Exhibit 10.1
PRIVATE AND CONFIDENTIAL
To: Telewest Communications Networks Limited
160 Great Portland Street
London W1N 5TB
Attn: David Buckingham
2 November 2004
Ladies and Gentlemen,
TELEWEST COMMUNICATIONS NETWORKS LIMITED - COMMITMENT LETTER
Each of Barclays Capital, the investment banking division of Barclays Bank
PLC (together with Barclays Bank PLC referred to as "BARCLAYS CAPITAL"),
BNP Paribas, Citigroup Global Markets Limited, Credit Suisse First Boston,
Deutsche Bank AG London and Royal Bank of Scotland (each as "MANDATED LEAD
ARRANGER" and, collectively, the "MANDATED LEAD ARRANGERS") hereby confirm
their commitment to arrange, on your behalf, certain bank financing (the
"FINANCING") described herein, with an international syndicate of lenders.
Each of Barclays Bank PLC, BNP Paribas, Citibank, N.A., Credit Suisse First
Boston, Deutsche Bank AG London and Royal Bank of Scotland1 (each an
"UNDERWRITER" and, collectively, the "UNDERWRITERS"), hereby further
confirm their commitment to underwrite (or procure that their customary
funding affiliate underwrites) the Financing on the terms and conditions of
this Commitment Letter and the detailed terms and conditions as set out in
the Summary of Principal Terms and Conditions attached hereto (the "SUMMARY
TERMS AND CONDITIONS").
Capitalised terms, unless otherwise defined, shall bear the same meanings
as those ascribed to them in the Summary Terms and Conditions.
1. FINANCING
Subject to the terms of this letter (incorporating the Summary Terms
and Conditions, the "COMMITMENT LETTER") and a fees letter to be
entered into between yourselves and ourselves in connection with the
Financing (the "FEES LETTER" and, together with the Commitment Letter,
the "COMMITMENT DOCUMENTS"), we are pleased to confirm the terms on
which you have exclusively mandated us:
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1 Legal lending entities to be determined upon confirmation of identity
of Borrowers
(a) to lead arrange, and on which the Mandated Lead Arrangers are
willing to lead arrange, the Financing; and
(b) to underwrite, and on which the Underwriters are willing to
underwrite, one hundred per cent. (100%) of the Financing in the
following proportions:
SENIOR SECOND LIEN
FACILITIES FACILITY
Barclays Capital 16.667% 20%
BNP Paribas 16.667% 10%
Citibank, N.A. 16.667% 20%
Credit Suisse First Boston 16.667% 20%
Deutsche Bank AG London 16.667% 20%
Royal Bank of Scotland 16.667% 10%
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100% 100%
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The net proceeds of the Financing will be available for the purposes
of (i) refinancing all of the Existing Senior Credit Facilities
Agreement and (ii) the on-going working capital needs and general
corporate purposes of Telewest Communications Networks Limited ("TCN")
and its subsidiaries and associated partnerships (together with TCN,
the "TCN GROUP").
The Financing will comprise:
(i) pound 1,450 million of senior secured term loan facilities;
(ii) pound 100 million of senior secured revolving credit facilities;
and
(iii) pound 250 million of second lien financing,
together referred to as the "FACILITIES", details of which are set out
in the attached Summary Terms and Conditions.
The commitment of each Mandated Lead Arranger and each Underwriter is
several and the failure by one Mandated Lead Arranger or Underwriter
to perform its obligations hereunder shall not prejudice the rights or
obligations of the other Mandated Lead Arrangers or, as the case may
be, any other Underwriters. Each Mandated Lead Arranger and
Underwriter may enforce its rights separately and you may enforce your
rights against each Mandated Lead Arranger and Underwriter separately.
No Mandated Lead Arranger or Underwriter shall be responsible for the
obligations of any other Mandated Lead Arranger, or as the case may
be, Underwriter.
2. CONDITIONS OF COMMITMENT
The Mandated Lead Arrangers' commitment to arrange and the
Underwriters' commitment to underwrite the Financing is subject to the
following conditions:
(a) the negotiation of customary finance documentation (including,
without limitation, loan and intercreditor agreements and
guarantee, security and associated documentation for the
Financing, including legal opinions (together, the "FINANCING
DOCUMENTATION")) on terms satisfactory to the Mandated Lead
Arrangers and the Underwriters (acting reasonably) and their
execution and delivery by the parties thereto. The Financing
Documentation will be drafted by counsel to the Mandated Lead
Arrangers and, unless otherwise agreed by TCN, will incorporate,
without limitation, the terms and conditions set out in the
Commitment Documents;
(b) receipt by us of a copy of the Fees Letter dated as at the date
hereof and counter-signed by you;
(c) Barclays Capital, BNP Paribas, Citigroup Global Markets Limited,
Credit Suisse First Boston, Deutsche Bank AG London and Royal
Bank of Scotland being appointed as joint bookrunners for the
Facilities;
(d) confirmation that the consolidated financial statements of the
TCN Group for the fiscal quarter ended September 2004 are not
materially inconsistent with the budget ("6:6 Plan") for that
quarter most recently provided to us prior to the date hereof (it
being understood that neither adjustments relating to fresh start
accounting nor reasonable stock option costs shall be taken into
account for the purposes of determining compliance with this
paragraph (d)); and
(e) compliance by you and your subsidiaries with the terms of the
Commitment Documents in all material respects.
3. ASSIGNMENTS AND AMENDMENTS
You may not assign or transfer any of your rights, or (except as
provided in paragraph 13) be relieved of any of your obligations,
under the Commitment Documents, without the prior written consent of
the Mandated Lead Arrangers (and any purported assignment or transfer
without such consent shall be void).
Subject to the terms of the Commitment Documents, the Mandated Lead
Arrangers and the Underwriters may assign or transfer all or any of
our respective rights and obligations under the Commitment Documents
to any of our respective affiliates that customarily acts as the
funding affiliate of such Mandated Lead Arranger or Underwriter;
provided that any such assignment or transfer shall not be permitted
without the prior consent of TCN if as a result of such assignment or
transfer any member of the TCN Group would incur any additional
obligation or liability by way of withholding tax.
This Commitment Letter may not be amended or modified and no provision
may be waived except by an instrument in writing signed by TCN, the
Mandated Lead Arrangers and the Underwriters.
4. SYNDICATION TIMETABLE
The parties to this Commitment Letter have agreed to use all
reasonable endeavours to comply with the following timetable:
(a) launch of syndication to existing lenders by no later than the
week commencing 1 November 2004; and
(b) launch of syndication to new lenders by no later than the week
commencing 8 November 2004.
5. INDEMNIFICATION
TCN hereby agrees to indemnify and hold harmless each of those parties
listed in Annex A to this Commitment Letter on the terms and subject
to the conditions set out therein.
6. Confidentiality and Conflicts
(a) You will not, without the prior written consent of the Mandated
Lead Arrangers and Underwriters, disclose the contents of the
Commitment Documents or their existence to any person except,
following your acceptance of this Commitment Letter in accordance
with its terms:
(i) to the extent required by any court or other regulatory
body, by law or to comply with the rules of any regulatory
body or applicable securities exchange to which you or we
are subject; or
(ii) to your employees and your legal or financial advisers who
are made aware of, and either agree to be bound by, the
obligations under this paragraph prior to such information
being disclosed to them or are in any event subject to
confidentiality obligations as a matter of law or
professional practice.
(b) None of the Mandated Lead Arrangers or the Underwriters will,
without the prior written consent of TCN (save where already
disclosed pursuant to paragraph (a) above), disclose the contents
of the Commitment Documents or their existence or any information
relating to the Financing or Telewest Global, Inc., Telewest UK
Limited, TCN or any of their respective subsidiaries or
associated partnerships or joint venture or minority interests
(collectively, the "GROUP") which it receives from you or any
other Mandated Lead Arranger or Underwriter or any of their
affiliates to any person except:
(i) as required by law or to comply with the rules of or any
request by any regulatory body or applicable securities
exchange to which you or we are subject or with which we are
obliged to comply, in which case we shall provide you with
reasonable prior notice to the extent possible; or
(ii) to any potential transferee, assignee or other participant
in the commitments hereunder, our employees and our legal or
financial advisers who are made aware of, and either agree
to be bound by, the obligations under this paragraph prior
to such information being disclosed to them or are in any
event subject to confidentiality obligations as a matter of
law or professional practice.
(c) You acknowledge that the Mandated Lead Arrangers, the
Underwriters or any of their respective affiliates may be
providing debt financing, equity capital or other services
(including corporate or financial advisory services) to persons
with whom you may have conflicting interests in connection with
the Financing or otherwise. The appointments of the Mandated Lead
Arrangers and the commitments of the Underwriters under this
Commitment Letter do not prevent the Mandated Lead Arrangers or
the Underwriters from providing such services to its other
clients or customers. Without prejudice to the generality of
paragraph 6(b), the Mandated Lead Arrangers and the Underwriters
will keep confidential any information relating to the Financing
or the Group which it receives from you or your advisers from any
of its other clients or customers. You acknowledge that the
Mandated Lead Arrangers and the Underwriters have no obligation
to you, to use in connection with the Financing, or to furnish to
you or any of your affiliates or advisers, information obtained
from other clients or customers.
7. EXCLUSIVITY
In consideration of the Mandated Lead Arrangers and the Underwriters
entering into this Commitment Letter you agree that during the period
from the date of your counter-signature of this Commitment Letter to
the date which is the earlier of the Closing Date and 31 January 2005:
(a) you will negotiate with us in good faith and on an exclusive
basis to finalise and to enter into the Financing Documentation
on terms consistent with those set out in this Commitment Letter;
(b) you will not agree or negotiate with any other bank or financial
institution any refinancing of the Existing Senior Credit
Facilities Agreement by such bank or financial institution by
debt raised in the domestic or international debt markets, and
you will not approach, mandate or appoint, or solicit or respond
to any offer from any other bank or financial institution to
arrange or underwrite any such financing; and
(c) you will not seek to replace the Mandated Lead Arrangers or the
Underwriters as the lead arrangers and underwriters of the
Financing (save as contemplated by paragraph 13).
8. DELEGATION
Subject to the provisions of paragraph 3, each of the Mandated Lead
Arrangers and the Underwriters may employ the services of any of its
affiliates in providing the services contemplated by this Commitment
Letter and each of the Mandated Lead Arrangers and Underwriters
reserves the right to allocate, in whole or in part, to such
affiliates the fees payable under the Commitment Documents in such
manner as they and such affiliates may agree in their sole discretion.
You acknowledge that the Mandated Lead Arrangers, the Underwriters and
such affiliates may share with each other any information relating to
the Group, the Financing or any of the matters contemplated by the
Committment Documents. Any such affiliate may rely on this Commitment
Letter.
9. ANNOUNCEMENT
You, the Mandated Lead Arrangers and the Underwriters each agree that
none of us nor any of our respective affiliates shall make any
announcement relating to the Financing without the prior consent of
the other persons save to the extent that such announcement is
required by law or to comply with the rules of any regulatory body or
applicable securities exchange to which you or we are subject. The use
of the names of the Mandated Lead Arrangers and Underwriters on any
announcement or communication relating to the Financing must appear in
alphanumerical order.
10. GOVERNING LAW AND JURISDICTION
This Commitment Letter shall be governed by and construed in
accordance with English law.
For the benefit of the Mandated Lead Arrangers and the Underwriters,
you agree that the courts of England have jurisdiction to settle any
disputes in connection with the Commitment Documents and accordingly
submit to the exclusive jurisdiction of the English courts and waive
any defence of inconvenient forum which may be available.
11. THIRD PARTY RELIANCE
Save as expressly provided otherwise in this Commitment Letter, a
person who is not a party to this Commitment Letter may not rely on it
and the terms of the Contracts (Rights of Third Parties) Act 1999 are
excluded. The parties to this Commitment Letter may amend this
Commitment Letter in writing without the consent of any third party.
12. SURVIVAL
The provisions of paragraphs 5, 6, 9, 10 11 and 12 of this Commitment
Letter shall survive the termination of the obligations of any of the
parties under this Commitment Letter or its expiry.
13. COMMITMENT AND TERMINATION
(a) The commitments of the Mandated Lead Arrangers and Underwriters
under this Commitment Letter will commence upon your signature
and return of the Commitment Documents.
(b) Following your acceptance of this Commitment Letter as provided
in subparagraph (a) above, any of the Mandated Lead Arrangers and
the Underwriters may terminate its obligations under this
Commitment Letter (by written notice to each of the other parties
to this Commitment Letter) only in the following circumstances:
(i) on or after the close of business in London on 31 January
2005, unless the first drawdown under the Facilities has
occurred on or before that date; or
(ii) if you breach any term of the Commitment Documents in any
material respect and that breach, if capable of remedy, is
not remedied within 10 business days of the date notice is
given to you of such breach; or
(iii)any factual information relating to the Group received by
any of the Mandated Lead Arrangers or the Underwriters (or
any of their advisers) from you (or any of your advisers) or
any representation made by you to any of the Mandated Lead
Arrangers or the Underwriters (or any of their advisers)
prior to the signing date of the Financing Documentation is
inaccurate or misleading in any respect which would be
reasonably likely to materially prejudice the achievement of
a Successful Syndication (as defined in the Fees Letter) of
the Facilities; or
(iv) if you fail to disclose any facts or information to the
Mandated Lead Arrangers or the Underwriters, which are
within your knowledge and which has or is reasonably likely
to have, a material adverse effect on the business, assets,
operations or financial condition of the TCN Group taken as
a whole; or
(v) if a change occurs after the date hereof which has or is
reasonably likely to have, a material adverse effect on the
business, assets, operations or financial condition of the
TCN Group taken as a whole.
(c) You may terminate the appointment of any Mandated Lead Arranger
or the commitment of any Underwriter hereunder (by written notice
to each of the other parties to this Commitment Letter):
(i) if such Mandated Lead Arranger or Underwriter breaches or
indicates its intention to breach any term of the Commitment
Documents relating to its obligation to fund its commitments
under this Commitment Letter; or
(ii) if such Mandated Lead Arranger or Underwriter breaches any
term of the Commitment Documents (other than as specified in
sub-paragraph (i) above) in any material respect and that
breach, if capable of remedy is not remedied within 10
business days of the date on which you give notice of such
breach; or
(iii)if the representation given by such Mandated Lead Arranger
or Underwriter in paragraph 2(b) of the Fees Letter is
incorrect in any material respect; or
(iv) on or after the close of business in London on the date
which is the earlier of the Closing Date and 31 January
2005,
and upon such termination you shall (save as provided in
paragraph 11) and without prejudice to the rights of any other
Mandated Lead Arranger or Underwriter against you in respect of
any breach of the Commitment Documents prior to such termination)
have no further obligations to such Mandated Lead Arranger or
Underwriter under the Commitment Documents.
14. CLASSIFICATION
The Mandated Lead Arrangers and the Underwriters will treat you for
the purposes of their respective appointments under this Commitment
Letter, as an intermediate customer within the meaning of and for the
purposes of the Financial Services Authority Handbook of Rules and
Guidance (the "Handbook"). In addition, you agree that you will, at
any time upon the request of the Mandated Lead Arrangers and the
Underwriters and in connection with the requirements set out in the
Handbook, provide the Mandated Lead Arrangers and the Underwriters
within a reasonable period after such request, documentation
evidencing the existence, ownership and control of any obligors under
the loan documentation in relation to the Financing.
The offer contained in this Commitment Letter shall remain in effect until
close of business in London on 2 November 2004 at which time it will expire
unless written acceptance of each of the Commitment Documents has been
received by each of the Mandated Lead Arrangers (marked for the attention
of Andrew Shellard (in the case of Barclays Capital) Louis Kenna in the
case of BNP Paribas, Paul Shedel (in the case of Citigroup Global Markets
Limited), Marisa Drew (in the case of Credit Suisse First Boston), Guy du
ParcBraham (in the case of Deutsche Bank AG London) and Mike Cunningham in
the case of Royal Bank of Scotland) from you in accordance with the
instructions set out below.
This Commitment Letter may be signed in any number of counterparts, which
shall have the same effect as if the signatures on the counterparts were
signatures on a single copy of this Commitment Letter.
The provisions of this Commitment Letter supersede all prior oral and/or
written understandings and agreements related to the Financing and,
together with the other Commitment Documents, shall (until the execution
and delivery of the Financing Documentation), comprise the entire agreement
(in respect of the matters referred therein) between us.
Please indicate your acceptance of this Commitment Letter by countersigning
this Commitment Letter in the space indicated below, whereupon it shall
constitute a binding agreement between us, and returning two original
copies of such signed counterpart together with two original signed copies
of the Fees Letter, one to each of the Mandated Lead Arrangers, marked in
each case for the attention of the relevant person specified above.
We look forward to your favourable response to our proposal and to your
mandate to us to proceed with this transaction.
Yours faithfully,
THE MANDATED LEAD ARRANGERS
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For and on behalf of For and on behalf of
BARCLAYS CAPITAL BNP PARIBAS
/s/ ANDREW SHELLARD /s/ LOUIS KENNA /s/ PAUL GIBBON
For and on behalf of For and on behalf of
CITIGROUP GLOBAL MARKETS CREDIT SUISSE FIRST BOSTON
LIMITED
/s/ MARISA DREW
/s/ PAUL SHEDEL
For and on behalf of For and on behalf of
DEUTSCHE BANK AG LONDON ROYAL BANK OF SCOTLAND
/s/ GUY DU PARC BRAHAM /s/ KIERAN RYAN
/s/ BRIAN BASSETT
THE UNDERWRITERS
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For and on behalf of For and on behalf of
BARCLAYS BANK PLC BNP PARIBAS
/s/ ANDREW SHELLARD /s/ LOUIS KENNA /s/ PAUL GIBBON
For and on behalf of For and on behalf of
CITIBANK, N.A. CREDIT SUISSE FIRST BOSTON
/s/ PAUL SHEDEL /s/ MARISA DREW
For and on behalf of For and on behalf of
DEUTSCHE BANK AG LONDON ROYAL BANK OF SCOTLAND
/s/ GUY DU PARC BRAHAM /s/ KIERAN RYAN
/s/ BRIAN BASSETT
We accept and agree the terms of the foregoing letter.
For and on behalf of
TELEWEST COMMUNICATIONS NETWORKS LIMITED
/s/ Neil Smith
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Name: NEIL SMITH
Title: Director
Date: 2 November 2004
ANNEX A
INDEMNIFICATION
1. In the event that any of the Mandated Lead Arrangers, the Underwriters
or any of their respective affiliates or any of their respective
partners, directors, agents, advisers or employees (each a "RELEVANT
PERSON") becomes involved in any capacity in any action, proceeding,
or investigation brought by or against any person, including without
limitation shareholders of Telewest Global, Inc., TCN or any of their
respective subsidiaries arising out of, in connection with or as a
result of either the commitment or any matter referred to in the
Commitment Documents, you agree promptly on request to reimburse the
Relevant Person for its reasonable legal and other expenses (including
the reasonable cost of any investigation and preparation of any
defence) arising out of or incurred in connection therewith. You also
agree (provided that in doing so, you and your subsidiaries'
respective positions are not materially prejudiced (including by
acting contrary to any confidentiality undertaking or so as to
prejudice any legal privilege to which they are entitled)) to afford
reasonable cooperation to each Relevant Person and to give, so far as
you are able to procure the giving of, all such information and render
all such assistance to the Relevant Persons as they may reasonably
request in connection with any such action, proceeding or
investigation and not to take any action which might reasonably be
expected to prejudice the position of a Relevant Person in relation to
any such action, proceeding or investigation without the consent of
the Relevant Person concerned (such consent not to be unreasonably
withheld). Notwithstanding the aforesaid, you shall not be liable for
any reimbursement or obliged to give any information or render any
assistance or be precluded from taking any action pursuant to this
paragraph, to the extent that any action, proceeding or investigation
arises from the bad faith, gross negligence or wilful misconduct of
the Relevant Person in performing the services that are the subject of
the Commitment Documents or a breach of such Relevant Person's
obligations under the Commitment Documents.
2. You also agree to indemnify and hold harmless each Relevant Person
from and against any and all losses, liabilities, claims, damages, and
reasonable costs or expenses incurred by such Relevant Person in
connection with or as a result of any action, claim, investigation or
proceeding commenced in relation to its appointments or commitments or
any matter referred to in the Commitment Documents and in particular
(without limitation to the generality of the foregoing) arising out of
or in relation to or in connection with any untrue statement (or
alleged untrue statement) of a material fact contained in any
preliminary or final offering materials or information memorandum
prepared in connection with the Financing (including, without
limitation, any preliminary summary of the Financing prepared by the
Mandated Lead Arrangers and approved by you or your professional
advisors on your behalf) or any filings with or submissions to any
governmental or self regulatory authority or agency or securities
exchange, in each case, approved by you or your professional advisers
on your behalf, or caused by an omission (or alleged omission) to
state therein a material fact necessary to make the statements therein
in the light of the circumstances under which they are made, not
misleading, except to the extent that any such losses, liabilities,
claims, damages, costs or expenses are the result of bad faith, gross
negligence or wilful misconduct of the Relevant Person in performing
the services that are the subject of the Commitment Documents or a
breach of such Relevant Person's obligations under the Commitment
Documents.
3. You also agree that the Relevant Persons shall not have any liability
including, but not limited to, any direct, indirect, incidental or
consequential damages to you or any person asserting claims on your
behalf arising out of or in connection with or as a result of
performing the services that are the subject of the Commitment
Documents, except (i) to the extent such liability is the result of
bad faith, gross negligence or wilful misconduct of the Relevant
Person in performing the services that are the subject of the
Commitment Documents or (ii) liability of the Relevant Person to you
resulting from a breach of such Relevant Person's obligations under
the Commitment Documents.
4. Each Relevant Person may rely on the terms of this Commitment Letter.
5. No provision of this Commitment Letter shall apply so as to exclude
any liability of the Relevant Persons which by the Handbook or other
applicable law or regulations cannot be excluded by agreement with
you.
ANNEX B
ANTI-TYING DISCLOSURE
Citigroup's Global Corporate and Investment Bank ("GCIB") maintains a
policy of strict compliance to the anti-tying provisions of the Bank
Holding Company Act of 1956, as amended, and the regulations issued by the
Federal Reserve Board implementing the anti-tying rules (collectively, the
"Anti-tying Rules"). Moreover our credit policies provide that credit must
be underwritten in a safe and sound manner and be consistent with Section
23B of the Federal Reserve Act and the requirements of federal law.
Consistent with these requirements, and the GCIB's Anti-tying Policy:
o You will not be required to accept any product or service offered by
Citibank or any Citigroup affiliate as a condition to the extension of
commercial loans or other products or services to you by Citibank or
any of its subsidiaries, unless such a condition is permitted under an
exception to the Anti-tying Rules.
o The GCIB will not vary the price or other terms of any Citibank
product or service based on a condition that you purchase any other
product or service from Citibank or any Citigroup affiliate, unless we
are authorized to do so under an exception to the Anti-tying Rules.
o The GCIB will not require you to provide property or services to
Citibank or any affiliate of Citibank as a condition to the extension
of a commercial loan to you by Citibank or any Citibank subsidiary,
unless such a requirement is reasonably required to protect the safety
and soundness of the loan.
o The GCIB will not require you to refrain from doing business with a
competitor of Citigroup or any of its affiliates as a condition to
receiving a commercial loan from Citibank or any of its subsidiaries,
unless the requirement is reasonably designed to ensure the soundness
of the loan.