
part in respect of any other Advance.
<PAGE>
4 REVOLVING ADVANCES
4.1 Senior Loan Agreement
Subject to the terms and conditions of this Agreement, Revolving
Advances may only be drawn during the Revolving Period and only if the
Senior Loan has been drawn to the fullest extent possible at the
relevant time.
4.2 Maximum Outstandings
The aggregate principal amount of Revolving Advances outstanding on any
day falling within the period set out in column (1) below shall be such
that the amount calculated by dividing Total TCN Secured Debt
(including the proposed Advance) by Consolidated Annualised TCN Group
Net Operating Cash Flow (determined by reference to the most recently
delivered Monthly Management Accounts) does not exceed the number set
out against such period in column (2) below and no Revolving Advances
shall be made if, following the making of such Revolving Advance, such
limit would be exceeded:
<TABLE>
<CAPTION>
(1) (2)
PERIOD MAXIMUM TOTAL TCN SECURED DEBT DIVIDED BY
CONSOLIDATED ANNUALISED TCN GROUP NET
OPERATING CASH FLOW
<S> <C>
from 1 July 1999 to (and including) 31 6.0
December 1999
from (but excluding) 31 December 1999 to 5.0
(and including) 31 December 2000
from (but excluding) 31 December 2000 to 4.5
(and including) 30 June 2001
</TABLE>
4.3 Maximum aggregate outstanding Advances
The aggregate principal amount of the Loan shall not at any time exceed
(pound)100,000,000 and no Revolving Advance shall be made under this
Agreement if, following the making of such Revolving Advance, such
limit would be exceeded.
4.4 Drawdown
Subject to the terms and conditions of this Agreement a Revolving
Advance will be made to the Borrower following receipt by the Agent
from the Borrower of a Drawdown Notice signed by an Authorised Officer
not later than 10 a.m. on the second Banking Day before the proposed
Drawdown Date. A Drawdown Notice shall be effective on actual receipt
by the Agent and, once given, shall, subject as provided in clause
<PAGE>
5.8(a), be irrevocable. No Drawdown Notice may be given in respect of
an amount which is the subject of a notice received by the Agent under
clause 6.7.
4.5 Rollover
Subject to the terms and conditions of this Agreement, if the Borrower
wishes to draw a Revolving Advance on any day (the "RELEVANT DAY") of
an amount of not more than the amount of a Revolving Advance which is
due to be repaid on the Relevant Day in accordance with clause 4.10,
the Borrower shall not be obliged to serve a Drawdown Notice in
relation to such new Revolving Advance but may serve a Rollover Notice
signed by an Authorised Officer specifying the amount of the new
Revolving Advance and the Term thereof and whether such new Revolving
Advance is to be made. A Rollover Notice shall be effective on actual
receipt by the Agent (which must be no later than 10 a.m. on the second
Banking Day before the Relevant Day) and, once given, shall, subject as
provided in clause 5.8(a), be irrevocable. No Rollover Notice may be
given in respect of an amount which is the subject of a notice received
by the Agent under clause 6.7.
4.6 No Rollover Notice
If the Agent does not receive a Rollover Notice from the Borrower in
accordance with clause 4.5 in respect of a new Revolving Advance to be
made on the Term Date of a Revolving Advance outstanding to the
Borrower then, subject to the terms and conditions of this Agreement
(including without limitation clauses 4.2 and 4.3), a Revolving Advance
of an amount equal to the amount of the Revolving Advance due to be
repaid shall be made to the Borrower if the Revolving Advance due to be
repaid was outstanding on such Term Date, for a Term of one month or
such other period as shall comply with clause 4.7 unless the amount of
such Revolving Advance is the subject of a notice received by the Agent
under clause 6.7.
4.7 Term and Amount of Revolving Advances
(a) Revolving Advances may be made only on Banking Days falling
within, in the case of Revolving Advances the Revolving Period,
and may be borrowed only for a Term of one month or two, three
or six months or (with the prior agreement of all of the Banks)
any other period in any such case ending not later than the last
day of the Revolving Period Provided that any Revolving Advances
made less than one month prior to the last day of the Revolving
Period may only be borrowed for the period up to and ending on
such date;
(b) each Revolving Advance shall be of (pound)10,000,000 or any
larger sum which is an integral multiple of (pound)2,000,000;
and
(c) no Revolving Advance may be drawn down if, as a result, there
would be more than four Revolving Advances then outstanding.
<PAGE>
4.8 Notification to Banks
On the date of receipt of a Drawdown Notice or a Rollover Notice
complying with the terms of this Agreement or if a Revolving Advance is
otherwise to be made in accordance with clause 4.6 the Agent shall
notify each Bank thereof, of the date on which such Revolving Advance
is to be made and the Term thereof. Subject to the provisions of
clauses 3 and 4.10, on the date for the making of the relevant
Revolving Advance each of the Banks shall make available to the Agent
its portion of such Revolving Advance in accordance with clause 8.2.
4.9 Termination of Commitments
Any part of the Commitments undrawn and uncancelled at the end of the
Revolving Period, shall thereupon be automatically reduced to zero.
4.10 Repayment of Revolving Advances
The Borrower agrees to repay each Revolving Advance in respect of which
the Term Date is before the last day of the Revolving Period on such
Term Date. If a Revolving Advance (the "NEW REVOLVING ADVANCE") is to
be made to the Borrower on a day on which another Revolving Advance
made to the Borrower (the "MATURING REVOLVING ADVANCE") is due to be
repaid then, subject to the terms of this Agreement and so long as the
conditions referred to in clause 3.2 shall have been satisfied in
relation to the new Revolving Advance, (i) the maturing Revolving
Advance shall be deemed to have been repaid on its Term Date either in
whole (if the new Revolving Advance is equal to or greater than the
maturing Revolving Advance) or in part (if the new Revolving Advance is
less than the maturing Revolving Advance) and the Borrower shall only
be obliged to repay the principal amount by which the maturing
Revolving Advance exceeds the new Revolving Advance and (ii) to the
extent that the maturing Revolving Advance is so deemed to have been
repaid, the principal amount of the new Revolving Advance to be made on
such date shall be deemed to have been credited to the account of the
Borrower by the Agent on behalf of the Banks in accordance with the
terms of this Agreement and the Banks shall only be obliged to make
available to the Borrower pursuant to clause 4.8 a principal amount (if
any) equal to the amount by which the new Revolving Advance exceeds the
maturing Revolving Advance.
4.11 Conversion to a Term Loan
On the last day of the Revolving Period the revolving credit facility
shall convert to a term loan and all outstanding Revolving Advances the
Term Date of which is the last day of the Revolving Period shall be
consolidated with any other such Revolving Advances into the Loan and
be repaid in accordance with clause 6.
4.12 Term Advances
Following the consolidation referred to in clause 4.11, all Revolving
Advances shall be deemed to have been repaid and the Loan shall be
deemed to be a Term Advance for the purposes of this Agreement. The
Borrower may by notice received by the Agent not later than 10 a.m. on
<PAGE>
the second Banking Day before the beginning of each Interest Period in
respect of a Term Advance specify that such Term Advance shall be
divided into more than one Term Advance, or consolidated with any other
Term Advance outstanding in respect of the Loan in respect of which the
then current Interest Period ends on the same day as the current
Interest Period in respect of such Term Advance. No more than four Term
Advances may be outstanding under this Agreement at any time. If more
than one Term Advance is outstanding in respect of the Loan each such
Term Advance shall be either (pound)10,000,000 or any larger sum which
is an integral multiple of (pound)2,000,000 or the balance of the Loan.
5 INTEREST AND INTEREST PERIODS; ALTERNATIVE INTEREST RATES
5.1 Normal interest rates
The Borrower agrees to pay interest on each Advance in respect of each
Interest Period relating thereto on each Interest Payment Date at the
rate per annum determined by the Agent to be the aggregate of (a) the
applicable Margin, (b) the Additional Cost and (c) LIBOR.
5.2 Calculation of Margin
The Margin for an Advance drawn within a period set out in column (1)
below shall be the rate set out in the corresponding part of column (2)
below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATE (PER CENT. PER ANNUM)
<S> <C>
from 1 July 1999 to (and including) 31 3.5
December 1999
from (but excluding) 31 December 1999 to (and 4.5
including) 30 June 2000
from (but excluding) 30 June 2000 to (and 5.5
including) 30 June 2006
</TABLE>
5.3 Interest Periods
The Interest Period in relation to each Revolving Advance shall be of a
duration equal to the Term of such Revolving Advance. Interest Periods
in respect of Term Advances shall be of a duration determined in
accordance with clauses 5.4 and 5.5.
5.4 Selection of Interest Periods for Term Advances
The Borrower may by notice received by the Agent not later than 11 a.m.
on the second Banking Day before the beginning of each Interest Period
in respect of a Term Advance specify whether such Interest Period shall
have a duration of one month or two, three or six months or (with the
prior agreement of all of the Banks) any other period.
<PAGE>
5.5 Determination of Interest Periods for Term Advances
Every Interest Period in respect of a Term Advance shall be of the
duration specified by the Borrower pursuant to clause 5.4 but so that:
(a) the initial Interest Period in respect of each Term Advance will
commence on the last day of the Revolving Period and each
subsequent Interest Period in respect of such Term Advance will
commence forthwith upon the expiry of the previous Interest
Period in respect of such Term Advance;
(b) Interest Periods in respect of Term Advances of an aggregate
amount at least equal to the amount of the Loan to be repaid on
any Term Repayment Date shall end on such date; and
(c) if the Borrower fails to specify the duration of an Interest
Period in accordance with the provisions of clause 5.4 and this
clause 5.5 such Interest Period shall, subject to this clause
5.5, have a duration of one month.
5.6 Default interest
If the Borrower fails to pay any sum (including, without limitation,
any sum payable pursuant to this clause 5.6) on its due date for
payment under this Agreement the Borrower agrees to pay interest on
such sum from the due date up to the date of actual payment (as well
after as before judgment) at a rate determined by the Agent pursuant to
this clause 5.6. The period beginning on such due date and ending on
such date of payment shall be divided into successive periods of not
more than three months as selected by the Agent (after consultation
with the Banks) each of which (other than the first, which shall
commence on such due date) shall commence on the last day of the
preceding such period. The rate of interest applicable to each such
period shall be the aggregate (as determined by the Agent) of (a) one
per cent. per annum, (b) the Margin, (c) the Additional Cost and (d)
LIBOR, provided that if such unpaid sum is all or part of an Advance
which shall have become due and payable prior to the last day of the
then current Interest Period relating thereto, the first such period
selected by the Agent shall end on the last day of such Interest Period
and interest shall be payable on such unpaid sum during such period at
a rate one per cent. above the rate applicable thereto immediately
before it became due. Default interest under this clause 5.6 shall be
due and payable on the last day of each period determined by the Agent
pursuant to this clause 5.6 or, if earlier, on the date on which the
sum in respect of which such default interest is accruing shall
actually be paid. If, for the reasons specified in clause 5.8(a)(i) or
(ii), the Agent is unable to determine a rate in accordance with the
foregoing provisions of this clause 5.6 each Bank shall promptly notify
the Agent of the cost of funds to such Bank and interest on any sum not
paid on its due date for payment shall be calculated for each Bank at a
rate determined by the Agent to be one per cent. per annum above the
aggregate of the Margin and the cost of funds (including Additional
Cost ) to such Bank.
<PAGE>
5.7 Notification of Interest Periods and interest rate
The Agent shall notify the Borrower and the Banks promptly of the
amount of each Term Advance, the duration of each Interest Period or
other period for the calculation of interest (or, as the case may be,
default interest) and of each rate of interest determined by it under
this clause 5.
5.8 Market disruption; non-availability
(a) If and whenever, at any time prior to the commencement of any
Interest Period:
(i) the Agent shall have determined (which determination
shall, in the absence of manifest error, be conclusive),
that adequate and fair means do not exist for
ascertaining LIBOR during such Interest Period; or
(ii) none or only one of the Reference Banks supplies the
Agent with a quotation for calculating LIBOR; or
(iii) the Agent shall have received notification from Banks
with Contributions aggregating not less than one-third
of the Loan that deposits in Sterling are not available
to such Banks in the London Interbank Market in the
ordinary course of business in sufficient amounts to
fund their contributions to the relevant Advance for
such Interest Period or that LIBOR does not accurately
reflect the cost to such Banks of obtaining such
deposits;
the Agent shall forthwith give notice (a "DETERMINATION
NOTICE") thereof to the Borrower and to each of the Banks. A
Determination Notice shall contain particulars of the relevant
circumstances giving rise to its issue. After the giving of
any Determination Notice the undrawn amount of the Commitments
of all of the Banks shall not be borrowed until notice to the
contrary is given to the Borrower by the Agent.
(b) During the period of 10 days after any Determination Notice has
been given by the Agent under clause 5.8(a), (i) if the Borrower
so requires, the Borrower and the Agent and each affected Bank
shall enter into negotiations with a view to agreeing a
substitute basis for determining the rates of interest from time
to time applicable to the Advances thereafter and any such
substitute basis that is agreed shall take effect in accordance
with its terms; and (ii) if no substitute basis has been agreed
between the Borrower, the Agent and each affected Bank pursuant
to paragraph (i) above, each affected Bank shall certify a
substitute basis for funding its contribution to the relevant
Advance. Such substitute basis may (without limitation) include
<PAGE>
alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin above
the cost of funds including Additional Cost, if any, to such
Bank equivalent to the Margin for the relevant Interest Period
determined in accordance with clause 5.2.
Each substitute basis so agreed in accordance with (i) or,
failing such agreement, certified in accordance with (ii)
shall be binding upon the Borrower, the Agent and (in the case
of (i)) each Bank and (in the case of (ii)) each affected Bank
and shall take effect in accordance with its terms from the
date specified in the Determination Notice.
5.9 Reference Bank quotations
If any Reference Bank is unable or otherwise fails to furnish a
quotation for the purpose of calculating LIBOR the interest rate shall
be determined, subject to clause 5.8, on the basis of the quotations
furnished by the remaining Reference Banks.
6 REPAYMENT, PREPAYMENT AND CANCELLATION
6.1 Repayment of Advances
The Borrower agrees to repay the outstanding amount of the Loan in one
instalment on or before the Repayment Date.
6.2 Voluntary prepayment
The Borrower may prepay any Advance in whole or in part (being
(pound)5,000,000 or any larger sum which is an integral multiple of
(pound)5,000,000) at any time.
6.3 Additional voluntary prepayment
The Borrower may also prepay (in whole but not in part only), without
premium or penalty, but without prejudice to its obligations under
clauses 5.8, 8.7 and 15.2:
(a) the Contribution of any Bank to which the Borrower shall have
become obliged to pay additional amounts under clause 8.7;
(b) any Bank's Contribution to which a substitute basis applies by
virtue of clause 5.8(b); or
(c) the Contribution of any Bank if it is or becomes contrary to any
law or regulation for that Bank to contribute to Advances or to
maintain its Commitment or fund or maintain its Contribution.
Upon any notice of such prepayment being given, the Commitment of the
relevant Bank shall be reduced to zero.
<PAGE>
6.4 Mandatory Prepayment
(a) The Borrower shall apply, or procure the application of, 100 per
cent. of Surplus Cash Flow (if any) in respect of each of the
Six Month Periods of the Borrower ending on 30 June and 31
December in each year (commencing with the Six Month Period
ending 30 June 2001) in mandatory prepayment of the Loan
provided that the first (pound)10,000,000 which the Borrower
would, but for this proviso, have been obliged so to apply or
procure the application of may be retained by the Borrower (but
without prejudice to the operation of this clause 6.4(a) in
respect of all other relevant amounts).
(b) The Borrower shall apply, or procure the application of the net
cash proceeds after expenses of issue from any raising of equity
finance or Borrowed Money (the "PREPAYMENT PROCEEDS") by
Telewest made after the date hereof in prepayment of the Loan
(save for (i) any such proceeds raised for the purpose of
purchasing the shares held by Comcast UK Cable Partners Limited
in Birmingham Cable Corporation Limited and/or Cable London plc
and provided that such proceeds are so applied within 90 days of
receipt and (ii) any such proceeds from any raising of equity
finance pursuant to a rights issue specifically to finance or
part finance an acquisition of General Cable plc by Telewest and
provided that the shares in relation to the equity financing are
issued no later 31 December 1998). During the Revolving Period
the Commitments shall automatically be cancelled by the amount
of such prepayment and the Commitment of each Bank shall be
reduced proportionately.
(c) Each prepayment to be made under paragraph (a) above shall:
(i) be made on Interest Payment Dates falling after the date
upon which the Quarterly Management Accounts in respect
of the Quarterly Period ending on the last day of the
relevant Six Month Period are delivered to the Agent
pursuant to clause 10.1(g), beginning with the first
such date and continuing until the prepayment obligation
under paragraph (a) above in respect of such Six Month
Period has been satisfied; and
(ii) if on any Interest Payment Date upon which an amount of
Excess Cash Flow is to be applied in prepayment of the
Loan:
(1) such amount is less than the amount of the
Advances whose Interest Period ends on such
date, the Borrower may select against which
Advance or Advances the prepayment is to be made
and the proportion of the relevant amount to be
prepaid on each Advance but shall ensure that
the full amount of such Excess Cash Flow
required to be applied is so applied in
prepayment;
<PAGE>
(2) such amount is equal to or greater than the
amount of the Advances whose Interest Period
ends on such date, the Borrower shall prepay
each such Advance on such date.
(d) Each prepayment to be made under paragraph (b) above shall:
(i) be made on Interest Payment Dates falling after the date
upon which the Prepayment Proceeds are received by
Telewest Communications plc beginning with the first
such date and continuing until the prepayment obligation
under paragraph (b) above has been satisfied; and
(ii) if on any Interest Payment Date upon which Prepayment
Proceeds are to be applied in prepayment of the Loan:
(1) such amount is less than the amount of the
Advances whose Interest Period ends on such
date, the Borrower may select against which
Advance or Advances the prepayment is to be made
and the proportion of the relevant amount to be
prepaid on each Advance but shall ensure that
the full amount of such Prepayment Proceeds
required to be applied are so applied in
prepayment;
(2) such amount is equal to or greater than the
amount of the Advances whose Interest Period
ends on such date, the Borrower shall prepay
each such Advance on such date.
(e) The Borrower's obligations under paragraph (a) above shall cease
in respect of the relevant Six Month Period and all future Six
Month Periods if, in respect of each of two consecutive Six
Month Periods, Total TCN Group Debt on the last day of the
relevant Six Month Period is less than 3.5 times Consolidated
Annualised TCN Group Net Operating Cashflow calculated by
reference to such Six Month Period, each as demonstrated in the
Compliance Certificate for the Quarterly Period ending on the
last day of the relevant Six Month Period.
(f) If the Compliance Certificate for one Quarterly Period
demonstrates that Total TCN Group Debt on the relevant Quarter
Day is less than 3.5 times Consolidated Annualised TCN Group Net
Operating Cashflow calculated by reference to the Six Month
Period ending on such Quarter Day, then the Borrower's
obligations under paragraph (a) above shall be suspended until
the delivery of the Quarterly Management Accounts for the
subsequent Quarterly Period (the "SUBSEQUENT ACCOUNTS") are
delivered. If the Compliance Certificate in respect of that
subsequent Quarterly Period also demonstrates that Total TCN
Group Debt on the relevant Quarter Day is less than 3.5 times
Consolidated Annualised TCN Group Net Operating Cashflow
calculated by reference to the Six Month Period ending on such
subsequent Quarter Day then such suspended obligations shall be
extinguished; if not, then such suspended obligations shall take
effect as of the date of delivery of the Subsequent Accounts but
otherwise in accordance with paragraph (a) above.
<PAGE>
6.5 Amounts payable on prepayment
Any prepayment under this Agreement shall be made together with: (a)
accrued interest to the date of prepayment (calculated, in the case of
any prepayment of a Bank's Contribution pursuant to clause 6.4(b), and
in respect of the period during which the relevant substitute basis has
applied by virtue of clause 5.8(b), at a rate per annum equal to the
rate certified by such Bank in accordance with clause 5.8(b)); (b) any
additional amount payable under clause 8.7 or 15.2; and (c) all other
sums payable by the Borrower to the relevant Bank or the Banks (as the
case may be) under this Agreement including, without limitation, any
accrued commitment commission payable under clause 7.1(c) and any
amounts payable under clause 14.
6.6 Notice of prepayment
No prepayment may be effected unless the Borrower shall have given the
Agent at least two Banking Days' notice of its intention to make such
prepayment. Every notice of prepayment shall be effective only on
actual receipt by the Agent, shall be irrevocable and shall oblige the
Borrower to make such prepayment on the date specified. No amount
prepaid after the end of the Revolving Period may be reborrowed. The
Borrower may not prepay the Loan or any part thereof save as expressly
provided in this Agreement.
6.7 Cancellation of Commitments
The Borrower may at any time by notice to the Agent (effective only on
actual receipt) cancel with effect from a date not less than two
Banking Days after the receipt by the Agent of such notice the whole or
any part (being (pound)10,000,000 or any larger sum which is an
integral multiple of (pound)2,000,000) of the total of the Commitments
of all of the Banks which is not then outstanding or requested in a
Drawdown Notice in respect of which an Advance has not then been made.
Any such notice of cancellation, once given, shall be irrevocable and
upon such cancellation taking effect the Commitment of each of the
Banks shall be reduced proportionately.
7 FEES AND EXPENSES
7.1 Fees
The Borrower agrees to pay to the Agent whether or not any part of the
Commitments is ever advanced:
(a) Front end fee
on the date of this Agreement, for the account of the Arrangers,
an up-front fee of an amount agreed between the Borrower and the
Arrangers and set out in a letter of even date herewith;
<PAGE>
(b) Agency fee
an agency fee of an amount agreed between the Borrower and the
Agent and set out in a letter of even date herewith; and
(c) Commitment commission
in arrears on each Quarter Day after the date of this Agreement and
on the last day of the Revolving Period, for the account of each
Bank, commitment commission computed from the date of this
Agreement as set out below on the daily undrawn and uncancelled
amount of such Bank's Commitment provided that commitment
commission shall cease to be payable to any Bank which shall be
in breach of its obligation to make Revolving Advances under
this Agreement with effect from the date of such breach and for
so long as such breach is continuing.
<TABLE>
<CAPTION>
(1) (2)
PERIOD COMMITMENT COMMISSION
<S> <C>
date of this Agreement to (and including) 0.75 per cent.
30 September 1998 per annum
from (and including) 1 October 1998 to (and 1 per cent.
including) 31 March 1999 per annum
from (and including) 1 April 1999 to (and 1.5 per cent.
including) 30 June 1999 per annum
from (and including) 1 July 1999 50% of the applicable Margin
</TABLE>
7.2 Expenses
The Borrower agrees to pay to the Agent within 30 days from the date on
which the Agent makes demand on the Borrower for payment of the same:
(a) all reasonable out-of-pocket expenses (including legal, other
professional, printing and out-of-pocket expenses) incurred by
the Agent, the Arrangers and the Security Trustee in connection
with the negotiation, preparation (including reasonable due
diligence), syndication and execution of this Agreement and the
Security Documents and of any amendment or extension of or the
granting of any waiver or consent under this Agreement or any
Security Document together with interest at the rate referred to
in clause 5.6 from the date falling 30 days after the date of
demand for payment of such expenses to the date of payment (as
well after as before judgment); and
(b) all expenses (including legal and out-of-pocket expenses)
incurred by the Agent, the Arrangers, the Security Trustee and
the Banks or any of them in contemplation of, or otherwise in
connection with, the enforcement of, or preservation of any
rights under, this Agreement or any Security Document, or
<PAGE>
otherwise in respect of the moneys owing under this Agreement,
together with interest at the rate referred to in clause 5.6
from the date falling 30 days after the date of demand for
payment of such expenses to the date of payment (as well after
as before judgment).
7.3 Value Added Tax
All fees and expenses payable pursuant to this clause 7 shall be paid
together with Value Added Tax (if any) properly chargeable thereon.
7.4 Stamp and other duties
The Borrower agrees (i) to pay all stamp, documentary, registration or
other like duties or taxes (including any duties or taxes payable by
the Agent, the Arrangers, the Security Trustee and the Banks) imposed
on or in connection with this Agreement, any Security Document or the
Loan and (ii) to indemnify the Agent, the Arrangers, the Security
Trustee and the Banks against any liability arising by reason of any
delay or omission by the Borrower to pay such duties or taxes.
8 PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 No set-off or counterclaim; distribution to the Banks
All payments to be made by the Borrower under this Agreement shall be
made in full, without any set-off or counterclaim whatsoever and,
subject as provided in clause 8.7, free and clear of any deductions or
withholdings, in Sterling on the due date to the account of the Agent
at such bank in London as the Agent may from time to time specify for
this purpose. Save as otherwise expressly provided by this Agreement
such payments shall be for the account of the Banks and the Agent shall
forthwith distribute such payments in like funds as are received by the
Agent to the Banks rateably in accordance with their Commitments and/or
Contributions, as the case may be.
8.2 Payments by the Banks
All sums to be advanced by the Banks to the Borrower under this
Agreement shall be remitted in Sterling on the date of the relevant
Advance to the account of the Agent at such bank in London as the Agent
may have notified to the Banks and shall be paid by the Agent on such
date in like funds as are received by the Agent to the account of the
Borrower specified in the relevant Drawdown Notice.
8.3 Agent may assume receipt
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may assume that the payment will
be made when due and may (but shall not be obliged to) make such sum
available to the person so entitled. If it proves to be the case that
such payment was not made to the Agent, then the person to whom such
sum was so made available shall on request refund such sum to the Agent
together with interest thereon sufficient to compensate the Agent for
<PAGE>
the cost of making available such sum up to the date of such repayment
and the person by whom such sum was payable shall indemnify the Agent
for any and all loss or expense which the Agent may sustain or incur as
a consequence of such sum not having been paid on its due date.
8.4 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be extended
to the next following Banking Day unless such Banking Day falls in the
next calendar month in which case payment shall be made on the
immediately preceding Banking Day. If any date or day specifically
referred to in this Agreement (being a date for the making of any
payment under this Agreement) is not a Banking Day all references
thereto shall be deemed to be references to the immediately preceding
Banking Day.
8.5 Calculations
All interest and other payments of an annual nature under this
Agreement or to be calculated on an annual basis shall accrue from day
to day and be calculated on the basis of actual days elapsed and a 365
day year.
8.6 Certificates conclusive
Any certificate or determination of the Agent, any Arranger, the
Security Trustee or any Bank as to any rate of interest or any amount
payable under this Agreement shall, in the absence of manifest error,
be conclusive and binding on each TCN Entity and (in the case of a
certificate or determination by the Agent) on the Banks.
8.7 Grossing-up for Taxes
If at any time the Borrower is required to make any deduction or
withholding in respect of Taxes from any payment due under this
Agreement for the account of any Bank, any Arranger, the Security
Trustee or the Agent (or if the Agent is required to make any such
deduction or withholding from a payment to any Arranger, the Security
Trustee or a Bank), the sum due from the Borrower in respect of such
payment shall, subject to clause 8.8 and 8.9, be increased to the
extent necessary to ensure that, after the making of such deduction or
withholding, each Bank, any Arranger, the Security Trustee and the
Agent receives on the due date for such payment (and retains, free from
any liability in respect of such deduction or withholding) a net sum
equal to the sum which it would have received had no such deduction or
withholding been required to be made and the Borrower shall indemnify
each Bank, each Arranger, the Security Trustee and the Agent against
any losses or costs incurred by any of them by reason of any failure of
the Borrower to make any such deduction or withholding or by reason of
any increased payment not being made on the due date for such payment.
The Borrower shall promptly deliver to the Agent copies of (or, where
required, originals of) any receipts, certificates or other proof
evidencing the amounts (if any) paid or payable in respect of any
deduction or withholding as aforesaid.
<PAGE>
8.8 Exemption
The Borrower is not obliged to pay any additional amount pursuant to
clause 8.7 above in respect of any deduction or withholding which would
not have been required if the relevant Bank had obtained any exemption
(including, for the avoidance of doubt, any exemption under a double
tax agreement) which it is able to or capable of obtaining. The
Borrower shall use reasonable endeavours to expedite any application
for exemption made by the relevant Bank.
8.9 Qualifying Banks
Each Bank confirms to the Borrower that on the date on which it becomes
a party to this Agreement that it is a Qualifying Bank and agrees
promptly to notify the Borrower if it ceases to be a Qualifying Bank.
If any Bank is not or ceases to be a Qualifying Bank, then (save in
circumstances where such Bank has ceased to be a Qualifying Bank by
reason of any change in any law, directive or regulation or in its
application or interpretation, in each case taking effect after the
date of this Agreement) the Borrower shall not be liable to pay to that
bank under clause 8.7 any sum in excess of the sum it would have been
obliged to pay if that Bank had been, or had not ceased to be, a
Qualifying Bank (and in the case of a Qualifying Bank under paragraph
(b) of the definition of "Qualifying Bank", on the assumption that the
Borrower has been directed by the United Kingdom Inland Revenue by a
notice in writing given under the Double Taxation Relief (Taxes on
Income) (General) Regulations 1970 that it shall make payments under
this Agreement to that Bank without deduction or withholding in respect
of UK tax).
8.10 Collecting Agent Rules
Each Bank confirms in favour of the Agent (on the date hereof or, in
the case of a Bank which becomes a party hereto pursuant to an
assignment or transfer, on the date on which the relevant assignment or
transfer becomes effective) that either:
(a) it is not resident for tax purposes in the United Kingdom and is
beneficially entitled to the principal and interest payable by
the Agent to it under this Agreement; or
(b) it is a Bank as defined in section 840A of the Income and
Corporation Taxes Act 1998 and is beneficially entitled to the
principal and interest payable by the Agent to it under this
Agreement,
and each Bank shall promptly notify the Agent if there is any change in
its position from that set out above.
<PAGE>
8.11 Claw-back of Tax benefit
If following any such deduction or withholding as is referred to in
clause 8.7 from any payment by the Borrower, the Agent, any Arranger,
the Security Trustee or any Bank shall receive or be granted a credit
against or remission for any taxes payable by it, the Agent, any
Arranger, the Security Trustee or such Bank shall, subject to the
Borrower having made any increased payment in accordance with clause
8.7 and to the extent that the Agent, such Arranger, the Security
Trustee or such Bank can do so without prejudicing the retention of the
amount of such credit or remission and without prejudice to the right
of the Agent, such Arranger, the Security Trustee or such Bank to
obtain any other relief or allowance which may be available to it,
reimburse the Borrower with such amount as the Agent, such Arranger,
the Security Trustee or such Bank shall in its absolute discretion
certify to be the proportion of such credit or remission as will leave
the Agent, such Arranger, the Security Trustee or such Bank (after such
reimbursement) in no worse position than it would have been in had
there been no such deduction or withholding from the payment by the
Borrower as aforesaid. Such reimbursement shall be made forthwith upon
the Agent, such Arranger, the Security Trustee or such Bank certifying
that the amount of such credit or remission has been received by it
provided that the Agent, the relevant Arranger, the Security Trustee or
the relevant Bank shall not unreasonably delay before so certifying.
Nothing contained in this Agreement shall oblige the Agent, any
Arranger, the Security Trustee or any Bank to disclose to the Borrower,
any other TCN Entity or any other person any information regarding its
tax affairs or tax computations or interfere with the right of the
Agent, such Arranger, the Security Trustee or such Bank to arrange its
tax affairs in whatever manner it thinks fit and, in particular, none
of the Agent, the Arrangers, the Security Trustee or the Banks shall be
under any obligation to claim relief from its corporate profits, tax
liability or similar tax liabilities in respect of such tax in priority
to any other claims, reliefs, credits or deductions available to it.
Without prejudice to the generality of the foregoing, none of the
Borrower or any other TCN Entity shall by virtue of this clause 8.9, be
entitled to enquire about the Agent's, any Arranger's, the Security
Trustee's or any Bank's tax affairs.
8.12 Bank accounts
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. The Agent shall maintain
a control account showing the Loan and other sums owing by the Borrower
under this Agreement and all payments in respect thereof made by the
Borrower from time to time. The control account shall be prima facie
evidence as to the amount from time to time owing by the Borrower under
this Agreement.
8.13 Partial payments
If, on any date on which a payment is due to be made by the Borrower
under this Agreement, the amount received by the Agent from the
Borrower falls short of the total amount of the payment due to be made
<PAGE>
by the Borrower on such date then, without prejudice to any rights or
remedies available to the Agent and the Banks under this Agreement, the
Agent shall apply the amount actually received from the Borrower in or
towards discharge of the obligations of the Borrower under this
Agreement in the following order, notwithstanding any appropriation
made, or purported to be made, by the Borrower:
(a) first, in or towards payment to the Arrangers, of any portion of
the front end fee payable under clause 7.1(a) which shall have
become due but remains unpaid;
(b) secondly, in or towards payment to the Agent, the Arrangers, the
Security Trustee and the Banks, on a pro rata basis, of any
unpaid fees, costs and expenses of the Agent, the Arrangers, the
Security Trustee and the Banks under this Agreement and any
portion of the agency fee payable under clause 7.1(b) which
shall have become due but remains unpaid;
(c) thirdly, in or towards payment to the Banks, on a pro rata
basis, of any accrued commitment commission payable under clause
7.1(c) which shall have become due but remains unpaid;
(d) fourthly, in or towards payment to the Banks, on a pro rata
basis, of any accrued interest which shall have become due but
remains unpaid;
(e) fifthly, in or towards payment to the Banks, on a pro rata
basis, of any principal which shall have become due but remains
unpaid;
(f) sixthly, in or towards payment of any other sum which shall have
become due but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro rata basis).
The order of application set out in this clause 8.13 may be varied by
the Agent if all Banks so direct.
9 REPRESENTATIONS AND WARRANTIES
9.1 Repeated representations and warranties
Each TCN Entity severally represents and warrants in respect of itself
and, in the case of the Borrower, each other member of the TCN Group to
each of the Banks, the Arrangers, the Security Trustee and the Agent
that:
(a) Due incorporation of the Borrower and the Charging Subsidiaries
the Borrower, each Charging Subsidiary and each other Subsidiary
of the Borrower are duly incorporated and validly existing under
the laws of the respective countries of their incorporation as
limited liability companies and have power to carry on their
respective business as they are now being and hereafter proposed
to be conducted and to own their respective property and other
assets;
<PAGE>
(b) Power of the Borrower and each Charging Subsidiary
the Borrower and each Charging Subsidiary have all requisite
power to execute, deliver and perform their respective
obligations under this Agreement and the Security Documents to
which they are party including, in the case of the Borrower to
borrow the Commitments; compliance has been made with all
necessary requirements and all necessary corporate, shareholder
or other action has been taken by the Borrower and each Charging
Subsidiary to authorise the execution, delivery and performance
of this Agreement and the Security Documents to which they are a
party; no limitation on the powers of the Borrower to borrow
will be exceeded as a result of borrowings under this Agreement
and notwithstanding the generality of the foregoing, each
Charging Subsidiary (where necessary) has amended its Articles
of Association to permit:
(i) any transfer of its shares in favour of the Security
Trustee (or its nominee) pursuant to any Security
Document; and
(ii) any transfer of its shares where such transfer is duly
executed by the Security Trustee (or its nominee)
pursuant to any power of sale under any Security
Document;
(c) Due formation of Charging Partnerships
each Charging Partnership is a general or limited partnership
duly formed, validly existing and in good standing under the
laws of the State of Colorado or England and having other TCN
Entities (being in the case of the Charging Partnerships formed
in the State of Colorado, the TCN Entities that have executed or
are expected to execute the Pledge and Security Agreements) as
its only partners (there being no outstanding rights to acquire
further interests therein) and has provided to the Agent a true,
correct and complete copy of the partnership agreement pursuant
to which it was formed and currently exists, as amended to date.
Each Charging Partnership has the power and authority to own its
properties and to carry out its business as it is now being and
is hereafter proposed to be conducted. Each Charging Partnership
is duly qualified, validly existing and in good standing and
authorised to do business in each jurisdiction in which the
character of its properties or the nature of its business
requires such qualification or authorisation;
(d) Power of the Charging Partnerships
each Charging Partnership has all requisite power to execute,
deliver and perform its obligations under this Agreement and the
Security Documents to which it is a party, compliance has been
made with all necessary requirements and all necessary action
has been taken to authorise the execution, delivery and
performance by each Charging Partnership of this Agreement and
the Security Documents to which it is a party; no resolution
(other than resolutions that have already been adopted) is
required pursuant to the terms of any partnership agreement
forming any Charging Partnership to authorise the execution,
delivery and performance by it of this Agreement and the
Security Documents to which it is a party;
<PAGE>
(e) Binding Obligations
this Agreement constitutes valid and legally binding obligations
of each TCN Entity enforceable in accordance with its terms
subject to the qualifications contained in the legal opinions
referred to in Schedule 3 which relate to this Agreement. The
Security Documents to which they are a party constitute valid
and legally binding obligations of each TCN Entity enforceable
in accordance with their respective terms subject to the
qualifications contained in the legal opinions referred to in
Schedule 3 which relate to the relevant Security Document and
for this purpose any statement contained in the qualifications
to any such legal opinion that no opinion is given or expressed
in relation to any particular matter shall be deemed to be a
qualification of such opinion as regards such matter;
(f) No conflict with other obligations
the execution and delivery of, the performance of their
respective obligations under, and compliance with the provisions
of, this Agreement by each TCN Entity and the Security Documents
to which they are a party by each TCN Entity will not (i)
contravene in any material respect any existing applicable law,
statue, rule or regulation or any judgment, decree or permit to
which any TCN Entity is subject, (ii) (in the case of the
Borrower and each Charging Subsidiary) contravene or conflict
with any provision of the Memorandum and Articles of Association
of the Borrower or any Charging Subsidiary, (iii) (in the case
of each Charging Partnership) contravene or conflict with any
provision of the partnership agreement of any Charging
Partnership, (iv) breach in any material respect any term of the
Licences or the Necessary Authorisations, (v) conflict with in
any material respect, or result in any breach of any of the
terms of, or constitute a default under any agreement (including
any partnership agreements) to which any TCN Entity is a party
or is subject or by which it or any of its property is bound or
(vi) result in the creation or imposition of or oblige any TCN
Entity, any Subsidiary or Associated Partnership of the Borrower
or any of their respective Associated Companies or Associated
Partnerships to create any Encumbrance (other than those created
by the Security Documents) on any TCN Entity, any Subsidiary or
Associated Partnership of the Borrower's or any of their
respective Associated Companies' or Associated Partnerships'
undertakings, assets, rights or revenues;
<PAGE>
(g) No litigation
no litigation, arbitration or administrative proceeding is
taking place, pending or, to the knowledge of the officers of
any TCN Entity (as the case may be), threatened against any TCN
Entity or Telewest which (if adversely determined) would or is
reasonably likely, in the opinion of the Agent, to have a
Material Adverse Effect;
(h) Financial statements
(i) the audited financial statements of the Telewest Group,
the TCN Group and the Borrower in respect of the
financial year ended on 31 December 1996 as delivered to
the Agent have been prepared in accordance with GAAP
which principles have (save, in relation to any
repetition of this warranty pursuant to this Agreement,
where the Borrower is permitted to prepare financial
statements on a New Basis and is not required to prepare
financial statements on the Original Basis (each as
defined in clause 10.1(i))) been consistently applied
and present fairly and accurately the financial position
of each such entity as at such date and the results of
the operations of each such entity respectively for the
financial year ended on such date and, as at such date,
no such entity had any significant liabilities
(contingent or otherwise) nor any significant unrealised
or anticipated losses, which, in any such case, are not
disclosed by, or reserved against in, such financial
statements;
(ii) the pro forma consolidated financial projections for the
financial years ending 31 December 1998 to 31 December
2006 inclusive for the TCN Group and the operating
statistics projections for each Region for such
financial years, and the Long Range Plan have been
prepared based upon historical financial information and
upon the assumptions set forth therein, which
assumptions were reasonable both when made and are
reasonable on the date hereof;
(i) No filing required
it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or
any of the Security Documents that any of them or any other
instrument be notarised, filed, recorded, registered or enrolled
in any court or public office (save for (i) the registration of
the Debenture, the Pledge and Security Agreements, the Telewest
Loan Assignment, the Telewest National Network Licence
Assignment and the Scottish Security Documents pursuant to
Section 395 or 410 Companies Act 1985, to the extent required
thereunder and, in the case of (1) the Debenture, pursuant to
the Land Registration Act 1925 and the Land Charges Act 1925 and
regulations made thereunder and (2) the Standard Securities, the
recording thereof in the Register of Sasines or registration
thereof in the Land Register for Scotland (as appropriate) and
(ii) the filing of UCC-1 Financing Statements and continuation
statements with respect to the Pledge and Security Agreements
pursuant to the Colorado Uniform Commercial Code);
<PAGE>
(j) Choice of law
the choice by each TCN Entity of English law to govern this
Agreement and the Security Documents to which they are a party
(other than the Pledge and Security Agreements and the
Reimbursement Agreement, under which Colorado law is to govern
and the Scottish Security Documents, under which Scots law is to
govern) and the submission by such TCN Entity to the
jurisdiction of the English courts, are valid and binding
subject to the qualifications contained in the legal opinions
referred to in Schedule 3 which relate to this Agreement or the
Security Documents and for this purpose any statement contained
in the qualifications to any such legal opinion that no opinion
is given or expressed in relation to any particular matter shall
be deemed to be a qualification of such opinion as regards such
matter;
(k) Legal and beneficial owners
subject to any Permitted Encumbrances, the TCN Entities are the
legal and beneficial owners of and have good and marketable
title to all their respective properties and other material
assets free from any Encumbrances;
(l) No material adverse change
there has been no adverse change in the financial position of
the TCN Group from that set forth in the financial statements
referred to in clause 9.1(h)(i) and there has been no adverse
change in the operations or business prospects of the TCN Group
from that set forth in such financial statements which, in
either case, would or is reasonably likely, in the opinion of
the Agent, to have a Material Financial Adverse Effect;
(m) Solvency
after giving effect to the transactions contemplated hereby, the
Advances to be made hereunder and the application of the
proceeds thereof, and taking into account the execution,
delivery and effectiveness of the Reimbursement Agreement, (i)
on a pro forma basis, the fair value and the present fair
saleable value of each Associated Partnership's assets will
exceed that Associated Partnership's stated liabilities and
identified contingent liabilities, (ii) each Associated
Partnership will have the ability to pay its debts as they
become absolute or mature, and (iii) the capital or assets
remaining in each Associated Partnership after consummation of
the transactions contemplated hereby will not be unreasonably
small to conduct that Associated Partnership's business as it is
now conducted and is proposed to be conducted during the term
hereof;
<PAGE>
(n) Compliance with Environmental Laws and Licences
each member of the TCN Group:
(i) complies and has at all times complied with all
Environmental Laws and Environmental Licences and all
other laws, regulations and judgments (other than
Telecommunications and Cable Laws) the breach of which
would or is reasonably likely to have a Material
Financial Adverse Effect; and
(ii) has obtained and maintains in full force and effect all
Environmental Licences, and there are no facts or
circumstances entitling any such Environmental Licences
to be revoked, suspended, amended, varied, withdrawn or
not renewed where such revocation, suspension,
amendment, variation, withdrawal or non-renewal, would
or is reasonably likely to have a Material Financial
Adverse Effect;
(o) Environmental Claim
no Environmental Claim is pending or has been made or threatened
against any member of the TCN Group or any of their respective
officers or any occupier of any property owned or leased by any
member of the TCN Group and no member of the TCN Group has any
reason to believe that it or, in the case of the Borrower, any
of its Subsidiaries or Associated Partnerships has or is likely
to have any liability in relation to Environmental Matters which
would or is reasonably likely to have a Material Financial
Adverse Effect;
(p) Deposit of Relevant Substance
to the best of its knowledge and belief, no Relevant Substance
has been deposited, disposed of, kept, treated, imported,
exported, transported, processed, manufactured, used, collected,
sorted or produced at any time, or is present in the environment
(whether or not on property owned, leased, occupied or
controlled by any member of the TCN Group) in circumstances
which are likely to result in an Environmental Claim against any
member of the TCN Group which would, or is reasonably likely to
have a Material Financial Adverse Effect;
(q) Disclosure of inspection results
full details have been given to the Agent of any inspections,
investigations, studies, audits, tests, reviews or other
analyses in relation to Environmental Matters relating to any
member of the TCN Group or to the best of the knowledge of any
member of the TCN Group (as the case may be) any property now
owned, leased or occupied by any member of the TCN Group and of
all Environmental Licences which disclose any matters which
would or would be reasonably likely to have a Material Financial
Adverse Effect;
<PAGE>
(r) Intellectual Property Rights
(i) the Intellectual Property Rights owned by each member of
the TCN Group are free from any Encumbrance (save for
those created or to be created by or pursuant to the
Security Documents) and any other rights or interests in
favour of third parties;
(ii) the Intellectual Property Rights owned by each member of
the TCN Group are all the Intellectual Property Rights
required by them in order to carry on, maintain and
operate in all material respects their respective
businesses, properties and assets and no member of the
TCN Group in carrying on its business infringes any
Intellectual Property Rights of any third party where
any action taken by such third party in respect of any
such infringement would or is reasonably likely to have
a Material Financial Adverse Effect; and
(iii) no Intellectual Property Rights owned by each member of
the TCN Group are being infringed, nor is there any
threatened infringement of any such Intellectual
Property Rights which, in either case would or is
reasonably likely to have a Material Financial Adverse
Effect; and
(s) Copyright matters
each member of the TCN Group has obtained all consents and taken
all other action required in connection with the secondary
transmission by it of any broadcast television signals and no
member of the TCN Group has any knowledge, nor is it aware of
any claim, that it is or may be liable to any person for any
copyright infringement of any nature whatsoever as a result of
the operation of its business which liability in the opinion of
the Agent would or is reasonably likely to have a Material
Financial Adverse Effect.
9.2 Further Representation and Warranties
Each TCN Entity severally further represents and warrants in respect of
itself and, in the case of the Borrower, each other member of the TCN
Group to each of the Banks, the Arrangers, the Security Trustee and the
Agent that:
(a) Principal Agreements
(i) the Principal Agreements which have been entered into on or
prior to the date of this Agreement are in full force and effect
and (ii) to the best of its knowledge and belief after due
enquiry, (1) no party is in breach of the terms thereof, (2)
there is no dispute subsisting between the parties thereto and
(3) no amendments have been made thereto (save for any
amendments thereto referred to in schedule 10 to this
Agreement);
<PAGE>
(b) Licences and Necessary Authorisations
the Licences are in full force and effect and each TCN Entity
(as the case may be) is in compliance in all material respects
with all provisions thereof. Each TCN Entity has secured all the
Necessary Authorisations, all such Necessary Authorisations are
in full force and effect and each TCN Entity is in compliance in
all material respects with all provisions thereof. To the best
of the knowledge of the TCN Entity, neither the Licences nor any
of the Necessary Authorisations are the subject of any pending
or threatened attack or revocation;
(c) Consents obtained
every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public
bodies or authorities or courts (other than the Licences and the
Necessary Authorisations) required by each TCN Entity to
authorise, or required by each TCN Entity in connection with,
the execution, delivery, validity, enforceability or
admissibility in evidence of this Agreement and the Security
Documents to which they are a party or the performance by each
TCN Entity of their respective obligations under this Agreement
and the Security Documents (other than (i) the registration of
the Debenture, the Pledge and Security Agreements, the Telewest
Loan Assignment, the Telewest National Network Licence
Assignment and the Scottish Security Documents pursuant to
Section 395 or 410 of the Companies Act 1985, to the extent
required thereunder and, in the case of (1) the Debenture,
pursuant to the Land Registration Act 1925 and the Land Charges
Act 1925 and regulations made thereunder and (2) the Standard
Securities, the recording thereof in the Register of Sasines or
registration thereof in the Land Register for Scotland (as
appropriate) and (ii) the filing of UCC-1 Financing Statements
with respect to the Pledge and Security Agreements pursuant to
the Colorado Uniform Commercial Code) has been obtained or made
and is in full force and effect and there has been no material
default in the observance of the conditions or restrictions (if
any) imposed in, or in connection with, any of the same;
(d) Contractual commitments
no dividends of the Borrower or repayments of the capital
contributions made by Telewest to the Borrower or any other
rights or benefits have been declared, made or paid by the
Borrower and no member of the TCN Group has entered into any
contractual commitments of a material nature (other than (i) the
Principal Agreements, (ii) for the purpose of carrying out the
business of constructing, installing and operating cable
television and telecommunications systems in the TCN Franchises
or such other business as is permitted by the terms of this
Agreement or (iii) contractual commitments arising pursuant to
or constituting Permitted Borrowings, Permitted Disposals,
Permitted Guarantees, Permitted Intra-TCN Group Transactions,
Permitted Investments or Permitted Encumbrances);
<PAGE>
(e) No withholding Taxes
as at the date of this Agreement, on the basis that all of the
Banks are Qualifying Banks (and in the case of a Qualifying Bank
under paragraph (b) of the definition of "Qualifying Bank", on
the assumption that the Borrower has been directed by the United
Kingdom Inland Revenue by a notice in writing given under the
Double Taxation Relief (Taxes on Income) (General) Regulations
1970 that it shall make payments under this Agreement to that
Bank without deduction or withholding in respect of UK tax), no
Taxes are imposed by withholding or otherwise on any payment to
be made to the Agent, the Arrangers, the Security Trustee or the
Banks by any TCN Entity under this Agreement or any Security
Document to which any of them is a party or are imposed on or by
virtue of the execution or delivery by any TCN Entity of this
Agreement or any Security Document to which any of them is a
party or any document or instrument to be executed or delivered
under this Agreement or any such Security Document (other than
stamp duty payable on any Security Document);
(f) Telecommunications and Cable Laws
each member of the TCN Group complies and has at all times
complied in all material respects with all Telecommunications
and Cable Laws but excluding, for these purposes only, breaches
of Telecommunications and Cable Laws which have been expressly
waived by the relevant regulatory authority;
(g) No Default
no Default has occurred and is continuing which has not been
expressly waived;
(h) Long Range Plan
to the best of the Borrower's knowledge and belief after due
enquiry, as at the date of the Long Range Plan all opinions,
projections and forecasts contained therein and the assumptions
on which such opinions, projections and forecasts were based
were arrived at after due and careful consideration and enquiry
and represent the views of the Borrower as at the date of the
Long Range Plan; none of the opinions, projections and forecasts
contained in the Long Range Plan (and the assumptions on which
such opinions, projections and forecasts were made) were or are
misleading in any material respect either as at the date of the
Long Range Plan or as the date of this Agreement.
<PAGE>
No warranty or representation is made in respect of any
opinions, projections, forecasts or circumstances relating to
the cable and telecommunications industry as a whole
("Information"), (ii) any person other than Telewest, the
Borrower and members of the TCN Group or (iii) any Information
which is in the public domain or which is identified in the Long
Range Plan as having been obtained from or made by a source, or
being those of a person, other than the Borrower, any other
member of the TCN Group or Telewest;
(i) Carry on business solely in UK
each of the TCN Entities (i) does not employ any employees in
the State of Colorado or elsewhere in the United States of
America and (ii) carries on business solely in, and its
principal places of business, books and records and the property
(other than the interests in the Original Charging Partnerships)
subject to the Security Documents are located in, the United
Kingdom (except that, in the case of any Charging Partnership
formed in the State of Colorado, if it maintains an office in
the United States of America, it maintains such office in the
State of Colorado). Control and management of each of the TCN
Entities takes place outside the United States of America; and
(j) Immaterial Group Entities
each member of the TCN Group (other than Cable Guide Limited
(registered no. 2025654) and each of the Acceding TCN Entities)
which is not an Immaterial Group Entity is a party to this
Agreement and each Original Non-Charging Subsidiary (other than
Cable Guide Limited and each of the Acceding TCN Entities) is an
Immaterial Group Entity.
9.3 Repetition
The representations and warranties in clause 9.1 (and so that (i) the
representation and warranty in clause 9.1(h)(i) shall for this purpose
refer to the then latest audited financial statements of the Borrower
or the latest consolidated financial statements of the TCN Group or the
Telewest Group (as applicable) verified by the auditors of the TCN
Group and delivered to the Agent under clause 10.1, (ii) the
representation and warranty contained in clause 9.1(h)(ii) shall for
this purpose refer to the then latest pro forma consolidated financial
projections of the TCN Group and the then latest operating statistics
projections for each Region and shall not include a representation or
warranty as to the Long Range Plan, and (iii) the representation and
warranty in clause 9.1(l) shall for this purpose refer to the latest
audited financial statements of the TCN Group delivered to the Agent
under clause 10.1) shall be deemed to be repeated by each TCN Entity in
respect of itself on and as of each Interest Payment Date and the date
<PAGE>
on which each Advance is made under this Agreement. Additionally, the
Borrower shall be deemed to represent and warrant as at each such date
in respect of the then latest audited and/or verified financial
statements delivered to the Agent under clause 10.1(f) that (A) such
financial statements have been prepared in accordance with GAAP which
have been consistently applied (save as provided for in Clause 10.1(i))
and present fairly and accurately the financial position of the
Borrower and the consolidated financial position of the TCN Group and
the Telewest Group respectively as at the dates to which such financial
statements were made up and the results of the operations of the
Borrower and the consolidated results of the operations of the TCN
Group and the Telewest Group respectively for the financial year ended
on such date and that as at such date, neither the Borrower nor any
member of the TCN Group nor the Telewest Group had any significant
liabilities (contingent or otherwise) which are not disclosed by, or
reserved against in, such financial statements (or the notes thereto)
and neither the TCN Group nor the Telewest Group had any unrealised or
anticipated losses and (B) there has been no adverse change in the
financial position of the Borrower or the consolidated financial
position of the TCN Group or the Telewest Group from that set forth in
the latest set of financial statements delivered pursuant to clause
10.1(f) and there has been no adverse change in the operations or
business prospects of the Borrower or the TCN Group or the Telewest
Group from that set forth in such financial statements which, in either
case, would or is reasonably likely to have a Material Financial
Adverse Effect.
10 POSITIVE COVENANTS
10.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the
Banks, each of the Arrangers, the Security Trustee and the Agent that
they will from the date of this Agreement and so long as any monies are
owing under this Agreement or any part of the Commitments remains
outstanding:
(a) Notice of Default, etc.
promptly inform the Agent of (i) any occurrence of which it
becomes aware which would or is reasonably likely to have a
Material Adverse Effect (ii) any Default and any potential
breach of any of the undertakings set out in clause 12
forthwith upon becoming aware thereof and will from time to
time, if so requested by the Agent, confirm to the Agent in
writing that, save as otherwise stated in such confirmation,
no Default has occurred and is continuing, (iii) any lapse,
suspension or termination of or refusal by any person to renew
or extend any Licence or Necessary Authorisation or any breach
of any Licence or Necessary Authorisation where any such
breach would or is reasonably likely to have a Material
Adverse Effect, (iv) (to the extent known to any TCN Entity)
the commencement of all proceedings and investigations by or
before any governmental body and all actions and proceedings
in any court or before any arbitrator where any such
proceedings, investigations or actions would, if adversely
determined, have a Material Adverse Effect (v) any application
<PAGE>
of which it becomes aware for any other licence or franchise
agreement by means of cable television systems (including
satellite master antennae television systems and multi-point
microwave distribution systems) with respect to the territory
covered by the Licences where any such application, if
successful, would or is reasonably likely to have a Material
Adverse Effect and (vi) any breach of any Telecommunications
and Cable Laws by any member of the TCN Group which would or
is reasonably likely to have a Material Adverse Effect.
(b) Consents and authorisations
obtain or cause to be obtained (i) every consent,
authorisation, licence (other than a Licence or a renewal or
extension thereof) or approval of, or registration with or
declaration to, governmental or public bodies or authorities
or courts and (ii) every notarisation, filing, recording,
registration or enrolment in any court or public office in the
United Kingdom (in any such case) required by any TCN Entity
or Telewest to authorise the execution, delivery, validity,
enforceability or admissibility in evidence of this Agreement
and the Security Documents or the performance by any TCN
Entity or Telewest of their respective obligations under this
Agreement and the Security Documents to which they are a
party;
(c) Licences
(i) obtain or cause to be obtained every Licence and ensure
that (A) where there are any Subscribers within the
relevant TCN Franchise subscribing for services covered
by a Licence, (1) such Licence is not revoked,
cancelled, suspended, withdrawn, terminated, expires or
otherwise ceases to be in full force and effect unless
the same is, prior to or contemporaneously with such
event, renewed or replaced and (2) none of the DTI, ITC,
OFTEL nor any other relevant authority issues any notice
in respect of any TCN Franchise informing Telewest or
any TCN Entity that it has or will (whether or not
following the failure to satisfy certain conditions)
revoke, cancel, suspend, withdraw, terminate or not
permit the renewal of such Licence (whether or not such
notice gives Telewest or any TCN Entity a period within
which to remedy the matter which gave rise to such
notice) and (B) such Licence is not modified and no TCN
Entity commits any breach of the terms or conditions
thereof (including, without limitation, any failure to
meet the milestones referred to therein) where any such
modification, breach or failure would or is reasonably
likely, in the opinion of the Agent, to have a Material
Financial Adverse Effect;
(ii) apply to extend or renew each Licence no later than 12
months before the date on which the same is scheduled to
expire and take all steps required by Telecommunications
<PAGE>
and Cable Laws and all other steps reasonably necessary
to effect the extension or renewal of the same for a
period extending to at least 30 June 2008;
(d) Necessary Authorisations
obtain or cause to be obtained every Necessary Authorisation
and ensure that (i) none of the Necessary Authorisations is
revoked, cancelled, suspended, withdrawn, terminated, expires
and is not renewed or otherwise ceases to be in full force and
effect and (ii) no Necessary Authorisation is modified and no
TCN Entity commits any breach of the terms or conditions of
any Necessary Authorisation which, in the case of any of the
actions or events referred to in either (i) or (ii), would or
is reasonably likely, in the opinion of the Agent, to have a
Material Adverse Effect;
(e) Business of the Borrower and the Charging Subsidiaries
in the case of the Charging Subsidiaries and Charging
Partnerships, engage in the business of acting as the holder
of shares and/or partnership interests in other TCN Entities
and/or the business of constructing, installing, operating and
utilising cable television and telecommunications systems in
the TCN Franchises and in no other activities save for any
directly related business reasonably considered to be
financially beneficial to such business; in the case of the
Borrower engage in the business of acting as the holding
company of its Subsidiaries and Associated Partnerships (which
shall include the raising of Permitted Borrowings and the
onlending of such Borrowed Money to TCN Entities or to
Telewest in accordance with the provisions of this Agreement)
and in no other activities;
(f) Financial statements
prepare financial statements of the Borrower and consolidated
financial statements of the Telewest Group and the TCN Group
in accordance with GAAP and cause such financial statements to
be reported on by their respective auditors and deliver to the
Agent sufficient copies of the same for distribution to all of
the Banks, unless such Bank is also a bank under the Senior
Loan Agreement and such document is deliverable to it under
the Senior Loan Agreement, as soon as practicable but not
later than 180 days after the end of the financial year to
which they relate;
(g) Quarterly Management Accounts
in respect of each Quarterly Period, prepare unaudited
consolidated Quarterly Management Accounts for the TCN Group
and the Telewest Group in each case containing information of
the same type and to the same level of detail as in the format
agreed with the Arrangers (including, without limitation, a
profit and loss account, balance sheet, cash flow statement
<PAGE>
and, in relation to each Region, a summary of operating
statistics in the agreed form and, in the case of the last
Quarterly Period of each financial year, a profit and loss
account, balance sheet and cash flow statement for that
financial year in the agreed form) or omitting any such
information or detail or containing such other information or
to such other level of detail or containing such other
information or to such other level of detail as may, from time
to time, be approved by the Agent (acting on the instructions
of the Majority Banks) in writing and deliver a copy of the
same to the Agent for distribution to all of the Banks as soon
as practicable but not later than 30 days (in the case of the
last Quarterly Period of each financial year, 50 days) after
the Quarterly Period to which they relate;
(h) Monthly Management Accounts
in respect of each calendar month ending during the Revolving
Period (and in respect of each calendar month after the end of
the Revolving Period for which the Borrower so chooses),
prepare unaudited consolidated Monthly Management Accounts for
the TCN Group in each case containing information of the same
type and to the same level of detail as in the format agreed
with the Arrangers (including, without limitation, a profit
and loss account, balance sheet and cash flow statement) or
omitting any such information or detail or containing such
other information or to such other level of detail or
containing such other information or to such other level of
detail as may, from time to time, be approved by the Agent
(acting on the instructions of the Majority Banks) in writing
and deliver a copy of the same to the Agent for distribution
to all of the Banks as soon as practicable but not later than
30 days (in the case of the last calendar month of each
financial year 50 days) after the calendar month to which they
relate;
(i) Change in basis of accounts
the Borrower shall ensure that all financial statements
delivered under Clause 10.1(f) are prepared in accordance with
GAAP and in accordance with the accounting principles and
practices used in the preparation of the financial statements
referred to in clause 9.1(h)(i) and the 1998 Budget (the
"ORIGINAL BASIS") consistently applied in respect of each
financial year unless to do so would be inconsistent with then
current GAAP (the "NEW BASIS"). If the preparation of
financial statements on the Original Basis is contrary to New
Basis then the Borrower shall promptly notify the Agent in
writing of the relevant change and (at the option of the
Borrower) shall either (1) prepare and deliver to the Agent
audited financial statements on both the Original Basis and
the New Basis (or shall prepare and deliver financial
statements on the New Basis only but shall also prepare and
deliver an audited reconciliation statement (a "RECONCILIATION
STATEMENT") showing those adjustments necessary in order to
reconcile the financial statements produced on the New Basis
<PAGE>
to the Original Basis) or (2) request the Agent to enter into
good faith negotiations for such amendment (if any) as are
necessary to the covenants contained in Clause 12.1 and any
other provisions of this Agreement affected by such change, in
which event the Agent will enter into such negotiations for a
period of not more than 28 days. If agreement is reached
between the Borrower and the Agent (acting on the instructions
of the Majority Banks) within such period as to the amendment
of any such covenants or provisions, then the parties hereto
will enter into such documentation and take such other steps
as are required to put such amendments into effect following
which the Borrower shall then be obliged to produce financial
statements on the New Basis only. If no such agreement is
reached then the Borrower shall be obliged to prepare and
deliver financial statements on both the Original Basis and
the New Basis (or shall prepare and deliver audited financial
statements on the New Basis accompanied by a Reconciliation
Statement).
Where the Borrower is under an obligation to deliver financial
statements under clause 10.1(f) on both the Original Basis and
the New Basis (or on the New Basis but accompanied by a
Reconciliation Statement), Monthly Management Accounts and
Quarterly Management Accounts shall also be delivered on both
bases or on the New Basis but accompanied by a Reconciliation
Statement.
All financial statements, Quarterly Management Accounts,
Monthly Management Accounts and Reconciliation Statements
delivered pursuant to this clause 10.1(i) shall be delivered
within the relevant time period set out in clause 10.1.
The provisions of this clause 10.1(i) shall also apply,
mutatis mutandis, to the preparation and delivery of the
Annual Budget under clause 10.1(j)(a)(iii);
(j) Delivery of reports
deliver to the Agent, for distribution to the Banks (in the
case of a Compliance Certificate issued by the auditors of the
TCN Group) sufficient copies for all of the Banks, unless such
Bank is also a bank under the Senior Loan Agreement and such
document is deliverable to it under the Senior Loan Agreement,
or (in any other case):
(a) each of the following documents, in each case at the
time of issue thereof or (in the case of the
Compliance Certificates referred to in (ii) below)
together with the financial statements prepared in
respect of each financial year and Quarterly
Management Accounts prepared in respect of each
Quarterly Period pursuant to clause 10.1(g) in
respect of the financial period to which such
Compliance Certificate relates:
<PAGE>
(i) every document issued by the Borrower to its
shareholders (in their capacity as a
shareholder) or issued by the Borrower or any of
its Subsidiaries or Associated Partnerships to
its creditors generally;
(ii) a Compliance Certificate stating that the
Borrower and each other member of the TCN Group
as at the last day of the financial period to
which such financial statements or Quarterly
Management Accounts relate were in compliance
with the relevant covenants and undertakings in
clause 12 (or if it was not in compliance
indicating the extent of the breach);
(iii) an Annual Budget for each financial year for the
TCN Group no later than 45 days after the
beginning of such financial year; and
(iv) no later than 90 days after the end of each
financial year, for the avoidance of doubt, not
including the financial year ending 31st
December 1997, revised financial projections and
revised projections for operating statistics in
relation to the TCN Group containing information
of the same type and to the same level of detail
as the operational statistics projections
contained in the Long Range Plan, such
projections to extend to at least the earlier of
(a) ten years from the end of such financial
year and (b) 31 December 2007 and to contain
details of the assumptions on the basis of which
such projections have been prepared and an
explanation of any discrepancies from the most
recently delivered financial projections and
projections for operating statistics delivered
under this sub-paragraph (j)(iv) (or, in the
case of the first such financial projections,
from the base case financial projections or
operating statistics projections (as the case
may be) contained in the Long Range Plan); and
(b) sufficient copies for all of the Banks of every document
or announcement issued by Telewest to its shareholders
generally or made available by Telewest to the public
where any such document or announcement relates to the
financial position or prospects of Telewest;
(k) Financial Year End
maintain a financial year end of 31 December for each TCN
Entity;
<PAGE>
(l) Authorised Officers
ensure that any new or replacement Authorised Officer has
provided the Agent with evidence satisfactory to it of such new
officer(s)' authority and a specimen of his or their
signature(s) prior to signing any Compliance Certificates,
Drawdown Notices, Rollover Notices, Conversion Notices or any
other notices, requests or confirmations referred to in this
Agreement or relating to the facility granted pursuant to this
Agreement;
(m) Auditors
ensure that KPMG Peat Marwick is appointed as auditors of each
TCN Entity and not change such appointment without appointing a
major firm of recognised international standing and repute;
(n) Provision of Further Information
notify the Agent of any change to the business of any TCN Entity
where due to such change such business would thereafter be
carried on in a different Region providing details of such
change as soon as practicable after making such change and
provide the Agent with a copy of (i) each Principal Agreement
entered into after the date of this Agreement and (ii) any
material report, notice or other communication relating to the
Licences, the Necessary Authorisations and such financial and
other information concerning each TCN Entity and their
respective affairs as the Agent or any Bank (acting through the
Agent) may from time to time reasonably require;
(o) Insurance
maintain insurance cover in accordance with the terms and
conditions of the Security Documents and ensure that such
insurance cover is governed by English law;
(p) Inspection
permit representatives of the Agent or any of the Banks upon
three Banking Days' prior written notice to the Borrower and
after having made arrangements with the Borrower so to do to (a)
visit and inspect the properties of any TCN Entity during normal
business hours, (b) inspect and make extracts from and copies of
its books and records and (c) discuss with its principal
officers and auditors, its business, assets, liabilities,
financial position, results of operations and business
prospects;
(q) Notification of Environmental Claim and Expenditure
promptly on becoming aware of it inform the Agent of any
Environmental Claim which has been made or threatened against
any member of the TCN Group or any occupier of any property
owned or leased by any member of the TCN Group or any
<PAGE>
requirement by any Environmental Licence or applicable
Environmental Laws for any member of the TCN Group to make any
investment or incur any expenditure in excess of (pound)500,000
in aggregate in any calendar year or to take or desist from
taking any action which would or is reasonably likely, if
substantiated, to have a Material Financial Adverse Effect;
(r) Delivery of Environmental Licences and other information
promptly on receipt provide the Agent with copies of all
material Environmental Licences and the terms and conditions
thereof and any material amendments thereto;
(s) Compliance with laws and regulations
comply with the terms and conditions of all laws (other than
Telecommunications and Cable Laws, the Licences and the
Necessary Authorisations including any milestone requirements in
respect thereof), regulations, agreements, licences and
concessions including, without limitation, all Environmental
Laws and all Environmental Licences if the failure to comply
therewith, would or is reasonably likely, in the opinion of the
Agent, to have a Material Financial Adverse Effect;
(t) Relevant Substance
notify the Agent forthwith upon becoming aware of any Relevant
Substance at or brought on to any property owned, leased or
occupied by any member of the TCN Group which is likely to give
rise to an Environmental Claim which would or is reasonably
likely to have a Material Financial Adverse Effect and take or
procure the taking of all necessary action to deal with, remedy
or remove from such property or prevent the incursion of (as the
case may be) that Relevant Substance in order to prevent such an
Environmental Claim and in a manner that complies with all
requirements of Environmental Law;
(u) Taxes
file or cause to be filed all tax returns required to be filed
in all jurisdictions in which it is situated or carries on
business or is otherwise subject to Taxation and will pay all
Taxes shown to be due and payable on such returns or any
assessments made against it within the period stipulated for
such payment (other than those being contested in good faith and
where such payment may be lawfully withheld);
(v) Cost capitalisation policy
maintain a cost capitalisation policy consistent with the cost
capitalisation policy used in the preparation of the financial
statements referred to in clause 9.1(h)(i) or such other cost
capitalisation policy as may be approved by the auditors and the
Agent (acting on the instructions of the Majority Banks) from
time to time;
<PAGE>
(w) Use of Proceeds
ensure that the Borrower uses the Loan exclusively for the
purposes specified in clause 1.1;
(x) New TCN Entities
it will and will procure that each Subsidiary or Associated
Partnership that is or becomes a member of the TCN Group (other
than an Immaterial Group Entity unless such Immaterial Group
Entity no longer complies with the definition of Immaterial
Group Entity) and which is not already a party to this Agreement
promptly upon such Subsidiary or Associated Partnership becoming
a member of the TCN Group, executes and delivers a Supplemental
Deed and provides the Agent with such evidence as it may
reasonably request as to the power and authority of such party
to enter into such Supplemental Deed and that such Supplemental
Deed constitutes (subject to any qualifications contained in any
legal opinions delivered in connection therewith and reasonably
acceptable to the Majority Banks and for this purpose any
statement contained in the qualification to any such legal
opinion that no opinion is given or expressed in relation to any
particular matter shall be deemed to be a qualification of such
opinion as regards such matter) valid and legally binding
obligations of such party enforceable in accordance with its
terms. The parties hereto agree that upon the execution and
delivery of such Supplemental Deed by all parties thereto such
Subsidiary or Associated Partnership shall become a party to
this Agreement as a TCN Entity and a party to each relevant
Security Document as a chargor;
(y) Maintain Operating Capacity
ensure that the TCN Group will maintain:
(i) managerial, subscriber and technical services from time
to time sufficient, in the reasonable opinion of the
Borrower to meet the projected demand from Subscribers
for cable television and telephony services at that
time; and
(ii) switch capacity from time to time sufficient, based on
the projections most recently delivered under Clause
10.1(j)(a)(iv) (or, if none, the projections contained
in the Long Range Plan), to meet the projected demand
from Subscribers for cable telephony services at that
time;
(z) Reimbursement Agreement
comply with their respective obligations under the Reimbursement
Agreement and not assign or transfer all or any part of their
respective rights and/or obligations under the Reimbursement
Agreement or amend, vary or waive all or any of the provisions
of the Reimbursement Agreement;
<PAGE>
(aa) Security Documents
provide to the Security Trustee within six months of the date
of this Agreement, the Debenture, the Deed of Subordination,
the Telewest Loan Assignment, the Telewest National Network
Licence Assignment, the Share Charge and the Security Trust
Deed, each duly executed by each party thereto other than the
Security Trustee;
(bb) 1998 Financial Statements
deliver to the Agent sufficient copies for all the Banks of
consolidated financial statements of both the Telewest Group
and the TCN Group in respect of the financial year ending 31st
December, 1998 within 120 days of the end of such financial
year and reported on by their respective auditors so that the
report of the auditors on such consolidated financial
statements is not qualified in any way whatsoever except where
the qualification is of a technical nature and the remedy for
the matter giving rise to such qualification would have no
effect on the results of the Telewest Group or the TCN Group,
as the case may be for the period to which such accounts
relate or on the financial position of the Telewest Group or
the TCN Group, as the case may be, as at the end of such
periods; and
(cc) Acceding TCN Entities
ensure that:
(i) the Acceding TCN Entities accede to this Agreement and
the relevant Security Documents within 14 days of the
date hereof, and the parties hereto acknowledge that
this shall be in accordance with and in due satisfaction
of the covenant set out in Clause 10.1(x) hereof; and
(ii) within 28 days of the date hereof, the articles of the
Borrower and the Acceding TCN Entities shall be amended
in a similar manner to the equivalent amendment to the
articles to certain TCN Entities effected at or about
the date of the Senior Loan Agreement in order to
prevent the directors of the Borrower or the relevant
Acceding TCN Entity refusing to register any transfer of
the shares in the Borrower or the relevant Acceding TCN
Entity charged pursuant to any relevant Security
Document.
<PAGE>
11 NEGATIVE COVENANTS
11.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the
Banks, each of the Arrangers, the Security Trustee and the Agent from
the date of this Agreement and so long as any monies are owing under
this Agreement or any of the Commitments remain outstanding that,
without the prior written consent of the Agent acting on the
instructions of the Majority Banks:
(a) Negative Pledge
they will not permit any Encumbrance (other than Permitted
Encumbrances) by any member of the TCN Group to subsist, arise
or be created or extended over all or any part of their
respective present or future undertakings, assets, rights or
revenues to secure or prefer any present or future Indebtedness
of any member of the TCN Group or any other person;
(b) No Merger
they will procure that no member of the TCN Group merges or
consolidates with any other company or person;
(c) Disposals
they will procure that no TCN Entity sells, transfers, leases,
lends or otherwise disposes of or ceases to exercise control
over the whole or any part of their present or future
undertakings, assets, rights or revenues whether by one or a
series of transactions related or not other than Permitted
Disposals, provided that in the case of any Permitted Intra-TCN
Group Transaction which involves any asset of any nature being
transferred by any means whatsoever (directly or indirectly) by
the Borrower, an Original Charging Subsidiary or an Original
Charging Partnership to another TCN Entity (not being the
Borrower, an Original Charging Subsidiary or an Original
Charging Partnership), the relevant transfer must be made
expressly subject to the security interests granted under the
Security Documents;
(d) Borrowed Money
they will procure that no member of the TCN Group creates,
assumes, incurs or otherwise permits to be outstanding any
Borrowed Money other than Permitted Borrowings;
(e) Guarantees
they will procure that no member of the TCN Group incurs any
obligations or assumes any liability under any guarantee other
than Permitted Guarantees;
<PAGE>
(f) Issue of Shares
neither the Borrower nor any other member of the TCN Group
issues any shares of any class provided that the Borrower may
issue shares to Telewest and any member of the Group may issue
shares to any TCN Entity provided that such shares are charged
in favour of the Security Trustee pursuant to the terms of a
Security Document and there are delivered to the Security
Trustee at the same time, if the Borrower is not and may not
be obliged to deliver them under the Senior Loan Agreement or
any security document relating to the Senior Loan Agreement,
the relevant share certificates and blank stock transfer forms
in respect thereof;
(g) Investments
they will procure that no member of the TCN Group (i) makes
any loan or advance to, or enters into any transaction having
the effect of lending money with, any person or otherwise
acquires for a consideration any document evidencing
Indebtedness, capital stock or other securities of any person
or (ii) acquires all or any substantial part of the assets,
property or business of any other person or any assets that
constitute a division or operating unit of the business of any
other person or creates or acquires any Subsidiary or
Associated Partnership other than in the case of any of (i)
and (ii) above, Permitted Investments;
(h) Capital Expenditure
they will procure that no member of the TCN Group incurs any
capital expenditure other than (a) in relation to the business
of constructing, installing, operating and utilising cable
television and telecommunications systems in the area
permitted by the Licences or any directly related business
reasonably considered to be financially beneficial thereto or
(b) in Permitted Investments;
(i) Swaps and Hedging
they will procure that no member of the TCN Group enters into
any interest rate or currency swaps or other hedging
arrangements other than in the case of a TCN Entity (i)
directly relating to the risk management of any Borrowed Money
permitted to subsist by the terms of this Agreement or (ii)
forward foreign exchange contracts entered into in the normal
course of business in relation to future liabilities of such
TCN Entity incurred in relation to the construction,
maintenance or operation of the Cable Systems up to an
aggregate notional principal amount at any time outstanding of
(in respect of all such contracts entered into by TCN
Entities) (pound)80,000,000, for a period not in excess of 15
months and having an average life not in excess of nine
months;
<PAGE>
(j) Change of Business
they will procure that the TCN Group (taken as a whole) does
not change the nature of the business carried on by it in any
material respect from that carried on at the date of this
Agreement and that no TCN Entity ceases to carry on a business
where any such cessation would or is reasonably likely to have
a Material Adverse Effect;
(k) Memoranda and Articles of Association; Partnership Agreements
the Borrower will not, and will procure that no Charging
Subsidiary amends its Memorandum or Articles of Association in
any way which would restrict the ability of the Security
Trustee to exercise its rights under the Security Documents in
respect of the shares in such company and no Charging
Partnership will amend its partnership agreement in any way
which would restrict or impair the ability of the Security
Trustee to exercise its rights under the Pledge and Security
Agreements in respect of the partnership interests in such
partnership or otherwise as may be limited or prohibited under
the Pledge and Security Arrangements;
(l) Restricted Payments
they will procure that no member of the TCN Group makes any
Restricted Payment other than Permitted Payments;
(m) Services to Restricted Persons, TCI and US WEST
they will procure that no TCN Entity enters into any
contractual or other arrangements with a Restricted Person or
any of the Ultimate Shareholders or any of their Subsidiaries
or Associated Partnerships other than on bona fide arms length
commercial terms in the ordinary course of trading or
contractual arrangements between Telewest and the Borrower
regulating any Subordinated Debt which is the subject of a
Deed of Subordination;
(n) Liabilities of Restricted Persons
they will procure that no Restricted Person has outstanding
any liabilities to any TCN Entity which, when aggregated with
the liabilities of that Restricted Person to each other TCN
Entity and of each other Restricted Person to each TCN Entity,
exceeds (pound)100,000.
In this clause 11.1(n) "LIABILITIES" of a Restricted Person to
a TCN Entity shall mean liabilities incurred after the date
hereof and shall include, without limitation, (i) any
liabilities of that TCN Entity to a third party entered into
on behalf of that Restricted Person and (ii) any payments made
by that TCN Entity on behalf of that Restricted Person, in
either case where such liabilities or payments have not been
discharged or reimbursed but shall exclude any liabilities of
a Restricted Person to a TCN Entity which are a Permitted
Investment by that TCN Entity in that Restricted Person;
<PAGE>
(o) No Carrying on Business in United States
None of the TCN Entities (i) shall employ any employees in the
State of Colorado or elsewhere in the United States and (ii)
shall carry on any business or maintain its principal places
of business, books and records and the property (other than
the interests in the Original Charging Partnerships) subject
to the Security Documents in the United States (except that,
in the case of any Charging Partnership formed in the State of
Colorado, if it maintains an office in the United States of
America, it maintains such an office in the State of
Colorado). Control and management of each of the TCN Entities
shall take place outside the United States of America; and
(p) Senior Loan Agreement
they will not permit:
(i) any increase in the commitments under the Senior Loan
Agreement; and
(ii) the granting of further security thereunder other than
in circumstances where second ranking security or, if
such security is not legally possible, such other
security as is legally possible over the same property
has been granted concurrently to the Security Trustee
for the obligations hereunder.
12 FINANCIAL COVENANTS
12.1 Covenants
Each TCN Entity jointly and severally undertakes with each of the
Banks, the Arrangers, the Security Trustee and the Agent:
(a) Minimum Consolidated TCN Group Net Operating Cash Flow
to ensure that from (and including) the date hereof to (but
excluding) the second consecutive Quarter Day (as shown in the
relevant Compliance Certificates) upon which Total TCN Group
Debt is equal to or less than five times Consolidated
Annualised TCN Group Net Operating Cash Flow (i) on each
Quarter Day as shown in the relevant Compliance Certificate
and (ii) on the last day of each financial year as shown in
the relevant Compliance Certificate, the amount of
Consolidated TCN Group Net Operating Cash Flow on any Quarter
Day set out in column (1) below for the preceding Six Month
Period shall not be less than the amount set out opposite that
Quarter Day in column (2) below:
<PAGE>
<TABLE>
<CAPTION>
(1) (2)
QUARTER DAY CONSOLIDATED TCN GROUP NET OPERATING
CASHFLOW
(POUND)000S
<S> <C>
31 March 1998 40,000
30 June 1998 46,000
30 September 1998 54,000
31 December 1998 64,000
31 March 1999 71,000
30 June 1999 74,000
30 September 1999 84,000
31 December 1999 98,000
31 March 2000 110,000
30 June 2000 118,000
30 September 2000 129,000
31 December 2000 147,000
31 March 2001 180,800
30 June 2001 204,800
30 September 2001 213,500
31 December 2001 230,900
31 March 2002 260,700
30 June 2002 286,400
30 September 2002 295,200
31 December 2002 304,000
31 March 2003 325,400
30 June 2003 348,800
30 September 2003 359,600
<PAGE>
31 December 2003 370,400
31 March 2004 391,100
30 June 2004 413,800
30 September 2004 426,600
31 December 2004 439,400
31 March 2005 451,500
30 June 2005 465,300
30 September 2005 479,700
31 December 2005 494,100
</TABLE>
(b) Senior Tranche B Loan/Consolidated Annualised TCN Group Net
Operating Cash Flow
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below the ratio of the Senior Tranche B Loan to
Consolidated Annualised TCN Group Net Operating Cash Flow
calculated by reference to the Six Month Period ending on such
day (as shown in the relevant Compliance Certificate) shall
not exceed the number set out against such period in column
(2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from the date of this Agreement to (and 6.5
including) 31 December 1998
from 1 January 1999 to (and including) 6.0
30 June 1999
from 1 July 1999 to (and including) 31 5.0
December 1999
from 1 January 2000 to (and including) 4.0
31 December 2000
thereafter 3.5
</TABLE>
(c) Senior Facility Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
<PAGE>
column (1) below the ratio of Consolidated TCN Group Net
Operating Cash Flow in respect of the Six Month Period ending
on such day to Senior Facility Debt Interest Charges for such
Six Month Period shall not be less than the number set out
against such period in column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 January 1998 to (and including) 31 1.50:1
December 1998
from 1 January 1999 to (and including) 31 2.00:1
December 1999
from 1 January 2000 to (and including) 30 2.50:1
June 2000
from 1 July 2000 to (and including) 31 3.00:1
December 2000
from 1 January 2001 onwards 4.00:1
</TABLE>
(d) TCN Group Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below the ratio of Consolidated TCN Group Net
Operating Cash Flow in respect of the Six Month Period ending
on such day to Total TCN Group Cash Paying Debt Interest
Charges during such Six Month Period shall not be less than
the number set out against such period in column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 January 1998 to (and including) 30 1.00 : 1
June 1998
from 1 July 1998 to (and including) 31 1.20 : 1
December 1998
from 1 January 1999 to (and including) 30 1.25 : 1
June 1999
from 1 July 1999 to (and including) 31 1.35 : 1
December 1999
<PAGE>
from 1 January 2000 to (and including) 31 1.50:1
March 2000
from 1 April 2000 to (and including) 30 1.75 : 1
September 2001
from 1 October 2001 to (and including) 31 2.00: 1
March 2002
from 1 April 2002 to (and including) 30 2.25 : 1
June 2002
from 1 July 2002 to (and including) 31 2.50 : 1
December 2002
from 1 January 2003 to (and including) 31 2.75 : 1
March 2003
from 1 April 2003 onwards 3.00 : 1
</TABLE>
(e) Telewest Group Debt Interest Cover
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below the ratio of Consolidated Telewest Group Net
Operating Cash Flow in respect of the Six Month Period ending
on such day to Total Telewest Group Cash Paying Debt Interest
Charges during such Six Month Period shall not be less than
the number set out against such period in column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 January 1998 to (and including) 31 1.00 : 1
December 1998
from 1 January 1999 to (and including) 31 1.25 : 1
December 1999
from 1 January 2000 onwards 1.50 : 1
</TABLE>
(f) Pro-Forma Total Telewest Group Debt Service Cover
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below, the ratio of Consolidated Annualised
Telewest Group Net Operating Cash Flow calculated by reference
<PAGE>
to the Six Month Period ending on such day to Proforma Total
Telewest Group Debt Service (as shown in the relevant
Compliance Certificate) shall not be less than the number set
against such period in column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 January 1999 up to (and including) 1.00 : 1
31 December 2001
from 1 January 2002 to (and including) 31 1.20 : 1
December 2002
from 1 January 2003 to (and including) 31 1.40 : 1
December 2003
from 1 January 2004 onwards 1.50 : 1
</TABLE>
(g) Pro-forma Total TCN Group Debt Service Cover
to ensure that (i) on each Quarter Day falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below, the ratio of Consolidated Annualised TCN
Group Net Operating Cash Flow calculated by reference to the
Six Month Period ending on such day to Proforma Total TCN
Group Debt Service (as shown in the relevant Compliance
Certificate) shall not be less than the number set out against
such period in column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 April 2000 up to (and including) 31 1.00 : 1
December 2001
from 1 January 2002 to (and including) 31 1.20 : 1
December 2002
from 1 January 2003 to (and including) 31 1.40 : 1
December 2003
from 1 January 2004 onwards 1.50 : 1
</TABLE>
(h) Total TCN Secured Debt
to ensure that (i) on each Quarter Date falling within the
period set out in column (1) below and (ii) on the last day of
each financial year falling within the period set out in
column (1) below the ratio of Total TCN Secured Debt to
Consolidated Annualised TCN Group Net Operating Cash Flow
<PAGE>
calculated by reference to the Six Month Period ending on such
day shall not exceed the number set out against such period in
column (2) below:
<TABLE>
<CAPTION>
(1) (2)
PERIOD RATIO
<S> <C>
from 1 July 1999 to (and including) 31 6.0
December 1999
from 1 January 2000 to (and including) 31 5.0
December 2000
from 1 January 2001 to (and including) 30 4.5
June 2001
from 1 July 2001 to (and including) 31 4.0
December 2001
thereafter 3.5
</TABLE>
12.2 Auditors certificate
If at any time the Majority Banks do not consider (acting reasonably)
that any figure set out in any Compliance Certificate issued by any
Authorised Officer is correct, they shall be entitled within 30 days of
the date of the delivery of such Compliance Certificate to the Agent
pursuant to clause 10.1 to call for a certificate from the Borrower's
auditors as to such figure. For such purposes the Borrower's auditors
shall act as independent experts and not as arbiters and every such
certificate shall be addressed to the Agent (on behalf of the Banks)
and be at the expense of the Borrower. The Majority Banks may only call
for one such certificate in any calendar year. If the Majority Banks
call for such a certificate all calculations under this Agreement by
reference to the relevant figure shall (i) until the Borrower's
auditors deliver the relevant certificate under this clause 12.2 be
made by reference to the figure set out in the relevant Compliance
Certificate delivered to the Agent under this Agreement and (ii)
following the delivery by the Borrower's auditors of a certificate
under this clause 12.2 be made by reference to such certificate and the
Borrower undertakes forthwith to take all action, including, without
limitation, the prepayment of all or part of the Loan so as to procure
that all action taken on the basis of the relevant Compliance
Certificate which on the basis of such auditors certificate would not
have been permitted is reversed.
13 EVENTS OF DEFAULT
13.1 Events of Default
Each of the following events and circumstances is an Event of Default
(whether or not caused by any reason outside the control of any TCN
Entity):
<PAGE>
(a) Non-payment
(i) any principal amount due and payable under this Agreement
is not paid on the due date or (ii) an amount of interest due
and payable under this Agreement is not paid within 3 Banking
Days of the due date or (iii) any other sum due and payable
under this Agreement is not paid within 5 Banking Days of the
due date, and, in each such case, in the manner stipulated in
this Agreement; or
(b) Breach of certain obligations
(i) any TCN Entity commits any breach of the undertakings
contained in clauses 10.1(a), (c)(i)(A) and (B), (e),
(k) and (cc), 11.1(a), (b), (c), (f), (g), (h), (i),
(j), (k) and (l), and 12.1; or
(ii) any TCN Entity commits any breach of the undertakings
contained in clauses 11.1(d) and (e) and, in respect of
any such breach where the principal amount of the
relevant Borrowed Money or guarantee does not exceed
(pound)1,000,000, such breach is not remedied within
five Banking Days of such breach; or
(c) Breach of other obligations
any TCN Entity or Telewest commits any breach of or omits to
observe any of the obligations or undertakings expressed to be
assumed by them under this Agreement (other than failure to
pay any sum when due or any breach of the undertakings
referred to in (b)) above or any of the Security Documents
and, in respect of any such breach or omission which in the
opinion of the Majority Banks is capable of remedy, such
remedial action as the Majority Banks shall require is not
carried out within 28 days of the Agent notifying the Borrower
of such default and of such remedial action; or
(d) Misrepresentation
any representation or warranty made or deemed to be made or
repeated by or in respect of any TCN Entity or Telewest in or
pursuant to this Agreement or the Security Documents or in any
notice, certificate or statement referred to in or delivered
under this Agreement or the Security Documents is or proves to
have been incorrect or misleading in any material respect on
the date on which it was made or deemed to be made or
repeated; or
(e) Challenge to security
any Security Document is not or ceases to be effective (unless
by reason of the Banks' or the Security Trustee's failure to
file any required UCC Statements in the United States) or any
TCN Entity or Telewest shall in any way challenge, or any
proceedings shall in any way be brought to challenge (and in
the case of a proceeding brought by someone other than any TCN
Entity or Telewest shall continue unstayed for 30 days) the
<PAGE>
prior status of the charges created by the Security Documents
or the validity or enforceability of the Security Documents
Provided that the creation or existence of the Permitted
Encumbrances shall not be deemed to be a challenge to the
prior status of such charges for the purposes of this clause
13.1(e); or
(f) Cross-default
(i) Borrowed Money of any member of the TCN Group or Telewest
(which, in aggregate and including for these purposes any
Borrowed Money referred to in clause 13.1(f)(ii) below,
exceeds (pound)7,500,000) is not paid when due (or within any
applicable grace period expressly contained in the agreement
relating to such Borrowed Money in its original terms) or
becomes due or (ii) any creditor of any member of the TCN
Group, or Telewest becomes entitled to declare any such
Borrowed Money in excess of (pound)7,500,000 (in aggregate)
due and payable prior to the date when it would otherwise have
become due; or
(g) Hedging Default
an event entitling the relevant counterparty to terminate any
arrangements in relation to interest rate hedging permitted
pursuant to clause 11.1(i) or any other interest rate or
currency swap or other hedging arrangements entered into by
any member of the TCN Group occurs and the aggregate notional
principal amounts of the swaps or other hedging arrangements
entitled to be so terminated exceeds (pound)25,000,000; or
(h) Appointment of receivers and managers
(i) any administrative or other receiver is appointed of any
member of the TCN Group (other than an Immaterial Group
Entity), or Telewest or any part of their respective assets
and/or undertakings or (ii) any other legal proceedings are
taken which are not irrevocably discharged or withdrawn within
28 days of the commencement thereof to enforce any Encumbrance
over all or any part of the assets of any member of the TCN
Group or Telewest; or
(i) Insolvency
any member of the TCN Group (other than an Immaterial Group
Entity) or Telewest is deemed unable to pay its debts within
the meaning of sections 123(1)(e) or (2) of the Insolvency Act
1986 or any member of the TCN Group, (other than an Immaterial
Group Entity) or Telewest otherwise becomes insolvent or stops
or suspends making payments (whether of principal or interest)
with respect to all or any class of its debts or is unable or
announces an intention so to do or admits inability to pay its
debts as they fall due; or
<PAGE>
(j) Legal process
any judgment or order made against any member of the TCN Group
(other than an Immaterial Group Entity) or Telewest is not
stayed or complied with within 28 days or a creditor attaches
or takes possession of, or a distress, execution,
sequestration, diligence (other than on the dependence of an
action) or other process is levied or enforced upon or sued
out against, any material part of the undertaking, assets,
rights or revenues of any member of the TCN Group (other than
an Immaterial Group Entity) or Telewest and is not discharged
within 28 days; or
(k) Compositions
any steps are taken or negotiations commenced, by any member
of the TCN Group (other than an Immaterial Group Entity) or
Telewest or by their respective creditors with a view to
proposing any kind of composition, compromise or arrangement
involving such company and any group or class of its creditors
generally; or
(l) Winding-up
(i) any member of the TCN Group (other than an Immaterial
Group Entity) or Telewest takes any action or any legal
proceedings are started (not being action or proceedings which
can be demonstrated to the satisfaction of the Agent by
providing an opinion of a leading firm of London solicitors to
that effect, is frivolous, vexatious or an abuse of the
process of the court or relates to a claim to which such
person has a good defence and which is being vigorously
contested by such body) for any member of the TCN Group (other
than an Immaterial Group Entity) or Telewest to be adjudicated
or found bankrupt or insolvent (other than for the purpose of
an amalgamation or reconstruction previously approved in
writing by the Agent acting on the instructions of the
Majority Banks) or (ii) an order is made or resolution passed
for the winding-up of any other member of the TCN Group (other
than an Immaterial Group Entity) or Telewest or a notice is
issued convening a meeting for the purpose of passing any such
resolution; or
(m) Administration
any petition is presented or other step is taken for the
purpose of the appointment of an administrator of any member
of the TCN Group (other than an Immaterial Group Entity) or
Telewest or an administration order is made in relation to any
member of the TCN Group (other than an Immaterial Group
Entity) or Telewest; or
(n) Analogous proceedings
there occurs, in relation to any member of the TCN Group
(other than an Immaterial Group Entity) or Telewest in any
country or territory in which any of them carries on business
<PAGE>
or to the jurisdiction of which courts any part of their
respective assets is subject, any event which, in the
reasonable opinion of the Agent, appears in that country or
territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 13.1(h) to (m)
inclusive or any member of the TCN Group or Telewest (subject
always to equivalent grace periods and de minimis amounts as
are referred to in such clauses being exceeded) otherwise
becomes subject, in any such country or territory, to the
operation of any law relating to insolvency, bankruptcy or
liquidation; or
(o) Change of control of Telewest
at any time prior to the second consecutive Quarter Day in
respect of which the relevant Compliance Certificates
demonstrate that each of the ratios of (A) Total TCN Group
Debt to Consolidated Annualised TCN Group Net Operating Cash
Flow and (B) Total Telewest Group Debt to Consolidated
Annualised Telewest Group Net Operating Cash Flow is less than
or equal to 3.0 times, either:
(i) TCI and US WEST (directly or indirectly) cease to hold
at least (1) if TCI or US WEST have at any time disposed
of any of their voting or economic interest in Telewest
Group to any third party (not being TCI, US WEST or any
entity controlled, directly or indirectly, by either of
them or by both of them together) 40 per cent. or (2)
otherwise, 30 per cent. of the voting and economic
interest in Telewest; or
(ii) any person or persons acting together in concert (other
than, for these purposes, TCI, US WEST, SBC and/or Cox
and/or any entities controlled, directly or indirectly,
by any of them or by any two or more of them together or
which controls any one or more of them) acquire either
(1) a greater voting or economic interest in Telewest
than TCI and US WEST (together, and directly or
indirectly) or (2) 40 per cent. of the voting and
economic interest in Telewest.
For these purposes persons "acting together in concert" means
persons who pursuant to an agreement or understanding (whether
formal or informal) actively co-operate together with a view
to acquiring all or any part of the voting and economic
interest in Telewest and those persons who are presumed to be
acting in concert for the purposes of the City Code on
Take-overs and Mergers shall also be deemed to be acting in
concert for these purposes; or
(p) Change of control of the Borrower or any Charging Subsidiary or
Charging Partnerships
(i) any Charging Subsidiary (other than an Immaterial Group
Entity and Telewest Communications (London South)
Limited) ceases to be a wholly owned and controlled
Subsidiary of the Borrower or any Charging Partnership
ceases to have as its sole partners members of the TCN
Group; or
<PAGE>
(ii) the Borrower ceases to be a wholly owned Subsidiary of
Telewest; or
(q) Principal Agreements
(i) any Principal Agreement is terminated, suspended,
revoked or cancelled or otherwise ceases to be in full
force and effect unless services of a similar nature to
those provided pursuant to such Principal Agreement are
at all times provided to the TCN Group on similar
commercial terms or on terms no less beneficial to the
relevant member of the TCN Group save where any such
services are provided on more onerous terms to the
relevant member of the TCN Group due to the mandatory
requirements of OFTEL, the Office of Fair Trading, the
Department of Trade and Industry, the European
Commission or any other regulatory body and any such
termination, suspension, revocation, cancellation or
cessation would have a Material Financial Adverse
Effect; or
(ii) any alteration or variation is made to any term of any
Principal Agreement which would have a Material
Financial Adverse Effect; or
(iii) any party breaches any term of or repudiates any of its
obligations under any of the Principal Agreements where
such breach or repudiation would have a Material
Financial Adverse Effect; or
(r) Unlawfulness
it becomes unlawful at any time for the Borrower, any TCN
Entity or Telewest to perform any of their respective material
(in the opinion of the Majority Banks) obligations under this
Agreement or the Security Documents or any of the material (in
the opinion of the Majority Banks) obligations of any TCN
Entity or Telewest under this Agreement and the Security
Documents becomes unenforceable in any way or there ceases to
be a second priority charge over the relevant property or
assets of the Borrower, any TCN Entity or Telewest as intended
and created by the Security Documents save for Permitted
Encumbrances; or
(s) Environmental matters
as a result of any Environmental Law: (a) the Agent, any of
the Arrangers, the Security Trustee or any of the Banks
becomes, in the opinion of the Agent, subject to a material
obligation (actual or contingent, in the case of any
contingent obligation, being one which, at the relevant time,
would be likely to arise) in relation to any Relevant
Substance on or from any property, owned, occupied or leased
by any member of the TCN Group or Telewest; or (b) the rights
<PAGE>
and claims of the Agent, any of the Arrangers, the Security
Trustee, or any of the Banks under this Agreement or any of
the Security Documents become subordinated to the claims and
rights of any competent agency of the United Kingdom or the
European Community; or
(t) Telecommunications and Cable Laws
any TCN Entity fails to comply with any term or condition of
any Telecommunications and Cable Law where such non-compliance
would or is reasonably likely to have a Material Adverse
Effect, in the opinion of the Agent,; or
(u) Repudiation
any TCN Entity or Telewest repudiates this Agreement or any
Security Document to which it is a party or does or causes or
permits to be done any act or thing evidencing an intention to
repudiate this Agreement or any such Security Document; or
(v) Seizure
all or a material part of the undertakings, assets, rights or
revenues of or shares or other ownership interests in the TCN
Group (taken as a whole) or Telewest are seized, nationalised,
expropriated or compulsorily acquired by or under the
authority of any government;
(w) Material events
any other event occurs or circumstances arise which in the
opinion of the Agent acting on the instructions of the
Majority Banks is likely materially adversely to affect the
ability of the TCN Group (taken as a whole) to fulfil all or
any of its obligations under this Agreement or any Security
Document.
13.2 Acceleration
(A) If at any time or during any period, (i) Telewest or any member
of the TCN Group (other than an Immaterial Group Entity) shall
reside or have a domicile, a place of business or a property in
the United States (to the extent that such residence, domicile,
place of business or property is sufficient for a person to
become a "debtor" under section 109(a) of the U.S. Federal
Bankruptcy Code) and (ii) an Event of Default specified in
clauses 13.1(h) to (n) shall have occurred and be continuing in
respect of Telewest or any such member of the TCN Group, as
applicable, in furtherance of which Event of Default an order
for relief with respect to Telewest or such member of the TCN
Group, as applicable, shall actually be (or shall be deemed to
have been) entered under the U.S. Federal Bankruptcy Code, then
the obligation of each Bank to make its Commitment available
shall be automatically terminated and the Loan and all interest
and commitment commission accrued and all other sums payable
under this Agreement immediately shall become due and payable.
<PAGE>
(B) At any time after the happening of any Event of Default (other
than in the circumstances set out in sub-clause (A) above), so
long as the same is continuing and so long as either (1) the
agent under the Senior Loan Agreement has accelerated the Senior
Loan under clause 13.2 of the Senior Loan Agreement or (2) 365
days have elapsed since the occurrence of the Event of Default,
the Agent may, and if so requested by the Majority Banks shall,
without prejudice to any other rights of the Banks, by notice to
the Borrower declare that:
(a) the obligation of each Bank to make its Commitment
available shall be terminated, whereupon the
Commitments shall be reduced to zero forthwith;
and/or
(b) the Loan and all interest and commitment commission
accrued and all other sums payable under this
Agreement have become due and payable, whereupon the
same shall, immediately, or on demand or otherwise in
accordance with the terms of such notice, become due
and payable; and/or
(c) it and/or the Security Trustee shall exercise any of
the rights granted to the Agent, the Security Trustee
or the Banks under the Security Documents.
13.3 On demand basis
If, pursuant to clause 13.2(B)(b), the Agent declares the Loan to be
due and payable on demand then, at any time thereafter, the Agent may
(and, if so instructed by the Majority Banks, shall) by written notice
to the Borrower: (a) call for repayment of the Loan on such date as may
be specified in such notice whereupon the Loan shall become due and
payable on the date so specified together with all interest and
commitment commission accrued and all other sums payable under this
Agreement or (b) withdraw such declaration with effect from the date
specified in such notice.
14 INDEMNITIES
14.1 Miscellaneous Indemnities
The Borrower shall on demand indemnify each Bank, each Arranger, the
Security Trustee and the Agent, without prejudice to any of their other
rights under this Agreement, against any loss (including in the case of
(a) or (b) below loss of Margin) or expense which such Bank, such
Arranger, the Security Trustee or the Agent shall certify as sustained
or incurred by it as a consequence of:
<PAGE>
(a) any default in payment by the Borrower of any sum under this
Agreement when due;
(b) the occurrence of any other Event of Default;
(c) any repayment or prepayment of the Loan or part thereof being
made under clause 6 or 15.1 otherwise than on the last day of an
Interest Period relating to the part of the Loan repaid or
prepaid; or
(d) any Advance not being made for any reason (excluding any default
by the Agent or any Bank) after a Drawdown Notice has been
given,
including, but not limited to, any loss or expense sustained or
incurred by such Bank in maintaining or funding its Contribution or any
part thereof or in liquidating or re-employing deposits from third
parties acquired or contracted for to fund its Contribution or any part
thereof or any other amount owing to such Bank.
14.2 Currency Indemnity
If any sum due from the Borrower under this Agreement or any order or
judgment given or made in relation hereto has to be converted from the
currency (the "FIRST CURRENCY") in which the same is payable under this
Agreement or under such order or judgment into another currency (the
"SECOND CURRENCY") for the purpose of (a) making or filing a claim or
proof against the Borrower, (b) obtaining an order or judgment in any
court or other tribunal or (c) enforcing any order or judgment given or
made in relation to this Agreement, the Borrower agrees to indemnify
and hold harmless the Agent, each Arranger, the Security Trustee, and
each Bank from and against any loss suffered as a result of any
difference between (i) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (ii) the rate or rates of exchange at which the Agent,
such Arranger, the Security Trustee or such Bank may in the ordinary
course of business purchase the first currency with the second currency
upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. Any amount due from the
Borrower under this clause 14.2 shall be due as a separate debt and
shall not be affected by judgment being obtained for any other sums due
under or in respect of this Agreement and the term "rate of exchange"
includes any premium and costs of exchange payable in connection with
the purchase of the first currency with the second currency.
14.3 Environmental Indemnity
The Borrower agrees to indemnify on demand each Bank, each Arranger,
the Security Trustee and the Agent, and their respective officers,
employees, agents and delegates (together the "INDEMNIFIED PARTIES") in
respect of which each Bank, each Arranger, the Security Trustee and the
<PAGE>
Agent holds this indemnity on trust, without prejudice to any of their
other rights under this Agreement, against any loss, liability, action,
claim, demand, cost, expense, fine or other outgoing whatsoever whether
in contract, tort, delict or otherwise and whether arising at common
law, in equity or by statute which the relevant Indemnified Party shall
certify as sustained or incurred by it at any time as a consequence of,
or relating to, or arising directly or indirectly out of, an
Environmental Claims made or asserted against such Indemnified Party
which would not have arisen if this Agreement had not been executed and
which was not caused by the negligence or wilful default of the
relevant Indemnified Party.
15 UNLAWFULNESS AND INCREASED COSTS; MITIGATION
15.1 Unlawfulness
If it is or becomes contrary to any law or regulation for any Bank to
contribute to Advances or to maintain its Commitment or fund or
maintain its Contribution, such Bank shall promptly, through the Agent,
notify the Borrower whereupon (a) such Bank's Commitment shall be
reduced to zero and (b) the Borrower shall be obliged to prepay the
Contribution of such Bank on the earlier of (i) the date falling 30
days after the date of receipt by the Borrower of the relevant notice
pursuant to this clause or (ii) the latest date permitted by the
relevant law or regulation. Without prejudice to the reduction of such
Bank's Commitment to zero or the obligations of the Borrower to make
such repayment, the Borrower, the Agent and such Bank shall negotiate
for a period not exceeding 14 days with a view to such Bank making
available its Commitment and/or funding or maintaining its Contribution
in whole or in part in a manner which is not unlawful.
15.2 Increased Costs
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law or regulation, request or
requirement (whether or not having the force of law, but, if not having
the force of law, with which the relevant Bank or, as the case may be,
its holding company habitually complies) including, without limitation,
those relating to Taxation, capital adequacy, liquidity, reserve
assets, cash ratio deposits and special deposits is to:
(a) subject any Bank to Taxes or change the basis of Taxation of any
Bank with respect to any payment under this Agreement (other
than Taxes or Taxation on the overall net income, profits or
gains of such Bank imposed in the jurisdiction in which its
principal or lending office under this Agreement is located and
other than Taxes currently payable by such Bank on amounts
received by it under this Agreement but only to the extent so
payable at the date hereof); and/or
(b) increase the cost to, or impose an additional cost on, any Bank
or its holding company in making or keeping available all or
part of such Bank's Commitment or maintaining or funding such
Bank's Contribution; and/or
<PAGE>
(c) reduce the amount payable or the effective return to any Bank
under this Agreement; and/or
(d) reduce any Bank's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it
is required to allocate capital resources to such Bank's
obligations under this Agreement; and/or
(e) require any Bank or its holding company to make any additional
payment or forego (to a greater extent than at the date hereof)
a return calculated by reference to or on any amount received or
receivable by such Bank under this Agreement; and/or
(f) require any Bank or its holding company to incur or sustain a
loss (including a loss of future potential profits) additional
to that incurred or sustained at the date hereof by reason of
being obliged to deduct a greater part of such Bank's Commitment
or Contribution from its capital for regulatory purposes, than
is required to be deducted at the date hereof
then and in each such case (but subject to clauses 15.3 and 15.4):
(i) such Bank shall notify the Borrower through the Agent in
writing of such event promptly upon its becoming aware
of the same; and
(ii) the Borrower agrees to pay on demand, made at any time,
whether or not such Bank's Contribution has been repaid,
to the Agent for the account of such Bank the amount
which such Bank specifies (in a certificate setting
forth the basis of the computation of such amount but
not including any matters which such Bank or its holding
company regards as confidential) is required to
compensate such Bank and/or (if and to the extent that,
such holding company has passed the cost of the same on
to such Bank) its holding company for such liability to
Taxes, increased or additional cost, reduction, payment
or foregone return.
15.3 Exceptions
Nothing in this clause shall entitle any Bank to compensation for any
such increased cost, reduction, payment or foregone return (a) to the
extent that the same is taken into account in calculating the
Additional Cost or (b) to the extent that the same is the subject of an
additional payment under clause 8.7.
15.4 Further Exception
Nothing in this clause shall entitle any Bank to compensation for any
such increased cost, reduction, payment or foregone return which arises
as a consequence of any law or regulation implementing the proposals as
currently drafted for international convergence of capital measurement
and capital standards published by the Basle Committee on Banking
Regulations and Supervisory Practices in July 1988.
<PAGE>
15.5 Mitigation
If, in respect of any Bank, circumstances arise which would, or would
upon the giving of notice, result in:
(a) the Borrower being required to make an increased payment to such
Bank pursuant to clause 8.7;
(b) the reduction of such Bank's Commitment to zero or the Borrower
being required to prepay such Bank's Contribution pursuant to
clause 15.1; or
(c) the Borrower being required to make a payment to such Bank to
compensate such Bank for an increased cost, reduction, payment
or foregone return pursuant to clause 15.2(ii),
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under clauses 8 and 15, such Bank shall, in
consultation with the Agent, endeavour to take such reasonable steps as
may be open to it to mitigate or remove such circumstances including
(without limitation) the transfer of its rights and obligations under
this Agreement to another bank or financial institution acceptable to
the Borrower or a change of lending office of such Bank to one
acceptable to the Borrower unless, in either case, to do so might (in
the opinion of such Bank) be prejudicial to such Bank or be in conflict
with such Bank's general banking policies or involve such Bank in
expense or an increased administration burden.
16 SET-OFF AND PRO RATA PAYMENTS
16.1 Set-off
The Borrower authorises each Bank to apply any credit balance to which
the Borrower is then entitled on any account of the Borrower with such
Bank at any of its branches in or towards satisfaction of any sum then
due and payable from the Borrower to such Bank under this Agreement.
For this purpose each Bank is authorised to purchase with the moneys
standing to the credit of such account such other currencies as may be
necessary to effect such application. No Bank shall be obliged to
exercise any right given to it by this clause. Each Bank shall notify
the Agent and the Borrower forthwith upon the exercise or purported
exercise of any right of set-off giving full details in relation
thereto and the Agent shall inform the other Banks.
16.2 Pro Rata Payments
(a) If at any time any Bank (the "RECOVERING BANK") receives or
recovers any amount owing to it by the Borrower under this
Agreement by direct payment, set-off or in any manner (but
excluding any recoveries by virtue of any cash management or
interest netting arrangements operated by any Bank in its
capacity as a provider of day to day banking services to the TCN
Group to the extent that such arrangements are permitted by this
Agreement) other than by payment through the Agent pursuant to
<PAGE>
clause 8.1 or 8.11 (not being a payment received from an
Assignee, a Substitute or a Sub-Participant), the Recovering
Bank shall, within two Banking Days of such receipt or recovery
(a "RELEVANT RECEIPT") notify the Agent of the amount of the
Relevant Receipt. If the Relevant Receipt exceeds the amount
which the Recovering Bank would have received if the Relevant
Receipt had been received by the Agent and distributed pursuant
to clause 8.1 or 8.11 (as the case may be) then:
(i) within two Banking Days of demand by the Agent, the
Recovering Bank shall pay to the Agent an amount equal
to the excess;
(ii) the Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the
Borrower and shall distribute the same to the Banks
(other than the Recovering Bank) in accordance with
clause 8.11, and
(iii) as between the Borrower and the Recovering Bank the
excess amount so re-distributed shall be treated as not
having been paid but the obligations of the Borrower to
the other Banks shall, to the extent of the amounts so
re-distributed to them, be treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be
wholly or partly refunded by the Recovering Bank (whether to a
liquidator or otherwise) each Bank to which any part of such
Relevant Receipt was so re-distributed shall on request from the
Recovering Bank repay to the Recovering Bank such Bank's pro
rata share of the amount which has to be refunded by the
Recovering Bank.
(c) Each Bank shall on request supply to the Agent such information
as the Agent may from time to time request for the purpose of
this clause 16.2.
(d) Notwithstanding the foregoing provisions of this clause 16.2 no
Recovering Bank shall be obliged to share any Relevant Receipt
which it receives or recovers pursuant to legal proceedings
taken by it to recover any sums owing to it under this Agreement
with any other party which has a legal right to, but does not,
either join in such proceedings or commence and diligently
pursue separate proceedings to enforce its rights in the same or
another court (unless the proceedings instituted by the
Recovering Bank are instituted by it without prior notice having
been given to such party through the Agent).
16.3 No Release
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 16.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 16.2.
<PAGE>
16.4 No Charge
The provisions of this clause 16 shall not, and shall not be construed
so as to, constitute a charge by a Bank over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause
16.2.
17 ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
17.1 Benefit and Burden
This Agreement shall be binding upon, and enure for the benefit of, the
Banks, the Arrangers, the Agent, the Security Trustee, the TCN Entities
and their respective successors.
17.2 No Assignment by Borrower
None of the TCN Entities may assign or transfer any of its rights or
obligations under this Agreement.
17.3 Assignment by Banks
Each Bank (an "ASSIGNOR BANK") may assign all or any part (being at
least (pound)2,000,000 or, less than (pound)2,000,000 if the Bank is a
bank under the Senior Loan Agreement and the amount represents its
entire Commitment) of its rights in respect of its Contribution to any
Qualifying Bank (an "ASSIGNEE") with the prior written consent of the
Borrower (which shall not be unreasonably withheld or delayed) provided
that no such consent is necessary if (i) such Assignee is a wholly
owned Subsidiary of such Assignor Bank or a person of whom such
Assignor Bank is a wholly owned Subsidiary or (ii) a bank under the
Senior Loan Agreement. No Bank may assign all or any part of its rights
in respect of its Contribution to any person which is not a Qualifying
Bank.
17.4 Substitution
Each Bank (a "TRANSFEROR BANK") may transfer, by way of novation, all
or any part (being at least (pound)2,000,000 or, less than
(pound)2,000,000 if the Bank is a bank under the Senior Loan Agreement
and the amount represents its entire Commitment) of its rights,
benefits and/or obligations under this Agreement and the Security Trust
Deed to any Qualifying Bank (a "SUBSTITUTE") with the prior written
consent of the Borrower (which shall not be unreasonably withheld or
delayed) provided that no such consent is necessary if such Substitute
is a wholly-owned Subsidiary (being a Qualifying Bank) of such
Transferor Bank or a person (being a Qualifying Bank) of whom such
Transferor Bank is a wholly-owned Subsidiary if any such transfer would
not give rise to any obligation to make any payment on the part of the
Borrower which it would not have had to make at such time but for such
transfer. Any such novation shall be effected upon five Banking Days'
prior notice by delivery to the Agent of a duly completed Substitution
Certificate duly executed by such Bank, the Substitute and the Agent
(for itself, the Arrangers, the Security Trustee, the Borrower, the
Charging Subsidiaries and the other Banks). On the effective date
specified in a Substitution Certificate so executed and delivered, to
the extent that they are expressed in such Substitution Certificate to
be the subject of the novation effected pursuant to this clause 17.4:
<PAGE>
(a) the existing parties to this Agreement and the Bank party to the
relevant Substitution Certificate shall be released from their
respective obligations towards one another under this Agreement
and the Security Trust Deed ("DISCHARGED OBLIGATIONS") and their
respective rights against one another under this Agreement
("DISCHARGED RIGHTS") shall be cancelled;
(b) the Substitute party to the relevant Substitution Certificate
and the existing parties to this Agreement and the Security
Trust Deed (other than the Bank party to such Substitution
Certificate) shall assume obligations towards each other which
differ from the discharged obligations only insofar as they are
owed to or assumed by such Substitute instead of to or by such
Bank;
(c) the Substitute party to the relevant Substitution Certificate
and the existing parties to this Agreement and the Security
Trust Deed (other than the Bank party to such Substitution
Certificate) shall acquire rights against each other which
differ from the discharged rights only insofar as they are
exercisable by or against such Substitute instead of by or
against such Bank
and, on the date upon which such novation takes effect the Substitute
shall pay to the Agent for its own account a fee of (pound)500. The
Agent shall promptly notify the Borrower of the receipt by it of any
Substitution Certificate and deliver a copy thereof to the Borrower.
17.5 Reliance on Substitution Certificate
The Agent, the Banks, the Arrangers, the Security Trustee and each TCN
Entity shall be fully entitled to rely on any Substitution Certificate
delivered to the Agent in accordance with the foregoing provisions of
this clause 17 which is complete and regular on its face as regards its
contents and purportedly signed on behalf of the relevant Bank and the
Substitute and none of the Agent, the Banks, the Arrangers, the
Security Trustee or each TCN Entity shall have any liability or
responsibility to any party as a consequence of placing reliance on and
acting in accordance with any such Substitute Certificate if it proves
to be the case that the same was not authentic or duly authorised.
17.6 Authorisation of Agent
Each TCN Entity, each Arranger, the Security Trustee and each Bank
irrevocably authorises the Agent to counter-sign each Substitution
Certificate on its behalf without any further consent of, or
consultation with such TCN Entity, such Arranger, the Security Trustee
or such Bank except, in the case of the Borrower, the consent required
pursuant to clause 17.3 or 17.4.
<PAGE>
17.7 Construction of certain references
If any Bank assigns all or any part of its rights or novates all or any
part of its rights, benefits and obligations as provided in clause 17.3
or 17.4 all relevant references in this Agreement to such Bank shall
thereafter be construed as a reference to such Bank and/or its Assignee
or Substitute (as the case may be) to the extent of their respective
interests.
17.8 Lending offices
Each Bank shall lend through its office at the address specified in
Schedule 1 or, as the case may be, in any relevant Substitution
Certificate or through any other office located in the United Kingdom
of such Bank selected from time to time by such Bank through which such
Bank wishes to lend for the purposes of this Agreement. If the office
through which a Bank is lending is changed pursuant to this clause
17.8, such Bank shall notify the Agent promptly of such change.
17.9 Disclosure of information
Save as permitted pursuant to the terms of this Agreement or the
relevant Security Document any information furnished pursuant to this
Agreement or any Security Document to which the Borrower or any other
TCN Entity (as the case may be) is a party to the Agent, the Arranger,
the Security Trustee or the Banks shall be kept confidential by the
recipient and the Agent, the Arrangers, the Security Trustee and the
Banks, save that the provisions of this clause 17.9 shall not apply:
(a) to any information already known to the recipient;
(b) to any information subsequently received by the recipient which
it would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge
otherwise than as a result of a breach by any person of this
clause 17.9 or of any confidentiality undertaking entered into
pursuant to clause 17.11; and
(d) to any extent that the recipient is required to disclose the
same pursuant to any law or order of any court or order or
request of any governmental agency with whose instructions the
recipient habitually complies.
17.10 Sub-participation
No Bank may enter into any sub-participation arrangements in relation
to all or any part of its rights and obligations under this Agreement
with any person without the consent of the Borrower and the Agent.
17.11 Confidentiality undertaking
Any Bank, the Security Trustee, any Arranger or the Agent may, having
obtained the prior consent of the Borrower (such consent not to be
<PAGE>
unreasonably withheld) disclose to a prospective Assignee or Substitute
or to any other person who may propose entering into contractual
relations with such Bank, the Security Trustee, any Arranger or the
Agent in relation to this Agreement or any Security Document any
information referred to in clause 17.9 subject to the prospective
Assignee or Substitute or other person first entering into a
confidentiality undertaking with the Borrower and the other TCN
Entities in substantially the same terms as clause 17.9 and this clause
17.11.
18 ARRANGERS, AGENT AND REFERENCE BANKS
18.1 Appointment of Agent
Each Bank irrevocably appoints the Agent as its agent for the purposes
of this Agreement and any relevant Security Document and authorises the
Agent (whether or not by or through employees or agents) to take such
action on such Bank's behalf and to exercise such rights, remedies,
powers and discretions as are specifically delegated to the Agent by
this Agreement and/or any relevant Security Document, together with
such powers and discretions as are reasonably incidental thereto. None
of the Agent, the Arrangers or the Security Trustee shall, however,
have any duties, obligations or liabilities to the Banks beyond those
expressly stated in this Agreement and/or the Security Documents.
18.2 Amendments to this Agreement
(a) Subject to clause 18.2(b) and 18.2(c) and save where otherwise
provided in this Agreement, the Agent may, with the consent of
the Majority Banks (or if and to the extent expressly authorised
by the other provision of this Agreement), amend, modify or
otherwise vary or waive breaches of, or defaults under, or
otherwise excuse performance of, any provision of this Agreement
or any other Security Document entered into in favour of the
Agent. Any such action so authorised and effected by the Agent
shall be promptly notified to the Banks by the Agent and shall
be binding on all of the Banks.
(b) Except with the prior written consent of all of the Banks, the
Agent shall not have authority on behalf of the Banks (A) to
agree with any TCN Entity any amendment to this Agreement or to
grant waivers in respect of breaches of or defaults under this
Agreement or to excuse performance of this Agreement which would
(i) reduce the Margin, (ii) extend the due date or reduce the
amount of any payment of principal, interest or other amount
payable under this Agreement, (iii) change the currency in which
any amount is payable under this Agreement, (iv) increase any
Bank's Commitment, (v) change the definition of "Majority Banks"
in clause 1.2, (vi) change clauses 3.3, 4.2, 4.3, 15.2, 16.2 or
17.2, (vii) change this clause 18.2, (viii) change clause
11.1(p) (B) to release any asset of whatever nature that is
subject to a Security Document unless such release is to permit
the disposal or other dealing with such asset in accordance with
the terms of this Agreement or the relevant Security Document,
(C) to release any TCN Entity (other than an Immaterial Group
Entity) from all of its obligations under this Agreement and the
Security Documents or (D) to agree with any TCN Entity any
increase in the Commitments under the Senior Loan Agreement.
<PAGE>
(c) Each TCN Entity (other than TCN) irrevocably appoints TCN to act
on its behalf as its agent in relation to this Agreement and any
amendment agreement relating hereto and irrevocably authorises
TCN to execute on its behalf any amendments to this Agreement
without further reference to or the consent of such TCN Entity
and to give any waivers, consents and notices in relation to
this Agreement and any amendment agreement relating hereto and
to take any other action in relation to this Agreement and any
amendment agreement relating hereto.
(d) Except with the prior written consent of the Senior Agent, the
Agent shall not have authority on behalf of the Banks (A) to
agree to any reduction in the term of this Agreement or (B) to
agree to any waiver or reduction of the 365 day period in clause
13.2(B).
18.3 Rights of Agent, Security Trustee and each Arranger as Bank; no
partnership
With respect to its own Commitment and Contribution (if any) the Agent,
the Security Trustee and each Arranger shall have the same rights and
powers under this Agreement as any other Bank and may exercise the same
as though it were not performing the duties and functions delegated to
it under this Agreement and/or the Security Documents and the term
"Banks" shall, unless the context clearly otherwise indicates, include
the Agent, the Security Trustee, each Arranger in its individual
capacity as a Bank. This Agreement shall not and shall not be construed
so as to constitute a partnership between the parties or any of them.
18.4 No liability of the Arrangers, the Security Trustee and Agent
None of the Arrangers, the Security Trustee or the Agent shall:
(a) be obliged to request any certificate or opinion under clause 10
or 12 or to make any enquiry as to the use of the proceeds of
the Loan unless (in the case of the Agent) so required in
writing by any Bank, in which case the Agent shall promptly make
the appropriate request of the Borrower, or be obliged to make
any enquiry as to any default by the Borrower in the performance
or observance of any of the provisions of this Agreement or as
to the existence of a Default unless (in the case of the Agent)
the Agent has actual knowledge thereof or has been notified in
writing thereof by a Bank, in which case the Agent shall
promptly notify the Banks of the relevant event or circumstance;
or
(b) be liable to any Bank for any action taken or omitted under or
in connection with this Agreement or the Loan unless caused by
their or its gross negligence or wilful misconduct.
<PAGE>
For the purpose of this clause 18 neither the Agent nor the Security
Trustee shall be treated as having actual knowledge of any matter of
which the corporate finance or any other division outside the corporate
lending or loan administration departments of the person for the time
being acting as the Agent or the Security Trustee, as the case may be,
may become aware in the context of corporate finance or advisory
activities from time to time undertaken by the Agent or the Security
Trustee, as the case may be, for any TCN Entity, Telewest, any
Affiliate, any Ultimate Shareholder or any of their respective
Subsidiaries, Associated Partnerships or Affiliates.
18.5 Agent's duty to notify and take action
The Agent shall:
(a) promptly notify each Bank of the contents of each notice,
certificate or other document received by the Agent from the
Borrower under or pursuant to clause 11 and provide each Bank
with a copy of each set of financial statements, Monthly
Management Accounts or Quarterly Management Accounts delivered
to the Agent under clause 10.1(f), (g) or (h) unless such Bank
is also a bank under the Senior Loan Agreement and such document
is deliverable to it under the Senior Loan Agreement; and
(b) (subject to its being indemnified to its satisfaction) take such
action or, as the case may be, refrain from taking such action
with respect to any Default of which the Agent has actual
knowledge as the Majority Banks or Banks (as the case may be)
may reasonably direct.
18.6 Identity of the Banks
The Agent may deem and treat (a) each Bank as the person entitled to
the benefit of the Contribution of such Bank for all purposes of this
Agreement unless and until a notice of assignment of such Bank's
Contribution or any part thereof or a Substitution Certificate shall
have been filed with the Agent, and (b) the office set opposite the
name of each Bank in Part D of Schedule 1 or, as the case may be, in
any relevant Substitution Certificate as such Bank's lending office
unless and until a written notice of change of lending office shall
have been received by the Agent; and the Agent may act upon any such
notice unless and until the same is superseded by a further such
notice.
18.7 Non-reliance on the Arrangers, the Security Trustee or the Agent
Each Bank acknowledges that it has not relied on any statement,
opinion, forecast or other representation made by the Arrangers, the
Security Trustee or the Agent to induce it to enter into this Agreement
an that it has made and will continue to make, without reliance on the
Agent, the Arrangers or the Security Trustee and based on such
documents as it considers appropriate, its own appraisal of the
creditworthiness of each TCN Entity and Telewest and its own
independent investigation of the financial condition and affairs of
each TCN Entity and Telewest in connection with the making and
<PAGE>
continuation of the Loan under this Agreement. None of the Arrangers,
the Security Trustee or the Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information with respect to any TCN
Entity or Telewest, whether coming into their or its possession before
the making of any Advance or at any time or times thereafter, other
than (in the case of the Agent) as provided in clause 18.5(a).
18.8 No Responsibility on Arrangers, Security Trustee or Agent for
Borrower's, etc. performance
None of the Arrangers, the Security Trustee or the Agent shall have any
responsibility to any Bank on account of the failure of any TCN Entity
or Telewest, to perform their respective obligations under this
Agreement or the Security Documents or for the financial condition of
any TCN Entity or Telewest, or for the completeness or accuracy of any
statements, representations or warranties in this Agreement, the
Security Documents or any document delivered under this Agreement, the
Security Documents or for the execution, effectiveness, adequacy,
genuineness, validity, enforceability or admissibility in evidence of
this Agreement or the Security Documents or of any certificate, report
or other document executed or delivered under this Agreement or the
Security Documents or otherwise in connection with the Loan or its
negotiation or for acting (or, as the case may be, refraining from
acting) in accordance with the instructions of the Majority Banks or
all of the Banks (as the case may be). The Arrangers, the Security
Trustee and the Agent shall be entitled to rely on any communication,
instrument or document believed by them or it to be genuine and correct
and to have been signed or sent by the proper person and shall be
entitled to rely as to legal or other professional matters on opinions
and statements of any legal or other professional advisers selected or
approved by them or it.
18.9 Other dealings
The Arrangers, the Security Trustee and the Agent may, without any
liability to account to the Banks, accept deposits from, lend money to,
and generally engage in any kind of banking or trust business with,
each TCN Entity, Telewest or any of their respective Subsidiaries,
Associated Partnerships or Affiliates or any of the Banks as if they or
it were not an Arranger, the Security Trustee or the Agent (as the case
may be).
18.10 Reimbursement and indemnity by Banks
Each Bank shall reimburse the Arrangers, the Security Trustee and the
Agent (rateably in accordance with such Bank's Commitment, at any time
before the making of the first Advance or if no Advance is then
outstanding, or Contribution, at any other time) to the extent that
such Arranger, the Security Trustee or the Agent is not reimbursed by
the Borrower, for the charges and expenses incurred by such Arranger,
the Security Trustee and the Agent in connection with the negotiation,
preparation, syndication and execution of this Agreement and/or in
<PAGE>
contemplation of, or otherwise in connection with, the enforcement of,
or the preservation of any rights under, or in carrying out its duties
under, this Agreement and/or the Security Documents including (in each
case) the fees and expenses of legal or other professional advisers.
Each Bank shall indemnify the Agent and the Security Trustee (rateably
in accordance with such Bank's Commitment, at any time before the
making of the first Advance or if no Advance is then outstanding, or
Contribution, at any other time) against all liabilities, damages,
costs and claims whatsoever incurred by the Agent or the Security
Trustee (as the case may be) in connection with this Agreement and/or
the Security Documents or any document or report referred to in this
Agreement or the performance of its duties under this Agreement and/or
the Security Documents or any action taken or omitted by the Agent or
the Security Trustee (as the case may be) under this Agreement and/or
the Security Documents, unless such liabilities, damages, costs or
claims arise from the Agent's or the Security Trustee's (as the case
may be) own gross negligence or wilful misconduct.
18.11 Retirement of Agent
(a) The Agent may retire from its appointment as Agent under this
Agreement and/or the relevant Security Documents having given to
the Borrower and each of the Banks not less than 30 days' notice
of its intention to do so, provided that no such retirement
shall take effect unless there has been appointed by the Banks
(after consultation with the Borrower) as a successor agent:
(i) a Bank; or
(ii) any other reputable and experienced financial
institution with offices in London nominated and
accepted by the Majority Banks and to which the Borrower
has given its consent (such consent not to be
unreasonably withheld or delayed); or, failing such
nomination;
(iii) any reputable and experienced bank or financial
institution with offices in London nominated by the
Agent and to which the Borrower has given its consent
(such consent not to be unreasonably withheld or
delayed).
(b) All of the Banks (other than the Agent, in its capacity as a
Bank) may, having given to the Agent not less than 30 days'
notice of the intention to do so, remove the Agent from its
appointment as such under the Agreement. The removal shall
automatically be of effect on the expiry of the notice save,
where the Banks (other than the Agent, in its capacity as a
Bank) shall have failed to appoint a successor agent falling
within the requirements of clause 18.11(a) (i) or (ii), in which
case the removal shall be deferred until such appointment is
made. The Banks (other than the Agent, in its capacity as a
Bank) shall immediately notify the Agent in writing of their
making such appointment.
<PAGE>
(c) Upon any such successor as aforesaid being appointed, the
retiring Agent shall be discharged from any further obligation
under this Agreement and/or the relevant Security Documents and
its successor and each of the other parties to this Agreement
and/or the relevant Security Documents shall have the same
rights and obligations among themselves as they would have had
if such successor had been a party to this Agreement and/or the
relevant Security Documents in place of the retiring Agent.
18.12 Change of Reference Banks
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid, (b) the Commitment (if any) of any Reference Bank is reduced
to zero in accordance with clause 6.4 or 15.1, (c) a Reference Bank
assigns and/or novates the whole of its rights and obligations (if any)
as a Bank under this Agreement or (d) any Reference Bank ceases to
provide quotations to the Agent for the purposes of determining LIBOR,
the Agent may, acting on the instructions of the Majority Banks,
terminate the appointment of such Reference Bank and after consultation
with the Borrower appoint another Bank to replace such Reference Bank.
18.13 Security Documents
Each Bank acknowledges and agrees to the terms and conditions of the
Security Documents and the Security Trustee and the Banks agree that
the Banks will, subject to the terms of the Security Trust Deed, be
entitled to all the rights and subject to the liabilities and
obligations of the Banks under the Debenture and any other Security
Document entered into by the Security Trustee for the benefit of the
Banks.
19 NOTICES AND OTHER MATTERS
19.1 Notices
Every notice, request, demand or other communication under this
Agreement shall, if addressed to the Borrower, be copied to Telewest
and, if addressed to any other TCN Entity, be copied to the Borrower
and Telewest, and shall:
(a) be in writing delivered personally or by first-class prepaid
letter (airmail if applicable and available), telex or telefax
(confirmed in the case of a telefax, by first-class prepaid
letter (airmail if available)):
(b) be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a letter, when delivered
personally or 3 days (7 days in the case of a letter posted from
one country to another) after it has been put into the post and,
in the case of a telex or telefax, at the time of despatch with,
in the case of telex, confirmed answerback of the addressee
appearing at the beginning and end of the transmission or it the
case of a telefax, with confirmation by the sender's facsimile
machine that the message has been received at the correct
<PAGE>
facsimile number (provided that if the date of delivery or
despatch is not a business day in the country of the addressee
or if the time of despatch of any telex or telefax is after the
close of business in the country of the addressee it shall be
deemed to have been received at the opening of business on the
next such business day); and
(c) be sent:
(i) to the Borrower and each other TCN Entity at:
c/o Telewest Communications plc
Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
Telefax:.01483 750901
Attention: Vice-President - Treasury
(ii) to the Agent and the Security Trustee at:
Triton Court
14-18 Finsbury Square
London EC2A 1DB
Telefax:.0171 638 0006
Attention: Director, Communications Finance
(iii) to each Arranger and each Bank at its address, telex
number or telefax number specified in Part D of Schedule
1 or in any relevant Substitution Certificate
or to such other address, telex number or telefax number as is
notified by the Borrower, a TCN Entity, the Agent, an
Arranger, the Security Trustee or a Bank (as the case may be)
to the other parties to this Agreement.
19.2 Notices through the Agent
Every notice, request, demand or other communication under this
Agreement to be given by any TCN Entity to any other party shall be
given to the Agent for onward transmission as appropriate and to be
given to any TCN Entity shall (except as otherwise provided in this
Agreement) be given by the Agent.
19.3 No implied waivers, remedies cumulative
No failure or delay on the part of the Agent, the Arrangers, the
Security Trustee, the Banks or any of them to exercise any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise by the Agent, the Arrangers, the
Security Trustee, the Banks or any of them of any power, right or
remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy. The remedies provided in this
Agreement are cumulative and are not exclusive of any remedies provided
by law.
<PAGE>
19.4 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
20 GOVERNING LAW AND JURISDICTION
20.1 Law
This Agreement is governed by and shall be construed in accordance with
English law.
20.2 Submission to jurisdiction
Each TCN Entity agrees for the benefit of the Agent, the Arrangers, the
Security Trustee and the Banks that any legal action or proceedings in
connection with this Agreement against any TCN Entity or any of their
respective assets may be brought in the English courts. Each TCN Entity
irrevocably and unconditionally submit to the jurisdiction of such
courts and in the case of TCN Entities which are not incorporated or
organised under the laws of England, irrevocably designate, appoint and
empower Legibus Secretaries Limited at present of 200 Aldersgate
Street, London EC1A 4JJ to receive for them and on their behalf,
service of process issued out of the English courts in any legal action
or proceedings arising out of or in connection with this Agreement. The
submission to such jurisdiction shall not (and shall not be construed
so as to) limit the right of the Agent, the Arrangers, the Security
Trustee or the Banks to take proceedings against any TCN Entity to
enforce any judgment obtained in any court referred to in this clause
20.2 in any jurisdiction in which any of the assets of any TCN Entity
are situated, nor shall the taking of proceedings in any one or more
jurisdiction referred to in this clause 20.2 preclude the taking of
proceedings in any other such jurisdiction, whether concurrently or
not.
20.3 Inconvenient forum
Each TCN Entity irrevocably waives any objection they may have now or
hereafter to the laying of venue of any action or proceeding in any
court or jurisdiction referred to in clause 20.2 and any claim they may
have now or hereafter that any action or proceeding brought in such
courts or jurisdiction has been brought in an inconvenient forum.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
<PAGE>
SCHEDULE 1
PART A
THE ORIGINAL CHARGING SUBSIDIARIES
<TABLE>
<CAPTION>
========================================================================== ===================================
(1) (2)
COMPANY NAME COMPANY NUMBER
========================================================================== ===================================
<S> <C>
Telewest Communications Group Limited 2514287
========================================================================== ===================================
Telewest Communications Cable Limited 2883742
========================================================================== ===================================
Telewest Communications Holdings Limited (formerly called Telewest 2982404
Holdings Limited)
========================================================================== ===================================
Telewest Parliamentary Holdings Limited 251 4316
========================================================================== ===================================
Theseus No 1 Limited 2994027
========================================================================== ===================================
Theseus No. 2 Limited 2994061
========================================================================== ===================================
The Cable Equipment Store Limited 2693805
========================================================================== ===================================
Telewest Communications (Cotswolds) Limited (formerly called United 1743081
Artists Communications (Cotswolds) Limited)
========================================================================== ===================================
Telewest Communications (Nominees) Limited (formerly called United 2318746
Artists Communications (Nominees) Limited)
========================================================================== ===================================
Telewest Communications (North East) Limited (formerly called United 2378214
Artists Communications (North East) Limited)
========================================================================== ===================================
Telewest Communications (South East) Limited (formerly called United 2270764
Artists Communications (South East) Limited)
========================================================================== ===================================
Telewest Communications (South Thames Estuary) Limited (formerly called 2270763
United Artists Communications (South Thames Estuary) Limited)
========================================================================== ===================================
Telewest Communications (Tyneside) Limited (formerly called United 2407676
Artists Communications (Tyneside) Limited)
========================================================================== ===================================
Telewest Communications (Midlands and North West) Limited (formerly 2795350
called SBC Cable Comms (UK) Limited)
========================================================================== ===================================
Southwestern Bell International Holdings Limited 2378768
========================================================================== ===================================
Telewest Communications (Midlands) Limited (formerly called Midlands 1882074
Cable Communications Limited)
========================================================================== ===================================
Telewest Communications (Telford) Limited (formerly called Telford 2389377
Telecommunications Limited)
========================================================================== ===================================
Telewest Communications (North West) Limited (formerly called North 2321124
West Cable Communications Limited)
========================================================================== ===================================
<PAGE>
========================================================================== ===================================
Telewest Communications (Wigan) Limited (formerly called Cable 2451112
Communications Wigan Limited)
========================================================================== ===================================
Telewest Communications (Central Lancashire) Limited (formerly called 1737862
Cable Communications (Central Lancashire) Limited)
========================================================================== ===================================
Telewest Communications (Liverpool) Limited (formerly called Cable 1615567
Communications (Liverpool) Limited)
========================================================================== ===================================
Telewest Communications (St. Helens & Knowsley) Limited (formerly 2466599
called Cable Communications (St. Helens & Knowsley) Limited)
========================================================================== ===================================
Telewest Communications (East Lothian & Fife) Limited (formerly called SC150057
Telewest (Motherwell) Limited)
========================================================================== ===================================
Telewest Communications (London South) Limited (formerly called United 1697437
Artists Communications (London South) Limited)
========================================================================== ===================================
Telewest Communications (South West) Limited (formerly called United 2271287
Artists Communications (Avon) Limited)
========================================================================== ===================================
Telewest Communications (Dundee & Perth) Limited (formerly called SC096816
Tayside Cable Systems Limited)
========================================================================== ===================================
Telewest Communications (Glenrothes) Limited (formerly called Kingdom SC119523
Cablevision Limited)
========================================================================== ===================================
Telewest Communications (Motherwell) Limited (formerly called Scotcable SC121617
(Motherwell) Limited)
========================================================================== ===================================
Telewest Communications (Cumbernauld) Limited (formerly called Scotcable SC121614
(Cumbernauld) Limited)
========================================================================== ===================================
Telewest Communications (Dumbarton) Limited (formerly called Scotcable SC121700
(Dumbarton) Limited)
========================================================================== ===================================
Telewest Communications (Falkirk) Limited (formerly called Cable North SC122481
(Forth District) Limited)
========================================================================== ===================================
Telewest Communications (Scotland) Limited (formerly called United SC80891
Artists Communications (Scotland) Limited)
========================================================================== ===================================
Telewest Communications (Scotland Holdings) Limited (formerly called SC150058
Telewest Scotland Holdings Limited)
========================================================================== ===================================
Telewest Communications (Internet) Limited 03141035
========================================================================== ===================================
Telewest Communications (Southport) Limited (formerly called Telewest 03085912
(Southport) Limited)
========================================================================== ===================================
Crystal Palace Radio Limited 01459745
========================================================================== ===================================
Avon Cable Investments Limited 2487110
========================================================================== ===================================
Telewest Communications (Worcester) Limited (formerly called Telewest 02475098
(Worcester) Limited)
========================================================================== ===================================
</TABLE>
<PAGE>
PART B
THE ORIGINAL CHARGING PARTNERSHIPS
<TABLE>
<CAPTION>
============================================================= =======================================================
(1) (2)
PARTNERSHIP NAME PRINCIPAL PLACE OF BUSINESS
============================================================= =======================================================
<S> <C>
Cotswolds Cable Limited Partnership Concord House,
Staverton Technology Park,
Staverton,
Cheltenham,
Gloucestershire GL51 6TQ
============================================================= =======================================================
Estuaries Cable Limited Partnership Communications House, Scimitar Park,
Courtauld Park,
Basildon,
Essex SS1 1ND
============================================================= =======================================================
TCI/US WEST Cable Communications Group Genesis Business Park,
Albert Drive,
Woking,
Surrey GU21 5RW
============================================================= =======================================================
Tyneside Cable Limited Partnership Communications House,
1 Duke's Way West,
Team Valley,
Gateshead,
County Durham NE11 6EG
============================================================= =======================================================
Telewest Communications (North East) Partnership (formerly Communications House,
called United Artists Communications (North East) 1 Duke's Way West,
Partnership) Team Valley,
Gateshead,
County Durham NE11 6EG
============================================================= =======================================================
Telewest Communications (South East) Partnership (formerly Communications House, Scimitar Park,
called United Artists Communications (South East) Courtauld Park, Basildon,
Partnership) Essex SS1 1ND
============================================================= =======================================================
London South Cable Partnership Communications Centre, 5 Factory Lane,
Croydon, Surrey
============================================================= =======================================================
Avon Cable Limited Partnership 700 Waterside Drive, Aztec West,
Almondsbury, Bristol BS12 4ST
============================================================= =======================================================
Edinburgh Cable Limited Partnership 1 South Gyle Crescent Lane, Edinburgh, EH2 9EG
============================================================= =======================================================
United Cable (London South) Limited Partnership Communications Centre,
5 Factory Lane, Croydon, Surrey
============================================================= =======================================================
<PAGE>
============================================================= =======================================================
Avon Cable Joint Venture 700 Waterside Drive, Aztec West,
Almondsbury, Bristol BS12 4ST
============================================================= =======================================================
Telewest (London South) Joint Venture (formerly called Communications Centre,
London South Joint Venture) 5 Factory Lane, Croydon, Surrey
============================================================= =======================================================
Telewest Communications (Cotswolds) Venture (formerly Network Centre,
called United Artists Communications (Cotswolds) Venture) Staverton Technology Park, Staverton,
Cheltenham, Gloucestershire GL51 6TQ
============================================================= =======================================================
Telewest Communications (Scotland) Venture (formerly called 1 South Gyle Crescent Lane, Edinburgh, EH2 9EG
United Artists Communications (Scotland) Venture)
============================================================= =======================================================
</TABLE>
<PAGE>
PART C
THE ORIGINAL NON-CHARGING SUBSIDIARIES
<TABLE>
<CAPTION>
========================================================================= ====================================
(1) (2)
COMPANY NAME COMPANY NUMBER
========================================================================= ====================================
<S> <C>
Cable Communications (Telecomm) Limited 02423585
========================================================================= ====================================
Cable Communications Limited 01860121
========================================================================= ====================================
Telewest Communications (Fylde & Wyre) Limited (formerly called Cable 02935056
Communications Fylde & Wyre Limited)
========================================================================= ====================================
Telewest Share Trust Limited 02472760
========================================================================= ====================================
Telewest Trustees Limited 03071066
========================================================================= ====================================
Crystalvision Productions Limited 01947225
========================================================================= ====================================
Capital City Cablevision Limited SC80665
========================================================================= ====================================
Edinburgh Cablevision Limited SC078895
========================================================================= ====================================
Hieronymous Limited SC80135
========================================================================= ====================================
Cable Interactive Limited (formerly called Cable Communications South 03006851
East Staffordshire Limited)
========================================================================= ====================================
Cable on Demand Limited (formerly called Cable Communications 03039816
Shrewsbury Limited)
========================================================================= ====================================
Perth Cable Television Limited SC032627
========================================================================= ====================================
Dundee Cable and Satellite Limited SC093114
========================================================================= ====================================
Cable Guide Limited 02025654
========================================================================= ====================================
</TABLE>
<PAGE>
PART D
THE BANKS AND THEIR COMMITMENTS
<TABLE>
<CAPTION>
NAME ADDRESS AND TELEX AND FACSIMILE NUMBERS COMMITMENT
(POUND)
<S> <C> <C>
The Bank of New York Company, Inc. 46 Berkeley Street 11,150,000
London
W1X 6AA
Tel: 0171 322 6017
Fax: 0171 322 6032
Attention: Loans Administration
CIBC Wood Gundy plc Cottons Centre 11,150,000
Cottons Lane
London SE1 2QL
Tel: 0171 234 6000
Fax: 0171 234 6134
Attention: Louise Moat
The Chase Manhattan Bank Chaseside 11,150,000
Bournemouth
Dorset
Tel: 01202 342000
Fax: 01202 343706
Attention: European Loans
National Westminster Bank plc 135 Bishopsgate 11,150,000
London EC2M 3UR
Tel: 0171 375 5085
Fax: 0171 375 5820
Telex: 882121
Attention: Portfolio Management
The Toronto-Dominion Bank Triton Court 11,150,000
14/18 Finsbury Square
London EC2A 1DB
Tel: 0171 282 8222/8225
Fax: 0171 638 0006
Telex: 883391 TORDOMC
Attention: Jerry Moore
NationsBank N.A. (London Branch) New Broad Street House 7,500,000
35 New Broad Street
London EC2M 1NH
Tel: 0171 282 2478/2476
Fax: 0171 282 2471
Attention: Dave Riordan/
Dilys Robertson
<PAGE>
Bank Boston, N.A. 39 Victoria Street 5,000,000
PO Box 155
London SW1H 0ED
Tel: 0171 932 9125
Fax: 0171 932 9110
Telex: 886705/885125
Attention: Rachel Moore/Mark Evans
Bankers Trust Company 1 Appold Street 5,000,000
Broadgate
London EC2A 2ME
Tel: 0171 982 2599
Fax: 0171 982 1182
Telex: 883341
Attention: Charles Griffiths
Banque Paribas 10 Harewood Avenue 5,000,000
London NW1 6AA
Tel: 0171 595 4747
Fax: 0171 595 5019
Attention: Ken Goldsborough
Barclays Bank PLC Structured Finance 5,000,000
Barclays Capital
5 The North Colonnade
Canary Wharf
London E14 4BB
Tel: 0171 773 4059
Fax: 0171 773 1826
Attention: Head of Asset Management
The British Linen Bank Limited PO Box 49 5,000,000
4 Melville Street
Edinburgh EH3 7NZ
Tel: 0131 243 8324
Fax: 0171 243 8391
Telex: 727221
Attention: Stuart H. Gibson
Deutsche Bank AG, London Branch 6 Bishopsgate 5,000,000
London EC2N 4DA
Tel: 0171 545 7469/7267
Fax: 0171 545 7130
Attention: Martin Flaherty/
Alison Pring
<PAGE>
MeesPierson N.V. Camomile Court 5,000,000
23 Camomile Street
London EC3A 7PP
Tel: 0171 444 8723
Fax: 0171 444 8810
Attention: Mrs Jackie Cuffling
N M Rothschild & Sons Limited New Court 1,750,000
St. Swithin's Lane
London EC4P 4DU
Tel: 0171 280 5320
Fax: 0171 280 5400
Attention: Adrian Gannon
--------------------
100,000,000
--------------------
</TABLE>
<PAGE>
SCHEDULE 2
PART A
FORM OF DRAWDOWN NOTICE
To: The Toronto-Dominion Bank
Triton Court
14-18 Finsbury Square
London EC2A 1DB
Attention: Supervisor, Banking Services [Date]
(POUND)100,000,000 LOAN FACILITY
LOAN AGREEMENT DATED O, 1998
(AS FROM TIME TO TIME AMENDED, VARIED, EXTENDED, RESTATED
OR REPLACED THE "LOAN AGREEMENT")
1. We refer to the above Loan Agreement and hereby give you notice that we
wish to draw a Revolving Advance of (pound)[ ] on [ ] and select a Term
for such Revolving Advance of [ ] months. The funds should be credited
to [NAME AND NUMBER OF ACCOUNT] with [BANK IN LONDON].
2. We confirm that:
(i) no event or circumstance has occurred and is continuing
which constitutes a Default;
(ii) the representations and warranties referred to in clause
9.3 including those deemed to be made by the Borrower
pursuant to such clause are (subject as provided in
clause 9.3) true and correct at the date hereof as if
each was made with respect to the facts and
circumstances existing at the date hereof; and
(iii) the borrowing to be effected by such Revolving Advance
will be within our powers, has been validly authorised
by appropriate action and will not cause any limit on
our borrowings (whether imposed by statute, regulation,
agreement or otherwise) to be exceeded.
3. We confirm that Consolidated Annualised TCN Group Net Operating Cash
Flow in the most recently delivered Monthly Management Accounts was [
].
4. We further confirm that the ratio of the Total TCN Secured Debt
(including, for these purposes, the amount of the Advance the subject
of this notice) to Consolidated Annualised TCN Group Net Operating Cash
Flow as calculated from the most recently delivered Monthly Management
Accounts delivered to the Agent under this Agreement was [ ].
<PAGE>
Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein.
For and on behalf of
TELEWEST COMMUNICATIONS NETWORKS LIMITED
..................................................
Authorised Officer
<PAGE>
SCHEDULE 2
PART B
FORM OF ROLLOVER NOTICE
To: The Toronto-Dominion Bank
Triton Court
14-18 Finsbury Square
London EC2A 1DB
Attention: Supervisor, Banking Services [Date]
(POUND)100,000,000 LOAN FACILITY
LOAN AGREEMENT DATED O 1998
(AS FROM TIME AMENDED, VARIED, EXTENDED, RESTATED
OR REPLACED THE "LOAN AGREEMENT")
We refer to the above Loan Agreement and hereby give you notice that we wish to
draw a Revolving Advance of (pound)[ ] on [ ] and select a Term for such
Revolving Advance of [ ] months. The funds should be applied in repayment [in
part] of the Revolving Advance of (pound)[ ] which falls due to be repaid on the
same day in accordance with clause 4.10 of the Loan Agreement.
Words and expressions defined in the Loan Agreement shall have the same meanings
when used herein.
For and on behalf of
TELEWEST COMMUNICATIONS NETWORKS LIMITED
...........................
Authorised Officer
<PAGE>
SCHEDULE 3
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT
(a) Copies, certified as true, complete and up-to-date copies by the
Company Secretary of the Borrower, of the Memorandum and Articles of
Association of the Borrower.
(b) A copy certified as a true copy by the Company Secretary of Resolutions
of the Board of Directors of the Borrower evidencing approval of this
Agreement and any Security Document to which it is a party and
authorising its appropriate officers to execute and deliver this
Agreement, each Security Document to which it is a party and to give
all notices and take all other action required by the Borrower under
this Agreement and each Security Document to which it is a party.
(c) A copy, certified as a true copy by the Company Secretary, of
Resolutions of the Board of Directors of Telewest evidencing approval
of the Share Charge, the Deed of Subordination, the Telewest National
Network Licence Assignment, and the Telewest Loan Assignment and
authorising its appropriate officers to execute and deliver the Share
Charge, the Deed of Subordination, the Telewest National Network
Licence Assignment, the Telewest Loan Assignment and to give all
notices and to take all action required by it under the Share Charge,
the Deed of Subordination, the Telewest National Network Licence
Assignment, and the Telewest Loan Assignment.
(d) Specimen signatures, authenticated by the relevant Company Secretary,
of the persons authorised in the Resolutions of the Board of Directors
referred to in paragraphs (b) and (c) above.
(e) Copies, certified as true copies by the relevant duly authorised
officer from Legibus Secretaries Limited as agents for receipt of
service of process referred to in this Agreement and/or the Security
Documents of acknowledgement of appointment as such.
(f) The Deed of Subordination, the Share Charge, the Telewest National
Network Licence Assignment and the Telewest Loan Assignment having been
duly executed and delivered by Telewest.
(g) The Security Documents having been duly executed and delivered by the
Borrower and the other applicable TCN Entities.
(h) A notice in the form attached to the Debenture having been given to
each insurer of all or any of the material assets of the Borrower and
each TCN Entity and the same having been agreed and accepted by each
relevant insurer.
(i) A copy, certified as a true copy by the Company Secretary of Telewest,
of the National Network Licence.
<PAGE>
(j) An opinion of Norton Rose, solicitors to the Agent, dated no earlier
than 15 days prior to the date of this Agreement.
(k) A letter, addressed to the Agent and the Banks, from KPMG Peat Marwick
stating that in KPMG Peat Marwick's opinion the financial projections
and underlying accounting assumptions of the Long Range Plan delivered
to the Arrangers prior to the date of this Agreement are reasonable.
(l) A copy of the budget of the TCN Group for the period commencing on 1
January 1998 and ending on 31 December 1998.
(m) A copy, certified as a true copy by a Director of the Borrower, of the
Long Range Plan.
(n) A letter from a director of Telewest confirming that as of the first
Drawdown Date any borrowing limit set out in Telewest's Articles of
Association will not be exceeded by the borrowing by the Borrower of
all the Commitments.
(o) Either (i) a letter from a director or the Company Secretary of
Telewest confirming that the Memorandum and Articles of Association of
each Original Charging Subsidiary or Partnership Agreement of each
Original Charging Partnership have not been amended from the date of
the Senior Loan Agreement; or (ii) copies, certified as true copies by
the relevant Company Secretary of the relevant revised Memorandum and
Articles of Association.
(p) A copy certified as a true copy by the Company Secretary of Resolutions
of the Board of Directors of each Original Charging Subsidiary and by a
Partnership Secretary of Resolutions of the Partners of each Original
Charging Partnership evidencing approval of this Agreement, and any
Security Document to which it is a party and authorising its
appropriate officers to execute and deliver this Agreement and the
Security Documents to which it is a party and to give all notices and
take all other action required by each such Original Charging
Subsidiary or, as the case may be, such Original Charging Partnership
under this Agreement and each Security Document to which it is a party
together with a copy of the resolutions of the authorised
representative of each General Partner of each Charging Partnership
evidencing approval of this Agreement and any Security Document to
which it is a party certified as a true copy by a responsible officer
of such General Partner and certifying as to the authority of such
authorised representative.
(q) Specimen signatures certified by the relevant Company Secretary or
Partnership Secretary of the persons authorised by the resolutions
referred to in paragraph (p) above.
(r) Opinions of legal counsel to the Agent in the jurisdiction of
incorporation or formation of each Original Charging Subsidiary and
each Original Charging Partnership dated no earlier than 15 days prior
to the date hereof including an opinion from Morrison & Foerster
together with an opinion from Sherman and Howard L.L.C., special legal
counsel to the Borrower in Denver, Colorado, dated no earlier than 15
days prior to the date hereof.
<PAGE>
(s) A Pledge and Security Agreement with respect to each of the Original
Charging Partnerships organised under the laws of one of the United
States of America in each case duly executed and delivered by each and
every of the partners in such Original Charging Partnership.
(t) Certificates of valid existence by the appropriate State in relation to
each of the Original Charging Partnerships that is a limited
partnership and is organised under the laws of one of the United States
of America.
(u) Receipt of all regulatory consents and letters (in the agreed form) and
the effecting of all registrations required in connection with this
Agreement and the Security Documents, including letters from the ITC,
OFTEL and the DTI.
(v) Confirmation from an authorised officer of the Borrower that no member
of the Telewest Group is in default under any existing financing
arrangements including the Senior Securities and the Senior Loan
Agreement.
(w) A UCC-1 financing statement executed by each of the partners in each of
the Original Charging Partnerships that is organised under the laws of
one of the United States of America with respect to their respective
pledges under the Pledge and Security Agreements.
(x) Certified copies of those charges detailed in schedule 8 and underlying
loan documentation, together with a notice to each party secured by an
existing encumbrance, such notice to be in a form agreed between the
Borrower and the Agent, and any acknowledgements of such notices which
the Borrower has, using its reasonable endeavours, been able to
procure.
(y) Certified copies of Telewest/TCN Loan Agreement and the 1997 Telewest
Letter Agreement.
(z) Confirmation from the Company Secretary of the Borrower that there are
no outstanding Encumbrances or Borrowings other than Permitted
Encumbrances/Permitted Borrowings.
(aa) Confirmation from the Senior Agent that the amendments to the Senior
Loan Agreement set out in the Senior Loan Amendment Agreement have
become effective.
<PAGE>
SCHEDULE 4
CALCULATION OF ADDITIONAL COST
1 The Additional Cost for any period is calculated in accordance with the
following formula:
BY + L(Y-X) + S(Y-Z)
------------------------
100 - (B+S) per cent. per annum
where on the day of application of the formula:
B is the percentage of the Agent's eligible liabilities which
the Bank of England then requires the Agent to hold on a
non-interest-bearing deposit account in accordance with its
cash ratio requirements;
Y is the percentage rate at which Sterling deposits are offered
by the Agent to leading banks in the London interbank market
at or about 11 a.m. on that day for the relevant period;
L is the percentage of eligible liabilities which (as a result
of the requirements of the Bank of England) the Agent
maintains as secured money with members of the London Discount
Market Association or in certain marketable or callable
securities approved by the Bank of England;
X is the percentage rate at which secured Sterling investments
may be placed by the Agent with members of the London Discount
Market Association at or about 11 a.m. on that day for the
relevant period or, if greater, the rate at which Sterling
bills of exchange (of a tenor equal to the duration of the
relevant period) eligible for rediscounting at the Bank of
England can be discounted in the London Discount Market at or
about 11 a.m. on that day;
S is the percentage of the Agent's eligible liabilities which
the Bank of England requires the Agent to place as a special
deposit; and
Z is the interest rate expressed as a percentage per annum
allowed by the Bank of England on special deposits.
2 For the purposes of this Schedule 4:
(a) "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(b) "RELEVANT PERIOD" in relation to each period for which
Additional Cost falls to be calculated means:
<PAGE>
(i) if it is 3 months or less, that period; or
(ii) if it is more than 3 months, 3 months.
3 In the application of the formula, B, Y, L, X, S and Z are included in
the formula as percentages, e.g. if B = 0.5 per cent. and Y = 15 per
cent. BY is calculated as 0.5 x 15.
4 The formula is applied on the first day of each relevant period. Each
amount is rounded up (if necessary) to the nearest four decimal places.
5 If the Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Agent (after consultation
with all of the Banks) shall notify the Borrower of the manner in which
the Additional Cost will subsequently be calculated. The manner of
calculation so notified by the Agent shall, in the absence of manifest
error, be binding on all the parties.
<PAGE>
SCHEDULE 5
FORM OF SUBSTITUTION CERTIFICATE
BANKS ARE ADVISED NOT TO EMPLOY SUBSTITUTION CERTIFICATES OR OTHERWISE TO ASSIGN
OR TRANSFER INTERESTS IN THE AGREEMENT WITHOUT FIRST ENSURING THAT THE
TRANSACTION COMPLIES WITH ALL APPLICABLE LAWS AND REGULATIONS, INCLUDING THE
FINANCIAL SERVICES ACT 1986 AND REGULATIONS MADE THEREUNDER.
To: The Toronto-Dominion Bank
Triton Court
14-18 Finsbury Square
London EC2A 1DB
Attention: Director, Communications Finance
[Date]
SUBSTITUTION CERTIFICATE
This Substitution Certificate relates to a Loan Agreement (as from time to time
amended, varied, extended, restated or replaced (the "AGREEMENT") dated o 1998
between Telewest Communications Networks Limited as Borrower (1), the
Subsidiaries of the Borrower whose respective names and registered numbers are
set out in part A of Schedule 1 thereto, (2), the Associated Partnerships of the
Borrower whose respective names and principal places of business are set out in
part B of Schedule 1 thereto, (3), the Arrangers (4), the banks and financial
institutions whose respective names and addresses are set out in Part D of
Schedule 1 thereto as Banks (5), the Agent (6) and the Security Trustee (7).
Terms defined in the Agreement shall have the same meaning in this Substitution
Certificate.
1 [Existing Bank] (the "EXISTING BANK") (a) confirms the accuracy of the
summary of its participation in the Agreement set out in the Schedule
hereto; and (b) requests [Substitute Bank] (the "SUBSTITUTE") to accept
by way of novation the portion of such participation specified in the
schedule hereto by countersigning and delivering this Substitution
Certificate to the Agent at its address for the service of notices
specified in the Agreement.
2 The Substitute hereby requests the Agent (on behalf of itself, the
Arrangers, the Security Trustee, the Borrower, the other TCN Entities
and the Banks) to accept this Substitution Certificate as being
delivered to the Agent pursuant to and for the purposes of clause 17.4
of the Agreement, so as to take effect in accordance with the
respective terms thereof on [date of transfer] (the "EFFECTIVE DATE")
or on such later date as may be determined in accordance with the terms
thereof.
3 The Agent (on behalf of itself, the Arrangers, the Security Trustee,
the Borrower, the other TCN Entities and the Banks) confirms the
novation effected by this Substitution Certificate pursuant to and for
the purposes of clause 17.4 of the Agreement so as to take effect in
accordance with the terms thereof.
<PAGE>
4 The Substitute confirms:
(a) that it has received a copy of the Agreement, the Security
Documents and all other documentation and information required
by it in connection with the transactions contemplated by this
Substitution Certificate;
(b) that it has made and will continue to make its own assessment
of the validity, enforceability and sufficiency of this
Agreement and the Security Documents and the Substitution
Certificate and has not relied and will not rely on the
Existing Bank, any Arranger, the Security Trustee, any other
Bank or the Agent or any statements made by any of them in
that respect;
(c) that it has made and will continue to make its own credit
assessment of the Borrower, each other TCN Entity and Telewest
and has not relied and will not rely on the Existing Bank, any
Arranger, the Security Trustee, any other Bank or any
statements made by any of them in that respect;
(d) accordingly, none of the Existing Bank, any Arranger, the
Security Trustee, any other Bank or the Agent shall have any
liability or responsibility to the Substitute in respect of
any of the foregoing matters; and
(e) it is a Qualifying Bank.
5 Execution of this Substitution Certificate by the Substitute
constitutes its representation to the Existing Bank and all other
parties to the Agreement and the Security Trust Deed that it has power
to become party to the Agreement and the Security Trust Deed as a Bank
on the terms herein and therein set out and has taken all necessary
steps to authorise execution and delivery of this Substitution
Certificate.
6 The Existing Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Agreement or the Security Documents
or any document relating thereto and assumes no responsibility for the
financial condition of the Borrower, each other TCN Entity and Telewest
or any other party to the Agreement or the Security Documents or for
the performance and observance by the Borrower, each other TCN Entity
and Telewest or any other such party of any of its obligations under
the Agreement or the Security Documents or any document relating
thereto and any and all such conditions and warranties, whether express
or implied by law or otherwise, are hereby excluded.
7 The Substitute hereby undertakes to the Existing Bank, the Borrower,
the other TCN Entities, the Arrangers, the Security Trustee, the other
Banks and the Agent that it will perform in accordance with their terms
all those obligations which by the respective terms of the Agreement
and the Security Documents will be assumed by it after acceptance of
this Substitution Certificate by the Agent.
<PAGE>
8 This Substitution Certificate and the rights and obligations of the
parties hereunder are governed by and shall be construed in accordance
with English law.
NOTE: This Substitution Certificate is not a security, bond, note,
debenture, investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
<PAGE>
THE SCHEDULE
AMOUNT OF CONTRIBUTION NEXT INTEREST PAYMENT DATE(S) PORTION NOVATED
((POUND))
AMOUNT OF COMMITMENT PORTION NOVATED ((POUND))
ADMINISTRATIVE DETAILS OF SUBSTITUTE
Lending office:
Account for payments:
Telephone:
Telex:
Fax:
Attention:
[Existing Bank] [Substitute]
By: By:
Date: Date:
The Agent
By:
Date:
on its own behalf
and on behalf of the Borrower, the other TCN Entities, the Arrangers, the
Security Trustee, and the Banks.
<PAGE>
SCHEDULE 6
PART A
FORM OF COMPLIANCE CERTIFICATE TO BE ISSUED BY AN
AUTHORISED OFFICER OF THE BORROWER
CIBC Wood Gundy plc
Cottons Centre.
Cottons Lane
London SE1 2QL
Attention: Supervisor, Banking Services [Date]
Dear Sirs
TELEWEST COMMUNICATIONS NETWORKS LIMITED
(POUND)100,000,000 LOAN FACILITY, LOAN AGREEMENT DATED O 1998
(AS FROM TIME TO TIME AMENDED, VARIED, EXTENDED, RESTATED OR REPLACED
(THE "LOAN AGREEMENT")
We refer to the Loan Agreement and deliver this Certificate in respect of the
Quarterly Period ended [ ] pursuant to clause 10.1(j)(a)(ii) thereof. Terms
defined in the Loan Agreement shall have the same meaning when used in this
Certificate. Net Operating Cashflow shall herein be defined as "NOCF".
We confirm that on or as of the last day of the Quarterly Period ending [ ]:
1 Consolidated TCN Group NOCF for the Six Month Period ended [ ] was [ ].
2 *Consolidated Annualised TCN Group NOCF for the Six Month Period ended
[ ], was [ ].
3 *Senior Tranche B Loan as at [ ] was [ ].
4 *Senior Facility Debt Interest Charges for the Six Month Period ended [
] was [ ].
5 *Total TCN Group Cash Paying Debt Interest Charges for the Six Month
Period ended [ ] was [ ].
6 *Consolidated Telewest Group NOCF for the Six Month Period ended [ ]
was [ ].
7 *Total Telewest Group Cash Paying Debt Interest Charges for the Six
Month Period ended [ ] was [ ].
8 **On the basis of projections provided by Telewest management,
Pro-forma Total Telewest Group Debt Service for the twelve months
commencing [ ] is [ ].
<PAGE>
9 ****On the basis of projections provided by Telewest management,
Proforma Total TCN Group Debt Service for the twelve months commencing
[ ].
10 ***Total TCN Secured Debt for the Six Month Period ended [ ] was [ ].
===
Based on the above, we confirm that on [ ]:
(1) *Senior Tranche B Loan divided by Consolidated Annualised TCN Group
NOCF was [ x].
(2) *Consolidated TCN Group NOCF divided by Senior Facility Debt Interest
Charges was [ x].
(3) *Consolidated TCN Group NOCF divided by Total TCN Group Cash Paying
Debt Interest Charges was [ x].
(4) *Consolidated Telewest Group NOCF divided by Total Telewest Group Cash
Paying Debt Interest Charges was [ x].
(5) **Consolidated Annualised Telewest Group NOCF divided by Proforma Total
Telewest Group Debt Service was [ x].
(6) ****Consolidated Annualised TCN Group NOCF divided by Proforma Total
TCN Group Debt Service was [ x].
(7) ***Total TCN Secured Debt divided by Consolidated Annualised TCN Group
NOCF was [ x].
Based on the above, we confirm that the Borrower was in compliance with the
undertakings set out in clause 12.1(a) to (g) as at [ ].
We also confirm that the representations and warranties referred to in clause
9.3 including those deemed to be made by the Borrower pursuant to such clause
are (subject as provided in clause 9.3) true and correct at the date hereof as
if each was made with respect to the facts and circumstances existing at the
date hereof.
FOR AND ON BEHALF OF
TELEWEST COMMUNICATIONS
NETWORKS LIMITED
..........................................................
Authorised Officer
* To be reported with effect from 31 March 1998
** To be reported with effect from 31 March 1999
*** To be reported with effect from 30 September 1999
**** To be reported with effect from 30 June 2000
<PAGE>
PART B
FORM OF COMPLIANCE CERTIFICATE TO BE ISSUED BY THE
AUDITORS OF THE TCN GROUP
Dear Sirs
TELEWEST COMMUNICATIONS NETWORKS LIMITED
(POUND)100,000,000 LOAN FACILITY, LOAN AGREEMENT DATED O 1998
AS FROM TIME TO TIME AMENDED, VARIED, EXTENDED, RESTATED OR REPLACED
(THE "LOAN AGREEMENT")
We refer to the Loan Agreement and, in accordance with our instructions, deliver
this Certificate in respect of the financial year ended 31 December [ ] pursuant
to clause 10.1(j)(a)(ii) thereof. Terms defined in the Loan Agreement shall have
the same meaning when used in this Certificate. Net Operating CashFlow shall be
defined as "NOCF".
On the basis of the consolidated audited accounts of the Borrower and Telewest
for the financial year ended 31 December [ ] and on the basis of unaudited
management accounts for the six month period ended 30 June [ ], we confirm that:
1 Consolidated TCN Group NOCF for the Six Month Period ended [ ] was [ ].
2 *Consolidated Annualised TCN Group NOCF for the Six Month Period ended
[ ], was [ ].
3 *Senior Tranche B Loan as at [ ] was [ ].
4 *Senior Facility Debt Interest Charges for the Six Month Period ended [
] was [ ].
5 *Total TCN Group Cash Paying Debt Interest Charges for the Six Month
Period ended 31 December [ ] was [ ].
6 *Consolidated Telewest Group NOCF for the Six Month Period ended [ ]
was [ ].
7 *Total Telewest Group Cash Paying Debt Interest Charges for the Six
Month Period ended [ ] was [ ].
8 **On the basis of projections provided by Telewest management,
Pro-forma Total Telewest Group Debt Service for the twelve months
commencing [ ] is [ ].
9 ****On the basis of projections provided by Telewest management,
Proforma Total TCN Group Debt Service for the twelve months commencing
[ ].
<PAGE>
10 ***Total TCN Secured Debt for the Six Month Period ended [ ] was [ ].
===
Based on the above, we confirm that on [ ]:
(A) *Senior Tranche B Loan divided by Consolidated Annualised TCN Group
NOCF was [ x].
(B) *Consolidated TCN Group NOCF divided by Senior Facility Debt Interest
Charges was [ x].
(C) *Consolidated TCN Group NOCF divided by Total TCN Group Cash Paying
Debt Interest Charges was [ x].
(D) *Consolidated Telewest Group NOCF divided by Total Telewest Group Cash
Paying Debt Interest Charges was [ x].
(E) **Consolidated Annualised Telewest Group NOCF divided by Proforma Total
Telewest Group Debt Service was [ x].
(F) ****Consolidated Annualised TCN Group NOCF divided by Proforma Total
TCN Group Debt Service was [ x].
(G) ***Total TCN Secured Debt divided by Consolidated Annualised TCN Group
NOCF was [ x].
Based on the above, we confirm that the Borrower was in compliance with the
undertakings set out in clause 12.1(a) to (g) as at [ ].
FOR AND ON BEHALF OF
..........................................................
Auditors
* To be reported with effect from 31 March 1998
** To be reported with effect from 31 March 1999
*** To be reported with effect from 30 September 1999
**** To be reported with effect from 30 June 2000
<PAGE>
SCHEDULE 7
FORM OF DEED OF SUBORDINATION
DATED O
TELEWEST COMMUNICATIONS PLC
and
THE TORONTO-DOMINION BANK
as Security Trustee
---------------------------------------------
DEED OF SUBORDINATION
---------------------------------------------
<PAGE>
THIS DEED OF SUBORDINATION is dated o, 1998 and made
BETWEEN:
(1) TELEWEST COMMUNICATIONS PLC (Company No. 2983307) whose registered
office is at Genesis Business Park, Albert Drive, Woking, Surrey GU21
5RW (the "CREDITOR"); and
(2) THE TORONTO-DOMINION BANK of Triton Court, 14-18 Finsbury Square,
London EC2A 1DB in its capacity as Security Trustee for the
Beneficiaries (as defined below) (in this capacity, the "SECURITY
TRUSTEE").
WHEREAS
(A) By an agreement dated o, 1998 (as from time amended, varied, extended,
restated or replaced the "LOAN AGREEMENT") and made between Telewest
Communications Networks Limited as Borrower (1), certain Subsidiaries
of the Borrower (2), certain Associated Partnerships of the Borrower
(3), the Arrangers (4), the banks and financial institutions whose
names and addresses are set out in Part D of Schedule 1 thereto, (5)
the Agent (6) and the Security Trustee (7), the Banks agreed, upon and
subject to the terms and conditions of the Loan Agreement, to make
available to the Borrower a revolving credit facility converting to a
reducing term loan of up to(pound)100,000,000.
(B) The execution of this Deed is one of the conditions precedent to the
obligation of each Bank to make its Commitment available under the Loan
Agreement.
NOW IT IS AGREED as follows:
1 INTERPRETATION
1.1 Definitions
In this Deed, unless the context otherwise requires:
"BENEFICIARIES" has the meaning ascribed thereto in the Security Trust
Deed;
"COLLATERAL INSTRUMENTS" means the Security Documents, any guarantees
and any other documents or instruments (including, without limitation,
any other document or instrument creating or evidencing a mortgage,
charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, trust arrangement or security interest of any kind) which
contain or evidence an obligation (with or without security) to pay,
discharge or be responsible directly or indirectly for any of the
Secured Liabilities under or pursuant to the Loan Agreement;
"INCAPACITY" means in relation to a person the death, bankruptcy,
insolvency, liquidation, dissolution, winding-up, administration,
receivership, amalgamation, reconstruction or other incapacity of that
person whatsoever (and, in the case of a partnership, includes the
termination or change in the composition of such partnership);
<PAGE>
"INSOLVENCY EVENT" means, in relation to the Borrower or any of its
Subsidiaries or Associated Partnerships (other than any Immaterial
Group Entities) any of the events or circumstances described in clause
13.1(h) to (n) inclusive of the Loan Agreement;
"INSOLVENCY PROCEEDINGS" means winding-up, dissolution, liquidation,
receivership, administration, voluntary arrangements, proceedings under
Title 11 of the United States Bankruptcy Code or any proceedings in any
jurisdiction which correspond with or have an effect equivalent to any
of the same;
"LIABILITIES" means all obligations and liabilities whatsoever, whether
express or implied, whether as principal or surety, whether present or
future, actual or contingent, whether joint or several, in whatever
style, name or form and in whatever currency denominated;
"PERMITTED AMOUNTS" means all amounts which the Borrower or any of its
Subsidiaries are permitted to pay pursuant to Clauses 11.1(l), (m) and
(n) of the Loan Agreement;
"SECURED LIABILITIES" means all obligations, present, future or
contingent, joint or several, of any TCN Entity pursuant to the Loan
Agreement and/or any Security Document;
"SECURITY PROVIDER" means any person who has or may at any time
hereafter enter into a Collateral Instrument;
"SENIOR DEED OF SUBORDINATION" means the deed of subordination in a
substantially similar form to this deed entered into by the Creditor
pursuant to the Senior Loan Agreement; and
"SENIOR SECURED LIABILITIES" means all obligations, present, future or
contingent, joint or several, of any TCN Entity or Telewest pursuant to
the Senior Loan Agreement and/or any Senior Security Document.
1.2 Defined Expressions
Unless the context requires or unless otherwise defined in this Deed,
words and expressions defined in the Loan Agreement shall have the same
meaning when used in this Deed (including its Recitals).
1.3 Headings
Clause headings are inserted for convenience of reference only and
shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
In this Deed, unless the context otherwise requires:
<PAGE>
(a) references to clauses are to be construed as references to the clauses
of this Deed;
(b) reference to (or to any specified provision of) this Deed or any other
document shall be construed as references to this Deed, that provision
or that document as in force for the time being and as amended in
accordance with the terms thereof or, as the case may be, with the
agreement of the relevant parties and (where such consent is, by the
terms of this Deed or the relevant document, required to be obtained as
a condition to such amendment being permitted) the prior written
consent of the Agent, the Security Trustee, all of the Banks, the
Majority Banks or the Beneficiaries (as the case may be);
(c) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency, authority, central bank or
government department or any self-regulatory or other national or
supra-national authority;
(d) words importing the plural shall include the singular and vice versa;
(e) references to a time of day are to London time;
(f) references to a person shall be construed as including references to an
individual, firm, company, corporation, unincorporated body of persons
or any State or any agency thereof;
(g) reference to "set-off" includes retention, compensation and balancing
of accounts under Scots law;
(h) references to a "guarantee" include references to an indemnity or other
assurance against financial loss including, without limitation, an
obligation to purchase assets as a consequence of default by any other
person to pay any Indebtedness and "guaranteed" shall be construed
accordingly; and
(i) references to any enactment shall be deemed to include references to
such enactment as replaced, amended or re-enacted from time to time.
1.5 Effect as a deed
This Deed is intended to take effect as a deed notwithstanding that the
Security Trustee and/or the Creditor may have executed it under hand
only.
1.6 Successors and assigns
The expressions "BENEFICIARY", "SECURITY TRUSTEE", "BORROWER", "TCN
ENTITY", "AGENT", "Arranger", "BANK", "SECURITY PROVIDER" and
"CREDITOR" include, where the context admits, their respective
successors, permitted assigns, in the case of the Banks, their
Assignees and Substitutes, in the case of the Security Trustee such
<PAGE>
other person as may from time to time be appointed as Security Trustee
for the Beneficiaries pursuant to the terms of the Security Trust Deed
and, in the case of the Agent, such other person as may from time to
time be appointed as Agent pursuant to clause 18.11 of the Loan
Agreement.
2 RESTRICTED PAYMENTS
The Creditor undertakes with the Security Trustee that so long as any
of the Secured Liabilities remain outstanding:
(a) it will not, and will procure that none of its Subsidiaries or
Associated Partnerships (which are not TCN Entities) demand, take,
accept or receive, by set-off or in any other manner, any Restricted
Payment other than a Permitted Amount;
(b) it will not, and will procure that none of its Subsidiaries or
Associated Partnerships (which are not TCN Entities) take, accept,
receive or permit to exist any Encumbrance over all or any part of the
present or future undertakings, assets, rights or revenues of any
member of the TCN Group to secure any Restricted Payment;
(c) it will not, and will procure that none of its Subsidiaries, or
Associated Partnerships (which are not TCN Entities) assign, transfer,
create any Encumbrance over or otherwise dispose of any Restricted
Payment other than a Permitted Amount; and
(d) it will not, and will procure that none of its Subsidiaries or
Associated Partnerships (which are not TCN Entities) commence any
proceedings against any member of the TCN Group in respect of any
Restricted Payment, (including, without limitation, any action or step
with a view to winding-up any member of the TCN Group).
3 SUBORDINATION
3.1 Insolvency Events
Upon an Insolvency Event occurring in respect of any TCN Entity:
(a) the claims of the Creditor in respect of any Restricted Payment owed by
that TCN Entity other than any Permitted Amounts shall be postponed in
all respects to the Secured Liabilities;
(b) at any time after the Senior Deed of Subordination has been terminated:
(i) the Creditor shall not, unless otherwise directed by the
Security Trustee, prove in any Insolvency Proceedings for any
Restricted Payment, other than the Permitted Amounts until the
Secured Liabilities have first been irrevocably paid or
discharged in full (and for all purposes any payment or
distribution of assets (whether in cash, property, securities
or otherwise) received by the Security Trustee or any of the
Beneficiaries shall only be taken to discharge the Secured
Liabilities to the extent of the actual amount received);
<PAGE>
(ii) if the Creditor is directed by the Security Trustee to prove
in any Insolvency Proceedings for all or any part of any
Restricted Payment, other than any Permitted Amounts then it
shall act in accordance with such directions and shall procure
that any resultant payment or distribution of assets (whether
in cash, property, securities or otherwise) shall be made by
the liquidator of any member of the TCN Group or, as the case
may be, any other person making the payment or distribution of
assets (whether in cash, property, securities or otherwise) to
the Security Trustee to the extent necessary to repay all the
Secured Liabilities in full; and
(iii) at any time after the Senior Deed of Subordination has been
terminated the Creditor hereby irrevocably authorises and
directs the Security Trustee to submit any proof and/or to
instruct the relevant liquidator or other person to make any
payment or distribution of assets (whether in cash, property,
securities or otherwise) in accordance with the foregoing.
3.2 Payments contrary to this Deed
At any time after the Senior Deed of Subordination has been terminated
and in the event of:
(a) any payment or distribution of assets (whether in cash, property,
securities or otherwise) being made to or right of set-off being
exercised by the Creditor contrary to the provisions of this Deed; or
(b) any payment or distribution of assets (whether in cash, property,
securities or otherwise) being made by a liquidator or any other person
to the Creditor rather than to the Security Trustee as required by
clause 3.1,
the Creditor shall forthwith pay to the Security Trustee an amount
equal to the payment or distribution of assets (whether in cash,
property, securities or otherwise) which shall have been so received by
it up to an aggregate amount equal to the Secured Liabilities or, as
the case may be, in the case of set-off, an amount equal to the sum
set-off up to an aggregate amount equal to the Secured Liabilities and,
until such payment to the Security Trustee, the Creditor will hold such
sums on trust for the Security Trustee (provided that, for the
avoidance of doubt, this clause 3.2 shall not oblige the Creditor to
create any Encumbrance in favour of the Security Trustee over such
money or other property) and any sums so paid to the Security Trustee
shall be applied in accordance with the terms of the Security Trust
Deed.
<PAGE>
3.3 Subrogation
If the Secured Liabilities are partially paid out of any proceeds
received in respect of or on account of any Restricted Payment, the
Creditor will not be subrogated to the Secured Liabilities so paid (or
any Collateral Instrument) until the Secured Liabilities have been
irrevocably paid in full.
4 CONTINUING OBLIGATIONS
4.1 Continuing obligations
The obligations of the Creditor hereunder shall be continuing
obligations and shall be and remain fully effective until this Deed is
formally released following the discharge in full of the Secured
Liabilities notwithstanding any intermediate reduction or settlement of
the Secured Liabilities or any part thereof and notwithstanding any
increase in or variation of the Secured Liabilities or any variation,
extension or supplement to the Loan Agreement or any Security
Documents.
4.2 Statements of accounts
Any statement of account of any TCN Entity, signed as correct by an
officer of the Security Trustee, showing the amount of the Secured
Liabilities shall be prima facie evidence of the amount of the Secured
Liabilities.
4.3 Continuing security and other matters
This Deed shall:
(a) secure the ultimate balance from time to time of the Secured
Liabilities and shall be a continuing security, notwithstanding any
settlement of account or other matter whatsoever;
(b) be in addition to any present or future Collateral Instrument, right or
remedy held by or available to the Security Trustee, the Beneficiaries
or any of them; and
(c) not be in any prejudiced by the existence of any such Collateral
Instrument, rights or remedies or by the same becoming wholly or in
part void, voidable or unenforceable on any ground whatsoever or by the
Security Trustee, the Beneficiaries or any of them dealing with,
exchanging, varying or failing to perfect or enforce any of the same or
giving time for payment or indulgence or compounding with the Borrower
or any Security Provider.
4.4 Liability unconditional
The liability of the Creditor shall not be affected, discharged or
reduced by reason of:
<PAGE>
(a) the Incapacity or any change in the name, style or constitution of the
Borrower or any other Security Provider;
(b) the Security Trustee, the Beneficiaries or any of them granting any
time, indulgence or concession to, or compounding with, discharging,
releasing or varying the liability of, the Borrower or any other
Security Provider or renewing, determining, varying or increasing any
accommodation, facility or transaction or otherwise dealing with the
same in any manner whatsoever or concurring in, accepting or varying
any compromise, arrangement or settlement or omitting to claim or
enforce payment from the Borrower or any other Security Provider; or
(c) any act or omission which but for this provision might operate to
exonerate the Creditor.
4.5 Collateral Instruments
None of the Beneficiaries or the Security Trustee shall be obliged to
make any claim or demand on the Borrower or any other Security Provider
or to resort to any Collateral Instrument or other means of payment now
or hereafter held by or available to them or it before enforcing this
Deed and no action taken or omitted by the Security Trustee or any
Beneficiary in connection with any such Collateral Instrument or other
means of payment shall discharge, reduce, prejudice or affect the
liability of the Creditor under this Deed nor shall the Security
Trustee or any Beneficiary be obliged to account for any money or other
property received or recovered in consequence of any enforcement or
realisation of any such Collateral Instrument or other means of
payment.
4.6 Suspense accounts
Any money received in connection with this Deed (whether before or
after any Incapacity of the Borrower, any other Security Provider or
the Creditor) may be placed to the credit of an interest bearing
suspense account with a view to preserving the rights of the Security
Trustee and each Beneficiary to prove for the whole of their respective
claims against the Borrower or any other person liable or may be
applied in or towards satisfaction of such of the Secured Liabilities
as the Security Trustee may from time to time determine in accordance
with the terms of the Security Trust Deed (which determination shall,
save in the case of manifest error, be conclusive). Interest shall
accrue on monies from time to time standing to the credit of any
suspense account at the rate agreed between the Security Trustee and
the Creditor at the relevant time or, failing such agreement, the
Security Trustee's overnight deposit rate from time to time and shall
be credited to such suspense account or may be applied in or towards
satisfaction of such of the Secured Liabilities as the Security Trustee
may from time to time determine in accordance with the terms of the
Security Trust Deed (which determination shall, save in the case of
manifest error, be conclusive).
<PAGE>
4.7 Settlements conditional
Any release, discharge or settlement between the Creditor and the
Security Trustee or any of the Beneficiaries shall be conditional upon
no security, disposition or payment to the Security Trustee, or any of
the Beneficiaries by the Borrower or any other person liable being
void, set aside or ordered to be refunded pursuant to any enactment or
law relating to bankruptcy, liquidation, administration or insolvency
or for any other reason whatsoever and if such condition shall not be
fulfilled the Security Trustee shall be entitled to enforce this Deed
subsequently as if such release, discharge or settlement had not
occurred and any such payment had not been made.
4.8 Retention of this Deed
Notwithstanding any other provision of this Deed, this Deed shall not
be released, the Security Trustee shall be entitled to retain this Deed
and all the provisions of this Deed shall remain in full force and
effect until the irrevocable payment or discharge in full of all the
Secured Liabilities. Following the irrevocable payment or discharge in
full of all the Secured Liabilities, the Security Trustee shall
forthwith release this Deed (and to effect or evidence such release
shall execute such documents (at the cost of the Creditor) as the
Creditor may reasonably require) and deliver this Deed, together with
such documents, to the Creditor.
5 REPRESENTATIONS AND WARRANTIES
5.1 Representation and warranties
The Creditor represents and warrants to the Security Trustee that:
(a) Due Incorporation
it is duly incorporated, validly existing as a limited
liability company and has all requisite corporate power and
authority to own its property and other assets and to carry on
its business as it is now being conducted and is authorised to
do business in each jurisdiction where such qualification or
authorisation is required, except where the failure to so
qualify, to be so authorised or to be in good standing would
not have a material adverse effect on the ability of the
Creditor to perform any of its obligations under this Deed;
(b) Power of the Creditor
the Creditor has all requisite power to execute, deliver and
perform its obligations under this Deed and compliance has
been made with all necessary requirements and all necessary
action has been taken to authorise the execution, delivery and
performance of the same;
<PAGE>
(c) Binding obligations
this Deed constitutes valid and legally binding obligations of
the Creditor enforceable in accordance with its terms subject
to the qualifications contained in the legal opinions referred
to in schedule 3 to the Loan Agreement which relate to this
Deed and for this purpose any statement contained in the
qualifications to any such legal opinion which relate to this
Deed that no opinion is given or expressed in relation to any
particular matter shall be deemed to be a qualification of
such opinion as regards such matter;
(d) No conflict with other obligations
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this
Deed by the Creditor, will not (i) contravene any existing
applicable law, statute, rule or regulation or any judgment,
decree or permit to which the Creditor is subject except where
such contravention would not or would not be likely to have a
material adverse effect on the ability of the Creditor to
perform any of its obligations under or otherwise to comply
with the terms of this Deed, (ii) contravene or conflict with
any provision of the Memorandum and Articles of Association of
the Creditor, (iii) breach any term of the Licences or the
Necessary Authorisations, (iv) conflict with, or result in any
breach of any of the terms of, or constitute a default under,
any agreement to which the Creditor is a party or is subject
or by which it or any of its property is bound except where
such breach or default would not or would not be likely to
have a material adverse effect on the ability of the Creditor
to perform any of its obligations under or otherwise to comply
with the terms of this Deed or (v) result in the creation or
imposition of or oblige the Creditor to create any Encumbrance
(other than those created by the Security Documents) on any of
the Creditor's material undertakings, assets, rights or
revenues;
(e) No litigation
no litigation, arbitration or administrative proceeding is
taking place, pending or, to the knowledge of the officers of
the Creditor threatened against the Creditor which would or is
reasonably likely to have a material adverse effect on the
ability of the Creditor to fulfil its obligations under this
Deed;
(f) No filing required
it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Deed that
this Deed or any other instrument be notarised, filed,
recorded, registered or enrolled in any court or public office
in the United Kingdom or that any stamp, registration or
similar tax or charge be paid in the United Kingdom on or in
relation to this Deed;
<PAGE>
(g) Choice of law
the choice by the Creditor of English law to govern this Deed
is valid and binding;
(h) Consents obtained
every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public
bodies or authorities or courts required by the Creditor (i)
to authorise the execution and delivery of this Deed or the
performance by the Creditor of its obligations under this Deed
or (ii) to ensure the validity, enforceability or
admissibility in evidence of this Deed or the performance by
the Creditor of its obligations under this Deed has been
obtained or made and is in full force and effect and there has
been no material default in the observance of the conditions
or restrictions (if any) imposed in, or in connection with,
any of the same which would, in any such case, adversely
affect the execution, delivery, validity, enforceability or
admissibility in evidence of this Deed or the performance by
the Creditor of its obligations under this Deed.
5.2 Repetition
The representations and warranties in clause 5.1 shall be deemed to be
repeated by the Creditor in respect of itself and its Subsidiaries on
and as of each Interest Payment Date and the date on which each
Revolving Advance is made under the Loan Agreement.
6 COVENANTS
6.1 Covenants by Telewest
The Creditor hereby undertakes with the Security Trustee that from the
date of this Deed and so long as any of the Secured Obligations remain
outstanding or any Beneficiary remains under any commitment to any TCN
Entity:
(a) New Debt
all Borrowed Money (excluding, for the avoidance of doubt, any
security given by Telewest pursuant to the Senior Loan
Agreement) incurred or assumed by the Creditor after the date
of the Loan Agreement (herein "NEW DEBT") will have a
contractual maturity date falling not earlier than 1 January
2007 (and will be on terms which would not reasonably be
considered by the Agent (acting on the instructions of the
Majority Banks) to be materially more onerous than the terms
currently applying to existing Senior Securities) except for:
(i) Finance Leases where the asset in question has been
sub-Finance Leased by Telewest to a TCN Entity and
such sub-Finance Lease falls within paragraph (v) of
the definition of Permitted Borrowings;
<PAGE>
(ii) Borrowed Money where (a) the lender is a TCN Entity
and (b) the relevant payment by the TCN Entity in
question is a Permitted Payment;
(iii) Borrowed Money comprising a guarantee or indemnity of
any obligations of a TCN Entity;
(iv) Borrowed Money comprising a guarantee or indemnity
issued or to be issued by the Creditor in favour of a
bank in relation to a bond issued by such bank in
favour of any regulatory body or other person
pursuant to any Telecommunications and Cable Laws in
an aggregate amount not exceeding (pound)1,250,000;
(v) Borrowed Money resulting from a refinancing of any
Borrowed Money of the Creditor outstanding at the
date hereof provided that the principal amount
thereof is not increased, the term thereof is not
decreased and the terms and conditions thereof taken
as a whole (taking into account the pricing,
covenants (unless Telewest shall have entered into
covenants in substantially the same form with or for
the benefit of the Banks) and term) are not
materially more onerous than the terms applying to
the existing Borrowed Money;
(vi) any hedging entered into (1) in compliance with
paragraph (g) below, (2) in connection with any
Borrowed Money falling within paragraph (v) of this
clause 6.1(a) or (3) in connection with any Borrowed
Money having a contractual maturity date falling not
earlier than 1 January 2007; and
(vii) any Borrowed Money not within sub-paragraphs (i) to
(vi) (inclusive) above and not exceeding in aggregate
(pound)5,000,000;
(b) Change to Senior Securities
to ensure that there is no change to the terms and conditions
of the Senior Securities which would reasonably be considered
to be materially adverse by the Agent (acting on the
instructions of the Majority Banks).
(c) Nature of Acquisitions
not to make any acquisitions of any companies or businesses
other than those engaged in the cable/telecommunications
business, any television and/or licensing business or any
programming guide or telephone directory business.
The above prohibition will cease and shall have no further
effect on the first occasion upon which the ratio of Total
Telewest Group Debt to Consolidated Annualised Telewest Group
Operating Cash Flow is or is less than 5 to 1.
<PAGE>
(d) Adequacy of finance
to ensure that for a period of at least 18 months following
the acquisition by any Restricted Person of a cable television
and/or telecommunications franchise adequate monies are
available to the relevant Restricted Person to finance the
working capital and capital expenditure requirements of such
franchise.
(e) Financial Information
to provide to the Agent copies of all circulars, statements
and other information about the Creditor at the time that the
same is made generally available by the Creditor to the public
or to the shareholders of the Creditor, including, without
limitation, Forms 10K and 10Q (and any equivalent replacement
thereof) for the Telewest Group.
(f) Hedging
to maintain foreign exchange arrangements in relation to the
Senior Securities which cap the Sterling amount of the
liabilities under the Senior Securities at no more than the
maximum sterling amount payable under the hedging arrangements
in place at the date hereof in relation to the Senior
Securities.
(g) Borrower to be wholly-owned
to ensure that the Borrower remains its wholly-owned and
controlled Subsidiary.
7 BENEFIT OF THIS DEED
7.1 Benefit and burden
This Deed shall be binding upon the Creditor and its successors in
title and shall enure for the benefit of the Security Trustee (and any
successor Security Trustee appointed pursuant to the provisions of the
Security Trust Deed) and their respective successors for the benefit of
the Beneficiaries in accordance with the provisions of the Security
Trust Deed.
7.2 Changes in constitution or reorganisation of Banks
For the avoidance of doubt and without prejudice to the provisions of
clause 7.1, this Deed shall remain binding on the Creditor
notwithstanding any change in the constitution of the Security Trustee
or any of the Beneficiaries or their or its absorption in, or
amalgamation with, or the acquisition of all or part of their or its
undertaking or assets by, any other person, or any reconstruction or
<PAGE>
reorganisation of any kind, to the intent that this Deed shall remain
valid and effective in all respects in favour of the Security Trustee
(and any successor Security Trustee appointed pursuant to the
provisions of the Security Trust Deed and their respective successors
in title) as trustee for the Beneficiaries and any assignee, transferee
or other successor in title of a Beneficiary.
7.3 No assignment by the Creditor
The Creditor may not assign or transfer any of its rights or
obligations under this Deed.
7.4 The Security Trust Deed
The Creditor and the Security Trustee hereby acknowledge that the
covenants of the Creditor contained in this Deed and the rights
constituted by this Deed and all moneys, property and assets paid to,
or held, received or recovered by the Security Trustee pursuant to or
in connection with this Deed are held by the Security Trustee subject
to and on the terms of the trusts declared in the Security Trust Deed.
8 NOTICES AND OTHER MATTERS
8.1 Notices
Every notice, request, demand or other communication under this Deed
shall be given in accordance with clause 19.1(a) and (b) of the Loan
Agreement and shall be sent to the Creditor at its address set out
above (facsimile number: 01483 750901) or to the Security Trustee at
its address or telex or facsimile number set out in clause 19.1(c)(ii)
of the Loan Agreement or to such other address or such telex or
facsimile number as is notified by one party to this Deed to the other.
8.2 No implied waivers, remedies cumulative
No failure or delay on the part of the Security Trustee or the
Beneficiaries (or any of them) to exercise any power, right or remedy
under this Deed shall operate as a waiver thereof, nor shall any single
or partial exercise by the Security Trustee or the Beneficiaries (or
any of them) of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or
remedy. The remedies provided in this Deed are cumulative and are not
exclusive of any remedies provided by law.
8.3 Other Collateral Instruments
The Creditor agrees to be bound by this Deed notwithstanding that any
other person intended to execute or to be bound by any Collateral
Instrument may not do so or may not be effectively bound and
notwithstanding that such other Collateral Instrument may be determined
or be or become invalid or unenforceable against any other person,
whether or not the deficiency is known to the Security Trustee or any
of the Beneficiaries.
<PAGE>
8.4 Severability
Each of the provisions of this Deed is severable and distinct from one
another and if at any time one or more of such provisions is or becomes
illegal, invalid or unenforceable under any applicable law the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
9 LAW AND JURISDICTION
9.1 Governing Law
This Deed is governed by and shall be construed in accordance with
English law.
<PAGE>
IN WITNESS whereof the parties to this Deed have caused this Deed to be duly
executed on the date first above written.
EXECUTED by
TELEWEST COMMUNICATIONS PLC
By:
CHARLES BURDICK
.............................
Director
HOWARD BAKER
..............................
Director/Secretary
Signed for and on behalf of )
THE TORONTO-DOMINION BANK )
by: )
<PAGE>
SCHEDULE 8
ENCUMBRANCES
<TABLE>
<CAPTION>
COMPANY/PARTNERSHIP ENCUMBRANCE
<S> <C>
(A) Telewest Communications (i) Mortgage of deposited moneys dated 21st January,
(South East) Limited (formerly 1994 with Electricity Supply Nominees Limited.
known as United Artists
Communications (South East)
Limited)
(ii) Deed of Variation and Further Charge dated 26th
June, 1995 with Electricity Supply Nominees Limited.
(B) Telewest Communications Legal charges dated 9 October, 1991 in favour of Barclays
(South West) Limited (formerly Bank Plc over Units 550 and 700 Aztec West, Almondsbury.
known as United Artists
Communications (Avon) Limited)
(C) Telewest Communications Mortgage dated 23 March, 1992 in favour of National
(London South) Limited (formerly Westminster Bank Plc over Shannon Commercial Centre, New
known as United Artists Malden.
Communications (London South)
Limited)
(D) Avon Cable Partnership Mortgage dated 4 October, 1993 in favour of Barclays Bank
Plc over Unit 7 Hawkfield Business Park, Whitchurch.
(E) Telewest Communications Mortgage of Shares in Cable London PLC dated 29 September,
Holdings Limited (formerly known 1995 with Canadian Imperial Bank of Commerce.
as Telewest Holdings Limited)
(F) Telewest Communications Standard Security granted or to be granted over premises at
(Motherwell) Limited (formerly Bothwell Park Industrial Estate, Uddingston in favour of
known as Scotcable (Motherwell) British Linen Bank Limited.
Limited)
</TABLE>
<PAGE>
SCHEDULE 9
PART A
THE AVON LICENCES
<TABLE>
<CAPTION>
Telecommunications Act 1984 Licence:
====================================== ==================================== ===================================
Licence Holder Licence Area Date of Grant
====================================== ==================================== ===================================
<S> <C> <C>
Telewest Communications (South West) Avon 05.12.89
Limited
====================================== ==================================== ===================================
Broadcasting Act 1990 - Local Delivery Licence:
====================================== ==================================== ===================================
Licence Holder Licence No. Licence Area Date of Grant
====================================== ==================================== ===================================
Telewest Communications (South West) LDS005 Avon 16.10.91
Limited
====================================== ================= ================== ===================================
Telewest Communications (Taunton and LDS037 Taunton and 2.9.97
Bridgewater) Limited Bridgewater
====================================== ================= ================== ===================================
</TABLE>
PART B
THE COTSWOLDS LICENCES
<TABLE>
<CAPTION>
Telecommunications Act 1984 Licence:
======================================= ================================== ===============================
LICENCE HOLDER LICENCE AREA DATE OF GRANT
======================================= ================================== ===============================
<S> <C> <C>
Telewest Communications (Cotswolds) Cheltenham and Gloucester 26.08.88
Limited
======================================= ================================== ===============================
</TABLE>
<TABLE>
<CAPTION>
Broadcasting Act 1990 - Local Delivery Licence:
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
<S> <C> <C> <C>
Telewest Communications LDS009 Cheltenham and Gloucester 16.10.91
(Cotswolds) Limited
============================= =========================== ========================== ===========================
</TABLE>
<PAGE>
PART C
THE LONDON SOUTH LICENCES
<TABLE>
<CAPTION>
Telecommunications Act 1984 Licence:
====================================== ==================================== ===================================
Licence Holder Licence Area Date Of Grant
====================================== ==================================== ===================================
<S> <C> <C>
Telewest Communications (London Croydon 14.01.94
South) Limited Kingston and Richmond 08.05.90
Merton and Sutton 23.01.90
====================================== ==================================== ===================================
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service Licences:
====================================== ==================== ====================== ============================
Licence Holder Licence No. Licence Area Date of Grant
====================================== ==================== ====================== ============================
Telewest Communications (London PDSL021 Merton and Sutton 15.03.90
South) Limited
PDSL109 Kingston and Richmond 03.12.90
====================================== ==================== ====================== ============================
Broadcasting Act 1990 - Local Delivery Licence:
====================================== ==================== ====================== ============================
Licence Holder Licence No. Licence Area Date of Grant
====================================== ==================== ====================== ============================
Telewest Communications (London LDS002 Croydon 16.10.91
South) Limited
====================================== ==================== ====================== ============================
</TABLE>
<PAGE>
PART D
THE NORTH EAST LICENCES
<TABLE>
<CAPTION>
Telecommunications Act 1984 Licence:
======================================= ================================== ===============================
LICENCE HOLDER LICENCE AREA DATE OF GRANT
======================================= ================================== ===============================
<S> <C> <C>
Telewest Communications (North East) Tyneside 26.04.91
Partnership
======================================= ================================== ===============================
</TABLE>
<TABLE>
<CAPTION>
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service Licence:
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
<S> <C> <C> <C>
Telewest Communications PDSL 030 Tyneside 03.09.90
(North East) Limited
============================= =========================== ========================== ===========================
</TABLE>
PART E
THE SCOTLAND LICENCES
<TABLE>
<CAPTION>
Telecommunications Act 1984 Licence:
====================================== ==================================== ===================================
Licence Holder Licence Area Date of Grant
====================================== ==================================== ===================================
<S> <C> <C>
Telewest Communications (Scotland) Edinburgh 20.12.90
Limited
====================================== ==================================== ===================================
Telecommunications Act 1984 Licences (cont.):
====================================== ==================================== ===================================
Licence Holder Licence Area Date of Grant
====================================== ==================================== ===================================
Telewest Communications Cumbernauld and Monklands 18.01.90
(Cumbernauld) Limited
====================================== ==================================== ===================================
Telewest Communications (Dumbarton) Dumbarton 18.01.90
Limited
====================================== ==================================== ===================================
Telewest Communications (Dundee & Dundee 17.01.91
Perth) Limited Perth 17.01.91
<PAGE>
====================================== ==================================== ===================================
Telewest Communications (Falkirk) Falkirk and Livingstone 11.11.90
Limited
====================================== ==================================== ===================================
Telewest Communications (Glenrothes) Glenrothes and Kirkcaldy 18.04.91
Limited
====================================== ==================================== ===================================
Telewest Communications (Motherwell) Motherwell, Hamilton and East 18.01.90
Limited Kilbride
====================================== ==================================== ===================================
<CAPTION>
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service Licences:
============================= =========================== ========================== ===========================
Licence Holder Licence No. Licence Area Date of Grant
============================= =========================== ========================== ===========================
<S> <C> <C> <C>
Telewest Communications PDSL 115 Cumbernauld and Monkland 03.12.90
(Cumbernauld) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 117 Dumbarton 03.12.90
(Dumbarton) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 069 Dundee 03.12.90
(Dundee & Perth) Limited PDSL 113 Perth 03.12.90
============================= =========================== ========================== ===========================
Telewest Communications PDSL 101 Falkirk and Livingstone 03.12.90
(Falkirk) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 064 Glenrothes and Kirkcaldy 03.12.90
(Glenrothes) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 116 Motherwell, Hamilton and 03.12.90
(Motherwell) Limited East Kilbride
============================= =========================== ========================== ===========================
<PAGE>
<CAPTION>
Broadcasting Act 1990 - Local Delivery Licence:
====================================== ======================= ========================= ======================
Licence Holder Licence No. Licence Area Date of Grant
====================================== ======================= ========================= ======================
<S> <C> <C>
Telewest Communications (Scotland) LDS 008 Edinburgh 16.10.91
Limited
====================================== ======================= ========================= ======================
Telewest Communications (East LDS 038 East Lothian 29.7.97
Lothian and Fife) Limited
====================================== ======================= ========================= ======================
<PAGE>
PART F
THE SOUTH EAST LICENCES
<CAPTION>
Telecommunications Act 1984 Licences:
======================================= ================================== ===============================
LICENCE HOLDER LICENCE AREA DATE OF GRANT
======================================= ================================== ===============================
<S> <C> <C>
Telewest Communications (South East) Basildon, Brentwood and 14.11.90
Limited Chelmsford
======================================= ================================== ===============================
Telewest Communications (South Thames Chatham, Gillingham, Gravesend, 30.11.90
Estuary) Limited Maidstone, Northfleet, Rochester
and Sittingbourne
======================================= ================================== ===============================
<CAPTION>
Broadcasting Act 1990 - Local Delivery Licences:
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
<S> <C> <C> <C>
Telewest Communications LDS006 Basildon, Brentwood and 16.10.91
(South East) Limited Chelmsford
============================= =========================== ========================== ===========================
Telewest Communications LDS007 Chatham, Gillingham, 16.10.91
(South Thames Estuary) Gravesend, Maidstone,
Limited Northfleet, Rochester
and Sittingbourne
============================= =========================== ========================== ===========================
<PAGE>
PART G
THE SBCC LICENCES
<CAPTION>
Telecommunications Act 1984 Licences:
======================================= ================================== ===============================
LICENCE HOLDER LICENCE AREA DATE OF GRANT
======================================= ================================== ===============================
<S> <C> <C>
Telewest Communications (Liverpool) Merseyside 14.10.89
Limited
======================================= ================================== ===============================
Telewest Communications (Liverpool) North Liverpool and Sefton 30.11.90
Limited
======================================= ================================== ===============================
Telewest Communications (St Helens & St Helens and Knowsley 08.12.90
Knowsley) Limited
======================================= ================================== ===============================
Telewest Communications (Wigan) Wigan 14.11.90
Limited
======================================= ================================== ===============================
Telewest Communications (Central Central Lancashire 14.10.89
Lancashire) Limited
======================================= ================================== ===============================
Telewest Communications (Telford) Telford 12.04.91
Limited
======================================= ================================== ===============================
Telewest Communications (Midlands) Black Country 25.01.91
Limited
======================================= ================================== ===============================
Telewest Communications (Southport) Southport 19.12.96
Limited
======================================= ================================== ===============================
Telewest Communications Fylde and Fylde and Wyre 19.12.96
Wyre Limited
======================================= ================================== ===============================
Telewest Communications (Worcester) Worcester 25.9.93
Limited
======================================= ================================== ===============================
<PAGE>
<CAPTION>
Cable and Broadcasting Act 1984 - Prescribed Diffusion Service Licences:
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
<S> <C> <C> <C>
Telewest Communications PDSL 007 Merseyside 14.09.84
(Liverpool) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 077 North Liverpool and 03.12.90
(Liverpool) Limited Sefton
============================= =========================== ========================== ===========================
Telewest Communications (St PDSL 076 St Helens and Knowsley 03.12.90
Helens & Knowsley) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 105 Wigan 03.12.90
(Wigan) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 016 Central Lancashire 17.10.89
(Central Lancashire) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 132 Telford 03.12.90
(Telford) Limited
============================= =========================== ========================== ===========================
Telewest Communications PSDL 131 Black Country 03.12.90
(Midlands) Limited
============================= =========================== ========================== ===========================
Telewest Communications PDSL 129 Worcester 31.12.90
(Worcester) Limited
============================= =========================== ========================== ===========================
<PAGE>
Broadcasting Act 1990 - Local Delivery Licence:
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
Cable Communications (Fylde LDS 011 Fylde and Wyre 16.12.94
& Wyre) Limited
============================= =========================== ========================== ===========================
Telewest Communications LDS 029 Southport 19.1.98
(Southport) Limited
============================= =========================== ========================== ===========================
<PAGE>
PART H
THE NATIONAL NETWORK LICENCE
Telecommunications Act 1984 Licence
============================= =========================== ========================== ===========================
LICENCE HOLDER LICENCE NO. LICENCE AREA DATE OF GRANT
============================= =========================== ========================== ===========================
Telewest Communications plc Out of Area 14.1.97
============================= =========================== ========================== ===========================
</TABLE>
<PAGE>
SCHEDULE 10
PRINCIPAL AGREEMENTS
PART A
BT INTERCONNECT AGREEMENTS
(i) First Supplemental Agreement dated 18 August 1997 between (1) Various
Operators (Telewest) and (2) British Telecommunications Plc;
(ii) Network Charge Control Supplementary Agreement dated 20 October 1997
between (1) Telewest Group and (2) British Telecommunications Plc;
(iii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Central Lancashire) Limited and (2) British
Telecommunications Plc relating to the Preston franchise;
(iv) Interconnection Agreement dated 26 July 1996 between (1) Telewest
Communications (Cotswolds) Limited and (2) British Telecommunications
Plc relating to the Cheltenham and Gloucester franchise;
(v) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Cumbernauld) Limited and (2) British Telecommunications
Plc;
(vi) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dumbarton) Limited and (2) British Telecommunications
Plc;
(vii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dundee & Perth) Limited and (2) British
Telecommunications Plc relating to the Dundee and Broughty Ferry
franchise;
(viii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Scotland) Limited and (2) British Telecommunications
Plc relating to the Edinburgh franchise;
(ix) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Falkirk) Limited and (2) British Telecommunications Plc
relating to the Falkirk and West Lothian franchise;
(x) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Glenrothes) Limited and (2) British Telecommunications
Plc relating to the Glenrothes, Kirkcaldy and Leven franchise;
(xi) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Liverpool) Limited and (2) British Telecommunications
Plc relating to the Liverpool South franchise;
<PAGE>
(xii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Liverpool) Limited and (2) British Telecommunications
Plc relating to the Liverpool North, Sefton and Bootle franchise;
(xiii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Croydon franchise;
(xiv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Kingston and Richmond franchise;
(xv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (London South) Limited and (2) British
Telecommunications Plc relating to the Merton and Sutton franchise;
(xvi) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Midlands) Limited and (2) British Telecommunications
Plc relating to the Dudley, Wolverhampton and Black Country franchises;
(xvii) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Motherwell) Limited and (2) British Telecommunications
Plc relating to the Motherwell and Hamilton franchise;
(xviii) Interconnection Agreement dated 1 September 1996 between (1) Telewest
Communications (North East) Limited and (2) British Telecommunications
Plc relating to the Newcastle and Gateshead franchise;
(xix) Interconnection Agreement dated 22 August 1996 between (1) Telewest
Communications (Dundee & Perth) Limited and (2) British
Telecommunications Plc relating to the Perth and Scone franchise;
(xx) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (South Thames Estuary) Limited and (2) British
Telecommunications Plc relating to the Gravesend and Rochester
franchise;
(xxi) Interconnection Agreement dated 26 July 1996 between (1) Telewest
Communications (South West) Limited and (2) British Telecommunications
Plc relating to the Bristol, Bath and Weston franchise;
(xxii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (South East) Limited and (2) British Telecommunications
Plc relating to the Basildon and Southend franchise;
(xxiii) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (St. Helens & Knowsley) Limited and (2) British
Telecommunications Plc;
(xxiv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Telford) Limited and (2) British Telecommunications
Plc;
<PAGE>
(xxv) Interconnection Agreement dated 26 September 1996 between (1) Telewest
Communications (Wigan) Limited and (2) British Telecommunications Plc;
(xxvi) Multiple systems Operator Agreement dated 23 December 1996 between (1)
British Telecommunications plc and (2) SBC CableComms (UK) Limited
(renamed Telewest Communications (Midlands and North West) Limited);
(xxvii) Interconnection Agreement dated 15 January 1997 between (1) Telewest
Communications Plc and (2) British Telecommunications Plc amending
(i)-(xxvi) above.
<PAGE>
PART B
SKY STANDARD CABLE OPERATOR AGREEMENTS
(i) Standard Cable Operator Agreement dated 25 February 1993 made between
Sky Television Plc, British Sky Broadcasting Limited, Telewest
Communications Group Limited and certain other companies party thereto;
(ii) Standard Cable Operator Agreement dated 30 April 1995 made between
British Sky Broadcasting Limited, British Sky Broadcasting Group Plc,
Telewest Communications plc and the other companies party thereto as
amended by all or any of the following:
(A) letter from Telewest to BSkyB dated 27 June 1995,
(B) letter to British Sky Broadcasting Limited and British Sky
Broadcasting Group Plc from Telewest Communications plc dated
25 May 1995, and
(C) undated letter from British Sky Broadcasting Limited and
British Sky Broadcasting Group Plc to Telewest Communications
Plc; and
(iii) Unsigned/undated agreement between British Sky Broadcasting Limited,
Sky Television Limited, SBC Cablecomms UK and certain other companies
party thereto.
<PAGE>
THE BORROWER
SIGNED for and on behalf of )
TELEWEST COMMUNICATIONS ) CHARLES BURDICK
NETWORKS LIMITED )
THE ORIGINAL CHARGING SUBSIDIARIES
SIGNED for and on behalf of each of
TELEWEST COMMUNICATIONS GROUP LIMITED
TELEWEST COMMUNICATIONS CABLE LIMITED
TELEWEST COMMUNICATIONS HOLDINGS LIMITED
TELEWEST PARLIAMENTARY HOLDINGS LIMITED
THESEUS NO. 1 LIMITED
THESEUS NO. 2 LIMITED
THE CABLE EQUIPMENT STORE LIMITED
TELEWEST COMMUNICATIONS (COTSWOLDS) LIMITED
TELEWEST COMMUNICATIONS (NOMINEES) LIMITED
TELEWEST COMMUNICATIONS (NORTH EAST) LIMITED
TELEWEST COMMUNICATIONS (SOUTH EAST) LIMITED
TELEWEST COMMUNICATIONS (SOUTH THAMES ESTUARY) LIMITED
TELEWEST COMMUNICATIONS (TYNESIDE) LIMITED
TELEWEST COMMUNICATIONS (MIDLANDS AND NORTH WEST) LIMITED
SOUTHWESTERN BELL INTERNATIONAL HOLDINGS LIMITED
TELEWEST COMMUNICATIONS (MIDLANDS) LIMITED
TELEWEST COMMUNICATIONS (TELFORD) LIMITED
TELEWEST COMMUNICATIONS (NORTH WEST) LIMITED
TELEWEST COMMUNICATIONS (WIGAN) LIMITED
TELEWEST COMMUNICATIONS (CENTRAL LANCASHIRE) LIMITED
TELEWEST COMMUNICATIONS (LIVERPOOL) LIMITED
TELEWEST COMMUNICATIONS (ST HELENS & KNOWSLEY) LIMITED
TELEWEST COMMUNICATIONS (EAST LOTHIAN & FIFE) LIMITED
TELEWEST COMMUNICATIONS (LONDON SOUTH) LIMITED
TELEWEST COMMUNICATIONS (SOUTH WEST) LIMITED
TELEWEST COMMUNICATIONS (DUNDEE & PERTH) LIMITED
TELEWEST COMMUNICATIONS (GLENROTHES) LIMITED
TELEWEST COMMUNICATIONS (MOTHERWELL) LIMITED
TELEWEST COMMUNICATIONS (CUMBERNAULD) LIMITED
TELEWEST COMMUNICATIONS (DUMBARTON) LIMITED
TELEWEST COMMUNICATIONS (FALKIRK) LIMITED
TELEWEST COMMUNICATIONS (SCOTLAND) LIMITED
TELEWEST COMMUNICATIONS (SCOTLAND HOLDINGS) LIMITED
TELEWEST COMMUNICATIONS (INTERNET) LIMITED
TELEWEST COMMUNICATIONS (SOUTHPORT) LIMITED
CRYSTAL PALACE RADIO LIMITED
AVON CABLE INVESTMENTS LTD
TELEWEST COMMUNICATIONS (WORCESTER) LIMITED
BY: CHARLES BURDICK
<PAGE>
THE ORIGINAL CHARGING PARTNERSHIPS
SIGNED for and on behalf of each of
COTSWOLDS CABLE LIMITED PARTNERSHIP
ESTUARIES CABLE LIMITED PARTNERSHIP
TYNESIDE CABLE LIMITED PARTNERSHIP
EDINBURGH CABLE LIMITED PARTNERSHIP
AVON CABLE LIMITED PARTNERSHIP
UNITED CABLE (LONDON SOUTH) LIMITED PARTNERSHIP
TCI/US WEST CABLE COMMUNICATIONS GROUP
by their general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by their general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
SIGNED for and on behalf of the partners of
LONDON SOUTH CABLE PARTNERSHIP
by the following:
Signed for and on behalf of its managing partner
UNITED CABLE (LONDON SOUTH) LIMITED PARTNERSHIP
by its general partner
THESEUS NO.1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO.2 LIMITED: CHARLES BURDICK
Signed by
CRYSTAL PALACE RADIO LIMITED: CHARLES BURDICK
<PAGE>
SIGNED for and on behalf of the partners of
TELEWEST COMMUNICATIONS
(SOUTH EAST) PARTNERSHIP
by the following:
Signed for and on behalf of
ESTUARIES CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS
(SOUTH EAST) LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS
(SOUTH THAMES ESTUARY) LIMITED: CHARLES BURDICK
SIGNED for and on behalf of the partners of
TELEWEST COMMUNICATIONS
(NORTH EAST) PARTNERSHIP
by the following:
Signed for and on behalf of
TYNESIDE CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS
(NORTH EAST) LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS
(TYNESIDE) LIMITED: CHARLES BURDICK
SIGNED for and on behalf of the partners of
AVON CABLE JOINT VENTURE
by the following: CHARLES BURDICK
<PAGE>
Signed for and on behalf of
AVON CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS
(SOUTH WEST) LIMITED: CHARLES BURDICK
SIGNED for and on behalf of the partners of
TELEWEST (LONDON SOUTH) JOINT VENTURE
by the following:
Signed for and on behalf of
LONDON SOUTH CABLE PARTNERSHIP by its
managing partner
UNITED CABLE (LONDON SOUTH) LIMITED PARTNERSHIP by its
general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed for and on behalf of
TELEWEST COMMUNICATIONS
(LONDON SOUTH) LIMITED: CHARLES BURDICK
SIGNED for and on behalf of the partners of
TELEWEST COMMUNICATIONS
(COTSWOLDS) VENTURE
by the following:
Signed for and on behalf of
COTSWOLDS CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed by
TELEWEST COMMUNICATIONS CHARLES BURDICK
(COTSWOLDS) LIMITED:
<PAGE>
SIGNED for and on behalf of
TELEWEST COMMUNICATIONS
(SCOTLAND) VENTURE
by the following:
Signed for and on behalf of
EDINBURGH CABLE LIMITED PARTNERSHIP
by its general partner
THESEUS NO. 1 LIMITED: CHARLES BURDICK
and by its general partner
THESEUS NO. 2 LIMITED: CHARLES BURDICK
Signed for and on behalf of
TELEWEST COMMUNICATIONS
(SCOTLAND) LIMITED: CHARLES BURDICK
THE ARRANGERS
SIGNED for and on behalf of
THE BANK OF NEW YORK
by: PHILIP WALKER
SIGNED for and on behalf of
CIBC WOOD GUNDY PLC
by: LOUISE MOAT
SIGNED for and on behalf of
CHASE MANHATTAN PLC
by: PATRICK LEAHY
SIGNED for and on behalf of
GREENWICH NATWEST
by: RORY MCCARTHY
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by: HOWARD BAKER
<PAGE>
THE BANKS AND FINANCIAL INSTITUTIONS
SIGNED for and on behalf of
THE BANK OF NEW YORK COMPANY, INC.
by: KALPANA RAINA
SIGNED for and on behalf of
CIBC WOOD GUNDY PLC
by: LOUISE MOAT
SIGNED for and on behalf of
THE CHASE MANHATTAN BANK
by: PATRICK LEAHY
SIGNED for and on behalf of
NATIONAL WESTMINSTER
BANK PLC
by: RORY MCCARTHY
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by: HOWARD BAKER
SIGNED for and on behalf of
BANKERS TRUST COMPANY
by its attorney: HOWARD BAKER
SIGNED for and on behalf of
BANQUE PARIBAS
by: DAVID COTTAM
SIGNED for and on behalf of
BARCLAYS BANK PLC
by its attorney: HOWARD BAKER
SIGNED for and on behalf of
THE BRITISH LINEN BANK LIMITED
by its attorney: HOWARD BAKER
<PAGE>
SIGNED for and on behalf of BANKBOSTON, N.A.
by: RACHEL MOORE
SIGNED for and on behalf of
DEUTSCHE BANK AG, LONDON BRANCH
by: MARTIN FLAHERTY
ERWAN FOURNIS
SIGNED for and on behalf of MEESPIERSON N.V.
by: EUAN LYNES
SIGNED for and on behalf of
NATIONSBANK N.A. (LONDON BRANCH)
by: DAVID RIORDAN
SIGNED for and on behalf of
N M ROTHSCHILD & SONS LIMITED
by: TOM SMYTH
STEPHEN LOUIS
THE AGENT
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by: HOWARD BAKER
THE SECURITY TRUSTEE
SIGNED for and on behalf of
THE TORONTO-DOMINION BANK
by: HOWARD BAKER
CONFORMED COPY
STRICTLY CONFIDENTIAL
The Directors
Telewest Communications Group Limited
Unit 1
Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
WITHOUT PREJUDICE
24 April 1998
Gentlemen
I am employed by the Company under a Service Agreement dated 7 August 1997 (the
AGREEMENT).
1. Subject to the conditions set out below, I hereby give notice to terminate
the Agreement on 15 June 1998.
2.1 The Company will pay me my salary and pension contributions for the month of
April 1998 in the normal course (my salary being paid at the rate of
(pound)350,000 per annum).
2.2 On or before 22 June 1998 the Company will pay me my salary for the period
to 15 June, any outstanding pension contributions due to 30 April and any
holiday pay outstanding as at 30 April and any other amounts owed to me as at
that date (including any expenses).
2.3 In addition, on 22 June 1998 or, if later, within 5 days of my complying
with paragraph 5 below, the Company will pay me, subject to deduction of income
tax and any other legally required deduction, the sum of (pound)494,375 (made up
as set out in Schedule 1), in lieu of notice and in full settlement of all my
rights, and any outstanding claims, under the Agreement, but without prejudice
to my rights under this Agreement.
3. The Company will continue to allow me to use my present company car and
retain my fuel card on the terms specified in clause 8 of the Agreement until 30
April 1999. I will then return that car to the Company's head office.
4. Notwithstanding that I shall not be an employee of any Telewest Group Company
the Company will also continue to provide private medical, permanent health and
<PAGE>
life insurance on the terms specified in clause 7 of the Agreement until 30
April 1999, provided that no adverse change shall be made to the level of any
such cover unless it is equivalent to any such change introduced for executive
directors generally. The Company shall similarly continue the Directors and
Officers Insurance Cover presently available until 30 April 2004 and shall
indemnify me against all liabilities, costs and expenses in connection with the
claims brought against, inter alia, the Company and me by Mr Alan Robinson.
5. I undertake to sign a letter of resignation as a director in the form of
Schedule 2 and to return to the Company all Telewest Group property, including
(other than my company car and fuel card), any company-sponsored credit/charge
cards, computer equipment, fax machine, board papers, documents, correspondence
and relevant copies thereof within 5 days of acceptance of this letter by the
Company.
6. The Company will procure that I will be permitted to exercise (subject to the
rules of each relevant scheme and to any applicable performance criteria) my
share options listed in Schedule 3 at any time between the first and last
exercise dates noted against each option. I accept that the option granted to me
under the Telewest 1995 Sharesave Scheme has lapsed (without prejudice to my
right to continue making contributions and to a refund of contributions).
7. It is agreed that the 475,183 shares awarded to me under the Telewest 1995
Restricted Share Scheme have vested and that the award may be exercised by me,
subject to and in accordance with the Scheme rules, as varied by the Agreement.
8. I acknowledge that all my rights in respect of an award under the Telewest
Equity Participation Plan have lapsed. It is agreed that I will receive the sum
of (pound)7,205 as compensation for the matching award of 7,790 shares (at
92.5p) which might have been made to me under the Plan. This payment will be
made at the same time and on the same terms (in particular as to any legally
required deduction of tax), as the payment due under paragraph 2 above.
9. It is agreed that I should have received two awards of shares under the
Telewest Long Term Incentive Plan as set out in Schedule 3. In order to
compensate me on terms which are as close as possible to those I would have
enjoyed had the awards been made, the provisions of Schedule 4 shall apply.
10. I accept that all the terms of the Agreement expressed to be operative after
termination (in particular, clauses 12 and 14) will remain in full force and
effect. The Company will consider favourably any request I might make for waiver
of any of the restrictions in clause 14 of the Agreement.
11. The Company will pay up to (pound)10,000 (plus VAT) direct to my legal
advisers by way of contribution to the legal fees (including disbursements)
which I have incurred in connection with the termination of my employment. The
Company will also arrange for me to receive outplacement counselling and
assistance up to a value of (pound)12,500 (plus VAT).
2
<PAGE>
12. Save as required by law or to give effect to the terms of this letter or as
required by the listing rules of the London Stock Exchange or by a regulatory
authority neither I nor the Company (contracting for itself and on behalf of
each Telewest Group Company) will, without the written consent of the other:
o disclose the terms of this agreement to anyone (other than to my
professional advisers who require the information for necessary
professional purposes);
o directly or indirectly make any statement about matters concerning my
directorship of the Company and all my other Telewest Group
directorships or my employment with the Company (other than in the form
of the attached public announcements); or
o make any derogatory or disparaging comment about me, the Company any
Telewest Group company, any corporate shareholder of Telewest
Communications plc as at the date of this Agreement, or any of its or
their respective directors or employees.
Providing that the Company may respond to proper enquiries by, or on behalf of,
shareholders, in a manner consistent with the attached public announcements.
13. In this letter Telewest Group shall mean any of:
o Telewest Communications plc; and
o any subsidiary of Telewest Communications plc from time to time.
Yours sincerely
STEPHEN DAVIDSON
I agree to the terms set out above.
GARY AMES 24 APRIL 1998
.............................. .........................
for and on behalf of Telewest Date
Communications Group Limited
3
<PAGE>
SCHEDULE 1
SUM PAYABLE IN LIEU OF NOTICE
(pound)
Salary 350,000
Pension Contributions 35,000
Bonus ((pound)350,000 x 25% x 125%) 109,375
-------
Total 494,375
=======
4
<PAGE>
SCHEDULE 2
The Directors of Telewest Communications plc
24 April 1998
Gentlemen
I hereby resign with immediate effect as a Director of Telewest Communications
plc (the COMPANY) and as a Director of the companies listed in the Schedule
hereto and of any other direct or indirect subsidiary of the Company of which I
am currently a director (the COMPANIES).
I confirm that, save for my rights under the letter dated 24 April 1998 from me
to the Company, I have no claim outstanding against the Company, or any of its
corporate shareholders as at 24 April 1998, or any of the Companies and/or any
of its or their respective directors, officers or employees in respect of any
cause, matter or thing whatsoever, but to the extent that any such claim exists
or may exist, I hereby irrevocably waive such claim and release the Company, its
corporate shareholders as at 24 April 1998, and the Companies from any liability
whatsoever in respect thereof.
SCHEDULE
ATTACHED
SIGNED as a DEED and delivered )
by _____ _____ in the presence of: )
Witness:
Signature:
Name:
Address:
5
<PAGE>
SCHEDULE 3
THE TELEWEST SHARE OPTION SCHEMES
<TABLE>
<CAPTION>
- --------------------- ------------------ ------------------ ---------------------- ---------- -----------
SCHEME DATE OF AWARD FIRST EXERCISE LAST EXERCISE DATE NO. OF EXERCISE
DATE SHARES PRICE
- --------------------- ------------------ ------------------ ---------------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Executive Options 11 March 1996 11 March 1999 11 September 1999 21,277 141.0p
(No.1)
- --------------------- ------------------ ------------------ ---------------------- ---------- -----------
Executive Options 11 March 1996 11 March 1999 11 September 1999 86,302 141.0p
(No.2)
- --------------------- ------------------ ------------------ ---------------------- ---------- -----------
Executive Options 16 June 1995 16 June 1998 30 April 1999 166,880 171.5p
(No.2)
- --------------------- ------------------ ----------------------------------------- ---------- -----------
Sharesave 4 1 February 1998 These options will lapse 16,810 58.0p
- --------------------- ------------------ ----------------------------------------- ---------- -----------
</TABLE>
THE TELEWEST LONG TERM INCENTIVE PLAN
- --------------------- ----------------------- ----------------------------------
DATE OF AWARD NUMBER OF SHARES PROPORTION OF RELEVANT SHARES
- --------------------- ----------------------- ----------------------------------
November 1997 410,036 15/36ths
- --------------------- ----------------------- ----------------------------------
March 1998 364,129 3/36ths
- --------------------- ----------------------- ----------------------------------
6
<PAGE>
SCHEDULE 4
DEFINITIONS
ALLOCATION means a promise to transfer shares in the Company in accordance with
the rules of the Plan;
PAYMENTS means the cash payments or Shares representing a value equal to such
cash payments, set out in paragraphs 1 and 2 below or either of them;
COMPANY means Telewest Communications plc (for the purposes of this Schedule).
PERFORMANCE PERIOD means:
(a) in respect of the Payment payable under paragraph 1 below, 1 January 1997
to 31 December 1999;
(b) in respect of the Payment payable under paragraph 2 below, 1 January 1998
to 31 December 2000;
NOTICE OF EXERCISE means a notice substantially in the form set out in Appendix
2 to this Schedule.
PARTICIPANT means a person who has been given an Allocation under the Plan;
PLAN means the Telewest Long Term Incentive Plan;
REMUNERATION COMMITTEE means the Remuneration Committee of the Company.
SHARES means Shares in the Company
1. Within 10 working days of the service of a Notice of Exercise by the
Executive (which may not be served before 31 December 1999 or after 31 January
2000) the Company shall pay the Executive a cash sum or, at the election of the
Remuneration Committee, transfer Shares equal in value to such cash sum, subject
to paragraphs 3 to 8 below, calculated in accordance with the following formula:
15
A x B x ---- = C
36
Where:
A is 410,036;
7
<PAGE>
B is the Company's middle market share price (per Share) either:
o at the close of business on the date immediately preceding the
date on which a Notice of Exercise is served or, where
appropriate, an event within paragraph 4 below occurs; or
o at the close of business on the tenth working day preceding
the date of payment to the personal representatives under
paragraph 7 below.
15
C is the product of A x B x ---- in cash or Shares, the
36
value of which at the close of business on the date of valuation
referred to in this paragraph is equal to such cash sum. In the event
that the cash sum cannot be represented by a whole number of Shares,
the number of Shares shall be rounded up to the next whole number.
2. Within 10 working days of the service of a Notice of Exercise by the
Executive (which may not be served before 31 December 2000 or after 31 January
2001) the Company shall pay the Executive a cash sum or, at the election of the
Remuneration Committee, transfer Shares equal in value to such cash sum, subject
to paragraphs 3 to 8 below, calculated in accordance with the following formula:
3
D x E x ---- = F
36
Where:
D is 364,129;
E is the Company's middle market share price (per Share) either:
o at the close of business immediately preceding the date on
which a Notice of Exercise is served, or where appropriate,
the occurrence of an event within paragraph 4 below occurs;
o at the close of business on the tenth working day preceding
the date of payment to the personal representatives under
paragraph 7 below.
3
F is the product of D x E x ---- in cash or Shares, the
36
value of which at the close of business on the date of valuation
referred to in this paragraph is equal to such cash sum. In the event
that the cash sum cannot be represented by a whole number of Shares,
the number of Shares shall be rounded up to the next whole number.
8
<PAGE>
3. Except where paragraph 4 below applies, such percentage of the Payments set
out in paragraphs 1 and 2 above shall be paid as the conditions in Appendix 1 to
this Schedule provide (RELEVANT PAYMENTS).
4. If any person obtains control of the Company (within the meaning of section
840 of the Income and Corporation Taxes Act 1988) as a result of making a
general offer to acquire shares in the Company or having obtained such control
makes such an offer, or if any person becomes bound or entitled to acquire
shares in the Company under sections 428 to 430F of the Companies Act 1985, or
if under section 425 of the Companies Act 1985 the Court sanctions a compromise
or arrangement proposed for the purposes of or in connection with a scheme for
the reconstruction of the Company or its amalgamation with any other company or
companies, or if the Company passes a resolution for voluntary winding up, or if
an order is made for the compulsory winding up of the Company the Payments shall
be made in full to the Executive within 10 working days thereof (subject always
to paragraph 8 below).
5. For the purposes of paragraph 4 above, a person shall be deemed to have
obtained control of the Company if he and others acting in concert with him have
together obtained control of it.
6. In the event of any increase or variation of the share capital of the Company
(whenever effected), the Remuneration Committee may adjust the Payments as it
considers appropriate but in a manner consistent with any adjustment made to the
entitlements of at least a majority of the Participants in the Plan. As soon as
reasonably practicable after making any such adjustment the Company shall give
notice in writing to the Executive at his last known address.
7. If the Executive dies after the end of the relevant Performance Period but
before either or both of the Payments are paid, the outstanding Relevant
Payments shall be paid to the Executive's personal representatives as soon as
practicable following the death of the Executive. If the Executive dies before
the end of either of the Performance Periods, the Relevant Payments shall not be
made before the end of the respective Performance Periods.
8.1 Where the Payment is a cash sum, the Company shall withhold or make
necessary deductions from the Payment in respect of any tax or social security
contribution it is required to deduct from any such payment:
8.2 Where the Payment is a transfer of Shares and the Company is obliged to
account for any tax and/or any social security contributions recoverable from
the Executive (together, the TAX Liability) for which the Executive is liable by
virtue of being entitled to the transfer of Shares, the Company shall not be
obliged to transfer the Shares, unless either it has received on or prior to the
transfer of the Shares payment from the Executive of an amount not less than the
Tax Liability, or the Executive has entered into arrangements reasonably
acceptable to the Company to secure that such a payment is made.
9
<PAGE>
9. In the event of any dispute or disagreement as to the interpretation of this
Schedule, or as to any question or right arising from or related to this
Schedule, the decision of the Remuneration Committee shall be final and binding
provided that it is accepted that any entitlement pursuant to this Schedule
shall be generally no less favourable (other than in relation to the proportion
of Relevant Shares applicable) than that of the majority of the Participants in
the Plan.
10. Any alterations made pursuant to Rule 7 of the Plan shall also be made to
the terms of this Schedule, where relevant.
10
<PAGE>
APPENDIX 1
THE SCHEDULE TO THE PLAN
PART A
1. For the purposes of this Appendix:
(a) TSR means total shareholder return, calculated by Datastream after:
(i) reinvesting dividends (plus associated tax credits) on a
company's shares on the day on which the shares went
ex-dividend on the London Stock Exchange;
(ii) making such adjustments to take account of any increase or
variation of the share capital of a company as the
Remuneration Committee considers relevant; and
(iii) averaging the index of closing share prices and reinvested
dividends for the period of three months preceding the
Performance Period and averaging the index of closing share
prices and reinvested dividends for the final three months of
the Performance Period.
(b) THE FT-SE 100 INDEX means the Financial Times - Stock Exchange index of
the market values of 100 leading UK equities;
(c) THE COMPARATOR COMPANIES means the group of companies set out in Part B
of this Appendix (or such other such group of companies as the Board
may decide from time to time before a Payment is made, taking into
account any factors considered by the Board to be relevant);
(d) THE RELEVANT FT-SE 100 COMPANIES means the companies which were the
constituent companies for the purposes of the FT-SE 100 Index at the
commencement of the Performance Period in question and, if it was not
such a company, the Company;
(e) THE RELEVANT COMPARATOR COMPANIES means the Company and the Comparator
Companies which were listed on the London Stock Exchange at the
commencement of the Performance Period in question;
(f) any reference to the Company's position is a reference to what would be
its position in a table of the Relevant FT-SE 100 Companies or a table
of the Relevant Comparator Companies arranged in descending order
according to the TSR of each of them for the Performance Period;
(g) in the event that one of the Relevant FT-SE 100 Companies or one of the
Relevant Comparator Companies is taken over, the TSR of that company
shall be calculated up to the date of change of control (within the
meaning of section 840 of the Income and Corporation Taxes Act 1988) of
that company on the basis that:
11
<PAGE>
(i) if the takeover is on terms that an offer wholly or partly in
cash is made to shareholders, that cash is assumed to have
been reinvested in the FT-SE 100 Index for the balance of the
Performance Period;
(ii) if the takeover is on terms that it is compulsory for part or
all of the offer to be satisfied in the form of shares, those
shares are assumed to be held until the end of the Performance
Period.
(h) in the event of a demerger of one of the Relevant FT-SE 100 Companies
or one of the Relevant Comparator Companies into two or more companies
quoted on a recognised stock exchange (within the meaning of that term
as set out in section 841 of the Income and Corporation Taxes Act
1988), the TSR of the relevant company will be calculated by
aggregating the total shareholder return of the demerged company or
companies and the company from which it or they demerged for the part
of the Performance Period following the demerger become effective.
2. If one of the events specified in paragraph 4 of Schedule 4 of this Agreement
occurs, for the purposes of the calculation of TSR the middle-market quotation
of the Relevant FT-SE 100 Companies or the Relevant Comparator Companies on such
date shall be taken as the final share price of such companies (and the final
share price shall not be averaged) and the final share price of the Company
shall be taken as the most valuable option offered to shareholders in the
Company as at the date of such event.
3. The percentage of the Payment, when TSR is measured against the Relevant
FT-SE 100 Companies, is as follows:
(a) 50% of the Payment if the Company is in the 25th (or a higher) position;
(b) 12 1/2% of the Payment if the Company is in the 50th position;
(c) 0% of the Payment if the Company is in the 51st (or a lower) position;
and pro rata for positions between those specified at (a) and (b) above.
4. The percentage of the Payment, when TSR is measured against the Relevant
Comparator Companies, is as follows:
(a) 50% of the Payment if the Company has an upper quartile position;
12
<PAGE>
(b) 12 1/2% of the Payment if the Company is at the median position (or if
there is no median position, the position immediately above the median
position);
(c) 0% of the Payment if the Company is below the median position;
and pro rata for positions between those specified at (a) and (b) above.
5. The Remuneration Committee may make such adjustments to the method of
calculating TSR or any other feature of this Appendix as it considers
appropriate to ensure that the condition in this Appendix achieves its original
purpose.
PART B
LIST OF COMPARATOR COMPANIES
British Telecommunications plc
Vodafone Group plc
Orange plc
General Cable plc
British Sky Broadcasting Group plc
Flextech plc
Eurotunnel plc
Comcast Corp
Nynex Corporation
International CabelTel Corp
Carlton Communications plc
Yorkshire Tyne Tees Television Holdings plc
HTV Group plc
Scottish Television plc
13
<PAGE>
APPENDIX 2
NOTICE OF EXERCISE
Mr Stephen Davidson
Whiteleaf House
Whiteleaf
Princes Risborough
Bucks HP17 0LL
The Directors
Telewest Communications plc
Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
[Date]
Dear Sirs
AGREEMENT DATED 24 APRIL 1998 (THE AGREEMENT)
Pursuant to paragraph [1] [2] and subject to any deduction pursuant to paragraph
8 of the Schedule to the Agreement I hereby serve a Notice of Exercise with the
effect that you shall make the Relevant Payments to me by cheque or by delivery
of Shares, such cheque or Shares to be received by me not later than 10 working
days of the date of this notice.
Yours faithfully
STEPHEN DAVIDSON
14
<PAGE>
PUBLIC AND INTERNAL ANNOUNCEMENT
FOLLOWING RESIGNATION
ATTACH ANNOUNCEMENTS.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE BODY OF THE ACCOMPANYING FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> POUNDS STERLING
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.6765
<CASH> 43,875
<SECURITIES> 0
<RECEIVABLES> 70,272
<ALLOWANCES> (8,097)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,233,753
<DEPRECIATION> (528,846)
<TOTAL-ASSETS> 2,415,314
<CURRENT-LIABILITIES> 0
<BONDS> (1,448,820)
0
(49,607)
<COMMON> (92,757)
<OTHER-SE> (527,658)
<TOTAL-LIABILITY-AND-EQUITY> (2,415,314)
<SALES> 0
<TOTAL-REVENUES> 110,424
<CGS> 0
<TOTAL-COSTS> (39,458)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (42,721)
<INCOME-PRETAX> (68,748)
<INCOME-TAX> 20
<INCOME-CONTINUING> (68,728)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,728)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
EXHIBIT 99
Telewest Communications plc Press Release issued on May 7, 1998 with respect to
results of operations for the three month period ended March 31, 1998 (including
unaudited consolidated financial statements prepared in accordance with UK
GAAP).
<PAGE>
FOR IMMEDIATE RELEASE 7TH MAY 1998
TELEWEST COMMUNICATIONS PLC
1ST QUARTER RESULTS 1998
EBITDA (POUND) 25.8M +254%
REVENUE (POUND)110.4M +22.2%
CATV MARGIN 42.8% +3.7% POINTS
TELEPHONY MARGIN 77.1% +6.5% POINTS
HOUSEHOLD PENETRATION 34.5% +0.7% POINTS
<TABLE>
<CAPTION>
Quarter ending Mar. 98 Mar. 97 Dec. 97
- -------------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
TELEVISION
Customers 617,877 541,728 (+14.1%) 605,988 (+2.0%)
Penetration 22.1% 22.2% (-0.1% points) 22.0% (+0.1% points)
Churn 34.8% 32.6% (+2.2% points) 34.0% (+0.8% points)
Av. Rev. per cust (pound)23.72 (pound)23.57 (+0.6%) (pound)23.40 (+1.4%)
RESIDENTIAL TELEPHONY
Customers 831,585 669,577 (+24.2%) 810,358 (+2.6%)
Penetration 30.1% 28.2% (+1.9% points) 29.7% (+0.4% points)
Churn 20.5% 19.5% (+1.0% point) 20.0% (+0.5% points)
Av. Rev. per line (pound)19.10 (pound)20.31 (-6.0%) (pound)19.19 (-0.5%)
BUSINESS TELEPHONY
Lines 110,015 74,540 (+47.6%) 100,989 (+8.9%)
Av. Lines per cust. 4.1 3.5 (+17.1%) 4.0 (+2.5%)
Av. Rev. per line (pound)42.81 (pound)43.68 (-2.0%) (pound)43.62 (-1.9%)
Av. Rev. per cust. (pound)173.40 (pound)145.73 (+19.0%) (pound)158.05 (+9.7%)
INTERNET
Dial-up customers 17,059 4,895 (+248.5%) 16,713 (+2.1%)
</TABLE>
TELEWEST TODAY ANNOUNCED ITS 1ST QUARTER RESULTS.
COMMENTING ON THE RESULTS CHARLES BURDICK, GROUP FINANCE DIRECTOR, SAID:
"THE FINANCIAL RESULTS FOR THE FIRST QUARTER OF 1998 REFLECT SUBSTANTIAL
PROGRESS FOLLOWING THE RESTRUCTURING OF THE BUSINESS TOWARDS THE END OF LAST
YEAR AND UNDERSCORE THE STRATEGIC RATIONALE OF OUR PROPOSED MERGER WITH GENERAL
CABLE. TURNOVER HAS INCREASED BY 22.2% TO (POUND)110.4M WITH ALL REVENUE STREAMS
CONTRIBUTING TO THE GROWTH. EBITDA OF (POUND)25.8M HAS BEEN ACHIEVED THROUGH
GROWTH IN CUSTOMER NUMBERS, MARGIN IMPROVEMENTS AND CONTINUED EMPHASIS ON THE
CONTROL OF OPERATING COSTS EVIDENCED BY DECLINING SG&A IN THE FACE OF
SUBSTANTIAL GROWTH IN CUSTOMER VOLUMES AND REVENUES.
<PAGE>
"TELEPHONY MARGINS INCREASED 6.5% TO 77.1% AS A RESULT OF THE INCREASED VOLUME
OF TRAFFIC CARRIED SOLELY ON OUR OWN NETWORKS AND CONTINUED FAVOURABLE TERMS IN
INTERCONNECT PROVISION. SECOND LINE PENETRATION IS 3.9% UP FROM 1.5% REFLECTING
GROWTH IN THE USE OF THE INTERNET. THE PROGRAMMING STRATEGY WE HAVE EMPLOYED
WITH OUR MILLENNIUM PACKAGES IS CREATING A MORE FAVOURABLE DISTRIBUTION OF
SERVICES AMONGST OUR CUSTOMER BASE. THE CHANGE IN PRODUCT DISTRIBUTION, COUPLED
WITH REVISED CONTRACT ARRANGEMENTS WITH PROGRAMME SUPPLIERS, CONTRIBUTED TO AN
INCREASE OF 3.7% IN CATV MARGINS TO 42.8%. THE RECENTLY ANNOUNCED ITC PROPOSAL
ON PROGRAMME `BUNDLING' IS DESIGNED TO PROMOTE CONSUMER CHOICE AND IS WELCOMED
BY THE COMPANY.
"THE COMPANY ENDED Q1, 1998 WITH (POUND)1.42 BILLION OF DEBT SPLIT BETWEEN
(POUND)0.55 BILLION OF SENIOR BANK DEBT AND (POUND)0.87 BILLION OF BOND DEBT.
THE COMPANY REMAINS FULLY FUNDED AND IS OPERATING COMFORTABLY WITHIN ITS
RECENTLY RESTRUCTURED BANK FACILITIES. WE ARE LOOKING AT FINANCING OPTIONS IN
REGARD TO THE EXERCISE OF OUR PRE-EMPTION RIGHTS RESULTING FROM THE COMCAST /
NTL MERGER AND THE POSSIBLE PURCHASE OF THE BIRMINGHAM CABLE AND CABLE LONDON
SHARES HELD BY COMCAST.
DAVID VAN VALKENBURG, INTERIM CHIEF EXECUTIVE OF TELEWEST, CONTINUED:
"1998 IS OFF TO A PROMISING START. WITH THE RESTRUCTURING OF THE BUSINESS NOW
BEHIND US WE HAVE BEEN ABLE TO CONCENTRATE ON OUR CORE PRODUCTS. WE NOW HAVE
1,106,169 CUSTOMERS SERVICED BY OUR OWNED AND OPERATED AND AFFILIATED
FRANCHISES.
"CABLE TELEVISION PENETRATION IS AT 22.1% UP 0.1% POINTS ON THE PREVIOUS QUARTER
WHILE RESIDENTIAL TELEPHONY PENETRATION REACHED 30.1%, UP 0.4% POINTS ON Q4
1997. AN INCREASE IN CHURN OVER THE PREVIOUS QUARTER FOR BOTH TELEVISION (UP
0.8% POINTS) AND TELEPHONE (UP 0.5% POINTS) WAS DUE IN PART TO SERVICE RELATED
ISSUES FLOWING FROM OUR RESTRUCTURING AND THE PRICE INCREASES OF NOVEMBER 1. WE
ARE FOCUSSING THE EFFORTS OF THE COMPANY TOWARDS REDUCING THIS NUMBER.
"SALES OF THE MILLENNIUM PACKAGES, LAUNCHED IN FEBRUARY, HAVE EXCEEDED
EXPECTATIONS. THE MAJORITY OF NEW SUBSCRIBERS ARE IN RE-MARKET AREAS WHICH
DEMONSTRATES THE NEW AUDIENCE CREATED FOR OUR SERVICE OFFERINGS. THIS IS
EVIDENCED BY TOTAL SALES RELATIVE TO THE NUMBER OF FRESH HOMES AVAILABLE TO
MARKET. DESPITE A REDUCTION IN THE NUMBER OF FRESH HOMES RELEASED TO MARKET,
GROSS SALES FOR THE QUARTER COMPARE FAVOURABLY TO THE CORRESPONDING PERIOD IN
1997.
2
<PAGE>
"EXCELLENT RESULTS WERE ACHIEVED IN OUR BUSINESS SERVICES DIVISION. CUSTOMERS
INCREASED TO 26,532, A RISE OF 4.1% FOR THE QUARTER AND LINES INCREASED BY 8.9%
TO 110,015. OUR BUSINESS CUSTOMERS FOR THE QUARTER AVERAGED 8.5 LINES AND IN
TOTAL NOW AVERAGE 4.1 LINES EACH, A SLIGHT INCREASE ON THE PREVIOUS QUARTER AND
A CONTINUATION OF THE UPWARD TREND.
"ON 15TH APRIL 1998 WE ANNOUNCED THAT TELEWEST AND GENERAL CABLE HAD AGREED
TERMS OF A PROPOSED MERGER TO BE ACHIEVED BY WAY OF A RECOMMENDED OFFER BY
TELEWEST FOR GENERAL CABLE SHARES. DOCUMENTS ARE EXPECTED TO BE POSTED TO
SHAREHOLDERS IN JUNE / JULY 1998. WE HAVE ALREADY STARTED THE PLANNING PROCESS
FOR THE INTEGRATION OF OUR TWO COMPANIES AND EXPECT THIS TO PROGRESS SMOOTHLY.
"WITH THE STRONG RESULTS OF THE FIRST QUARTER AND THE INCLUSION OF GENERAL CABLE
INTO AN ENLARGED GROUP WE HAVE AN EXCELLENT PLATFORM FOR CONTINUED GROWTH AND
ARE POSITIONED TO ASSUME MARKET LEADERSHIP."
NOTE:
THE FOLLOWING IS INCLUDED IN CONNECTION WITH LEGISLATION IN THE UNITED STATES OF
AMERICA, THE SAFE HARBOUR STATEMENT UNDER THE US PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. THE FOREGOING INCLUDES CERTAIN FORWARD LOOKING STATEMENTS
THAT INVOLVE VARIOUS RISKS AND UNCERTAINTIES WHICH COULD LEAD TO ACTUAL RESULTS
SIGNIFICANTLY DIFFERENT THAN THOSE ANTICIPATED BY TELEWEST. FOR A DISCUSSION OF
CERTAIN OF THESE RISKS AND UNCERTAINTIES SEE THE COMPANY'S 1997 ANNUAL REPORT.
Enquiries to: TELEWEST COMMUNICATIONS PLC
David Van Valkenburg, Interim Chief Executive
Tel: 01483 750 900
Charles Burdick, Group Finance Director
Tel: 01483 750 900
Ian Hood, Director of Corporate Communications & Investor
Relations
Tel: 01483 295 184
and at :
Dewe Rogerson
Anthony Carlisle
0171 638 9571
3
<PAGE>
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated on an equity basis
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
1st Quarter 1998 Net Additions
NET ADDITIONS NET ADDITIONS
Q1 1998 Q1 1997
<S> <C> <C>
CABLE TELEVISION
- ----------------
HOMES MARKETED 34,652 103,424
CATV CUSTOMERS 11,889 13,586
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 35,672 122,777
RESIDENTIAL TELEPHONY CUSTOMERS 21,227 49,200
RESIDENTIAL TELEPHONY LINES 28,157 52,886
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 1,057 623
BUSINESS TELEPHONY LINES 9,026 6,717
AS AT 31 MARCH AS AT 31 MARCH
1998 1997
CABLE TELEVISION
- ----------------
HOMES MARKETED 2,794,836 2,439,377
CATV CUSTOMERS 617,877 541,728
CATV PENETRATION 22.1% 22.2%
QUARTERLY CHURN RATE (ANNUALISED) 37.2% 34.3%
ROLLING 12 MONTH CHURN RATE 34.8% 32.6%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 2,760,826 2,377,511
RESIDENTIAL TELEPHONY CUSTOMERS 831,585 669,577
RESIDENTIAL TELEPHONY PENETRATION 30.1% 28.2%
RESIDENTIAL TELEPHONY LINES 864,325 679,895
QUARTERLY CHURN RATE PER LINE (ANNUALISED) 21.7% 19.8%
ROLLING 12 MONTH CHURN RATE 20.5% 19.5%
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 26,532 21,505
BUSINESS TELEPHONY LINES 110,015 74,540
AVERAGE NUMBER OF LINES PER CUSTOMER 4.1 3.5
INTERNET
- --------
DIAL-UP CUSTOMERS 17,059 4,895
CABLE TELEVISION AND RESIDENTIAL TELEPHONY CUSTOMERS 490,875 397,738
CABLE TELEVISION ONLY CUSTOMERS 127,002 143,990
RESIDENTIAL TELEPHONY ONLY CUSTOMERS 340,710 271,839
INTERNET ONLY CUSTOMERS 1,769 2,228
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
TELEWEST COMMUNICATIONS PLC
Operating Statistics - Owned and operated and affiliated franchises
* On an equity basis
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1st Quarter 1998 Net Additions
NET ADDITIONS NET ADDITIONS
Q1 1998 Q1 1997
<S> <C> <C>
CABLE TELEVISION
- ----------------
HOMES MARKETED 35,686 118,268
CATV CUSTOMERS 13,247 17,409
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 36,350 137,681
RESIDENTIAL TELEPHONY CUSTOMERS 24,791 53,812
RESIDENTIAL TELEPHONY LINES 32,211 57,706
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 1,189 744
BUSINESS TELEPHONY LINES 10,133 7,547
AS AT 31 MARCH AS AT 31 MARCH
1998 1997
CABLE TELEVISION
- ----------------
HOMES MARKETED 3,132,268 2,745,103
CATV CUSTOMERS 700,599 617,007
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 3,098,677 2,680,722
RESIDENTIAL TELEPHONY CUSTOMERS 919,473 739,913
RESIDENTIAL TELEPHONY LINES 954,752 751,227
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 29,520 24,042
BUSINESS TELEPHONY LINES 126,806 86,116
AVERAGE NUMBER OF LINES PER CUSTOMER 4.3 3.6
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Note:
* The affiliated franchises include Telewest's interests in Cable London plc
(50.0% interest), Birmingham Cable Corporation (27.5% interest) and The Cable
Corporation (16.5% interest).
5
<PAGE>
TELEWEST COMMUNICATIONS PLC
Owned and Operated Franchises
As at 31 March 1998
<TABLE>
<CAPTION>
London and Midlands and Scotland
South East South West and North East North West Total
---------- ---------- -------------- ---------- -----
<S> <C> <C> <C> <C> <C>
CABLE TELEVISION
- ----------------
HOMES MARKETED 618,356 832,637 747,995 595,848 2,794,836
CATV CUSTOMERS 144,142 177,814 169,704 126,217 617,877
CATV PENETRATION 23.3% 21.4% 22.7% 21.2% 22.1%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 612,226 832,757 720,818 595,025 2,760,826
RESIDENTIAL TELEPHONY CUSTOMERS 154,609 272,739 222,641 181,596 831,585
RESIDENTIAL TELEPHONY PENETRATION 25.3% 32.8% 30.9% 30.5% 30.1%
RESIDENTIAL TELEPHONY LINES 164,540 282,089 229,903 187,793 864,325
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 6,429 8,740 6,121 5,242 26,532
BUSINESS TELEPHONY LINES 30,617 39,863 19,227 20,308 110,015
AVERAGE NUMBER OF LINES PER
CUSTOMER 4.8 4.6 3.1 3.9 4.1
</TABLE>
6
<PAGE>
TELEWEST COMMUNICATIONS PLC
Owned and Operated Franchises
As at 31 March 1998
<TABLE>
<CAPTION>
London South South West North East Scotland South East North West Midlands Total
------------ ---------- ---------- -------- ---------- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CABLE TELEVISION
- ----------------
HOMES MARKETED 364,744 380,508 224,624 523,371 253,612 595,848 452,129 2,794,836
CATV CUSTOMERS 79,706 80,973 53,451 116,253 64,436 126,217 96,841 617,877
CATV PENETRATION 21.9% 21.3% 23.8% 22.2% 25.4% 21.2% 21.4% 22.1%
RESIDENTIAL TELEPHONY
- ---------------------
HOMES MARKETED 358,595 380,628 221,401 499,417 253,631 595,025 452,129 2,760,826
RESIDENTIAL TELEPHONY CUSTOMERS 73,833 117,656 74,548 148,093 80,776 181,596 155,083 831,585
RESIDENTIAL TELEPHONY PENETRATION 20.6% 30.9% 33.7% 29.7% 31.8% 30.5% 34.3% 30.1%
RESIDENTIAL TELEPHONY LINES 79,750 123,575 75,981 153,922 84,790 187,793 158,514 864,325
BUSINESS TELEPHONY
- ------------------
BUSINESS TELEPHONY CUSTOMERS 4,938 5,124 1,708 4,413 1,491 5,242 3,616 26,532
BUSINESS TELEPHONY LINES 24,829 21,734 4,655 14,572 5,788 20,308 18,129 110,015
AVERAGE NUMBER OF LINES PER
CUSTOMER 5.0 4.2 2.7 3.3 3.9 3.9 5.0 4.1
</TABLE>
7
<PAGE>
TELEWEST COMMUNICATIONS PLC
Affiliated Franchises
As at 31 March 1998
<TABLE>
<CAPTION>
CABLE LONDON BIRMINGHAM CABLE THE CABLE CORPORATION TOTAL AFFILIATES
ACTUAL EQUITY ACTUAL EQUITY ACTUAL EQUITY ACTUAL EQUITY
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CABLE TELEVISION
HOMES MARKETED 354,004 177,002 414,744 114,055 281,065 46,376 1,049,813 337,433
CATV CUSTOMERS 85,726 42,863 117,653 32,355 45,482 7,505 248,861 82,723
CATV PENETRATION 24.2% 24.2% 28.4% 28.4% 16.2% 16.2% 23.7% 24.5%
RESIDENTIAL TELEPHONY
HOMES MARKETED 354,004 177,002 414,744 114,055 283,602 46,794 1,052,350 337,851
RESIDENTIAL TELEPHONY CUSTOMERS 85,006 42,503 126,559 34,804 64,130 10,581 275,695 87,888
RESIDENTIAL TELEPHONY PENETRATION 24.0% 24.0% 30.5% 30.5% 22.6% 22.6% 26.2% 26.0%
RESIDENTIAL TELEPHONY LINES 90,083 45,042 126,559 34,804 64,130 10,581 280,772 90,427
BUSINESS TELEPHONY
BUSINESS TELEPHONY CUSTOMERS 3,044 1,522 4,052 1,114 2,129 351 9,225 2,987
BUSINESS TELEPHONY LINES 15,313 7,657 18,130 4,986 25,143 4,149 58,586 16,792
AVERAGE NUMBER OF LINES PER
CUSTOMER 5.0 5.0 4.5 4.5 11.8 11.8 6.4 5.6
</TABLE>
8
<PAGE>
TELEWEST COMMUNICATIONS PLC
UK GAAP
UNAUDITED SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE THREE MONTHS
ENDED 31 MARCH 1998
<TABLE>
<CAPTION>
NOTE 3 MONTHS 3 MONTHS YEAR
ENDED ENDED ENDED
31 MARCH 31 MARCH 31 DECEMBER
1998 1997 1997
(POUND)000 (POUND)000 (POUND)000
TURNOVER
<S> <C> <C> <C> <C>
CABLE TELEVISION 44,180 38,101 159,918
TELEPHONY - RESIDENTIAL 48,436 39,674 166,645
TELEPHONY - BUSINESS 13,502 9,287 43,882
OTHER (INTERNET, AD SALES ETC) 4,306 3,328 16,053
110,424 90,390 386,498
====================================================
OPERATING LOSS (20,965) (30,172) (127,764)
SHARE OF RESULTS OF ASSOCIATED UNDERTAKINGS (6,704) (4,978) (21,312)
OTHER INTEREST RECEIVABLE AND SIMILAR INCOME 1,637 2,483 9,097
INTEREST PAYABLE AND SIMILAR CHARGES 3 (44,213) (36,878) (169,930)
LOSS ON ORDINARY ACTIVITIES BEFORE TAX (70,245) (69,545) (309,909)
TAX ON LOSS ON ORDINARY ACTIVITIES 20 (64) (521)
LOSS ON ORDINARY ACTIVITIES AFTER TAX (70,225) (69,609) (310,430)
MINORITY INTERESTS (26) (117) (293)
LOSS FOR THE FINANCIAL PERIOD (70,251) (69,726) (310,723)
====================================================
LOSS PER EQUITY SHARE (4.9) (4.9) (21.8)
====================================================
1 EARNINGS/ (LOSS) BEFORE INTEREST, TAXES,
DEPRECIATION, AND AMORTISATION ("EBITDA")
OPERATING LOSS (20,965) (30,172) (127,764)
ADD: DEPRECIATION 46,724 37,456 177,341
EBITDA 25,759 7,284 49,577
=====================================================
2 OPERATING COSTS
PROGRAMMING EXPENSES 25,257 23,198 93,441
TELEPHONY EXPENSES 14,201 14,379 50,145
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES 45,207 45,529 193,335
DEPRECIATION 46,724 37,456 177,341
131,389 120,562 514,262
=====================================================
3 INTEREST PAYABLE AND SIMILAR CHARGES
ON BANK LOANS AND OVERDRAFTS AND OTHER LOANS
WHOLLY REPAYABLE WITHIN 5 YEARS 1,064 3,320 16,941
WHOLLY OR PARTLY REPAYABLE IN MORE THAN 5 YEARS 9,846 539 14,741
FINANCE COSTS OF SENIOR DISCOUNT DEBENTURES 19,854 16,815 71,661
FINANCE COSTS OF SENIOR DEBENTURES 5,686 5,657 22,657
FINANCE CHARGES PAYABLE IN RESPECT OF FINANCE
LEASE AND HIRE PURCHASE CONTRACTS 1,243 1,109 4,702
EXCHANGE LOSSES ON FOREIGN CURRENCY TRANSLATION, NET 1,316 7,517 30,954
OTHER 5,204 1,921 8,274
44,213 36,878 169,930
</TABLE>
The consolidated financial statements as set out on pages 9 and 10 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1997 Annual Report. The balance sheet, profit and loss account and
cash flow statement at 31 December 1997 is derived from the statutory accounts
for 1997 which will be delivered to the Registrar of Companies following the
Company's annual general meeting. The auditors have reported on those accounts:
their report was unqualified and did not contain a statement under section
237(2) or (3) of the Companies Act 1985.
9
<PAGE>
TELEWEST COMMUNICATIONS PLC
UK GAAP
UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET AT 31 MARCH 1998
<TABLE>
<CAPTION>
31 MARCH 31 MARCH 31 DECEMBER
1998 1997 1997
(POUND)000 (POUND)000 (POUND)000
<S> <C> <C> <C>
FIXED ASSETS 1,785,383 1,657,750 1,809,213
CURRENT ASSETS
Stocks 96 62 32
Debtors 81,741 79,821 70,457
Cash at bank and in hand 43,875 106,802 29,582
125,712 186,685 100,071
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (228,100) (220,425) (334,756)
NET CURRENT LIABILITIES (102,388) (33,740) (234,685)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,682,995 1,624,010 1,574,528
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR (1,484,400) (1,113,359) (1,305,708)
MINORITY INTERESTS (666) (464) (640)
------------------------------------------------------
CAPITAL AND RESERVES 197,929 510,187 268,180
</TABLE>
10
<PAGE>
TELEWEST COMMUNICATIONS PLC
UK GAAP
<TABLE>
<CAPTION>
3 Months ended Year ended
March 31 31 Dec 97
1998 1997 1997
---- ---- ----
(pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 9,101 (18,706) 68,624
----------------------------------------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 1,194 1,045 3,599
Interest paid (13,090) (3,421) (63,479)
Interest element of finance lease payments (1,243) (151) (4,702)
----------------------------------------------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE (13,139) (2,527) (64,582)
----------------------------------------------
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (49,345) (92,619) (436,100)
Sale of tangible fixed assets 3,188 999 6,066
----------------------------------------------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT (46,157) (91,620) (430,034)
----------------------------------------------
ACQUISITIONS AND DISPOSALS
Investment in associated undertakings and other
participating interests (2,202) (8,505) (9,633)
----------------------------------------------
NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (2,202) (8,505) (9,633)
----------------------------------------------
MANAGEMENT OF LIQUID RESOURCES
(Increase) / Decrease in fixed deposits (net) (10,574) (16,052) 53,288
FINANCING
Cash paid for credit facility arrangement costs (5,900) 0 0
Proceeds from borrowings 75,000 150,000 392,500
Repayment of borrowings (10) 0 (2,375)
Capital element of finance lease payments (2,400) (1,020) (3,971)
----------------------------------------------
NET CASH INFLOW FROM FINANCING 66,690 148,980 386,154
----------------------------------------------
INCREASE IN CASH 3,719 11,570 3,817
</TABLE>
11
<PAGE>
TELEWEST COMMUNICATIONS PLC
US GAAP
<TABLE>
<CAPTION>
UNAUDITED SUMMARISED CONSOLIDATED STATEMENTS OF OPERATIONS 3 MONTHS 3 MONTHS 3 MONTHS
ENDED ENDED ENDED
31 MARCH 31 MARCH 31 MARCH
1998 1998 1997
---- ---- ----
$000 (POUND)000 (POUND)000
<S> <C> <C> <C>
REVENUE
Cable television 74,068 44,180 38,101
Telephony - residential 81,203 48,436 39,674
Telephony - business 22,636 13,502 9,287
Other 7,219 4,306 3,328
-------------------------------------------
185,126 110,424 90,390
===========================================
OPERATING LOSS (46,211) (27,564) (36,766)
Interest income 1,829 1,091 2.362
Interest expense (71,622) (42,721) (30,314)
Foreign exchange gain/(losses), net 11,115 6,630 (24,127)
Share of losses of affiliates (11,239) (6,704) (4,978)
Minority interest in profits of consolidated subsidiaries, net (44) (26) (117)
Other, net 916 546 121
-------------------------------------------
LOSS BEFORE INCOME TAXES (115,256) (68,748) (93,819)
Income tax expense 34 20 (64)
-------------------------------------------
NET LOSS (115,222) (68,728) (93,883)
===========================================
LOSS PER ORDINARY SHARE
(DOLLARS/POUNDS) $(0.12) (POUND)(0.07) (pound)(0.10)
===========================================
1 EARNINGS/(LOSS) BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTISATION ("EBITDA")
Operating loss (46,211) (27,564) (36,766)
Add: depreciation and amortisation of goodwill 89,396 53,323 44,050
-------------------------------------------
EBITDA 43,185 25,759 7,284
===========================================
2 OPERATING COSTS AND EXPENSES
Programming 42,343 25,257 23,198
Telephony 23,808 14,201 14,379
Selling, general and administration 75,790 45,207 45,529
Depreciation 78,333 46,724 37,456
Amortisation of goodwill 11,063 6,599 6,594
-------------------------------------------
231,337 137,988 127,156
</TABLE>
The consolidated financial statements as set out on pages 12 and 13 which are
unaudited, have been prepared on the basis of the accounting policies set out in
the Group's 1997 Annual Report. The balance sheet, profit and loss account and
cash flow statement at 31 December 1997 is derived from the statutory accounts
for 1997 which will be delivered to the Registrar of Companies following the
Company's annual general meeting. The auditors have reported on those accounts:
their report was unqualified and did not contain a statement under section
237(2) or (3) of the Companies Act 1985.
The economic environment in which the Company operates is the United Kingdom
("UK") and hence its reporting currency is Pounds Sterling ("(pound)"). Merely
for convenience, the financial statements contain translations of certain Pounds
Sterling amounts into US Dollars at $1.6765 per (pound)1.00, the Noon Buying
Rate of the Federal Reserve Bank of New York on March 31, 1998. The presentation
of the US Dollar amounts should not be construed as a representation that the
Pounds Sterling amounts could be so converted into US Dollars at the rate
indicated or at any other rate.
12
<PAGE>
TELEWEST COMMUNICATIONS PLC
US GAAP
<TABLE>
<CAPTION>
31 MARCH 31 MARCH 31 MARCH
1998 1998 1997
$000 (POUND)000 (POUND)000
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents 73,556 43,875 29,582
Receivables and prepaid expenses 134,824 80,420 70,459
Investments 130,755 77,993 85,373
Property and equipment 2,858,277 1,704,907 1,705,520
Goodwill 770,035 459,311 465,905
-------------------------------------------------------
Other assets 81,827 48,808 56,513
=======================================================
TOTAL ASSETS 4,049,274 2,415,314 2,413,352
=======================================================
LIABILITIES
Debt 2,428,947 1,448,820 1,373,054
Other liabilities 495,918 295,806 300,908
-------------------------------------------------------
TOTAL LIABILITIES 2,924,865 1,744,626 1,673,962
MINORITY INTERESTS 1,117 666 640
SHAREHOLDERS' EQUITY 1,123,292 670,022 738,750
-------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,049,274 2,415,314 2,413,352
-------------------------------------------------------
UNAUDITED SUMMARISED CONSOLIDATED STATEMENTS OF CASH FLOWS
3 months 3 months 3 months
ended ended ended
31 March 31 March 31 March
1998 1998 1997
$000 (pound)000 (pound)000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (115,222) (68,728) (93,883)
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation 78,333 46,724 37,456
Amortisation of goodwill 11,055 6,594 6,594
Amortisation of deferred financing costs and issue
discount on senior discount debentures 40,145 23,946 18,276
Unrealised (gains)/loss on foreign currency translation (11,107) (6,625) 23,794
Share of losses of affiliates 11,239 6,704 4,978
Gain on disposals of assets (857) (511) (121)
Minority interests in profits of consolidated 44 26 117
subsidiaries, net
Changes in operating assets and liabilities
Change in receivables (7,754) (4,625) (11,553)
Change in prepaid expenses (4,230) (2,523) 167
Change in accounts payable 9,710 5,792 (15,034)
Change in other liabilities (18,125) (10,811) 7,976
-------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES (6,769) (4,037) (21,233)
NET CASH USED IN INVESTING ACTIVITIES (81,073) (48,359) (100,125)
NET CASH PROVIDED BY FINANCING ACTIVITIES 111,804 66,689 148,980
-------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS 23,962 14,293 27,622
Effect of exchange rate changes on cash and cash equivalents 0 0 64
Cash and cash equivalents at beginning of period 49,594 29,582 79,116
-------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 73,556 43,875 106,802
</TABLE>
- ENDS -
13
