FORM OF COMMITMENT LETTER

Telewest Communications Networks Limited (TCN)

(on behalf of itself and the other TCN Entities),

Telewest Communications plc (Telewest),

Telewest Global, Inc. (New Telewest),

and to Telewest UK Limited (Telewest UK)

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇ ▇▇▇ ▇▇▇

Determination Date

Basis points

March 7 to March 17  

March 18 to March 24

March 25 to March 31

April 1 to April 7          

April 8 onwards            

Subject to sub-paragraph 3.6, the obligations of each of TCN, Telewest, New Telewest and Telewest UK under paragraphs 6 (Indemnity), 12 (Governing law) and sub-paragraph 3.5 of

this letter will survive the termination (for whatever reason) of the obligations of a Lender under this letter.

Telewest and TCN agree that ▇▇▇▇▇▇▇▇ will pay to TCN within five Banking Days of signing this letter the sum of £41,000,000 (together with accrued interest) held by Telewest on trust

for itself and TCN pursuant to the terms of the trust deed dated 1 October 2002, such payment to be made on the basis that TCN shall be absolutely entitled to any cash or property in the sum of £41,000,000 (together with accrued interest) from the time of receipt of the payment.

Each of TCN, ▇▇▇▇▇▇▇▇ and Telewest UK jointly and severally indemnifies, and holds harmless, each Lender and its directors, officers, employees, agents, advisers and affiliates (each an Indemnified Party) from and against any and all losses, claims, costs, expenses, damages and liabilities, whether joint or several, to which any such Indemnified Party may become subject under any applicable law or regulation, in connection with or arising by reason of such Indemnified Party’s negotiation, execution or performance of this letter or the Term Sheet or participation in the Restructuring, and will promptly reimburse any Indemnified Party for any expenses (including legal fees and expenses and any value added tax thereon) which they incur in connection with the investigation of, or preparation for, or defence of, any

pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto (the Indemnity). The Indemnity shall not apply to the extent such claim, damage, loss, liability or expense resulted from such Indemnified Party’s gross negligence or wilful misconduct or a breach of the Indemnified Party’s contractual obligations under this letter. An Indemnified Party may separately instruct legal advisers in connection with any such investigation, claim, action or proceeding.

If any discharge or arrangement is made in whole or in part on the faith of any payment, security or other disposition of New Telewest which is avoided or must be restored on

insolvency, liquidation or otherwise (without limitation), the liability of New Telewest under the Guarantee will continue as if the discharge or arrangement had not occurred.

CIBC World Markets plc

as Agent acting on behalf of the Lenders

pursuant to clause 19.2 of the Loan Agreement

CIBC World Markets plc

in its capacity as Security Trustee for and on behalf of the Beneficiaries

For and on behalf of

Telewest Communications Networks Limited

for and on behalf of itself and each other TCN Entity

Date:

For and on behalf of

Telewest Communications plc

Date:

For and on behalf of

Telewest Global, Inc.

Date:

For and on behalf of

Telewest UK Limited

Date:

unless on the immediately preceding testing day the ratio of Total Senior Debt to Annualised EBITDA (calculated on the same basis as Financial Covenant (A)) was less than 3.5:1, of an amount equal to 25 per cent. of the net proceeds of any raising of new equity by Delco or any Affiliate of Delco. To the extent that the Facilities have been voluntarily prepaid and permanently cancelled out of the proceeds of the raising of new debt by ▇▇▇▇▇ the net proceeds of any raising of new equity by Delco or any Affiliate of Delco may be used to prepay such debt and the amount so used shall be deducted from the net proceeds of such raising of new equity for the purposes of this paragraph (E)(i); and

of an amount equal to the incremental net proceeds of any new debt raised by Delco to the extent that the total aggregate amount raised in cash exceeds £200,000,000 in 2003, increasing to £300,000,000 in 2004 and £400,000,000 in 2005 and thereafter.

(a)      A floating charge over all the assets of Subco and of each Material Group Entity and any additional Subsidiaries and Associated Partnerships to the extent necessary to meet the 95% test referred to in Positive Covenants (v) below; NB: TCN has confirmed that it will not be necessary for any additional Subsidiaries or Associated Partnerships to accede to the security package in order to meet such 95% test.

(b)      guarantee from Subco and upstream guarantees/cross guarantees from each Material Group Entity and any additional Subsidiaries and Associated Partnerships to the extent necessary to meet the 95% test referred to in Positive Covenants (v) below;

(c)      first fixed equitable share charges over shares in TCN and the UK Channel Management Limited and UK Gold Holdings Limited (the “Existing JVs”) and to the extent all relevant consents have been obtained, any other joint ventures, together with first fixed equitable (or in the case of Scottish companies only, legal) charges over the shares in each Material Group Entity and any additional Subsidiaries and Associated Partnerships to the extent necessary to meet the 95% test referred to in Positive Covenants (v) below;

(d)      first fixed charge over the loan notes held in the Existing JVs, and to the extent all relevant consents have been obtained, any other joint ventures;

(e)      assignment by way of security of all Subco’s rights in respect of loans made by it to any member of the TCN Group and of all Delco’s rights in respect of loans made by it to Subco;

(f)       subordination of all rights to dividends, repayment of loans, interest, etc. (i) of Delco from Subco and (ii) of Subco from any member of the TCN Group pursuant to Deeds of Subordination;

(g)      first fixed equitable charge over shares in Subco by ▇▇▇▇▇; and

(h)      a new first fixed charge over bank account with one of the Overdraft Lenders to which cash balances will be swept on a daily basis as set out in paragraph (aa) of Positive Covenants.

Total Senior Debt to Annualised EBITDA

Total Senior Debt to Annualised EBITDA

(i)     0.50 per cent. flat on the committed amount of the Facilities under the commitment letter payable on the business day after the signing of such commitment letter (in the agreed form) in respect of these Indicative Terms and Conditions by all the Lenders, provided that such commitment letter is signed by all the Lenders on or before 1 December 2003 and on or before such date all the Lenders have also confirmed their agreement to the form of the Amended and Restated Facility Agreement.

(ii)    1.50 per cent. flat on the committed amount of the Facilities (£2.03 billion) payable on the scheme of arrangement under s.425 of the Companies Act 1985 to implement the restructuring becoming effective (less the amount of any fee paid under (i) above).

(iii)  on the earlier of (a) 28 February 2005 and (b) the date on which the Quarterly Management Accounts and Compliance Certificate are delivered under the Amended and Restated Facility Agreement in respect of the Quarterly Period ending 31 December 2004, a fee calculated on the committed amount of the Facilities on 31 December 2004 determined by reference to the ratio of Total Senior Debt to Annualised EBITDA as at 31 December 2004 in accordance with the following grid:

Total Senior Debt to Annualised EBITDA

Fee

Greater than or equal to 4.25x

Less than 4.25x but greater than or equal to 3.75x

Less than 3.75x

(a)      appointment as a director of TCN of a person who is not, and has not been within the preceding 3 years, and will not in the future be, a shareholder (other than (i) shares in Delco obtained as part of such person’s compensation and (ii) other shareholdings in Delco representing less than 0.25 per cent. of the entire issued share capital of Delco) of Delco, Subco, Telewest or any member of the TCN Group, is independent of the shareholders of Delco and is not a director of Delco or any Affiliate of Delco (other than a subsidiary of TCN) (the “TCN Independent Director”). For these purposes a person will be deemed to be “independent of the shareholders of Delco” if such person is not (and has not been for a period of 3 years prior to appointment) an employee, principal officer or director of any institution that is a member of the ad hoc committee of holders of Agreed Securities, ▇.▇. ▇▇▇▇ Asset Management Co. LLC, Liberty Media Corporation, IDT Corporation or any institution that is (or was during the last 3 years) the holder of a 5% or greater interest in the share capital of Telewest or Delco or any of their respective Affiliates. For the avoidance of doubt, such TCN Independent Director may be a member of management of TCN and its subsidiaries;

(b)      certified copy of the constitutional documents of Delco and ▇▇▇▇▇;

(c)      certificate that there has been no change to the constitutional documents of the TCN Entities (other than TCN) since the date of execution of the Facility Agreement or (as the case may be) accession to the Facility Agreement or a certified copy of any revised constitutional documents;

(d)      a certified copy of the constitutional documents of TCN amended to the effect that the following matters will require the vote of a super majority (66 ²/3 per cent.) of the directors of TCN including the TCN Independent Director:

(i)       filing a bankruptcy petition or otherwise instituting or consenting to insolvency proceedings; dissolving, liquidating; and

(ii)    amending the constitutional documents of the company, including removal or amendment of these provisions;

(e)      certified copy of the Certificate of Incorporation and Memorandum and Articles of Association of any member of the TCN Group which is required to give a guarantee/ security and has not done so already (the “New Obligors”);

(f)       resolutions of the Board of Directors of the TCN Entities, Delco, Subco and each New Obligor (if any);

(g)      certified specimen signature of the persons authorised in (f) above;

(h)      charge over Bank Account referred to in paragraph (aa) of Positive Covenants duly executed by TCN;

(i)       first fixed equitable charge over the shares in Subco, assignment of loans made to Subco and ▇▇▇▇ of Subordination, duly executed by ▇▇▇▇▇;

(j)       guarantee and debenture and Deed of Subordination duly executed by ▇▇▇▇▇; N.B: ▇▇▇▇▇▇▇▇ has already entered into a first fixed equitable charge over the shares in TCN, an assignment of loans made to TCN (see note under definition of Subco);

(k)      legal opinions;

(l)       a copy of an annual budget of the TCN Group for 2004 prepared on a month by month basis;

(m)     insurances brokers letter;

(n)      confirmation that there are no Encumbrances or outstanding Borrowed Money other than (i) as set out in the schedules delivered pursuant to the 21 August 2002 suspension letter and (ii) additional Borrowed Money not exceeding £5 million in aggregate;

(o)      share certificates and loan stock certificates in relation to Subco and each New Obligor (if any);

(q)      repayment to the Lenders under the existing Facility B of the Advance of £160 million made on 27 September 2002;

(r)       the proceeds of sale (net of any costs directly attributable to such sale) of the SMG shares having been downstreamed to TCN;

(s)      after payment of all Restructuring Fees, payment by Telewest to TCN of all cash balances not in the TCN Group at the completion of the Restructuring other than £5 million. For the purposes of these Indicative Terms and Conditions, “Restructuring Fees” means, subject to review by the Lenders’ legal advisers of the relevant agreements and provision of a schedule of cash at Telewest and the application of such cash, the fees payable to UBS, SSSB and Gleacher & Co in accordance with agreements in place as at the date of these Indicative Terms and Conditions and the fees of Deloitte & Touche (as prospective administrator and as liquidator of Telewest), together with any other fees and expenses reasonably incurred in relation to the proposed restructuring, including fees and expenses of the legal advisers to Telewest, the Lenders, ▇.▇. ▇▇▇▇ Asset Management Co. LLC (to the extent that such fees and expenses relate solely to the negotiation and implementation of the restructuring; fees relating to items other than negotiation and implementation of the restructuring to be discussed and agreed) and the ad hoc committee of holders of the Agreed Securities and PWC as financial advisers to the Lenders;

(t)       (i) satisfaction with the terms of the scheme of arrangement for Telewest and (ii) evidence that such scheme has become effective or will become effective on delivery of an office copy of the court order sanctioning the scheme of arrangement to the registrar of companies;

(u)      the Lenders having been kept informed of, and consulted in relation to, the proposed composition of the board of directors and senior management of Delco, Subco and TCN and any directors or management incentivisation scheme and the Lenders’ views having been considered in finalising such composition and any such incentivisation scheme;

(v)    (i) satisfaction with the terms of the cancellation/equitisation of all outstanding loans made by Telewest to TCN including the Agreed Cash Management Loans and (ii) such loans having been cancelled/equitised;

(w)     appointment of appropriate agents to receive service of process (where appropriate);

(x)      solvency certificates and certificates of good standing (where appropriate);

(y)      the assets which are the subject of leases with RB Leasing having been transferred to the TCN Group;

(z)      list of material/immaterial contracts for the purposes of conditions subsequent (A) and (B);

(aa)    settlement agreements in respect of the hedging arrangements entered into by Telewest with Credit Agricole Indosuez, The Bank of New York, The Chase Manhattan Bank and The Royal Bank of Scotland plc having been entered into;

(bb)    Telewest having been delisted and Delco having been listed on one of NASDAQ, the New York Stock Exchange or the official list of the UKLA or evidence that the same will become effective on delivery of an office copy of the court order sanctioning the scheme of arrangement for Telewest to the Registrar of Companies or, in the case of a listing on NASDAQ, upon notice of issuance being given by Delco to NASDAQ which notice will be given upon delivery of such office copy to the Registrar of Companies;

(cc)    evidence that the US Borrower has been liquidated or dissolved;

(dd)    the passing of appropriate shareholders resolutions by Telewest;

(ee)    termination of the Relationship Agreement between Telewest and Liberty Media, Corporation becoming effective upon the scheme of arrangement for Telewest becoming effective;

(ff)     evidence of transfer/assignment of the tax warranties/indemnities given by Deutsche Telecom AG to Telewest in connection with acquisition of Eurobell;

(gg)  amendments to the Colorado law Pledge and Security Agreements having been entered into (together with supporting board resolutions);

(hh)  bring down certificate confirming that all conditions precedent documents have become unconditional subject only to the delivery of the court order sanctioning the scheme of arrangement for Telewest to the English registrar of companies.

(A)   All material agreements entered into by Telewest and used in the business of the TCN Group having been transferred to a TCN Entity by not later than six months after the effective date of the Supplemental Agreement.

(B)   TCN to use reasonable endeavours to transfer all immaterial agreements entered into by Telewest and used in the business of the TCN Group to a TCN entity prior to their expiry or termination.

(C)   Delivery of a revised Long Range Plan which encompasses the new hedging arrangements set out in the settlement agreements referred to under condition precedent (aa) within 60 days of the Telewest scheme of arrangement becoming effective. The Majority Lenders may request PWC to report on such Long Range Plan, in which event Delco and its Affiliates (and their respective directors and officers) shall co-operate fully to enable PWC to prepare such report.

(D)   Delivery of share certificates and loan stock certificates upon signing of the shareholders agreement in connection with the UKTV New Ventures Joint Venture.

Conditions Precedent

to all Drawdowns under

Facility B:

(a)    no potential or actual Event of Default;

(b)    pro-forma covenant compliance (based on the numbers for covenant compliance purposes demonstrated by most recently produced quarterly

management accounts, but recalculating Total Senior Debt as at the drawdown date, including the amount to be drawn down); and

(c)    reaffirmation of repeating representations and warranties.

(i)     Total Senior Debt will be gross total TCN Group debt including leasing (but excluding subordinated debt from Subco);

The definition of EBITDA will be as agreed (save as set out below) in the draft Amended and Restated Facility Agreement, being the total of TCN Group EBITDA and the TCN Group’s share of the UKTV Joint Ventures’ EBITDA (determined on the basis set out in the existing Facility Agreement). To the extent that the auditors of TCN require all or any of the Restructuring Fees to be included in the calculation of TCN Group EBITDA, such costs will be ignored in determining TCN Group EBITDA for the purposes of these Indicative Terms and Conditions (including, without limitation, the determination of the Interest Rate). Exceptional items will not be excluded from the calculation of TCN Group EBITDA save that (a) severance costs and the costs of disposal of surplus properties will be excluded up to an aggregate amount of £4m in 2003 and £16m in 2004 (to the extent such limit is not reached in 2003 the shortfall may be carried forward to 2004) and (b) exceptional expenses in respect of the transfers referred to in conditions subsequent (A) and (B) up to £5,000,000 in aggregate will be excluded;

Annualised EBITDA will be four times the last Quarter’s EBITDA;

The definitions of Total Capital Expenditure and Contribution will be as agreed in the draft Amended and Restated Facility Agreement;

Total Senior Debt Interest Charges will be the total accrued interest cost of the TCN Group including lease interest, bank interest and periodic commission and fees and amounts up-streamed to fund interest payable on new debt raised by Delco that has been used to prepay and permanently cancel the Facilities (as set out under Negative Covenants (m)) (less)

interest income from cash on deposit of the TCN Group. (taking account of interest rate hedging arrangements).

(A)   Total Senior Debt to Annualised EBITDA -determined on the basis of a headroom from the EBITDA projections contained in the Long Range Plan as follows:

Quarter ending

31 March 2004

30 June 2004

30 September 2004

31 December 2004

31 March 2005

30 June 2005

30 September 2005

31 December 2005

(B)   Rolling six months EBITDA to rolling six months Total Senior Debt Interest Charges -determined on the basis of a headroom from the EBITDA projections contained in the Long Range Plan as follows:

Quarter ending

31 March 2004

30 June 2004

30 September 2004

31 December 2004

31 March 2005

30 June 2005

30 September 2005

31 December 2005

(C)   Maximum rolling twelve months Total Capital Expenditure - determined on the basis of a headroom from the rolling 12 month Total Capital Expenditure contained in the Long Range Plan as set out below. The headroom shall be increased by 50 per cent. of the amount by which actual EBITDA for the twelve month period ending immediately prior to the testing period and in respect of which Quarterly

Management Accounts have been delivered exceeds the projected EBITDA for such twelve month period contained in the Long Range Plan. This covenant shall cease to apply in respect of all Quarterly Periods after the Quarterly Period in respect of which Total Senior Debt to Annualised EBITDA is less than 4x, save that should Total Senior Debt to Annualised EBITDA be more than or equal to 4x for any subsequent Quarterly Period, this covenant will be reinstated automatically for such Quarterly Period and all subsequent Quarterly Periods (unless the ratio of Total Senior Debt to Annualised EBITDA is again less than 4x, in which event the provisions of this sentence shall apply again).

Quarter ending

(D)   Contribution on a six month rolling basis - to be determined on the basis of a headroom from the Contribution contained in the Long Range Plan as set out below. This covenant shall cease to apply in respect of all Quarterly Periods after the Quarterly Period in respect of which Total Senior Debt to Annualised EBITDA is less than 4x save that should Total Senior Debt to Annualised EBITDA be more than or equal to 4x for any subsequent Quarterly Period this covenant will be reinstated automatically for such Quarterly Period and all subsequent Quarterly Periods (unless the ratio of Total Senior Debt to Annualised EBITDA is again less than 4x, in which event the provisions of this sentence shall apply again).

Quarter ending

(a)    notification of defaults;

(b)    obtain and maintain all consents, etc. required in connection with the Finance Documents;

(c)    obtain and maintain, as necessary, every telecommunications, cable and broadcasting licence;

(d)    obtain and maintain all other necessary authorisations;

(e)    only engage in the business of acting as holder of shares and/or partnership interests in other TCN Entities, constructing, installing, operating and utilising cable television and/or telecommunications systems and/or the business of broadcasting and directly related business;

(f)     prepare consolidated financial statements for the TCN Group;

(g)    prepare quarterly management accounts and monthly management accounts for the TCN Group (monthly management accounts to be delivered within 28 days of month end). [The format of quarterly/monthly accounts is to be agreed];

(h)    prepare 13 week cash flow forecasts on a monthly basis and deliver the same on the first day of each month;

(i)     ensure financial statements/annual budget are prepared in accordance with GAAP and on a consistent basis (or provide a reconciliation statement);

(j)     deliver to the Agent (i) all documents issued to creditors, (ii) documents evidencing default/ crystallisation of Lessor/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ obligations, (iii) Compliance Certificates

(quarterly by TCN, annually by auditors), (iv) annual monthly budget by 31 December, (v) revised financial projections and revised projections for operating statistics by 31 December and (vi) documents delivered to shareholders/public documents;

(k)    PWC to perform quarterly review of KPIs and quarterly review of management accounts and cash flow forecasts and attend quarterly meetings with senior management (to report back to Lenders). The terms of engagement of PWC will be agreed between TCN and the Agent. The role of PWC will fall away (save in relation to the quarter ending 31 December 2004 for the purposes of reviewing the calculation of the upfront fee under paragraph (iii) thereof) once the ratio of Total Senior Debt to Annualised EBITDA is less than 4x, save that should Total Senior Debt to Annualised EBITDA be more than or equal to 4x for any subsequent Quarterly Period the role of PWC will be reinstated automatically (unless the ratio of Total Senior Debt to Annualised EBITDA is again less than 4x, in which event the provisions of this sentence will apply again);

(l)     maintain financial year end of 31 December;

(m)   ensure new authorised officers have provided evidence of authorisation;

(n)    maintain KPMG or another recognised international firm as auditors;

(o)    supply details of (i) litigation, (ii) communications from any relevant regulatory body and (iii) all such other financial information reasonably required;

(p)    maintenance of insurances;

(q)    permit Agent access to properties, books and records, officers and auditors;

(r)     notify the Agent of material environmental claims etc. and provide copies of any material environmental licences etc.;

(s)    comply with law and regulations;

(t)     notify the Agent of Relevant Substances brought into property giving rise to an Environment Claim;

(u)    prompt payment of taxes;

(v)    ensure TCN Entities account for not less than 95 per cent. in aggregate of the gross assets, consolidated EBITDA and revenues;

(w)   ensure all Material Group Entities give guarantees and enter into the security package;

(x)    make one of the Chief Executive Officer, Managing Director and Chief Financial Officer of the Delco Group and other appropriate senior management of the Delco Group available for Lender meetings on a six monthly basis;

(y)    comply with the Reimbursement Agreement;

(z)    maintain a prudent policy for management of interest rate and foreign exchange exposures (to be agreed and implemented);

(aa)  on a daily basis all cash balances in excess of £20 million to be swept into a charged account maintained by one of the Overdraft Lenders. The amount of up to £20 million held outside the charged account may be held in Permitted Financial Investments;

(bb)  (i) all contracts entered into by Telewest to be renewed on expiry in the name of a TCN Entity and (ii) all contracts entered into after the Recapitalisation Supplemental Effective Date in connection with the business of the TCN Group to be in the name of a TCN Entity;

(cc)  inform the Agent of any changes to the Board of Directors of TCN as soon as reasonably practicable and in any event at least one Banking Day prior to any public announcement thereof; and

(dd)  notify the Agent (i) prior to convening a meeting of the directors to consider filing for any voluntary US bankruptcy proceedings, (ii) prior to making any such filing, (iii) of any resolution of the directors to make such filing and (iv) upon becoming aware of any creditor intending to make any filing under US bankruptcy proceedings.

(a)    negative pledge in respect of each TCN Entity (carve out for permitted encumbrances set out in paragraphs (a), (b), (e), (f), (g), (h), (i), (j), (l) and (m) of the current definition of Permitted Encumbrances);

(b)    no merger or consolidation by any TCN Entity other than as set out in the current Facility Agreement;

(c)    no disposals by any TCN Entity (carve out for the permitted disposals set out in paragraphs (a), (b), (c), (d), (e), (g), (h) and (i) of the current definition of Permitted Disposals). For the avoidance of doubt, an IPO of, or the disposal of, any Joint Venture, vendor financing or sale and leasebacks of newly acquired assets and the rolling over of existing vendor financing and sale and leasebacks shall be permitted, subject to the mandatory prepayment provisions and paragraph (d) below. There will be an additional permitted disposal in respect of all or part of the Flextech business provided that such disposal is on bona fide arms length terms and subject to the Mandatory Prepayment provisions;

(d)    no borrowing by any TCN Entity (carve out for the permitted borrowings set out in paragraphs (a), (b), (c), (d), (e) and (i) of the current definition of Permitted Borrowings save that paragraph (d) shall be amended to allow leases and vendor financing in respect of newly acquired assets and the rollover of existing leasing and vendor financing arrangements on fair market terms (provided that security is limited to the assets supplied) up to a maximum aggregate amount of £350 million and paragraph (i) shall be amended to read £20 million). Additional permitted borrowing in respect of deferral of PAYE by TCN with the agreement of the Inland Revenue;

(e)    no guarantees by any TCN Entity (carve out for permitted guarantees set out in paragraphs (a) to (e) inclusive of the current definition of Permitted Guarantees save that paragraph (e) shall be amended to read £20 million);

(f)     no issue of shares by TCN or any TCN Entity other than to Subco or (as the case may be) a TCN Entity in circumstances where such shares are charged to the Lenders;

(g)    no TCN Entity to lend any money to any person (carve out for all the permitted loans as set out in the current definition of Permitted Loans);

(h)    no TCN Entity will create or acquire any subsidiary company or partnership or otherwise make any acquisition of a business or make any other investment (including debt securities/ commercial paper) (carve out for the permitted investments set out in each of paragraphs (a), (d) (in relation to the amount of up to £20 million held outside the charged account only), (e) and (f) of the current definition of Permitted Investments, save that paragraph (f) shall be amended to read £15 million save that if the TCN Group is free cash flow positive for two consecutive Quarterly Periods the figure shall be increased to £25 million. In addition any investment made pursuant to this exception above £15 million shall be counted as Capital Expenditure and only be permitted to the extent that it would not cause a breach of financial covenant at paragraph (C);

(i)     the TCN Group (taken as a whole) will not change its business in any material respect;

(j)     no TCN Entity to change its constitutional documents;

(k)    no TCN Entity to enter into any arrangements with Restricted Persons (other than bona fide arms length arrangements in the ordinary course of trading and those existing and approved prior to signing);

(l)     no Restricted Person to have outstanding liabilities to TCN Entities which are not satisfied within 60 days;

(m)   prohibition on distributions or other upstream payments of any nature by the TCN Group (including, without limitation a prohibition on payments to fund payments on borrowings and derivatives contracts outside the TCN Group) save for (i) payments on an arm’s length basis to Subco to fund costs and expenses of Delco and Subco incurred in relation to acting as holding companies for the Delco Group of up to £5,000,000 in respect of each financial year and (ii) payments from TCN to Subco and by Subco to Delco to fund the interest payable on new debt raised by ▇▇▇▇▇ that has been used to prepay and permanently cancel the Facilities provided that the amount thereof does not exceed the lower of (A) the amount of interest that would have been paid on the amount of the Facilities so prepaid in respect of the same period and (B) the amount of interest due and payable on that part of

the new debt used to make such prepayment in respect of the same period;

(n)    no member of the TCN Group will employ employees or carry on any business, maintain any place of business, books, records, bank or similar accounts, property or other assets in the USA;

(o)    TCN may not reduce its share capital;

(p)    restrictions in respect of members of the Joint Venture Group regarding borrowings, encumbrances, loans and disposals;

(q)    no swaps or hedging (other than in accordance with the agreed policy referred to in paragraph (z) of Positive Covenants);

(r)     TCN may not allow any Joint Ventures to be terminated, disposed of or convene any meeting to create new shares; and

(s)    not to purchase or exchange any debt of the TCN Group or prepay (or offer to prepay) any such debt other than (i) the Facilities (ii) permitted borrowings under the permitted borrowings £20,000,000 basket and (iii) the refinancing of finance leases and vendor financing arrangements on fair market terms.

(a)    to maintain 100 per cent of the voting and economic interest in TCN;

(b)    to act solely as a holding company so that Subco does not own any assets used in the TCN Group or any other material assets (other than the shares in TCN), does not undertake any borrowing (other than of the proceeds of new equity or debt issues on-lent by Delco), does not establish or acquire any person or business other than TCN or make any other investment, does not enter into any derivatives contracts, does not give any security or give any guarantees (save for (i) guarantees given by Telewest in respect of trading obligations of the TCN Group outstanding on the date of these Indicative Terms and Conditions, (ii) guarantees to be given by Subco under finance leases with Hewlett Packard outstanding on the date of these Indicative Terms and Conditions and in respect of the obligations of Telewest Communications Holdco Limited under the sale and purchase agreement dated 28 March 2002 in relation to the sale of TV Travel Group Limited, in

circumstances where the counterparty requires such guarantees in consideration for release of existing guarantees of Telewest and (iii) guarantees given to the Lenders);

(c)    not to raise any new equity (other than from Delco) or to merge or consolidate with any other person;

(d)    to inform the Agent of any changes to the Board of Directors as soon as reasonably practicable and in any event at least one Banking Day prior to making any public announcement thereof;

(e)    not to, and ensure that the TCN Group does not, employ any employees or carry on any business or maintain any place of business, books, records, bank or similar accounts, property or other assets in the USA; and

(f)     to notify the Agent (i) prior to convening a meeting of the directors to consider filing for any voluntary US bankruptcy proceedings, (ii) prior to making any such filing, (iii) of any resolution of the directors to make such filing and (iv) upon becoming aware of any creditor intending to make any filing under US bankruptcy proceedings.

(a)    to maintain 100 per cent of the voting and economic interest in Subco;

(b)    to act solely as a holding company so that Delco does not own any assets used in the TCN Group or any other material assets (other than the shares in Subco), does not establish or acquire any person or business (other than Subco) or make any other investment or give any security or guarantees (save to the Lenders);

(c)    to maintain a listing on one of NASDAQ, the New York Stock Exchange or the official list of the UKLA and to provide financial information as soon as it is available publicly;

(d)    to inform the Agent of any changes to the Board of Directors and provide the Agent with copies of all material public announcements, in each case as soon as reasonably practicable and in any event, to the extent not prohibited by law or regulation, at least one Banking Day prior to any public announcement thereof;

(e)    there will be no restriction on the raising of new equity by ▇▇▇▇▇ or any Affiliate of Delco. Delco will procure that no holding company of TCN or other subsidiary of Delco (other than Subco in respect of the borrowing of the proceeds of new equity or debt issues by Delco) undertakes any borrowing, save that raising of new debt (including PIK) by ▇▇▇▇▇ will be permitted subject to the following conditions:

(i)     subject to Mandatory Prepayment, to a limit in respect of the net proceeds received of 5.5x Total Delco Group Gross Debt to Annualised EBITDA (tested at the time the debt is incurred and including such debt and accreted interest to the testing date). In addition, to the extent that Delco raises PIK debt, the accreted amount of PIK debt to 30 June 2006 cannot exceed £500,000,000;

(ii)    maturity date no earlier than 1 January 2010. Refinancing out of the proceeds of new equity issues (subject to the terms set out in paragraph (j) below) or new debt issues (on no worse terms) subject to the terms of this paragraph (e) will be permitted;

(iii)  save as permitted under Negative Covenant (m), no principal or interest to be serviced (in whole or in part) before, at or after maturity by the TCN Group;

(iv)   to the extent that any amounts are downstreamed by way of subordinated debt to Subco, save as permitted under Negative Covenant (m), this will be on a non-interest bearing basis, with a maturity no earlier than 1 January 2010 and with no early right of redemption;

(f)     to keep the Lenders informed of, and consulted in relation to, the proposed composition of the board of directors and senior management of Delco and any directors or management incentivisation scheme and ensure that the Lenders’ views are considered in finalising such composition and any such incentivisation scheme;

(g)    not to merge or consolidate with any other person save as permitted under Mandatory Prepayment (A);

(h)    to notify the Agent (i) prior to convening a meeting of the directors to consider filing for any voluntary US bankruptcy proceedings, (ii) prior to making any such filing, (iii) of any resolution of the directors to make such filing and (iv) upon becoming aware of any creditor intending to make any filing under US bankruptcy proceedings;

(i)     to ensure that the TCN Group does not employ any employees or carry on any business or maintain any place of business, books, records, bank or similar accounts, property or assets in the USA;

(j)     unless on the immediately preceding testing day the ratio of Total Senior Debt to Annualised EBITDA (calculated on the same basis as Financial Covenant (A)) was less than 3.5:1, to procure that 50 per cent. of the net proceeds of any raising of new equity by Delco or any Affiliate of Delco are (indirectly through Subco) downstreamed to TCN and 25 per cent. of the net proceeds of any raising of new equity by Delco or any Affiliate of Delco are used to prepay and permanently cancel the Facilities in accordance with Mandatory Prepayment (E)(i). To the extent that the Facilities have been voluntarily prepaid and permanently cancelled out of the proceeds of the raising of new debt by ▇▇▇▇▇ the net proceeds of any raising of new equity by Delco or any Affiliate of Delco may be used to prepay such debt and the amount so used shall be deducted in determining the net proceeds of such raising of equity for the purposes of this paragraph (j); and

(k)    represent and warrant that the latest audited financial statements of the Delco Group present the financial position of the Delco Group fairly and accurately.

▇▇▇▇▇, Subco

and TCN separate

entities:

(a)    maintain separate books and records;

(b)    not co-mingle assets;

(c)    conduct business in their own names;

(d)    maintain separate financial statements;

(e)    pay their own liabilities from their own funds (save for guarantees referred to under paragraph (b) of Covenants by Subco or under paragraph (b) of Covenants by Delco (as the case may be));

(f)     observe all corporate formalities;

(g)    maintain an arm’s length relationship with affiliates;

(h)    pay salaries of their own employees;

(i)     not guarantee or become obligated for the debts of each other or hold their credit out as being available to satisfy the obligations of creditors of each other (save for guarantees referred to under paragraph (b) of Covenants by Subco or under paragraph (b) of Covenants by Delco (as the case may be));

(j)     use separate stationery, invoices and cheques;

(k)    not pledge their assets for the benefit of each other, except as expressly required by the Facilities; and

(l)     hold themselves out as separate entities.

(a)    non-payment;

(b)    breach of certain key terms of the Financing Documents (including financial covenants);

(c)    breach of other terms of the Financing Documents (subject to a grace period);

(d)    any representation or warranty being incorrect or misleading in any material respect;

(e)    any security document being ineffective or ceasing to constitute the security purported to be constituted thereby at the date of closing;

(f)     cross default subject to an aggregate de minimis limit of £35,000,000. Cross acceleration subject to an aggregate de minimis limit of £20,000,000;

(g)    the relevant counterparty being entitled to terminate interest rate or currency hedging arrangements subject to an aggregate de minimis limit of £35,000,000. The relevant counterparty terminating interest rate or currency hedging arrangements subject to an aggregate de minimis limit of £20,000,000;

(h)    the appointment of an administrative or other receiver or the taking of legal proceedings to enforce any Encumbrance;

(i)     an insolvency event occurs or the relevant entity stops or suspends making payments in respect of its debts or is unable or announces an intention so to do;

(j)     any judgment or order is made and not stayed or complied with or a creditor takes possession of or process is levied against any material assets;

(k)    steps are taken or negotiations commenced by or with any creditors with a view to proposing any kind of arrangement with creditors;

(l)     legal proceedings are started for winding-up the relevant entity, a winding-up order is made, a resolution is passed to wind-up the relevant entity or a notice is issued of a meeting for such purpose;

(m)   any step is taken for the purposes of the appointment of an administrator or an administration order is made;

(n)    any filing for proceedings under the US bankruptcy code;

(o)    an analogous insolvency event occurs in any other jurisdiction;

(p)    Subco ceasing to be a wholly owned subsidiary of Delco or TCN ceasing to be a wholly owned subsidiary of Subco or any TCN Entity ceasing to be wholly owned by TCN (with the exception of existing minority interests);

(q)    TCN ceases to have a TCN Independent Director at any time;

(r)     performance of any Finance Document becomes unlawful;

(s)    non-compliance with telecommunications laws;

(t)     repudiation of any Finance Document;

(u)    seizure, nationalisation, appropriation or compulsory acquisition of Material Assets;

(v)    Material Adverse Effect; and

(w)   Joint Venture material events.

(a)    due incorporation or formation of each TCN Entity and power of the same to carry on its business and execute, deliver and perform its obligations under the Finance Documents;

(b)    the taking of all necessary action to execute, deliver and perform the Finance Documents;

(c)    the Finance Documents constitute valid and legally binding obligations of all relevant parties enforceable in accordance with their terms (subject to legal opinion qualifications);

(d)    execution, delivery and performance of the Finance Documents not contravening any law, judgement etc., any constitutional document, any licence or agreement evidencing borrowed money or resulting in the creation of an encumbrance;

(e)    no filings, registrations etc. required in relation to any of the Finance Documents;

(f)     the choice of law and the submission to the jurisdiction being valid and binding;

(g)    save as disclosed and subject to permitted encumbrances, legal and beneficial ownership of all relevant material assets with valid title;

(h)    solvency of Associated Partnerships;

(i)     certain environmental matters;

(j)     maintenance of intellectual property rights and copyrights and no infringement of third parties’ intellectual property rights or copyrights;

(k)    drawdown proceeds to be used for the permitted purposes;

(l)     no material litigation;

(m)   (i) the latest audited financial statements of the TCN Group present the financial position of the TCN Group fairly and accurately, (ii) the latest quarterly management accounts and monthly management accounts present the relevant financial position fairly and accurately, (iii) the latest 13 week cash flow forecasts having been prepared in good faith and based upon reasonable assumptions and (iv) latest projections prepared in

good faith and based upon reasonable assumptions; and

(n)    TCN Group carrying on business solely in the United Kingdom.

(a)    the Licences being in full force and effect and all necessary Licences having been maintained;

(b)    all necessary consents having been obtained;

(c)    no withholding tax;

(d)    compliance in all material respects with telecommunications, cable and broadcasting laws;

(e)    no Default has occurred and is continuing;

(f)     projections in the Long Range Plan prepared in good faith and based upon reasonable assumptions;

(g)    each member of the TCN Group (other than Immaterial Group Entities) being party to the Facility Agreement;

(h)    neither TCN Entities or any member of the Joint Venture Group being a “disqualified” person for the purposes of the Broadcasting Act 1990 (as amended);

(i)     Joint Venture Documentation in full force and effect; and

(j)     latest Group structure chart delivered true, complete and accurate.