EX-10.9 6 y47169ex10-9.txt CREDIT AGREEMENT 1 EXECUTION COPY EXHIBIT 10.9 ================================================================================ Dated 30 May 2000 NTI COMMUNICATIONS CORP. as Parent NTL (UK) GROUP, INC. as Intermediate Parent NTL COMMUNICATIONS LIMITED as Borrower MORGAN STANLEY DEAN WITTER BANK LIMITED AND CHASE MANHATTAN PLC as Arrangers and Joint Book Managers and CHASE MANHATTAN INTERNATIONAL LIMITED as Agent and Security Trustee and OTHERS -------------------- L1,300,000,000 CREDIT AGREEMENT -------------------- =============================================================================== WHITE & CASE 7-11 Moorgate London EC2R 6HH 2 THIS AGREEMENT is made on 30 May 2000 BETWEEN: (1) NTL COMMUNICATIONS CORP., a company incorporated in Delaware (the "PARENT"); (2) NTL (UK) GROUP, INC., a company incorporated in Delaware (the "INTERMEDIATE PARENT"); (3) NTL COMMUNICATIONS LIMITED, a company incorporated in England and Wales with company number 3521915 (the "BORROWER"); (4) MORGAN STANLEY DEAN WITTER BANK LIMITED AND CHASE MANHATTAN PLC as arrangers and joint book managers of the Facility (the "ARRANGERS"); (5) CHASE MANHATTAN INTERNATIONAL LIMITED as agent for the Banks (the "AGENT"); (6) CHASE MANHATTAN INTERNATIONAL LIMITED as security trustee for the Finance Parties (the "SECURITY Trustee"); and (7) THE BANKS (as defined below). IT IS AGREED as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS In this Agreement: "ACCOUNTANTS' REPORT" means the report prepared by the Target's accountants, Arthur Andersen, dated 14 February 2000 and splitting the Target's financial statements for its financial years ended 31 March 1997, 31 March 1998 and 31 March 1999 between the CWC ConsumerCo Business and the CWC DataCo Business (as set out in Part A of Appendix 8 of the CWC Circular). "ACQUISITION" means the acquisition by NTL Holdings of the issued share capital of CWC Holdings pursuant to the Transaction Agreement. "ACQUISITION DATE" means the date on which the Acquisition is completed, being a date on or prior to 31 March 2001. "ADDITIONAL INCREMENTAL AMOUNT" means the next L500,000,000 of Financial Indebtedness incurred pursuant to clause (i) of the definition of Permitted Indebtedness after the Incremental Amount. "ADVANCE" means an advance (as from time to time consolidated, divided or reduced by repayment in accordance with the terms hereof) made or to be made by the Banks under the Facility. 1 3 "ASSET ADJUSTMENT PAYMENTS" means: (a) a payment made by a member of the Target Group to a company carrying on the CWC DataCo Business, in respect of a transfer of assets from that company carrying on the CWC DataCo Business to such a member of the Target Group; or (b) a payment made by a company carrying on the CWC DataCo Business to a member of the Target Group, in respect of a transfer of assets from such a member of the Target Group to that company carrying on the CWC DataCo Business, in each case in accordance with the terms of the Transaction Agreement and where either Cable & Wireless is obliged to reimburse NTL Holdings in respect of a payment made by a member of the Target Group under paragraph (a) or NTL Holdings is obliged to reimburse Cable & Wireless in respect of a payment received by a member of the Target Group pursuant to paragraph (b). "ASSET PASSTHROUGH" means a series of transactions, commencing with a transaction between the Parent and a member of the Covenant Group, which may be followed by one or more similar transactions between various members of the Covenant Group and culminating with a similar transaction between a member of the Covenant Group and a Final Asset Transferee, the purpose of which is to enable the Parent to indirectly transfer assets to that Final Asset Transferee by way of transfers of those assets to and from (and, if necessary, between) one or more members of the Covenant Group in such a matter as to be neutral to the Covenant Group taken as a whole, PROVIDED THAT: (a) the consideration payable (if any) by the first member of the Covenant Group to acquire such assets to the Parent comprises either (i) cash funded or to be funded directly or indirectly by a payment from the Final Asset Transferee in connection with that series of transactions or (ii) Subordinated Funding; (b) if the Intermediate Parent (having acquired such assets from the Parent) transfers them on to another member of the Covenant Group, the consideration payable by such a member of the Covenant Group comprises either (i) cash funded or to be funded directly or indirectly by a payment from the Final Asset Transferee in connection with that series of transactions or (ii) Parent Funding; (c) the consideration payable by the Final Asset Transferee is equal to the consideration received or receivable by the Parent; (d) the consideration payable by each member of the Covenant Group participating in such a series of transactions is equal in value; (e) all of the transactions comprising such a series of transactions (from and including the transfer of the assets by the Parent to and including the acquisition of those assets by the Final Asset Transferor) are completed within two Business Days; and (f) upon completion of all of the transactions comprising such a series of transactions, no person (other than another member of the Covenant Group) has any recourse to any member of the Covenant Group in relation to such a series 2 4 of transactions (other than in respect of (i) the Subordinated Funding mentioned in paragraph (a) above) and (ii) covenants as to title provided in favour of the Final Asset Transferee on the same terms as such covenants were provided in favour of the Initial Asset Transferor in respect of the relevant assets. "ASSIGNED DEBT" means any loan made by the Parent to the Intermediate Parent or by the Intermediate Parent to the Borrower where the lender's rights in respect of any such loan have been assigned to the Security Trustee pursuant to the Inter-Company Loan Assignment. "AUTHORISED SIGNATORY" means, in relation to an Obligor, any person who is duly authorised (in such manner as may be reasonably acceptable to the Agent) and in respect of whom the Agent has received a certificate signed by a director or another Authorised Signatory of such Obligor setting out the name and signature of such person and confirming such person's authority to act. "AVAILABLE COMMITMENT" means, in relation to a Bank at any time and save as otherwise provided herein, its Commitment at such time LESS the aggregate amount which it has advanced hereunder at such time (but not including any amount added to the Advances pursuant to Clause 4.3 (Limitations on Cash Interest)), PROVIDED THAT such amount shall not be less than zero. "AVAILABLE EXCESS CASH FLOW" means, at any time, the aggregate Excess Cash Flow generated in respect of each financial year of the Borrower, commencing with the financial year ended 31 December 2003, less the amount of such Excess Cash Flow (in respect of each such financial year) which: (a) is required to be used (in respect to such financial year) to prepay the Senior Bank Loan in accordance with clause 10.1 of the Senior Bank Credit Agreement or the Loan in accordance with Clause 9.1 (Mandatory Prepayment from Excess Cash Flow) of this Agreement; and (b) has, on or after 1 January 2003, already been used to fund a Permitted Payment. "AVAILABLE FACILITY" means, at any time, the aggregate amount of the Available Commitments adjusted, in the case of any proposed drawdown, so as to take into account any reduction in the Available Commitment of a Bank pursuant to the terms hereof. "AVERAGE REVENUE CONTRIBUTIONS" means, in respect of any asset at any time: A + B ------- 2 where: A = the revenue generated by, or attributable (whether in whole or in part) to, such asset during the immediately preceding financial year of the Borrower, expressed as a percentage of the aggregate of the consolidated revenue of the UK Group and, prior to the Pushdown Date, the consolidated revenue of the Target Group for such a financial year; and 3 5 B = the revenue generated by, or attributable (whether in whole or in part) to, such asset during the financial year of the Borrower preceding that referred to in A above, expressed as a percentage of the aggregate of the consolidated revenue of the UK Group and, prior to the Pushdown Date, the consolidated revenue of the Target Group for such financial year. "BANK" means any financial institution: (a) named in Schedule 1 (The Banks); or (b) which has become a party hereto as a Bank in accordance with Clause 30.4 (Assignments by Banks) or Clause 30.5 (Transfers by Banks), and which has not ceased to be a party hereto in accordance with the terms hereof. "BUDGET" means a budget delivered by the Borrower to the Agent pursuant to Clause 16.5 (Budgets). "BUSINESS DAY" means a day (other than a Saturday or Sunday) which is not a public holiday and on which banks are open for general business in both London and New York. "BUSINESS PLAN" means the financial model including profit and loss accounts, balance sheets and cashflow projections, in the agreed form, relating to the UK Group (for these purposes assuming that the Pushdown has been completed) as set out in annex 16 to the Information Memorandum. "C&W (UK) HOLDINGS" means Cable & Wireless (UK) Holdings plc, a company incorporated in England and Wales (company number 3888319), being (on and after the Scheme Effective Date) a wholly owned subsidiary of Cable & Wireless. "CABLE & WIRELESS" means Cable & Wireless plc, a company incorporated in England and Wales (company number 238525). "CABLE BUSINESS" means (i) any person directly or indirectly operating, or owning a license to operate, a cable and/or television and/or telephone and/or telecommunications system or service principally within the United Kingdom and/or in Ireland and (ii) any Cable Related Business. "CABLE RELATED BUSINESS" means a person which directly, or indirectly, owns or provides a service or product used in a Cable Business, including, without limitation, any television programming, production and/or licensing business or any programming guide or telephone directory business or content or software related thereto. "CAPITAL EXPENDITURE" means expenditure on the acquisition or improvement of an asset which would be treated as a capital asset in accordance with generally accepted accounting principles in the United Kingdom. "CAPITAL EVENT PROCEEDS" means the net cash proceeds received by any member of the Group from the issuance or sale of Financial Indebtedness or equity interests to persons which are not members of the Group other than: 4 6 (a) Financial Indebtedness under the Senior Bank Credit Agreement (other than the Incremental Amount); (b) Financial Indebtedness constituting the Additional Incremental Amount; (c) Financial Indebtedness incurred or equity proceeds raised by the Group's Australian companies to the extent that the net cash proceeds thereof do not exceed L250,000,000; (d) Financial Indebtedness used for the Group's working capital, capital expenditure and other general corporate purposes, in each case incurred in the ordinary course of business to the extent that the aggregate principal amount of such Financial Indebtedness does not exceed L50,000,000 at any one time outstanding; (e) Financial Indebtedness incurred for working capital purposes pursuant to commitments existing on the Execution Date; (f) Non-Recourse Bank Indebtedness incurred by a Non-Recourse Subsidiary; (g) Net cash proceeds received from the issuance of equity interests (including, without limitation, warrants and options) to officers, directors and employees pursuant to stock option or other incentive plans, to the extent that the aggregate amount of such net cash proceeds received after the Execution Date does not exceed L50,000,000; (h) amounts equal to Debt Adjustment Payments from time to time invested as contemplated in Clause 19.15 (Debt Adjustment Payments); and (i) any net cash proceeds received on conversion and/or cancellation and reissue of securities. "CAPITAL EVENT PROCEEDS AMOUNT" means at any time of the receipt by the Group of Capital Event Proceeds (x) the aggregate amount of Capital Event Proceeds (including the Capital Event Proceeds then being received) received after the Execution Date multiplied by the applicable Required Percentage less (y) the amount of such Capital Event Proceeds which have been applied in accordance with Clause 9.6 (Application of Proceeds), provided (i) any product of such calculation which is negative shall be treated as zero and (ii) the Capital Event Proceeds Amount for any Capital Event Proceeds received during a Remedy Restriction Period shall be an amount equal to 100% of such Capital Event Proceeds. For the avoidance of doubt, the net cash proceeds of the Incremental Amount shall constitute Capital Event Proceeds. "CAXTON" means Caxton Holdings Limited, a company incorporated in England and Wales (company number 3840888), being (prior to the First Caxton Sale) a wholly owned subsidiary of the Target and, together with its subsidiaries, comprising the CWC DataCo Business. "CHARGED ACCOUNT" means an account, bearing interest at a commercially reasonable rate in relation to the given circumstances, in the name of any member of the NTL 5 7 Holding Group over which security has been granted in favour of the Finance Parties (or the Security Trustee on their behalf) on terms acceptable to the Agent (or if the Senior Bank Credit Agreement is in effect, in favour of the banks under the Senior Bank Credit Facility (or a security trustee on their behalf)), into which members of the UK Group make deposits for the purpose of making Permitted Payments in accordance with paragraph (e) of the definition thereof. "CODE" means the City Code on Takeovers and Mergers. "COMMITMENT" means, in relation to a Bank at any time and save as otherwise provided herein, the amount set opposite its name under the heading "COMMITMENT" in Schedule 1 (The Banks). The Commitments of Morgan Stanley Dean Witter Bank Limited and Morgan Stanley Senior Funding, Inc. shall be determined in accordance with Clause 30.11 (Morgan Stanley Commitment). "COMPLIANCE CERTIFICATE" means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate). "CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking in the standard form from time to time of the LMA or in such other form as may be agreed between the Borrower and the Agent. "COURT" means the High Court of Justice of England and Wales. "COURT MEETING" means the meeting of the holders of the shares of Target summoned by the Court and directed to consider and vote on whether to approve the Scheme pursuant to Section 425. "COVENANT GROUP" means the Intermediate Parent, any subsidiary of the Intermediate Parent which is a direct or indirect holding company of the Borrower, the Borrower and the other members of the UK Group. For the avoidance of doubt, the Parent is not a member of the Covenant Group. "COVENANT GROUP OBLIGOR" means each member of the Covenant Group which is an Obligor. "CWC CIRCULAR" means the circular to the Target's shareholders dated 14 February 2000 (as supplemented by a circular dated 3 March 2000), relating to the Scheme and the proposed acquisition of the CWC DataCo Business by Cable & Wireless and the CWC ConsumerCo Business by NTL Holdings. "CWC CONSUMERCO BUSINESS" means the residential cable, business cable, indirect residential telephony, residential internet and digital television development and services businesses owned and operated by the Target and its subsidiaries. "CWC DATACO BUSINESS" means the corporate, business, internet protocol and wholesale operations carried on by the Target and its subsidiaries prior to the First Caxton Sale. "CWC HOLDINGS" means Cable & Wireless Communications (Holdings) plc, a company incorporated in England and Wales with company number 3922682. 6 8 "CWC HOLDINGS CAPITAL REDUCTION" means the reduction in the share capital of CWC Holdings occurring prior to the Acquisition, such a reduction being confirmed by the Court in accordance with section 135 of the Companies Act 1985. "DEBT ADJUSTMENT PAYMENTS means: (a) in the event that the members of the Target Group are found to have had excessive indebtedness as at the Acquisition Date, the issue and/or transfer of Cable & Wireless shares to NTL Holdings; or (b) in the event that the members of the Target Group are found to have had insufficient indebtedness as at the Acquisition Date, the payment of a sum equal to such an insufficient amount of indebtedness by NTL Holdings to Cable & Wireless. "DIAMOND NOTES" means the: (a) 13-1/4% senior discount notes due 30 September, 2004, with a principal amount at maturity of $285,000,000, issued by Diamond Cable Communications plc; (b) 11-3/4% senior discount notes due 15 December, 2005, with a principal amount at maturity of $531,000,000, issued by Diamond Cable Communications plc; (c) 10-3/4% senior discount notes due 15 February, 2007, with a principal amount at maturity of $421,000,000, issued by Diamond Cable Communications plc; (d) 10% senior notes due 1 February, 2008, with a principal amount at maturity of L135,000,000, issued by Diamond Holdings plc; and (e) 9-1/8% senior notes due 1 February, 2008, with a principal amount at maturity of $110,000,000, issued by Diamond Holdings plc. "DISCLOSURE LETTER" means the letter, in the agreed form, dated on or about the Execution Date from the Borrower to the Agent (on behalf of the Finance Parties) setting out various matters to be excluded from certain representations and covenants in this Agreement. "DISPUTE" means any dispute referred to in Clause 39 (Jurisdiction). "DORMANT SUBSIDIARY" means, at any time, any subsidiary of the Borrower which is "dormant" as defined in Section 250(3) of the Companies Act 1985. "EBITDA" has the meaning given to it in Clause 17.2 (Financial Definitions). "EGM" means the extraordinary general meeting of Target convened to consider and vote on the resolutions necessary to implement the Scheme. "EMU" means Economic and Monetary Union as contemplated in the Treaty on European Union. "EMU LEGISLATION" means legislative measures of the European Union for the introduction of, changeover to or operation of the euro in one or more member states, being in part legislative measures to implement the third stage of EMU. 7 9 "ENCUMBRANCE" means (a) a mortgage, charge, pledge, lien or other encumbrance securing any obligation of any person, (b) any arrangement under which money or claims to, or the benefit of, a bank or other account may be applied, set off or made subject to a combination of accounts so as to effect discharge of any sum owed or payable to any person or (c) any other type of preferential arrangement (including any title transfer and retention arrangement) having a similar effect. "ENVIRONMENTAL CLAIM" means any claim, proceeding or investigation by any person pursuant to any Environmental Law. "ENVIRONMENTAL LAW" means any applicable law in any jurisdiction in which any member of the Covenant Group conducts business which relates to the pollution or protection of the environment or harm to or the protection of human health or the health of animals or plants. "ENVIRONMENTAL PERMITS" means any permit, licence, consent, approval and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Covenant Group conducted on or from the properties owned or used by the relevant member of the Covenant Group. "EVENT OF DEFAULT" means any circumstance described as such in Clause 19 (Events of Default). "EXCESS CAPACITY NETWORK SERVICES" means the provision of network services, or agreement to provide network services, by a member of the UK Group in favour of one or more of its affiliates where such network services are only provided in respect of the capacity available to such a member of the UK Group in excess of that network capacity it requires to continue to provide current services to its existing and projected future customers and to allow it to provide further services to both its existing and projected future customers in accordance with the Business Plan. "EXCESS CASH FLOW" has the meaning given to it in Clause 17.2 (Financial Definitions). "EXCESS CASH FLOW PAYMENT AMOUNT" means for any financial year an amount equal to (x) 50 per cent. of Excess Cash Flow for such financial year less (y) the permanent reductions to the advances and loans under the Senior Bank Credit Agreement required to be made from such Excess Cash Flow for such financial year pursuant to clause 10.1 of the Senior Bank Credit Agreement. "EXECUTION DATE" means the date of this Agreement. "EXISTING PERFORMANCE BONDS" means: (a) performance bonds in an aggregate amount of up to L7,100,000 issued by Zurich Re at the request of certain members of the Target Group; (b) performance bonds in an aggregate amount of up to L1,139,199 issued by National Westminster Bank Plc at the request of certain members of the Target Group; and 8 10 (c) performance bonds in an aggregate amount of up to L2,800,000 issued by National Westminster Bank Plc at the request of certain members of the UK Group. "FACILITY" means the L1,300,000,000 multiple draw loan facility granted to the Borrower in this Agreement. "FACILITY OFFICE" means, in relation to the Agent, the office identified with its signature below or such other office as it may select by notice and, in relation to any Bank, the office notified by it to the Agent in writing prior to the date hereof (or, in the case of a Transferee, at the end of the Transfer Certificate to which it is a party as Transferee) or such other office as it may from time to time select by notice to the Agent. "FINAL ASSET TRANSFEREE" means the member of the Group, other than a member of the Covenant Group, who is the final transferee in respect of a transfer from the Parent, through one or more members of the Covenant Group. "FINAL MATURITY DATE" means 31 March 2006. "FINANCE DOCUMENTS" means this Agreement, the fee letters referred to in Clause 21.4 (Agency and other Fees), the Security Documents, the Security Trust Agreement, any Guarantor Accession Memorandum, the Parent Subordination Agreement, the Intermediate Parent Subordination Agreement, the Intercreditor Agreement and any other document designated as such by the Agent and the Borrower. "FINANCE PARTIES" means, at any time, the Agent, the Arrangers, the Security Trustee and the Banks at such time. "FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of: (a) Indebtedness for Borrowed Money; (b) any documentary or standby letter of credit facility or performance bond facility; (c) any Hedging Agreement (and the amount of the Financial Indebtedness in relation thereto shall be calculated by reference to the mark-to-market valuation of such transaction at the relevant time); and (d) (without double counting) any guarantee or indemnity for any of the items referred to in paragraphs (a) to (c) above. "FINANCIAL QUARTER" has the meaning given to it in Clause 17.2 (Financial Definitions). "FIRST CAXTON SALE" means the transfer, after the Scheme Effective Date, of Caxton by the Target to CWC Holdings, as authorised by the Scheme, such a transfer being made at book value (subject to adjustment under Schedule 19 of the Transaction Agreement), on terms that the price payable by CWC Holdings is left outstanding to the extent that CWC Holdings does not assume at least a corresponding amount of indebtedness of the Target in consideration for the sale of Caxton. "FULL FUNDING DATE" has the meaning given to it in the Intercreditor Agreement as in effect on the Execution Date. 9 11 "FUNDED EXCLUDED SUBSIDIARY" means a UK Group Excluded Subsidiary which: (a) indirectly receives funding from the Parent; and/or (b) by way of dividend or other distribution, loan or payment of interest on or the repayment of the principal amount of any indebtedness owed by it, makes a payment to the Parent, in each case by way of a Funding Passthrough. "FUNDING PASSTHROUGH" means a series of transactions between the Parent, one or more members of the Covenant Group and a Funded Excluded Subsidiary where: (a) in the case of funding being provided by the Parent to the Funded Excluded Subsidiary, that funding is: (i) first made available by the Parent to the Intermediate Parent by way of Subordinated Funding; (ii) secondly made available by the Intermediate Parent to the Borrower by way of Parent Funding; and (iii) thirdly (if relevant) made available by one or more transactions between members of the UK Group and finally made available by a member of the UK Group to the Funded Excluded Subsidiary in all such cases by way of either the subscription for new equity capital, the advancing of loans or capital contribution; or (b) in the case of a payment to be made by the Funded Excluded Subsidiary to the Parent, that payment is: (i) first made by the Funded Excluded Subsidiary to a member of the UK Group, and thereafter between members of the UK Group (as relevant), by way of dividend or other distribution, loan or payment of interest on or the repayment of the principal amount of any indebtedness owed by such Funded Excluded Subsidiary or relevant UK Group; and (ii) finally made by a member of the UK Group to the Parent by way of dividend or other distribution, loan or the payment of interest on or the repayment of the principal amount of any Subordinated Debt owed to the Parent by the Intermediate Parent. "GROUP" means NTL Holdings and its subsidiaries. "GROUP STRUCTURE CHARTS" means: (a) the structure chart showing (at least) the UK Group and the NTL Holding Group, in the agreed form; and (b) the structure chart showing the Target Group (in a form similar to the structure chart referred to in paragraph (a) above). 10 12 "GUARANTOR" means the Parent, the Intermediate Parent and any other person who becomes a guarantor pursuant to Clause 37. "GUARANTOR ACCESSION MEMORANDUM" means a memorandum substantially in the form set out in Schedule 10. "HEDGING AGREEMENT" means an agreement in respect of an interest rate swap, currency swap, forward foreign exchange transaction, cap, floor, collar or option transaction or any other treasury transaction or any combination thereof or any other transaction entered into in connection with protection against or benefit from fluctuation in any rate or price. "HEDGING STRATEGY" means the hedging strategy adopted by the Borrower from time to time for the sole purpose of hedging the UK Group's then existing interest rate or currency risk exposure in connection with its ordinary business acting reasonably and prudently and not for speculative or proprietary trading purposes. "ICTA" means the Income and Corporation Taxes Act 1988. "INCREMENTAL AMOUNT" means the first L500,000,000 of Financial Indebtedness incurred pursuant to clause (i) of the definition of Permitted Indebtedness. "INDEBTEDNESS FOR BORROWED MONEY" means any indebtedness for or in respect of: (a) moneys borrowed; (b) any amount raised by acceptance under any acceptance credit facility; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument (for the avoidance of doubt excluding any such instrument issued solely by way of consideration for the acquisition of assets where such an instrument is not issued for the purpose of raising finance); (d) any amount raised pursuant to any issue of shares which are expressed to be redeemable in cash (other than (i) shares redeemable after 31 March 2007 and (ii) redeemable shares issued by way of consideration for the acquisition of assets where such shares are not issued for the purpose of raising finance); (e) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with generally accepted accounting principles in the relevant jurisdiction, be treated as a finance or capital lease; (f) the amount of any liability in respect of any advance or deferred purchase agreement if the primary reason for entering into such agreement is to raise finance; (g) receivables sold or discounted (other than on a non-recourse basis); (h) any agreement or option to re-acquire an asset if the primary reason for entering into such agreement or option is to raise finance; 11 13 (i) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; and (j) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above. "INFORMATION MEMORANDUM" means the document concerning the CWC ConsumerCo Business and the UK Group and the Target Group which, at, inter alia, the Borrower's request and on its behalf, was prepared in relation to the Senior Bank Credit Agreement and distributed by the Arrangers to selected banks during May 2000 (as the same may be updated on or before the Syndication Date). "INTEREST PERIOD" means, save as otherwise provided herein: (a) any of those periods mentioned in Clause 4.5 (Interest Periods); and (b) in relation to an Unpaid Sum, any of those periods mentioned in Clause 23.1 (Default Interest Periods). "INITIAL ADVANCE DATE" means the first date on which Advances are made under the Facility. "INSTRUCTING GROUP" means: (a) before any Advances have been made, a Bank or Banks whose Commitments amount in aggregate to more than sixty-six and two thirds per cent. of the Total Commitments; and (b) thereafter, a Bank or Banks to whom in aggregate more than sixty-six and two thirds per cent. of the amount of the Loan is (or, immediately prior to its repayment, was then) owed. "INSURANCE PROCEEDS" means the proceeds of any insurance claim intended to compensate for damage to any asset or interruption of business received by any member of the UK Group after deducting: (a) any reasonable out of pocket expenses incurred by any member of the UK Group in relation to such a claim; and (b) proceeds relating to third party claims, which are applied towards meeting such claims. "INTELLECTUAL PROPERTY" means all patents, trade marks, service marks, designs, copyrights, design rights, moral rights, inventions, confidential information, know-how and other intellectual property rights and interests, whether registered or unregistered, and the benefit of all licences, applications and rights to use such intellectual property now or hereafter belonging to any member of the Covenant Group. "INTERCREDITOR AGREEMENT" means the agreement dated on or about the Execution Date between (inter alia) the Banks, the lenders under the Senior Bank Credit Agreement, the Agent and the Security Trustee, by which the Banks undertake certain obligations in respect of their rights under this Agreement. 12 14 "INTER-COMPANY LOAN ASSIGNMENT" means the Assignment Agreement among the Parent, the Intermediate Parent and the Security Trustee dated on or about the Execution Date. "INTERMEDIATE SUBORDINATION AGREEMENT" means the subordination agreement in the agreed form between the Intermediate Parent (as the lender) and the Security Trustee, pursuant to which, whilst sums remain outstanding under the Finance Documents, no payment of interest, repayment of principal or any other payments of any kind can be made in respect of indebtedness owed by the Borrower to the Intermediate Parent, save for certain Permitted Payments. "INTRA-GROUP SERVICES" means: (a) the provision of services by a member of the UK Group to a member of the Group, where such member of the Group requires those services to enable it to carry on its business and PROVIDED THAT the consideration for the provision thereof is in the reasonable opinion of the Borrower no less than the cost (save in any immaterial respect) incurred by such a member of the UK Group in providing such services; (b) the provisions of services constituted by NTL Group Limited employing personnel, acting as agent to buy equipment or other assets or trade with residential customers on behalf of other members of the Group, where the costs of such employment or purchasing and the costs and revenues generated by such trading are in the reasonable opinion of the Borrower reimbursed by or distributed (save in any immaterial respect) to the relevant Group member; and (c) the provision of services constituted by NTL Business Limited (formerly named NTL Technologies Limited) acting as agent to trade with business customers on behalf of other members of the Group, where the costs and revenues of such trading are in the reasonable opinion of the Borrower reimbursed by or distributed (save in any immaterial respect) to the relevant Group member. "IRELAND" means the Republic of Ireland. "LIBOR" means, in relation to any amount to be advanced to or owing by an Obligor under the Finance Documents on which interest for a given period is to accrue: (a) the percentage rate per annum equal to the offered quotation which appears on the page of the Telerate Screen which displays the British Bankers Association Interest Settlement Rate for sterling (being currently "3750") or the currency of any Unpaid Sum for such period as of 11.00 a.m. on the Quotation Date for such period or, if such page or such service shall cease to be available, such other page or such other service for the purpose of displaying the British Bankers Association Interest Settlement Rate for sterling (or the currency of such Unpaid Sum) as the Agent, after consultation with the Banks and the Borrower, shall select; or (k) if no quotation for sterling (or the currency of such Unpaid Sum) and the relevant period is displayed and the Agent has not selected an alternative service on which a quotation is displayed, the arithmetic mean (rounded 13 15 upwards to five decimal places) of the rates (as notified to the Agent) at which each of the Reference Banks was offering to prime banks in the London interbank market deposits in sterling (or the currency of such Unpaid Sum) for such period as of 11.00 a.m. on the Quotation Date for such period. "LICENCES" means each licence which is material to the conduct of the business of any member of the Covenant Group. "LMA" means the Loan Market Association. "LOAN" means, at any time, the aggregate principal amount of the outstanding Advances at such time. "MANDATORY COST RATE" means the rate determined in accordance with Schedule 7 (Mandatory Costs). "MARGIN" means 4.50 per cent. per annum, provided that the Margin shall increase by 0.50 per cent. per annum on the three month anniversary of the Initial Advance Date and by an additional 0.50 per cent. per annum on each subsequent three month anniversary of the Initial Advance Date. "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of a Covenant Group Obligor or the UK Group taken as a whole or if on or prior to the Pushdown Date, the UK Group taken as a whole (assuming that the Pushdown had occurred on the Execution Date) or (b) the ability of any Covenant Group Obligor to perform its material obligations under the Finance Documents to which it is a party. "MATERIAL COMMERCIAL CONTRACTS" means any commercial agreements entered into by any member of the Covenant Group which are reasonably likely to be material to the business or prospects of the Covenant Group taken as a whole. "MEETINGS" means each of the Court Meeting and EGM. "NET AVERAGE REVENUE CONTRIBUTIONS" means, at any time: (a) the aggregate of the Average Revenue Contributions of all assets disposed of by members of the UK Group under paragraph (f) of the definition of Permitted Disposals, less (b) the aggregate of the estimated Average Revenue Contributions of all assets acquired by members of the UK Group either in exchange for, or out of the proceeds of the disposal of, assets disposed of under paragraph (f) of the definition of Permitted Disposals (such estimated Average Revenue Contributions to be reasonably agreed between the Borrower and the Agent on the basis of the revenues such acquired assets could have reasonably been expected to have generated for the two financial years of the Borrower immediately preceding the date of their acquisition, had such assets been owned by the relevant member of the UK Group throughout those two financial years). 14 16 "NEW YORK OFFICE EXPENSES" means, in relation to any financial year of NTL Holdings, the expenses (including taxes) so described and specified in relation to such financial year in the Business Plan. "NON-RECOURSE BANK INDEBTEDNESS" means any Financial Indebtedness incurred by a Non-Recourse Subsidiary from financial institutions pursuant to a bank credit or loan agreement where the liabilities of such Non-Recourse Subsidiary in respect of such Financial Indebtedness are not directly or indirectly the subject of a guarantee, indemnity or any other form of assurance, undertaking or support from any other member of the Group (other than the subsidiaries of such person). "NON-RECOURSE SUBSIDIARY" means a person which is a member of the Group (other than a member of the Covenant Group, a member of the Target Group, the Parent and any direct or indirect parent company of the Parent) and whose creditors have no recourse to any other member of the Group (other than the subsidiaries of such person) in respect of any Financial Indebtedness of that person or any of its subsidiaries (other than recourse to any member of the Group which has granted security over its shares or other interests in such a Non-Recourse Subsidiary beneficially owned by it provided that such recourse is limited to the realisation of such security). "NOTICE OF DRAWDOWN" means a notice substantially in the form set out in Schedule 4 (Notice of Drawdown). "NOTICE PERIOD" means the period commencing ten Business Days before the proposed date for the making of an Advance and ending 2.00 p.m. three Business Days before the proposed date for the making of such Advance (or such later time as all of the Banks may agree). "NTL CC NOTES" means, to the extent such have been issued in either the domestic or international capital markets, the bonds, notes or similar public debt instruments issued by the Parent and outstanding on the Execution Date. "NTL HOLDING GROUP" means NTL Holdings and the Borrower's other holding companies. "NTL HOLDINGS" means NTL Incorporated (formerly named NTL Holdings Incorporated), a company incorporated in Delaware which became the holding company of NTL Delaware Inc. with effect from the effective date of the CWC Holdings Capital Reduction. "NTL DELAWARE INC." means NTL (Delaware) Incorporated (formerly named NTL Incorporated), a company incorporated in Delaware. "NTL TRIANGLE ACCESSION" means the accession of the members of the NTL Triangle Sub-Group as guarantors under the Senior Bank Credit Agreement in accordance with Clause 34.5 (NTL Triangle Accession) of the Senior Bank Credit Agreement. "NTL TRIANGLE SUB-GROUP" means NTL Triangle LLC and its subsidiaries from time to time. 15 17 "NTLIH" means NTL Investment Holdings Limited, a company incorporated in England and Wales with company number 3173552. "OBLIGORS" means the Borrower and the Guarantors. "OFTEL" means the Director General of Telecommunications and/or any other successor or other body or authority having, inter alia, the right, function and/or obligation to monitor and enforce compliance with the provisions of licences issued pursuant to the Telecommunications Act 1984. "ORIGINAL FINANCIAL STATEMENTS" means: (a) in relation to the Borrower, its audited consolidated financial statements for its financial year ended 31 December 1998; and (b) in relation to Intermediate Parent, its audited unconsolidated financial statements for the financial year ended 31 December 1998; and (c) in relation to the Target (and insofar as they relate to the CWC ConsumerCo Business), the consolidated financial statements of the Target and its subsidiaries, prepared by its auditors, for the financial year ended 31 March 1999 (as set out in the Accountants Report) and the consolidated financial statements of the Target and its subsidiaries, prepared by its management for the six month period ended 30 September 1999 (as set out in the CWC Circular). "OVERDRAFT FACILITY" means any facility provided by a United Kingdom clearing bank to a member of the UK Group. "PANEL" means the Panel on Takeovers and Mergers. "PARENT COVENANT GROUP" means the Parent and each Guarantor. "PARENT FUNDING" means: (a) the subscription by the Intermediate Parent for new equity capital of the Borrower; and (b) Subordinated Debt incurred by the Borrower from the Intermediate Parent. "PARENT SUBORDINATION AGREEMENT" means the subordination agreement in the agreed form between the Parent (as the lender) and the Security Trustee, pursuant to which, whilst sums remain outstanding under the Finance Documents, no payment of interest, repayment of principal or any other payments of any kind can be made in respect of indebtedness owed by the Borrower to the Parent, save for certain Permitted Payments. "PARTICIPATING MEMBER STATE" means any member state of the European Union which has adopted the euro as its lawful currency at the relevant time. "PERMITTED ACQUISITIONS" means: (a) the Acquisition or any acquisitions necessary to effect either the issues or transfers of shares referred to in paragraphs (a), (b), (c), (d), (e) and (f) of the 16 18 definition of the Pushdown set forth in the Senior Bank Credit Agreement as in effect on the Execution Date; (b) with respect to any member of the UK Group at any time, any acquisition of (or of any interests in) (A) companies, partnerships, consortia, joint ventures or other arrangements or (B) businesses, licences, revenues or assets provided that: (i) the relevant company, partnership, consortium, joint venture or other arrangement or the acquired business, licence, revenues or asset engages in, or, as the case may be, relates to, a Cable Business; (ii) if the total consideration (including, without limitation, assumed debt, deferred consideration and any consideration comprising of the issue of either debt instruments or shares) for such acquisition either (A) exceeds L80,000,000 (or its equivalent in other currencies) or (B) when aggregated with the consideration (determined as aforesaid) arising in respect of all such other acquisitions (save for any acquisitions permitted by paragraphs (a), (c), (d), (e) or (g) of this definition of Permitted Acquisitions) made by members of the UK Group during the then current financial year, exceeds L100,000,000 (or its equivalent in other currencies): (1) the Borrower has provided the Agent with a pro forma business plan (over a period ending at least one year after the Final Maturity Date), together with the key operating assumptions relating thereto, has provided representations to the Finance Parties (in the form agreed by the Agent (acting reasonably) with respect thereto) in relation to such business plan and has confirmed that no Event of Default or Potential Event of Default has occurred and is continuing or would occur following such acquisition; (2) the pro forma business plan demonstrates pro forma compliance with the financial covenants set out in Clause 17 (Financial Condition) until the Final Maturity Date; and (3) the pro forma business plan demonstrates that amounts available for drawdown under the Senior Bank Credit Agreement (following any planned drawdown to finance the contemplated acquisition) and under other financing sources committed to the UK Group are sufficient to meet the UK Group's projected financing needs until the Final Maturity Date (excluding the amount of principal to be repaid in respect to the Senior Bank Credit Agreement and this Agreement on the respective maturity date thereof); (c) the incorporation of a company or the acquisition of the shares in a newly incorporated company from its subscribing shareholders, where such a company at all times carries on business in an administrative capacity, supporting the business of the UK Group (as carried on in accordance with 17 19 Clause 18.25 (Change of Business) or acts as a holding company for a Permitted Acquisition within paragraph (b) above; (d) any acquisition made by a member of the UK Group pursuant to the implementation of an Asset Passthrough or a member of the UK Group pursuant to a Funding Passthrough; (e) any acquisition by a member of the UK Group pursuant to a Permitted Disposal within paragraphs (g) or (h) of the definition thereof; (f) any acquisition by any member of the UK Group of the minority shareholdings in Northampton Cable Television Limited and/or Herts Cable Limited; and (g) any acquisition of assets as referred to in paragraph (a) of the definition of Asset Adjustment Payments. "PERMITTED DISPOSAL" means any disposal: (a) made in the ordinary and usual course of business; (b) on arm's length commercial terms of an asset by a member of the UK Group who is not an Obligor; (c) for cash (if the relevant asset has any value) on arm's length commercial terms of any surplus or obsolete assets no longer required for the efficient operation of the business of the UK Group; (d) of cash, where such a disposal is not otherwise prohibited by the Finance Documents; (e) by way of a realisation of a Permitted Investment; (f) on (A) arm's length commercial terms for cash consideration or (B) in exchange for similar assets located in either the United Kingdom or Ireland which the Agent (acting reasonably) determines to be of a comparable or superior quality, provided that: (i) in each case the Net Average Revenue Contributions at no time exceed 15 per cent; and (ii) the proceeds of any disposal under (A) of this paragraph (f) are applied in accordance with Clause 9.2 (Mandatory Prepayment from Asset Disposals); (g) of an interest in real property by way of a lease or licence granted by a member of the UK Group to a member of the UK Group; (h) by a member of the UK Group to another member of the UK Group; (i) (by way of share sale) of any UK Group Excluded Subsidiary or any Target Group Excluded Subsidiary (other than Cable & Wireless Communications (B) Limited) (or any interest therein); 18 20 (j) necessary to effect the transfers of shares referred to in paragraphs (d), (e) and (j) of the definition of the Pushdown; (k) (by way of share sale) of NTL Insurance Limited, for fair market value, to any member of the NTL Holding Group; (l) (by way of share sale) of Lanbase Espania SL, for fair market value; (m) of any assets as referred to in paragraph (b) of the definition of Asset Adjustment Payments; and (n) of any assets pursuant to the implementation of an Asset Passthrough or of any funds received pursuant to the implementation of a Funding Passthrough. For the avoidance of doubt, in no event shall the transfer of the shares of the Borrower or any Guarantor to a person which is not a Guarantor constitute a Permitted Disposal. "PERMITTED ENCUMBRANCE" means: (a) any Encumbrance specified in Schedule 5 (Existing Encumbrances), if the principal amount thereby secured is not increased; (b) any Encumbrance over or affecting any asset acquired by a member of the UK Group after the date hereof and subject to which such asset is acquired, if: (i) such Encumbrance was not created in contemplation of the acquisition of such asset by a member of the UK Group; and (ii) the Financial Indebtedness secured by such Encumbrance at all times falls within paragraph (o) of the definition of Permitted Indebtedness; (c) any Encumbrance over or affecting any asset of any company (other than a member of the Target Group) which becomes a member of the UK Group after the date hereof, where such Encumbrance is created prior to the date on which such company becomes a member of the UK Group, if: (i) such Encumbrance was not created in contemplation of the acquisition of such company; and (ii) the Financial Indebtedness secured by such Encumbrance at all times falls within paragraph (l) or (o) of the definition of Permitted Indebtedness; (d) any netting or set-off arrangement entered into by the Intermediate Parent or any member of the UK Group in the normal course of its banking arrangements for the purpose of netting debit and credit balances; (e) any right of set-off or any title transfer or retention of title arrangement entered into by the Intermediate Parent or any member of the UK Group in the normal course of its trading activities on the counterparty's standard or usual terms (where such terms reasonably accord with the terms generally adopted in the market to which such a trading activity relates); 19 21 (f) any lien arising by operation of law or by a contract having a similar effect and in each case arising or entered into in the normal course of business, if such lien is discharged within thirty days of arising; (g) any Encumbrance created pursuant to, arising under or evidenced by the Security Documents; (h) any Encumbrance granted by a member of the UK Group over the shares or other interests it holds in, or over the assets attributable to, a Project Company; (i) any Encumbrance created by any arrangements referred to in paragraph (e) or paragraph (f) of the definition of Indebtedness for Borrowed Money; (j) any Encumbrance arising pursuant to an order of attachment, an injunction restraining the disposal of assets or any similar legal process in each case arising in connection with court proceedings being diligently conducted by a member of the Covenant Group in good faith; (k) any Encumbrance over cash deposited as security for the obligations of a member of the UK Group in respect of a performance bond, guarantee, standby letter of credit or similar facility entered into by such a member of the UK Group in the ordinary course of business; (l) any Encumbrance on assets of the UK Group or the Intermediate Parent securing the obligations under the Senior Bank Credit Agreement; (m) any Encumbrance securing Permitted Indebtedness falling within paragraph (i) of the definition of that term; (n) any Encumbrance constituted by a rent deposit deed entered into on arm's length terms and in the ordinary course of business securing the obligations of a member of the UK Group in relation to property leased to a member of the UK Group; and (o) any Encumbrance securing Permitted Indebtedness falling within paragraph (p) of the definition of that term. "PERMITTED INDEBTEDNESS" means any Financial Indebtedness: (a) arising under or permitted pursuant to the Finance Documents; (b) of the Intermediate Parent, any other Guarantor (other than the Parent) or the Borrower, in respect of the Subordinated Debt and provided, in the case of the Intermediate Parent and the Borrower, that the indebtedness in respect of it constitutes Assigned Debt; (c) of a member of the UK Group, from the Borrower or any other member of the UK Group; (d) of members of the UK Group under the Senior Bank Credit Agreement which does not exceed L2,500,000,000 at any time outstanding less the amount of permanent repayment of amounts outstanding thereunder and/or (without 20 22 duplication) permanent reductions in the commitments thereunder (whether the occurring prior to the Pushdown Date or thereafter); (e) of the UK Group arising in relation to the implementation of the Hedging Strategy; (f) of the Parent, under the NTL CC Notes; (g) of the Parent, where: (i) such Financial Indebtedness does not have any scheduled repayments or other amortisations prior to, and has a final maturity date no earlier than, the date one year after the Final Maturity Date; (ii) after giving effect thereto, the requirements of subclause 17.1.1 through 17.1.4 would be satisfied on a pro forma basis; and (iii) Capital Event Proceeds of such Financial Indebtedness are applied by the Borrower in cancellation of the Loan in accordance with Clause 9.6 (Application of Proceeds) to the extent required by Clause 9.5 (Mandatory Prepayment from Capital Event Proceeds); (h) of the Covenant Group, arising under Permitted Loans and Guarantees; (i) on and after the Pushdown Date, of the UK Group, arising under one or more credit facilities which does not exceed L1,000,000,000 in the aggregate principal amount at any one time outstanding less the amount of permanent repayment of amounts outstanding thereunder and/or (without duplication) permanent reductions in the commitments thereunder (it being understood that the Financial Indebtedness permitted by this clause (i) may, but shall not be required to be, incurred under the Senior Bank Credit Agreement); (j) of the UK Group, falling within paragraph (e) of the definition of Indebtedness for Borrowed Money ("FINANCE LEASE DEBT") which, when aggregated with any other Finance Lease Debt incurred in reliance on this paragraph (j) by each member of the UK Group does not exceed L45,000,000 (or its equivalent); (k) arising in respect of Existing Performance Bonds; (l) of any company which becomes a member of the UK Group after the date hereof, where such Financial Indebtedness arose prior to the date on which such company becomes a member of the UK Group, if: (i) such Financial Indebtedness was not created in contemplation of the acquisition of such company; (ii) the aggregate amount of all Financial Indebtedness falling within this paragraph (l) does not exceed L20,000,000 (or its equivalent); and (iii) such Financial Indebtedness is repaid within three months of such company becoming a member of the UK Group; 21 23 (m) of members of the UK Group under the Secured Ancillary Facilities or in relation to any documentary or standby letter of credit facility or performance bond facility made available by a financial institution on an unsecured basis PROVIDED THAT the aggregate indebtedness of all members of the UK Group in relation to such facilities and the Secured Ancillary Facilities does not exceed L40,000,000 (or its equivalent); (n) of the UK Group in respect of Permitted Overdraft Borrowings, provided that the aggregate amount of such Financial Indebtedness does not exceed L20,000,000 (or its equivalent); (o) arising in relation to either an Asset Passthrough or a Funding Passthrough PROVIDED THAT any such Financial Indebtedness is Subordinated Debt if it is owed by a Covenant Group Obligor to a member of the Group and Assigned Debt if it is owed by the Borrower to the Intermediate Parent or by the Intermediate Parent to the Parent; and (p) not falling within paragraphs (a) through (o) above, of any member of the UK Group, PROVIDED THAT the aggregate amount of such Financial Indebtedness does not exceed L20,000,000 (or its equivalent). "PERMITTED INVESTMENTS" means: (a) any debt securities which are readily marketable and which are rated at least "AA" by Standard & Poor's Corporation or "Aa2" by Moody's Investors Service, Inc.; (b) certificates of deposit and deposits with banks and bankers acceptances in each case with a bank rated at least A- (or the equivalent thereof) by Moody's Investors Service, Inc. or Standard & Poor's Corporation; or (c) commercial paper rated at least A-1 (or the equivalent thereof) by Moody's Investors Service, Inc. or Standard & Poor's Corporation. "PERMITTED LOANS AND GUARANTEES" means: (a) trade credit or guaranties or indemnities granted in the ordinary course of business on usual and customary terms; (b) loans made by any member of the UK Group to its employees either (i) in the ordinary course of its employees' employment or (ii) to fund the exercise of share options by its employees; (c) loans permitted pursuant to subclauses (b) and (c) of the definition of Permitted Indebtedness; (d) loans made by a member of the UK Group to a member of the Covenant Group where the proceeds of such a loan are either directly or indirectly used to fund a Permitted Payment; (e) loans made, credit granted and guarantees or indemnities given in an aggregate amount not exceeding L200,000 (or its equivalent); 22 24 (f) any loan made to a UK Group Excluded Subsidiary made out of Available Excess Cash Flow; (g) any guarantee or indemnity given by a member of the UK Group in respect of any Permitted Indebtedness, or other obligation not restricted by the terms of the Finance Documents, of another member of the UK Group; (h) credits granted by any member of the UK Group to a member of the Group, where the indebtedness outstanding thereunder relates to Intra-Group Services; and (i) loans made to either of the Telecential Partnerships outstanding on the Execution Date or made in accordance with Clause 18.16 (Telecential Partnerships). "PERMITTED OVERDRAFT BORROWINGS" means Financial Indebtedness in respect of an Overdraft Facility if such Financial Indebtedness: (a) has been incurred solely for short term cash management purposes in the ordinary course of business; (b) is fully repaid within three Business Days of it having been incurred (from available funds other than Permitted Overdraft Borrowings); and (c) is not outstanding at any time between the date on which the Pushdown Condition is satisfied and the Pushdown Date. "PERMITTED PAYMENT" means a Restricted Payment which is: (a) made after 31 December 2003 and funded from Available Excess Cash Flow; (b) made, at any time, to fund the payment of New York Office Expenses, the amount of such payments during each financial year of the Borrower being no greater than the amount of New York Office Expenses so attributed for that financial year in the Business Plan; (c) made, at any time, to fund the cash payment obligations of the Parent or any other member of the NTL Holding Group in relation to: (i) the NTL CC Notes; (ii) any Permitted Refinancings within either paragraph (a) of the definition thereof or any refinancing of this Facility; (iii) subject to the NTL Triangle Accession having been completed, any Permitted Refinancings within paragraph (c) of the definition thereof; or (iv) any bonds, notes or similar public debt instruments issued by any member of the NTL Holding Group after the date hereof, in either the domestic or the international capital markets, to the extent that the proceeds thereof have been invested into the Borrower; 23 25 which, in either case, has fallen due or will fall due within five Business Days; or (d) made pursuant to an Asset Passthrough and funded solely from cash generated by entities outside of the Covenant Group or made available pursuant to a Funding Passthrough and funded solely from cash generated by entities outside of the Covenant Group; or (e) deposited in the Charged Account and: (i) represents the proceeds from a payment of interest on Subordinated Debt, being paid by the Borrower to the Intermediate Parent and then paid by the Intermediate Parent to the Parent and by the Parent to NTL (Delaware) Inc. in accordance with arrangements the Group has with the Inland Revenue; and (ii) is reinvested in the Borrower within ten Business Days of the date of the Restricted Payment, such an investment being by way of Subordinated Funding or Parent Funding; (f) of an amount of up to L2,000,000 made to NTL, Inc. to finance payments to be made by NTL, Inc. to Cable & Wireless in relation to certain Acquisition overhead costs; or (g) made out the proceeds of an Asset Adjustment Payment referred to in paragraph (b) of the definition thereof received by a member of the Target Group; or (h) made by either a member of the Target Group or NTL Business Limited where the proceeds of such a Restricted Payment are to be used by NTL Holdings to make a Debt Adjustment Payment to Cable & Wireless in accordance with paragraph (b) of the definition thereof, and provided in each case that such payment shall only be permitted if and to the extent that no Event of Default has occurred (and is continuing) or would result from the making of such payment. "PERMITTED REFINANCINGS" means any refinancing of: (a) the NTL CC Notes by the Parent; (b) the Diamond Notes, by the Parent; or (c) the Triangle Notes, by the Parent; PROVIDED THAT, in each case, the final maturity date of the indebtedness incurred in respect of such refinancing is a date no earlier than the day falling one year after the Final Maturity Date. "PLEDGE AGREEMENT" means the Pledge Agreement in agreed form executed or to be executed by the Parent in favour of the Security Trustee relating to 100% of the capital stock of the Intermediate Parent. 24 26 "POTENTIAL EVENT OF DEFAULT" means any event which would become (with the passage of time, the giving of notice, the making of any determination hereunder or any combination thereof) an Event of Default. "PREPAYMENT ESCROW ACCOUNT" means an account, bearing interest at a commercially reasonable rate in relation to the given circumstances, held with the Agent (or such other financial institution reasonably acceptable to the Agent) in the name of the Borrower, over which the Borrower has granted or will grant security in favour of the Security Trustee and into which sums are deposited in accordance with Clause 9 (Mandatory Prepayment). "PROJECT COMPANY" means a subsidiary of the Borrower (or a person in which a subsidiary of the Borrower has an interest), which has a special purpose and whose creditors have no recourse to any other member of the Covenant Group in respect of any Financial Indebtedness of that person or any of its subsidiaries (other than recourse to any member of the UK Group which has granted security over its shares or other interest in such a Project Company beneficially owned by it provided that such recourse is limited to the realisation of such security). "PROPERTIES" means the properties owned or leased by members of the UK Group. "PUSHDOWN" has the meaning given to it in the Senior Bank Credit Agreement as in effect on the Execution Date. "PUSHDOWN CONDITION" means that each of the following conditions has been satisfied: (a) the Pushdown has been completed in all material respects in accordance with the terms of the Senior Bank Credit Agreement as in effect on the Execution Date; (b) on the Pushdown Date, and after giving effect to the Pushdown, all representations and warranties set forth in this Agreement are true in all material respects; (c) on the Pushdown Date and prior to giving effect to the Pushdown, the Target Group shall be in compliance with all of the covenants set forth in the Senior Bank Credit Agreement as in effect on the Execution Date; (d) on the Pushdown Date, and after giving effect to the Pushdown, no Event of Default or Potential Event of Default shall be continuing; and (e) the Agent shall have received a certificate of the Borrower certifying that the conditions set forth in paragraphs (a) through (d) above have been satisfied. "PUSHDOWN DATE" means the date upon which the Pushdown is completed. "QUALIFYING LENDER" means: (a) a Bank which is (on the date a payment of interest falls due under a Finance Document) beneficially entitled to and within the charge to United Kingdom corporation tax in respect of that payment provided that the advance in respect of which the payment is made was made by a bank for the purposes of section 349 of ICTA at the time that the advance was made; or 25 27 (b) a Treaty Lender. "QUARTER DATE" has the meaning given to it in Clause 17.2 (Financial Definitions). "QUOTATION DATE" means, in relation to any period for which an interest rate is to be determined under the Finance Documents, the day on which quotations would ordinarily be given by prime banks in the London Interbank Market for deposits in the currency of the relevant sum for delivery on the first day of that period, PROVIDED THAT, if, for any such period, quotations would ordinarily be given on more than one date, the Quotation Date for that period shall be the last of those dates. "REFERENCE BANKS" means: (a) whilst the financial institutions named in Schedule 1 (The Banks) are the only Banks hereunder, the principal London offices of The Chase Manhattan Bank; and (b) at any other time, the principal London offices of The Chase Manhattan Bank, and the principal London offices of two other Banks agreed between the Agent and the Borrower on or before the Syndication Date, or such other bank or banks as may from time to time be agreed between the Borrower and the Agent acting on the instructions of an Instructing Group. "RELEVANT PERIOD" has the meaning given to it in Clause 17.2 (Financial Definitions). "REMEDY RESTRICTION PERIOD" means any period during which the rights and remedies of the Banks which would otherwise arise by reason of an Event of Default (whether or not such Event of Default is deemed waived pursuant to the Intercreditor Agreement) are restricted, delayed or suspended, or the Banks are required to waive (or are deemed to have waived) conditions to drawdown hereunder, pursuant to the terms of the Intercreditor Agreement as in effect on the Execution Date. "REPEATED REPRESENTATIONS" means each of the representations set out in Clause 15.2 (Status and Due Authorisation), Clause 15.4 (No Immunity), Clause 15.7 (Binding Obligations), Clause 15.9 (No Material Defaults) to Clause 15.11 (Audited Financial Statements), Clause 15.16 (Budgets), Clause 15.21 (Execution of this Agreement), Clause 15.25 (Intellectual Property), Clause 15.26 (Security Interest) and Clause 15.27 (Group Structure). "REQUIRED PERCENTAGE" means: (a) in the case of the first L700,000,000 of Capital Event Proceeds (other than Capital Event Proceeds arising from the Incremental Amount) received by the Group after the Execution Date, 50 per cent.; (b) in the case of Capital Event Proceeds (other than Capital Events Proceeds arising from the Incremental Amount) received by the Group after the Execution Date which exceed L700,000,000, 70 per cent.; and (c) in the case of Capital Event Proceeds arising from the Incremental Amount, 100 per cent. 26 28 "RESERVATIONS" means: (a) the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court, the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors, the time barring of claims under any applicable law, the possibility that an undertaking to assume liability for or to indemnify against non-payment of any stamp duty or other tax may be void, defences of set-off or counterclaim and similar principles; (b) anything analogous to any of the matters set out in paragraph (a) above under any laws of any applicable jurisdiction; and (c) the reservations in or anything disclosed by any of the legal opinions delivered pursuant to Clause 2.4 (Conditions Precedent) and Schedule 3 (Conditions Precedent). "RESTRICTED GROUP" means any member of the Group other than a member of the UK Group. "RESTRICTED PAYMENT" means any payment by a member of the Covenant Group to a member of the Restricted Group whether by way of dividend or other distribution, loan, interest or the payment of interest on or repayment of the principal amount of inter-company Indebtedness for Borrowed Money. "SCHEME" means the scheme of arrangement under Section 425 in relation to the Target, as detailed in appendix 12 of the CWC Circular (or with such modifications, additions or conditions as may be approved or imposed by the Court). "SCHEME DOCUMENTS" means the CWC Circular, including the notice of Court Meeting and of the EGM set out therein and the resolutions of such Court Meeting and EGM. "SCHEME EFFECTIVE DATE" the date upon which an office copy of the order of the Court sanctioning the Scheme and the cancellation of the Target's shares covered by the Scheme was registered by the Registrar of Companies being 12 May 2000. "SECOND CAXTON SALE" means the transfer of Caxton by CWC Holdings to C&W (UK) Holdings in part satisfaction of the CWC Holdings Capital Reduction. "SECTION 425" means section 425 of the Companies Act 1985. "SECURED ANCILLARY FACILITIES" has the meaning given to it in the Senior Bank Credit Agreement as in effect on the Execution Date. "SECURITY" means the security from time to time constituted by or pursuant to the Security Documents and the guarantees provided hereunder. 27 29 "SECURITY DOCUMENTS" means the Pledge Agreement, the Share Charge, the Inter-Company Loan Assignment and any other agreement or document pursuant to which any member of the Group creates any security interest in favour of the Finance Parties (or the Security Trustee on their behalf) for all or any part of the obligations of the Obligors or any of them under any of the Finance Documents. "SECURITY TRUST AGREEMENT" means the security trust agreement entered into or to be entered into in connection herewith between the Parent, the Intermediate Parent and the Security Trustee. "SENIOR AGENT" means the person from time to time appointed as agent of the banks under the Senior Bank Credit Agreement. "SENIOR BANK CREDIT AGREEMENT" means the L2,500,000,000 Credit Agreement dated on or about the date hereof among the Borrower, NTL Technologies, the Parent, Chase Manhattan Plc and Morgan Stanley Dean Witter Bank Limited, as arrangers and joint book managers, Chase Manhattan International Limited, as agent and security trustee and others. "SHARE CHARGE" means the share charge in agreed form executed or to be executed by the Intermediate Parent in favour of the Security Trustee relating to 65% of the issued share capital of the Borrower. "SPECIFIED FINANCIAL INDEBTEDNESS" means any Financial Indebtedness of the Parent or any Guarantor (other than arising in respect of any letters of credit or performance bonds issued at the request of a member of the Group in the ordinary course of its business) arising under (a) the NTL CC Notes, (b) any Permitted Refinancing and (c) any Financial Indebtedness incurred to refinance the Facility in whole or in part. "STATUTORY REQUIREMENTS" means any applicable provision or requirement of any Act of Parliament including the Telecommunications Act 1984, the Cable and Broadcasting Act 1984 and the Cable and the Broadcasting Act 1990 or any instrument, rule or order made under any Act of Parliament or any regulation or by-law of any local or other competent authority or any statutory undertaking or statutory company which has jurisdiction in relation to the carrying out, use, occupation, operation of the properties or the businesses of any member of the UK Group (or, prior to the Pushdown Date, the Target Group) carried out thereon. "STEERING COMMITTEE GROUP" means the Arrangers. "SUBORDINATED DEBT" means any loan made by the Parent to any Guarantor which is a direct subsidiary of the Parent or by any Guarantor to the Borrower or any other Guarantor provided that in each case (x) the lender of such loan is the direct parent of the borrower of such loan and (y) such loan has been subordinated to the Loan on the terms of a Subordination Agreement. "SUBORDINATED FUNDING" means: (a) the subscription by the Parent for new equity capital of the Intermediate Parent; and 28 30 (b) Subordinated Debt. "SUBORDINATION AGREEMENT" means each subordination agreement in the agreed form executed or to be executed in connection herewith pursuant to which the indebtedness identified therein owed by any Guarantor (including, without limitation, the Intermediate Parent) or the Borrower, as the case may be, is subordinated to the obligations of the Obligors under the Finance Documents. "SUBSEQUENT PARTICIPANT" means a member state that adopts the euro as its lawful currency after 1 January 1999. "SYNDICATION DATE" means the earlier of (a) the day specified by the Arrangers, after having given five Business Days prior notice to the Borrower, as the day on which primary syndication of the Facility is completed and (b) the day falling six months after the date hereof. "TARGET" means Cable and Wireless Communications plc (company number 3288998). "TARGET GROUP" means CWC Holdings, Target and its direct and indirect subsidiaries (other than the Target Group Excluded Subsidiaries (as defined in the Senior Bank Credit Agreement)) immediately after the Second Caxton Sale, such comprising the CWC ConsumerCo Business and, for the purpose of Clause 17.2 (Financial Definitions) and any other provisions of this Agreement using the definitions defined in Clause 17.2 (Financial Definitions), NTL Business Limited. "TELECENTIAL PARTNERSHIPS" means: (a) Telecential Communications (Herts) Partnership, a partnership between CableTel Limited and CableTel Investments Limited (acting through the Telecential Communications Partnership), Maza Limited and Herts Cable Limited; and (b) Telecential Communications (Northants) Partnership, a partnership between CableTel Limited and CableTel Investments Limited (acting through the Telecential Communications Partnership), Maza Limited and Northampton Cable Television Limited. "TOTAL COMMITMENTS" means, at any time, the aggregate of the Banks' Commitments. "TOTAL NET CASH FINANCE CHARGES" has the meaning given to it in Clause 17.2 (Financial Definitions). "TRANSACTION AGREEMENT" means the restated agreement dated as of 26 July 1999 between Bell Atlantic Corporation, Cable & Wireless, the Target and NTL Delaware Inc. (as amended from time to time before the date of this Agreement). "TRANSFER CERTIFICATE" means a certificate substantially in the form set out in Schedule 2 (Form of Transfer Certificate) or in such other form as may be agreed between the Borrower and the Agent signed by a Bank and a Transferee under which: (a) such Bank seeks to procure the transfer to such Transferee of all or a part of such Bank's rights, benefits and obligations under the Finance Documents upon 29 31 and subject to the terms and conditions set out in Clause 30.3 (Assignments and Transfers by Banks); and (b) such Transferee undertakes to perform the obligations it will assume as a result of delivery of such certificate to the Agent as contemplated in Clause 30.5 (Transfers by Banks). "TRANSFER DATE" means, in relation to any Transfer Certificate, the date for the making of the transfer as specified in such Transfer Certificate. "TRANSFEREE" means a person to which a Bank seeks to transfer by novation all or part of such Bank's rights, benefits and obligations under the Finance Documents. "TREATY LENDER" means a Bank which is (on the date a payment falls due under a Finance Document) entitled to that payment under a double taxation agreement in force with the United Kingdom on that date (subject to the completion of any necessary procedural formalities) without a deduction or withholding for or on account of tax imposed by the United Kingdom from such a payment. "TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on 7 February 1992 and came into force on 1 November 1993). "TRIANGLE NOTES" means the 11.2% senior discount debentures due 15 November 2007, with a principal amount at maturity of $517,300,000, issued by NTL Triangle LLC (formerly known as Comcast UK Cable Partners Limited). "UNPAID SUM" means the unpaid balance of any of the sums referred to in Clause 23.1 (Default Interest Periods). "UK GROUP" means: (a) for the purpose of Clause 17.1 (UK Group Financial Condition), Clause 17.2 (Financial Definitions) and any other provision of this Agreement using the definitions defined in Clause 17.2 (Financial Definitions): (i) the Borrower; (ii) Northampton Cable Television Limited and Herts Cable Limited; (iii) Cable & Wireless Communications (South Hertfordshire) Limited; (iv) each of the Borrower's direct and indirect subsidiaries from time to time, excluding the UK Group Excluded Subsidiaries (other than Northampton Cable Television Limited, Herts Cable Limited and Cable & Wireless Communications (South Hertfordshire) Limited; and (v) prior to the Pushdown Date, the Target Group (including NTL Business Limited); and (b) for all other purposes, the Borrower and each of its direct or indirect subsidiaries from time to time other than the UK Group Excluded Subsidiaries. For information purposes only, the members of the UK Group on the Execution 30 32 Date (as defined by this paragraph (b)) are listed on Schedule 14 to the Senior Bank Credit Agreement. "UK GROUP EXCLUDED SUBSIDIARY" means: (a) any subsidiary of the Borrower which is a Dormant Subsidiary and which (i) has assets (save for loans existing on the Execution Date owed to it by other members of the UK Group) with an aggregate value of L10,000 or less and (ii) does not hold a Licence; (b) X-Tant Limited and its subsidiaries; (c) Northampton Cable Television Limited (until such time as it becomes a wholly owned subsidiary of the Borrower); (d) Herts Cable Limited (until such time as it becomes a wholly owned subsidiary of the Borrower); (e) any member of the NTL Triangle Sub-Group (until such time as the Parent elects for the members of the NTL Triangle Sub-Group to become members of the UK Group in accordance with Clause 34.5 (NTL Triangle Accession) of the Senior Bank Credit Agreement; (f) any Target Group Excluded Subsidiaries which become subsidiaries of the Borrower pursuant to the Pushdown; (g) any subsidiary of the Borrower which is a Project Company; and (h) any company (other than a member of the Target Group) which becomes a subsidiary of the Borrower after the date hereof pursuant to an Asset Passthrough, PROVIDED THAT, any of such companies shall become a member of the UK Group and cease to be a UK Group Excluded Subsidiary if the Borrower and the Agent (acting on the instructions of an Instructing Group, acting reasonably) so agree. 1.2 INTERPRETATION Any reference in this Agreement to: the "AGENT", an "ARRANGER", the "SECURITY TRUSTEE" or any "BANK" shall be construed so as to include it and any subsequent successors and permitted transferees in accordance with their respective interests; an "AFFILIATE" of a specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with that specified person, where: (a) "CONTROL" (and "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether by the ownership of shares, by agreement or otherwise; and 31 33 (b) the beneficial ownership of 10 per cent. or more of the issued share capital of a person shall be deemed to constitute control of that person; "AGREED FORM" in relation to any document means a form which is initialled by each of the Agent and the Borrower for the purposes of identification (as such form may be amended from time to time by agreement between such parties) or a document executed on or before the Execution Date by (among others) the Parent or the Borrower and the Agent or, if not so executed or initialed, a document in form and substance reasonably satisfactory to the Agent; "ASSETS" includes present and future properties, revenues and rights of every description; a "COMPANY" includes any body corporate; "CONTINUING", in relation to an Event of Default, shall be construed as a reference to an Event of Default which has not been waived (any deemed waiver pursuant to the Intercreditor Agreement not being a waiver for these purposes) in writing or remedied and, in relation to a Potential Event of Default, one which has not been remedied within the relevant grace period or waived (any deemed waiver pursuant to the Intercreditor Agreement not being a waiver for these purposes) in accordance with the terms hereof; "DISPOSAL" includes any sale, lease, transfer or other disposal; the "EQUIVALENT" on any date in one currency (the "FIRST CURRENCY") of an amount denominated in another currency (the "SECOND CURRENCY") is a reference to the amount of the first currency which could be purchased with the amount of the second currency at the spot rate of exchange quoted by the Agent at or about 11.00 a.m. on such date for the purchase of the first currency with the second currency; a "HOLDING COMPANY" of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary; "INDEBTEDNESS" shall be construed so as to include any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; a "LAW" shall be construed as any law (including common or customary law), statute, constitution, decree, judgment, treaty, regulation, directive, bye-law, order or any other legislative measure of any government, supranational, local government, statutory or regulatory body or court; a "MEMBER STATE" shall be construed as a reference to a member state of the European Union; a "MONTH" is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that: (a) if any such numerically corresponding day is not a Business Day, such period shall end on the immediately succeeding Business Day to occur in that next succeeding calendar month or, if none, it shall end on the immediately preceding Business Day; and 32 34 (b) if there is no numerically corresponding day in that next succeeding calendar month, that period shall end on the last Business Day in that next succeeding calendar month, (and references to "MONTHS" shall be construed accordingly); a "PERSON" shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing; "REPAY" (or any derivative form thereof) shall, subject to any contrary indication, be construed to include "PREPAY" (or, as the case may be, the corresponding derivative form thereof) and vice versa; a "SUBSIDIARY" of a company or corporation shall be construed as a reference to: (a) any company or corporation: (i) which is controlled, directly or indirectly, by the first-mentioned company or corporation; (ii) more than half the issued share capital of which is beneficially owned, directly or indirectly, by the first-mentioned company or corporation; or (iii) which is a subsidiary of another subsidiary of the first-mentioned company or corporation, and, for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body; and (b) for the purposes of only Clause 16 (Financial Information), Clause 17 (Financial Condition) and where the financial definitions referred to in Clause 17.2 (Financial Definition) are used in this Agreement, any company or corporation which is a subsidiary undertaking as defined in Section 258 of the Companies Act 1985 or any other legal entity which is accounted for as a subsidiary of that first mentioned company or corporation; a "SUCCESSOR" shall be construed so as to include an assignee or successor in title of such party and any person who under the laws of its jurisdiction of incorporation or domicile has assumed the rights and obligations of such party under this Agreement or to which, under such laws, such rights and obligations have been transferred; "TAX" shall be construed so as to include any tax, levy, impost, duty or other charge of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same); "VAT" shall be construed as a reference to value added tax including any similar tax which may be imposed in place thereof from time to time; a "WHOLLY-OWNED SUBSIDIARY" of a company or corporation shall be construed as a reference to any company or corporation which has no other members except that other 33 35 company or corporation and that other company's or corporation's wholly-owned subsidiaries or persons acting on behalf of that other company or corporation or its wholly-owned subsidiaries; and the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors. 1.3 CURRENCY SYMBOLS 1.3.1 "L" and "STERLING" denote lawful currency of the United Kingdom and "$" and "DOLLARS" denote lawful currency of the United States of America. 1.3.2 "EURO" means the single currency unit of the European Union as constituted by the Treaty on European Union as referred to in EMU Legislation and "EURO UNIT" means the currency unit of the euro as defined in EMU Legislation. 1.4 AGREEMENTS AND STATUTES Any reference in a Finance Document to: 1.4.1 this Agreement or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented; and 1.4.2 a statute or treaty shall be construed as a reference to such statute or treaty as the same may have been, or may from time to time be, amended or, in the case of a statute, re-enacted. 1.5 HEADINGS Clause and Schedule headings are for ease of reference only. 1.6 TIME Any reference in this Agreement to a time of day shall, unless a contrary indication appears, be a reference to London time. 1.7 THIRD PARTY RIGHTS A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. 2. THE FACILITY 2.1 GRANT OF THE FACILITY The Banks grant to the Borrower, upon the terms and subject to the conditions hereof, a sterling multiple draw loan facility in an aggregate amount of L1,300,000,000, as the same may be reduced in accordance with the terms hereof. 2.2 PURPOSE The Facility is intended to fund loans by the Borrower to other members of the UK Group each of which shall utilize the proceeds thereof to finance the working capital 34 36 requirements of the UK Group, provided that in no event shall the proceeds of any Advance be used for a purpose other than to finance the construction, capital expenditure and working capital needs of a Cable Business. 2.3 APPLICATION The Borrower shall apply all amounts raised by it hereunder in or towards satisfaction of, the purposes specified in Clause 2.2 (Purpose) and none of the Finance Parties shall be obliged to concern themselves with such application. 2.4 CONDITIONS PRECEDENT Save as the Banks may otherwise agree, the Borrower may not deliver any Notice of Drawdown unless the Agent has confirmed to the Borrower and the Banks that it has received all of the documents and other evidence listed in Schedule 3 (Conditions Precedent) and that each is, in form and substance, satisfactory to the Agent. The Agent shall notify the Borrower and the Banks promptly upon being so satisfied. 2.5 BANKS' OBLIGATIONS SEVERAL The obligations of each Bank are several and the failure by a Bank to perform its obligations hereunder shall not affect the obligations of an Obligor towards any other party hereto nor shall any other party be liable for the failure by such Bank to perform its obligations hereunder. 2.6 BANKS' RIGHTS SEVERAL The rights of each Bank are several and any debt arising hereunder at any time from an Obligor to any of the other parties hereto shall be a separate and independent debt. Each such party shall be entitled to protect and enforce its individual rights arising out of this Agreement independently of any other party (so that it shall not be necessary for any party hereto to be joined as an additional party in any proceedings for this purpose). 3. UTILISATION OF THE FACILITY 3.1 DRAWDOWN CONDITIONS FOR ADVANCES An Advance will be made by the Banks to the Borrower if: 3.1.1 during the Notice Period, the Agent has received a completed Notice of Drawdown from the Borrower; 3.1.2 the proposed date for the making of such Advance is a Business Day falling one month or more before the Final Maturity Date; 3.1.3 the proposed amount of such Advance is (a) if less than the Available Facility an amount or integral multiple of L50,000,000 or (b) equal to the amount of the Available Facility; 3.1.4 there would not, immediately after the making of such an Advance, be more than five Advances outstanding; 3.1.5 neither of the events mentioned in sub-clauses 5.1.1 and 5.1.2 of Clause 5.1 (Market Disruption and Alternative Interest Rates) shall have occurred; 35 37 3.1.6 to the extent that the initial aggregate principal amount of Advances made under this Facility would exceed L300,000,000 after giving effect to the making of such Advance, the Pushdown Condition has been satisfied; 3.1.7 on and as of the proposed date for the making of such Advance (i) no Event of Default or Potential Event of Default is continuing and (ii) the Repeated Representations are true in all material respects; 3.1.8 the cash on hand of the UK Group at the close of business on the Business Day immediately preceding the date the Notice of Drawdown for such Advance is delivered to the Agent shall not exceed L25,000,000; and 3.1.9 in the case of Advances made on or after the Pushdown Date, the advances which are outstanding under the Senior Bank Credit Agreement shall equal at least L2,500,000,000 less any permanent reductions to the availability thereunder made after the Execution Date. 3.2 EACH BANK'S PARTICIPATION IN ADVANCES Each Bank will participate through its Facility Office in each Advance made pursuant to this Clause 3 (Utilisation of the Facility) in the proportion borne by its Available Commitment to the Available Facility immediately prior to the making of that Advance. 3.3 REDUCTION OF AVAILABLE COMMITMENT If a Bank's Commitment is reduced in accordance with the terms hereof after the Agent has received the Notice of Drawdown for an Advance and such reduction was not taken into account in the Available Facility, then the amount of that Advance shall be reduced accordingly. 3.4 FORCED DRAWDOWN At any time during the continuance of a Remedy Restriction Period, the Agent, acting upon the instructions of an Instructing Group, shall have the right to require the Borrower to incur an Advance in the amount necessary to cause the Full Funding Date to occur (such amount the "FORCED DRAWDOWN Amount"). Such right shall be exercised by the giving of notice of such drawdown by the Agent to the Banks and the Borrower. In such an event, upon notice to each Bank, such Bank shall fund its pro rata portion of the Forced Drawdown Amount to the Agent and the Agent, on behalf of the Borrower, will transfer the amounts so made available to the Borrower's account at the Senior Agent. The Borrower and each of the other Obligors acknowledge and agree that the making of an Advance by the Banks pursuant to this Clause 3.4 (Forced Drawdown) has been irrevocably and unconditionally consented to by the Borrower and the Obligors and neither the Borrower nor any other Obligor nor any other person shall have the right to revoke, cancel or otherwise limit such consent or the right of the Banks to make such Advance hereunder. 36 38 4. PAYMENT AND CALCULATION OF INTEREST ON ADVANCES; INTEREST PERIODS 4.1 PAYMENT OF INTEREST On the last day of each Interest Period (and, if the Interest Period of such Advance exceeds six months, on the expiry of each period of six months during such Interest Period) the Borrower shall pay accrued interest on the Advance to which such Interest Period relates. 4.2 CALCULATION OF INTEREST The rate of interest applicable to an Advance from time to time during an Interest Period relating thereto shall be the rate per annum which is the lesser of: 4.2.1 16 per cent. per annum; and 4.2.2 the sum of: (a) the Margin at such time; (b) the Mandatory Cost Rate; and (c) LIBOR on the Quotation Date therefor. 4.3 LIMITATIONS ON CASH INTEREST. Notwithstanding anything to the contrary set forth in this Agreement, to the extent that the rate of interest applicable to an Advance on any interest payment date for such Advance exceeds the sum of 14 per cent. per annum and the increase, if any, in the rate of interest pursuant to Clause 4.4 (Default Interest) such excess interest shall be paid by adding such excess interest to the principal amount of such Advance unless the Borrower shall have given the Agent notice at least three Business Days prior to such interest payment date that it shall pay such excess amount in cash. 4.4 DEFAULT INTEREST The interest rate determined in accordance with Clause 4.2 (Calculation of Interest) shall be increased by one per cent. per annum (it being understood that the interest rate could by reason of such increase exceed 16 per cent. per annum) from the date determined by the Agent (acting reasonably) (in writing) as being the date on which an Event of Default or Potential Event of Default has occurred or come into existence until the date specified by the Agent (in writing) as being the date on which it has been demonstrated to its satisfaction (acting reasonably) that such Event of Default or Potential Event of Default is no longer continuing. The Agent shall promptly notify the other parties hereto of any determination that an Event of Default or Potential Event of Default has occurred or exists or, as the case may be, that it has been demonstrated to its reasonable satisfaction that such is no longer continuing. 4.5 INTEREST PERIODS The period for which an Advance is outstanding shall be divided into successive periods each of which (other than the first, which shall begin on the day such Advance is made) shall start on the last day of the preceding such period. 4.6 DURATION 37 39 The duration of each Interest Period shall, save as otherwise provided herein, be one, two, three or six months or such other period as the Agent (acting on instructions of all the Banks) may agree in each case as the Borrower may by not less than five Business Days' prior notice to the Agent select, PROVIDED THAT: 4.6.1 if the Borrower fails to give such notice of its selection in relation to an Interest Period, the duration of that Interest Period shall, subject to sub-clauses 4.6.2, 4.6.3 and 4.6.4 be one month; 4.6.2 if there are more than five Advances outstanding any Interest Period which begins during or at the same time as anyone or more other Interest Periods shall end at the same time as such one of those other Interest Periods as the Borrower may, by not less than five Business Days' prior notice to the Agent, select or, failing such selection, the first such other Interest Period to expire; 4.6.3 any Interest Period which would otherwise end during the month preceding, or extend beyond, the Final Maturity Date shall be of such duration that it shall end on the Final Maturity Date; and 4.6.4 prior to the Syndication Date, Interest Periods shall be one month or such other period as the Agent and the Borrower may agree. 4.7 CONSOLIDATION OF ADVANCES If two or more Interest Periods end at the same time, then, on the last day of those Interest Periods, the Advances to which they relate shall be consolidated into and treated as a single Advance. 4.8 DIVISION OF ADVANCES The Borrower may, by not less than five Business Days' prior notice to the Agent, direct that any Advance shall, at the beginning of any Interest Period relating thereto, be divided into (and thereafter, save as otherwise provided herein, treated in all respects as) two or more Advances in such amounts (in aggregate, equaling the amount of the Advance being so divided) as shall be specified by the Borrower in such notice, PROVIDED THAT the Borrower shall not be entitled to make such a direction if: 4.8.1 as a result of so doing, there would be more than five outstanding Advances; or 4.8.2 any Advance thereby coming into existence would be of an amount less than L50,000,000. 5. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES 5.1 MARKET DISRUPTION If, in relation to any Advance: 5.1.1 LIBOR is to be determined by reference to Reference Banks and at or about 11.00 a.m. on the Quotation Date for the relevant Interest Period none or only one of the Reference Banks supplies a rate for the purpose of determining LIBOR for the relevant Interest Period; or 38 40 5.1.2 before the close of business in London on the Quotation Date for such Advance the Agent has been notified by a Bank or each of a group of Banks, to whom in aggregate fifty per cent. or more of such Advance would be owed if made that the LIBOR rate does not accurately reflect the cost of funding its participation in such Advance, then the Agent shall notify the Borrower and the Banks of such event and, notwithstanding anything to the contrary in this Agreement, Clause 5.2 (Substitute Interest Period and Interest Rate) shall apply to such Advance (if it is a Rollover Advance). If either sub-clause 5.1.1 or 5.1.2 of Clause 5.1 (Market Disruption and Alternative Interest Rates) applies to a proposed Advance (other than a Rollover Advance), such an Advance shall not be made. 5.2 SUBSTITUTE INTEREST PERIOD AND INTEREST RATE If sub-clause 5.1.1 of Clause 5.1 (Market Disruption and Alternative Interest Rates) applies to an Advance, the duration of the relevant Interest Period shall be one month or, if less, such that it shall end on the Final Maturity Date. If either sub-clause 5.1.1 or 5.1.2 of Clause 5.1 (Market Disruption and Alternative Interest Rates) applies to an Advance, the rate of interest applicable to each Bank's portion of such Advance during the relevant Interest Period shall (subject to any agreement reached pursuant to Clause 5.3 (Alternative Rate)) be the rate per annum which is the sum of: 5.2.1 the Margin at such time; 5.2.2 the Mandatory Cost Rate; and 5.2.3 the rate per annum notified to the Agent by such Bank before the last day of such Interest Period to be that which expresses as a percentage rate per annum the cost to such Bank of funding from whatever sources it may reasonably select its portion of such Advance during such Interest Period. 5.3 ALTERNATIVE RATE If either of those events mentioned in sub-clauses 5.1.1 or 5.1.2 of Clause 5.1 (Market Disruption and Alternative Interest Rates) occurs in relation to an Advance, then if the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations with a view to agreeing a substitute basis (i) for determining the rates of interest from time to time applicable to the Advances and/or (ii) upon which the Advances may be maintained (whether in sterling or some other currency) thereafter and any such substitute basis that is agreed shall take effect in accordance with its terms and be binding on each party hereto, PROVIDED THAT the Agent may not agree any such substitute basis without the prior consent of each Bank (which is not to be unreasonably withheld). 6. NOTIFICATION 6.1 ADVANCES The Agent shall, promptly upon its receipt of a Notice of Drawdown, notify each Bank of: 6.1.1 the proposed amount of the relevant Advance; 39 41 6.1.2 the proposed length of the relevant Interest Period; and 6.1.3 the aggregate principal amount of the relevant Advance allocated to such Bank pursuant to Clause 3.2 (Each Bank's Participation in Advances). 6.2 INTEREST PERIODS Not less than three Business Days before the first day of an Interest Period, the Agent shall notify each Bank of the proposed amount of the relevant Advance, the proposed length of such Interest Period and the aggregate principal amount of the relevant Advance allocated to such Bank pursuant to Clause 3.2 (Each Bank's Participation in Advances). 6.3 INTEREST RATE DETERMINATION The Agent shall promptly notify the Borrower and the Banks of each determination of LIBOR, the Mandatory Cost Rate and the Margin. 6.4 CHANGES TO ADVANCES OR INTEREST RATES The Agent shall promptly notify the Borrower and the Banks of any change to (a) the proposed length of an Interest Period or (b) any interest rate occasioned by the operation of Clause 5 (Market Disruption and Alternative Interest Rates). 7. REPAYMENT AND REDUCTION OF THE FACILITY 7.1 REPAYMENT The Borrower shall repay each Advance made to it in full on the Final Maturity Date. 8. CANCELLATION AND PREPAYMENT 8.1 CANCELLATION OF THE FACILITY Subject to the provisions of Clause 8.7 (Limitations on Cancellation of the Facility), the Borrower may, by giving to the Agent not less than five Business Days' prior written notice to that effect, cancel the whole or any part (being a minimum amount of L50,000,000 and an integral multiple of L10,000,000) of the Available Facility. Any such cancellation shall reduce the Available Commitment and Commitment of each Bank rateably. 8.2 PREPAYMENT OF THE FACILITY Subject to the provisions of Clause 8.7 (Limitations on Cancellation of the Facility) and Clause 23.4 (Break Costs), the Borrower may, by giving to the Agent not less than five Business Days prior written notice to that effect, prepay the whole or any part of an Advance (being a minimum amount of L50,000,000 and an integral multiple of L10,000,000). 8.3 NOTICE OF CANCELLATION OR PREPAYMENT Any notice of cancellation or prepayment given by the Borrower pursuant to this Clause 8 (Cancellation and Prepayment) shall be irrevocable, shall specify the date upon which such cancellation or prepayment is to be made and the amount of such cancellation or prepayment and, in the case of a notice of prepayment, shall oblige the Borrower to make such prepayment on such date. 40 42 8.4 REPAYMENT OF A BANK'S SHARE OF THE LOAN If: 8.4.1 any sum payable to any Bank by an Obligor is required to be increased pursuant to Clause 10.1 (Tax Gross-up); or 8.4.2 any Bank claims indemnification from an Obligor under Clause 10.2 (Tax Indemnity), the Agent claims indemnification from an Obligor under Clause 10.2 (Tax Indemnity) in respect of a payment received by it and paid by it to a Bank under the Finance Documents or any Bank claims indemnification from the Borrower under Clause 12.1 (Increased Costs), the Borrower may, whilst such circumstance continues, give the Agent at least five Business Days prior written notice (which notice shall be irrevocable) of its intention to procure the repayment of such Bank's share of the Loan. On the last day of each then current Interest Period, or at any other time subject to the provisions of Clause 23.4 (Break Costs), the Borrower shall repay such Bank's portion of the Advance to which such Interest Period relates. 8.5 NO FURTHER ADVANCES A Bank for whose account a repayment is to be made under Clause 8.4 (Repayment of a Bank's Share of the Loan) shall not be obliged to participate in the making of Advances on or after the date upon which the Agent receives the Borrower's notice of its intention to procure the repayment of such Bank's share of the Loan, and such Bank's Available Commitment shall be reduced to zero. 8.6 NO OTHER REPAYMENTS The Borrower shall not repay all or any part of the Loan except at the times and in the manner expressly provided for in this Agreement and shall not be entitled to reborrow any amount repaid. 8.7 LIMITATION ON CANCELLATION OF THE FACILITY Notwithstanding anything to the contrary set forth in this Clause 8 (Cancellation and Prepayment) or Clause 8.2 (Prepayment of the Facility), the Borrower may not voluntarily reduce the Available Commitment pursuant to Clause 8.1 (Cancellation of the Facility) or prepay all or any part of an Advance pursuant to Clause 8.2 (Prepayment of the Facility) at any time that the Senior Bank Credit Agreement is in effect, without the consent of the Senior Agent under the Senior Bank Credit Facility, unless such reduction or prepayment is permitted under Clause 19.35 (Working Capital Facility Amendments) of the Senior Bank Credit Agreement as in effect on the Execution Date. 9. MANDATORY PREPAYMENT 9.1 MANDATORY PREPAYMENT FROM EXCESS CASH FLOW The Borrower shall ensure that within te