-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NieuCDpa9JgRn9wb0rk05fpYxC4h9QTrT5oCioraoersV+pxefyWFjAMJ9/DO2E4 OXy/maJQiSBQR+D464AMJw== 0001047469-05-014147.txt : 20050510 0001047469-05-014147.hdr.sgml : 20050510 20050510143239 ACCESSION NUMBER: 0001047469-05-014147 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050510 DATE AS OF CHANGE: 20050510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NTL INC CENTRAL INDEX KEY: 0000906347 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 521822078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22616 FILM NUMBER: 05815750 BUSINESS ADDRESS: STREET 1: 909 THIRD AVENUE STREET 2: SUITE 2863 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-906-8440 MAIL ADDRESS: STREET 1: 909 THIRD AVENUE STREET 2: SUITE 2863 CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: NTL COMMUNICATIONS CORP DATE OF NAME CHANGE: 19990401 FORMER COMPANY: FORMER CONFORMED NAME: NTL INC /DE/ DATE OF NAME CHANGE: 19970326 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL CABLETEL INC DATE OF NAME CHANGE: 19930601 10-Q 1 a2157664z10-q.htm 10-Q
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-22616

NTL INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		52-1822078 (I.R.S. Employer Identification No.)
909 Third Avenue, Suite 2863 New York, New York (Address of principal executive offices)		10022 (Zip Code)

(212) 906-8440
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No o

The number of shares outstanding of the registrant's common stock as of May 6, 2005 was 84,704,868.

NTL INCORPORATED
FORM 10-Q
QUARTER ENDED MARCH 31, 2005

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	Condensed Consolidated Balance Sheets—March 31, 2005 and December 31, 2004	4
	Condensed Consolidated Statements of Operations—Three Months Ended March 31, 2005 and 2004	5
	Condensed Consolidated Statements of Cash Flows—Three Months Ended March 31, 2005 and 2004	6
	Condensed Consolidated Statement of Shareholders' Equity—Three Months Ended March 31, 2005 and 2004	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures about Market Risk		36
Item 4. Controls and Procedures		38
PART II. OTHER INFORMATION		39
Item 1. Legal Proceedings		39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3. Defaults Upon Senior Securities		40
Item 4. Submission of Matters to a Vote of Security Holders		40
Item 5. Other Information		40
Item 6. Exhibits		41
SIGNATURES		42

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Various statements contained in this document constitute "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995. Words like "believe," "anticipate," "should," "intend," "plan," "will," "expects," "estimates," "projects," "positioned," "strategy," and similar expressions identify these forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied by these forward-looking statements. These factors include those set forth under the caption "Risk Factors" in our Form 10-K that was filed on March 16, 2005, such as:

•: potential adverse developments with respect to our liquidity or results of operations;
•: our significant debt payments and other contractual commitments;
•: our ability to fund and execute our business plan;
•: our ability to generate cash sufficient to service our debt;
•: interest rate and currency exchange rate fluctuations;
•: our ability to complete the integration of our billing systems;
•: the impact of new business opportunities requiring significant up-front investments;
•: our ability to attract and retain customers and increase our overall market penetration;
•: our ability to compete against other communications and content distribution businesses;
•: our ability to maintain contracts that are critical to our operations;
•: our ability to respond adequately to technological developments;
•: our ability to develop and maintain back-up for our critical systems;
•: our ability to continue to design networks, install facilities, obtain and maintain any required governmental licenses or approvals and finance construction and development, in a timely manner at reasonable costs and on satisfactory terms and conditions; and
•: our ability to have an impact upon, or to respond effectively to, new or modified laws or regulations.

We assume no obligation to update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.

Exchange Rates

The following tables set forth, for the periods indicated, the period end, period average, high and low noon buying rate in the City of New York for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York expressed as U.S. dollars per £1.00 and U.S. dollars per €1.00. The noon buying rate of the pound sterling on March 31, 2005 was $1.8888 per £1.00 and the noon buying rate of the euro on March 31, 2005 was $1.2969 per €1.00.

	U.S. Dollars per £1.00
Three Months Ended March 31,	Period End	Average(1)	High	Low
2004	1.84	1.84	1.90	1.79
2005	1.89	1.90	1.93	1.86

	U.S. Dollars per €1.00
Three Months Ended March 31,	Period End	Average(1)	High	Low
2004	1.23	1.24	1.29	1.21
2005	1.30	1.31	1.35	1.28

(1): The average rate is the average of the noon buying rates on the last day of each month during the relevant period.

The above rates may differ from the actual rates used in the preparation of the condensed consolidated financial statements and other financial information appearing in this quarterly report. Our inclusion of these exchange rates is not meant to suggest that the pound sterling amounts actually represent these U.S. dollar amounts or that these amounts could have been converted into U.S. dollars at any particular rate, if at all.

Unless we otherwise indicate, all amounts in U.S. dollars as of March 31, 2005 are based on an exchange rate of $1.8888 to £1.00, all amounts disclosed for the three months ended March 31, 2005 are based on an average exchange rate of $1.8904 to £1.00, and all amounts disclosed for the three months ended March 31, 2004 are based on an average exchange rate of $1.8396 to £1.00. All amounts in U.S. dollars as of December 31, 2004 are based on an exchange rate of $1.9160 to £1.00. Unless we otherwise indicate, all euro amounts as of March 31, 2005 are based on an exchange rate of $1.2969 to €1.00 and all amounts disclosed for the three months ended March 31, 2005 are based on an average rate of $1.3107 to €1.00 and all amounts disclosed for the three months ended March 31, 2004 are based on an average rate of $1.2513 to €1.00. All amounts in euros as of December 31, 2004 are based on an exchange rate of $1.3538 to €1.00. All rates are based on the noon buying rate in the City of New York for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York. The variation between the 2004 and 2005 exchange rates has impacted the dollar comparisons.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NTL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)

			March 31, 2005			December 31, 2004
			(Unaudited)			(See Note)
Assets
Current assets
	Cash and cash equivalents		$	1,591.8		$	240.0
	Restricted cash			33.6			31.4
	Marketable securities			16.8			22.1
	Accounts receivable—trade, less allowances for doubtful accounts of $99.6 (2005) and $90.7 (2004)			424.7			410.4
	Prepaid expenses and other current assets			98.8			93.0
	Current assets held for sale			—			80.5

		Total current assets		2,165.7			877.4
Fixed assets, net				6,708.5			6,933.8
Reorganization value in excess of amounts allocable to identifiable assets				374.9			383.6
Customer lists, net				636.4			698.1
Other intangible assets, net				8.7			10.4
Investments in and loans to affiliates, net				1.3			1.3
Other assets, net of accumulated amortization of $40.6 (2005) and $15.2 (2004)				208.0			236.4
Other assets held for sale				—			1,384.2

Total assets			$	10,103.5		$	10,525.2

Liabilities and shareholders' equity
Current liabilities
	Accounts payable		$	260.5		$	230.6
	Accrued expenses and other current liabilities			575.2			602.9
	Interest payable			176.6			99.4
	Deferred revenue			222.8			224.2
	Current liabilities of discontinued operations			—			144.1
	Current portion of long-term debt			73.5			116.8

		Total current liabilities		1,308.6			1,418.0
Long-term debt, net of current portion				4,672.5			5,657.1
Deferred revenue and other long-term liabilities				390.5			420.9
Deferred income taxes				—			—
Long term liabilities of discontinued operations				—			3.5
Commitments and contingent liabilities
Shareholders' equity
	Preferred stock—$.01 par value; authorized 5.0 (2005 and 2004) shares; issued and outstanding none			—			—
	Common stock—$.01 par value; authorized 400.0 (2005 and 2004) shares; issued 87.8 and outstanding 85.9 (2005) and issued and outstanding 87.7 (2004) shares			0.9			0.9
	Additional paid-in capital			4,382.3			4,376.9
	Treasury stock			(129.7	)		—
	Unearned stock-based compensation			(27.0	)		(29.8	)
	Accumulated other comprehensive income			271.7			512.0
	Accumulated (deficit)			(766.3	)		(1,834.3	)

		Total shareholders' equity		3,731.9			3,025.7

Total liabilities and shareholders' equity			$	10,103.5		$	10,525.2

Note: The balance sheet at December 31, 2004 has been derived from the audited financial statements at that date.

See accompanying notes.

NTL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in millions, except per share data)

		Three Months Ended March 31,
		2005			2004
Revenue		$	977.8		$	944.8
Costs and expenses
	Operating costs (exclusive of depreciation shown separately below)		(405.9	)		(398.8	)
	Selling, general and administrative expenses		(236.4	)		(240.4	)
	Other charges		(0.7	)		(0.9	)
	Depreciation		(250.3	)		(269.6	)
	Amortization		(53.4	)		(48.6	)

	Total costs and expenses		(946.7	)		(958.3	)

Operating income (loss)			31.1			(13.5	)
Other income (expense)
	Interest income and other, net		12.4			3.0
	Interest expense		(132.6	)		(137.9	)
	Share of income from equity investments		—			0.2
	Foreign currency transaction (losses) gains		(7.4	)		12.9

(Loss) from continuing operations before income taxes			(96.5	)		(135.3	)
Income tax (expense)			(21.7	)		(3.5	)

(Loss) from continuing operations		$	(118.2	)	$	(138.8	)

Discontinued operations
Income from discontinued operations before income taxes		$	7.8		$	18.5
Gain on disposal of assets			1,178.4			—
Income tax (expense)			—			—

	Income from discontinued operations	$	1,186.2		$	18.5

Net income (loss)		$	1,068.0		$	(120.3	)

Basic and diluted loss from continuing operations per share		$	(1.36	)	$	(1.60	)
Basic and diluted income from discontinued operations per share		$	13.70		$	0.21
Basic and diluted net income (loss) per share		$	12.33		$	(1.39	)
Average number of shares outstanding			86.6			86.8

See accompanying notes.

NTL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in millions)

			Three Months Ended March 31,
			2005			2004
Net cash provided by operating activities			$	262.5		$	81.2
Investing activities
	Purchase of fixed assets			(145.3	)		(104.7	)
	Investments in and loans to affiliates			—			0.9
	Purchase of marketable securities			(11.3	)		—
	Proceeds from sale of marketable securities			16.4			—
	Proceeds from sale of broadcast operations, net			2,302.3			—

		Net cash provided by (used in) investing activities		2,162.1			(103.8	)
Financing activities
	Proceeds from employee stock option exercises			0.8			1.2
	Purchase of shares			(129.7	)		—
	Principal payments on long-term debt			(942.9	)		(432.8	)

		Net cash (used in) financing activities		(1,071.8	)		(431.6	)
Effect of exchange rate changes on cash and cash equivalents				(1.0	)		24.8

Increase (decrease) in cash and cash equivalents				1,351.8		$	(429.4	)
Cash and cash equivalents, beginning of period				240.0			795.9

Cash and cash equivalents, end of period			$	1,591.8		$	366.5

Supplemental disclosure of cash flow information
	Cash paid during the period for interest, exclusive of amounts capitalized		$	25.8		$	211.9
	Income taxes paid			—			—

See accompanying notes.

NTL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(unaudited) (in millions, except per share data)

			Preferred Stock $.01 Par Value			Common Stock $.01 Par Value
			Preferred Stock $.01 Par Value			Common Stock $.01 Par Value			Additional Paid-In Capital		Treasury Stock			Unearned Stock-Based Compensation
			Shares	Par		Shares	Par		Additional Paid-In Capital		Treasury Stock			Unearned Stock-Based Compensation
Balance, December 31, 2004			—		—	87.7	$	0.9	$	4,376.9	$	—		$	(29.8	)
Exercise of stock options and tax effect			—		—	0.1		—		2.8		—			—
Purchase of shares			—		—	—		—		—		(129.7	)		—
Stock option grants at fair value			—		—	—		—		2.6		—			(2.6	)
Restricted stock amortized to operations			—		—	—		—		—		—			0.4
Stock options amortized to operations			—		—	—		—		—		—			4.2
Performance related stock awards amortized to operations			—		—	—		—		—		—			0.8
Comprehensive loss:
	Net income for the three months ended March 31, 2005		—		—	—		—		—		—			—
	Currency translation adjustment		—		—	—		—		—		—			—
	Net unrealized gains on derivatives		—		—	—		—		—		—			—
		Total

Balance March 31, 2005			—	$	—	87.8	$	0.9	$	4,382.3	$	(129.7	)	$	(27.0	)

See accompanying notes.

						Accumulated Other Comprehensive Income (Loss)
			Comprehensive Income (Loss)			Foreign Currency Translation			Pension Liability Adjustments			Net Unrealized Income (Loss) on Derivatives			Accumulated (Deficit)			Total
Balance, December 31, 2004						$	562.0		$	(4.1	)	$	(45.9	)	$	(1,834.3	)	$	3,025.7
Exercise of stock options and tax effect							—			—			—			—			2.8
Purchase of shares							—			—			—			—			(129.7	)
Stock option grants at fair value							—			—			—			—			—
Restricted stock amortized to operations							—			—			—			—			0.4
Stock options amortized to operations							—			—			—			—			4.2
Performance related stock awards amortized to operations							—			—			—			—			0.8
Comprehensive loss:
	Net income for the three months ended March 31, 2005		$	1,068.0			—			—			—			1,068.0			1,068.0
	Currency translation adjustment			(254.6	)		(255.2	)		—			0.6			—			(254.6	)
	Net unrealized gains on derivatives			14.3			—			—			14.3			—			14.3

		Total	$	827.7

Balance, March 31, 2005						$	306.8		$	(4.1	)	$	(31.0	)	$	(766.3	)	$	3,731.9

See accompanying notes.

NTL INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1—Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2004.

Certain prior period balances have been reclassified to conform to the current period presentation.

Basic and diluted earnings per share is computed by respectively dividing the loss from continuing operations, income from discontinued operations and the net income (loss) by the average number of shares outstanding during the three months ended March 31, 2005 and 2004. Outstanding warrants, options to purchase 3.2 million shares and 0.1 million shares of restricted stock at March 31, 2005 are excluded from the calculation of diluted earnings per share, since the inclusion of such warrants, options and shares is anti-dilutive. The average number of shares outstanding is computed as follows (in millions):

	Three Months Ended March 31,
	2005		2004
Number of shares outstanding at start of period(1)	87.6		86.8
Issues of common stock	—		—
Repurchase of stock	(1.0	)	—

Average number of shares outstanding	86.6		86.8

(1): Excludes 0.1 million shares of restricted stock.

Note 2—Discontinued Operations

On January 31, 2005, we sold our broadcast operations, a provider of commercial television and radio transmission services, to a consortium led by Macquarie Communications Infrastructure Group. Accordingly, we have accounted for the broadcast operations as discontinued operations. Revenue of the broadcast operations, reported in discontinued operations, for the three months ended March 31, 2005 and 2004 was $40.5 million and $131.3 million, respectively. Broadcast's pre-tax income, reported within discontinued operations, for the three months March 31, 2005 and 2004 was $7.8 million and $18.5 million, respectively.

The assets and liabilities of the broadcast operations reported as held-for-sale as of December 31, 2004 include (in millions):

Current assets held for sale
	Accounts receivable, net		$	47.8
	Prepaid expenses			32.7
	Other current assets			—

		Current assets held for sale	$	80.5

Other assets held for sale
	Fixed assets, net		$	838.8
	Reorganization value in excess of amounts allocable to identifiable assets			188.2
	Customer lists, net			366.2
	Investments in and loans to affiliates, net			(10.2	)
	Other assets			1.2

		Other assets held for sale	$	1,384.2

Current liabilities of discontinued operations
	Accounts payable		$	29.0
	Accrued expenses			66.7
	Deferred revenue			48.4

			$	144.1

Long-term liabilities of discontinued operations
	Deferred income taxes		$	0.2
	Other long-term liabilities			3.3

			$	3.5

Note 3—Acquisitions and Disposals

In November 2004, we acquired Virgin Media Group's remaining ownership interests in Virgin Net Limited together with the remaining interests held by existing and former management for £23.9 million, or $43.8 million. The acquisition increased our ownership in Virgin Net Limited from 49% to 100%. Virgin Net Limited provides internet services through the virgin.net ISP.

On May 9, 2005, we sold our operations in the Republic of Ireland, comprising all of the ordinary shares of ntl Communications (Ireland) Limited and ntl Irish Networks Limited and certain additional assets, to MS Irish Cable Holdings B.V., an affiliate of Morgan Stanley & Co. International Limited, for an aggregate purchase price of €325 million, subject to a post-closing adjustment.

Other than in respect of the sale of our operations in the Republic of Ireland, there is no material relationship between us, MS Irish Cable Holdings B.V., Morgan Stanley & Co. International Limited or any of our affiliates, directors or officers.

The Share Sale Agreement relating to ntl Communications (Ireland) Limited and ntl Irish Networks Limited, among NTL Group Limited, ntl Communications (Ireland) Limited, ntl Irish Networks Limited and MS Irish Cable Holdings B.V., and some related agreements are attached as Exhibits 2.1-2.3 to this Form 10-Q.

Note 4—Fixed Assets

Fixed assets consist of (in millions):

			Estimated Useful Life	March 31, 2005			December 31, 2004
				(unaudited)
Operating equipment
	Cable distribution plant		8 – 30 years	$	6,117.8		$	6,171.8
	Switches and headends		8 – 10 years		601.9			610.6
	Customer premises equipment		5 – 10 years		1,577.7			1,524.1
	Other operating equipment		8 – 20 years		124.7			126.5

		Total operating equipment			8,422.1			8,433.0
Other equipment
	Land		—		8.4			8.6
	Buildings		30 years		123.4			125.2
	Leasehold improvements		20 years or, if less, the lease term		129.3			131.2
	Computer infrastructure		3 – 5 years		440.3			438.4
	Other equipment		5 – 12 years		113.3			109.6

		Total other equipment			814.7			813.0

					9,236.8			9,246.0
Accumulated depreciation					(2,624.0	)		(2,409.9	)

					6,612.8			6,836.1
Construction in progress					95.7			97.7

				$	6,708.5		$	6,933.8

Note 5—Intangible Assets

Intangible assets consist of (millions):

			Estimated Useful Life	March 31, 2005		December 31, 2004
				(unaudited)
Intangible assets not subject to amortization:
	Reorganization value in excess of amounts allocable to identifiable assets			$	374.9	$	383.6

Intangible assets subject to amortization:
	Costs
		Non-compete agreements	1 year	$	5.3	$	5.4
		Trademark license	5 years		6.1		6.1
		Customer lists	3 – 5 years		1,089.7		1,105.4

					1,101.1		1,116.9

	Accumulated amortization
		Non-compete agreements			2.2		0.9
		Trademark license			0.5		0.2
		Customer lists			453.3		407.3

					456.0		408.4

				$	645.1	$	708.5

Estimated aggregate amortization expense for each of the five succeeding fiscal years from December 31, 2004 is as follows: $212.6 million in 2005, $206.5 million in 2006, $205.3 million in 2007, $67.2 million in 2008 and $6.5 million in 2009.

The change in the carrying amount of reorganization value in excess of amounts allocable to identifiable assets during the three months ended March 31, 2005 is as follows (in millions) (unaudited):

Reorganization value in excess of amounts allocable to identifiable assets—December 31, 2004	$	383.6
Foreign currency translation adjustments		(5.4	)
Adjustments to deferred tax accounts		(3.3	)

Reorganization value in excess of amounts allocable to identifiable assets—March 31, 2005	$	374.9

The movement in reorganization value in excess of amounts allocable to identifiable assets during the three months ended March 31, 2005 includes a tax benefit of approximately $3.3 million that is attributable to the use of tax attributes that existed as of January 10, 2003, the date that we emerged from Chapter 11 reorganization. The deferred tax asset attributable to these tax attributes had previously been offset by a valuation allowance.

Note 6—Long-Term Debt

Long-term debt consists of (in millions):

		March 31, 2005			December 31, 2004
		(unaudited)
	8.75% Senior Notes due 2014	$	425.0		$	425.0
	9.75% Sterling Senior Notes due 2014		708.3			718.5
	8.75% Euro Senior Notes due 2014		291.8			304.6
	Floating Rate Senior Notes due 2012		100.0			100.0
	Senior Credit Facility		3,144.7			4,148.1
	Capital leases		73.2			74.6
	Other		3.0			3.1

			4,746.0			5,773.9
Less: current portion			(73.5	)		(116.8	)

		$	4,672.5		$	5,657.1

The effective interest rates on the variable interest rate debt were as follows:

		March 31, 2005		December 31, 2004
Floating Rate Senior Notes due 2012		7.66	%	7.07	%
Senior Credit Facility
	Revolving Facility	—		—
	Term Facility	7.10	%	7.13	%

On February 4, 2005, we prepaid £500.0 million, or $942.5 million, of the Term Facility of our Senior Credit Facility.

Note 7—Derivative Instruments and Hedging Activities

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. As some of our indebtedness accrues interest at variable rates, we have exposure to volatility in future cash flows and earnings associated with variable interest rate payments. Also, substantially all of our revenue and operating costs are earned and paid in pounds sterling and, to a lesser extent, euros, but we pay interest and principal obligations on some of our indebtedness in U.S. dollars and euros. As a result, we have exposure to volatility in future cash flows and earnings associated with changes in foreign currency exchange rates on payments of principal and interest on a portion of our indebtedness.

Our objective in managing our exposure to fluctuations in interest rates and foreign currency exchange rates is to decrease the volatility of our earnings and cash flows caused by changes in underlying rates. To achieve this objective, we enter into derivative financial instruments. We have established policies and procedures to govern the strategic management of these exposures through a variety of derivative financial instruments, including interest rate swaps, cross-currency interest rate swaps and foreign currency forward rate contracts. By policy, we do not enter into derivative financial instruments with a level of complexity or with a risk that is greater than the exposure to be managed.

In accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, or FAS 133, we recognize derivative financial instruments as either assets or liabilities measured at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. To the extent that the derivative instrument is designated and considered to be effective as a cash flow hedge of an exposure to future changes in interest rates or foreign currency exchange rates, the change in fair value of the instrument is deferred in other comprehensive income. Amounts recorded in other comprehensive income are reclassified to the income statement to match the corresponding cash flows on the underlying hedged transaction. Changes in fair value of any instrument not designated as a hedge or considered to be ineffective as a hedge are reported in earnings immediately.

The fair values of our derivative instruments were as follows (in millions):

		March 31, 2005		December 31, 2004
		(unaudited)
Included within other assets:
	Foreign currency forward rate contracts	$	3.2	$	—
	Interest rate swaps		0.1		2.3

		$	3.3	$	2.3

Included within other current liabilities:
	Foreign currency forward rate contracts	$	—	$	3.9

Included within deferred revenue and other long-term liabilities:
	Foreign currency forward rate contracts	$	76.3	$	64.6
	Interest rate swaps		31.1		48.2

		$	107.4	$	112.8

Interest Rate Swaps—Hedging of Interest Rate Sensitive Obligations

As of March 31, 2005 we have entered into interest rate swap agreements to manage the exposure to variability in future cash flows on the interest payments associated with £1,250 million of our outstanding Senior Credit Facility, which accrues at variable rates based on LIBOR. The interest rate swaps allow us to receive interest based on LIBOR in exchange for payments of interest at fixed rates of 5.30% and 5.10%. The interest rate swaps became effective on October 14, 2004 and mature on April 14, 2007. The net settlement of $1.9 million under the hedges is included within interest expense for the three months ended March 31, 2005.

We have designated these interest rate swaps as cash flow hedges under FAS 133, because they hedge against changes in the amount of future cash flows attributable to changes in LIBOR. As of March 31, 2005, we recorded $9.7 million of unrealized gains in accumulated other comprehensive income (loss) as a result of the increase in fair market value of these interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Cross-Currency Interest Rate Swaps—Hedging the Interest Payments of Senior Notes and Senior Credit Facility

At March 31, 2005, we have entered into cross-currency interest rate swaps with principal amounts of $920.2 million and €151.0 million. We currently hedge the pound sterling value of interest payments on the U.S. dollar denominated 8.75% Senior Notes due 2014, interest payments on our U.S. dollar denominated Floating Rate Notes due 2012, interest payments on the U.S. dollar denominated portion of our Senior Credit Facility, and the interest payments on the euro denominated portion of our Senior Credit Facility. Under these cross-currency swaps, we receive interest in U.S. dollars at a fixed rate of 8.75% and variable rate based on LIBOR, and in euros at variable rate based on LIBOR, in exchange for payments of interest in pound sterling at a fixed rate of 9.42%, and variable rate LIBOR based on the pound sterling equivalent of $920.2 million and €151.0 million. The net settlement of $3.8 million under the hedges is included within interest expense for the three months ended March 31, 2005.

We have designated these cross-currency swaps as cash flow hedges under FAS 133 because they hedge the changes in the pound sterling value of the interest payments on our U.S. dollar denominated Senior Notes and the U.S. dollar and euro denominated portion of our Senior Credit Facility, that result from changes in the U.S. dollar, euro and pound sterling exchange rates. As of March 31, 2005, we recorded $3.2 million of unrealized losses and $7.8 million of unrealized gains in accumulated other comprehensive income (loss) as a result of the changes in fair market value of these cross currency interest rate hedges. There was no realized gain or loss arising from any ineffectiveness of the hedges.

Foreign Currency Forward Rate Contracts—Hedging the Principal Obligations of the U.S. Dollar Senior Notes and Senior Credit Facility

As of March 31, 2005, we have entered into foreign currency forward rate contracts to purchase $820.2 million and €151.0 million, maturing in April 2009. These contracts hedge changes in the pound sterling, U.S. dollar and euro value of the principal obligation of the 8.75% Senior Note due 2014, and variable rate LIBOR Senior Credit Facility, caused by changes in the U.S. dollar, euro and pound sterling exchange rates.

The forward rate contracts are not effective hedges under FAS 133. As such, the contracts are carried at fair value on our balance sheet with changes in the fair value recognized immediately in the income statement. The forward rate contracts do not subject us to material volatility in our earnings and cash flows because changes in the fair value directionally and partially mitigate the gains or losses on the translation of our U.S. dollar and euro denominated debt into our functional currency, pound sterling, in accordance with FASB Statement No. 52, Foreign Currency Translation. Changes in fair value of these contracts are reported with foreign exchanges gains (losses).

Net changes in the fair value of the forward rate contracts recognized in (loss) from continuing operations for the three months ended March 31, 2005 and 2004 were as follows (in millions) (unaudited):

		2005			2004
Net change in fair value of forward rate contracts		$	(5.5	)	$	—

Note 8—Fair Values of Financial Instruments

In estimating the fair value disclosures for financial instruments we have used the following methods and assumptions:

Cash and cash equivalents and restricted cash: The carrying amounts reported in the consolidated balance sheets approximate fair value.

Marketable securities: The carrying amounts reported in the consolidated balance sheets approximate fair value.

Long-term debt: The carrying amounts of the Senior Credit Facility approximate their fair values. The fair values of our other debt in the following table are based on the quoted market prices.

The carrying amounts and fair values of our financial instruments are as follows (in millions):

		March 31, 2005				December 31, 2004
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(unaudited)
Cash and cash equivalents		$	1,591.8	$	1,591.8	$	240.0	$	240.0
Restricted cash			33.6		33.6		31.4		31.4
Marketable securities			16.8		16.8		22.1		22.1
Long-term debt:
	8.75% Senior Notes due 2014	$	425.0	$	461.1	$	425.0	$	482.4
	9.75% Sterling Senior Notes due 2014		708.3		722.5		718.5		774.3
	8.75% Euro Senior Notes due 2014		291.8		309.3		304.6		340.3
	Floating Rate Senior Notes Due 2012		100.0		103.3		100.0		103.5
	Senior Credit Facility		3,144.7		3,144.7		4,148.1		4,148.1

Note 9—Stock Based Compensation

Our stock-based employee compensation plans are described more fully in Note 13 of our Annual Report on Form 10-K for the year ended December 31, 2004. Effective as of January 1, 2003, we adopted the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, prospectively for all stock options granted after December 31, 2002. The fair value of each option is estimated on the date of grant using a Black-Scholes option-pricing model. For the three months ended March 31, 2005 and 2004 we expensed $5.4 million and $3.8 million, respectively, related to stock-based compensation.

The following weighted-average assumptions have been used in the Black-Scholes option pricing model for the three months ended March 31, 2005 and 2004:

	2005		2004
Risk-free Interest Rate	3.98	%	3.91	%
Expected Dividend Yield	0	%	0	%
Expected Volatility	0.82		0.86
Expected Lives	3.4		3.5

A summary of the activity and related information for stock options for the three months ended March 31, 2005 and 2004 is as follows:

	2005				2004
	Options		Weighted Average Exercise Price		Options		Weighted Average Exercise Price
	(unaudited)
Outstanding—beginning of period	3,140,977		$	22.84	3,229,967		$	13.85
Granted	190,000			66.99	223,500			70.20
Exercised	(50,133	)		14.00	(83,467	)		14.40
Expired	—			—	—			—
Forfeited	(94,400	)		12.88	(17,400	)		12.00

Outstanding—end of period	3,186,444		$	25.95	3,352,600		$	17.60

Exercisable at end of the period	479,810		$	19.03	185,800		$	12.83

Weighted-average grant date fair value of options granted during the period			$	55.77			$	36.12

Exercise prices for options outstanding as of March 31, 2005 are as follows:

Range of Exercise Prices	Number of Options Outstanding	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life	Number of Shares Currently Exercisable	Weighted Average Exercise Price
$0.01	200,000	0.01	9.1	66,666	0.01
$9.00 to $15.00	2,100,544	13.45	8.0	341,544	14.15
$40.00 to $50.00	160,000	45.46	8.9	25,000	42.00
$50.01 to $60.00	128,900	59.09	9.1	6,600	58.32
$60.01 to $70.00	397,000	63.55	9.6	—	—
$70.01 to $80.00	200,000	71.60	8.8	40,000	71.60

	3,186,444	25.95	8.4	479,810	19.03

Note 10—Employee Benefit Plans

Effective December 31, 2003, we adopted FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits. This standard requires the disclosure of the components of net periodic benefit cost recognized during interim periods.

Components of Net Periodic Benefit Costs

	Three Months Ended
	March 31, 2005			March 31, 2004
	(unaudited)(in millions)
Service costs	$	2.1		$	3.1
Interest costs		7.1			6.4
Expected return on plan assets		(6.6	)		(6.4	)
Amortization of transition obligation		—			—
Amortization of prior service costs		—			—
Recognized actuarial loss		—			—

Net periodic benefit costs	$	2.6		$	3.1

Employer Contributions

We previously disclosed in our financial statements for the year ended December 31, 2004, that we expected to contribute $115.6 million to our pension plans in 2005. For the three months ended March 31, 2005 we contributed $7.9 million to our pension plans. We anticipate contributing an additional $106.2 million to fund our pension plans in 2005 for a total of $114.1 million. On April 1, 2005, in accordance with commitments made in connection with the disposal of our broadcast operations, we made a single contribution of $102.0 million relating primarily to the earned pension and other post-retirement benefits liabilities related to the broadcast operations.

Note 11—Other Charges Including Restructuring Charges

Other charges of $0.7 million for the three months ended March 31, 2005, relate to our announcement to consolidate call centers and include recruitment and training costs. On April 7, 2004, we announced the consolidation over the next eighteen months of our thirteen UK customer service call centers into three equipped to handle anticipated expansion of our customer base. Following an internal review, we decided to retain and develop three specialist call centers, to be supported by four sales and customer support sites, located throughout the UK. As part of the consolidation, we intend to make additional investments in technology and training in order to streamline processes and generate efficiencies. As of March 31, 2005, we have incurred $44.4 million, and we expect to incur a total of approximately $54.8 million, of costs to fully execute this program.

The following table summarizes the restructuring charges incurred and utilized in 2005 (in millions):

	Involuntary Employee Termination and Related Costs			Lease Exit Costs			Agreement Modifications		Other			Total
Balance, December 31, 2004	$	3.3		$	57.7		$	0.3	$	—		$	61.3
Foreign currency exchange translation adjustments		—			(1.0	)		—		—			(1.0	)
Released		—			—			—		—			—
Charged to expense		—			—			—		0.7			0.7
Utilized		(2.3	)		(3.8	)		—		(0.7	)		(6.8	)

Balance, March 31, 2005	$	1.0		$	52.9		$	0.3	$	—		$	54.2

Note 12—Related Party Transactions

We have entered into several transactions with related parties as described below.

Refinancing Transactions

In November 2003, we effected an approximately $1.4 billion rights offering in which we distributed to each of our stockholders proportionate rights to purchase shares of our common stock. The rights were transferable, subject to various exceptions. The proceeds from the rights offering were used in part to prepay in full an outstanding principal amount of approximately $599.7 million under our 19% Senior Secured Notes due 2010 and to repay in full a working capital facility with an outstanding principal amount of approximately $616.2 million.

In connection with our rights offering, on September 26, 2003, we entered into two separate participating purchaser agreements with each of W.R. Huff Asset Management Co., L.L.C., on behalf of certain of its affiliates and managed accounts, and Franklin Mutual Advisers LLC, as agent and investment advisor for certain funds. Each participating purchaser held shares of our common stock or was the general partner or investment manager of managed funds and third party accounts that directly held shares of our common stock.

Pursuant to these agreements, W.R. Huff Asset Management Co., L.LC., on behalf of managed accounts and affiliates, and Franklin Mutual Advisers LLC, on behalf of funds for which it acts as an agent or investment advisor, each agreed in advance of the rights offering to exercise the basic subscription privilege for all of the rights distributed to their respective managed accounts, affiliates and funds in the rights offering. The rights offering prospectus indicated to our stockholders that these parties had made advance commitments. Other stockholders did not have to commit to exercise their subscription privileges in advance.

W.R. Huff Asset Management Co., L.L.C., on behalf of managed accounts and affiliates, purchased 4,582,594 shares of our common stock for $40.00 and Franklin Mutual Advisers LLC, on behalf of funds for which it acts as an agent or investment advisor, purchased 2,974,908 shares of our common stock for $40.00 per share. This was the same price offered to all recipients of rights in the offering. W.R. Huff Asset Management Co., L.L.C., on behalf of managed accounts and affiliates, also purchased approximately 25,000 shares of our common stock for $40.00 per share pursuant to the

over-subscription privilege available to all rights holders in the offering. Franklin Mutual Advisers LLC, on behalf of funds for which it acts as an agent or investment advisor, also purchased 35,752 shares of our common stock for $40.00 per share pursuant to the over-subscription privilege available to all rights holders in the offering.

The shares of our common stock that each participating purchaser received upon the exercise of the rights that the participating purchaser had committed to exercise constituted restricted stock for the purposes of the Securities Act of 1933. Accordingly, we entered into a registration rights agreement with each participating purchaser. We filed a registration statement on February 13, 2004 to fulfill our obligations under these agreements.

We completed a transaction on April 13, 2004 in which our indirect wholly owned subsidiary, NTL Cable PLC, issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012. Some of our significant stockholders were holders of the 10% senior sterling notes due 2008 and 9¹/8% senior notes due 2008 of Diamond Holdings Limited and of the 11.2% discount debentures due 2007 of NTL (Triangle) LLC, which were redeemed on May 13, 2004 in connection with the transaction. Some of these stockholders, including managed accounts and affiliates of W.R. Huff Asset Management Co., L.L.C., acquired a substantial quantity of the notes issued in the transaction. On behalf of managed accounts and affiliates, W.R. Huff Asset Management Co., L.L.C. is a significant participant in the market for non-investment grade debt securities.

Pursuant to the participating purchaser agreements, and in consideration for their advance commitments in the rights offering, managed accounts and affiliates for which W.R. Huff Asset Management Co., L.L.C. acts as an investment adviser were paid fees totaling $5.3 million on March 24, 2004 and funds for which Franklin Mutual Advisers LLC acts as an agent or investment adviser were paid fees totaling $3.1 million on November 24, 2003 and $0.3 million on March 17, 2004, In consideration for financial and business services, subject to the successful completion of the refinancing, a related entity of W.R. Huff Asset Management Co., L.L.C. was paid $7.5 million on April 27, 2004.

In May 2004, our board granted to each of Eric Koza and Karim Samii, who were then each employees of W.R. Huff Asset Management Co., L.L.C. or its affiliates, the right to receive 20,000 restricted shares of our common stock under the 2003 Stock Option Plan. The restricted stock award was made in consideration of financial and business services provided to us by Messrs. Koza and Samii. Mr. Samii is no longer an employee of W.R. Huff Asset Management Co., L.L.C. or its affiliates. Shares authorized under the 2003 Stock Option Plan, including those granted to Messrs. Koza and Samii, were registered under a registration statement on Form S-8 that we filed with the SEC on May 6, 2004.

Note 13—Comprehensive Income (Loss)

Comprehensive income for the three months ended March 31, 2005 was $827.7 million and comprehensive loss for the three months ended March 31, 2004 was $13.1 million.

Comprehensive income (loss) comprises (in millions) (unaudited):

	Three Months Ended March 31,
	2005			2004
Net income (loss) for period	$	1,068.0		$	(120.3	)
Currency translation adjustment		(254.6	)		107.2
Net unrealized gains on derivatives		14.3			—
Pension liability adjustment		—			—

Comprehensive income (loss)	$	827.7		$	(13.1	)

Note 14—Commitments and Contingent Liabilities

At March 31, 2005, we were committed to pay approximately $327.9 million for equipment and services and for investments in and loans to affiliates. This amount includes approximately $49.7 million for operations and maintenance contracts and other commitments from April 1, 2006 to 2013. The aggregate amount of the fixed and determinable portion of these obligations for the succeeding five fiscal years is as follows (in millions) (unaudited):

Year ended March 31
	2006	$	278.2
	2007		49.7
	2008		—
	2009		—
	2010		—
Thereafter			—

		$	327.9

We are involved in certain disputes and litigation arising in the ordinary course of our business. None of these matters are expected to have a material adverse effect on our financial position, results of operations or cash flows.

Our banks have provided guarantees in form of performance bonds on our behalf as part of our contractual obligations. The fair value of the guarantees has been calculated by reference to the monetary value for each performance bond. The amount of commitment expires over the following periods (in millions) (unaudited):

Year ended March 31
	2006	$	22.6
	2007		—
	2008		—
	2009		—
	2010		—
Thereafter			15.6

		$	38.2

Note 15—Recent Account Pronouncements

On March 30, 2005, the Financial Accounting Standards Board, FASB, released Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations—An Interpretation of FASB Statement No. 143. FIN 47 addresses the timing of liability recognition for legal obligations associated with the retirement of a tangible long-lived asset when the timing and (or) method of settlement of the obligation are conditional on a future event. FIN 47 concludes that an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. The adoption of FIN 47 will not have any material impact on our future financial results.

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment. Under a rule issued by the Securities and Exchange Commission (SEC) in April 2005, SFAS No. 123(R) was amended and is now effective for public companies for annual, rather than interim, periods that begin after June 15, 2005. SFAS No. 123(R) requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. We adopted, in January 2003, the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, prospectively for all stock options granted after December 31, 2002. In March 2005, the SEC also issued Staff Accounting Bulletin No. 107 (SAB No. 107), which summarizes the staff's views regarding share-based payment arrangements for public companies. We have evaluated the impact of SFAS No. 123(R) and SAB 107 on our results of operations and financial position and do not expect that the impact will be material.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are one of the leading communications and content distribution companies in the U.K. and the Republic of Ireland, providing broadband internet access, telephone and television services to over 3 million residential customers as of March 31, 2005, including more than 1.4 million broadband customers. We also provide internet and telephone services to our residential customers who are not connected to our cable network via access to other companies' telecommunications networks and via an internet service provider operated by our subsidiary, Virgin Net Limited. We offer what we refer to as a "triple play" bundle of internet, telephone and television services through competitively-priced bundled packages. We also provide a range of voice services to business and public sector organizations, as well as a variety of data communications solutions from high speed internet access to fully managed business communications networks and communication transport services.

Our services are delivered through our wholly-owned local access communications network passing approximately 7.9 million homes in the U.K. and 466,000 homes in the Republic of Ireland. The design and capability of our network provides us with the ability to offer "triple play" bundled services and a broad portfolio of reliable, competitive communications solutions to business customers.

We provide services to three categories of customers: residential customers, business customers and customers in the Republic of Ireland, as follows:

•: Consumer. We provide internet, telephone and cable television services to residential customers in the U.K.;
•: Business. We provide internet, data and voice services to large businesses, public sector organizations and small and medium-sized enterprises, or SMEs, communications transport services, and wholesale internet access solutions to internet service providers, or ISPs; and
•: Ireland. We provide internet, cable television and MMDS television services to residential customers in the Republic of Ireland and internet, data and voice services to business customers in the Republic of Ireland.

Our consolidated revenue for the three months ended March 31, 2005, was $977.8 million. Our revenues by sales channel as a percentage of total revenue for the three months ended March 31, 2005 and 2004 are set forth in the table below:

		Three Months Ended March 31,
		2005		2004
Revenue:
	Consumer	74.3	%	72.0	%
	Business	22.0	%	24.6	%
	Ireland	3.7	%	3.4	%

Total revenue		100.0	%	100.0	%

Revenue

The principal sources of revenue within each sales channel are:

•: Consumer—monthly fees and usage charges for telephone service, cable television service and internet access;

•: Business—monthly fees and usage charges for inbound and outbound voice, data and internet services and charges for transmission, fiber and voice services provided to other telecommunications service providers over our national network; and
•: Ireland—monthly fees and usage charges for cable television services and, to a lesser extent, telephone and internet services.

Expenses

The principal components of our operating costs and selling, general and administrative expenses include:

•: payroll and other employee-related costs;
•: interconnection costs paid to other carriers related to telephone services;
•: television programming costs;
•: marketing and selling costs;
•: repairs and maintenance costs;
•: facility related costs, such as rent, utilities and rates; and
•: allowances for doubtful accounts.

Acquisitions and Disposals

In November, 2004, we acquired Virgin Media Group's remaining ownership interests in Virgin Net Limited together with the remaining interests held by existing and former management for £23.9 million, or $43.8 million. The acquisition increased our ownership in Virgin Net Limited from 49% to 100%. Virgin Net Limited provides internet services through the virgin.net ISP.

On January 31, 2005, we sold our broadcast operations to a consortium led by Macquarie Communications Infrastructure Group. The cash proceeds from the sale were approximately £1.27 billion. Our broadcast operations provided site leasing, broadcast transmission, satellite, media, public safety communications and other network services, utilizing broadcast transmission infrastructure, wireless communications and other facilities.

Discontinued Operations

As a result of the sale of our broadcast operations, we are accounting for the broadcast operations as a discontinued operation. Financial information for all prior periods presented in this report is restated accordingly. Accordingly, the results of operations for the broadcast operations have been

excluded from the components of loss from continuing operations and shown in a separate caption, titled income from discontinued operations, and the assets and liabilities of the broadcast operations are reported as held for sale as at December 31, 2004. Revenue from the broadcast operations reported in discontinued operations for the three months ended March 31, 2005 and 2004 was $40.5 million and $131.3 million respectively. Pre-tax income from broadcast operations, reported as pre-tax income from discontinued operations, for the three months ended March 31, 2005 and 2004, was $7.8 million and $18.5 million respectively.

Factors Affecting Our Business

Our residential customers account for the majority of our total revenue. The number of customers, the number and types of services that each customer uses and the prices we charge for these services drive our revenue. Our profit is driven by the relative margins on the types of services we provide to customers. For example, broadband internet is more profitable than ATV. Our packaging of services and our pricing are designed to encourage our customers to use multiple services like dual telephone and broadband. Factors affecting our profitability include customer churn, average revenue per user, or ARPU, and competition.

Summary Statistics

Selected statistics for U.K. residential customers for the three months ended March 31, 2005, as well as the four prior quarters are set forth in the table below.

			For the Three Months Ended
			March 31, 2005		December 31, 2004		September 30, 2004		June 30, 2004		March 31, 2004
Opening customers(1)			3,136,800		3,164,600		3,082,100		3,070,600		3,007,100
	Data cleanse(2)		—		(20,000	)	2,700		(6,100	)	(6,200	)
Adjusted opening customers			3,136,800		3,144,600		3,084,800		3,064,500		3,000,900
	Customer additions		195,100		185,200		190,700		169,700		191,600
	Customer disconnects		(137,000	)	(151,000	)	(148,900	)	(116,600	)	(121,900	)
		Net customer movement	58,100		34,200		41,700		53,100		69,700
	Reduction in customer count		—		(42,000	)	(23,800	)	(35,500	)	—
Closing customers(1)			3,194,900		3,136,800		3,102,800		3,082,100		3,070,600
Churn(3)			1.4	%	1.6	%	1.6	%	1.2	%	1.3	%
Revenue generating units(2,4)			—
	Television		1,960,000		1,979,600		2,056,100		2,070,600		2,048,900
		DTV	1,387,900		1,382,500		1,414,700		1,408,700		1,371,000
	Telephone		2,646,700		2,638,500		2,681,400		2,693,700		2,705,700
	Broadband		1,443,200		1,330,300		1,174,400		1,094,200		1,028,800
Total Revenue Generating Units			6,049,900		5,948,400		5,911,900		5,858,500		5,783,400
RGU/Customers			1.89x		1.90x		1.91x		1.90x		1.88x
Internet dial-up and DTV access(5)			695,400		754,800		346,900		393,900		468,400
Average revenue per user(6)			£39.58		£41.44		£40.80		£40.10		£40.66

(1): Customer numbers have been updated to include customers off our network and virgin.net customers.
(2): Data cleanse activity, as part of the harmonization of billing systems, resulted in adjustments to the number of recorded customers.

(3): Customer churn is calculated by taking the total disconnects during the month and dividing them by the average number of customers during the month. Average monthly churn during a quarter is the average of the three monthly churn calculations within the quarter.
(4): Each telephone, television and broadband internet subscriber directly connected to our network counts as one RGU. Accordingly, a subscriber who receives both telephone and television service counts as two RGUs. RGUs may include subscribers receiving some services for free or at a reduced rate in connection with incentive offers.
(5): Dial-up internet customers have been adjusted to exclude metered customers who have not used the service within the last 30 days and have been updated to include the ISP, virgin.net.
(6): Average Revenue Per User, or ARPU, is calculated on a monthly basis by dividing total revenue generated from the provision of telephone, cable television and internet services to customers who are directly connected to our network in that month, exclusive of VAT, by the average number of customers in that month. Quarterly ARPU is the average of the three months in that quarter.

Customer Churn. Customer churn is a measure of the number of customers who stop using our services. An increase in our customer churn can lead to increased costs and reduced revenue. We continue to focus on improving our customer service and enhancing and expanding our service offerings to existing customers in an effort to manage our customer churn rate. Although our ability to reduce our customer churn rate beyond a base level is limited by factors like customers moving outside our network service area, in particular during the summer season, managing our customer churn rate is a significant component of our business plan. To help meet these objectives, we have consolidated the number of billing systems for our residential customers from eleven at the beginning of 2003 to three currently. No assurances can be made to the timing of our further integration efforts or the degree of integration ultimately accomplished. In addition, our customer churn rate may also increase if we are unable to deliver our services over our network without interruption or if we fail to match offerings by our competitors.

ARPU. Average Revenue Per User, or ARPU, is a measure we use to evaluate how effectively we are realizing potential revenue from customers. We believe that our "triple play" offering of telephone service, broadband access to the internet and DTV will prove attractive to our existing customer base and allow us to increase our ARPU by facilitating the sale of multiple services to each customer.

Competition. Our ability to acquire and retain customers and increase revenue depends on our competitive strength. There is significant competition in our markets, including through other broadband service providers, telephone services offered by BT, alternative internet access services like DSL, which is offered by BT, digital satellite television services offered by BSkyB and digital terrestrial television offered by Freeview. If competitive forces prevent us from charging the prices for these services that we plan to charge, or if our competition is able to attract our customers or potential customers we are targeting, our results of operations will be adversely affected.

Capital Expenditures. Our business requires substantial capital expenditures on a continuing basis for various purposes, including expanding, maintaining and upgrading our network, investing in new customer acquisitions, and offering new services. If we do not continue to invest in our network, our ability to retain and acquire customers may be hindered. Therefore, our liquidity and the availability of cash to fund capital projects are important drivers of our revenue. When our liquidity is restricted, so is our ability to meet our capital expenditure requirements. We believe that our cash on hand, together with cash from operations, and if required, drawdowns under the £250 million revolving tranche of our senior credit facility, will be sufficient for our cash requirements through March 31, 2006.

Labor and overhead costs directly related to the construction and installation of fixed assets, including payroll and related costs of some employees and related rent and other occupancy costs, are

capitalized. The payroll and related costs of some employees that are directly related to construction and installation activities are capitalized based on specific time devoted to these activities where identifiable. In cases where the time devoted to these activities is not specifically identifiable, we capitalized costs based upon estimated allocations. We are continuing to enhance our processes to reduce reliance upon these estimates in determining amounts capitalized. The labor and overhead costs capitalized for the three months ended March 31, 2005 were approximately £8.3 million, or $15.7 million, and for March 31, 2004, approximately £14.8 million, or $27.3 million.

The following table illustrates the calculation of labor and overhead costs capitalized as a percentage of total operating and selling, general and administrative expenses and as a percentage of cash used to purchase fixed assets.

	For the Three Months Ended March 31,
	2005			2004
	(in millions, except percentage data)
Labor and overhead costs capitalized	$	15.7		$	27.3
Total operating costs and selling, general and administrative expenses		642.3			639.2
Labor and overhead costs capitalized as a percentage of total operating costs and selling, general and administrative expenses		2.4	%		4.3	%
Purchase of fixed assets		143.2			98.9
Labor and overhead costs capitalized as a percentage of purchase of fixed assets		11.0	%		27.6	%

Currency Movements. We encounter currency exchange rate risks because substantially all of our revenue and operating costs are earned and paid primarily in pounds and, to a lesser extent, euros, but we pay interest and principal obligations with respect to a portion of our existing indebtedness in U.S. dollars. To the extent that the pound declines in value against the U.S. dollar, the effective cost of servicing our U.S. dollar debt will be higher. As of March 31, 2005, $920.2 million, or 19.4% of our long-term debt, was denominated in U.S. dollars. To mitigate the risk from these exposures, we have implemented a cash flow hedging program. The objective of this program is to reduce the volatility of our cash flows and earnings caused by changes in underlying rates.

Because revenue and expenses from our principal operations are denominated primarily in pounds but we report our financial results in U.S. dollars, our financial results are also impacted by currency fluctuations, which are unrelated to our underlying results of operations.

Seasonality. Some revenue streams are subject to seasonal factors. For example, telephone usage revenue by customers and businesses tends to be slightly lower during summer holiday months. Our customer churn rates include persons who disconnect service because of moves, resulting in a seasonal increase in our churn rates during the summer months when higher levels of U.K. house moves occur and students leave their accommodations between school years.

Integration of Billing Systems. Our historical growth through acquisitions resulted in our inheriting numerous billing systems, which had many differences in functionality, resulting in inefficiencies in our customer service processes. As a result of our billing systems integration program, we have consolidated the number of billing systems for our residential customers from eleven at the beginning of 2003 to three currently. We continue to evaluate how many billing systems we will utilize for residential and business customers, taking into account the prospects for improved efficiencies and better customer service as well as the impact on the business of additional migration of data. Accordingly, the timing and extent of further integration efforts remain under review. The total cost of the integration program is estimated to be approximately £100 million, or $190 million, of which we have incurred approximately £94 million, or $178 million, through March 31, 2005.

Call Center Consolidation. On April 7, 2004, we announced the consolidation over the next eighteen months of our thirteen U.K. customer service call centers into three equipped to handle anticipated expansion of our customer base. Following an internal review, we decided to retain and develop three specialist call centers, to be supported by four sales and customer support sites, located throughout the U.K. As part of the consolidation, we intend to make additional investments in technology and training in order to streamline processes and generate efficiencies. As of March 31, 2005, we have incurred £24.1 million, or $44.4 million of costs, and we expect to incur a total approximately £29.0 million, or $54.8 million, of costs to execute this program including property costs that will be expensed as the properties are vacated.

If the integration of our billing systems or the consolidation of our call centers is not successful, we could experience an adverse effect on our customer service, customer churn rate and costs of maintaining these systems going forward. We could also experience operational failures related to billing and collecting revenue from our customers which, depending on the severity of the failure, could have a material adverse effect on our business.

Consolidated Results of Operations from Continuing Operations

Three months ended March 31, 2005 and 2004

Revenue

For the three months ended March 31, 2005, consolidated revenue increased by 3.5% to $977.8 million from $944.8 million for the three months ended March 31, 2004, and revenue expressed in pounds sterling increased by 0.7% to £517.3 million from £513.6 million during the same period. Our revenue expressed in U.S. dollars and pounds sterling by customer type for the three months ended March 31, 2005 and 2004 are as follows (in millions):

		2005		2004		Increase		2005	2004	Increase
		$		$		%		£	£	%
Revenue:
	Consumer	$	726.8	$	680.3	6.8	%	£384.5	£369.8	4.0	%
	Business		214.8		232.4	(7.6	)%	113.6	126.3	(10.1	)%
	Ireland		36.2		32.1	12.8	%	19.2	17.5	9.7	%

Total revenue		$	977.8	$	944.8	3.5	%	£517.3	£513.6	0.7	%

Consumer: For the three months ended March 31, 2005, revenue from residential customers increased by 6.8% to $726.8 million from $680.3 million for the three months ended March 31, 2004, and revenue from residential customers expressed in pounds sterling increased by 4.0% to £384.5 million from £369.8 million during the same period. This increase is driven largely by growth in the number of broadband internet subscribers as well as the inclusion of revenue from our subsidiary Virgin Net following its acquisition in November 2004. These increases have been offset by lower telephony usage revenue, lower television revenue because of the decline in the number of ATV subscribers exceeding the growth in the number of DTV subscribers and lower take up of premium TV content, and lower revenue from subscribers who are not directly connected to our network.

Business: For the three months ended March 31, 2005, revenue from business customers decreased by 7.6% to $214.8 million from $232.4 million for the three months ended March 31, 2004, and revenue from business customers expressed in pounds sterling decreased by 10.1% to £113.6 million from £126.3 million during the same period. This decrease is caused mainly by the loss of wholesale revenue from Virgin Net which ceased to be a business customer as a consequence of its acquisition by us in November 2004. Growth in wholesale install, new product and project revenue has

been offset by a decline in telephony revenue because of lower access and usage revenue and the loss of revenue following the conclusion of a significant customer contract.

Ireland: For the three months ended March 31, 2005, revenue from Ireland customers increased by 12.8% to $36.2 million from $32.1 million for the three months ended March 31, 2004, and revenue from Ireland customers expressed in pounds sterling increased by 9.7% to £19.2 million from £17.5 million during the same period, and revenue from Ireland customers expressed in euros increased by 7.8% to €27.7 million from €25.7 million during the same period. This increase is because of price rises and growth in the number of subscribers.

Expenses

Operating Costs. For the three months ended March 31, 2005 and 2004, operating costs, including network expenses, increased by 1.8% to $405.9 million from $398.8 million, but operating costs expressed in pounds sterling decreased by 1.0% to £214.7 million from £216.7 million during the same period in 2004. Operating costs as a percentage of revenue decreased to 41.5% for the three months ended March 31, 2005, from 42.2% for the same period in 2004 primarily because of a more favourable mix of consumer revenues, a reduction in telephony interconnect costs driven by lower mobile call rates and lower television content costs.

Selling, general and administrative expenses. For the three months ended March 31, 2005, selling, general and administrative expenses decreased by 1.7% to $236.4 million from $240.4 million for the three months ended March 31, 2004, and selling, general and administrative expenses expressed in pounds sterling decreased by 4.4% to £125.0 million from £130.7 million for the same period in 2004. Selling, general and administrative expenses as a percentage of revenue decreased to 24.2% for the three months ended March 31, 2005, from 25.4% for the same period in 2004. Maintenance costs savings through renegotiated contracts, and reduced levels of set-top box repair and recycling costs have been partly offset by the impact of installs in pre-wired consumer homes where the cost to install is expensed, together with increased allowances for doubtful accounts.

Other charges

Other charges of $0.7 million in the three months ended March 31, 2005 relate to restructuring charges incurred in connection with our call center consolidation program. The costs of $0.7 million relates to the recruitment and training of new employees at the new sites. Other charges of $0.9 million for the three months ended March 31, 2004 relate to initial costs incurred in connection with our call center consolidation program.

The following table summaries the restructuring charges incurred and utilized in the three months ended March 31, 2005 (in millions):

	Involuntary Employee Termination and Related Costs			Lease Exit Costs			Agreement Modifications		Other			Total
Balance, December 31, 2004	$	3.3		$	57.7		$	0.3	$	—		$	61.3
Foreign currency exchange translation adjustments		—			(1.0	)		—		—			(1.0	)
Released		—			—			—		—			—
Charged to expense		—			—			—		0.7			0.7
Utilized		(2.3	)		(3.8	)		—		(0.7	)		(6.8	)

Balance, March 31, 2005	$	1.0		$	52.9		$	0.3	$	—		$	54.2

Depreciation expense

For the three months ended March 31, 2005, depreciation expense decreased to $250.3 million from $269.6 million for the three months ended March 31, 2004. Depreciation expense expressed in pounds sterling decreased to £132.4 million for the three months ended March 31, 2005 from £146.5 million for the same period in 2004. This reduction in depreciation expense is because of the absence of depreciation on some assets that became fully depreciated in 2004.

Amortization expense

For the three months ended March 31, 2005, amortization expense increased to $53.4 million from $48.6 million for the three months ended March 31, 2004. Amortization expense expressed in pounds sterling increased slightly to £28.2 million for the three months ended March 31 2005 from £26.4 million for the same period in 2004. The increase in amortization expense relates to additional intangible assets arising from the acquisition of Virgin Net Limited during the fourth quarter of 2004.

Interest expense

For the three months ended March 31, 2005, interest expense decreased to $132.6 million from $137.9 million for the three months ended March 31, 2004, primarily as a result of the prepayment of $942.5 million of our Senior Credit Facility on February 4, 2005 and the effects of the refinancing transaction in April 2004 that lowered our weighted average interest expense, offset by the accelerated amortization of deferred financing costs resulting from the prepayment on February 4, 2005.

We paid interest in cash of $25.8 million for the three months ended March 31, 2005, and $211.9 million for the three months ended March 31, 2004. The decrease in cash interest payments resulted from the effects of the refinancing transaction in April 2004 that lowered our weighted average interest expense and rescheduled some interest payments.

Foreign currency transaction (losses) gains

Our functional currencies are the pound sterling and, to a significantly lesser extent, the euro, while our reporting currency is the U.S. dollar. The assets and liabilities of our U.K. and Ireland subsidiaries have been translated using the exchange rates in effect at the balance sheet dates, and revenue and expenses have been translated at the average rates for the respective years. Exchange gains and losses on our net equity investment in our subsidiaries are reported as a separate component of other comprehensive income (loss) in shareholders' equity. Foreign currency transaction gains and losses are recorded in the statement of operations.

For the three months ended March 31, 2005, foreign currency transaction losses were $7.4 million as compared with gains of $12.9 million for the three months ended March 31, 2004. These losses for the three months ended March 31, 2005 were primarily because of the effect of changes in the exchange rate on the U.S. dollar and euro denominated debt and unrealized losses of $5.5 million arising from changes in the fair value of our foreign currency forward contracts. Our results of operations will continue to be affected by foreign exchange rate fluctuations since $920.2 million of our indebtedness is denominated in U.S. dollars and €376.0 million is denominated in euros.

Income tax expense

For the three months ended March 31, 2005, income tax expense was $21.7 million as compared with $3.5 million for the same period in 2004.

The tax provision of $21.7 million is primarily comprised of federal taxes of $21.3 million which mainly relate to the use of proceeds arising from the sale of our broadcast operations, including the distribution of funds to NTL Incorporated.

Loss from continuing operations

For the three months ended March 31, 2005, loss from continuing operations was $118.2 million as compared with a loss of $138.8 million for the same period in 2004. The reduction in loss from continuing operations is attributable to our improved operating performance.

Loss from continuing operations per share

Basic and diluted loss from continuing operations per common share for the three months ended March 31, 2005 was $1.36 and for the three months ended March 31, 2004 was $1.60. Basic and diluted loss from continuing operations per share is computed using an average of 86.6 million shares issued in the three months ended March 31, 2005 and an average of 86.8 million shares issued for the same period in 2004. Outstanding warrants, options to purchase 3.2 million shares and 0.1 million shares of restricted stock at March 31, 2005, are excluded from the calculation of diluted loss from continuing operations per share, since the inclusion of such warrants, options and shares is anti-dilutive.

Statement of Cash Flows

Cash flow information provided below includes continuing and discontinued operations.

Three Months Ended March 31, 2005 and 2004

For the three months ended March 31, 2005, cash provided by operating activities increased to $262.5 million from $81.2 million for the three months ended March 31, 2004. This increase was a result of the improvement in operating results and lower interest payments partly offset by reduced cash flows from discontinued operations due to the sale of our broadcast operations on January 31, 2005. For the three months ended March 31, 2005, cash paid for interest, exclusive of amounts capitalized, decreased to $25.8 million from $211.9 million during the same period in 2004. This decrease resulted from lower level of debt, lower weighted average interest rates and re-scheduling of interest payments following our refinancing transaction.

For the three months ended March 31, 2005, cash provided by investing activities was $2,162.1 million compared with cash used in investing activities of $103.8 million for the three months ended March 31, 2004. The cash provided by investing activities in the three months ended March 31, 2005 includes $2.3 billion from the sale of our broadcast operations. Purchases of fixed assets increased to $145.3 million for the three months ended March 31, 2005 from $104.7 million for the same period in 2004 primarily because of the timing of cash payments.

Cash used in financing activities for the three months ended March 31, 2005 was $1,071.8 million and $431.6 million in the three months ended March 31, 2004. The principal components of cash used in financing activities for the three months ended March 31, 2005 were as follows:

•: $129.7 million (£68.7 million) relating to repurchases of our common stock in the open market in February 2005. On January 31, 2005 we announced that we intended to use up to £475 million of the proceeds from the sale of our broadcast operations to repurchase shares of our common stock; and
•: $942.5 million (£500 million) prepayment on our senior credit facility on February 4, 2005.

For the three months ended March 31, 2004, cash used in financing activities resulted primarily from a prepayment on our then-existing senior credit facility of $431.9 million (£234.8 million). In January 2004, we repaid £184.8 million of our then-existing senior credit facility, of which £11.0 million was a mandatory principal payment under the terms of our then-existing senior credit facility. The balance of £173.8 million was a voluntary prepayment of the revolving credit facility. On February 12, 2004, we made an additional £50.0 million voluntary prepayment on this facility.

Liquidity and Capital Resources

In the second quarter of 2004, we completed our refinancing transaction from which we raised approximately $5.9 billion of indebtedness. The refinancing transaction extended the maturities on substantially all of our debt and lowered our weighted average interest expense. In particular:

•: On April 13, 2004, our wholly owned, newly formed subsidiary, NTL Cable PLC, issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal amount of 8.75% senior notes due 2014, €225 million aggregate principal amount of 8.75% senior notes due 2014 and $100 million aggregate principal amount of floating rate senior notes due 2012, together referred to as the senior notes. The senior notes were offered and sold under Rule 144A and Regulation S.
•: Also, on April 13, 2004, we entered into a new fully underwritten £2,425 million senior secured credit facility, which includes a £250 million revolving tranche. On April 14, 2004 we drew down £2,175 million of our senior credit facility, which, together with some of the proceeds from the issuance of the new notes and cash on hand, we used to repay our then-existing senior credit facility.
•: The remaining proceeds from the notes offering, together with cash on hand, were used on May 13, 2004 to redeem the Diamond notes, redeem the Triangle debentures, and pay transaction costs.

The redemption of the Diamond notes and the Triangle debentures on May 13, 2004, as well as making Diamond Cable Communications Limited and its direct or indirect subsidiaries wholly owned subsidiaries of NTL Cable PLC as required by the terms of the indenture governing the notes and our senior credit facility, has provided us with additional flexibility to engage in intercompany transfer of funds and other transactions.

On February 4, 2005, we repaid £500 million of principal outstanding under our senior credit facility using proceeds from the sale of our broadcast operations.

The agreements governing the senior notes and our senior credit facility significantly and, in some cases absolutely, restrict our ability and the ability of most of our subsidiaries to:

•: incur or guarantee additional indebtedness;
•: pay dividends or make other distributions, or redeem or repurchase equity interests or subordinated obligations;
•: make investments;
•: sell assets, including the capital stock of subsidiaries;
•: enter into sale/leaseback transactions;
•: create liens;
•: enter into agreements that restrict the restricted subsidiaries' ability to pay dividends, transfer assets or make intercompany loans;
•: merge or consolidate or transfer all or substantially all of its assets; and
•: enter into transactions with affiliates.

Our business is capital intensive, we are highly leveraged, and we have historically incurred operating losses and negative cash flow, partly as a result of our construction costs, operating expenditures and interest costs. We require significant amounts of capital to connect customers to our network, expand and upgrade our network, offer new services and integrate our billing systems and

customer databases. For the period of April 1, 2005 through March 31, 2006, we expect to spend between £280 million and £320 million, or between $530 million and $600 million, on acquiring fixed assets. We must also regularly service interest payments with cash flows from operations. Our ability to sustain operations, meet financial covenants under our indebtedness, and make required payments on our indebtedness could be impaired if we are unable to maintain or achieve various financial performance measures.

Our ability to service our capital needs, to service our obligations under our indebtedness and to fund our ongoing operations will depend upon our ability to generate cash. For the three months ended March 31, 2005, our cash increased by $1,351.8 million; however, this was principally because of the proceeds from the sale of our broadcast operations.

Although we expect to generate positive cash flow in the future, we cannot assure you that this will be the case. We believe that our cash on hand, together with cash from operations and, if required, drawdowns under the £250 million revolving tranche of our credit facility, will be sufficient for our cash requirements through at least March 31, 2006. However, our cash requirements after March 31, 2006 may exceed these sources of cash. This may require that we obtain additional financing in excess of the financing incurred in the refinancing transaction. We may not be able to obtain financing at all, or on favorable terms, or we may be contractually prevented by the terms of the senior notes or our senior credit facility from incurring additional indebtedness.

We are a holding company with no independent operations or significant assets other than our investments in our subsidiaries. As a result, we will depend upon the receipt of sufficient funds from our subsidiaries to meet our obligations. In addition, the terms of our and our subsidiaries' existing and future indebtedness and the laws of the jurisdictions under which those subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us under many circumstances.

Our debt agreements and the debt agreements of some of our subsidiaries contain restrictions on our ability to transfer cash between groups of our subsidiaries. As a result of these restrictions, although our overall liquidity may be sufficient to satisfy our obligations, we may be limited by covenants in some of our debt agreements from transferring cash to other subsidiaries that might require funds. In addition, cross-default provisions in our other indebtedness may be triggered if we default on any of these debt agreements.

Derivative Instruments and Hedging Activities

In the refinancing transaction, we incurred obligations in a combination of U.S. dollars, euros and pound sterling at fixed and variable interest rates. As a result we are exposed to variability in our cash flows and earnings resulting from changes in foreign currency exchange rates and interest rates.

We have entered into a number of derivative instruments with a number of counter-parties to manage our exposures to changes in interest rates and foreign currency exchange rates. The derivative instruments consist of interest rate swaps, cross-currency interest rate swaps and foreign currency forward contracts.

Interest rate swaps

We have entered into a number of interest rate swaps to hedge the variability in future interest payments on the senior credit facility which accrues interest at variable rates based on LIBOR. The interest rate swaps allow us to receive interest based on LIBOR in exchange for payments of interest at fixed rates of 5.30% and 5.10%. The net settlement of $1.9 million under the interest rate swaps is included within interest expense for the three months ended March 31, 2005.

We have designated the interest rate swaps as cash flow hedges under FAS 133 because they hedge against changes in LIBOR. The interest rate swaps are recognized as either assets or liabilities and

measured at fair value. Changes in the fair value are recorded within other comprehensive income (loss).

Cross-currency interest rate swaps

We have entered into a number of cross-currency interest rate swaps to hedge the variability in the pound sterling value of interest payments on the 8.75% Senior Notes due 2014, the interest payments on the Floating Rate Senior Notes due 2012, and variable rate based on LIBOR interest payments on the senior credit facility due 2012, denominated in U.S. dollars and euros. Under the cross-currency interest rate swaps we receive interest in U.S. dollars at a rate of 8.75%, and U.S. dollar and euros at a variable rate based on LIBOR, and we pay interest in pound sterling at a rate of 9.42%, and at a variable rate based on LIBOR. The net settlement of $3.8 million under the cross-currency interest rate swap is included within interest expense for the three months ended March 31, 2005.

We have designated the cross-currency interest rate swaps as cash flow hedges under FAS 133 because they hedge against changes in the pound sterling value of the interest payments on the Senior Notes and senior credit facility that result from changes in the U.S. dollar, pound sterling and euro exchange rates. The cross-currency interest rate swaps are recognized as either assets or liabilities and measured at fair value. Changes in the fair value are recorded within other comprehensive income (loss).

Foreign currency forward contracts

We have entered into a number of forward contracts maturing on April 14, 2009 to purchase a total of $820.2 million and €151.0 million. The contracts hedge the variability in the pound sterling value of the principal obligation of the 8.75% senior notes and on the senior credit facility based on a variable rate of LIBOR, resulting from changes in the U.S. dollar, pound sterling and euro exchange rates.

The forward contracts are not effective as hedges under FAS 133. The forward contracts are still recognized as either assets or liabilities and measured at fair value but changes in the fair value are reported in the income statement. However, the forward contracts do not subject us to material volatility in our earnings and cash flows because changes in the fair value directionally and partially mitigate the gains or losses on the translation of the U.S. dollar and euro denominated senior notes and senior credit facility into pounds sterling.

Description of Outstanding Indebtedness

The terms of the significant notes and credit facilities issued by our subsidiaries as at March 31, 2005 are summarized below.

Senior Credit Facility

•: The principal amount outstanding is £1,665.0 million or $3,144.7 million. Our senior credit facility comprises a term facility denominated in a combination of pound sterling, euros and U.S. dollars totaling £1,665.0 million or $3,144.7 million, and a revolving facility of £250 million, or $472.0 million. The term facility was fully drawn and the revolving facility was undrawn at December 31, 2004. On February 4, 2005, we voluntarily prepaid £500.0 million, or $942.5 million, of the term facility.
•: Our senior credit facility bears interest at LIBOR plus mandatory costs plus a margin rate. The term facility and the revolving facility have different margin rates. At March 31, 2005, the effective average annual interest rate on the term facility was 7.10%. Interest is payable at least semi-annually.

•: The principal amount outstanding under the term facility is repayable by semi-annual installments beginning September 2004. The voluntary prepayment of £500 million made on February 4, 2005 included the scheduled repayments due in 2005 and reduced the scheduled repayments thereafter.
•: Most of our assets are secured under the senior credit facility.
•: We are subject to financial maintenance tests under our senior credit facility, including a test of liquidity, coverage and leverage ratios applied to us and some of our subsidiaries. As at March 31, 2005, we were in compliance with these covenants.

Senior Notes

•: 9.75% Senior Notes due April 15, 2014—The principal amount at maturity is £375 million. Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.
•: 8.75% Senior Notes due April 15, 2014—The principal amount at maturity is $425 million. Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.
•: 8.75% Senior Notes due April 15, 2014—The principal amount at maturity is €225 million. Interest is payable semi-annually on April 15 and October 15 commencing October 15, 2004.
•: Floating Rate Senior Notes due October 15, 2012—The principal amount at maturity is $100 million. The interest rate on the floating rate senior notes is three-month LIBOR plus 5.00%. Interest is payable quarterly on January 15, April 15, July 15 and October 15, commencing July 15, 2004.

Contractual Obligations and Commercial Commitments

The following table includes aggregate information about our contractual obligations as of March 31, 2005, and the periods in which payments are due (in millions).

			Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-Term Debt	$	4,672.8	$	72.3	$	434.6	$	638.3	$	3,527.6
Capital Lease Obligations		225.1		8.5		16.3		15.3		185.0
Operating Leases		817.6		84.6		147.1		109.0		476.9
Unconditional Purchase Obligations		327.9		278.2		49.7		—		—
Other Long-Term Obligations		—		—		—		—		—

Total Contractual Cash Obligations	$	6,043.4	$	443.6	$	647.7	$	762.6	$	4,189.5

The following table includes information about our commercial commitments as of March 31, 2005. Commercial commitments are items that we could be obligated to pay in the future. They are not required to be included in the consolidated balance sheet (in millions).

			Amount of Commitment Expiration per Period
Other Commercial Commitments	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Guarantees	$	38.2	$	22.6	$	—	$	—	$	15.6
Lines of Credit		—		—		—		—		—
Standby Letters of Credit		—		—		—		—		—
Standby Repurchase Obligations		—		—		—		—		—
Other Commercial Commitments		—		—		—		—		—

Total Commercial Commitments	$	38.2	$	22.6	$	—	$	—	$	15.6

Guarantees relate to performance bonds provided by banks on our behalf as part of our contractual obligations. The fair value of the guarantees has been calculated by reference to the monetary value of each bond.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, like foreign currency exchange and interest rates. We do not enter into derivative financial instruments for trading or speculative purposes.

We encounter currency exchange rate risks because substantially all of our revenues and operating costs are earned and paid primarily in pounds sterling and, to a lesser extent, euros, but we pay interest and principal obligations with respect to a portion of our existing indebtedness in U.S. dollars. To the extent that the pound declines in value against the U.S. dollar, the effective cost of servicing our U.S. dollar debt will be higher. Changes in the exchange rate result in foreign currency gains or losses. As of March 31, 2005, $920.2 million, or 19.4% of our long-term debt, was in U.S. dollars.

Because the revenues and expenses from our principal operations are denominated primarily in pounds sterling, but we report our financial results in U.S. dollars, our financial results also are impacted by currency fluctuations, which are unrelated to our underlying results of operations. The aggregate potential loss from a hypothetical one percent fall in the U.S. dollar/pound sterling exchange rate is $8.8 million for the three months ended March 31, 2005.

The fair market value of long-term fixed interest rate debt and the amount of future interest payments on variable interest rate debt are subject to interest rate risk.

The following table provides information as of March 31, 2005 about our long-term fixed and variable interest rate debt that are sensitive to changes in interest rates and foreign currency exchange rates (in millions).

			Year Ended December 31,
		Nine Months Ended December 31, 2005
										Fair Value March 31, 2005
			2006	2007	2008	2009	Thereafter	Total		Fair Value March 31, 2005
Long-term debt including current portion
U.S. Dollars
	Fixed rate	—	—	—	—	—	$425.0	$	425.0	$461.1
	Average interest rate						8.75%
Pounds Sterling
	Fixed rate	—	—	—	—	—	£375.0		£375.0	£382.5
	Average interest rate						9.75%
	Average forward exchange rate						1.89
Euros
	Fixed rate	—	—	—	—	—	€225.0		€225.0	€238.5
	Average interest rate						8.75%
	Average forward exchange rate						1.47
U.S. Dollars
	Variable Rate	—	—	—	—	—	$100.0	$	100.0	$103.3
	Average interest rate						LIBOR plus 5%
Pounds Sterling
	Variable Rate	—	£76.0	£121.1	£164.9	£162.0	£243.0		£767.0	£767.0
	Average interest rate		LIBOR plus 2.25%	LIBOR plus 2.25%	LIBOR plus 2.25%	LIBOR plus 2.25%	LIBOR plus 2.25%
	Average forward exchange rate		1.86	1.86	1.86	1.86	1.86
Pounds Sterling
	Variable Rate	—	—	—	—	—	£585.0		£585.0	£585.0
	Average interest rate						LIBOR plus 3%
	Average forward exchange rate						1.86
Euros
	Variable Rate	—					€151.0		€151.0	€151.0
	Average interest rate						LIBOR plus 3%
	Average forward exchange rate						1.43
U.S. Dollars
	Variable Rate						$395.2	$	395.2	$395.2
	Average interest rate						LIBOR plus 3%

ITEM 4. CONTROLS AND PROCEDURES

(a): Disclosure Controls and Procedures. Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, these controls and procedures are effective to ensure that information required to be disclosed by the registrant in the reports the registrant files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the registrant in the reports that it files or submits is accumulated and communicated to the registrant's management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b): Changes in Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

PTV, formerly NTL Europe, and some of its former officers, including Barclay Knapp, our former president and chief executive officer, have been named as defendants in a number of purported securities class action lawsuits and one individual action brought by former PTV stockholders. The complaints in those cases generally allege that the defendants failed to disclose PTV's financial condition, finances and future prospects accurately in press releases and other communications with investors prior to filing its Chapter 11 case in federal court. The defendants filed motions to dismiss the actions and, on July 31, 2003, the court entered an order dismissing the complaint in the individual action without prejudice to filing an amended complaint and deferred its decision on the complaint in the class action lawsuits. On August 20, 2003, the plaintiff in the individual action filed an amended complaint which the defendants moved to dismiss. The cases have been consolidated for all purposes before the U.S. District Court for the Southern District of New York. On December 7, 2004, the court denied in part and granted in part the defendants' motions to dismiss all actions. The court denied the defendants' motions to dismiss claims based on factual allegations that PTV (i) failed to disclose material difficulties it faced in integrating acquired companies, (ii) failed to disclose material practices that inflated subscriber numbers (with respect to some defendants), and (iii) failed to disclose the cash flow status of its largest acquisition during the relevant period (with respect to some defendants). The court found no factual support for the plaintiffs' other allegations. The defendants have informed us that they intend to defend these lawsuits vigorously. While PTV has been released from monetary liability (other than PTV's insurance coverage) in these actions as a result of the completion of the Plan, the case remains pending against PTV and the individuals named as defendants. We have not been named as a defendant. We may be liable for indemnification claims from some of PTV's former officers and directors, including Mr. Knapp, to the extent PTV's insurance coverage is insufficient.

Two separate proceedings that were initiated in the U.S. Bankruptcy Court for the Southern District of New York by Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P. requesting that we be held liable for alleged damages attributable to their trading in our "when-issued" common stock prior to the completion of the Plan were voluntarily dismissed by the plaintiffs in June 2003 without prejudice to recommencement in state court where related litigation against third parties is pending. The third parties are primarily the counterparties to the various trades made by Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P. On March 16, 2004, in an action to which we are not a party, a state court in New York granted the summary judgment motion of a U.S. broker dealer to require that "when-issued" trading in our common stock prior to the completion of the Plan be settled on an adjusted basis by the parties to the action in a manner to be set forth in an order of the state court, which was entered on July 1, 2004. Several plaintiffs have appeals pending. On March 30, 2004, Owl Creek Asset Management, L.P. and JMB Capital Partners, L.P. filed a complaint in the Supreme Court of the State of New York seeking to hold us and PTV liable for alleged damages attributable to some of their trading in our common stock on a "when-issued" basis. On April 13, 2004, the plaintiff agreed to adjourn the case until there has been a final determination in the aforementioned state court action, including any appeals in that action, by the U.S. broker dealer.

We are involved in various other disputes and litigation arising in the ordinary course of our business. None of these matters is expected to have a material adverse effect on our financial position, results of operation or cash flow.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer

Period		(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum approximate dollar value of shares that may yet be purchased under the plans or programs(1)
January 1 – 31, 2005		—	$	—	—	$	898,700,000
February 1 – 28, 2005		1,891,255	$	68.5770	1,891,255		768,956,051
March 1 – 31, 2005		—	$	—	—		768,956,051
April 1 – 30, 2005		1,349,685	$	63.3997	1,349,685		681,832,645

	Total	3,240,940	$	66.4210	3,240,940	$	681,832,645

(1): On January 31, 2005 we announced our plans to repurchase up to an aggregate of £475 million of our common stock. These repurchases could be made in the open market or by another method determined by us. Based upon an exchange rate of $1.8920 to £1.00, the noon buying rate on May 6, 2005, this would mean that approximately $681,832,645 of repurchases could be made in the future. Repurchases would be effected using proceeds from the sale of our broadcast operations, which were paid to us in pounds sterling. Accordingly, the actual maximum amount may differ due to changes in prevailing exchange rates.

On January 31, 2005, we announced our plans to repurchase up to £475 million of our common stock through one or more of the following methods; an open market program, one or more tender offers, or one or more private transactions. We effected repurchases of an aggregate of 3,240,940 shares of our common stock in the open market in the months of February and April, 2005 for an aggregate consideration of approximately $215 million. Since the repurchase program is subject to market factors, our competitive environment, exchange rates and other factors, no assurances can be made as to the method of undertaking repurchases, the schedule of any repurchases or whether we will continue repurchasing shares of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted for a vote to stockholders during the three months ended March 31, 2005.

ITEM 5. OTHER INFORMATION

Further repurchases of common stock

In April 2005, we repurchased 1,349,685 shares of our common stock on the open market for a total consideration of $85.6 million.

Sale of our operations in the Republic of Ireland

On May 9, 2005, we sold our operations in the Republic of Ireland, comprising all of the ordinary shares of ntl Communications (Ireland) Limited and ntl Irish Networks Limited and certain additional

assets, to MS Irish Cable Holdings B.V., an affiliate of Morgan Stanley & Co. International Limited, for an aggregate purchase price of €325 million, subject to a post-closing adjustment.

ITEM 6. EXHIBITS

2.1		Share Sale Agreement relating to ntl Communications (Ireland) Limited and ntl Irish Networks Limited, dated as of May 9, 2005, among ntl Group Limited, ntl Irish Holdings Limited, ntl (Chichester) Limited and MS Irish Cable Holdings B.V.
2.2		Deed of Tax Covenant relating to ntl Communications (Ireland) Limited, ntl Irish Networks Limited and their subsidiaries, dated as of May 9, 2005, among ntl Irish Holdings Limited, ntl (Chichester) Limited and MS Irish Cable Holdings B.V.
2.3		Asset Transfer Agreement, dated as of May 9, 2005, between ntl Group Limited and MS Irish Cable Holdings B.V.
31.1		Certification of Chief Executive Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act.
31.2		Certification of Chief Financial Officer, pursuant to Rule 13(a)-14(a) and Rule 15d-14(a) of the Exchange Act.
32.1		Certifications of CEO and CFO Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
99.1		Press Release, dated May 9, 2005, issued by the Company.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NTL INCORPORATED
Date: May 10, 2005	By:	/s/ SIMON P. DUFFY Simon P. Duffy Chief Executive Officer, President and Director
Date: May 10, 2005	By:	/s/ JACQUES KERREST Jacques Kerrest Chief Financial Officer

QuickLinks

INDEX
PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

SIGNATURES
EX-2.1 2 a2157664zex-2_1.htm EXHIBIT 2.1

Exhibit 2.1

Dated 9 May 2005

(1) NTL GROUP LIMITED

(2) NTL IRISH HOLDINGS LIMITED

(3) NTL (CHICHESTER) LIMITED

(4) MS IRISH CABLE HOLDINGS B.V.

SHARE SALE AGREEMENT

RELATING TO

NTL COMMUNICATIONS (IRELAND) LIMITED

AND NTL IRISH NETWORKS LIMITED

CONTENTS

CLAUSE OF AGREEMENT

1.	DEFINITIONS AND INTERPRETATION
2.	SALE OF SHARES AND ADDITIONAL ASSETS
3.	CONSIDERATION AND ADJUSTMENT
4.	POST-COMPLETION OBLIGATIONS
5.	COMPLETION
6.	ADDITIONAL CORE ASSETS/HISTORIC USE OF ASSETS/NO FURTHER CLAIMS
7.	WARRANTIES
8.	PROTECTION OF GOODWILL
9.	CONFIDENTIALITY
10.	ANNOUNCEMENTS
11.	COSTS
12.	POST-COMPLETION ARRANGEMENTS
13.	USE OF NTL NAME AND LOGO
14.	GUARANTEE
15.	APPLICABLE LAW AND JURISDICTION
16.	GENERAL
17.	NOTICES

SCHEDULES

1.	TARGET GROUP COMPANIES
2.	COMPLETION OBLIGATIONS
3.	WARRANTIES
4.	LIMITATIONS ON CLAIMS
5.	ANCILLARY AGREEMENTS
6.	PROPERTIES
7.	ADJUSTMENT STATEMENT
8.	NATTRANS GUARANTEES

DOCUMENTS IN THE APPROVED TERMS

1.	ASSET TRANSFER AGREEMENT
2.	NOVATION AGREEMENT
3.	FRAMEWORK SERVICES AGREEMENT
4.	ANCILLARY AGREEMENTS
5.	ANNOUNCEMENT
6.	TAX DEED
7.	DATA ROOM DOCUMENTS
8.	RESIGNATION LETTERS
9.	RELEASES OF SECURITY
10.	LEGAL OPINION
11.	POWERS OF ATTORNEY
12.	NOVATION DOCUMENTATION

THIS AGREEMENT is made on 9 May 2005

BETWEEN:

(1) NTL GROUP LIMITED, incorporated in England and Wales with registered number 2591237 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“NGL”);

(2) NTL IRISH HOLDINGS LIMITED, incorporated in England and Wales with registered number 5313953 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“Holdings”);

(3) NTL (CHICHESTER) LIMITED, incorporated in England and Wales with registered number 3056817 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“Chichester”); and

(4) MS IRISH CABLE HOLDINGS B.V., incorporated in The Netherlands, with registered number 34225555 and whose registered office is at Locatellikade 1, 1076AZ, Amsterdam, The Netherlands (“Buyer”).

INTRODUCTION

(A) Holdings has agreed to sell the Communications Shares and Chichester has agreed to sell the Networks Shares, in each case on the terms and conditions of this Agreement.

(B) NGL has agreed to procure the sale of certain Additional Assets by members of the Core Group to the Buyer pursuant to a separate Asset Transfer Agreement to be entered into between NGL and the Buyer upon Completion.

(C) The Buyer has agreed to buy the Shares and the Additional Assets on the terms and conditions of this Agreement and the Asset Transfer Agreement respectively.

(D) NGL has agreed to guarantee the obligations of Holdings and Chichester, inter alia, under this Agreement and the Asset Transfer Agreement.

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 The following words and expressions where used in this Agreement have the meanings given to them below:

2002 Accounts

the audited consolidated financial statements of Communications and its subsidiaries, prepared in

		accordance with the Irish Acts, for the 12 month period ended on 31 December 2002, together with the directors’ and auditors’ reports and notes on those accounts, attached to the Disclosure Letter.

2003 Accounts		the audited consolidated financial statements of Communications and its subsidiaries, prepared in accordance with the Irish Acts, for the 12 month period ended on 31 December 2003, together with the directors’ and auditors’ reports and notes on those accounts, attached to the Disclosure Letter.

Accounts		the audited consolidated financial statements of Communications and its subsidiaries, prepared in accordance with the Irish Acts, for the 12 month period ended on the Accounts Date, together with the directors’ and auditors’ reports and notes on those accounts, attached to the Disclosure Letter.

Accounts Date		31 December 2004.

Additional Assets		the assets to be sold under the terms of the Asset Transfer Agreement.

Additional Contracts		has the meaning given in the Asset Transfer Agreement.

Additional Core Assets		has the meaning given in clause 6.1.

Adjustment Date		30 April 2005.

Adjustment Statement		has the meaning given in clause 3.7.

Aggregate Consideration		the Consideration and the Assets Consideration.

Ancillary Agreements		those agreements in the approved terms listed in Schedule 5.

Announcement		the announcement in the approved terms relating to the Transaction.

Appointment Period		has the meaning given in clause 3.11.1.

Assets		all tangible and intangible assets including, without limitation, book debts, business claims, business information, prepayments, goodwill, real property, Intellectual Property Rights, plant, equipment, licences and the benefit of contracts.

Assets Consideration		has the meaning given in clause 3.3.

Asset Sharing Agreement		the agreement in the approved terms to be entered into between NGL and the Buyer on Completion in connection with the separation of the Irish Cable Business from the Core Business.

Asset Transfer Agreement		the asset transfer agreement in the approved terms to be entered into between NGL and the Buyer on Completion.

Borrowings		all obligations for borrowed money, all obligations evidenced by notes, debentures, bonds, loan stock, commercial paper or instruments (whether secured or unsecured), and all finance and capital lease obligations.

Business Plan		the business plan of the Irish Cable Business for the period from 2005 to 2010, which is contained in the Data Room Documents.

Business Day		any day other than a Saturday, Sunday or bank or public holiday in England or Ireland.

Buyer Group		the Buyer, any parent undertaking of the Buyer and any subsidiary undertaking of the Buyer or such parent undertaking from time to time (including with effect from Completion every Target Group Company) and references to “Buyer Group Company” and to “any member of the Buyer Group” shall be construed accordingly.

Buyer’s Solicitors		William Fry of Fitzwilton House, Wilton Place, Dublin 2.

Buyer Undertaking		the undertaking dated today’s date between NGL, the Sellers and the Buyer in relation to the Transaction.

Cable Assets	has the meaning given in clause 6.2.

Communications	ntl Communications (Ireland) Limited, a company incorporated in Ireland with registered number 32156.

Communications Consideration	has the meaning given in clause 3.1.

Communications Shares	all of the ordinary shares of Communications in issue at Completion.

Competitive Activities	has the meaning given in clause 8.1.

Completion	completion of the sale and purchase of the Shares under this Agreement.

Completion Cash	the aggregate amount, as at 23:59 hours in Ireland on the Adjustment Date, of:

	(a)	all cash in hand and cash in transit of any member of the Target Group;

	(b)	all accrued unpaid/uncredited interest due to a member of the Target Group on cash held;

	(c)	all cash deposits (whether on current account or otherwise) with any bank by any member of the Target Group;

	(d)	all amounts held on behalf of any member of the Target Group in blocked accounts to support guarantees/bonds in respect of licences or other arrangements to the extent that the same would be shown as cash in statutory accounts of the Target Group prepared in accordance with GAAP and the Irish Acts;

	(e)	the full face value of any deposited or undeposited uncashed cheques, bank transfers or BACS payments dated on or before Completion, in each case in favour

			of any member of the Target Group;

	(f)		the realisable value of certificates of governments and companies or other readily realisable deposits owned by any member of the Target Group; and

	(g)		the amount of any pre-paid expenses in advance in respect of rent payments and insurance premiums of any member of the Target Group.

Completion Date	the date of this Agreement.

Completion Indebtedness	the aggregate amount, as at 23:59 hours in Ireland on the Adjustment Date, of:

	(a)	any indebtedness (whether being principal, premium, accrued unpaid interest, accrued discount or other amounts) for or in respect of money borrowed or raised by any member of the Target Group;

	(b)	the principal amount of any debenture, bonds, notes, loan stock, commercial paper or instruments (whether secured or unsecured and whether bearer or registered) of any member of the Target Group;

	(c)	the capital element of any finance leases of any member of the Target Group which would be shown at the relevant time as an obligation in a balance sheet and prepared in accordance with the accounting principles used in the preparation of the relevant balance sheet;

	(d)	any standby or documentary letter of credit or any other similar instrument issued by a bank or financial institution; and

	(e)	the amount of any liability in respect of any guarantee, indemnity or other security for any of the items referred to in paragraphs (a) to (d) above,

	but excluding (i) the intercompany debt (and accrued interest thereon) owed by Communications to ntl Communications Limited, provided that it has been novated in full to Holdings (or another member of the Core Group) on or prior to Completion in accordance with clause 4.2; (ii) the intercompany debt (and accrued interest thereon) owed by Communications to NTL Incorporated, provided that it has been novated in full to Holdings (or another member of the Core Group) on or prior to Completion in accordance with clause 4.2; (iii) any guarantees, indemnities or other Security Interests provided by the Target Group to the extent that they are released upon Completion; and (iv) any operating leases.

Confidentiality Agreement	the confidentiality agreement entered into between NGL and Morgan Stanley & Co. International Limited dated 13 April 2005 in connection with the Transaction.

Consideration	has the meaning given in clause 3.1.

Consideration Adjustment	has the meaning given in clause 3.4.

control	the power to direct the affairs of any person, directly or indirectly, by reason of ownership of voting shares, by contract or otherwise and “controlled” and “controlling” shall be construed accordingly.

Core Business	all of the businesses carried on by the NTL Group at Completion other than the Irish Cable Business.

Core Group	the NTL Group other than the Target Group.

Data Room Documents	the documentation relating to the Irish Cable Business (including, for the avoidance of doubt, the Business Plan), the Target Group Companies, the Additional Assets and, insofar as such information

		relates to the separation of the Irish Cable Business from the Core Business, the Core Group which was made available to the Buyer as listed in an index in the approved terms.

Direct Competitor		means any person that competes with any material part of the Core Business in the United Kingdom (other than any member of the UGC Group).

Disclosed Matters		any fact, matter, event or circumstance which is Fairly Disclosed in this Agreement, the Disclosure Letter and/or the Data Room Documents.

Disclosure Letter		the letter dated the date of this Agreement from the Sellers to the Buyer containing disclosures against the Warranties.

Domain Name Licence		the licence in the approved terms to be entered into upon Completion between NGL, Communications and Networks in respect of the domain names “ntl.ie” and “ntlworld.ie”.

Eircom Duct		the Remaining Infrastructure, as defined in the Communications Infrastructure Agreement dated 20th August 2003 between eircom Limited and Communications (the “2003 Agreement”) and as more particularly described in the table and map contained in Schedule 1 to the 2003 Agreement.

Employees		the employees of the Target Group at the date of this Agreement.

Environmental Claim		any litigation, claim, proceeding, notice of violation, demand, action, official warning, abatement, enforcement, notice or order relating to any Environmental Matter.

Environmental Laws		all applicable European, national and local laws concerning Environmental Matters in force at the date of this Agreement including but not limited to regulations, directives, statutes, secondary legislation and statutory guidance.

Environmental Matters		all matters relating to health and safety, waste, nuisance, discharges, emissions, deposits, disposals and releases to land, air and water, and the sale, import, export, manufacture, use, treatment, storage, handling, deposit, transport or disposal of chemicals, wastes, radioactive substances or any other polluting, dangerous, hazardous or toxic substances or materials or forms of energy.

Fairly Disclosed		disclosed in a manner and with such reasonable accuracy and detail so as to enable the Buyer (as advised by its legal and financial advisers and technical consultants) to make an informed and proper assessment of the matters concerned, their nature and effect and “Fair Disclosure” shall be interpreted accordingly.

Final Adjustment Payment		has the meaning given in clause 3.6.

Framework Services Agreement		the agreement dated today’s date between NGL, Communications and the Buyer relating, inter alia, to the services to be provided between the Core Group and the Target Group under the terms of the Ancillary Agreements.

GAAP		means generally accepted accounting standards, principles and practice in Ireland with respect to accounts of companies incorporated under the laws of Ireland, being accounts that are intended to give a true and fair view.

Group		in relation to a body corporate, any parent undertaking of such body corporate and any subsidiary undertaking of such body corporate and any subsidiary undertaking of any such parent undertaking from time to time.

Holdings Debt		the intercompany debt owing from Holdings to Communications at Completion.

IBM Outsourcing Agreements		the Framework Agreement between NGL and IBM United Kingdom Limited for the provision of IT Outsourcing Services dated 23 May 2001 and the associated Ireland Services Agreement between

		Communications and IBM Ireland Limited also dated 23 May 2001 as both agreements have been amended from time to time.

ICA		the Irish Competition Authority.

Initial Consideration Adjustment		has the meaning given in clause 3.5.

Intellectual Property Rights		patents, trade marks, trade names, service marks, domain names, design rights, copyright, rights in databases, Know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any such rights and all rights having equivalent or similar effect anywhere in the world.

Irish Acts		the Companies Acts 1963 to 2003 of Ireland.

Irish Cable Business		the cable and MMDS television, telephony, broadband services and business telecommunication services businesses carried on by the Target Group at the date of this Agreement.

Irish Transfer Agreement		the Irish Transfer Agreement dated 30 November 2004 between Networks, NGL and NatTrans.

IT Systems		(a) all computer software together with all computer and data processing hardware used exclusively by the Irish Cable Business, but excluding the Retained IT Systems and (b) for the purposes of paragraphs 1.2 and 1.3 of Part X of Schedule 3 only, all computer software together with all computer and data processing hardware used, operated or managed by IBM UK Limited or IBM Ireland Limited in connection with the Irish Cable Business under the IBM Outsourcing Agreements.

Know-how		inventions, discoveries, improvements, processes, formulae, techniques, specifications, technical information, methods, tests, reports component lists, manuals, instructions, drawings and information relating to customers and suppliers (whether written, unwritten or in any other form).

LCIA	has the meaning given in clause 15.2.

Management Accounts	the unaudited consolidated balance sheet of Communications and its subsidiaries and the unaudited profit and loss account of Communications and its subsidiaries for the period from 31 December 2004 to 31 March 2005 as annexed to the Disclosure Letter.

Material Customer	a customer of the Target Group in respect of whom invoices raised for the 12 month period ended on 31 March 2005 exceeded €250,000 (two hundred and fifty thousand euro) (excluding VAT).

Material Customer Contract	a material contract relating to the supply of products or services by the Target Group to a Material Customer.

Material Supplier	a supplier to the Target Group in respect of whom expenditure for the 12 month period ended on 31 March 2005 exceeded €800,000 (eight hundred thousand euro).

Material Supplier Contract	a material contract relating to the supply of products or services to the Target Group by a Material Supplier.

Merger Event	(a)	any merger, amalgamation or consolidation of any member of the NTL Group with a Merger Partner (or any subsidiary or parent undertaking of a Merger Partner) which results in the NTL Group and the Merger Partner’s Group forming one and the same group of companies;

	(b)	the acquisition by any member of the NTL Group of a majority of the issued share capital of a Merger Partner (or any subsidiary or parent undertaking of a Merger Partner); or

	(c)	the acquisition by a Merger Partner (or any subsidiary or parent undertaking of a Merger

		Partner) of any member of the NTL Group, or the acquisition by any person of both a member of the NTL Group and a Merger Partner, which results in all or substantially all of the assets and business of the NTL Group being acquired by or forming part of the Merger Partner’s Group or coming under common control with the Merger Partner or all or substantially all of the assets and business of the Merger Partner being acquired by or forming part of the NTL Group or coming under common control with the NTL Group.

Merger Partner	a person whose operations (and the operations of whose Group) are based predominantly in the UK and whose Group’s principal area of business is the provision of broadband or telecoms services, including without limitation, residential telephones, cable television and Internet services.

month	a calendar month.

NatTrans	National Transcommunications Limited, a company incorporated in England and Wales with registered number 2487597.

NatTrans Guarantees	has the meaning given in clause 12.3.

Net Cash	the difference between Completion Cash and Completion Indebtedness.

Net Working Capital	the net working capital of the Target Group, as at 23:59 hours in Ireland on the Adjustment Date, comprising those items set out in paragraph 1.3 of Part III of Schedule 7, as calculated on the basis of the requirements, accounting policies and accounting methods set out in Schedule 7.

Networks	ntl Irish Networks Limited, a company incorporated in Ireland with registered number 393660.

Networks Consideration	has the meaning given in clause 3.1.2.

Networks Shares	all of the ordinary shares of Networks in issue at Completion.

Non-compete Period	has the meaning given in clause 8.1.

Novation Agreement	the agreement in the approved terms to be entered into on Completion between Communications, Holdings and the Buyer in relation to the novation from Holdings to the Buyer of the Holdings Debt.

NTL Group	NTL Holdco and any subsidiary undertaking of NTL Holdco from time to time, (excluding, after Completion, every Target Group Company) and references to “NTL Group Company” and to “any member of the NTL Group” shall be construed accordingly.

NTL Holdco	NTL Incorporated or any new immediate holding company of NTL Incorporated which is established after the date of this Agreement as part of a reorganisation, whose only significant asset is the securities in NTL Incorporated and whose common stock (or equivalent) is publicly traded on a securities exchange.

party	a party to this Agreement.

Permitted Security Interests	(a)	mechanics’, carriers’, workmen’s, repairmen’s liens or other liens subsisting solely by operation of law arising or incurred in the ordinary course of the Irish Cable Business;

	(b)	conditional sales contracts and equipment leases with third parties entered into in the ordinary course of the Irish Cable Business;

	(c)	Security Interests for Taxation, assessments and other governmental charges that are not due and payable or that may thereafter be paid without penalty or that are being contested in good faith;

	(d)	Security Interests in respect of any right of set-off, netting arrangement, title transfer or title retention arrangements arising in the ordinary course of the Irish Cable Business; and

	(e)	Security Interests which will be released on or prior to Completion.

Properties	the freehold or leasehold properties listed in Schedule 6 (being (a) those properties which are considered by the management of the Irish Cable Business to be material to the day to day operation of the Irish Cable Business; and (b) those leasehold properties in respect of which a member of the Target Group has an outstanding financial commitment in excess of €500,000 (five hundred thousand euro)).

Relevant Group	in relation to any covenants, obligations, undertakings or warranties given by Holdings, the Target Group (other than Networks), and in relation to any covenants, obligations, undertakings or warranties given by Chichester, Networks, and references to “Relevant Group Company” and to “any member of the Relevant Group” shall be construed accordingly.

Relevant Persons	each of the individuals named in the letter dated today’s date between NGL, the Sellers and the Buyer.

Remedial Action	any steps necessary for limiting, removing, remedying, abating, mitigating, containing, preventing, monitoring or investigating any actual or potential harm to the environment, human health, land or buildings.

Representatives	means, with respect to any person, such person’s employees, legal advisers, accountants and other representatives and professional advisers.

Resolution Period	has the meaning given in clause 3.11.1.

Retained Confidential Information		all information (whether oral or recorded in any medium) relating to the business, future plans, financial or other affairs of any member of the NTL Group (including for these purposes any member of the Target Group) which is treated by that NTL Group Company as confidential (or is marked or is by its nature confidential), other than Target Confidential Information.

Retained IT Systems		the computer software used by the Irish Cable Business, together with all computer and data processing hardware used by the Irish Cable Business, which will be managed and operated by the Core Group and provided to the Irish Cable Group under the terms of the Ancillary Agreements.

Review Period		has the meaning given in clause 3.9.

Schemes		the ntl Defined Contribution & Death Benefit Plan and the ntl Limited Retirement and Death Benefit Plan or the trustees of each or every such scheme as the context determines.

Security Interest		any mortgage, charge, lien, pledge or other security interest of any kind and any agreement to create any of the foregoing.

Sellers		Holdings and Chichester, and references to a “Seller” shall be construed accordingly.

Sellers’ English Solicitors		Travers Smith of 10 Snow Hill, London EC1A 2AL.

Sellers’ Irish Solicitors		Arthur Cox (acting by Ciarán Bolger) of Earlsfort Centre, Earlsfort Terrace, Dublin 2.

Senior Credit Facility		the £2,425,000,000 Senior Facilities Agreement dated 13 April 2004 between, inter alia, NTL Incorporated, ntl Investment Holdings Limited, the Mandated Lead Arrangers, the Facility Agent and Security Trustee, the Administrative Agent and the Lenders (as each such term is defined therein), as from time to time amended, modified or otherwise varied.

Senior Note Indenture		the indenture dated 13 April 2004 entered into by NTL Cable PLC, NTL Incorporated, NTL (UK) Group Inc., ntl Communications Limited, ntl Investment Holdings Limited and the Bank of New York (as Trustee) in relation to the 9.75% Senior Notes due 2014, the 8.75% Senior Notes due 2014 and the Floating Rate Senior Notes due 2012, as from time to time amended, modified or otherwise varied.

Shares		the Communications Shares and the Networks Shares.

Subscriber		an active customer of the Target Group who is receiving services and who is not in payment arrears by more than the period allowed by the Target Group’s current practice for terminating services for payment arrears (it being acknowledged that its practice may give a longer period to remedy any arrears in payment than its stated policy).

Target Change of Control		means the direct or indirect acquisition by or of a Direct Competitor at any time after the Completion Date, whether by sale, merger, operation of law or otherwise, resulting in such Direct Competitor acquiring control of, being acquired by or coming under common control with (i) the Target Group; or (ii) a portion of the assets of the Irish Cable Business which was material to the Irish Cable Business taken as a whole immediately prior to Completion.

Target Confidential Information		all information (whether oral or recorded in any medium) relating exclusively to the Irish Cable Business and/or the Additional Assets which is designated by any member of the Target Group as confidential (or is marked as or is by its nature confidential).

Target Group		Communications, Networks, ntl Communications (Waterford) Limited, ntl Construction Limited, ntl Communications (Galway) Limited and ntl Dublin Cablesystems Limited and references to “Target Group Company” shall be construed accordingly.

Tax and Taxation		has the meaning given in the Tax Deed.

Tax Deed		the deed in the approved terms to be entered into by the Buyer and the Sellers at Completion, relating to certain Taxation liabilities of the Target Group.

TCA		the Taxes Consolidation Act 1997 of Ireland.

Transaction		the matters contemplated by this Agreement and the Asset Transfer Agreement.

Transaction Documents		this Agreement and any other document referred to in this Agreement or required to be entered into pursuant to this Agreement (including, without limitation, the Asset Transfer Agreement and the Ancillary Agreements).

UGC		United Pan Europe Communications N.V.

UGC Group		UGC, any parent undertaking of UGC and any subsidiary undertaking of UGC and any subsidiary undertaking of any such parent undertaking from time to time.

UK		the United Kingdom of Great Britain and Northern Ireland.

VAT		Value Added Tax.

VATA		the Value Added Tax Act 1972 (as amended) of Ireland.

Warranties		the Warranties given by the Sellers, set out in Schedule 3.

West Corner Unit		the lease of the West Unit, Willsborough Industrial Estate, as more particularly described in Part II of Schedule 6.

1.2 Unless the context requires otherwise, words and expressions defined in or having a meaning provided by the Companies Act 1985 at today’s date, shall have the same meaning in this Agreement.

1.3 Unless the context requires otherwise, references in this Agreement to:

1.3.1 any of the masculine, feminine and neuter genders shall include other genders;

1.3.2 a “person” shall include a reference to any natural person, body corporate (including, without limitation, a limited liability company), unincorporated association, partnership and trust and its permitted assigns and successors;

1.3.3 a company shall include reference to any body corporate;

1.3.4 any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed so as to include a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated or re-enacted except to the extent that any amendment or modification made after the date of this Agreement would increase any liability or impose any additional obligation upon the Sellers under this Agreement;

1.3.5 any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than that of England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term;

1.3.6 any time or date shall be construed as a reference to the time or date prevailing in England;

1.3.7 a particular government or statutory authority shall include any entity which is a successor to that authority; and

1.3.8 references to Ireland exclude Northern Ireland.

1.4 The headings in this Agreement are for convenience only and shall not affect its meaning. References to a “clause”, “Schedule” or “paragraph” are (unless otherwise stated) to a clause of and Schedule to this Agreement and to a paragraph of the relevant Schedule. The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

1.5 A document expressed to be “in the approved terms” means a document, the terms of which have been approved by the parties and a copy of which has been identified as such and initialled by or on behalf of each of NGL and the Buyer.

1.6 A document expressed to be an “Annexure” means a document a copy of which has been identified as such and initialled by or on behalf of each of NGL and the Buyer.

2. SALE OF SHARES AND ADDITIONAL ASSETS

2.1 Holdings shall sell with full title guarantee the Communications Shares, Chichester shall sell with full title guarantee the Networks Shares and the Buyer shall buy the Communications Shares and the Networks Shares on the terms and conditions of this Agreement. At Completion, the Sellers will have the right to transfer legal and beneficial title to the Shares to the Buyer.

2.2 Holdings and Chichester shall procure that the Buyer acquires good title to the Communications Shares and the Networks Shares respectively, free from all Security Interests except any and all such Security Interests that may have been created by the Buyer.

2.3 The Buyer shall buy the Shares with effect from and including the Completion Date to the intent that as from that date all rights and advantages accruing to the Shares, including any dividends or distributions declared, made or paid on the Shares on or after that date shall belong to the Buyer.

2.4 Upon Completion, NGL and the Buyer shall enter into the Asset Transfer Agreement pursuant to which NGL shall procure the sale by certain members of the Core Group to the Buyer of the Additional Assets on the terms and conditions of the Asset Transfer Agreement.

2.5 The Buyer shall not be obliged to complete the purchase of any of the Shares or the Additional Assets and neither Holdings nor Chichester nor NGL shall be obliged to sell any of the Shares or the Additional Assets unless, in each case, the sale of all the Shares and the Additional Assets is completed simultaneously in accordance with the terms and conditions of this Agreement and the Asset Transfer Agreement respectively, and the provisions of clause 5.2 are complied with.

3. CONSIDERATION AND ADJUSTMENT

Consideration for the Shares

3.1 Subject to any adjustment pursuant to clauses 3.4, 3.5 and 3.6, the consideration for the sale of the Shares shall be as follows:

3.1.1 for the Communications Shares:

(a) €320,784,186 (three hundred and twenty million, seven hundred and eighty four thousand, one hundred and eighty six euro) (the “Communications Consideration”); and

(b) the assumption by the Buyer of the Holdings Debt under the terms of the Novation Agreement; and

3.1.2 for the Networks Shares: €1,938,000 (one million nine hundred and thirty eight thousand euro) (the “Networks Consideration”),

(the Communications Consideration and the Networks Consideration together being the “Consideration”).

3.2 At Completion, the Buyer shall pay the Consideration plus the amount of the estimated adjustment referred to in clause 3.5 to such bank accounts as NGL (as agent for the Sellers) shall specify by written notice to the Buyer prior to execution of this Agreement.

Consideration for the Additional Assets

3.3 The consideration for the sale of the Additional Assets shall be €2,277,814 (two million, two hundred and seventy seven thousand, eight hundred and fourteen euro) (the “Assets Consideration”) which shall be payable in accordance with the provisions of the Asset Transfer Agreement.

Consideration Adjustment

3.4 The Consideration shall be subject to adjustment on the following basis (such basis being the “Consideration Adjustment”):

3.4.1 if the amount of Completion Cash is greater than the amount of Completion Indebtedness (in each case as shown in the Adjustment Statement), the Consideration shall be increased by the amount of the Net Cash; or

3.4.2 if the amount of Completion Cash is less than the amount of Completion Indebtedness (in each case as shown in the Adjustment Statement), the Consideration shall be reduced by the amount of the Net Cash,

PROVIDED THAT if the Net Working Capital as shown in the Adjustment Statement is more negative than €(28,800,000) (negative twenty eight million eight hundred thousand euro), then the amount of the Consideration (as adjusted pursuant to sub-clauses 3.4.1 or 3.4.2 above) shall be reduced by the amount of such excess. By way of example: (a) if Net Working Capital is €(28,900,000) (negative twenty eight million nine hundred thousand euro), the Consideration shall be reduced by €100,000 (one hundred thousand euro), whereas (b) if Net Working Capital is €(28,700,000) (negative twenty eight million seven hundred thousand euro), there will be no reduction in the Consideration by reference to the Net Working Capital).

Initial Consideration Adjustment

3.5 NGL (as agent for the Sellers) estimates that the adjustment to be made pursuant to clause 3.4 shall result in an increase of €8,412,000 (eight million four hundred and twelve thousand euro) in the Consideration to be paid by the Buyer (such estimated increase being the “Initial Consideration Adjustment”) and the Consideration payable by the Buyer pursuant to clause 3.2 shall be increased accordingly.

Final Consideration Adjustment

3.6 Not later than five (5) Business Days after the Adjustment Statement is agreed or deemed agreed under clauses 3.9.1 or 3.10 or finally determined under clause 3.11, the Consideration Adjustment shall be calculated on the basis of the amounts of Consideration Cash, Consideration Indebtedness and Net Working Capital shown in the Adjustment Statement (as agreed or deemed agreed) to determine the definitive amount of the adjustments to be made to the Consideration, and:

3.6.1 if the calculation of the Consideration as adjusted pursuant to clause 3.4 by reference to the Adjustment Statement (as agreed or deemed agreed) is more than the Consideration paid as adjusted pursuant to clause 3.5, the Buyer shall, within such five (5) Business Day period, pay to the Sellers an amount equal to the difference by way of further adjustment to the Consideration; or

3.6.2 if the calculation of the Consideration as adjusted pursuant to clause 3.4 by reference to the Adjustment Statement (as agreed or deemed agreed) is less than the Consideration paid as adjusted pursuant to clause 3.5, the Sellers shall, within such five (5) Business Day period, pay to the Buyer an amount equal to the difference by way of further adjustment to the Consideration,

(any such payment pursuant to sub-clauses 3.6.1 or 3.6.2 being the “Final Adjustment Payment”).

Preparation of Adjustment Statement

3.7 As soon as practicable following Completion, but (subject to compliance by the Buyer with its obligations under clause 3.12) in any event within twenty (20) Business Days after the Completion Date, NGL (as agent for the Sellers) shall prepare a draft statement identifying:

3.7.1 the Completion Cash and the Completion Indebtedness; and

3.7.2 the Net Working Capital,

for the purpose of determining the amount of the Final Adjustment Payment (the “Adjustment Statement”). NGL shall prepare the draft Adjustment Statement on the basis

of the requirements, accounting policies and accounting methods set out in Parts II and III of Schedule 7, and in the same (or substantially the same) format as the Pro-Forma Adjustment Statement set out in Part I of Schedule 7.

3.8 The Buyer and the Sellers agree that the sole purpose of the Adjustment Statement is to determine the Completion Cash, the Completion Indebtedness and the Net Working Capital. The Adjustment Statement is not intended to permit the introduction of different judgments, accounting methods, policies, practices, procedures, classifications or estimation methodology for the purposes of determining the Completion Cash, the Completion Indebtedness and/or the Net Working Capital from those used in the preparation of the Accounts (other than to the extent provided in Schedule 7).

3.9 When the draft Adjustment Statement has been prepared, NGL shall as soon as reasonably practicable thereafter deliver a copy of such statement to the Buyer together with certificates of the Completion Cash, the Completion Indebtedness and the Net Working Capital. The Buyer and its accountants shall then have a period of twenty (20) Business Days after the date on which NGL delivers the draft Adjustment Statement to the Buyer (the “Review Period”) within which to review the draft Adjustment Statement. The Buyer shall, before the expiry of the Review Period, either:

3.9.1 confirm in writing to NGL that it agrees that the draft Adjustment Statement has been duly prepared and that the value of the Completion Cash, the Completion Indebtedness and/or the Net Working Capital has been correctly certified; or

3.9.2 give notice in writing to NGL explaining, in reasonable detail, why it disagrees that the Adjustment Statement has been duly prepared and that the value of the Completion Cash, the Completion Indebtedness and/or the Net Working Capital has been correctly certified and setting out details of its proposed adjustments to the draft Adjustment Statement and to the value of the Completion Cash, the Completion Indebtedness and/or the Net Working Capital (if any); provided that the Buyer may only give such notice pursuant to this sub-clause 3.9.2 if the aggregate value of its proposed adjustments to the Completion Cash, the Completion Indebtedness and the Net Working Capital exceeds €200,000 (two hundred thousand euro).

3.10 If the Buyer fails to give the confirmation or notice in accordance with clause 3.9, the draft Adjustment Statement and the certificates of the Completion Cash, the Completion Indebtedness and/or the Net Working Capital (as applicable) as delivered by NGL pursuant to clause 3.9 shall, upon expiry of the Review Period, be deemed to have been finally accepted and agreed by the parties.

3.11 If the Buyer serves a valid notice in accordance with clause 3.9.2

3.11.1 the parties shall endeavour to resolve all matters in dispute as soon as practicable. If they fail to resolve such matters within twenty (20) Business Days of the date on which NGL receives such notice from the Buyer (or such longer period as NGL and the Buyer shall agree) (the “Resolution Period”), the matters shall be referred for final determination to a team within Ernst & Young LLP which do not provide directly any audit or other services to either the NTL Group or the Buyer Group. If such firm is unable to serve, the Buyer and NGL shall jointly select an expert from an accounting firm of national standing in the UK that is not the independent auditor of either the Buyer or NGL (or any member of the Buyer Group or the NTL Group). If NGL and the Buyer fail to make such appointment within the ten (10) Business Days of the end of the Resolution Period (the “Appointment Period”), the appointment shall be made on behalf of NGL and the Buyer by the President for the time being of the Institute of Chartered Accountants in England and Wales as soon as practicable after the expiry of the Appointment Period, on the application of either NGL or the Buyer. Such accountant shall be instructed to determine the dispute in accordance with the provisions of this clause 3 and to make such determination as soon as practicable and in any event within thirty (30) Business Days of his being instructed. Such accountant shall only consider those items and amounts set forth in the Adjustment Statement as to which the Buyer and NGL have disagreed within the time periods and on the terms specified above, and shall select as a resolution the position of either the Buyer or NGL for each item of disagreement (based solely on presentations and supporting material provided by the parties and not pursuant to any independent review). Such accountant shall not impose an alternative resolution. In making such determination, such accountant shall act as an expert and not as an arbitrator and his decision shall (in the absence of manifest error) be final and binding on the parties. The costs of such accountant shall be borne by the Sellers and the Buyer in such proportions as he may direct, or in the absence of any such direction, as to one half by the Buyer and as to the other half by the Sellers; and

3.11.2 save as provided in clause 3.11.1, the parties shall bear their own costs in connection with the resolution of the matters in dispute.

3.12 The Buyer and its accountants shall be entitled to examine the working papers relating to the draft Adjustment Statement for the purposes of their review under clause 3.9. The Buyer agrees that it will promptly upon request provide NGL and its advisers with access to or copies of all accounting information and other information relating to the operations and affairs of the Target Group in its possession or control or in the possession or control of the Buyer and such access to the personnel and records of the Target Group, as may be relevant for the purposes of preparing the first draft of the Adjustment Statement within the timetable envisaged by this clause 3, or as may reasonably be required to facilitate the determination of any dispute in relation thereto.

3.13 Any Final Adjustment Payment shall be paid by the Buyer or the Sellers, as applicable, in accordance with clause 3.6 in cash in euro by wire transfer of immediately available funds to an account designated in writing by the party entitled to receive such payment together with an amount equal to the interest which would have accrued on the amount of such reduction or increase from the Completion Date to the date of such payment thereof if interest had been payable at the per annum rate equal to the 6 month London Interbank Offer Rate on the Completion Date, as published in The Wall Street Journal.

3.14 The Sellers and the Buyer agree that any increase or reduction in the Consideration by way of Initial Consideration Adjustment and/or any payment made to or by them by way of Final Adjustment Payment shall be apportioned between the Sellers in such manner as fairly reflects the cause of the relevant adjustment (save that no additional amount shall be attributed to the Assets Consideration). If the parties disagree as to how the adjustment is apportioned, it shall be resolved in the same manner as the dispute resolution provisions in clause 3.11.

3.15 Following Completion, the Buyer shall, and shall procure that the Target Group shall, use reasonable endeavours to collect amounts (other than amounts taken into account in Completion Cash) held at the date of Completion on behalf of any member of the Target Group in blocked accounts to support guarantees/bonds in respect of licences or other arrangements (“Deposits”) and, subject to the collection of any such Deposits by the Buyer or the Target Group, the Buyer shall pay to the Sellers a sum equal to the full amount of any such Deposit actually received by the Buyer or any member of the Target Group or the Irish Cable Business (less reasonable costs of recovery) within ten (10) Business Days of receipt of the same and such transfer shall be deemed to be an increase in the Consideration to be apportioned between the Sellers in accordance with clause 3.14. Following Completion, the Buyer shall, or shall procure that the Target Group shall upon reasonable request, keep the Sellers informed as to, and respond promptly to any reasonable enquiries from NGL or the Sellers in respect of, the progress of recovering such Deposits and shall promptly notify the Sellers of any such Deposits actually recovered. With effect from Completion, the Buyer undertakes to the Sellers to procure that no member of the Target Group shall directly compromise in any way the Deposits or their repayment terms.

3.16 NGL and the Sellers confirm that, between the Adjustment Date and Completion, no member of the Target Group has declared, made or paid any dividend or other distribution in favour of its shareholders, made any loans to any member of the Core Group or incurred any Borrowings which would have been included in the calculation of Completion Indebtedness if they had been outstanding at the Adjustment Date or entered into any new trading arrangements with the Core Group.

4. POST-COMPLETION OBLIGATIONS

4.1 For the period of two months from Completion, each of the Sellers shall, to the extent

permitted under applicable laws (anti-trust or otherwise) as soon as reasonably practicable following a request from the Buyer, provide to the Buyer, and/or procure that each of its Relevant Group Companies shall provide to the Buyer, such reasonable assistance as it or United Global Com Inc. shall reasonably require in relation to the filing of financial statements of the Target Group Companies with the Securities and Exchange Commission (“SEC”) or accounting for the Transaction or the Target Group (including, for the avoidance of doubt, the preparation of accounts for Networks) PROVIDED THAT the Buyer shall pay to the Sellers an amount of €220 (two hundred and twenty euro) per person per hour in respect of the time incurred by the management and/or employees of the Sellers or members of the Core Group in providing such assistance. For the avoidance of doubt, reasonable assistance will be requested from the Sellers for the completion by the Buyer of the 31 March 2004 and 31 March 2005 unaudited interim financial statements of the Target Group Companies that are prepared in accordance with US GAAP and in conformity with SEC Rules and Regulations (Article 10 of Regulation S-X). Following the expiry of the two month period following Completion, the Sellers agree to provide reasonable assistance to the Buyer (on the basis of the hourly charges described above) to seek customary representations from E&Y in connection with the inclusion of its previously delivered audit report in financial statements and other relevant SEC filings.

4.2 Holdings confirms that, prior to Completion, Holdings made a contribution to Communications in the amount of the aggregate of the intercompany debts (plus any accrued interest thereon) referred to in sub-clauses 4.2.1 and 4.2.2 (such amount being the “Loan Amount”), immediately following which Communications paid to Holdings an amount equal to the Loan Amount in consideration of which Holdings assumed (and Holdings procured that Communications novated to Holdings pursuant to the documents in the approved terms):

4.2.1 the obligations of Communications (including, without limitation, its obligations to pay) pursuant to the intercompany debt (plus accrued interest thereon) owed by Communications to ntl Communications Limited; and

4.2.2 the obligations of Communications (including, without limitation, its obligations to pay) pursuant to the intercompany debt owed by Communications to NTL Incorporated.

The Sellers confirm that the novations referred to in this clause 4.2 will not give rise to any requirement for consent pursuant to section 765 Income and Corporation Taxes Act 1988. The Sellers further confirm that the novation on 5 May 2005 of the Holdings Debt by NGL to Holdings did not give rise to any requirement for consent pursuant to section 765 Income and Corporation Taxes Act 1988.

4.3 NGL agrees that if any of the Shared Sites in respect of which Communications is granted rights under the terms of the Co-Location and Site Sharing Agreement to be entered into between NGL and Communications on Completion or the Co-Location and Site Sharing

Agreement entered into on 31 January 2005 between Communications and National Transcommunications Limited (the “Co-Location Agreements”) is not made available to Communications under the terms of either such Co-Location Agreement, NGL shall use reasonable endeavours (which shall not extend to making any payment other than in respect of its own reasonable legal costs) to put in place arrangements or to request that National Transcommunications Limited puts in place arrangements to enable Communications to use the relevant Shared Site substantially on the terms of the relevant Co-Location Agreement.

Submission

4.4 The Sellers acknowledge that shortly after Completion one or more notifications will be made to the ICA in respect of a proposed sale of the entire issued share capital of the Buyer to UGC or a member of the UGC Group (or a similar such transaction, including the sale of the Irish Cable Business) (the “Submission”). The Sellers shall in a timely manner and following a request from the Buyer (to the extent permitted by applicable law and regulation), provide to the Buyer such information relating to the Target Group Companies and/or the Irish Cable Business as the Buyer may reasonably request, and shall otherwise co-operate with the reasonable requests of the Buyer and provide the Buyer with all reasonable assistance, for the purposes of the Submission and the ICA’s subsequent review of the Submission. For this purpose, a request for information and/or co-operation will be deemed “reasonable” if it is responsive to a request received by the Buyer and/or the intended purchaser from the ICA or from the Irish Minister for Enterprise, Trade and Employment.

5. COMPLETION

5.1 Completion shall take place at the offices of the Sellers’ Irish Solicitors immediately following execution of this Agreement.

5.2 On Completion, the parties shall each perform their respective obligations in relation to the sale and purchase of the Shares in accordance with and as set out in Schedule 2.

6. ADDITIONAL CORE ASSETS/HISTORIC USE OF ASSETS/NO FURTHER CLAIMS

Additional Core Assets

6.1 If, at any time within 18 months after Completion, NGL or any other member of the Core Group notifies the Buyer in writing that it has identified any Assets (but excluding, for the avoidance of doubt, any fibre assets situated in Ireland other than any network assets which form part of the Sirius link) which are owned by a member of the Target Group, held on trust for a member of the Target Group or to which a member of the Target Group has a contractual entitlement but which are used exclusively in the Core Business and which is not reflected in the Accounts (“Additional Core Assets”), the Buyer shall procure that the relevant Target Group Company shall (at the cost of the relevant member of the Core Group) transfer its interest in any such Additional Core Asset free from any Security Interest created after Completion to a member of the Core Group (as directed by NGL) and, upon such transfer, the Buyer shall pay in cash to the relevant Target Group Company an amount equal to the fair market value of the Additional Core Asset by way of consideration for such transfer. For the avoidance of doubt, NGL and the Sellers confirm that at the date of this Agreement they have not identified any Additional Core Assets which would be subject to this clause 6.1.

6.2 If at any time within 18 months after Completion, the Buyer or any member of the Target Group notifies NGL in writing that it has identified any Assets which are owned by a member of the Core Group, held on trust for a member of the Core Group or to which a member of the Core Group has a contractual entitlement but which are used exclusively in the Irish Cable Business (“Cable Assets”), but excluding any Assets which will be made available to the Target Group under the terms of the Ancillary Agreements, any network assets situated outside Ireland and, for the avoidance of doubt, any network assets which form part of the Sirius link, NGL shall procure that the relevant Core Group Company shall transfer its interest in any such Cable Asset free from any Security Interest to a member of the Target Group (as directed by the Buyer) and for no additional consideration.

6.3 In the event that the Buyer or NGL disputes whether an Asset in respect of which it receives a notification under clause 6.1 or 6.2 is a Cable Asset or an Additional Core Asset, it shall promptly notify the other parties accordingly and either NGL or the Buyer may call a meeting to resolve such dispute or effect a binding determination or agreement in respect of such dispute, such meeting to be held within five (5) Business Days of the date of written notice to the other calling the same (unless otherwise agreed). Each of NGL and the Buyer shall appoint a senior representative who has the authority to resolve the dispute to attend that meeting. The representatives shall meet as often as NGL and the Buyer jointly deem necessary in order to gather and exchange all applicable information with respect to the matter in issue which NGL and the Buyer believe appropriate and the senior representatives shall negotiate in good faith to that end.

6.4 In the event that the dispute remains unresolved for a period of fifteen (15) Business Days from the date of the written notice referred to in clause 6.1 or 6.2, the matter shall at the election of any party be resolved in accordance with clause 15.2.

Historic use of assets

6.5 Without prejudice to any contractual arrangements that may be effected in respect of the period following Completion (including pursuant to the Ancillary Agreements):

6.5.1 the Buyer agrees that no member of the Target Group is or shall be entitled to raise any invoice or otherwise claim any sums or costs against any member of the NTL Group or any director, officer or employee of any member of the NTL Group in respect of any benefit derived by any member of the NTL Group from the use of any of the assets (including, without limitation, cash) of, or services provided by, any member of the Target Group in the period prior to Completion, and the Buyer shall forthwith pay to the Sellers an amount equal to any amount so claimed in breach of this clause 6.5.1 as an adjustment to the Consideration; and

6.5.2 the Sellers agree that no member of the NTL Group is or shall be entitled to raise any invoice or otherwise claim any sums or costs against any member of the Target Group or any director, officer or employee of any member of the Target Group in respect of any benefit derived by it from the use of any of the assets (including, without limitation, cash) of, or services provided by, any member of the NTL Group in the period before Completion, and the Sellers shall pay to the Buyer an amount equal to any amount so claimed in breach of this clause 6.5.2 as an adjustment to the Consideration.

7. WARRANTIES

NGL’s and Sellers’ warranties

7.1 Each of NGL and the Sellers warrants that it is a corporation validly existing under the laws of the place of its incorporation, and it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and the Transaction Documents to which it is a party and the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and the Transaction Documents to which it is a party are legal, valid and binding and enforceable against it in accordance with their terms, and the execution, delivery and performance by it of this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and the Transaction Documents to which it is a party will not:

7.1.1 result in a material breach of, or constitute a default under, any agreement or arrangement to which it is a party or under its constitutional documents; or

7.1.2 result in a breach by it of any law or order, judgment or decree of any court, governmental agency or regulatory body to which it is a party or by which it is bound.

7.2 The Sellers, upon and as of the execution of this Agreement, warrant to the Buyer in the terms of the Warranties. Each Warranty is given subject to the Disclosed Matters (to the extent that such Disclosed Matters represent Fair Disclosure). Neither the Sellers nor NGL shall be liable in respect of any Warranty for claims or possible claims relating to or arising from the information Fairly Disclosed in the Disclosure Letter and the Warranties shall be modified accordingly.

7.3 The Warranties shall continue in full force and effect notwithstanding Completion.

7.4 Each Warranty shall be separate and independent and shall not be limited by reference to any other Warranty provided that (other than the Warranties contained in paragraphs 1 and 2.2 of Part III, paragraphs 1 and 2 of Part IV and paragraph 3 of Part VII of Schedule 3) the only Warranties to be given in relation to:

7.4.1 Intellectual Property are those contained in Part IX of Schedule 3;

7.4.2 IT Systems are those contained in Part X of Schedule 3;

7.4.3 Employees are those contained in Part XI of Schedule 3;

7.4.4 Pensions are those contained in Part XII of Schedule 3;

7.4.5 Properties (including rights to use or occupy Properties) and compliance with Planning Legislation are those contained in Part XIII of Schedule 3;

7.4.6 Environmental Matters are those contained in Part XIV of Schedule 3; and

7.4.7 Taxation are those contained in Part XV of Schedule 3.

7.5 Where any statement in the Warranties is qualified by the expression “to the best of the knowledge, information and belief of the Seller” or “so far as the Seller is aware” or any similar expression, the Sellers shall be deemed only to have knowledge of anything of which any of Graham Sutherland, Brendan Hunt, Conor Harrison, Mark Mohan, Michael Thompson or Howard Kalika had actual knowledge at the date of this Agreement.

7.6 Any claim under the Warranties shall be limited in accordance with Schedule 4.

7.7 For the avoidance of doubt, no warranty or representation, express or implied, is given in relation to any information or expression of opinion, intention or expectation or any forecast or projection contained or referred to in the Data Room Documents.

7.8 Save in the case of fraud, wilful misrepresentation, wilful misconduct or wilful concealment, each of the Sellers undertakes to the Buyer to waive any rights, remedies or claims which it may have against any director or officer of any member of the Target Group or any Employee in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by any director or officer of any member of the Target Group or any Employee in connection with assisting the Sellers in the giving of any Warranty or any indemnity or the preparation of the Disclosure Letter.

7.9 The rights and remedies of the Buyer in respect of a breach of any of the Warranties shall not be affected by the sale and purchase of the Shares under this Agreement or the Additional Assets under the Asset Transfer Agreement.

7.10 Notwithstanding any other provision of this Agreement or the Disclosure Letter and save as provided below, no limitation of any kind whatsoever shall apply in respect of any claim made hereunder against the Sellers and/or NGL:

7.10.1 if such claim arises or is delayed as a result of any fraudulent act or fraudulent omission or fraudulent misrepresentation of the Sellers and/or NGL; or

7.10.2 to the extent that the claim relates to title to the Shares or the Additional Assets.

Buyer’s warranties

7.11 The Buyer warrants to the Sellers that none of Scott Matlock, Jaime-Enrique Hugas or any Relevant Person is aware of any material fact, matter, event or circumstance:

7.11.1 which does, or is reasonably likely to, constitute a material breach of Warranty as at the date of this Agreement; and

7.11.2 which such person is aware has or may have potential material implications for the Irish Cable Business or the valuation of the Irish Cable Business,

PROVIDED THAT, for the avoidance of doubt this clause 7.11 shall not apply to any fact, matter, event or circumstance Fairly Disclosed in the Data Room Documents or the Disclosure Letter.

7.12 The Buyer warrants to NGL and the Sellers that it is a corporation validly existing under the laws of the place of its incorporation, that it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and each of the Transaction Documents to which it is a party, that the obligations expressed to be assumed by it under this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and each of the Transaction Documents to which it is a party are legal, valid and binding and enforceable against it in accordance with their terms and that the execution, delivery and performance by it of this Agreement, the Tax Deed, the Framework Services Agreement, the Asset Sharing Agreement and each of the Transaction Documents to which it is a party will not:

7.12.1 result in a material breach by it of, or constitute a default under, any agreement or arrangement to which it is a party or under its constitutional documents; or

7.12.2 result in a breach of any law or order, judgment or decree of any court, governmental agency or regulatory body to which it is a party or by which it is bound.

7.13 The Buyer warrants to NGL and the Sellers that (a) there are not at the date of this Agreement and, prior to Completion, there will not be arrangements in place between the Buyer and any member of the UGC Group pursuant to which any member of the UGC Group will have any right directly or indirectly to exercise any control or decisive influence over the Irish Cable Business; and (b) it has disclosed to them in writing the terms of any agreement, arrangement or understanding (whether written or not) which is in existence at the date of this Agreement between the Buyer or any other member of the Buyer Group and any member of the UGC Group in relation to:

7.13.1 any sale by the Buyer of any Target Group Company or all or any part of the

Irish Cable Business to any person following Completion; and

7.13.2 any rights of any person other than the Buyer or the Buyer Group to determine or materially to influence the implementation of the Transaction or the operations of any Target Group Company and/or the conduct of the Irish Cable Business in the period following Completion.

7.14 The Buyer hereby covenants with NGL and the Sellers that the residence of each of the members of the Target Group will not be transferred outside Ireland within 12 months after Completion in circumstances that could give rise to a liability to any member of the NTL Group under Section 629(4) of the TCA and the Buyer shall pay on demand to NGL and the Sellers (for themselves and/or on behalf of each other member of the NTL Group) an amount equal to the amount of any such liability.

7.15 The Buyer acknowledges that NGL and the Sellers have entered into this Agreement and the Asset Transfer Agreement in reliance upon the warranties in clauses 7.11 to 7.13 inclusive.

7.16 NGL and the Sellers acknowledge that the Buyer has entered into this Agreement and the Asset Transfer Agreement in reliance on the Warranties and the warranties in clause 7.1.

Government EIOP Infrastructure Grant

7.17 NGL shall pay to the Buyer as an adjustment to the Consideration an amount equal to any amount actually repaid by the Target Group under the Government EIOP Infrastructure Grant referred to in the Disclosure Letter as a result of this Transaction.

8. PROTECTION OF GOODWILL

8.1 Non-competition

Subject to clauses 8.2 to 8.4 (inclusive), as further consideration for the Buyer agreeing to purchase the Shares on the terms of this Agreement and with the intent of assuring to the Buyer the full benefit and value of the goodwill and connections of each Target Group Company and as a constituent part of the sale of the Shares, the Sellers and NGL hereby undertake to the Buyer that (except with the written consent of the Buyer) for a period of 24 months commencing on the Completion Date (the “Non-compete Period”), they shall not, and shall procure that each other member of the NTL Group shall not, provide cable television services, fixed line telephony services or internet services in Ireland (the “Competitive Activities”).

8.2 The Buyer hereby acknowledges and agrees that clause 8.1 shall not be breached by any member of the Core Group:

8.2.1 supplying fibre and transmission capacity to other telecommunications carriers

to be used for any purpose; or

8.2.2 supplying business services in Ireland:

(a) that form part of the supply to; or

(b) to persons that are affiliated with,

a person to whom the Core Group agrees to provide, in the UK, business services pursuant to a contract under which anticipated revenues for the remainder of the Non-compete Period (as estimated in good faith by NGL) from the provision of services outside Ireland are greater than anticipated revenues from the provision of services within Ireland.

8.3 The Buyer hereby acknowledges and agrees that clause 8.1 shall not be breached:

8.3.1 as a consequence of any member of the NTL Group acquiring, owning and, if applicable, thereafter continuing to operate:

(a) less than an aggregate of ten per cent. (10%) of any class of shares of any person engaged in Competitive Activities;

(b) any indebtedness of any Merger Partner of less than the greater of (i) (x) twenty five per cent. (25%) or (y) €60,000,000 (sixty million euro) (if the Competitive Activities relate to the provision of services to business customers); or (ii) (x) fifteen per cent. (15%) or (y) €35,000,000 (thirty five million euro) (if the Competitive Activities relate to the provision of services to residential customers) in value of any class of indebtedness of any other person or business engaged in Competitive Activities;

(c) any person or business engaged in Competitive Activities if the portion of the revenues of such person and its subsidiaries (on a consolidated basis) or business for the financial year ending immediately prior to the time of such acquisition that is attributable to Competitive Activities accounts for less than the greater of (i) (x) twenty five per cent. (25%) of such person’s or business’ consolidated annual revenues or (y) €60,000,000 (sixty million euro) (if the Competitive Activities relate to the provision of services to business customers) or (ii) (x) fifteen per cent. (15%) of such person’s consolidated annual revenues or (y) €35,000,000 (thirty five million euro) if the Competitive Activities relate to the provision of services to residential customers); or

(d) any person or business engaged in Competitive Activities if such Competitive Activities account for at least the greater of (i) (x) twenty five per cent. (25%) of such person’s or business’ consolidated annual revenues for the financial year immediately prior to the time of acquisition of such person or business or (y) €60,000,000 (sixty million euro) of such person’s or business’ consolidated annual revenues for such financial year (if the Competitive Activities relate to the provision of services to business customers) or (ii) (x) fifteen per cent. (15%) of such person’s or business’ consolidated annual revenues for the financial year immediately prior to the time of acquisition of such person or business or (y) €35,000,000 (thirty five million euro) of such person’s or business’ consolidated annual revenues for such financial year (if the Competition Activities relate to the provision of services to retail customers) provided that, to the extent that this sub-clause 8.3.1(d) is applicable, the applicable member of the NTL Group uses its reasonable endeavours to sell, transfer or otherwise dispose of a portion of the person or business that conducts Competitive Activities within eight months after the date on which the acquisition of such person or business so that, following such sale, transfer or disposition, the relevant member of the NTL Group is in compliance with sub-clause 8.3.1(c) (it being acknowledged and agreed by (x) NGL that, in marketing such business for sale, the NTL Group shall ensure that the Buyer is offered a reasonable opportunity to purchase such business and (y) the Buyer that, if the relevant member of the NTL Group is unable to divest the requisite portion of the acquired person or business within such eight month time period, such member of the NTL Group may retain ownership of the person or business conducting the Competitive Activities with no obligation to the Buyer); or

8.3.2 as a result of any Merger Event (including any continuation of the business of any Merger Partner and/or its subsidiaries thereafter).

8.4 Notwithstanding anything in clause 8.1 to the contrary, any member of the NTL Group shall have the right to engage in any Competitive Activities comprising the provision of services to business customers at any time after a Target Change of Control.

Non-solicitation

8.5 NGL undertakes to the Buyer and each other Buyer Group Company that it will not, and it shall procure that each member of the NTL Group will not directly or indirectly, at any time during the period of twelve (12) calendar months from the Completion Date, solicit or entice away, or endeavour to solicit or entice away, from any Buyer Group Company (including, without limitation, any Target Group Company) any person who is at the Completion Date an Employee whether or not such person would commit a breach of his employment contract by reason of leaving service, save that this clause shall not apply to:

8.5.1 any employee employed in a non-managerial or purely administrative role earning less than €50,000 (fifty thousand euro) per annum in basic compensation; and

8.5.2 any recruitment of any person in response to a newspaper, web page or similar advertisement not aimed at employees of the Target Group.

8.6 The Buyer undertakes to NGL and each other NTL Group Company that it will not, and it shall procure that each member of the Target Group will not, directly or indirectly, at any time during the period of twelve (12) calendar months from the Completion Date, solicit or entice away, or endeavour to solicit or entice away, from any member of the NTL Group any person who is immediately following the Completion Date employed by any member of the NTL Group, whether or not such person would commit a breach of his employment contract by reason of leaving service, save that this clause shall not apply to:

8.6.1 any employee employed in a non-managerial or purely administrative role earning less than €50,000 (fifty thousand euro) (or the Sterling equivalent thereof) per annum in basic compensation; and

8.6.2 any recruitment of any person in response to a newspaper, web page or similar advertisement not aimed at employees of the NTL Group.

8.7 NGL undertakes to the Buyer and each other Buyer Group Company that it shall not, and it shall procure that each member of the NTL Group shall not, directly or indirectly, at any time during the period of twelve (12) calendar months from the Completion Date, cause or endeavour to cause IBM Ireland to reassign any consultant who provides services to any member of the Target Group immediately prior to Completion from any member of the Target Group to the Core Group.

8.8 NGL undertakes to the Buyer and each other Buyer Group Company that it will not, and it shall procure that each member of the NTL Group will not directly or indirectly, in each case for the sole purpose of activities which are prohibited by virtue of clause 8.1, at any time during the period of twelve (12) calendar months from the Completion Date, solicit or

entice away, or endeavour to solicit or entice away, from any Target Group Company any person who is at the Completion Date a Material Customer.

8.9 For the purposes of clauses 8.5 to 8.8 (inclusive), “directly or indirectly” shall mean NGL or the Buyer (as appropriate) acting either alone or jointly with or on behalf of any other person whether as principal, partner, manager, employee, contractor, director, consultant, investor or otherwise.

8.10 Following Completion, NGL shall not and shall use reasonable endeavours to procure that no members of the NTL Group shall knowingly do or say anything which is intended to be harmful to the reputation of the Target Group.

8.11 Each of the foregoing provisions of this clause 8 shall constitute an entirely separate and independent restriction and undertaking.

8.12 It is agreed between the parties that, whilst the restrictions set out in this clause 8 are considered fair and reasonable, if it should be found that any of the restrictions be void or unenforceable as going beyond what is fair and reasonable in all the circumstances and if by deleting part of the wording or substituting a shorter period of time or different geographical limit or a more restricted range of activities for any of the periods of time, geographical limits or ranges of activities set out in this clause 8 it would not be void or unenforceable then there shall be substituted such next less extensive period or limit or activity or such deletions shall be made as shall render this clause 8 valid and enforceable.

9. CONFIDENTIALITY

9.1 With effect from Completion, NGL shall, and shall procure that each other member of the NTL Group shall, in all respects keep confidential and not at any time disclose or make known in any other way to anyone whomsoever or use for its own or any other person’s benefit any information regarding this Transaction and any Target Confidential Information, PROVIDED THAT:

9.1.1 such obligation shall not apply to information which comes into the public domain (other than through a breach by NGL of the provisions of this clause 9.1) or any information obtained by it or any other member of the Core Group from a third party (other than a member of the Target Group) not, to NGL’s knowledge, subject to a duty of confidentiality towards the Target Group with respect to such information;

9.1.2 any member of the NTL Group shall be entitled at all times to disclose such information as may be required by law or by any competent judicial or regulatory authority or any Taxation Authority or by any securities exchange on which its shares are listed or traded or for the preparation of its financial statements; and

9.1.3 any member of the NTL Group shall be entitled to disclose to its directors, officers, employees, agents, auditors or advisers such information as may be necessary to enable them to carry out their duties (conditional upon any such person being informed of the confidential nature of such information and NGL procuring that such person keeps such information confidential in accordance with this clause 9.1).

9.2 The Buyer shall, and shall procure that each member of the Buyer Group (including, for the avoidance of doubt, following Completion, each Target Group Company) shall, in all respects keep confidential and not at any time disclose or make known in any other way to anyone whomsoever or use for its own or any other person’s benefit any information regarding this Transaction and any Retained Confidential Information, PROVIDED THAT:

9.2.1 such obligation shall not apply to information which comes into the public domain (other than through a breach by the Buyer of the provisions of this clause 9.2) or any information obtained by it or any other member of the Buyer Group (excluding the Target Group in respect of confidential information relating to the Core Business obtained prior to Completion) from a third party not, to the Buyer’s knowledge, subject to a duty of confidentiality towards NGL or any member of the NTL Group with respect to such information; or

9.2.2 any member of the Buyer Group shall be entitled at all times to disclose such information as may be required by law or by any competent judicial or regulatory authority or any Taxation Authority or by any securities exchange on which its shares are listed or traded or for the preparation of its financial statements;

9.2.3 any member of the Buyer Group shall be entitled to disclose to its directors, officers, employees, agents, auditors or advisers such information as may be necessary to enable them to carry out their duties (conditional upon any such person being informed of the confidential nature of such information and the Buyer procuring that such person keeps such information confidential in accordance with this clause 9.2); and

9.2.4 any member of the Buyer Group shall be entitled to disclose Retained Confidential Information to any proposed third party purchaser of the Irish Cable Business subject to such third party purchaser entering into a confidentiality agreement with NGL substantially on the terms of the Confidentiality Agreement (and NGL agrees that it shall act reasonably in agreeing the terms of such confidentiality agreement).

10. ANNOUNCEMENTS

10.1 At 7:30 a.m. on the Business Day immediately following today’s date NGL (or another member of the NTL Group) and the Buyer shall release the Announcement.

10.2 Save as provided in clauses 10.1 and 10.3, no party shall (and NGL shall procure that each other member of the NTL Group shall not, without the consent of the Buyer, and the Buyer shall procure that each other member of the Buyer Group shall not, without the consent of NGL) issue any press release or publish any circular to shareholders or any other document or make any public statement after Completion, relating to any part of the Transaction or any ancillary matter. For the avoidance of doubt, following the release of the Announcement, any party may announce in any reasonable form, the information (or any part of it) included in the Announcement.

10.3 Nothing in clause 10.2 shall restrict:

10.3.1 any NTL Group Company, the Buyer, any Buyer Group Company or any Target Group Company after Completion from directly informing their respective customers or suppliers of the acquisition of the Target Group by the Buyer;

10.3.2 any party or any member of its Group from making any disclosure to any of its directors, officers, employees, agents, auditors or advisers who are required to receive such disclosure to carry out their duties (conditional upon any such person being informed of the confidential nature of such information and the disclosing party procuring that such person keeps such information confidential for as long as the disclosing party is obliged to do so in accordance with this clause);

10.3.3 any announcement or disclosure required by law or by any competent judicial or regulatory authority or by any Taxation Authority or by any securities exchange provided that it shall (to the extent legally permitted to do so) provide the other parties with prior written notice that it is required or otherwise intends to make such announcement or disclosure;

10.3.4 any announcement or disclosure disclosing information which has previously been publicly announced or disclosed in accordance with the provisions of this clause 10; or

10.3.5 any announcement or disclosure necessary by any person in order to enforce its rights under this Agreement or any other agreement to be entered into pursuant to this Agreement.

11. COSTS

Save as otherwise expressly provided in this Agreement or any other agreements to be entered into pursuant to this Agreement, each party shall pay its own costs and expenses incurred in connection with the preparation, negotiation and completion or termination of this Agreement or any other agreement to be entered into pursuant to this Agreement.

12. POST-COMPLETION ARRANGEMENTS

Release of intra-group guarantees

12.1 Each of the Sellers shall use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs but shall include (to the extent permitted under the terms of the Senior Credit Facility and/or the Senior Note Indenture) the giving of guarantees in respect of the debts, liabilities or obligations of the relevant member of the Core Group) to obtain the release with effect from no later than Completion or, if later, the date of becoming aware of the same, of each member of its Relevant Group from any guarantee, security, bond, letter of comfort or other similar obligation given or incurred by it to the extent relating to debts or other liabilities or obligations (whether actual or contingent) of any member of the Core Group and, pending such release but following and subject to Completion, such Seller unconditionally and irrevocably agrees, as a continuing obligation, to indemnify each member of its Relevant Group against, and to pay on demand an amount equal to, any loss which such member may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) in connection with any such guarantee, security, bond, letter of comfort or other similar obligation, whether arising on, before or after Completion.

12.2 The Buyer shall use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs but shall include the giving of guarantees in respect of the debts, liabilities or obligations of any Target Group Company) to obtain the release with effect from Completion or, if later, the date of becoming aware of the same, of each member of the Core Group from any guarantee, security, bond, letter of comfort or other similar obligation given or incurred by it to the extent relating to debts or other liabilities or obligations (whether actual or contingent) of any Target Group Company and, pending such release but following and subject to Completion, the Buyer unconditionally and irrevocably agrees, as a continuing obligation, to pay to the Sellers (for themselves and as trustees for each other member of the Core Group) on demand an amount equal to, any loss which any member of the Core Group may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) in connection with any such guarantee, security, bond, letter of comfort or other similar obligation, whether arising on, before or after Completion PROVIDED THAT the Buyer shall not be liable to pay the Core Group to

the extent of any liability which arises as a result of a breach of the Warranties or in respect of which the Buyer has a claim under the Tax Deed.

12.3 The Buyer further agrees to use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs but shall include the giving of guarantees in respect of the debts, liabilities or obligations of any Target Group Company) to obtain the release of NatTrans and any member of its Group, with effect from Completion, from each guarantee listed in Schedule 8 (the “NatTrans Guarantees”) and, with effect from becoming aware of the same, from any other guarantee, security, bond, letter of comfort or other similar obligation given or incurred by it to the extent relating to the obligations of any member of the Target Group as a lessee in respect of any leasehold property, and the Buyer unconditionally and irrevocably agrees, as a continuing obligation, to pay to NGL and the Sellers (for themselves and as trustees for each member of the Core Group) on demand an amount equal to, any loss which any member of the Core Group may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) as a result of a claim under any indemnity given prior to the date of this Agreement by any member of the Core Group in favour of NatTrans or any member of its Group in respect of any loss suffered by NatTrans (or any member of its Group) as a result of any such guarantee, security, bond, letter of comfort or other similar obligation PROVIDED THAT the Buyer shall not be liable to pay the Core Group to the extent of any liability which arises as a result of a breach of Warranties or in respect of which the Buyer has a claim under the Tax Deed.

Records

12.4 Subject to the terms of the Ancillary Agreements, following Completion, NGL shall procure in relation to all material records, papers, documents and data (in whatever form they may exist) in the possession, custody or control of, or kept or made by or on behalf of any member of the NTL Group relating to any matters which include the Irish Cable Business, the Target Group Companies or the Additional Assets that:

12.4.1 to the extent that such records, papers, documents and data relate exclusively to the Irish Cable Business, the Target Companies or the Additional Assets (save as provided above), the relevant Target Group Company shall on request be given access by the relevant member of the NTL Group to such records, papers, documents and data to examine and/or remove or copy the same provided that where any such records, papers, documents and data are so removed the NTL Group shall be entitled to retain one copy thereof for compliance with applicable law or regulation or internal document retention policy or to the extent necessary to enable it to comply with its obligations under the Asset Transfer Agreement or any of the Ancillary Agreements, or, to the extent that such records, papers, documents and data are held by a third party document storage contractor on behalf of any member of the NTL Group, NGL shall procure that the Target Group Companies shall have access to such records,

papers, documents and data to examine and/or remove the same in accordance with the terms and conditions of the provision of such storage by such document storage contractor (at the cost of the relevant Target Group Company) and shall notify the Buyer and afford the Buyer and the Target Group Companies a reasonable opportunity to remove any such records, papers, documents and data in the event that any member of the NTL Group terminates any arrangements with a third party document storage contractor which are in effect at the date of this Agreement; and/or

12.4.2 to the extent that such records, papers, documents and data do not relate exclusively to the Irish Cable Business, the Target Group Companies or the Additional Assets (save as provided above), such records, papers, documents and data shall be retained for a period of at least three (3) years from Completion or six (6) years from Completion if such records, papers, documents and data relate to Taxation (or such longer period as may be required by statute) and the information in such records, papers, documents and data relating to the Irish Cable Business or the relevant Target Group Company shall, subject to clause 12.7, be made available (at reasonable times and on reasonable notice) to the Buyer or any of its officers, employees, agents or advisers PROVIDED THAT the Buyer shall and shall procure that its officers, employers, agents and advisers shall keep such information confidential save to the extent required to disclose the same by law, any competent judicial or regulatory authority or any securities exchange.

12.5 Subject to the terms of the Ancillary Agreements, following Completion the Buyer shall procure that all material records, papers, documents and data (in whatever form they may exist) in the possession, custody or control of, or kept or made by or on behalf of any of the Target Group Companies relating to any matters which include the business of any member of the NTL Group and all rights in such records, papers, documents and data shall:

12.5.1 to the extent that such records, papers, documents and data relate exclusively to the Core Business or to any member of the NTL Group (other than the Target Group), be deemed to be the property of, and shall be held on trust for, the relevant member of the NTL Group and any such items shall be delivered or made available to the relevant member of the NTL Group, provided that the Target Group shall be entitled to retain one copy thereof for compliance with applicable law or regulation or internal document retention policy; and/or

12.5.2 to the extent that such records, papers, documents and data do not relate exclusively to the Core Business, be retained for a period of at least three (3) years from Completion or six (6) years from Completion if such records, papers, documents and data relate to Taxation (or such longer period as may be required by statute) and the information in such records, papers, documents and data relating to the Core Business shall, subject to clause 12.7, be made

available (at reasonable times and on reasonable notice) to NGL, the Sellers and the other members of the NTL Group and their respective officers, employees, agents or advisers PROVIDED THAT NGL shall and shall procure that the officers, employers, agents and advisers of each member of NTL Group shall keep such information confidential save to the extent required to disclose the same by law, any competent judicial or regulatory authority or any securities exchange.

12.6 The Buyer shall procure that for a period of at least three (3) years from Completion or six (6) years from Completion if the same relate to Taxation (or such longer period as may be required by statute) the material records, papers, documents and data relating to the Irish Cable Business, the Target Group Companies and the Additional Assets shall be retained and the information in such records, papers, documents and data shall be made available to the Sellers and NGL and their respective officers, directors, employers, agents, advisers and auditors (at reasonable times and on reasonable notice) for the purpose of dealing with the accounting, taxation, financial or insurance affairs of the NTL Group or (in respect of pre-Completion matters) of the Target Group Companies, PROVIDED THAT NGL shall or shall procure that such persons shall keep such information confidential save to the extent required to disclose the same by law or any competent judicial or regulatory authority or in order to comply with the rules of any securities exchange. For the avoidance of doubt, the provisions of this clause 12.6 shall include the making available of information relating to the post-Completion affairs of the Target Group to the extent necessary to deal with the completion of the NTL Group’s tax returns.

12.7 Clauses 12.4.2 and 12.5.2 shall not require any person to disclose any information if to do so would breach any confidentiality undertaking existing at today’s date or prejudice legal privilege in respect of any matter in dispute or reasonably likely to be in dispute at the time of the proposed disclosure.

Net Trading Account Balance

12.8 Save as provided below, following Completion:

12.8.1 the Buyer shall procure that any net trading account balance owed by any member of the Target Group to any member of the Core Group (other than any trading account balance incurred under the terms of the Ancillary Agreements or the Framework Services Agreement and which is repayable under the terms thereof) shall be repaid in accordance with the regular timing of such payments adopted prior to Completion or, where any such balance has not historically been regularly settled, at the month end following Completion; and

12.8.2 NGL shall procure that any net trading account balance owed by any member of the Core Group to any member of the Target Group (other than any trading account balance incurred under the terms of any of the Ancillary Agreements or

the Framework Services Agreement and which is repayable under the terms thereof) shall be repaid in accordance with the regular timing of such payments adopted prior to Completion or, where any such balance has not historically been regularly settled, at the month end following Completion,

PROVIDED THAT any net trading account balance which is outstanding at the Adjustment Date and which is not taken into account in the calculation of Net Working Capital shall be eliminated and shall not be repaid following Completion.

Winding Up of the Sellers

12.9 If at any time after Completion, NGL wishes to procure the winding up of either or both of the Sellers, all of the relevant Seller’s rights and obligations under this Agreement and any other agreement entered into by it pursuant hereto shall be novated to NGL, and the Buyer hereby agrees to such novation.

Termination of Intra-Group Arrangements

12.10 Save to the extent provided in or envisaged by this Agreement, or any other agreement to be entered into pursuant to or in connection with this Agreement (including, without limitation, the Ancillary Agreements) or otherwise agreed between NGL and the Buyer, the Outsourcing of Internet Services Agreement (draft dated 8 October 2003) between ntl: Ireland and ntl: home, UK shall be terminated with effect from Completion without liability to any party thereto.

Insurance Policies

12.11 NGL shall use all reasonable endeavours to procure that any of the Policies (as defined in Part IV of Schedule 3 (the Warranties)) which are held by a member of the NTL Group (other than the Target Group) shall continue in existence, without alteration, for a period of 90 Business Days following Completion. The cost of maintaining (including, without limitation, any increase in the premium payable in respect of any such Policy) such Policies in relation to the Target Group shall be borne by the Buyer.

MCI Duct Lease

12.12 Subject to clause 12.13, the Buyer acknowledges that on or around 1 January 2001, the NTL Group (which, at that time, owned the Stentor network) entered into an informal agreement with MCI Worldcom (“MCI”) pursuant to which it granted to MCI a 20 year lease (the “MCI Duct Lease”) of a single sub-duct situated in Dublin and running from the junction of Alfie Road and East Point Business Park to the junction of Oscar Traynor Road and Clonshaugh Road (the “MCI Duct”). The Buyer hereby agrees to procure, following Completion, that Networks (as the current owner of the Stentor network) shall continue to maintain the MCI Duct and to make available to MCI, and permit the continued quiet use by

MCI of, the whole of the MCI Duct for no charge until the expiry of the MCI Duct Lease on 31 December 2021.

12.13 If, following Completion, Communications and MCI enter into a formal agreement in respect of the MCI Duct Lease (a “New MCI Agreement”) and compliance by Communications with its obligations under such New MCI Agreement would not have a material adverse effect on the existing arrangements between the Core Group and MCI in respect of the lease of sub-duct situated in the “Birmingham Loop” at the MCI switch site at Unit B, Parkway Industrial Centre, Heneage Street, Birmingham, the Buyer will have no further obligation to NGL and the Sellers under clause 12.12.

Section 765A Income and Corporation Taxes Act notifications

12.14 The Sellers will make all necessary notifications under s.765A Income and Corporation Taxes Act 1988 in relation to the sale of the Shares and provide such particulars as are required by the Board of the Inland Revenue in relation to those notifications in a timely and proper manner.

12.15 The Buyer confirms to the Sellers that it is resident in a Member State of the European Union for the purposes of s.765A Income and Corporation Taxes Act 1988, and agrees that it will as soon as is reasonably practicable provide the Sellers with all information and assistance reasonably requested by the Sellers or NGL in order to make all necessary notifications which are referred to in clause 12.14.

12.16 Following Completion, the Sellers shall use reasonable endeavours (which shall not extend to incurring any material expenditure) to assist the Buyer and/or the Target Group to register any unregistered property interests of the Target Group Companies in existence at the date of this Agreement (including the West Corner Unit and the City West Lease which are the subject of the Asset Transfer Agreement) with the Land Registry and/or Registry of Deeds.

Incentive Payments

12.17 The provisions of clauses 12.17 to 12.24 shall apply if, on or after Completion, at the direction of the Sellers, an award of stock is to be made, or a bonus amount is to be paid in cash, to any employee or former employee of Communications (a “Relevant Individual”) by any member of the Core Group (other than the Target Group) under or pursuant to any incentive plan established by the Core Group (other than the Target Group and excluding, for the avoidance of doubt, the Target Group’s annual bonus arrangements) prior to Completion (an “Incentive Award”).

12.18 If an Incentive Award is to be paid, the Sellers shall notify Communications and the Buyer no less than ten (10) Business Days in advance of such date as the Sellers shall specify as the date for the payment of the Incentive Award to be paid to the Relevant Individual (the “Payment Date”).

12.19 If the relevant Incentive Award is a payment of cash (a “Cash Bonus”) to be paid to the Relevant Individual, the Sellers shall pay to Communications an amount equal to the Cash Bonus no less than five (5) Business Days before the Payment Date, and Communications shall pay the Cash Bonus to the Relevant Individual on the Payment Date, after deducting any Tax which is required to be deducted in accordance with clause 12.23 and any other deductions and withholdings required by law.

12.20 The payment of an amount equal to the Cash Bonus to be made by the Sellers to Communications pursuant to clause 12.19 shall be made in full, without set-off or counterclaim and free and clear from all deductions or withholdings whatsoever, save only as may be required by law. If the Sellers are required by law to make a deduction or withholding, the Sellers shall, at the same time as the sum which is the subject of the deduction or withholding is payable under clause 12.19, pay to Communications such additional amount as shall be required to ensure that the net amount received by Communications pursuant to clause 12.19 will equal the full amount which would have been received by it had no such deduction or withholding been required to be made.

12.21 If any sum payable by the Sellers to Communications pursuant to clause 12.19 shall be subject to a Taxation Liability in the hands of Communications, the Sellers shall be under the same obligation to make an increased payment in relation to that Taxation Liability as if the liability were a deduction or withholding required by law, but only to the extent that Communications is not entitled to a Relief when it pays the relevant Cash Bonus to the Relevant Individual.

12.22 If Communications is entitled to and receives payment in respect of a credit for or refund of Taxation by reason of the deduction or withholding, the Buyer shall procure that Communications shall, provided it determines in good faith it can do so without prejudice to the retention of that credit or refund, reimburse the Sellers with such amount as shall leave Communications in no better or worse position than it would have been had no deduction or withholding been required.

12.23 If an Incentive Award in the form of a Cash Bonus is made at any time on or after Completion, the Buyer shall procure that Communications shall:

12.23.1 comply with all obligations placed on an employer under Part 42 TCA (and all regulations made thereunder) in respect of such Cash Bonus as if, in all respects, Communications is the ‘employer’ in respect of such Cash Bonus within the meaning of Section 983 TCA. For the avoidance of doubt, the obligations herein referred to include the administration of the Pay As You Earn system in respect of such Cash Bonus and accounting for all relevant Tax to the relevant Taxation Authority; and

12.23.2 comply with all obligations placed on an employer under the Social Welfare

(Consolidation) Act, 1993 (as amended) and the Health Contributions Act, 1979 (and all regulations made thereunder) in relation to Pay Related Social Insurance contributions (“PRSI Contributions”) in respect of such Cash Bonus, including accounting for all employer PRSI Contributions to the appropriate Taxation Authority.

For the avoidance of doubt, if the Incentive Award is made in the form of an award of stock or shares in the capital of any company (but which shall not include stock or shares in the Target Group or the Buyer), the obligations of the Buyer hereunder shall also include procuring that Communications complies with all relevant reporting requirements to a Taxation Authority placed on an employer in relation to such Incentive Award within the relevant statutory timeframe.

12.24 The Sellers shall pay to the Buyer on demand an amount equal to any loss suffered by the Buyer Group in relation to any claim made by a Relevant Individual against any member of the Buyer Group in relation to any Incentive Award (including, for the avoidance of doubt, any claim in relation to the entitlement to or quantum of an Incentive Award) and the provisions of paragraph 9 of Schedule 4 shall apply in relation to any such claim. Any such payment shall constitute an adjustment to the Consideration.

12.25 The provisions of clauses 16.19 to 16.22 (Gross up) shall not apply to any payment made under clauses 12.17 to 12.24.

12.26 Neither the Buyer nor the Target Group shall be obliged to pay any Cash Bonus to a Relevant Individual in respect of an Incentive Award unless Communications shall have received an amount equal to such Cash Bonus in accordance with clauses 12.17 to 12.24.

13. USE OF NTL NAME AND LOGO

13.1 Subject to the terms of the Domain Name Licence and to clause 13.3, the Buyer shall procure that as soon as reasonably practicable after Completion and, in any event, within twelve (12) months after such date or, if later, six (6) months after the date on which any sale by the Buyer of the Irish Cable Business is completed (provided that such date falls no later than fifteen (15) months after Completion):

13.1.1 the name of any Target Group Company which includes the word “NTL” is changed to a name which does not include such word (or any word which is similar or confusingly similar to such word);

13.1.2 the Target Group Companies shall cease in any manner whatsoever to use or display any trade or service marks, trade or service names, registered designs, logos or domain names used or owned by any member of the NTL Group including, without limitation, the “ntl:” logo (the “NTL Mark”) or any confusingly similar mark, design, name, logo or domain name; and

13.1.3 without prejudice to the generality of sub-clauses 13.1.1 and 13.1.2, the Target Group Companies shall cease in any manner whatsoever to use or display the name “NTL” or the NTL Mark or any confusingly similar mark, design, name, logo or domain name,

PROVIDED THAT the Target Group shall not be required to remove the name “NTL” or the NTL Mark from any items provided to customers prior to the date of this Agreement or from network or associated cable infrastructure constructed or installed prior to the date of this Agreement.

13.2 The Buyer shall procure that, throughout the period following Completion during which any of the Target Group Companies are using or displaying the name “NTL” or the NTL Mark in any way and for a period of twelve (12) months thereafter, the relevant Target Group Companies shall (at NGL’s cost) render to NGL such assistance as NGL may reasonably require in connection with any actual or threatened actions, claims, demands or proceedings in relation to the use or display of the name “NTL” or the NTL Mark (including, without limitation, by way of providing oral or written evidence or swearing any affidavits).

13.3 Subject to the limitations set out in the Framework Services Agreement, the Buyer unconditionally and irrevocably agrees to pay on demand to NGL and each Seller (for itself and/or as trustee for each member of the Core Group) an amount equal to any loss which any member of the Core Group may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) as a consequence of any claim made by any third party against any member of the Core Group as a result of the use by any Target Group Company of the name “NTL” or the NTL Mark pursuant to this clause 13 (including, without limitation, the continued use of the name “NTL” or the NTL Mark on network or associated cable infrastructure constructed or installed prior to the date of this Agreement) following Completion but excluding any loss arising as a result of any bona fide claim that the name “NTL” or the NTL Mark in the Irish Cable Business infringes the Intellectual Property Rights of any third party.

14. GUARANTEE

14.1 NGL as primary obligor unconditionally and irrevocably guarantees to the Buyer the full, prompt and complete performance by the Sellers and any other members of the NTL Group of all their respective obligations under this Agreement and any other agreement or arrangement to be entered into by them in connection with this Agreement (including, without limitation, the Framework Services Agreement, the Ancillary Agreements and the Transaction Documents) and the due and punctual payment of all sums now and subsequently payable by the Sellers, arising out of or in connection with this Agreement (and any such other agreement or arrangement) when the same shall become due.

14.2 The obligations assumed by NGL in clause 14.1 shall remain in force until all of the obligations of the Sellers under this Agreement have been fully performed and discharged.

14.3 Neither the obligations of NGL nor the rights and remedies of the Buyer under clause 14.1 or otherwise conferred by law shall be discharged, prejudiced or impaired by reason of:

14.3.1 any amendment to this Agreement or any variation of any of the obligations of the Sellers;

14.3.2 any incapacity or lack of powers, authority or legal personality of, or dissolution or change in the members or status or constitution of, either Seller, NGL, the Buyer or any other person or the acquisition of all or part of the undertaking of the Buyer or the Seller;

14.3.3 any of the obligations of the Sellers being or becoming invalid, illegal, void or unenforceable for any reason;

14.3.4 any time or indulgence given or agreed to be given, or any composition or arrangement made or accepted in respect of any of the obligations of the Sellers;

14.3.5 any waiver or release of the obligations of the Sellers;

14.3.6 any postponement, discharge, reduction, non-provability or other similar circumstance affecting any of the obligations of the Sellers and/or any sums payable by the Sellers resulting from:

(a) the making of any composition or arrangement by either Seller with its creditors;

(b) any insolvency, liquidation or dissolution proceedings; or

15. APPLICABLE LAW AND JURISDICTION

Governing Law

15.1 This Agreement and the rights and obligations of the parties shall be governed by and construed in accordance with the laws of England and Wales.

Dispute Resolution

15.2 Any dispute arising out of or in connection with this Agreement, including without limitation any question regarding the validity, existence or termination of this Agreement shall be finally resolved by arbitration in England, conducted in English, by three arbitrators pursuant to the rules of the London Court of International Arbitration (the “LCIA”) (the “Rules”) save that the Rules shall be amended in relation to the appointment of arbitrators as set out below.

15.3 One arbitrator shall be nominated by NGL and the Sellers and one arbitrator shall be nominated by the Buyer. If the Buyer is unable to agree on the nomination of an arbitrator within ten (10) Business Days of notification by NGL and the Sellers of their nominated arbitrator, the LCIA shall appoint an arbitrator on behalf of the Buyer. The third arbitrator shall be selected by the two so chosen within ten (10) Business Days of the appointment of the second arbitrator, failing which the LCIA shall appoint the third arbitrator, who shall be the chairman of the arbitral tribunal.

Enforcement of judgments

15.4 Without prejudice to clause 15.2, nothing in this Agreement shall affect the right to bring proceedings in any jurisdiction for the purposes of the enforcement or execution of any judgment or other settlement in any other court.

16. GENERAL

Entire agreement

16.1 This Agreement (together with the other Transaction Documents) contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement other than paragraphs 3.1.1 to 3.1.4 (inclusive), 3.5.5, 3.5.6, 4.7, 4.8, 5, 6 and 7 of the Confidentiality Agreement (insofar as they relate to Confidential Information in relation to the NTL Group (other than the Target Group)) which shall continue in force after the date of this Agreement.

16.2 Each party acknowledges and agrees that:

16.2.1 it is not entering into this Agreement on the basis of, and is not relying and has not relied on, any statement or representation (whether negligent or innocent) or warranty or other provision (in any case whether oral, written, express or implied) made, given or agreed to by any person (whether a party to this Agreement or not) except those expressly repeated or referred to in this Agreement and the only remedy or remedies available to the Buyer in respect of any misrepresentation or untrue statement made to it shall be a claim for

breach of contract under this Agreement; and

16.2.2 this clause 16.2 shall not apply to any statement, representation or warranty made fraudulently or to any provision of this Agreement (including for the avoidance of doubt, the Warranties) which was induced by fraud for which the remedies shall be all those available under the law governing this Agreement regardless of the other terms of this Agreement.

16.3 The Buyer acknowledges and agrees that the express terms of this Agreement are in lieu of all warranties, conditions, terms, undertakings and obligations implied by statute, common law or otherwise all of which are hereby excluded to the fullest extent permitted by law.

16.4 This Agreement shall not be construed as creating any partnership or agency relationship between the parties.

Variations and waivers

16.5 No variation of this Agreement shall be effective unless made in writing signed by or on behalf of all the parties and expressed to be such a variation.

16.6 No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

Assignment

16.7 The Sellers and NGL acknowledge and agree that the Buyer may at any time after Completion sell or transfer all of the Shares and its rights to the Additional Assets and at the same time wish to transfer all of the rights under this Agreement and the other Transaction Documents to which it is a party.

16.8 The Sellers and NGL agree that the benefit of this Agreement and all of the other Transaction Documents to which the Buyer is a party may, subject to clauses 16.9 and 16.10, be assigned (in whole but not in part) by the Buyer in the circumstances contemplated by clause 16.7 without the consent of the Sellers to, and may be enforced by, any such person as if it were the Buyer under this Agreement PROVIDED THAT the assignee shall have net assets of at least €1 (one euro) (or the equivalent in any currency) and shall, prior to such assignment:

16.8.1 warrant to the Sellers in the terms of the warranties in clause 7.12 of this Agreement in respect of the obligations to be assumed by it;

16.8.2 if it is not a corporate entity incorporated in England, Wales or Ireland, deliver

to NGL and the Sellers a legal opinion in respect of the obligations to be assumed by it in substantially the form of the legal opinion delivered to NGL and the Sellers on the date of this Agreement; and

16.8.3 if such assignee is a body corporate which is not incorporated in the United Kingdom, appoint an agent for service of Notices and/or proceedings in accordance with clause 17.6.

16.9 If an assignment of the benefit of this Agreement and all of the other Transaction Documents to which the Buyer is a party is made as permitted under clause 16.8:

16.9.1 the liabilities of the members of the Core Group under this Agreement and the Transaction Documents shall be no less or greater than such liabilities would have been had the assignment not occurred; and

16.9.2 save in relation to clauses 16.7 to 16.11 of this Agreement, references in this Agreement to “the Buyer” and “the Buyer Group” shall be deemed to be references to the relevant assignee and the relevant assignee’s Group respectively.

16.10 Without prejudice to the accrued rights of NGL and the Sellers against the Buyer under this Agreement or any of the Transaction Documents, if, following Completion, the Buyer sells the Shares to any third party or if an assignment of the benefit of this Agreement and all the other Transaction Documents to which the Buyer is party is made as permitted under clause 16.8, the Buyer shall procure that the purchaser or assignee (as applicable) shall undertake directly to NGL and the Sellers to comply with either (i) all the obligations of the Buyer under the Transaction Documents or (ii) the obligations of the Buyer under:

16.10.1 clauses 3.6, 3.9, 3.11, 3.12, 3.13, 3.15, 6.1 (subject to clauses 6.3 and 6.4), 6.5.1, 7.14, 8.6, 9.2, 12.2, 12.3, 12.5, 12.6, 12.8.1, 12.12, 12.18 to 12.24 (inclusive), 13.2, 13.3, 16.15, 16.19, 16.20, 16.21, 16.22 and paragraphs 9, 12 and 15 of Schedule 4 to this Agreement;

16.10.2 clauses 4.3, 5.4, 6, 7, 8, 11 of, and Schedule 2 to, the Asset Transfer Agreement;

16.10.3 clauses 6, 7, 8, 9, 11, 12.8, 13.3, 13.5 and 13.6 of the Tax Deed;

16.10.4 the Buyer Undertaking; and

16.10.5 to the extent that the Buyer is a party thereto, the Ancillary Agreements.

and NGL and the Sellers agree to enter into an agreement with the purchaser or assignee (as applicable) to give effect to such undertaking.

16.11 Save as otherwise expressly provided in this Agreement, no party shall be entitled to assign, transfer or create any trust in respect of the benefit or burden of any provision of this Agreement (or any other Transaction Document) without the prior written consent of any other party to the relevant document.

Invalidity

16.12 The invalidity, illegality or enforceability of any provision of this Agreement shall not affect or impair the continuation in force of the remainder of this Agreement.

Effect of Completion

16.13 The provisions of this Agreement, insofar as the same shall not have been fully performed or expressly waived in writing at Completion, shall remain in full force and effect notwithstanding Completion.

Counterparts

16.14 This Agreement may be executed as two or more counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Agreement.

Further assurance

16.15 Save as otherwise expressly provided in this Agreement and any other agreement to be entered into pursuant to this Agreement, each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonably be required to give effect to this Agreement.

Third party rights

16.16 Save as otherwise expressly provided in this Agreement or where any provision is expressed to be for the benefit of any member of the NTL Group or the Buyer’s Group which is not a party to this Agreement, no provisions of this Agreement which confer rights upon any third party shall be enforceable pursuant to the Contracts (Rights of Third Parties) Act 1999 by any such third party.

Compromise of claims

16.17 Notwithstanding that members of the NTL Group shall be entitled to enforce certain rights under this Agreement which have been given for their benefit, the parties to this Agreement may enter into any agreement or arrangement with the other parties varying or amending any of the terms of this Agreement, or comprising or settling any claim under this Agreement (including in respect of such rights) without reference to the interest of, or the consent of, the other members of the NTL Group not party to this Agreement.

No Set off

16.18 Except as otherwise expressly provided, all payments to be made by the parties arising out of or in connection with this Agreement (or any other agreement or arrangement required to be entered into by it in connection with this Agreement) shall be made in full, without set-off or counterclaim and without any deduction whatsoever except to the extent required by law.

Gross up

16.19 Subject to clause 12.25, all payments to be made by the parties arising out of or in connection with this Agreement (or any other agreement or arrangement required to be entered into in connection with this Agreement) shall be made in full, without set-off or counterclaim and free and clear of all deductions or withholdings whatsoever save only as may be required by law. Subject to clauses 16.20, 16.21 and 16.22, if the payer is required by law to make a deduction or withholding, the payer shall, at the same time as the sum which is the subject of the deduction or withholding is payable under this Agreement, pay to the payee such additional amount as shall be required to ensure that the net amount received by the payee under this Agreement will equal the full amount which would have been received by it had no such deduction or withholding been required to be made.

16.20 If the payee is entitled to and receives payment in respect of a credit for or refund of Taxation by reason of the deduction or withholding it shall, provided it determines in good faith it can do so without prejudice to the retention of that credit or refund, reimburse the payer with such amount as shall leave the payee in no better or worse position than it would have been had no deduction or withholding been required. If any sum payable by the Sellers to the Buyer under this Agreement shall be subject to a Taxation Liability in the hands of the Buyer, the Sellers shall be under the same obligation to make an increased payment in relation to that Taxation Liability as if the liability were a deduction or withholding required by law.

16.21 The obligation to pay additional amounts in clause 16.19 and the obligation to make increased payments in clause 16.20 shall only apply to the extent that:

16.21.1 the relevant deduction, withholding or Taxation Liability would arise under the current law as it is in force at the date of this Agreement; and

16.21.2 the relevant deduction, withholding or Taxation Liability would arise if the Buyer were resident in the United Kingdom for Taxation purposes and for the purposes of section 349(2)(c) Income and Corporation Taxes Act 1988 had its place of abode inside the UK.

16.22 Without prejudice to clause 16.8 (Assignment), if either party assigns its rights under this Agreement and the payee is an assignee, the payer shall only be required to pay such sum as is equal to the amount it would have had to pay under clauses 16.19 or 16.20 had the party’s rights under the Agreement not been assigned.

17. NOTICES

Form of notice

17.1 Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “Notice” for the purposes of this clause) shall be in English, in writing and signed by or on behalf of the person giving it.

Method of service

17.2 Service of a Notice must be effected by one of the following methods:

17.2.1 by hand to the relevant address set out in clause 17.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time; or

17.2.2 by facsimile transmission to the relevant facsimile number set out in clause 17.4 and shall be deemed served on despatch, if despatched during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using the method described in clause 17.2.1 no later than the end of the next Business Day.

17.3 In clause 17.2 “during a Business Day” means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located. References to “the start of a Business Day” and “the end of a Business Day” shall be construed accordingly.

Address for service

17.4 Notices shall be addressed as follows:

17.4.1 If to the Buyer:

c/o Morgan Stanley & Co. International Limited

25 Cabot Square

Canary Wharf

London E14 4QA

Fax: +44 (0) 20 7425 8990

For the attention of: Scott Matlock and the Company Secretary

17.4.2 If to NGL, Holdings or Chichester:

NTL House

Bartley Wood Business Park

Hook

Hampshire

RG27 9UP

Fax: +44 (0)1256 752 170

For the attention of: General Counsel

And with a copy (which shall not be a notice requirement) to:

Travers Smith

10 Snow Hill

London

EC1A 2AL

Fax: +44 (0)20 7295 3500

For the attention of: Spencer Summerfield.

Change of details

17.5 A party may change its address for service provided that the new address is within the same country and that it gives each other party not less than twenty-eight (28) days’ prior notice in accordance with this clause 17. Until the end of such notice period, service on either address shall be effective.

Agent for service/deemed service

17.6 The Buyer irrevocably authorises and appoints Morgan Stanley & Co. International Limited, 25 Cabot Square, Canary Wharf, London E14 4QA, for the attention of the Company Secretary (or the firm which at the time in question has succeeded to it and carries on its practice, or any replacement agent appointed by the Buyer in accordance with clause 17.7) as its agent for service of Notices and/or proceedings in relation to any matter arising out of or in connection with this Agreement and service on such agent in accordance with this clause 17 shall be deemed to be effective service on the Buyer.

17.7 If the agent referred to in clause 17.6 (or any replacement agent appointed pursuant to this clause 17.7) at any time ceases to act as such for any reason, the Buyer shall forthwith appoint a replacement agent to accept service on its behalf, such agent having a service address in England or Wales, and the Buyer shall notify the Seller forthwith of the name and address of the replacement agent.

THIS AGREEMENT has been duly executed on the date first stated above.

SCHEDULE 1

TARGET GROUP COMPANIES

Name:		Communications

Incorporated:		25 August 1970

Registered in Ireland under No.:		32156

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€1,377,950.00 comprising 1,063,255 “A” ordinary shares of €1.27 each and 21,745 “B” ordinary shares of €1.27 each

Issued Share Capital:		€110,464.60 comprising 65,235 “A” ordinary shares of €1.27 each and 21,745 “B” ordinary shares of €1.27 each, all of which are held by ntl Irish Holdings Limited

Directors:		Graham Sutherland Brendan Hunt

Secretaries:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 24 June 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

Name:		ntl Irish Networks Limited

Incorporated:		15 November 2004

Registered in Ireland under No.:		393660

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€1,000,000.00 comprising 1,000,000 ordinary shares of €1.00 each

Issued Share Capital:		€101.00 comprising 101 ordinary shares of €1.00 each, all of which are held by ntl (Chichester) Limited

Directors:		Robert Mackenzie Graham Sutherland

Secretaries:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 30 November 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

Name:		ntl Communications (Galway) Limited

Incorporated:		27 September 1979

Registered in Ireland under No.:		71375

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€12,700.00 comprising 10,000 ordinary shares of €1.27 each

Issued Share Capital:		€1,270.00 comprising 1,000 ordinary shares of €1.27 each, 999 of which are held by Communications and 1 of which is held by ntl Communications (Waterford) Limited

Directors:		Robert Mackenzie Graham Sutherland

Secretary:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 24 June 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

Name:		ntl Communications (Waterford) Limited

Incorporated:		13 April 1971

Registered in Ireland under No.:		33976

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€127.00 comprising 100 ordinary shares of €1.27 each

Issued Share Capital:		€127.00 comprising 100 ordinary shares of €1.27 each, 99 of which are held by Communications and 1 of which is held by ntl Communications (Galway) Limited

Directors:		Robert Mackenzie Graham Sutherland

Secretary:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 24 June 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

Name:		ntl Construction Limited

Incorporated:		26 June 1992

Registered in Ireland under No.:		190772

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€12,700,000.00 comprising 10,000,000 ordinary shares of €1.27 each

Issued Share Capital:		€762,000.00 comprising 600,000 ordinary shares of €1.27 each, 599,999 of which are held by Communications and 1 if which is held by ntl Communications (Galway) Limited

Directors:		Robert Mackenzie Graham Sutherland

Secretary:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 24 June 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

Name:		ntl Dublin Cablesystems Limited

Incorporated:		11 April 1975

Registered in Ireland under No.:		51062

Registered Office:		Building P2, East Point Business Park, Clontarf, Dublin 3, Ireland

Authorised Share Capital:		€127.00 comprising 100 ordinary shares of €1.27 each

Issued Share Capital:		€2.54 comprising 2 ordinary shares of €1.27 each, 1 of which is held by Communications and 1 of which is held by ntl Communications (Waterford) Limited

Directors:		Robert Mackenzie Graham Sutherland

Secretary:		Robert Mackenzie Gillian James (Deputy Secretary)

Auditors:		Ernst & Young

Accounting Reference Date:		31 December

Charges:		Charge dated 24 June 2004 in favour of Credit Suisse First Boston over the uncalled share capital of the Company, mortgaged registered or unregistered property of the Company, all Chattels, both present and future, including any fixed plant or machinery, together with Floating Charges over the assets of the Company, together with a covenant not to create any further charges or disposals without the Security Trustee’s consent

SCHEDULE 2

COMPLETION OBLIGATIONS

1. DELIVERY OBLIGATIONS

NGL and the Sellers shall deliver or procure the delivery of or, in the case of paragraph 1.3 below, make available to the Buyer:

Board Resolution

1.1 certified copies of board resolutions of each of NGL, Holdings and Chichester authorising the execution and performance by NGL, Holdings or Chichester (as the case may be) of its obligations under this Agreement and each of the documents to be executed by NGL, Holdings or Chichester (as the case may be) pursuant to this Agreement;

Share transfers, statutory books etc.

1.2 a stock transfer form in respect of the Communications Shares executed by Holdings and a stock transfer form in respect of the Networks Shares executed by Chichester in favour of the Buyer (or a person nominated by the Buyer), and the share certificates relating to the Communications Shares and the Networks Shares;

1.3 the certificate of incorporation and all certificates of incorporation on change of name, any common seal, the statutory books and minute books of each member of the Target Group (duly completed and written up to date);

1.4 the certificates in respect of all issued shares in ntl Communications (Waterford) Limited, ntl Construction Limited, ntl Communications (Galway) Limited and ntl Dublin Cablesystems Limited and duly executed transfers in respect of such shares which are not at Completion registered in the name of Communications or another member of the Target Group, in favour of the Buyer (or persons nominated by the Buyer);

Resignations

1.5 resignation letters in the approved terms executed as deeds by the directors and the company secretary of each member of the Target Group (other than for Graham Sutherland and Brendan Hunt);

Power of Attorney

1.6 a power of attorney in the approved terms executed by each Seller in favour of the Buyer whereby the Buyer is appointed as the attorney of each Seller to receive notices of and to

attend and vote at any meetings of the Company pending the stamping and registration of the transfer of the Shares;

Banking arrangements

1.7 copies of releases in substantially the approved terms of: (a) the charges detailed in Schedule 1 from the Facility Agent and the Security Trustee (as such terms are defined in the Senior Credit Facility) under the Senior Credit Facility; and (b) (i) the charge on shares dated 24 June 2004 granted by ntl (Triangle) LLC in favour of CSFB; (ii) the charge on shares dated 30 November 2004 granted by Chichester in favour of CSFB; (iii) the charge on shares dated 23 December 2004 granted by Holdings in favour of CSFB; (iv) the composite debenture dated 13 April 2004 granted by NGL to the extent that same constitutes security over assets to be transferred under the Asset Transfer Agreement and a release of the Target Group from their obligations under the Senior Credit Facility from the Facility Agent and the Security Trustee (as such terms are defined in the Senior Credit Facility) under the Senior Credit Facility;

Other documents

1.8 the Tax Deed executed by Holdings and Chichester;

1.9 the Asset Transfer Agreement, duly executed by NGL;

1.10 the Novation Agreement, duly executed by Holdings and Communications;

1.11 the Ancillary Agreements, duly executed by the parties thereto;

1.12 the Buyer Undertaking, duly executed by NGL, Holdings and Chichester;

1.13 a copy of the novation agreement in respect of the novation of the inter-company debt owed by Communications to ntl Communications Limited in accordance with clause 4.2 duly executed by the parties to that agreement (together with the related board minutes);

1.14 a copy of the novation agreement in respect of the novation of the inter-company debt owed by Communications to NTL Incorporated in accordance with clause 4.2 duly executed by the parties to that agreement (together with the related board minutes);

1.15 contribution letters in the approved terms;

Miscellaneous

1.16 a CG50 clearance certificate confirming that the Buyer does not have to deduct any sum representing capital gains tax on payment of the Consideration to the Sellers or certificate

from the auditors of Communications and Networks confirming that no CG50 clearance certificate is required in connection with the sale of the Communications Shares and Network Shares to the Buyer;

1.17 a copy of the memorandum and articles of association of each member of the Target Group certified by the secretary of each member of the Target Group as a true, complete and accurate copy as at the date of Completion; and

1.18 copies of all bank mandates relating to the Target Group Companies.

2. PROCUREMENT OBLIGATIONS

Holdings and Chichester agree with the Buyer to procure that at Completion:

Board resolutions

2.1 (with the co-operation of the Buyer) board resolutions of each member of the Target Group are passed:

2.1.1 sanctioning for registration (subject to due stamping) the transfers in respect of the Communications Shares, the Networks Shares and any shares referred to in paragraph 1.4 above; and

2.1.2 appointing such individuals as the Buyer may notify to the Sellers in writing no later than two (2) Business Days prior to Completion to be the directors and the secretaries of each member of the Target Group and accepting the resignations of the directors and secretaries referred to above.

3. PROPERTY

NGL and the Sellers shall further deliver or procure the delivery of:

3.1 the documents of title to the Properties in accordance with the schedules for the same as exhibited in the Data Room Documents;

3.2 discharges/releases of any charges created by the Target Group Companies over the Properties (or an unconditional undertaking of the Sellers to procure the same as soon as practicable after Completion and to furnish the same to the Buyer); and

3.3 a Statutory Declaration re. Lost Land Certificate for Folio 23368 F (County Galway).

4. ASSET TRANSFER AGREEMENT

NGL shall comply with its Completion obligations under Schedule 1 to the Asset Transfer Agreement.

PART II - - OBLIGATIONS OF THE BUYER

1. The Buyer shall:

1.1 pay, or procure the payment of, the Consideration (both as to amount and currency denomination) set out in clause 3.1 as adjusted pursuant to clause 3.5 in cleared funds to such bank account as NGL (as agent for the Sellers) shall specify prior to the date of this Agreement;

1.2 deliver to the Sellers’ English Solicitors certified copies of board resolutions of the Buyer authorising the execution and performance by the Buyer of its obligations under this Agreement and each of the documents to be executed by the Buyer pursuant to this Agreement;

1.3 deliver to the Sellers’ English Solicitors duly signed Forms B10 in respect of the individuals to be appointed at Completion as the directors and the company secretary of each Target Group Company;

1.4 deliver to the Sellers’ English Solicitors a counterpart of the Tax Deed executed by the Buyer;

1.5 deliver to the Sellers’ English Solicitors a counterpart of the Asset Transfer Agreement duly executed by the Buyer;

1.6 deliver to the Sellers’ English Solicitors a counterpart of the Novation Agreement, duly signed by the Buyer;

1.7 deliver to the Sellers’ English Solicitors a counterpart of the Buyer Undertaking, duly signed by the Buyer;

1.8 comply with its completion obligations under Schedule 1 to the Asset Transfer Agreement; and

1.9 deliver to the Seller’s English Solicitors a legal opinion in the approved terms.

SCHEDULE 3

WARRANTIES

Part:

I		Capacity and Shares

II		Constitution

III		Accounts

IV		Assets

V		Liabilities

VI		Trading arrangements

VII		Compliance and litigation

VIII		Insolvency

IX		Intellectual property

X		Information technology

XI		Employees

XII		Pensions

XIII		Property

XIV		Environment

XV		Tax

PART I

CAPACITY AND SHARES

1. SCHEDULE

The information stated in Schedule 1 (Target Group Companies) is true and accurate and not misleading in any material respect.

2. OWNERSHIP OF COMMUNICATIONS SHARES

The Communications Shares are legally and beneficially owned by Holdings free from all Security Interests (other than Security Interests which will be released on or prior to Completion) and such Communications Shares are fully paid and properly and validly allotted and represent the entire allotted and issued share capital of Communications.

3. OWNERSHIP OF NETWORKS SHARES

The Networks Shares are legally and beneficially owned by Chichester free from all Security Interests (other than Security Interests which will be released on or prior to Completion) and such Networks Shares are fully paid and properly and validly allotted and represent the entire allotted and issued share capital of Networks.

4. SUBSIDIARY UNDERTAKINGS

The shares of each member of the Target Group (other than Communications and Networks) are beneficially owned by Communications (or another member of the Target Group) free from all Security Interests (other than Security Interests which will be released on or prior to Completion) and such shares are fully paid and properly and validly allotted and represent the entire allotted and issued share capital of such member of the Target Group.

5. RIGHTS IN RELATION TO THE SHARE CAPITALS OF THE TARGET GROUP COMPANIES

5.1 Save as contemplated by this Agreement, no person has the right (whether exercisable now or in the future and whether contingent or not) to call for the allotment, conversion, issue, registration, sale or transfer, amortisation or repayment of any share capital or any other security giving rise to a right over, or an interest in, the share capital of any Target Group Company under any option or other agreement (including conversion rights and rights of pre-emption).

5.2 No Target Group Company:

5.2.1 has any interest in, or has agreed to acquire, any share capital or other security of the type referred to in paragraph 5.1 above of any other company (wherever incorporated) other than as set out in Schedule 1 (Target Group Companies); or

5.2.2 has or has had in the last three (3) years any associate (being an entity that falls to be treated as such for the purposes of International Accounting Standard No. 28, issued by the International Accounting Standards Board).

6. INTRA-GROUP AGREEMENTS

Save as required by this Agreement (including, for the avoidance of doubt, Schedule 5 (Ancillary Agreements)), no member of the Target Group will at Completion be a party to any legally binding agreement with or, any material legally binding agreement for the benefit of, any member of the NTL Group (excluding, for the avoidance of doubt, any other member of the Target Group).

PART II

CONSTITUTION

1. MEMORANDUM AND ARTICLES OF ASSOCIATION

The copy of the memorandum and articles of association of each Target Group Company contained in the Data Room Documents and annexed to the Disclosure Letter is true and complete and sets out in full the rights and restrictions attaching to the share capital of such Target Group Company.

2. STATUTORY BOOKS

The statutory books (excluding books of accounts) and minute books of each member of the Target Group are up to date in all material respects and in its possession or control and no member of the NTL Group has received any written notice (which is current) that any of them is incorrect or incomplete in any material respect or should be rectified.

3. FILINGS

In the five (5) years prior to the date of this Agreement, all resolutions, annual returns and other documents required to be delivered to the Irish Registrar of Companies or to any other governmental or regulatory body or to any local authority by any member of the Target Group have in all material respects been properly prepared and filed and are true and complete in all material respects.

4. COMPLIANCE

Due compliance has been made in all material respects with all the provisions of the Irish Acts in connection with:

4.1 any allotment, issue, purchase or redemption of shares, debentures or other securities in each member of the Target Group;

4.2 any reduction of the authorised or issued share capital of any member of the Target Group;

4.3 any amendment to the memorandum or articles of association of any member of the Target Group;

4.4 the passing of any resolutions by any member of the Target Group; and

4.5 the payment of any dividends by any member of the Target Group.

5. POWERS OF ATTORNEY

Other than under a contract entered into in the ordinary course of business or pursuant to the Senior Credit Facility, no Target Group Company has given a power of attorney which is still outstanding.

PART III

ACCOUNTS

1. GENERAL

1.1 The Accounts, the 2002 Accounts and the 2003 Accounts have been prepared in accordance with the Irish Acts, have been prepared and audited under GAAP at time of preparation and, as at the date of publication, showed a true and fair view of the assets, liabilities, state of affairs and financial position of Communications and its subsidiaries for the period ended on the relevant accounting date.

1.2 The bases and policies of accounting adopted for the purposes of preparing the Accounts are the same as those adopted for the purposes of preparing the audited consolidated accounts for Communications and its Subsidiaries for the two preceding accounting periods.

2. NETWORKS

2.1 Networks has no material assets or liabilities (whether actual or contingent) other than those transferred to it pursuant to or under the Irish Transfer Agreement and no employees and, prior to the date of this Agreement, it has not traded (save that its sole activity has been the operation of the assets transferred to it pursuant to the Irish Transfer Agreement).

2.2 At the date of this Agreement the aggregate liabilities of Networks, which would be required to be included in any audited financial statements of Networks (if prepared at such date and in accordance with the same accounting principles and policies as the Accounts), but excluding any liabilities in respect of Environmental Matters, do not exceed €1,000,000 (one million euro).

3. BUSINESS SINCE THE ACCOUNTS DATE

Since the Accounts Date:

3.1 there has been no material adverse change in the financial position of the Irish Cable Business (taken as whole);

3.2 the Irish Cable Business has in all material respects carried on its trading in the ordinary and usual course;

3.3 no Target Group Company has incurred any liability in connection with the Irish Cable Business in excess of €250,000 (two hundred and fifty thousand euro) outside the ordinary course of business;

3.4 no Target Group Company has acquired or agreed to acquire, in connection with the Irish Cable Business, any asset having a fair market value in excess of €500,000 (five hundred thousand euro) otherwise than in the ordinary course of business;

3.5 no Target Group Company has disposed of or agreed to dispose of, in connection with the Irish Cable Business, any asset having a fair market value in excess of €500,000 (five hundred thousand euro) otherwise than in the ordinary course of business;

3.6 no distribution of capital or income has been declared, made or paid by any Target Group Company; and

3.7 no Target Group Company has repaid or redeemed any share or loan capital or agreed to do so.

4. ACCOUNTING RECORDS

Other than books of account which are the subject of clause 12, all material books of account of each member of the Target Group will, at Completion, be in its possession or under its control.

5. MANAGEMENT ACCOUNTS

The Management Accounts: (i) have been prepared with due care and attention and on bases generally consistent with those adopted in previous management accounts of the relevant member of the Target Group for the year immediately preceding the date of the Management Accounts; (ii) (within the limitations inherent in the preparation of management accounts) represent in all material respects management’s understanding of the matters included therein as of the relevant dates prepared; and (iii) other than in any respect which would not have a material adverse effect on the Irish Cable Business taken as a whole, the profit and loss account, so far as the Seller is aware, does not materially overstate or materially understate the profits and losses for the Target Group as of the relevant dates prepared; it being acknowledged that such Management Accounts are unaudited and the information contained therein remains subject to normal audit adjustments.

6. ASSUMED LIABILITIES

The aggregate liabilities to be assumed by the Buyer pursuant to clause 7 of the Asset Transfer Agreement, which would be required to be included in any audited financial statements of the relevant Transferors (as defined in the Asset Transfer Agreement) (if prepared at such date and in accordance with the same accounting principles and policies as the Accounts), but excluding any liabilities in respect of Environmental Matters, would not, at Completion, exceed €1,000,000 (one million euro).

PART IV

ASSETS

1. ASSETS

1.1 All material assets included in the Accounts or acquired by any of the Target Group Companies since the Accounts Date (in either case other than trading stock subsequently disposed of in the ordinary and usual course of business) are legally and beneficially owned by the Target Group Companies free from any Security Interest (other than a Permitted Security Interest).

1.2 The Target Group owns or is entitled to use in all material respects all assets required to operate the Irish Cable Business in the manner in which it was operated immediately prior to the date of this Agreement (other than the Additional Assets contracted to be acquired by the Buyer pursuant to the Asset Transfer Agreement and any Assets to be made available to the Target Group under and subject to the terms of the Ancillary Agreements).

1.3 Each of the Additional Assets is legally and beneficially owned by NGL or the transferring member of the NTL Group free from any Security Interest (other than a Permitted Security Interest).

2. DEBTS

None of the debts of the Target Group has been factored, sold or discounted nor has there been any agreement to do so.

3. INSURANCE

3.1 A list of current insurance policies and their material particulars (being policy number, renewal date, excess, premium and indemnity limit) in respect of which the NTL Group has any continuing interest, so far as they relate to the Irish Cable Business or the Additional Assets (the “Policies”), is annexed to the Disclosure Letter. Such list is complete and accurate in all material respects. In respect of such Policies:

3.1.1 all premiums and related insurance premium taxes have been duly paid to date;

3.1.2 all the Policies are in full force and effect and, so far as the Seller is aware, are not void or voidable; and

3.1.3 so far as the Seller is aware, no circumstances have arisen which would render any of the Policies void, voidable or unenforceable for illegality or otherwise.

3.2 A list of all insurance claims having an anticipated value in excess of €250,000 (two hundred and fifty thousand euro) made in relation to the Irish Cable Business or the Additional Assets during the past three (3) years is contained in the Disclosure Letter.

3.3 No insurance claim having an anticipated value in excess of €500,000 (five hundred thousand euro) (“Material Insurance Claim”) is outstanding in relation to the Irish Cable Business or the Additional Assets and, so far as the Seller is aware, no circumstances exist which are reasonably likely to give rise to any such Material Insurance Claim.

3.4 So far as the Seller is aware during the period of two years prior to the date of this Agreement, all claims made by any member of the Target Group under its past and present insurance policies have been settled in full by the relevant insurers.

4. EIRCOM DUCT

4.1 All material agreements between the Target Group and eircom Limited in relation to the use by the Target Group of the Eircom Duct are included in the Data Room Documents.

4.2 So far as the Seller is aware, no Target Group Company has received a written notice from eircom Limited requiring such Target Group Company to cease to use the Eircom Duct.

4.3 The length of the Eircom Duct used by the Target Companies does not exceed 50,000 metres.

5. BROADCAST SEPARATION

5.1 The only agreements to which a member of the Target Group is party in relation to the Broadcast Separation are the Irish Transfer Agreement, a Designated Core Business Transfer Agreement – Irish Assets (which is only relevant as it is the agreement under which the Clonshaugh property transfers to Networks), a Framework Services Agreement, a Dark Fibre Services Agreement, a Mast Inspection, Microwave Link Design Agreement and a Site Sharing and Co-Location Agreement, each of which were contained in the Data Room.

5.2 So far as the Seller is aware, no member of the Target Group has received written notice from any third party seeking to prevent the transfer of the assets of NatTrans to Networks pursuant to the Irish Transfer Agreement.

PART V

LIABILITIES

1. GUARANTEES

There is not outstanding any guarantee or indemnity given:

1.1 by any Target Group Company in respect of any material obligation of any other person (other than in respect of the obligations of another Target Group Company); or

1.2 by any member of the NTL Group (other than a Target Group Company) or NatTrans in respect of any material obligation of a Target Group Company or in respect of the Additional Assets.

2. EVENTS OF DEFAULT

No written notice (which is current and outstanding) has been received by any member of the Target Group to the effect that such member is in material default under the terms of any borrowing made by it.

3. GRANTS

Since its acquisition by the NTL Group, no member of the Target Group has applied for any investment grant, employment subsidy or other similar payment and no such grant, subsidy or payment paid or due to be paid to any member of the Target Group is or might reasonably be expected to be liable to be refunded, withheld or refused (in whole or in part) in consequence of anything which such member has done or omitted to do (or has agreed to do or omit to do) or as a result of the Transaction.

4. SUCCESS FEES

No member of the Target Group is liable to pay, in connection with the sale of any of the Communications Shares or Network Shares under this Agreement, or the sale of the Additional Assets under the Asset Transfer Agreement or otherwise in connection with this Agreement, or any of the transactions contemplated hereby or thereby, any success fee, brokerage, commission or bonus.

5. OFF BALANCE SHEET FINANCING

No member of the Target Group is engaged in any financing (including the incurring of any Borrowings in the nature of acceptances or acceptance credits) of a type which would not be required to be shown or reflected in the Accounts prepared in accordance with the Irish Acts.

6. SECURITY INTERESTS

There is not outstanding in relation to any member of the Target Group or any Additional Asset any Security Interest other than a Permitted Security Interest.

7. DERIVATIVES AND COUNTER INDEMNITIES

There is not outstanding in relation to any Target Company:

7.1 any derivative transaction in connection with protection against or benefit from fluctuation in any rate or price; or

7.2 any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution.

8. BORROWINGS

At Completion, no member of the Target Group will have outstanding any Borrowings other than Completion Indebtedness.

PART VI

TRADING ARRANGEMENTS

1. SUPPLIERS

1.1 In each of the last two (2) financial years of Communications ended on 31 December 2004, no more than 15% of the aggregate amount of all purchases by the Target Group during that period were obtained from the same supplier (including, so far as the Seller is aware, any member of such supplier’s Group).

1.2 No Material Supplier has during the last twelve (12) months served notice under a Material Supplier Contract to cease supplying a Target Group Company nor, so far as the Seller is aware, has any such Material Supplier given notice in writing to any Target Group Company indicating an intention to cease or materially to reduce its supplies to a Target Group Company in circumstances in which a Target Group Company could otherwise demand supply under a Material Supplier Contract.

1.3 All material details of all existing Material Supplier Contracts in the possession of the Target Group are contained in the Data Room Documents.

2. CUSTOMERS

2.1 In each of the last two (2) financial years of Communications ended on 31 December 2004, no more than 15% of the aggregate amount of all sales by the Target Group during that period were made to the same customer (including, so far as the Seller is aware, any member of such customer’s Group).

2.2 No Material Customer has during the last twelve (12) months served notice under a Material Customer Contract to cease to trade with a Target Group Company nor, so far as the Seller is aware, has any such Material Customer given notice in writing to any Target Group Company indicating an intention to cease or materially to reduce trading with a Target Group Company prior to the expiry of the contracted term of the relevant Material Customer Contract.

2.3 All material details of any existing Material Customer Contracts are contained in the Data Room Documents.

3. AGREEMENTS

3.1 No member of the Target Group is currently a party to any contract and there is no Additional Contract which:

3.1.1 is in the nature of a material partnership, consortium arrangement or corporate joint venture;

3.1.2 limits or excludes to any material extent the right of any member of the Target Group to carry on its business and/or to compete in any country (in each case, insofar as it relates to the Irish Cable Business); or

3.1.3 is a material contract whereunder a Target Group Company is appointed as an agent for a third party, or a third party is appointed as an agent for a Target Group Company with the authority to bind such Target Group Company (other than contracts with employees).

3.2 No member of the Target Group has outstanding any bid or tender in respect of the Irish Cable Business which, if accepted, would constitute:

3.2.1 a contract of a nature described in paragraph 3.1; or

3.2.2 a contract which is anticipated to generate annual revenues (in the case of customer contracts) of more than €800,000 (eight hundred thousand euro) or give rise to annual expenditure (in the case of supplier contracts) of more than €250,000 (two hundred and fifty thousand euro).

3.3 Save as Fairly Disclosed in the Data Room Documents, neither the execution nor the completion or performance of this Agreement will enable any Material Customer or Material Supplier or the counterparty to any programming contract to terminate or alter any material terms of the relevant Material Customer Contract, Material Supplier Contract or programming contract to which a member of the Target Group is party.

4. VALIDITY OF AGREEMENTS

In relation to each Material Supplier Contract, each Material Customer Contract and each Additional Contract:

4.1 so far as the Seller is aware, there are no grounds for its invalidity, premature determination, avoidance, rescission or repudiation;

4.2 so far as the Seller is aware, no party has given written notice to terminate it or has sought to repudiate or disclaim it; and

4.3 so far as the Seller is aware, no member of the Target Group is in material breach of it.

5. STANDARD TERMS

Copies of the Irish Cable Business’ current principal standard terms and conditions of business are annexed to the Disclosure Letter.

6. DEPENDENCE ON THE NTL GROUP

Save for the assets, facilities and services to be provided pursuant to the Ancillary Agreements or as contemplated by this Agreement or the Asset Transfer Agreement, the Irish Cable Business does not depend to any material extent upon the use of any assets owned by or facilities or services provided by any member of the NTL Group in order to carry on its business in the manner in which it is carried on at today’s date.

7. SUBSCRIBERS

As at 31 March 2005, the Target Group had at least:

7.1 310,000 cable television (analogue and digital) Subscribers;

7.2 5,500 broadband Subscribers; and

7.3 17,000 MMDS Subscribers

in Ireland.

PART VII

COMPLIANCE AND LITIGATION

1. COMPLIANCE WITH LAWS

No written notice has been received by any member of the Target Group of any material violation by any member of the Target Group of, or material default by any member of the Target Group under, any statute, regulation, order, decree or judgment of any court or any governmental agency of Ireland or the European Community which is reasonably likely to have a material adverse effect upon the Irish Cable Business (taken as a whole) nor has there been any such material violation.

2. LICENCES AND CONSENTS

2.1 The Target Group has all material licences, registrations and other authorisations (public and private) reasonably necessary for the operation of the Irish Cable Business in the places and in the manner in which such business is carried on at today’s date including, without limitation, the General Authorisation administered by ComReg and licences issued pursuant to the Wireless Telegraphy Acts 1926, as amended (together the “Authorities”).

2.2 No written notice has been received by any member of the Target Group to the effect that it is not currently in compliance with all Authorities.

2.3 The Target Group has in the last three (3) years complied with the terms and conditions of all Authorities in all material respects.

3. LITIGATION

No member of the Target Group is involved in any civil, criminal, arbitration or administrative proceedings in any jurisdiction which, in each case, is reasonably likely to have a material adverse effect on the Irish Cable Business taken as a whole (together the “Proceedings”) nor, so far as the Seller is aware, has any member of the Target Group been threatened in writing with any such Proceedings.

4. JUDGMENTS

No member of the Target Group nor so far as the Seller is aware any of their respective officers or employees in his capacity as such, is subject to any order, decree, award, decision or judgment given by any court, tribunal, arbitrator, governmental agency or other regulatory body in any jurisdiction nor is it/he a party to any undertaking or assurance given to any court, tribunal, arbitrator, governmental agency or other regulatory body which is still in force and which is reasonably likely to have a material adverse effect on the Irish Cable Business taken as a whole.

5. INVESTIGATIONS

So far as the Seller is aware, no member of the Target Group, nor any of their respective officers or employees, acting in their capacity as such, is subject to any judicial or quasi-judicial investigation or disciplinary proceedings against it/them nor, so far as the Seller is aware, are any such investigations or disciplinary proceedings currently pending or threatened which, in each case, is reasonably likely to have a material adverse effect on the Irish Cable Business (taken as a whole).

6. COMPETITION LAW MATTERS

6.1 No member of the Target Group has in the last three (3) years:

6.1.1 received any process, notice, communication or request for information with respect to any actual or proposed agreement, arrangement or concerted practice relating to the Irish Cable Business from the ICA, European Commission, the EFTA Surveillance Authority or any other person or body involved in the investigation and/or regulation of mergers or anti-competitive agreements or practices anywhere in the world (for the purposes of this paragraph 6.1 only, each a “Competition Authority”); or

6.1.2 given any undertaking to any Competition Authority in respect of merger control, anti-competitive agreements or practices which is still extant.

6.2 All members of the Target Group have in all material respects complied with all undertakings given to any Competition Authorities relating to the Irish Cable Business.

7. DATA PROTECTION

So far as the Seller is aware:

7.1 each Target Group Company has complied in the last three (3) years in all material respects with all applicable requirements (including registration requirements) of the Data Protection Acts, 1988 and 2003; and

7.2 no notice alleging non-compliance in any material respect with the Data Protection Act 1988 and 2003 (including any enforcement notice or transfer prohibition notice) has been received by any of the Target Group Companies from the Data Protection Commissioner.

PART VIII

INSOLVENCY

1. RECEIVERSHIP

No receiver or receiver and manager has been appointed over the whole or any part of the assets or undertaking of any member of the Target Group.

2. EXAMINATION

No order for the appointment of an examiner has been made in relation to any member of the Target Group and, so far as the Seller is aware, no petition for such an order has been presented.

3. COMPROMISES

No voluntary arrangement or compromise between any member of the Target Group and its creditors (or any class of them) has been proposed or approved or is in contemplation of the relevant Target Group member.

4. WINDING-UP

No petition has been presented and is outstanding (so far as the Seller is aware) and no order has been made and no resolution has been passed for the winding-up of any member of the Target Group or for the appointment of a provisional liquidator to any member of the Target Group.

5. PAYMENT OF DEBTS

No member of the Target Group is unable to pay its debts as and when they fall due within the meaning of sections 213 and 214 of the Companies Act 1963 of Ireland.

6. DISSOLUTION

No member of the NTL Group has taken any step which is outstanding with a view to the dissolution or striking-off the register of any member of the Target Group.

7. UNSATISFIED JUDGMENTS

No material unsatisfied judgment or court order is outstanding against any member of the Target Group or any of its assets.

8. NGL AND THE SELLERS

No receiver or administrative receiver has been appointed of the whole or any part of the assets or undertaking of NGL or either of the Sellers, no administration order has been made in relation to NGL or either of the Sellers and no order has been made or resolution passed for the appointment of a liquidator to NGL or either of the Sellers.

PART IX

INTELLECTUAL PROPERTY

1. INTELLECTUAL PROPERTY RIGHTS

1.1 There are no material Intellectual Property Rights necessary for carrying on the Irish Cable Business other than:

1.1.1 Intellectual Property Rights in respect of which the Target Group is the sole legal and beneficial owner, free from any Security Interest;

1.1.2 Intellectual Property Rights the use of which is licensed to the Target Group by the Core Group or by a third party; or

1.1.3 Intellectual Property Rights permitted to be utilised by and on behalf of the Target Group under clause 13 of this Agreement or pursuant to the Ancillary Agreements (assuming that all requisite consents are obtained).

2. REGISTERED RIGHTS

2.1 Annexed to the Disclosure Letter is a list of all registered Intellectual Property Rights (and applications for such rights) owned by any member of the Target Group and which, during the 36 month period immediately preceding the date of this Agreement, have been utilised by, and are material to, the Irish Cable Business (the “Listed Intellectual Property”).

2.2 So far as the Seller is aware, no member of the Target Group has in the 36 month period immediately preceding the date of this Agreement received written notice to indicate that any Listed Intellectual Property is being challenged or attacked by any third party or by any relevant registry and all fees payable in respect of the registrations/applications have been paid.

3. INFRINGEMENTS

3.1 So far as the Seller is aware, none of the Intellectual Property Rights belonging to the Target Group or which the Target Group will be entitled to use under the Ancillary Agreements, is being infringed save where any such infringement would not have a material adverse effect on the Irish Cable Business (taken as a whole).

3.2 So far as the Seller is aware, none of the activities of the Irish Cable Business materially infringes any Intellectual Property Rights of any other person or involves the unlicensed use of information confidential to any person outside the NTL Group.

PART X

INFORMATION TECHNOLOGY

1. The IT Systems:

1.1 will, at Completion, after taking into account the other systems to be made available under the Ancillary Agreements, be substantially adequate for the current use and requirements of the Irish Cable Business in terms of capacity, functionality and performance;

1.2 have in place reasonably adequate protection against known viruses and harmful program codes in line with good business practice; and

1.3 to the extent that they consist of third party software, are being used pursuant to a valid licence agreement,

save, in each case, where the failure to do so would not have a material adverse effect on the Irish Cable Business (taken as a whole).

PART XI

EMPLOYEES

1. EMPLOYEE PARTICULARS

1.1 The particulars shown in the schedule of employees annexed to the Disclosure Letter list all the Employees as at the date of this Agreement (separately set out as full time employees, part time employees and agency employees), are true, complete and accurate in all material respects and show in relation to each such person:

1.1.1 the period of continuous service and workplace location;

1.1.2 job title and salary/wages;

1.1.3 incentive, commission and/or bonus arrangements; and

1.1.4 to the extent differing from company policy (as disclosed in the Data Room Documents) hours of work, overtime, notice periods, holiday entitlements and benefits (car, healthcare, etc).

1.2. No material change in the level of remuneration, benefits and/or arrangements shown in the schedule of employees annexed to the Disclosure Letter and/or disclosed in the Data Room is due.

1.3 The Target Group as at the date of this Agreement has not made any outstanding offer nor agreed to employ any person in connection with the Irish Cable Business who is not an Employee where the basic salary of such person would exceed €100,000 (one hundred thousand euro) per annum.

1.4 There is no material agreement between the Target Group and any Employee or former employee, in each case whose basic salary exceeds €70,000 (seventy thousand euro), with respect to his employment or his ceasing to be employed which is not included in the written terms of his employment.

1.5 There are written terms of employment in place in respect of each Employee whose basic salary exceeds €70,000 (seventy thousand euro).

1.6 No material consultancy agreements are in place between any member of the Target Group and any third party at the date of this Agreement.

2. COMPLIANCE

So far as the Seller is aware, the Target Group has complied in all material respects with all statutes and regulations applicable to or in respect of all Employees arising out of or in connection with their terms and conditions of employment and/or with any judgments, decisions, orders and awards, whether under European law or Irish law, made in respect of any of them and no amount due to or in respect of any such employee is in arrears and unpaid (including holiday pay and bonuses) other than salary for the month current at the date of this Agreement.

3. TRADE UNIONS

So far as the Seller is aware there are no recognition, procedural or other arrangements with trade unions which relate to any of the Employees.

4. LOANS

There are no outstanding loans between the Target Group and an Employee.

5. PROPERTY

No current Employee resides in or occupies or is entitled to reside in or occupy, in each case for residential purposes, any property belonging to the Target Group.

6. NOTICE

6.1 There is no contract of employment between the Target Group and any of the Employees which cannot be terminated by six months’ notice or less given at any time without damages or compensation (other than any compensation payable by statute).

6.2 No current Employee who is on an annual basic salary in excess of €100,000 (one hundred thousand euro) has given notice to terminate his contract of employment or is under notice of dismissal.

7. DISPUTES

There are no, nor within the twelve months preceding the date of this Agreement have there been any, material disputes (excluding for the avoidance of doubt internal disciplinary proceedings in the ordinary course) with any Employees and/or any trade union or other representatives, nor are any such material disputes pending or threatened in writing.

8. FORMER EMPLOYEES/WORKERS

There is no person previously employed or engaged in the Irish Cable Business whose last annual basic salary was more than €50,000 (fifty thousand euro) who has a right to return to work or a right to be re-instated or re-engaged in the Irish Cable Business.

9. RIGHTS ON TRANSFER

9.1 There are no contractual obligations entitling any of the Employees or employees or subcontractors of IBM (UK) Limited and for IBM Ireland to any payment or other benefit (including any right to shares, options over shares and/or any securities) from any member of the Target Group arising from the sale of the Shares and/or of the Additional Assets and/or the entering into and/or the performance (but excluding any termination) of the Ancillary Agreements.

9.2 No persons other than the Employees will acquire any right to employment in any member of the Target Group pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 arising from the Ancillary Agreements and/or the sale of the Shares and/or the Additional Assets.

9.3 No written notice has been received by any Target Group Company of any claims pending or threatened by any Employee in relation to his terms and conditions of employment or the termination thereof or in respect of any work-related accident or injury which is not covered by insurance.

10. LONG TERM INCENTIVE PLAN (THE “PLAN”)

10.1 None of the Target Group Companies has any obligation to make an award to any Employee under the Plan.

10.2 None of the Target Group Companies has an obligation to issue shares or options over shares under the Plan, the ntl Inc. Executive Group Compensation Bonus Plan and/or under the 2004 Stock Incentive Plan and/or any other plan or to put in place any other plan to replace any benefit to which the Employees are entitled under those plans.

10.3 There is no stock incentive plan in place for 2005 relevant to the Target Group Companies.

10.4 There is no other incentive plan or similar arrangement for Employees which places an obligation on the Buyer or the Buyer Group to award options over or issues of shares of any Target Group Companies or any Buyer Group Companies.

PART XII

PENSIONS

1. The Schemes are the only schemes to which the Target Group Companies make or could as at Completion become liable to make payments for providing retirement, death, disability or life assurance benefits. No proposal has been announced to establish any other scheme for providing any such benefits and the Target Group Companies do not provide and have not promised any such benefits except under the Schemes.

2. No undertaking, assurance or agreement has been given to any Employee to introduce or improve any retirement, death or disability benefits.

3. The Schemes are exempt approved schemes within the meaning of Chapter 1 of Part 30 of the Taxes Consolidation Act 1997 of Ireland.

4. The Schemes comply in all material respects with and have been managed in accordance with their governing documents, all applicable laws, regulations and requirements.

5. All material details relating to the Schemes are contained in the Data Room Documents or attached to the Disclosure Letter, including copies of:

5.1 all trust deeds and rules relating to the Schemes;

5.2 all explanatory literature and announcements to members;

5.3 details of all Employees who are the members of the Schemes together with sufficient information to ascertain their respective entitlements under the Schemes; and

5.4 in the case of the ntl Limited Retirement and Death Benefit Plan a copy of the most recent actuarial valuation of same.

These documents contain details of all material benefits payable under the Scheme in respect of Employees.

6. Neither of the Schemes nor any member of the Target Group is engaged in or involved in any material dispute which relates to the Schemes or the benefits under the Schemes and, so far as the Seller is aware, there are no facts which might reasonably be expected to give rise to any such dispute.

7. No person has been excluded from membership of the Schemes or from any benefits under the Schemes in contravention of Article 141 of the Treaty of Rome, the Pensions Act 1990 of Ireland or the provisions of the Schemes.

8. The ntl Defined Contribution & Death Benefit Plan is a defined contribution scheme as defined in Section 2 of the Pensions Act 1990 of Ireland.

9. The ntl Limited Retirement and Death Benefit Plan is a defined benefit scheme as defined in Section 2 of the Pensions Act 1990 of Ireland.

10. The Target Group has at all times complied in all material respects with the requirements of the Pensions Act 1990 of Ireland in relation to the provision of access to a personal retirement savings account so far as it relates to Employees.

11. In relation to each of the Schemes:

11.1 the Buyer has been notified of the current rates at which contributions are paid to the Scheme under its terms as at the date of this Agreement; and

11.2 all contributions which the Target Group Companies have agreed to be made to the Scheme have been paid in full.

PART XIII

PROPERTY

1. INTERPRETATION

In this Part each Warranty which is expressed to be given in relation to the “Property” shall be deemed to be given in relation to each of the Properties as if it had been repeated with respect to each of the Properties and each and every part thereof and reference to the “Owner” shall, where the context so admits, be a reference to the Target Group Company which is the owner/lessee of the relevant Property as shown in Schedule 6 and references to the “Lease” or to the “Licence” shall, where the context so admits, be references to each and every lease or licence as the case may be, under which the Property is held. References to the “Planning Legislation” shall mean the Local Government (Planning and Development) Acts, 1963 to 1999, the Planning and Development Acts, 2000-2002, the Building Control Act, 1990 and any statutory modification or re-enactment thereof for the time being in force and any regulations or orders for the time being made thereunder and any other planning or related legislation and any statute amending, consolidating or replacing any of the aforementioned acts for the time being in force and reference to the “Existing Use” means the actual use to which the Property is presently put referred to in Schedule 6. References to “Material Properties” means the Properties listed at numbers 3, 4, 5, 7, 10, 11, 12, 13 and 15 of Part II of Schedule 6.

2. WARRANTIES

2.1 Parts I and II of Schedule 6 contain a complete and accurate list of all the properties owned, controlled, used or occupied by the Target Group or in which the Target Group has any interest or liability (whether actual or contingent) and either (a) which the management of the Irish Cable Business considers to be material to the day-to-day operation of the Irish Cable Business or (b) in respect of which a member of the Target Group has an outstanding financial commitment in excess of €500,000 (five hundred thousand euro).

2.2 So far as the Seller is aware, the Property is free from all incumbrances or third party rights whatsoever save as are evident from the documents of title to the Property Fairly Disclosed to the Buyer and/or the Data Room Documents.

2.3 So far as the Seller is aware, the Property has the benefit of the material legal rights and easements necessary for the use and enjoyment of the Property for the Existing Use free from onerous conditions or restrictions or any right to terminate or curtail them.

2.4 So far as the Seller is aware, there are no material breaches of current or previous legislation (including Planning Legislation) or regulations, orders, notices or directions made under such legislation capable of enforcement affecting in any material respect the Property.

2.5 So far as the Seller is aware, there are no material disputes, claims, actions, demands, notices or complaints with any neighbouring owner in relation to boundaries or in relation to any easements or rights enjoyed by the Property which are outstanding or anticipated by the Owner.

2.6 So far as the Seller is aware, there are no material breaches of any covenants affecting the freehold to the Property or any Lease or Licence or other agreement under which the Property is held and, so far as the Seller is aware, there are no arrears of rent or licence fees or other charges where the Property is held under a Lease or Licence or otherwise.

2.7 So far as the Seller is aware, any written replies given by the Seller or the Seller’s Irish Solicitors or the Seller’s English Solicitors to any enquiries raised in respect of the Property and included in the Data Room Documents are true and accurate in all material respects and are not misleading in any material respect.

2.8 The list of properties attached to the Disclosure Letter is, so far as the Seller is aware, a complete and accurate list of all freehold and leasehold properties owned by the Target Group.

2.9 The Target Group have in their possession or there are presently held to their order unconditionally and free from any Security Interest or lien all of the original or certified or plain copy documents as shown on the Schedule for each of the Properties exhibited in the Data Room Documents.

3. MATERIAL PROPERTIES

3.1 The Material Properties are free from all material incumbrances or third party rights save as are Fairly Disclosed by the documents of title to the Material Properties disclosed to the Buyer and/or the Data Room Documents.

3.2 The Material Properties have in all material respects the benefit of the legal rights and easements reasonably necessary for the use and enjoyment of the Material Properties for the Existing Use save as are Fairly Disclosed by the documents of title to the Material Properties Fairly Disclosed by the Data Room Documents.

3.3 There are no breaches of any covenants affecting the Material Properties which would have a material adverse effect on the use and enjoyment of the Material Properties by the Target Group.

PART XIV

ENVIRONMENT

1. So far as the Seller is aware, neither the Owner (as defined in Part XIII of this Schedule) nor any member of the NTL Group has since 9 July 1999 received any written notice in relation to any of its properties that it is in contravention of any Environmental Laws.

2. No order, decree or judgment of any court or government agency is outstanding against the Owner nor any member of the NTL Group in relation to any properties which arises as a result of any Environmental Laws.

3. So far as the Seller is aware, the Owner has no legal liability under Environmental Law to carry out any material works at any of its properties.

4. So far as the Seller is aware, the Owner is in material compliance with the current Guidelines and Standards of the International Commission on Non-Ionising Radiation.

5. So far as the Seller is aware, the Owner is in the course of taking such action as is required to comply in all material respects with its duties under the European Communities (Protection of Workers) (Exposure to Asbestos) (Amendment) Regulations, 2000 and is not aware of any failure thereunder which would have a material adverse effect upon the Irish Cable Business (taken as a whole).

6. So far as the Seller is aware, in the three years prior to the date of this Agreement, the Irish Cable Business has been operated in compliance with applicable Environmental Laws, save where any failure so to comply is not reasonably likely to have a material adverse effect on the Irish Cable Business (taken as a whole).

PART XV

TAX

1. Provision for Taxation in the Accounts

1.1 No Target Group Company has any liability in respect of Tax that is not fully provided for in the Accounts.

2. Post-Accounting Date Tax Events

Since the Accounts Date:

2.1 no accounting period of a Target Group Company has ended or could be treated as having ended;

2.2 no Target Group Company has declared, made or paid any distribution within the meaning of TCA;

2.3 no Target Group Company has been involved in any transaction for which any Tax clearance certificate issued by the Revenue Commissioners under Section 980 TCA or any revenue, fiscal or Tax authority concession has been applied for, sought or obtained; and

2.4 no event has occurred which will or may give rise to a liability to Taxation on any Target Group Company where such liability would be computed by reference to deemed income, profits or gains.

3. Tax Residence

Since its acquisition by the NTL Group, each Target Group Company has been resident for Tax purposes in Ireland and nowhere else and will be so resident at Completion and no Target Group Company has carried on any trade in any other country (whether through a branch, agency, permanent establishment or otherwise).

4. Tax Returns and Tax Disputes

4.1 Since its acquisition by the NTL Group, each Target Group Company has made or caused to be made in a timely manner all proper returns, declarations and payments required to be made, and has supplied or caused to be supplied in a timely and proper manner all information required to be supplied, to any tax, revenue or fiscal authority.

4.2 There is no material dispute or disagreement outstanding with any tax, revenue or fiscal authority and no such dispute or disagreement is expected or contemplated or likely to commence regarding any liability or potential liability to any tax recoverable from a Target Group Company or regarding the availability of any relief from tax to a Target Group Company.

5. Value Added Tax

5.1 Each Target Group Company is registered for the purposes of VATA and, since its acquisition by the NTL Group, has made, given, obtained and kept complete, correct and up-to-date returns, records, invoices and other documents appropriate or required for VAT purposes and is not in arrears with any payments or returns due and has not been required by the Revenue Commissioners to give security or further security under Section 23A VATA.

5.2 Since its acquisition by the NTL Group, no Target Group Company has been treated as a member of a VAT group under Section 8(8) VATA and no application has been made for a Target Group Company to be treated as a member of a VAT group in that period.

5.3 No Target Group Company has acted as an agent of any person not established in Ireland within the meaning of section 37 VATA since its acquisition by the NTL Group.

5.4 No Target Group Company has applied to waive exemption in relation to any immovable goods in accordance with Section 7 VATA and regulation 4 of the Value Added Tax Regulations 1979.

5.5 Since its acquisition by the NTL Group, no Target Group Company engages in or has engaged in letting of immovable goods for periods of less than ten years.

6. Capital Duty and Stamp Duty

6.1 Every document in the possession of or under the control of a Target Group Company which is dated after its acquisition by the NTL Group and which affords any right or rights to a Target Group Company has been duly and properly stamped and no Target Group Company has any outstanding liability for stamp duty or capital duty or interest or penalties relating to stamp duty or capital duty which arose in the period since its acquisition by the NTL Group. No Target Group Company has been involved in any transaction involving any instrument in relation to which a claim for relief from stamp duty was made in accordance with Sections 79 and 80 of the Stamp Duties Consolidation Act 1999, other than claims in respect of which the periods for clawback of relief under the said Sections 79 and 80 have expired.

6.2 The Shares are not, and have not ever been “chargeable securities” for the purposes of Section 99 of the UK Finance Act, 1986.

7. Close Company

No Target Group Company is nor has, since its acquisition by the NTL Group, been a close company as defined in TCA and therefore the provisions of Part 13 TCA do not apply to it.

8. Group Events

8.1 Since its acquisition by the NTL Group, no Target Group Company has acquired any asset (i) from any other company in circumstances where the companies were, at the time of

acquisition, members of the same group of companies for Taxation purposes, and where that acquisition will result in a Taxation Liability under Section 623 of the TCA arising on Completion; or (ii) from any other Target Group Company.

8.2 Since its acquisition by the NTL Group, no Target Group Company has been involved in any transaction falling within the provisions of Section 621 and 622 TCA or within the provisions of Part 21 TCA.

9. PAYE, PRSI etc

9.1 Since its acquisition by the NTL Group, each Target Group Company has properly operated the Pay As You Earn (PAYE), PRSI and Health Contribution systems by making such deductions as are required by law from all payments made or deemed to be or treated as made by such Target Group Company or on its behalf or for which such Target Group Company is otherwise required to account and by duly accounting to any Tax, revenue or fiscal authority for all sums so deducted and for all other amounts for which it is required to account under the PAYE, PRSI and Health Contribution systems.

9.2 Since its acquisition by the NTL Group, each Target Group Company has complied in full with all its reporting obligations to all appropriate Tax, revenue or fiscal authorities in connection with benefits provided for any director or employee.

10. Accounting for Deductions

Since its acquisition by the NTL Group, all deductions or withholdings in respect of or on account of any Taxation which any Target Group Company has been obliged or entitled to make have been made by that Target Group Company from any payments made by it and such Target Group Company has duly and properly accounted to the relevant Tax, revenue or fiscal authority for all such amounts deducted or withheld.

11. Replacement of Business Assets

Full particulars of each claim under Section 597 TCA made since its acquisition by the NTL Group but prior to the date of this Agreement to which Section 597 or 620 TCA applies and which affects any asset which was owned by any Target Group Company on or after the Accounts Date have been disclosed in writing to the Buyer.

12. Miscellaneous

12.1 Each Target Group Company has sufficient and proper records relating to past events since its acquisition by the NTL Group concerning any claims or elections made to calculate the Tax liability or relief which would arise on any disposal or on the realisation of any asset owned by such Target Group Company at the Accounts Date or acquired by such Target Group Company since the Accounts Date but before Completion.

12.2 Since its acquisition by the NTL Group, no Target Group Company has been, so far as the Sellers are aware, involved in any Tax avoidance transaction within the meaning of Section 811 TCA.

12.3 Since its acquisition by the NTL Group, no Target Group Company has committed a Revenue Offence within the meaning of Section 1079 TCA.

12.4 Disregarded entities

All of the Target Group Companies are currently treated as disregarded entities for US tax purposes.

13. Warranties in relation to the Additional Assets

13.1 Value Added Tax (“VAT”)

NGL and each of the Transferors (as defined in the Asset Transfer Agreement) are duly registered for the purposes of VAT and have not elected to waive exemption for VAT purposes and neither NGL nor any of the Transferors is aware of any election to waive exemption made by any other person in respect of any of the Additional Properties. All customs and excise duties and VAT payable to any revenue, fiscal or tax authority in respect of the Additional Assets have been paid in full and none of the Additional Assets is subject to confiscation or forfeiture or is the subject of any security in favour of any revenue, fiscal or tax authority in respect of VAT or potential VAT liabilities or customs and excise duties or potential customs and excise duties. All proper records have been kept and all proper returns and payments have been made as required by law for the purposes of VAT in connection with the Additional Assets.

13.2 Tax Disputes

There is no dispute with any revenue, fiscal or tax authority in relation to the Additional Assets and there are no circumstances which make it likely that such a dispute could arise.

13.3 Capital Allowances

NGL and the Transferors have made available all information necessary to enable the Buyer to compute the capital allowances available on each of the Additional Assets in accordance with the Taxes Consolidation Act 1997.

SCHEDULE 4

LIMITATIONS ON CLAIMS

1. INTERPRETATION

1.1 In this Schedule 4 only (unless the context otherwise requires):

1.1.1 a “claim” means any claim against either of the Sellers under the Warranties and, for the purpose of paragraph 3 of this Schedule 4 only, a claim against the Sellers under clause 7.17;

1.1.2 “determination” means a final determination by a court of competent jurisdiction or a final award or decision of a duly appointed arbitrator or expert (as the case may be) and “determined” shall be construed accordingly;

1.1.3 references to the “Accounts” shall be deemed to include the Management Accounts; and

1.1.4 references to “the Relevant Date” shall mean the date on which any claim is finally settled or determined.

1.2 Where any provision of this Schedule 4 requires the approval or agreement of, or a notification by, either of the Sellers, any such approval or agreement or notification shall only be validly given if given by the General Counsel of NTL Incorporated (on behalf of the Sellers and NGL).

2. TIME LIMITS

2.1 None of the Sellers shall be liable for any claim unless written notice of the claim has been given to the relevant Seller by or on behalf of the Buyer within sixty (60) days after becoming aware of the claim and in any event:

2.1.1 written notice in respect of a claim under Part XV of Schedule 3 must be given on or before 31 December 2010;

2.1.2 written notice in respect of a claim under Part XIV of Schedule 3 must be given on or before the third anniversary of the Completion Date; and

2.1.3 written notice in respect of any other claim must be given on or before 30 June 2006.

2.2 To be valid, the written notice of the claim must give reasonable details of the nature of the claim, the circumstances giving rise to it (so far as are known to the Buyer after having

made reasonable enquiries) and the Buyer’s bona fide estimate of any alleged loss (to the extent reasonably ascertainable by the Buyer).

2.3 Any claim shall be deemed to be withdrawn (if it has not been previously satisfied, settled or withdrawn) and any claim in relation to the same fact, matter, event or circumstance shall be deemed to be waived unless legal proceedings in respect of such claim have been commenced within six (6) months of the giving of written notice of the claim, and for this purpose such legal proceedings shall not be deemed to have commenced unless both issued and served, PROVIDED THAT this six (6) month time limit shall not start to run:

2.3.1 in relation to a claim arising from a Third Party Claim (as defined in paragraph 9 below) until such Third Party Claim has been satisfied, settled, determined or withdrawn; or

2.3.2 in relation to a contingent or unquantifiable claim (as referred to in paragraph 14 below) until such claim has become an actual liability or capable of being quantified.

3. UPPER LIMITS

The aggregate liability of the Sellers for all claims shall be limited to:

3.1 €32,500,000 (thirty two million, five hundred thousand euro) for claims other than those set out in paragraphs 3.2 and 3.3 below; and

3.2 €56,875,000 (fifty six million, eight hundred and seventy five thousand euro) in respect of a claim under:

3.2.1 paragraphs 1 and 2 of Part IV of Schedule 3 (Assets);

3.2.2 Part V of Schedule 3 (Liabilities);

3.2.3 paragraph 7 of Part VI of Schedule 3 (Trading Arrangements); and

3.2.4 Part VIII of Schedule 3 (Insolvency);

PROVIDED THAT the aggregate liability of the Sellers for claims which are the subject of sub-clauses 3.1 and 3.2 shall not exceed €56,875,000 (fifty six million, eight hundred and seventy five thousand euro); and

3.3 the amount of the Aggregate Consideration in respect of a claim under the Tax Deed,

PROVIDED THAT the aggregate liability of the Sellers for all claims and any claims under the Tax Deed shall in no circumstances exceed the amount of the Aggregate Consideration.

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For the purposes of these limits, the liability of the Sellers shall be deemed to include the amount of all costs, expenses and other liabilities (together with any irrecoverable VAT thereon) payable by the Sellers in connection with the satisfaction, settlement or determination of any such claim.

4. LOWER LIMITS

4.1 Neither of the Sellers shall be liable for any claim (other than a claim under the Warranty in paragraph 4 of Part V (Liabilities) and the Warranties in paragraph 10 of Part XI (Employees) of Schedule 3) unless the aggregate amount of such claim, when taken together with the amount of all other claims against the Sellers, exceeds €5,000,000 (five million euro) (the “Threshold”), in which event the Sellers shall, subject to the other limits contained in this Schedule, be liable only for the amount by which such aggregate amount exceeds the Threshold.

4.2 Neither of the Sellers shall be liable for any claim (other than a claim under the Warranty in paragraph 4 of Part V (Liabilities) and the Warranties in paragraph 10 of Part XI (Employees) of Schedule 3) which does not exceed €100,000 (one hundred thousand euro) (a “De Minimis Claim”) and no such De Minimis Claim shall count towards the Threshold.

4.3 For the purposes of calculating claims counting towards the Threshold and/or any De Minimis Claim:

4.3.1 there shall be excluded from any claim the amount of any costs, expenses and other liabilities (together with any irrecoverable VAT thereon) incurred or to be incurred by any member of the Buyer Group in connection with the making of any such claim; and

4.3.2 there shall be excluded the amount of any other claim in respect of the same fact, matter, event or circumstance giving rise to the same loss.

5. DOUBLE CLAIMS

5.1 Neither of the Sellers shall be liable for any breach of the Warranties to the extent that the loss occasioned by the fact, matter, event or circumstance giving rise to such breach is (1) recovered under the Tax Deed or any other provisions of this Agreement (including, without limitation, the Consideration Adjustment); or (2) recovered under any of the other agreements to be entered into pursuant to this Agreement (including, without limitation, the Ancillary Agreements).

5.2 Neither of the Sellers shall be liable for any claim under the Tax Deed or any other provisions of this Agreement or any of the other agreements to be entered into pursuant to this Agreement, to the extent that the loss occasioned by the fact, matter, event or

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circumstance giving rise to such claim is recovered under the Warranties or under any other such provisions.

5.3 If the same fact, matter, event or circumstance gives rise to more than one claim, no member of the Buyer Group shall be entitled to recover more than once under any of the Transaction Documents in respect of the loss occasioned by such fact, matter, event or circumstance.

6. PROVISIONS AND RESERVES

Neither of the Sellers shall be liable for any claim to the extent that:

6.1 any specific provision or reserve has been made in the Accounts or in the Adjustment Statement or in Net Working Capital in respect of the fact, matter, event or circumstance giving rise to such claim; or

6.2 any specific provision or reserve made in any of the Accounts in respect of the fact, matter, event or circumstance giving rise to such claim is insufficient by reason of any change to legislation, any increase in rates of taxation or any change in the published practice of a revenue authority, in each case made on and/or after today’s date.

7. REDUCTIONS

7.1 For the purposes of this paragraph 7, a “Reduction” shall mean the amount of any benefit (including a Taxation benefit) accruing to any member of the Buyer Group as a consequence of the fact, matter, event or circumstance giving rise to the claim.

7.2 If a Reduction exists at the time when any payment is due to be made by the relevant Seller in respect of a claim:

7.2.1 the amount of the Reduction shall first be set-off against such payment;

7.2.2 to the extent that after such set-off any balance of the Reduction amount (the “Balance”) remains, a refund shall be made to the relevant Seller of any previous payment or payments made by it in respect of any claims which have not already been refunded under this paragraph up to the amount of the Balance; and

7.2.3 to the extent that the Balance is not exhausted under paragraph 7.2.2 above, the remainder of the Balance shall be carried forward and set-off against any future payment or payments which become due from such Seller in respect of any claim.

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8. CHANGES ON AND/OR AFTER THE DATE OF THIS AGREEMENT

Neither of the Sellers shall be liable for any claim to the extent that it arises, or is increased or extended by:

8.1 any change to legislation, any decision of any court or tribunal, any increase in rates of taxation, any introduction of new taxation or any change in the published practice of a revenue authority, in each case made on and/or after today’s date;

8.2 any change in the accounting reference date of any member of the Buyer Group made on and/or after Completion;

8.3 any change in any accounting policy or practice of any member of the Buyer Group made on and/or after Completion other than where such change is necessary to correct an error in existence prior to Completion or to comply with GAAP or law;

8.4 any cessation of, or any change in, the nature or conduct of any business carried on by any member of the Buyer Group being a cessation or change occurring on and/or after Completion;

8.5 the failure or omission on the part of any member of the Buyer Group on and/or after Completion to make any claim, action, surrender or disclaimer or to give any notice or consent or do any other thing the making or giving or doing of which could have been performed notwithstanding the sale of the Shares and which was taken into account in computing the provision or reserve for taxation in the Accounts;

8.6 any member of the Buyer Group waiving or surrendering on and/or after Completion any exemption, relief, allowance, credit deduction or set off (which is not a Buyer’s Relief (as defined in the Tax Deed)) available to it relevant to the computation of any liability to taxation or any credit against taxation; or

8.7 any act, omission or transaction outside the ordinary and usual course of business which is carried out or effected prior to Completion by, or at the request or with the approval of any member of the Buyer Group (or any of their respective directors, officers or employees) save where such act, omission or transaction is required to comply with a legally binding commitment of any Target Group Company entered into prior to Completion.

9. THIRD PARTY CLAIMS

In respect of any fact, matter, event or circumstance which comes to the notice of the Buyer which would, could or might result in a claim against any member of the Target Group (a “Third Party Claim”) and which, in turn, would, could or might result in a claim against either of the Sellers, the Buyer shall and shall procure that each member of the Target Group shall:

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9.1 as soon as reasonably practicable give written notice and reasonable details of the Third Party Claim to the relevant Seller;

9.2 not settle or compromise the Third Party Claim or make any admission in respect thereof without the prior written consent of the relevant Seller;

9.3 allow the relevant Seller and its advisers and agents to investigate the Third Party Claim (including whether and to what extent any amount is payable in respect thereof);

9.4 consult in good faith with the relevant Seller as to any ways in which the Third Party Claim might be avoided, disputed, resisted, mitigated, settled, compromised, defended or appealed;

9.5 take such action, at the written request of the relevant Seller, as such Seller may reasonably require to avoid, dispute, resist, mitigate, settle, compromise, defend or appeal the Third Party Claim;

9.6 permit the relevant Seller, at its written request and subject to the relevant Seller agreeing with the relevant member of the Target Group (to its reasonable satisfaction) to indemnify and pay to it an amount equal to all additional losses, claims, demands, costs and reasonable expenses (including reasonable legal costs) arising from the relevant Seller’s conduct of such proceedings, to have sole conduct of all proceedings relating to the Third Party Claim in the name of the relevant member of the Target Group, and to appoint solicitors or other professional advisers;

9.7 take all reasonable action to mitigate any loss suffered by any member of the Buyer Group;

9.8 make available (and shall use its reasonable endeavours to procure that any of its auditors, past or present, shall make available) to the relevant Seller and its advisers and agents (subject to their entering into confidentiality agreements on reasonable terms) all such information and assistance (including access to properties, management, records, papers, documents and data) as they may reasonably require; and

9.9 not require the relevant Seller to make any payment in respect of any claim until the Third Party Claim has been satisfied, settled, determined or withdrawn.

10. NON-ASSIGNMENT OF CLAIMS

Save as provided in clause 16, the Buyer shall not, and shall procure that no other member of the Buyer Group shall, assign or declare a trust over the benefit of any claim.

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11. CHANGE OF CONTROL ETC

If Completion occurs, neither of the Sellers shall be liable for any claim arising from any loss suffered or payment made by any member of the Buyer Group which would not have been suffered or made had such company not given warranties and/or indemnities, to any other person acquiring, directly or indirectly, all or part of the shares, assets or undertaking of any Target Group Company or all or part of the Irish Cable Business.

12. REMEDIABLE BREACHES

12.1 Neither of the Sellers shall be liable for any claim to the extent that the fact, matter, event or circumstance giving rise to such claim is remedied by or at the sole expense of the relevant Seller within sixty (60) Business Days of the date on which written notice of such claim is given to the Sellers and the Buyer shall, and shall procure that each member of the Buyer Group shall, co-operate with the Sellers where reasonably necessary (at the relevant Seller’s expense in respect of any third party costs incurred by any member of the Buyer Group at such Seller’s request) to enable them to remedy any such fact, matter, event or circumstance. Subject to paragraph 12.2 below, the subject matter of a valid claim is the failure of any Target Group Company to own or have use of an asset, the Sellers may elect to remedy any actionable claim by the transfer of their interest in such asset to a Target Group Company.

12.2 In the event that the Sellers elect to remedy any such claim by the transfer to the relevant Target Group Company of the interest of any member of the NTL Group in such asset, the Buyer shall co-operate fully with the Sellers for such purpose and if requested by the relevant Seller:

12.2.1 the Buyer shall procure that the relevant Target Group Company shall pay in cash to the relevant member of the NTL Group (or as it may direct) an amount equal to the fair market value of the interest in such asset upon it being transferred (plus VAT if applicable); and

12.2.2 immediately following any payment by a Target Group Company pursuant to paragraph 12.2.1 above, the Seller shall pay to the Buyer an amount equal to the fair market value of the interest in such asset by way of an adjustment to the Consideration.

13. THIRD PARTY RECOVERY

13.1 Neither of the Sellers shall be liable for any claim if any member of the Buyer Group is insured against any loss, damage or liability which is the basis of such claim under the terms of any insurance policy unless and until the insured company has made a claim against the insurers under such policy for the amount recoverable under such policy on such claim (unless the policy is in the name of Morgan Stanley or any subsidiary for the time being of Morgan Stanley, in which event this paragraph 13.1 shall not apply in respect of such

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policy). The amount recoverable under the claim shall be reduced by any amount which is recovered under such policy.

13.2 Save as provided in paragraph 13.1, should any claim have been paid under this Schedule by either of the Sellers and, after such payment, any members of the Buyer Group should recover part or all of such claim from a third party, the Buyer shall procure that such member of the Buyer Group shall pay over the amount so recovered (net of costs of recovery and any Taxation suffered by the Buyer or any member of the Buyer’s Group) to the Seller.

14. UNASCERTAINABLE CLAIMS

Neither of the Sellers shall be liable to make any payment in respect of a claim which arises by reason of a liability which, at the time when written notice of the claim is given to the relevant Seller, is contingent only or is otherwise not capable of being quantified:

14.1 unless and until the liability becomes an actual liability or (as the case may be) becomes capable of being quantified; and

14.2 unless the liability becomes an actual liability on or before the sixth anniversary of the Completion Date.

15. MITIGATION

The Buyer shall, and shall procure that each member of the Target Group shall, take all reasonable action to mitigate any loss suffered by it which would or might reasonably be expected to result in a claim against either of the Sellers and, without limiting the generality of the foregoing shall, in respect of any right of recovery (whether by payment, discount, credit, relief or otherwise) which could or might be made by it against any third party:

15.1 give written notice and reasonable details of such right of recovery to the relevant Seller as soon as reasonably practicable; and

15.2 take reasonable steps to maximise the amount recovered in respect of such right of recovery.

16. REDUCTION IN CONSIDERATION

Any amount paid by either of the Sellers in respect of any claim shall so far as possible be treated as a reduction in the relevant consideration payable to such Seller as contemplated by this Agreement.

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17. TAX DEED

If any limits on the liability of the Sellers under the Tax Deed conflict with the provisions of this Schedule 4 then the provisions of the Tax Deed shall prevail.

18. CURRENCY EQUIVALENT

18.1 For the purposes of determining whether the monetary limits referred to in paragraphs 3 and 4 above apply, liabilities in a currency other than euro shall be converted into euro at the noon buying rate as quoted by the Federal Reserve Bank of New York on the date of Completion.

18.2 Any payments to be made under this Agreement or any other agreement to be entered into pursuant to this Agreement (including, without limitation, the Tax Deed) by or to any member of the NTL Group shall be in euro. Where any such payments are to be made and the underlying liability has been calculated in a currency other than euro, the underlying liability shall be converted into euro at the noon buying rate as quoted by the Federal Reserve Bank of New York on last Business Day prior to the date of payment.

19. MAKE WHOLE PAYMENTS

If the Buyer or any member of the Buyer Group receives or is entitled to any payment pursuant to the Sale and Purchase Agreement of today’s date between, among others, Morgan Stanley Dean Witter Equity Funding, Inc. and UPC Ireland B.V. (the “Payment”) nothing in this Agreement or the other Transaction Documents shall:

19.1 require the Buyer or any member of the Buyer Group to claim the Payment or to pay the Payment (or an amount in respect of the Payment) to the Sellers or any member of the NTL Group;

19.2 exclude or limit the liability of the Sellers or any member of the NTL Group hereunder on (direct or indirect) grounds based on the Payment or the right to a Payment; or

19.3 give rise to (or constitute) any credit or saving for the benefit of the Sellers or any member of the NTL Group as a direct or indirect consequence of the Payment or the right to a Payment.

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SCHEDULE 5

ANCILLARY AGREEMENTS

A. Core Group to Target Group

Transitional Services Agreements

1. IT Services

2. Third Party Access

3. Voice, Data and Security Services

4. Contract and Road Works Support

5. Data Capacity Management

6. Co-Location and Site Sharing relating to Information Technology Assets

7. DTV Services

8. Voice, Data and Internet Operations

9. Security Site Monitoring Services

10. Optical Bureau Services

11. Support Services for Fault Management and Fault Reception

12. Technical Assistance

13. Domain Name Licence

Long Services Agreements

14. Customer Contact Management Support Services

15. IP Transit Services

16. Leased Line Services

17. Dark Fibre Services

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18. Contract Management for BT Private Circuits

19. Duct Sharing

20. Duct Access

B. Target Group to Core Group

Long Services Agreements

21. Plant Protection, Civils, Fibre Repair and Plant Enquiries

22. Leased Line Services

23. Dark Fibre Services

24. Management of Mechanical, Electrical, Cooling and Fire Protection Infrastructure

25. Field Support

26. Contract Management for Esat and Eircom Private Circuits

C. Mutual - - Core Group to Target Group and Target Group to Core Group

27. Interconnect for Voice Electronic Communications Services

28. Co-Location and Site Sharing relating to Network Assets

29. Letter relating to the Provision of Duct and Sub-Duct Space

D. Others

30. Asset Sharing Agreement

31. Framework Services Agreement

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SCHEDULE 6

PROPERTIES

PART I - - FREEHOLD PROPERTIES

1. KITCHENSTOWN, THE NAUL, COUNTY DUBLIN

ALL THAT AND THOSE the property comprised in Folio 90938F of the Register of Freeholders County Dublin.

PART II - - LEASEHOLD PROPERTIES

1. UNIT 16-18 WATERFORD BUSINESS PARK,WATERFORD

ALL THAT the industrial unit and premises known as Cluster Units 16, 17 and 18, Waterford Business Park situate at Waterford Business Park, Cork Road in the City of Waterford held under Lease dated 15 January 2001 between David Flynn of the one part and Communications of the other part being that part of the property comprised in Folio 4352F County Waterford more particularly outlined in red on the map annexed thereto together with the rights listed under Part 1 of the Schedule thereto.

2. 99 BARROW ROAD, DUBLIN 11

ALL THAT AND THOSE Unit 99 Dublin Industrial Estate held under Lease dated 26^th July 2001 between Princebrook Investments Limited of the one part and Cablelink Limited of the other part being all the lands described in Folio 19379 of the Register County Dublin together with all appurtenances and rights described in the Lease.

3. CALL MANAGEMENT CENTRE, CORK ROAD, WATERFORD

ALL THAT AND THOSE the land and premises situate in the townland of Ballyhanneeshaugh and County of Waterford being part of the lands comprised in Folio 15499F of the Register County Waterford held under Lease dated 25 April 2001 between Robert Quinn and Mary Quinn of the one part and Communications (formerly Cablelink Limited) of the other part as more particularly described on the plan annexed thereto and thereon outlined with a red verge line excluding the existing ESB station.

4. BLOCK P2, EAST POINT, FAIRVIEW, DUBLIN 3

ALL THAT the property known as Block P2 East Point, East Wall Road, in the City of Dublin held under Lease dated 18 April 2001 between Irish Life Assurance plc of the first part, Dublin Port Company of the second part, Earlsfort East Point of the third part, Communications of the fourth part and NatTrans of the fifth part and shown for the purposes of identification outlined in red on Plan No. 1 attached thereto together with the rights and appurtenances referred to therein together with the property comprising 22 car parking

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spaces shown for the purposes of identification only outlined in red and coloured in blue on Plan No. 1 annexed thereto together with the plot of ground comprising 49 car parking spaces shown for the purposes of identification only outlined in blue on Plan No. 2 together with the air space above the said plot for a height of up to 2.1 metres only but not including any part of the air space above the said 2.1 metres or the ceiling immediately overhead the said plot which said plot of ground is situate in the property currently known as the car park which is shown for the purposes of identification only outlined in brown on Plan No. 2 excepting and reserving from the demise the right if necessary to grant an interest (of the type required by the ESB) in favour of the ESB of any portion of the demised premises located on the ground floor in the event that this becomes necessary.

5. BLOCK P3, EAST POINT, FAIRVIEW, DUBLIN 3

ALL THAT AND THOSE the second and third floors of the office block known as Block P3, East Point, East Wall Road in the city of Dublin held under Lease dated 2 January 2001 between Salix Trust Limited of the first part, Dublin Port Company of the second part, Earlsfort East Point of the third part, Communications of the fourth part and NatTrans of the fifth part shown for the purposes of identification only outlined in red on Plan No. 3 and Plan No. 4 annexed thereto together with the rights and appurtenances referred to therein together with that portion of the premises shown outlined in red, coloured blue and hatched in red on Plan No. 1 which said property comprises 11 car parking spaces and that portion of the premises comprising car parking spaces described in Part 2 of the First Schedule to the Lease shown for the purpose of identification only outlined in blue and hatched in red on Plan No. 2 together with the air space over the said plot for a height up to 2.1 metres only but not including any part of the air space above the said 2.1 metres or the ceiling immediately overhead the said plot subject to the exceptions and reservations referred to therein.

6. THIRD FLOOR, EMBASSY HOUSE, HERBERT PARK LANE, BALLSBRIDGE

ALL THAT the premises being the third floor part of the office building known as Embassy House, Herbert Park Lane, Ballsbridge, Dublin 4 held under Lease dated 8 May 1998 between John J. Kennedy, Frank McSharry, Liam McSharry and Sean McKeon of the one part and Cablelink Limited of the other part which said building is for the purpose of identification only shown delineated on the plan annexed thereto and thereon edged blue together with any landlord’s fixtures and fittings in or about the same and all additions, alterations and improvement thereto which may be carried out during the term.

7. 11-12 GOLDEN BRIDGE INDUSTRIAL ESTATE, DUBLIN 8

ALL THAT AND THOSE the entire property comprised in Folio 76951L of the Register County Dublin being the property known as 11/12, Golden Bridge Industrial, Inchicore, Dublin 8 and marked Plan 31 on the Registry map thereof held under Lease between Wocsom Company Limited of the first part, Pipmarsh Limited of the second part and Communications of the third part together with all rights of the Landlord under the Contract by exchange of letters referred to at Schedule 4 of Agreement for Lease dated 2October

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2000 between Wocsom Company Limited of the first part, Pipmarsh Limited of the second part and Communications of the third part.

8. ODEON HOUSE, 7 EYRE SQUARE, GALWAY

ALL THAT AND THOSE the hereditaments and premises comprising part of the ground floor of the building known as Odeon House, Eyre Square, Galway held under Lease dated 24 October 1986 between Catherine Doyle of the one part and Cablelink Galway Limited of the other part more particularly delineated on the map numbered 1 and the section numbered 2 annexed to Lease dated 3 April 1984 between Catherine Doyle of the one part and Anglo Irish Bank Limited of the other part and thereon edged red in the townland of Townparks, Parish of St. Nicholas and Borough and Barony and County of Galway.

9. BASEMENT AND GROUND FLOOR OF RIGHT WING, PARK HOUSE, NORTH CIRCULAR, DUBLIN 7

ALL THAT suite of offices and the appurtenances thereto belonging situate on the basement and ground floors of the right wing of and being part of the building known as “Park House” situate at the North Circular Road in the City of Dublin held under Lease dated 21 April 1975 between Viscount Securities Limited of the one part and Marlin Communal Aerials Limited (later to be incorporated into Cablelink) and more particularly set out and delineated on the map or plan attached thereto together with the rights referred to therein.

10. RATHFADDEN, CO. WATERFORD

ALL THAT plot of land at Rathfadden in the City of Waterford containing in all approximately 0.517 acres held under Lease dated 19th May 1993 between The Mayor Aldermen and Burgesses of Waterford of the one part and Cablelink (Waterford) Limited of the other part and shown edged red on the map annexed thereto being part of the lands described in Folios 6066 and 6656 of the Register County Waterford.

11. TONABROCKY, GALWAY

ALL THAT AND THOSE the pieces of plots of land situate in the townland of Tonabrocky held under Lease dated 17 September 1990 between Walter J. Carr of the one part and Cablelink Galway Limited of the other part edged red on the map attached thereto and lettered “C”, “D”, “E”, “F” and “G” being part of the land comprised in Folio 56872 of the Register County Galway and situate in the Barony and County of Galway.

12. UNIT 6, BROOMHILL BUSINESS PARK, BROOMHILL ROAD, TALLAGHT, DUBLIN 24

ALL THAT property known as Unit 6, Broomhill Business Park, Broomhill Road, County Dublin held under Lease dated 3 December 1993 between Friends Provident Life Assurance Company Limited of the one part and Cablelink Limited of the other part shown edged red on Plan No. 1 annexed thereto being part of that piece or parcel of land situate at Broomhill

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Business Park, Broomhill Road, County Dublin shown edged in blue on Plan No. 2 annexed thereto being part of the premises comprised in Folio 75165L of the Register County Dublin.

13. UNIT 7, BROOMHILL BUSINESS PARK, BROOMHILL ROAD, TALLAGHT, DUBLIN 24

ALL THAT property known as Unit 7, Broomhill Business Park, Broomhill Road, Tallaght, County Dublin held under Lease dated 26 April 2000 between Friends First Life Assurance Company Limited of the one part and Cablelink of the other part shown edged red on Plan No. 1 annexed thereto being part of that piece or parcel of land situate at Broomhill Business Park, Broomhill Road, County Dublin shown edged in blue on Plan No. 2 annexed thereto being part of the premises comprised in Folio 75165L of the Register County Dublin.

14. UNIT 2, BLOCK 9, NEWTOWN INDUSTRIAL ESTATE, COOLOCK, DUBLIN 5

ALL THAT piece or plot of ground situate at Newtown Industrial Estate in the townland of Newtown, Barony of the County of Dublin held under Lease dated 19 January 2001 between Donald Welch and Margaret Welch of the one part and Communications of the other part as is more particularly delineated on the map annexed thereto and thereon surrounded by a red verge line which said piece or plot of ground is described as Block 9, Unit 2 Newtown Industrial Estate, Coolock and a moiety (in each case measured vertically) of all dividing walls and fences (or a part thereof) which mutually serve to enclose the demised premises and any immediately adjoining premises, such dividing walls and fences being deemed to be party walls and fences held under said Lease.

15. WEST UNIT, WILLSBOROUGH INDUSTRIAL ESTATE, CLONSHAUGH, CO. DUBLIN

ALL THAT AND THOSE part of the lands of Willsborough situate in the County of Dublin held under Lease dated 5^th of August 1999 between Erin Executor & Trustee Co. Limited of the first part, Willsborough Estate Management Limited of the second part, NatTrans of the third part and NGL of the fourth part being part of the lands comprised in Folio 85347L of the Register County Dublin.

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SCHEDULE 7

ADJUSTMENT STATEMENT

PART I

PRO-FORMA ADJUSTMENT STATEMENT

	€’000	€’000
Net Cash

Completion Cash		X
Completion Indebtedness	(X)
Net Cash		X

Net Working Capital

*Current assets*

Stock		X
Trade debtors		X
less provision for bad and doubtful debts		(X)
Accrued income		X
Other debtors		X
Prepaid expenses		X
[Trading account balance*		X]

		X

*Current liabilities*

[Trading account balance*	(X)]
Trade creditors	(X)
Accrued expenses	(X)
Deferred income	(X)

		(X)

Net Working Capital		X

*If the net trading account balance is an amount owing to the Target Group, then this will be shown as a current asset. If the net trading account balance is an amount owing by the Target Group, then this will be shown as a current liability.

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PART II

CALCULATION OF THE CONSIDERATION ADJUSTMENT

1. GENERAL REQUIREMENTS

The provisions of this Part II and Part III of this Schedule 7 shall apply for the purposes of preparing the Adjustment Statement.

The draft Adjustment Statement shall:

1.1 be prepared in accordance with the specific accounting policies and principles set out in Part III of this Schedule 7, so that, in the case of any conflict, such policies and principles shall override the provisions of paragraphs 1.2 and 1.3 below;

1.2 subject to paragraph 1.1 above, be prepared in accordance with the relevant accounting policies, principles, practices and procedures adopted by Communications in the preparation of the Accounts, so that, in the case of any conflict, such policies, principles, practices and procedures shall override the provisions of paragraph 1.3 below;

1.3 where none of the accounting policies, principles, practices or procedures referred to in paragraphs 1.1 and 1.2 above deal with the matter, be prepared or determined in accordance with GAAP as at today’s date;

1.4 exclude any effects of the change in control or ownership of the Target Group contemplated by this Agreement and shall not reappraise the value of any of the assets of any Target Group Company as a result of such change in control or ownership or otherwise howsoever;

1.5 exclude corporation tax, deferred tax or any other liability to Taxation (other than any VAT, payroll tax or social security expense taken into account in the table in Part III of this Schedule), unfunded obligations in relation to the any pension scheme, liabilities under any long term incentive plan, bonus entitlements of employees, restructuring costs which the Buyer or the Target Group may deem appropriate whether or not supported by a plan consummated on Completion, contingent liabilities (including without limitation those relating to Environmental Matters), any liability to repay any grant and any other post acquisition expenses (including without limitation rebranding or livery related expenses and separation costs);

1.6 make no provision for any liability of the Target Group in respect of MMDS aerials which have not been collected from customers’ premises or redundant overhead cables;

1.7 make no provision for any liability in connection with the removal of overhead cables or the decommissioning of cable;

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1.8 make no provision in respect of any liability to make any payments to the Dublin Corporation in connection with the Stentor network;

1.9 not make any provision for Accrued expenses other than those expressly stipulated in Part III of this Schedule 7 (and, for the avoidance of doubt, no provision shall be made for Accrued expenses in respect of Corporation tax, VAT install accrual, employee bonuses, LTIP liabilities, employee benefits/VHI Tax, contractors Tax, employment cases, postage costs, network costs, insurance claims and accruals, business operating expenditure accruals, costs of petrol/vehicles/other labour, software maintenance, IBM costs, audit/tax/legal/ professional fees, bank charges, duct rental, phone costs and other miscellaneous items in respect of which accruals are ordinarily made in the Management Accounts and which are not ordinarily included in the PO process (the “Excluded Items”));

1.10 make no provision in respect of any failure to obtain the consent of any third party to the provision of any assets or services under the terms of any of the Ancillary Agreements, the transfer to Networks of any assets under the terms of the Irish Transfer Agreement or the transfer to the Buyer of any Additional Assets under the Asset Transfer Agreement (or the cost of obtaining any such consent); and

1.11 take no account of any item to the extent that the impact of such item has already been taken into account elsewhere in the Adjustment Statement.

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PART III

SPECIFIC ACCOUNTING POLICIES FOR THE ADJUSTMENT STATEMENT

1.1 Completion Cash will comprise the items listed in the definition of Completion Cash in clause 1.1.

1.2 Completion Indebtedness will comprise the items listed in the definition of Completion Indebtedness in clause 1.1.

1.3 Net Working Capital will comprise the following items as at the Adjustment Date:

1.3.1 Stock

1.3.2 Trade debtors less provision for bad and doubtful debts

1.3.3 Accrued income

1.3.4 Other debtors and prepaid expenses (excluding prepaid expenses in respect of rent payments and insurance premiums)

[1.3.5 Trading account balances (as described in paragraph 1.4 below)*]

Less

[1.3.5 Trading account balances (as described in paragraph 1.4 below)*]

1.3.6 Trade creditors

1.3.7 Accrued expenses

1.3.8 Deferred income

1.4 The trading account balance is the net ordinary course inter-company trading balance between the Target Group and the Core Group at the Adjustment Date and will include but will not be limited to the following:

1.4.1 Amounts due to the Core Group by the Target Group in respect of the provision of services in the ordinary course of business;

Less

1.4.2 Amounts due to the Target Group by the Core Group in respect of the provision of services in the ordinary course of business.

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For the avoidance of doubt, the passing through of legitimate charges shall be considered to be ordinary course and the recharge of management services or other recharges of internal support shall not be considered to be ordinary course.

1.5 The following table sets out the accounting principles that will be applied in accordance with paragraph 1.1 of Part II of this Schedule 7 in arriving at the Net Working Capital.

Caption	Significant components	Accounting principles applied
Trade Debtors		This reflects amounts invoiced to external customers in relation to the Irish Cable Business for services delivered in accordance with an underlying customer order or contract. The balance on the Adjustment Date will reflect the general ledger amount as reconciled to the underlying aged trade debtors sub ledger.

Bad debt provision		This provision is made against trade accounts receivable the collection of which is no longer assured. Full provision is made in respect of accounts for which payment is 90 days or more overdue from the latest date specified for payment as at the Adjustment Date and in respect of disconnected accounts as at the Adjustment Date. A provision of 50%, 15% and 4% respectively is made against amounts due between 60 and 90 days, between 30 and 60 days and less than 30 days respectively beyond the latest date specified for payment.

Accrued income		This represents amounts recoverable from third party customers in relation to the Target Group’s business which have not yet been billed (in order to comply with an agreed billing schedule) and accordingly income has been booked in the profit and loss account.

Other debtors	Amounts recoverable on projects	This represents amounts due or payable in respect of the Irish Cable Business regarding rental income, channel income, refundable diversionary works, builders’ contributions, road opening deposits and other receivables.

Prepaid expenses	Rent and Rates	Certain expenses such as rent, rates and insurance are paid in advance. A prepaid expense balance will arise which will be supportable by the actual outlay incurred historically.

Trade creditors	Accounts payable ledger	This reflects amounts payable to third party suppliers in relation to the Target Group’s suppliers.

Accrued expense	PO accruals	This represents purchase order accruals for open purchase orders where the service has been delivered to the Target Group and an invoice is awaited.

Accrued expense	Onerous lease provisions	This relates to four redundant properties (those numbered 1, 5, 9 and 14 in Schedule 6). The accrual shall assume a weighted average capital cost of 15%.

Accrued expense	Overtime accruals	The accrual will be based on the actual overtime expense paid to Employees in the payroll for the calendar month ending on the Adjustment Date.

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Caption	Significant components	Accounting principles applied
Accrued expense	Building services accruals	This represents an accrual for utility related expenses such as gas, water and electricity charges. The accrual on the Adjustment Date will be based on a comparison between actual invoices received and amounts budgeted as contained in the Business Plan in respect of 2005.

Accrued expense	VAT	The accrual will be based on net amounts payable to the Revenue Commissioners up to the Adjustment Date.

Accrued expense	Programme Costs	This represents accruals for amounts payable to programme suppliers and shall be calculated by reference to the actual number of relevant subscribers on the Adjustment Date.

Accrued expense	Tax and social security	This accrual represents the actual payroll tax and social security expense related to Employees for the month ended on the Adjustment Date (excluding any tax or social security expense relating to bonuses).

Accrued expense	Capital Accounts	This accrual relates to open WIP capital projects plus other related capital expenditure where expenditure has been approved and contractually legally committed.

Accrued expense	Voice and Data costs	These accruals relate to the direct third party costs associated with the voice and data revenue streams. This includes interconnect costs and data circuits.

Deferred income		Deferred income represents amounts that have been billed in advance. Residential customers are billed a minimum of two months in advance. Deferred income represents the portion of service revenue received which relates future periods.

Stocks/ Inventory		Stock represents goods purchased for the construction and maintenance of the cable and MMDS systems. It specifically excludes set-top boxes, cable modems and related accessories.

119

SCHEDULE 8

NATTRANS GUARANTEES

1. The guarantees given by NatTrans in respect of the obligations of Communications under:

(a) the Lease dated 18 April 2001 between Irish Life Assurance plc, Dublin Port Company, Earlsfort East Point and Communications and NatTrans relating to Unit P2, East Point Business Park; and

(b) the Lease dated 2 January 2001 between Salix Trust Limited, Dublin Port Company, Earlsfort East Point and Communications and NatTrans relating to Unit P3, East Point Business Park.

120

EXECUTED by	)
NTL GROUP LIMITED	)
acting by: Sonia Gordon, its authorized attorney	) Sonia Gordon


EXECUTED by	)
NTL IRISH HOLDINGS LIMITED	)
acting by: Sonia Gordon, its authorized attorney	) Sonia Gordon


EXECUTED by	)
NTL (CHICHESTER) LIMITED	)
acting by: Sonia Gordon, its authorized attorney	) Sonia Gordon

121

EXECUTED by	)
MS IRISH CABLE HOLDINGS B.V.	)
acting by: attorney/special representative	) Scott W. Matlock

122

EX-2.2 3 a2157664zex-2_2.htm EXHIBIT 2.2

Exhibit 2.2

Dated 9 May, 2005

DEED OF TAX COVENANT

RELATING TO

NTL COMMUNICATIONS (IRELAND) LIMITED

NTL IRISH NETWORKS LIMITED

AND THEIR SUBSIDUARIES

(1) NTL IRISH HOLDINGS LIMITED

(2) NTL (CHICHESTER) LIMITED

(3) MS IRISH CABLE HOLDINGS B.V.

ARTHUR COX

Earlsfort Centre

Earlsfort Terrace

Dublin 2

CI31303.16

THIS DEED OF TAX COVENANT dated 9 May, 2005

BETWEEN

(1) NTL IRISH HOLDINGS LIMITED incorporated in England and Wales with registered number 2591237 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP (“Holdings”);

(2) NTL (CHICHESTER) LIMITED, incorporated in England and Wales with registered number 3056817 and whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP (“Chichester”) (together with Holdings, the “Sellers”)

(3) MS IRISH CABLE HOLDINGS B.V., incorporated in The Netherlands with registered number 34225555 and whose registered office is at Locatellikade 1, 1076AZ, Amsterdam, The Netherlands (“Buyer”) (which expression shall include its successors and permitted assigns).

WHEREAS

This Deed has been executed pursuant to the provisions of the Agreement.

NOW THIS DEED WITNESSES as follows:-

1. DEFINITIONS AND INTERPRETATION

1.1 In this Deed where the context admits:-

(a) “Appropriate Company” means any company within the Sellers’ Group or associated with any company within the Sellers’ Group, other than any Target Group Company.

(b) “Agreement” means the share sale agreement dated the 9th day of May, 2005 between NTL Group Limited (1), Holdings (2), Chichester (3) and the Buyer (4), as same may be varied, supplemented or amended from time to time.

(c) “Buyer’s Relief” means (i) any Relief arising to any Target Group Company in respect of an Event occurring or period ending on or before Completion to the extent that such Relief was taken into account in computing the provision for deferred tax in the Accounts or in eliminating such provision, or was included as an asset in the Accounts; (ii) any Relief arising to any Target Group Company in respect of an Event occurring after Completion or arising in the ordinary course of business to any Target Group Company in respect of an Event occurring or period commencing after the Accounts Date; and (iii) any Relief arising to any member of the Buyer’s Group (other than any Target Group Company).

(d) “Event” means any transaction, act, event, omission or occurrence of whatever nature including, without limitation, the acquisition, disposal or realisation of any asset and the making of any claim relevant for

taxation purposes and any reference to an Event occurring on or before a particular date shall include Events which for taxation purposes are treated or regarded as having occurred on or before that date.

(e) “UGC Sale and Purchase Agreement” means the sale and purchase agreement of today’s date between, amongst others, Morgan Stanley Dean Witter Equity Funding, Inc. and UPC Ireland BV.

(f) “Profits” means income, profits, gains (including capital gains) or the value of supplies and any other consideration, value or receipts used or charged for taxation purposes.

(g) “Relief” means any relief, loss, exemption, credit, allowance, deduction, charge or set-off relevant to the computation of any liability to make a payment of or relating to Taxation.

(h) “Sellers’ Group” means the Sellers and any company which is, has been or will be at any time a member of the same group as either Seller for any taxation purpose, excluding any Target Group Company.

(i) “Sellers’ Relief” means any Relief which is or becomes available to any member of the Target Group if and to the extent that such Relief is not a Buyer’s Relief, including, in particular, but without prejudice to the generality of the foregoing, any amount of capital losses which arose on a disposal prior to Completion.

(j) “Tax Assessment” means any notice, demand, assessment, letter, return, accounts, computations or other document or action taken indicating that any Target Group Company is or is reasonably likely to be placed under a liability to make a payment of or in respect of Taxation, and includes, for the avoidance of doubt, any such assessment, letter, return, accounts, computations or other document prepared or to be prepared by or on behalf of the company which is itself subject to that liability.

(k) “Taxation Authority” means any taxation or other authority (whether within or outside Ireland), which seeks to determine liability for and/or administers Taxation.

(l) “Tax” and “Taxation” means all forms of taxation and includes (without limiting the generality of the foregoing) corporation tax, dividend withholding tax, capital gains tax, capital acquisitions tax, value added tax, income tax, pay related social insurance, amounts due under the PAYE or PRSI system, customs and excise duties, any other import duties, stamp duty, companies capital duty and all other similar taxes, rates, levies, duties or other fiscal impositions of any similar kind whatsoever imposed by a revenue authority whether under the laws of Ireland or those of any other jurisdiction and all interest, fines and penalties incidental or relating to any of the liabilities or amounts referred to in this definition (save insofar as, but only to the extent that, such interest, fines and penalties are attributable to the unreasonable delay or default after Completion of the Buyer or any Target Group Company).

(m) “Tax Claim” means a claim against the Sellers under this Deed or in respect of, or alleging, a breach of the Warranties in Part XV of Schedule 3 to the Agreement.

(n) “Taxation Liability” has the meaning set out in clause 1.11.

1.2 Capitalised words and expressions defined in the Agreement and not in this Deed shall have the same meanings when used in this Deed.

1.3 References to “Profits” being earned, accrued or received on or before a particular date or in respect of a particular period shall include profits deemed for taxation purposes to have been earned, accrued or received on or before that date or in respect of that period.

1.4 References to any payment, dividend or distribution paid or made on or before a particular date shall include:

(a) any payment, dividend or distribution which on or before that date has fallen due to be made; and

(b) any Event which has occurred on or before that date and is deemed to be a payment, dividend or distribution.

1.5 References to any payment, dividend or distribution shall include anything which is deemed, for taxation purposes, to be a payment, dividend or distribution.

1.6 References to something being deemed or treated “for taxation purposes” in a certain way or to have occurred at a certain time shall mean that for the purposes of any applicable legislation or decided case law relating to or having reference to Taxation such things are deemed or treated in the way described or to have occurred at the time described.

1.7 References to a “person” include references to any unincorporated association, body of persons, partnership, trust or company.

1.8 References to any statute or statutory provision shall be construed so as to include a reference to such statute or statutory provision as it may have been, or may from time to time be, amended, modified, consolidated or re-enacted.

1.9 References to a particular Taxation Authority shall be construed so as to include a reference to any entity which is a successor to that Taxation Authority.

1.10 Except as are specifically provided, references to clauses are to the clauses of this Deed. Headings are for convenience only and shall not affect the construction or interpretation of this Deed.

1.11 Any references to a “Tax Liability” of any Target Group Company shall mean both liabilities of such Target Group Company to make actual payments of Tax (or amounts in respect of Tax) and also:-

(a) the loss, cancellation or non-availability of or the reduction in amount of a right to repayment of Tax which has been treated as an asset of

any Target Group Company in preparing the Accounts or the setting off of any such right to repayment of Tax against any actual Taxation Liability in respect of which the Buyer would, but for that setting off have been able to take any action, proceedings or claim against the Sellers under this Deed;

(b) the setting off against Profits that were earned, accrued or received on or prior to Completion or against any Tax chargeable in respect of an Event occurring on or before Completion of any Buyer’s Relief where, but for such setting off, any Target Group Company would have had an actual Taxation Liability in respect of which the Buyer would have been able to take any action, proceedings or claim against the Sellers under this Deed; and

(c) the loss, cancellation, non-availability, reduction in amount of, or the setting off against, Profits or against Tax otherwise chargeable, of any Buyer’s Relief.

Provided always that, to the extent that a Tax Liability arises pursuant to paragraphs (a), (b) or (c) hereof in respect of any matter, no liability shall arise under any other provision of this clause 1.11 in respect of the same matter.

1.12 In any situation falling within clause 1.11(a), 1.11(b) and/or 1.11(c) the amount that is to be treated for the purposes of this Deed as a Taxation Liability of any Target Group Company (the “Relevant Taxation Liability”) shall be determined as follows:-

(a) in a situation which falls within clause 1.11(a) the Relevant Taxation Liability shall be the amount of the repayment that would have been obtained but for the loss, cancellation, non-availability, reduction or setting off mentioned in that clause;

(b) in a situation which falls within clause 1.11(b) or 1.11(c) and where the Buyer’s Relief that was the subject of the loss, cancellation, non-availability, reduction or setting off mentioned in those clauses was a deduction from or offset against Tax, the Relevant Taxation Liability shall be the amount of that Buyer’s Relief; and

(c) in a situation which falls within clause 1.11(b) or 1.11(c) and where the Buyer’s Relief that was the subject of the loss, cancellation, non-availability, reduction or setting off mentioned in those clauses was a deduction from or offset against Profits, the Relevant Taxation Liability shall be:-

(i) if the Buyer’s Relief was the subject of such a loss, cancellation, non-availability, reduction, the amount of Tax which would, on the basis of the rates of Tax current at the date of Completion, have been saved but for the loss; or

(ii) if the Buyer’s Relief was the subject of such a setting off, the amount of Tax which has been saved in consequence of the setting off.

2. COVENANTS

2.1 Subject as hereinafter provided, the Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability arising, or by virtue of a Tax Assessment falling on, any Target Group Company as a result of:

(a) any Event occurring on or before the Accounts Date; or

(b) any Profits earned, accrued or received in respect of any period ending on or before the Accounts Date.

2.2 The Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability of any Target Group Company arising as a consequence of or by reference to any of the following occurring or being deemed to occur at any time after Completion:-

(i) any Appropriate Company ceasing to be resident in Ireland for Taxation purposes;

(ii) the disposal by any Appropriate Company of any asset or of any interest in or right over any asset; or

(iii) any Appropriate Company failing to pay the whole or any part of the Tax charged by any Taxation Authority to that Appropriate Company within the required time of being so charged.

2.3 Subject to the other provisions of this Deed, the Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability of any Target Group Company arising in respect of stamp duty on any of the following transactions (the “Stamp Duty Charge”):

(a) the transfer of assets by NTL Communications (Waterford) Limited to Communications on 31 December, 1999;

(b) the transfer of assets by NTL Communications (Galway) Limited to Communications on 31 December, 1999;

(d) the transfer of assets by National Transcommunications Limited to Networks on 30^th November, 2004.

2.4 Subject to the other provisions of this Deed, the Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability of Networks arising as a result of Completion under or pursuant to section 623 TCA (the “Degrouping Charge”).

2.5 Subject to the other provisions of this Deed, the Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability of any Target Group Company arising as a consequence of or by reference to, VAT being incorrectly charged, or not charged (as the case may be) in relation to any lease or sub-lease of (i) 99 Barrow Road, Dublin 11; (ii) Block P3 East Point,

Fairview, Dublin 3; or (iii) Basement and Ground Floor of Right Wing of Park House, North Circular Road, Dublin 7 (the “Lease VAT Charge”).

2.6 Subject to the other provisions of this Deed, the Sellers hereby covenant to pay to the Buyer an amount equal to any Taxation Liability of any Target Group Company resulting from or in connection with (i) any Events which are outside the ordinary course of the business of the Target Group Company concerned, but only where the relevant Event occurred or is deemed, for taxation purposes, to have occurred after the Accounts Date but on or before Completion or (ii) any Profits earned, accrued or received outside the ordinary course of the business of the Target Group Company concerned but only where and to the extent that such Profits are earned, accrued or received after the Accounts Date but on or before Completion. For the purposes of this clause 2.6, Events which are outside the ordinary course of the business of the Target Group Company concerned means:

(a) the payment of any dividend or the making of any distribution;

(b) the Target Group Company ceasing, or being deemed to cease, to be a member of any group of companies or associated with any other company for Taxation purposes;

(c) the disposal or realisation or acquisition of any asset in circumstances where, and only to the extent that, the consideration (if any) actually received or given for such disposal or realisation or acquisition is less than (or in the case of an acquisition, more than) the consideration deemed to be or to have been received or given for Taxation purposes;

(d) the creation, cancellation or re-organisation of any Target Group Company’s share or loan capital, or the creation, cancellation, reorganisation (including for the avoidance of doubt any novation) or repayment of any intra group debt;

(e) anything which relates to a transaction or arrangement or a series of transactions or arrangements which includes any step or steps having no commercial or business purposes apart from the reduction, avoidance or deferral of a liability to Taxation;

(f) anything which involves, or leads directly or indirectly to, a change of residence of any Target Group Company for Taxation purposes; or

(g) anything which gives rise to a liability to Taxation on deemed (as opposed to actual) profits or to the extent that it gives rise to a liability to Taxation on an amount of profits greater than the difference between the sale proceeds of an asset and the amount attributable to that asset in the Accounts or, in the case of an asset acquired since the Accounts Date, the cost of that asset.

2.7 Subject as hereinafter provided, the Sellers hereby covenant to pay to the Buyer an amount equivalent to any Tax or any amount on account of Tax which any Target Group Company or any other member of the Buyer’s Group is required to pay as a result of the failure by any member of the Sellers’ Group to discharge such Tax.

2.8 Any payment under this Deed shall, so far as legally possible, constitute a reduction in the consideration payable by the Buyer to the Sellers under the Agreement.

2.9 The Sellers’ obligations under this Deed shall be joint and several.

3. AMOUNTS PAYABLE TO THE BUYER

The amount of the Taxation Liability of a Target Group Company resulting from a Tax Assessment and which is payable to the Buyer under this Deed shall be the amount of the payment due to be made or made by the Target Group Company in respect of the Taxation Liability resulting from the Tax Assessment.

4. FINANCIAL AND TIME LIMITATIONS

4.1 The Sellers shall not be liable for any Tax Claim unless written notice of the claim has been given to the Sellers by or on behalf of the Buyer within 30 days (or 60 days if this extension in time from 30 days to 60 days does not prejudice the Sellers’ entitlement to lodge any appeal against the Tax Liability or otherwise deal with the claim) after the claim has arisen and in any event written notice in respect of a Tax Claim must be given on or before the fifth anniversary of the Completion Date.

4.2 To be valid, the written notice of the Tax Claim must give reasonable details of the nature of the Tax Claim, the circumstances giving rise to it (so far as are known to the Buyer after having made reasonable enquiries) and the Buyer’s bona fide estimate of any alleged Taxation Liability.

4.3 Any Tax Claim shall be deemed to be withdrawn (if it has not been previously satisfied, settled or withdrawn) and any claim (whether under this Deed or the Agreement) in relation to the same fact, matter, event or circumstance shall be deemed to be waived unless legal proceedings in respect of such claim have been commenced within six months of the giving of written notice of the claim or the Sellers have assumed conduct of the claim pursuant to clause 8.1 or the Buyer has commenced conduct of the claim in accordance with clause 8.4 (whichever is the earliest).

4.4 The aggregate liability of the Sellers for all Tax Claims and any other claims under the Warranties shall be limited to the amount of the Aggregate Consideration (but, for the avoidance of doubt, nothing in this clause 4.4 shall permit the Buyer to claim any amount in excess of the amount specified in paragraph 3 of Schedule 4 to the Agreement in respect of any claim which is not a Tax Claim). For the purposes of this limit, the liability of the Sellers shall be deemed to include the amount of all costs, expenses and other liabilities (together with any irrecoverable VAT thereon) payable by the Sellers in connection with the satisfaction, settlement or determination of any such claim.

4.5 Subject to the provisions of clause 4.6, the Sellers shall not be liable for any claim under this Deed:

(a) unless the aggregate amount of such claim, when taken together with the amount of all other claims under this Deed against the Sellers,

exceeds €3,000,000 (three million euro) (the “Threshold”) in which event the Sellers shall, subject to the other limits contained in this Deed, be liable only for the amount by which such aggregate amount exceeds the Threshold; and

(b) if the amount of the claim does not exceed €100,000 (one hundred thousand euro) (a “De Minimis Claim”) and no such De Minimis Claim shall count towards the Threshold. For the purposes of this clause, claims under this Deed arising from the same or a similar set of circumstances shall be treated as one claim under this Deed.

4.6 The provisions of clause 4.5, clauses 5.1(b)(i) to (iv) inclusive, 5.1(b)(vi), 5.1(b)(viii), 5.1(c) 5.1(e) to (h) inclusive and 5.1(j) shall not apply to any claim under this Deed to the extent that such claim relates to:

(a) a Stamp Duty Charge arising under clause 2.3 hereof;

(b) a Degrouping Charge arising under clause 2.4 hereof; or

(c) 50% of any Lease VAT Charge arising under clause 2.5 hereof (provided always that the provisions of clause 4.5(a) shall apply, and the provisions of clause 4.5(b) shall not apply, to the remaining 50% of such Lease VAT Charge).

4.7 The provisions of clause 5.1(b)(vii) shall not apply to any claim under this Deed to the extent that such claim relates to:

(a) a Stamp Duty Charge arising under clause 2.3 hereof;

(b) a Degrouping Charge arising under clause 2.4 hereof; or

if the failure of the Target Group Company in relation to the matters governed by that clause arises as a result of the failure by the Sellers to provide, or the delay in providing, such information as the Buyer or the Target Group Company requires in order to complete the relevant returns and computations.

4.8 For the purposes of calculating Tax Claims counting towards the Threshold and/or any De Minimis Claim:

(a) there shall be excluded from any Tax Claim the amount of any costs, expenses and other liabilities (together with any irrecoverable VAT thereon) incurred or to be incurred by any member of the Target Group in connection with the making of any such claim;

(b) there shall be excluded the amount of the same loss arising from any other claim (whether under the Deed or under the Agreement) in respect of the same fact, matter, event or circumstance.

5. EXCLUSIONS AND LIMITATIONS

5.1 Subject to the provisions of clauses 4.6 and 13.4, neither of the Sellers shall have a liability under this Deed or under the Warranties in the Agreement which relate to Taxation to the extent that:-

(a) it would not have arisen but for some act, omission, transaction or arrangement carried out after the Completion Date by or on behalf of the Buyer or after the Completion Date by or on behalf of a Target Group Company or any of their respective successors in title, other than any such act, omission, transaction or arrangement (i) carried out or effected in the ordinary course of trading or in the ordinary course of acquiring or disposing of capital assets; or (ii) carried out or effected under a legally binding commitment created on or before Completion;

(b) the Taxation Liability arises or is increased wholly or partly as a result of :-

(i) an increase in rates of Taxation, or variation in the method of applying or calculating the rate of Taxation made after the Completion Date with retrospective effect;

(ii) any administrative or judicial decision or practice or any generally accepted change in the interpretation of the law, after the Completion Date with retrospective effect;

(iii) the passing of any primary or subordinate legislation, or the making of any other government regulation, not in force at the Completion Date with retrospective effect or the withdrawal or alteration after the date hereof of any published extra statutory concession made by any fiscal or Taxation Authority and currently in operation;

(iv) the failure or omission on the part of the Buyer or any Target Group Company or any other person connected with either of them after Completion to make any valid claim, election, surrender or disclaimer or give any notice or consent or do any other thing the making, giving or doing of which was taken into account in computing any provision or reserve for Taxation in the Accounts which the Sellers have reasonably requested the Buyer in writing to make, give or perform (such request, where reasonably possible, to be made prior to Completion);

(v) any Target Group Company waiving or surrendering after the Completion Date any Relief (other than a Buyer’s Relief) available to it relevant to the computation of any Taxation Liability or any credit against Taxation;

(vi) the fact that the accounting policies of the Buyer or any Target Group Company or the application thereof (including without limitation the treatment of any assets or liabilities or of the Taxation attributable to any timing differences in future accounts of the Buyer or a Target Group Company) is changed

after the Completion Date from the treatment or application of the same utilised in preparing the Accounts except changes made in order to comply with GAAP to the extent that the preparation of accounts by any of the Target Group Companies is not fully compliant therewith as at Completion;

(vii) any Target Group Company (other than as a result of any act, omission or failure on behalf of the Sellers) failing to submit the returns and computations required to be made by it or not submitting such returns and computations within the appropriate time limits or submitting such returns and computations otherwise than on a proper basis, in each case on or after the Completion Date;

(viii) the failure by the Buyer to comply with any of its obligations under this Deed other than as a result of any default or unreasonable delay by any of the Sellers;

(c) provision, accrual or reserve has been made in the Accounts and/or the Adjustment Statement in respect of the matter to which the liability relates or that payment or discharge thereof is or has been taken into account therein or in the Accounts (provided always that this clause 5.1(c) shall only relate, in the case of the Adjustment Statement, to provisions accruals or reserves for VAT, payroll taxes and social security expenses as provided for in Part III of Schedule 7 of the Agreement);

(d) the Taxation Liability has been paid or otherwise extinguished, without cost to the Buyer or any member of the Target Group, other than pursuant to the UGC Sale and Purchase Agreement;

(e) the liability in respect thereof arises as a result of the appropriate provision, accrual or reserve in respect of a liability or reserve in the Accounts being insufficient by reason of any increase in rates of Taxation or variation in the method applying or calculating the rate of Taxation made after Completion;

(f) such Taxation Liability would not have arisen but for the winding up of, or the cessation of a trade or business of, any Target Group Company or any change in the nature or conduct of such trade or business, where the winding up, cessation or change occurs after Completion;

(g) the Buyer or any Target Group Company has been recompensed for any loss or damage suffered by either of them arising out of the breach or claim under the terms of any insurance policy for the time being in force;

(h) the claim would not have arisen but for anything expressly provided to be done or omitted to be done pursuant to this Deed or which is otherwise done or omitted to be done by the Buyer or at the written request or with the written consent of the Buyer prior to Completion;

(i) any Sellers’ Reliefs are available to relieve or mitigate the Taxation Liability or would have been available to relieve or mitigate that liability but for their use by a Target Group Company after Completion and any Sellers’ Relief that is so available shall be deemed to be used in such a way as to reduce to the extent possible the Sellers’ total liability hereunder; or

(j) the Profits (which, for the avoidance of doubt shall not include any Profits deemed to have been earned) in respect of which the Taxation Liability arises were actually earned, accrued or received by a Target Group Company but were not reflected in the Accounts and/or the Adjustment Statement and were not distributed by any Target Group Company prior to Completion.

5.2 Assignment

Save as provided in clauses 16.7 to 16.11 of the Agreement, the parties shall not be entitled to assign the benefit or burden of any provision of this Deed.

6. WITHHOLDINGS, DEDUCTIONS AND SET-OFF

6.1 All payments to be made by the parties arising out of or in connection with this Deed (or any other agreement or arrangement required to be entered into in connection with this Deed) shall be made in full, without set-off or counterclaim and free and clear of all deductions or withholdings whatsoever save only as may be required by law.

6.2 Subject to clauses 6.3, 6.4 and 6.5, if the payer is required by law to make a deduction or withholding, the payer shall, at the same time as the sum which is the subject of the deduction or withholding is payable under this Deed, pay to the payee such additional amount as shall be required to ensure that the net amount received by the payee under this Deed will equal the full amount which would have been received by it had no such deduction or withholding been required to be made.

6.3 If the payee is entitled to and receives payment in respect of a credit for or refund of Taxation by reason of the deduction or withholding it shall, provided it determines in good faith it can do so without prejudice to the retention of that credit or refund, reimburse the payer with such amount as shall leave the payee in no better or worse position than it would have been had no deduction or withholding been required. If any sum payable by the Sellers to the Buyer under this Deed shall be subject to a Taxation Liability in the hands of the Buyer, the Sellers shall be under the same obligation to make an increased payment in relation to that Taxation Liability as if the liability were a deduction or withholding required by law.

6.4 The obligation to pay additional amounts in clause 6.2 and the obligation to make increased payments in clause 6.3 shall only apply to the extent that:

(i) the relevant deduction, withholding or Taxation Liability would arise under the current law as it is in force at the date of this Deed; and

(ii) the relevant deduction, withholding or Taxation Liability would arise if the Buyer were resident in the United Kingdom for Taxation purposes and for the purposes of Section 349(2)(c) Income and Corporation Taxes Act, 1988 had its place of abode inside the United Kingdom.

6.5 Without prejudice to clause 5.2, if either party assigns its rights under this Deed and the payee is an assignee, the payer shall only be required to pay such sum as is equal to the amount it would have had to pay under this clause 6 had the party’s rights under the Deed not been assigned.

7. ACTIONS AGAINST THIRD PARTIES

7.1 If (i) either of the Sellers has made a payment to the Buyer under this Deed, or (ii) either of the Sellers has become liable to make such a payment, in either case in respect of a Taxation Liability under clause 2, then the following provisions of this clause 7 shall apply.

(a) If the Buyer or any Target Group Company receives from any person other than the Buyer or a Target Group Company or any person connected with them for Taxation purposes a payment or credit in respect of the Taxation Liability in question (including any interest or repayment supplement) provided that the payment or credit is not received by reason of a Buyer’s Relief and provided that the payment or credit does not arise as a result of a payment made under or pursuant to the UGC Sale and Purchase Agreement, the payment or credit shall be dealt with in accordance with clause 7.2.

(b) If the Buyer or any Target Group Company is or becomes entitled to a payment or credit in respect of the Taxation Liability in question from any person other than the Buyer, a Target Group Company or any person connected with them for Taxation purposes, then, provided that the payment or credit is not received by reason of a Buyer’s Relief and provided that the payment or credit does not arise as a result of a payment made under or pursuant to the UGC Sale and Purchase Agreement:

(i) the Buyer shall promptly notify the Sellers of the entitlement; and

(ii) the Buyer shall, if so required by the Sellers and at the Sellers’ expense, take or procure that the relevant Target Group Company shall take all appropriate steps to enforce that entitlement (keeping the Sellers fully informed of the progress of any action taken);

and any payment or credit received shall be dealt with in accordance with clause 7.2.

7.2 Where it is provided under clause 7.1 that a payment or credit is to be dealt with in accordance with this clause 7.2:

(a) in the case of a payment, the Buyer shall, within five Business Days of receipt, pay to the Sellers (or to either of them at the direction of the

Sellers) the amount of the payment received less any Taxation suffered by the Buyer or any Target Group Company on receipt of such sum (including any Taxation on any interest or repayment supplement included in the sum recovered);

(b) in the case of a credit, the Buyer shall, within five Business Days of the date on which Taxation would otherwise have been payable had such credit not been available, pay to the Sellers (or to either of them at the direction of the Sellers) an amount equal to the amount of such Taxation

subject to a maximum of the amounts previously paid by the Sellers to the Buyer under this Deed. Any excess shall be carried forward by the Buyer and set off against outstanding or future claims under this Deed.

8. CONDUCT OF CLAIMS

8.1 If the Buyer or any of the Target Group Companies receives a Tax Assessment which relates in whole or in part to Taxation for which the Sellers may be liable under this Deed or any other notification from a Tax Authority which may give rise to a Tax Claim, the Buyer shall within 10 Business Days of receipt give written notice of the Tax Assessment or other matter to the Sellers.

8.2 Notwithstanding any other provision of this clause 8, it is hereby agreed that the Sellers shall have sole conduct of all or any proceedings of whatsoever nature arising in connection with:

(a) a Stamp Duty Charge under clause 2.3;

(b) a Degrouping Charge under clause 2.4; or

(collectively, the “Sellers’ Proceedings”) provided that the Sellers shall not make any settlement or compromise of any Sellers’ Proceedings or take any other action in connection with the Sellers’ Proceedings under this clause 8 which will or is reasonably likely to materially adversely affect the future liability to Taxation or the business of the Target Group Companies or the Buyer’s Group.

8.3 The Buyer shall, or shall procure that the relevant Target Group Company or Companies shall, take such action and give such information and assistance in connection with the affairs of the relevant Target Group Company or Companies as the Sellers may reasonably request to resist, appeal, dispute, avoid or compromise the Tax Assessment or deal with any Sellers’ Proceedings, subject to the Buyer and/or any Target Group Company being indemnified to their reasonable satisfaction against all reasonable out-of-pocket costs and expenses which may be properly incurred thereby. Such information and assistance shall include, without limitation, providing reasonable access to relevant documentation and records and permitting the copying of such documentation and records.

8.4 For the avoidance of doubt, the actions which the Sellers may reasonably request under this clause 8 shall include (without limitation) the procuring of any Target Group Company to apply to postpone (so far as legally possible) the payment of any Taxation and/or allowing either or both of the Sellers to take on or take over at its own expense the conduct of all or any proceedings of whatsoever nature arising in connection with the Tax Claim in question. If the Seller(s) take on or take over the conduct of proceedings (including the Sellers’ Proceedings), the Buyer shall provide, and shall procure that any Target Group Company shall provide, such information and assistance as the Seller(s) may reasonably require in connection with the preparation for and conduct of those proceedings.

8.5 The following provisions shall apply in relation to the conduct of the Sellers’ Proceedings or in the event that either or both of the Sellers elect to have conduct of a claim in accordance with the provisions set out above:

(a) the Buyer shall be kept informed of all material matters pertaining thereto and steps proposed to be taken by the Seller(s) and shall be entitled to receive copies of all material correspondence in connection with the claim in question;

(b) the Sellers shall provide the Buyer with drafts of material correspondence in relation to the Tax Assessment in question and shall provide the Buyer with an opportunity to comment thereon. The Sellers shall not unreasonably refuse to accept any such comments;

(c) the Sellers shall not make any settlement or compromise of any Taxation Assessment unless it has first notified the Buyer and any Target Group Company of the terms of such proposed settlement or compromise and the Buyer has given its consent in writing to such settlement or compromise (such consent not to be unreasonably withheld or delayed) but if such consent is refused the Sellers’ liability under the Tax Deed in relation to that Taxation Assessment shall be limited to a maximum of the amount for which the Sellers would have been liable if such consent had been forthcoming. For the avoidance of doubt, the Sellers shall not be entitled to require the Buyer or the Target Group Companies to make any settlement or compromise of any Taxation Assessment or take any other action or be under any obligation under this clause 8 which will or is reasonably likely to materially adversely affect the future liability to Taxation or the business of the Target Group Companies or the Buyer’s Group (save where such settlement or compromise relates to the use of a Sellers’ Relief).

8.6 In the event that neither of the Sellers has requested in writing that it be allowed to take on or take over the conduct of all or any proceedings pursuant to clause 8.4 in relation to the Tax Assessment or notification referred to in clause 8.1:

(a) the Buyer shall, and shall procure that any Target Group Company shall, provide the Sellers with copies of all material correspondence entered into and notes of any material conversations or meetings with

any Taxation Authority to the extent that such correspondence or notes relate to the Tax Assessment in question;

(b) no material written communication shall be forwarded to any Taxation Authority in relation to that Tax Assessment without the prior written approval of the Sellers (such approval not to be unreasonably withheld or delayed) provided that if no such approval or notice that approval is to be withheld is received by the Buyer within 10 Business Days of request by the Buyer, the Buyer shall be entitled to forward such communication to any Taxation Authority;

(c) the Buyer or any Target Group Company (as the case may be) shall not be at liberty without reference to the Sellers to admit, compromise (consent to which shall not be unreasonably withheld by the Sellers) or otherwise deal with any Tax Assessment unless either of the Sellers serves a notice on the Buyer to the effect that it considers that the Tax Assessment should no longer be resisted provided that if neither of the Sellers serve such a notice on the Buyer or on any Target Group Company within 10 Business Days of receipt of written notice from the Buyer or any Target Group Company that it intends to admit, compromise, or otherwise deal with the Tax Assessment, the Buyer or any member of the Target Group may admit, compromise or otherwise deal with the Tax Assessment as the Buyer or Target Group Company may in its absolute discretion think fit;

(d) for the purposes of clause 8.6(c), the Sellers shall act reasonably in refusing to consent to a claim being admitted or compromised by the Buyer if either of the Sellers has instructed leading Tax Counsel of at least ten years’ call (at the Sellers’ expense) and has been advised by such Counsel that the chances of success are greater than the chances of failure if the Tax Assessment is resisted further and either or both of the Sellers then elect to have conduct of such claim, complying in relation to such conduct with the obligations set out in clauses 8.4 and 8.5.

8.7 In the event of any dispute between the Sellers as to any matter arising under this clause 8, the decision of Holdings on any such matter in dispute shall be final and binding.

9. OVER-PROVISIONS, SAVINGS

9.1 If the Buyer discovers (or is made aware) that any provision for Taxation in the Accounts may be an over-provision, the Buyer shall give full details to the Seller. If the parties cannot reach agreement as to the amount of that over-provision, the Buyer shall (at the request and expense of the Sellers) procure that the auditors for the time being of the Target Group shall certify such amount, applying the accounting policies, principles and practices adopted in relation to the preparation of the Accounts and shall procure that the Sellers are provided, on request, with such information as they reasonably require to check the accuracy of the certificate. The amount of such over-provision shall be dealt with in accordance with Clause 9.2.

9.2 Where it is provided under Clauses 9.1 that the amount of any over provision (the “Over Provision”) is to be dealt with in accordance with this Clause:

(a) the Over Provision shall first be set off against any payment then due from the Sellers under this Tax Deed;

(b) to the extent that there is an excess after applying 9.2(a) above which is not exhausted under that Clause, the remainder of the excess shall be carried forward and set off against any future payments which become due from the Sellers under this Tax Deed; and

(c) to the extent that there is an excess after applying 9.2(b) above on the fifth anniversary of Completion, the remainder of the excess shall be paid to the Sellers within 10 Business Days.

9.3 If the Buyer discovers (or is made aware) that the Target Group may have actually received and retained the benefit of any Saving which would not otherwise have arisen but for the payment made by the Sellers in respect of a claim under Clause 2 (and, for the avoidance of doubt, a Saving does not include any saving arising as a result of any payment made pursuant to the UGC Sale and Purchase Agreement), the Buyer shall give full details to the Seller. If the parties cannot reach agreement as to the amount of that Saving, the Buyer shall (at the request and expense of the Sellers) procure that the auditors for the time being of the Target Group shall certify such value and shall procure that the Sellers are provided, on request, with such information as they reasonably require to check the accuracy of the certificate. The amount of the actual Saving which would not otherwise have arisen but for the payment made by the Sellers in respect of a claim under Clause 2 which any of the Target Group has received and retained shall be dealt with in accordance with Clause 9.5.

9.4 For the purposes of Clause 9.3 “Saving” means:

(a) the reduction of any liability of any Target Group Company to make an actual payment of Taxation in respect of any period ending after the Accounts Date or in respect of any Event occurring after the Accounts Date and in respect of which the Sellers are not liable to make a payment under Clause 2 of this Tax Deed by virtue of the set-off against such liability or against profits of any Target Group Company of any Sellers’ Relief arising wholly as a result of a Liability to Taxation in respect of which the Sellers have made a payment under Clause 2 of this Tax Deed; and

(b) any repayment of Taxation which a Target Group Company obtains which it would not have been entitled to but for the payment of any Taxation by a Target Group Company in respect of which the Sellers have made a payment under Clause 2 of this Tax Deed.

The Buyer shall procure that any such Saving referred to in this Clause 9.4 which would not otherwise have arisen but for the payment made by the Sellers in respect of a claim under Clause 2 is used in priority to any other Relief (insofar as is legally possible) and in the absence of evidence to the contrary shall be deemed to be so used.

9.5 Where it is provided under clause 9.3 that any amount (the “Relevant Amount”) is to be dealt with in accordance with this Clause:

(a) the Relevant Amount shall first be set off against any payment then due from the Sellers under this Tax Deed;

(b) to the extent that there is an excess after applying 9.5(a) above, a refund shall be made to the Sellers of an amount equal to the lower of:-

(i) any previous payment or payments made by the Sellers under this Tax Deed and not previously refunded or offset under this Clause and/or under Clause 7; and

(ii) the amount of such excess.

10. PAYMENT DATE OF CLAIMS

10.1 The payment date shall be ascertained as follows:-

(a) insofar as the payment will be in respect of Taxation to be borne by a Target Group Company which has not yet become due the payment date will be in cleared funds at least three Business Days before the date on which that Taxation becomes due or would have to be paid in order to prevent a liability to interest or a fine, charge or penalty arising in respect of the Taxation in question or, as the case may be, three Business Days prior to the date on which the Taxation in question must be paid in order to entitle the Company to make an appeal in relation to such Taxation;

(b) insofar as the payment will be in respect of any loss, nullification, clawback, reduction or withdrawal of the right of repayment of Taxation, three business days after the date when such repayment would actually have been received by the Company;

(c) insofar as the payment will be in respect of the set off of a Relief the date on which the relevant Taxation Liability would have been payable but for the setting off of the relevant Relief; or

(d) in any other case not falling within the provisions of (a) to (c) of this clause 10.1, within ten Business Days after demand is made therefor by the Buyer.

11. COUNTER INDEMNITIES AND BUYER’S OBLIGATIONS

11.1 Change of Residence of any Target Group Company

(a) In consideration of the Agreement and the covenants hereby given by the Sellers in favour of the Buyer, the Buyer hereby covenants with and agrees to indemnify and hold harmless the Sellers in respect of any liability it (or any other person falling within Section 629(4) TCA) incur or become liable to pay whatsoever resulting from the residence of any Target Group Company being transferred outside Ireland within twelve months after the Completion Date or in consequence thereof.

(b) The Buyer shall, and shall procure that any Target Group Company shall, provide the Sellers in a timely manner with such information as either of the Sellers may request in order to enable the Sellers (or any member of the NTL Group) to comply with its obligations or those of any of the NTL Group in relation to the filing of the tax returns for the period to 31^st December, 2005 including, in particular the filing of tax returns in the U.S.A.

(c) No member of the Buyer Group shall make any elections, claims, notifications or filings, or otherwise communicate (except as required by law) with any Taxation Authority in the USA in relation to tax matters relating to any period up to and including the date of Completion with respect to any member of the Target Group without prior written consent of the Sellers, which consent shall not be unreasonably withheld. If the Buyer submits any elections, claims, notifications or filings to any Taxation Authority in the USA relating to tax matters that may have an adverse effect on any Target Group Company relating to the period after Completion and ending on December 31^st 2005, the Buyer shall provide to the Seller a copy of such elections, claims, notifications or filings.

11.2 Secondary Liability under Section 623 TCA

The Buyer hereby covenants with and agrees to pay to the Sellers an amount equal to (on an after-tax basis) any liability which any member of the Sellers’ Group (other than Networks) incurs or becomes liable to pay under section 623(5) TCA as a result of any Taxation Liability under section 623 TCA arising in Networks as a result of Completion, not having been paid by Networks within 6 months after Completion.

12. GENERAL

12.1 No variation of this Deed shall be effective unless made in writing and signed by or on behalf of both parties and expressed to be such a variation.

12.2 No waiver by either party of any requirement of this Deed, or of any remedy or right under this Deed, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Deed shall operate as a waiver of any repetition of such breach.

12.3 This Deed may be executed as two or more counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Deed.

12.4 Any notice, request, document, correspondence, communication, information or consent given to or served on one of the Sellers shall be deemed to have been given to or served to each of them.

12.5 Any notice, request, document, correspondence, communication, information or consent given to or served on the Buyer by either of the Sellers shall be deemed to have been given or served by both of the Sellers.

12.6 Any obligation of the Buyer to the Sellers under this Deed shall be deemed to have been satisfied if such obligation has been met with respect to one of the Sellers.

12.7 If the Buyer or any member of the Buyer Group receives or is entitled to any payment pursuant to the UGC Sale and Purchase Agreement (the “Payment”) nothing in this Deed shall:

(a) require the Buyer to claim the Payment or to pay the Payment (or an amount in respect of the Payment) to the Sellers or any member of the NTL Group;

(b) exclude or limit the liability of the Sellers or any member of the NTL Group hereunder on (direct or indirect) grounds based on the Payment or the right to a Payment;

(c) give rise to (or constitute) any credit or saving (including without limitation any Saving as defined in clause 9) for the benefit of the Sellers or any member of the NTL Group as a direct or indirect consequence of the Payment or the right to a payment.

12.8 The Buyer and its advisers shall, on reasonable notice in writing to the Sellers, be provided on a timely basis (and at the Buyer’s cost) with such information and assistance (including reasonable assistance from employees of the Sellers) and reasonable accesss to such documents and records relating to the Target Group Companies as may be reasonably required in connection with the preparation of all Taxation returns of the Target Group Companies.

13. INCENTIVE AWARDS

13.1 The Sellers hereby covenant to pay to the Buyer an amount equal to:

(a) any Taxation Liability of Communications (but not including any corporation tax chargeable on Communications by virtue of the receipt of any Cash Bonus (as defined in clause 12.19 of the Agreement) from either of the Sellers) arising as a consequence of the making of an Incentive Award (as defined in clause 12.17 of the Agreement); and

(b) any Taxation Liability arising to Communications, whether direct or indirect (but not including any corporation tax chargeable on Communications by virtue of the receipt of any Cash Bonus (as defined in clause 12.19 of the Agreement) from either of the Sellers) as a result of any Cash Bonus being paid to a Relevant Individual

and for the avoidance of doubt, the provisions of clause 13.3 of this Deed shall apply to the covenant contained in this clause 13.1, to the extent applicable.

13.2 The payment of such amounts mentioned in clause 13.1 above shall be made by the Sellers within five Business Days of being notified by Communications of the amount of such Taxation Liabilities. Any dispute arising between the Sellers and Communications as to the amount of such Taxation Liabilities shall be dealt with as provided for in clause 15.2 and 15.3 of the Agreement.

13.3 The provisions of clauses 6.1, 6.2 and 6.3 of this Deed shall apply to the payment of amounts pursuant to this clause 13, but clause 6.2 shall be read as if the reference to “clause 6.4 and 6.5” did not appear therein.

13.4 The provisions of clauses 4 and 5 of this Deed shall not apply to the Sellers’ obligations pursuant to this clause 13.

13.5 The Sellers shall provide to the Buyer and/or Communications (at the Sellers’ expense) on a timely basis, any and all necessary information (including reasonable assistance from employees of the Sellers) required by Communications in order to fulfil any reporting and/or payment obligations it or any other member of the Target Group may have in relation to the Incentive Award. The Buyer shall, and shall procure that Communications shall provide the Sellers (at the Sellers’ expense), on request and in a timely manner with copies of all returns and filings made to a Taxation Authority directly in respect of the making of an Incentive Award.

13.6 The Buyer hereby covenants with and agrees to pay the Sellers an amount equal to any liability which any member of the Sellers’ Group incurs or becomes liable to pay as a result of any failure by Communications to comply, either in whole or in part, with any obligations placed on it under this clause 13, subject to a maximum amount which equals the amount of the Cash Bonus paid by the Sellers to Communications pursuant to clause 12.19 of the Agreement.

14. NOTICES

Clause 17 of the Agreement shall apply to this Deed, mutatis mutandis, as if references to “this Agreement” were replaced with references to “this Deed”. In relation to any notice served on either of the Sellers, a copy should also be sent to: Jeni Sarson, NTL House, Bartley Wood Business Park, Hook, Hampshire, RG27 9UP.

15. APPICABLE LAW AND JURISDICTION

Clause 15.1 of the Agreement shall apply mutatis mutandis as if references to “this Agreement” were replaced with references to “this Deed”.

16. DISPUTE RESOLUTION

Clauses 15.2 and 15.3 of the Agreement shall apply to this Deed, but as if the words “Any dispute arising out of or in connection with this Agreement” in clause 15.2 were replaced with “Any dispute relating to the proper construction of this Deed” and as if all other references to “this Agreement” were replaced with references to “this Deed”.

IN WITNESS whereof this Deed has been executed the day and year first before WRITTEN

SIGNED as a DEED and

DELIVERED by

NTL IRISH HOLDINGS LIMITED

acting by Sonia Gordon its

duly authorised attorney

/s/ Sonia Gordon
Signature of Attorney


Signature of Director/Secretary

SIGNED as a DEED and

DELIVERED by

NTL (CHICHESTER) LIMITED

acting by Sonia Gordon its

duly authorised attorney

/s/ Sonia Gordon
Signature of Attorney


Signature of Director/Secretary

SIGNED as a DEED and

DELIVERED by

MS IRISH CABLE HOLDINGS B.V.

acting by

Scott W. Matlock
Print Name

/s/ Scott W. Matlock
Signature of Attorney/special representative

EX-2.3 4 a2157664zex-2_3.htm EXHIBIT 2.3

Exhibit 2.3

Dated 9 May 2005

(1) NTL GROUP LIMITED

(2) MS IRISH CABLE HOLDINGS B.V.

ASSET TRANSFER AGREEMENT

CONTENTS

Clause

1.		DEFINITIONS AND INTERPRETATION
2.		AGREEMENT TO TRANSFER
3.		CONSIDERATION
4.		COMPLETION
5.		TITLE, RISK AND INSURANCE
6.		ASSIGNMENT OF BENEFITS AND ASSUMPTION OF BURDENS
7.		ASSUMED LIABILITIES
8.		RIGHTS UNDER SHARED CORE CONTRACTS
9.		RECORDS
10.		POST-COMPLETION
11.		FURTHER ASSURANCE
12.		APPLICABLE LAW AND JURISDICTION
13.		ENTIRE AGREEMENT
14.		NO PARTNERSHIP OR AGENCY
15.		VARIATIONS AND WAIVERS
16.		ASSIGNMENT
17.		COUNTERPARTS
18.		THIRD PARTY RIGHTS
19.		COSTS AND VAT
20.		NOTICES

SCHEDULES

1.	COMPLETION OBLIGATIONS
2.	ADDITIONAL PROPERTIES
3.	ADDITIONAL CONTRACTS
4.	NETWORK EQUIPMENT
5.	APPORTIONMENT OF CONSIDERATION

ANNEXURE

ADDITIONAL DUCTS

THIS ASSET TRANSFER AGREEMENT is made on 9 May 2005

BETWEEN:

(1) NTL GROUP LIMITED, incorporated in England and Wales, with registered number 2591237, whose registered office is at NTL House, Bartley Wood Business Park, Hook, Hampshire RG27 9UP (“NGL”); and

(2) MS IRISH CABLE HOLDINGS B.V., incorporated in The Netherlands, with registered number 34225555, whose registered office is at Locatellikade 1, 1076AZ, Amsterdam, The Netherlands (the “Buyer”).

WHEREAS:

(A) A sale and purchase agreement (the “Sale and Purchase Agreement”) dated today’s date was executed between NGL, ntl Irish Holdings Limited, ntl (Chichester) Limited and the Buyer in relation to, inter alia, the shares in each of ntl Communications (Ireland) Limited (“Communications”) and ntl Irish Networks Limited and the Additional Assets (as such term is defined below).

(B) Under the terms of the Sale and Purchase Agreement, NGL has agreed to sell or procure the sale by the relevant members of the NTL Group of, and the Buyer has agreed to purchase, the Additional Assets on the terms and subject to the conditions of this Agreement.

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Words and expressions used in this Agreement shall have the meanings given to them below:

Additional Assets		all of the assets to be transferred to the Buyer pursuant to clause 2.1 of this Agreement.

Additional Contracts		those contracts listed in Schedule 3.

Additional Ducts		those ducts marked in green on the plans set out in the Annexure to this Agreement.

Additional Network Assets		(a) the Additional Ducts; (b) the Nortel Switch; and (c) the Network Equipment but not, for the avoidance of doubt, the Chambers.

Additional Properties		the leasehold properties listed in Part I of Schedule 2.

Assets Consideration		the purchase price for the Additional Assets specified in clause 3.1.1.

Asset Sharing Agreement		has the meaning given in the Sale and Purchase Agreement.

Assumed Liabilities		subject to clause 7.1, all Liabilities of the NTL Group relating and/or attached to the Additional Assets and the Processor Licences (other than in respect of Taxation).

Business Day		any day other than a Saturday, Sunday or bank or public holiday in England or Ireland.

Buyer’s Group		has the meaning given in the Sale and Purchase Agreement.

Chambers		means the access chambers to the Additional Ducts numbered 1 to 59 inclusive which are more particularly described in the plans in the Annexure to this Agreement.

Completion		completion of the sale and purchase of the Additional Assets pursuant to this Agreement.

Completion Date		means the date on which Completion occurs in accordance with clause 4.

Core Business		has the meaning given in the Sale and Purchase Agreement.

Core Group		has the meaning given in the Sale and Purchase Agreement.

Fittings		all fixtures, fittings and furnishings owned by the Core Group in each Additional Property (but excluding 28 racks which are situated at the West Corner Unit and which will be retained by members of the Core Group).

Group		in relation to a company, that company, its parent undertakings (if any) from time to time and the subsidiary undertakings of such company and its parent undertakings from time to time.

Irish Cable Business		has the meaning given in the Sale and Purchase Agreement.

Liabilities		all liabilities, duties and obligations of every description, whether deriving from contract, common law, statute or otherwise, whether present or future, actual or contingent, ascertained or unascertained and whether owed or incurred severally or jointly and as principal or surety (including, without limitation, all contingent and actual liabilities under warranty claims, service credits, accruals and deferred income).

NTL Group		has the meaning given in the Sale and Purchase Agreement.

Network Equipment		the assets listed in Schedule 4.

Nortel Switch		the Nortel DMS 100 Transit Switch (incorporating the SS8 Model 640 voicemail platform) together with any spare parts in relation thereto, in each case situated at the West Corner Unit.

Oracle Licence		the Software Licence and Services Agreement dated 7 May 1999 as varied 1 July 1999 and 31 January 2005 between (1) Oracle Corporation UK Limited and (2) NGL.

Permitted Security Interest		has the meaning given in the Sale and Purchase Agreement.

Processor Licences		has the meaning given in clause 4.3.

Security Interest		has the meaning given in the Sale and Purchase Agreement.

Shared Core Contract		has the meaning given in the Asset Sharing Agreement.

Target Group		has the meaning given in the Sale and Purchase Agreement.

Taxation		has the meaning given in the Sale and Purchase Agreement.

Transferors		has the meaning given in clause 2.1.

VAT		value added tax.

West Corner Unit		the West Unit, Willsborough Industrial Estate, Clonshaugh, County Dublin, Ireland, as more particularly described in Schedule 2.

1.2 Unless the context requires otherwise or such words and expressions are otherwise expressly defined in this Agreement, words and expressions defined in or having a meaning provided by the Companies Act 1985 at the date of this Agreement shall have the same meaning in this Agreement.

1.3 Unless the context requires otherwise, references in this Agreement to:

1.3.1 any of the masculine, feminine and neuter genders shall include other genders;

1.3.2 a “person” shall include a reference to any natural person, body corporate (including, without limitation, a limited liability company), unincorporated association, partnership and trust and its successors in title and permitted assigns;

1.3.3 a company shall include reference to any body corporate;

1.3.4 any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed so as to include a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated or re-enacted except to the extent that any amendment or modification made after the date of this Agreement would increase any liability or impose any additional obligation upon the Sellers under this Agreement;

1.3.5 any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than that of England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term;

1.3.6 any time or date shall be construed as a reference to the time or date prevailing in England;

1.3.7 a particular government or statutory authority shall include any entity which is a successor to that authority; and

1.3.8 references to Ireland exclude Northern Ireland.

1.4 The headings in this Agreement are for convenience only and shall not affect its meaning. References to a “clause”, “Schedule” or “paragraph” are (unless otherwise stated) to a clause of or Schedule to this Agreement and to a paragraph of the relevant Schedule. The Schedules and the Annexure form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

1.5 A document expressed to be “in the approved terms” means a document, the terms of which have been approved by the parties and a copy of which has been initialled by or on behalf of NGL and the Buyer.

2. AGREEMENT TO TRANSFER

2.1 With effect from Completion (save as otherwise provided by this Agreement), NGL agrees to transfer or procure the transfer to the Buyer by the relevant members of the NTL Group which own the Additional Assets (the “Transferors”) of such interest and rights as NGL or the Transferors (as applicable) have at Completion in the following Additional Assets free from any Security Interest (other than a Security Interest to be released on or prior to Completion):

2.1.1 the Additional Network Assets;

2.1.2 subject to Schedule 2, the Additional Properties, together with all ownership rights in the Fittings;

2.1.3 subject to clause 6, the benefit (subject to the burden) (so far as they can lawfully be assigned, transferred to or held in trust for the Buyer) of the Additional Contracts; and

2.1.4 any insurance proceeds provided for in clause 5.5,

in each case together with all such rights and advantages of NGL or the Transferors attaching to the same, to the intent that the same shall be transferred and thereafter belong to the Buyer in accordance with clause 5.

2.2 Nothing in this Agreement shall pass to the Buyer, or shall be construed as acceptance by the Buyer of, any Liability, debt or other obligation of NGL or any Transferor, other than the Assumed Liabilities as expressly set out in this Agreement.

2.3 For the avoidance of doubt nothing in this Agreement shall pass to the Buyer, or be construed as an acceptance by the Buyer of any Taxation for which NGL or any Transferor is liable, whether or not then due.

3. CONSIDERATION

3.1 In consideration of the sale of the Additional Assets, the Buyer shall:

3.1.1 pay to NGL (for itself and on behalf of the Transferors) in cash on Completion the sum of €2,277,814 (two million, two hundred and seventy seven thousand, eight hundred and fourteen euro) (“Assets Consideration”); and

3.1.2 assume responsibility for the satisfaction of the Assumed Liabilities pursuant to clause 7 of this Agreement.

3.2 The apportionment of the Assets Consideration referred to in clause 3.1.1 shall be as set out in Schedule 5.

4. COMPLETION

4.1 Completion shall take place at the offices of the Sellers’ Irish Solicitors (as such term is defined in the Sale and Purchase Agreement) at the same time as completion takes place pursuant to the Sale and Purchase Agreement.

4.2 On Completion, NGL and the Buyer shall each perform their respective obligations in accordance with and as set out in Schedule 1.

4.3 With effect from Completion, NGL shall grant to the Buyer or a member of the Target Group (as the Buyer may direct) a sub-licence in respect of 58 individual Oracle Database Enterprise Edition processor licences (the “Processor Licences”) under the terms of the Oracle Licence, such sub-licence being for the unexpired term of the Processor Licences and otherwise on terms consistent with and in compliance with the Oracle Licence. As soon as reasonably practicable following Completion, NGL shall notify the Buyer in writing of the fee payable by the Buyer in consideration of the sub-licence so granted (such amount being calculated on a pro rata basis by reference to the licence fees payable by NGL to Oracle Corporation UK Limited in respect of the Processor Licences for the period from Completion until expiry of the Processor Licences). As soon as reasonably practicable and, in any event within 10 Business Days of receipt by the Buyer of such notice, the Buyer shall pay the amount specified in such notice to the Buyer to the bank account detailed in Part II of Schedule 1. For the avoidance of doubt the sub-licence granted under this clause 4.3 shall automatically end on termination or expiry of the Oracle Licence.

5. TITLE, RISK AND INSURANCE

5.1 NGL shall procure that the Buyer acquires such title to the Additional Assets as NGL and the Transferors have, free from all Security Interests (other than a Security Interest which

will be released on or prior to Completion) and any other third party rights of any other nature.

5.2 NGL shall procure that such title and interest as NGL and the Transferors have agreed to transfer pursuant to clause 5.1 and risk in respect of the Additional Assets shall pass to the Buyer on Completion. Title to all Additional Assets which can be transferred by delivery shall pass on delivery and such delivery shall (where practicable) be deemed to take place at the Additional Properties or other premises used by the Irish Cable Business on Completion. NGL and each Transferor shall be a trustee for the Buyer in respect of the Additional Assets held by it until the same shall have been actually delivered and/or, in the case of Additional Assets not capable of transfer by delivery, formally transferred or assigned to the Buyer.

5.3 The provisions of clauses 5.1 and 5.2 shall not apply to the Additional Properties in respect of which the provisions of Schedule 2 shall apply.

5.4 Subject to the provisions of Schedule 2 in relation to Additional Properties, NGL shall, and shall procure that the Transferors (and/or the relevant members of the Core Group) shall, upon signing this Agreement and until all title to the Additional Assets has been transferred to the Buyer by NGL and the Transferors, use all reasonable endeavours to maintain the same level of insurance as is in place at Completion in respect of such Additional Assets and NGL shall from Completion hold the Additional Assets in trust for the Buyer absolutely until they have been delivered, formally transferred or assigned to the Buyer pursuant to the terms of this Agreement and shall act in accordance with the Buyer’s instructions in respect of any Additional Asset which it so holds as trustee. NGL shall, or shall procure that the relevant Transferors (and/or the relevant members of the Core Group) shall, if so required by the Buyer, produce from time to time the policies of such insurance together with receipts for the applicable premiums for inspection. The Buyer shall not do or omit to be done anything or permit any other member of its Group (including, following Completion, the Target Group) to do or omit to do anything which might reasonably be expected to render any such policy void or voidable.

5.5 The proceeds of all claims under any insurance covering or relating to the Additional Assets shall form part of the Additional Assets and shall be acquired by the Buyer pursuant to this Agreement (or, to the extent they cannot be acquired by the Buyer, NGL shall, and shall procure that the Transferors (and/or any relevant members of the Core Group) shall, pay an amount equal to such proceeds to the Buyer).

5.6 Pending the transfer of title to any Additional Asset to the Buyer, NGL shall not, and shall procure that the relevant Transferor shall not, encumber or create or agree to create any Security Interest (other than a Permitted Security Interest) over such Additional Asset and shall to the extent that NGL or a member of the NTL Group is capable of so doing take all reasonable steps (but without any obligation to incur additional expense, cost or liability other than as set out in clause 5.4) to preserve and protect such Additional Asset and to prevent any damage being done to such Additional Asset.

6. ASSIGNMENT OF BENEFITS AND ASSUMPTION OF BURDENS

6.1 Insofar as any Additional Asset cannot effectively be assigned or transferred under this Agreement to the Buyer except by novation or otherwise with the consent, approval or waiver from a third party or if the assignment or transfer could otherwise cause a breach of any agreement comprising an Additional Asset in the absence of an appropriate consent, approval or waiver from a third party being obtained, the sale of such Additional Asset shall (unless the Buyer otherwise determines in its absolute discretion) be subject to and conditional upon such consent, approval, waiver or novation being obtained and:

6.1.1 the Buyer and NGL shall, or, in the case of NGL, NGL shall procure that the relevant Transferors shall, take all reasonable steps (but without NGL or such Transferors incurring additional external expenditure other than their reasonable legal expenses) to procure that such necessary consent, approval, waiver or novation for the transfer of such Additional Asset is obtained as soon as reasonably practicable after Completion (to the extent not obtained prior thereto);

6.1.2 pending any such consent, approval, waiver or novation being obtained, NGL shall, or shall procure that the relevant Transferor shall, hold the benefit of the relevant Additional Asset on trust for the Buyer and shall accordingly pay or deliver to the Buyer promptly upon receipt by NGL or the Transferors or any other member of the Core Group any sums or other assets received by it which relate to any such Additional Asset and otherwise permit the Buyer to enjoy the full benefit of any such Additional Asset;

6.1.3 in the case of any Additional Contract which requires consent, approval, waiver or novation to be obtained, the Buyer shall at its election either:

(a) (at the Buyer’s cost) following Completion, perform all the obligations of NGL under any such Additional Contract as its agent or sub-contractor and pay to NGL an amount equal to any and all liabilities (and all costs reasonably incurred by it) arising in connection with any such Additional Contract; or

(b) with effect from Completion, assume the obligations of NGL under such Additional Contract and carry out, perform and complete all the obligations and liabilities created by or arising under such Additional Contract and pay to NGL an amount equal to any and all liabilities (and all costs reasonably incurred) which NGL suffers or incurs in connection with any such Additional Contract or otherwise by reason of the Buyer’s failure to comply with its obligations under this clause 6.1.3.

6.2 If any necessary consent, approval, waiver or novation is not obtained within eighteen (18) months after Completion or is refused and the procedure set out in clause 6.1 does not enable the full benefit of any Additional Asset to be enjoyed by the Buyer after Completion, the parties shall use their reasonable endeavours (but without NGL or any Transferors incurring additional external expenditure other than reasonable legal expenses) to achieve an alternative solution pursuant to which the Buyer shall both receive the full benefits of that Additional Asset and assume the Assumed Liabilities in respect of that Additional Asset.

6.3 If it is necessary or, in the reasonable opinion of the Buyer, desirable for the novation of any Additional Contract to be effected by the termination of such Additional Contract and the entry into by the Buyer and the relevant counterparty of a new contract on substantially equivalent terms (provided that all accrued liabilities upon such termination are assumed by the Buyer), NGL shall, and shall procure that any other relevant member of the Core Group shall (in each case without incurring additional external expenditure other than reasonable legal expenses), co-operate fully with the Buyer for such purpose including, without limitation, by participating in all discussions and negotiations with the relevant counterparty.

6.4 The provisions of this clause 6 shall not apply to Additional Properties in respect of which the provisions of Schedule 2 shall apply.

7. ASSUMED LIABILITIES

7.1 The Buyer irrevocably and unconditionally undertakes to NGL that, with effect from Completion, it shall properly perform, assume and pay and discharge when due, and pay on demand to NGL (for itself and on behalf of the Transferors and each other member of the Core Group) an amount equal to the amount of, all Assumed Liabilities and any losses, costs, expenses, claims, demands, damages or liabilities arising from any failure of the Buyer to obtain the consent of any landlord required for the transfer and assignment of any Additional Property.

7.2 The Buyer, for itself and its successors and assigns, covenants that, as soon as practicable after Completion it will, at its own expense, execute and deliver all such further instruments of assumption and acknowledgements and take such other action as NGL may reasonably request in order to effect the release and discharge in full of any Assumed Liability or the assumption by the Buyer of the Assumed Liabilities and the substitution of the Buyer as the primary obligor in respect of the Assumed Liabilities in each case on a non-recourse basis to NGL, any Transferor or any other member of the Core Group.

7.3 Following Completion, the Buyer shall use all reasonable endeavours to obtain the release (with effect from becoming aware of the same) of NGL and the Transferors or any other member of the Core Group from any guarantee, security, bond, letter of comfort or other similar obligation given or incurred by it to the extent relating to Additional Assets or

Assumed Liabilities and, pending such release but following and subject to Completion, the Buyer unconditionally and irrevocably agrees that it shall, as a continuing obligation, pay on demand to NGL and the Transferors and/or any other member of the Core Group an amount equal to, any loss or payment obligation which NGL or any such Transferor or member of the Core Group may incur at any time or from time to time (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) in connection with any such guarantee, security, bond, letter of comfort or other similar obligation PROVIDED THAT the Buyer shall not be liable to pay NGL, the Transferors or any member of the Core Group to the extent of any liability which arises as a result of a breach of the Warranties or the Repeated Warranties (as such terms are defined in the Sale and Purchase Agreement) or in respect of which the Buyer has a claim under the Tax Deed. In particular, NGL acknowledges that landlord’s consent will be required for the release or substitution of NGL as guarantor under the West Corner Unit lease, and NGL agrees to use all reasonable endeavours (which shall not extend to making any external payment other than in respect of its own reasonable legal costs) to assist the Buyer in the procurement of landlord’s consent following Completion. NGL further acknowledges that, subject to the Buyer complying with its obligations under this clause 7.3, the Buyer will have no liability whatsoever towards NGL, any Transferor or any other member of the Core Group in the event that landlord’s consent as aforesaid is not forthcoming or is delayed.

8. RIGHTS UNDER SHARED CORE CONTRACTS

8.1 Following Completion, NGL shall, or shall procure that the relevant member of the Core Group shall, at the request of the Buyer, take all reasonable steps to enforce any rights that it may have under the terms of any Shared Core Contract in respect of any defect or fault in any goods, services and/or facilities provided to any member of the Target Group prior to Completion under the terms of any such Shared Core Contract and shall pass on to the Buyer (or as it may direct) any reimbursement or other benefit obtained by it through such enforcement PROVIDED ALWAYS THAT the Buyer complies with its obligations in clause 8.2 AND PROVIDED FURTHER THAT neither NGL nor any member of the Core Group shall be required to take any action which it reasonably considers may be detrimental to the continued existence or terms of the relevant Shared Core Contract.

8.2 The Buyer unconditionally and irrevocably agrees, as a continuing obligation, to pay on demand to NGL (for itself and as trustee for each member of the Core Group) an amount equal to any loss which NGL or any other member of the Core Group may incur following Completion (and all costs and expenses which such company may incur including reasonable legal fees and together with any applicable VAT) as a result of any steps taken by NGL or any member of the Core Group pursuant to clause 8.1 to enforce the terms of any Shared Core Contract in respect of any defect or fault in any goods, services and/or facilities provided to any member of the Target Group under the terms of such Shared Core Contract.

9. RECORDS

Following Completion, NGL undertakes to, and to procure that each Transferor shall, forward and transfer to the Buyer, as soon as practicable, any payments, documents, information, communications or correspondence which it or any other member of the Core Group may receive from time to time in relation to the Additional Assets and/or the Assumed Liabilities or which should properly have been paid to or received by the Buyer, and that any payments, documents or information as aforesaid so received by it or by the Transferors after Completion in relation to the Additional Assets shall be held as agent of and trustee for the Buyer pending such transfer.

10. POST-COMPLETION

If NGL or any member of the Core Group or the NTL Group receives any monies after Completion which relate to the Additional Assets (excluding, for the avoidance of doubt, the Assets Consideration), it shall (subject to any provisions to the contrary contained in this Agreement) hold them on trust for and account to the Buyer for them within 10 (ten) Business Days of receipt.

11. FURTHER ASSURANCE

11.1 Without prejudice to the generality of the foregoing, NGL shall, and shall procure that the Transferors shall (at their own cost), at any time after Completion, execute all such deeds, assignments and documents, do or perform all such acts and things and afford such assistance as the Buyer (or any of its permitted assigns) may reasonably require in order to vest the Additional Assets fully and effectively in the Buyer (without jeopardising its right to such Additional Assets) or to assure to the Buyer the rights hereby agreed to be granted.

11.2 On and at any time after Completion, NGL shall, and shall procure that the Transferors shall, give to the Buyer all such information and other assistance (including, without limitation, particulars of suppliers and others who have dealt with the Transferors in connection with the Additional Assets) as the Buyer may reasonably require in connection with the use of the Additional Assets and for the purpose of implementing the provisions of this Agreement.

12. APPLICABLE LAW AND JURISDICTION

12.1 This Agreement and the rights and obligations of the parties shall be governed by and construed in accordance with the laws of England and Wales.

Dispute Resolution

12.2 Any dispute arising out of or in connection with this Agreement, including any question

regarding the validity, existence or termination of this Agreement shall be finally resolved by arbitration in England, conducted in English, by three arbitrators pursuant to the rules of the London Court of International Arbitration (the “LCIA”) (the “Rules”) save that the Rules shall be amended in relation to the appointment of arbitrators in any arbitration proceedings as set out below.

12.3 One arbitrator shall be nominated by NGL and one arbitrator shall be nominated by the Buyer. The third arbitrator shall be selected by the two so chosen within 10 Business Days of the appointment of the second arbitrator, failing which the LCIA shall appoint the third arbitrator, who shall be the chairman of the arbitral tribunal.

12.4 Nothing in this clause 12 shall restrict the right which any party may have to seek injunctive relief in respect of a breach of this Agreement, in respect of which action for injunctive relief the parties submit to the exclusive jurisdiction of the English courts.

13. ENTIRE AGREEMENT

13.1 This Agreement and, to the extent applicable to the Additional Assets, the Sale and Purchase Agreement (together with any documents referred to herein or therein or required to be entered into pursuant to this Agreement) contain the entire agreement and understanding of the parties and supersede all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement and any such document.

13.2 Each of the parties acknowledges and agrees that:

13.2.1 it is not entering into this Agreement on the basis of, and is not relying and has not relied on, any statement or representation (whether negligent or innocent) or warranty or other provision (in any case whether oral, written, express or implied) made, given or agreed to by any person (whether a party to this Agreement or not) other than those of the Warranties (as such term is defined in the Sale and Purchase Agreement) in the Sale and Purchase Agreement which expressly relate to the Additional Assets; and

13.2.2 this clause 13.2 shall not apply to any statement, representation or warranty made fraudulently or to any provision of this Agreement which was induced by fraud for which the remedies shall be all those available under the law governing this Agreement regardless of the other terms of this Agreement.

13.3 Each of the parties acknowledges and agrees that the express terms of this Agreement are in lieu of all warranties, conditions, terms, undertakings and obligations implied by statute, common law or otherwise, all of which are hereby excluded to the fullest extent permitted by law.

14. NO PARTNERSHIP OR AGENCY

This Agreement shall not be construed as creating any partnership or agency relationship between any of the parties.

15. VARIATIONS AND WAIVERS

15.1 No variation of this Agreement shall be effective unless made in writing signed by or on behalf of all the parties and expressed to be such a variation.

15.2 No failure or delay by any party or time or indulgence given in exercising any remedy or right under or in relation to this Agreement shall operate as a waiver of the same nor shall any single or partial exercise of any remedy or right preclude any further exercise of the same or the exercise of any other remedy or right.

15.3 No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

15.4 Any waiver, release or compromise or any other arrangement of any kind whatsoever which any party gives or enters into with any other party in connection with this Agreement shall not affect any right or remedy of that party as regards any other parties or the liabilities of any other such parties under or in relation to this Agreement.

16. ASSIGNMENT

Save as provided in clause 16.8 of the Sale and Purchase Agreement, no party shall be entitled to assign the benefit or burden of any provision of this Agreement (or any of the documents referred to herein) without the prior written consent of any other party to the relevant document.

17. COUNTERPARTS

This Agreement may be executed as two or more counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Agreement.

18. THIRD PARTY RIGHTS

18.1 Save where any provision is expressed to be for the benefit of a member of the Core Group not party to this Agreement, nothing in this Agreement is intended to confer upon any person any right to enforce any term of this Agreement which that person would not have had but for the Contracts (Rights of Third Parties) Act 1999.

18.2 Notwithstanding that members of the Core Group shall be entitled to enforce certain rights under this Agreement which have been given for their benefit, the parties to this Agreement may enter into any agreement or arrangement with the other parties to this Agreement varying or amending any of the terms of this Agreement, or compromising or settling any claim under this Agreement (including in respect of such rights) without reference to the interest of, or the consent of, the other members of the Core Group not party to this Agreement.

19. COSTS AND VAT

19.1 Save as otherwise expressly provided in this Agreement, each party shall pay its own costs and expenses incurred in connection with the preparation, negotiation and completion or termination of this Agreement.

19.2 Where any supply for the purposes of UK VAT is made pursuant to the terms of this Agreement at a time when the person making the supply and the person to whom the supply is made do not belong to the same group of companies for the purposes of section 43 Value Added Tax Act 1994, then:

19.2.1 the amount or value of the consideration to be given for or allocated to that supply shall be exclusive of value added tax; and

19.2.2 value added tax shall be paid in addition to any such consideration on receipt by the person to whom the supply is made of a valid invoice for the purposes of value added tax issued by or on behalf of the person making the supply.

19.3 Where any supply for the purposes of Irish VAT is made pursuant to the terms of this Agreement at a time when the person making the supply and the person to whom the supply is made do not belong to the same group of companies for the purposes of section 8 (8) of the Irish VAT Act 1972, then:

19.3.1 the amount or value of the consideration to be given for or allocated to that supply shall be exclusive of VAT; and

19.3.2 VAT shall be accounted for in the proper manner by the person (or persons) obliged to account for VAT and, where applicable, VAT shall be paid in addition to any such consideration on receipt by the person to whom the supply is made of a valid invoice for the purposes of VAT issued by or on behalf of the person making the supply.

19.4 If the Buyer pays the Seller an amount in respect of VAT under clause 19.2.2 or 19.3.2 and it is subsequently noted or determined that all or part of it was not properly chargeable, the Seller shall promptly repay the amount or relevant part of it (or a sum in respect of such

amount or relevant part of it) to the Buyer.

20. NOTICES

Form of notice

20.1 Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “Notice” for the purposes of this clause) shall be in English, in writing and signed by or on behalf of the person giving it.

Method of service

20.2 Service of a Notice must be effected by one of the following methods:

20.2.1 by hand to the relevant address set out in clause 20.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time; or

20.2.2 by facsimile transmission to the relevant facsimile number set out in clause 20.4 and shall be deemed served on despatch, if despatched during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using the method described in clause 20.2.1 no later than the end of the next Business Day.

20.3 In clause 20.2 “during a Business Day” means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located. References to “the start of a Business Day” and “the end of a Business Day” shall be construed accordingly.

Address for service

20.4 Notices shall be addressed as follows:

20.4.1 If to the Buyer:

c/o Morgan Stanley & Co. International Limited

25 Cabot Square

Canary Wharf

London E14 4QA

Fax: +44 (0) 20 7425 8990

For the attention of: Scott Matlock and the Company Secretary

20.4.2 If to NGL, Holdings or Chichester:

NTL House

Bartley Wood Business Park

Hook

Hampshire

RG27 9UP

Fax: +44 (0)1256 752 170

For the attention of: General Counsel

And with a copy (which shall not be a notice requirement) to:

Travers Smith

10 Snow Hill

London

EC1A 2AL

Fax: +44 (0)20 7295 3500

For the attention of: Spencer Summerfield.

Change of details

20.5 A party may change its address for service provided that the new address is within the same country and that it gives each other party not less than twenty-eight (28) days’ prior notice in accordance with this clause 20. Until the end of such notice period, service on either address shall be effective.

Agent for service/deemed service

20.6 The Buyer irrevocably authorises and appoints Morgan Stanley & Co. International Limited, 25 Cabot Square, Canary Wharf, London E14 4QA (or the firm which at the time in question has succeeded to it and carries on its practice, or any replacement agent appointed by the Buyer in accordance with clause 20.7) as its agent for service of Notices and/or proceedings in relation to any matter arising out of or in connection with this Agreement and service on such agent in accordance with this clause 20 shall be deemed to be effective service on the Buyer.

20.7 If the agent referred to in clause 20.6 (or any replacement agent appointed pursuant to this clause 20.7) at any time ceases to act as such for any reason, the Buyer shall forthwith appoint a replacement agent to accept service on its behalf, such agent having a service address in England or Wales, and the Buyer shall notify the Seller forthwith of the name and address of the replacement agent.

THIS AGREEMENT has been duly executed on the date first stated above.

SCHEDULE 1

COMPLETION OBLIGATIONS

PART I

OBLIGATIONS OF NGL

NGL shall, or shall procure that the Transferors shall at the Additional Properties or other premises used by the Irish Cable Business, deliver or procure delivery to the Buyer of:

1. physical possession of all the Additional Assets capable of passing by delivery whereupon the title thereto shall pass to the Buyer by such delivery;

2. the Additional Contracts;

3. transfers and assignments of the Additional Properties, duly executed by the relevant Transferor, in the form prescribed by Schedule 2 properly completed to the reasonable satisfaction of the Buyer together with all title deeds relating to the Additional Properties (to the extent that the same are in the possession of NGL or the relevant Transferor);

4. a CG50 clearance certificate confirming that the Buyer does not have to deduct any sum representing capital gains tax on payment of the Consideration to NGL or an auditors’ certificate confirming that no CG50 clearance certificate is required in connection with the sale of the Additional Properties;

5. a copy VAT Form 4B dated 31 May 1999 in respect of West Unit, Willsborough Industrial Estate, Clonshaugh, Co. Dublin together with a letter of undertaking from NGL to the Buyer to provide or procure provision to the Buyer within 14 days following Completion of any further records of the Irish Cable Business which relate to the Additional Assets for VAT purposes which are in the possession and/or control of the Core Group and which are reasonably required to be preserved by the Buyer in place of NGL (or the relevant members of the NTL Group) pursuant to the relevant VAT legislation;

6. the documents of title to the Additional Property numbered 2 in Part I of Schedule 2, as exhibited in the Data Room Documents; and

7. a statutory declaration of the Transferor or certificate of the Transferor’s solicitor that the Additional Properties are not family homes within the meaning of the Family Law Act 1976 (as amended).

PART II

OBLIGATIONS OF THE BUYER

The Buyer shall:

1. pay or procure the payment of the Assets Consideration referred to in clause 3 of this Agreement by telegraphic transfer by CHAPS to the bank account notified to the Buyer pursuant to paragraph 1.1 of Part II of Schedule 2 of the Sale and Purchase Agreement; and

2. deliver to NGL counterparts of the transfers and assignments referred to in paragraph 3 of Part 1 of this Schedule 1, duly executed by it.

SCHEDULE 2

ADDITIONAL PROPERTIES

PART I

ADDITIONAL PROPERTIES

1. WEST UNIT, WILLSBOROUGH INDUSTRIAL ESTATE, CLONSHAUGH, CO. DUBLIN

ALL THAT AND THOSE part of the lands of Willsborough situate in the County of Dublin held under Lease dated 5^th of August 1999 between Erin Executor & Trustee Co. Limited of the first part, Willsborough Estate Management Limited of the second part, National Transcommunications Limited of the third part and ntl Group Limited of the fourth part being part of the lands comprised in Folio 85347L of the Register County Dublin, shown edged red on map No.1 annexed hereto.

2. CITYWEST BUSINESS CAMPUS, DUBLIN 24

ALL THAT AND THOSE all of the estate, right, title to and interest in Chambers No. 3 with associated 2 way ducts, Phases 1 and 2, Citywest Business Campus, Dublin 24held under and defined in Exclusive Premium Lease dated 19^th of February 2001 between Citywest Limited of the one part and ntl Business (Ireland) Limited of the other part as follows:-

“Ducts” mean the 2 way Ducts serving the Chambers forming part of the Network the route of which is shown for identification purposes along the broken line shown coloured orange and green respectively on Plan “B” annexed to the Lease, and shall be deemed to include any further ducts demised to the Tenant and which are comprised in any extension.

“Chambers” means the inspection jointing and pulling chambers no’s 3 serving inter alia (exclusively) the Ducts shown for identification purposes within the areas coloured blue and white on Plan “B” annexed to the Lease, and which shall be deemed to include any further chambers demised to the Tenant and which are comprised in any extension.

ALL THAT AND THOSE all of the estate, right, title to and interest in Phases 3(a) & 5(a) Ducting, Citywest Business Campus, Dublin 24 held under and defined in Supplemental Lease dated 2nd of December 2002 between Citywest Limited of the one part and ntl Business (Ireland) Limited of the other part as follows:-

The Ducts and Chambers in Phase 3(a), the route of which is shown for identification purposes coloured blue on Plan “A” annexed hereto, together with the Ducts and Chambers

in Phase 5(a), the route of which is shown for identification purposes on Plan “A” annexed hereto.

PART II

PROVISIONS RELATING TO THE ADDITIONAL PROPERTIES

1. If the consent of the relevant landlord to the assignment of any of the Additional Properties to the Buyer has not been obtained at Completion, NGL shall nonetheless deliver, or procure the delivery to the Buyer of, a duly executed assignment in the form or forms prescribed in Part III of this Schedule and it shall be the responsibility of the Buyer (subject to paragraph 2 below) to obtain the consent of the landlord (where required) to such assignment.

2. NGL shall, or shall procure that the relevant Transferor shall, use all reasonable endeavours (which shall not extend to the making of any payment other than in respect of reasonable legal costs) to assist the Buyer in any application to a landlord for a consent to the transfer and assignment of the Additional Properties or any of them (including, at the cost of the Buyer, any proceedings that are required to be instigated against any such landlord on the basis that they are unreasonably withholding consent to the transfer and assignment of any such Additional Property).

3. Without prejudice to the provisions of clause 7, the Buyer acknowledges that, with effect from Completion, it shall be entirely responsible for discharging all Assumed Liabilities in respect of the Additional Properties and for procuring releases of any guarantees or indemnities given by NGL or any other member of the Core Group in favour of any person in respect of such Additional Properties and the Buyer irrevocably and unconditionally undertakes to pay on demand to NGL (for itself and on behalf of the relevant Transferor and each member of the Core Group) an amount equal to any losses, costs, expenses, claims, demands, damages or liabilities arising in connection with any such obligations, guarantees or indemnities (including, without limitation, arising as a result of the Buyer taking occupation prior to any relevant landlord’s consent being obtained). Subject to the terms of the Co-Location Agreement to be entered into between NGL and Communications in respect of the West Corner Unit, the Buyer further acknowledges that it shall be responsible for putting in place appropriate insurance cover in relation to the Additional Properties with effect from Completion.

4. NGL agrees that if a landlord in respect of either of the Additional Properties withholds its consent to the transfer and assignment of either of such Additional Properties, NGL shall, or shall procure that the relevant Transferor shall, use reasonable endeavours (which shall not extend to making any external payment other than in respect of its own reasonable legal costs) to put in place arrangements to enable the Buyer to occupy or otherwise use the relevant Additional Property PROVIDED THAT NGL and/or the relevant Transferor shall not be required to take any action which would or might reasonably be expected to constitute a breach by it of the terms of the relevant lease.

PART III

FORM OF TRANSFERS/ASSIGNMENTS

THIS INDENTURE made the day of 2005 BETWEEN

[•] having its registered office at [•] (hereinafter called “the Vendor” which expression shall where the context so admits or requires include its successors in title and assigns) of the one part, AND

[•] having its registered office at [•] (hereinafter called “the Purchaser” which expression shall where the context so admits or requires include its successors in title and assigns) of the other part

WHEREAS:-

(A) By a lease (hereinafter called “the Lease”) dated the [•] day of [•] and made between [•] of the one part and [the Vendor] [whose interest is vested in the Vendor] of the other part the premises described in the schedule hereto (hereinafter called “the Premises”) were demised to [•/the Vendor] for a term of [•] years from the [•] day of [•] (hereinafter called “the Term”) subject to the yearly rent thereby reserved and the covenants on the part of the lessee and the conditions therein contained.

(B) The Vendor has agreed with the Purchaser for the sale to the Purchaser of the premises for all the residue now unexpired of the Term subject to the covenants on the part of the lessee and the conditions contained in the Lease but otherwise free from encumbrances.

NOW THIS INDENTURE WITNESSETH as follows:-

1. In pursuance of the said agreement and for the consideration recited in the Asset Transfer Agreement dated the [•] day of [•] 2005 and made between the ntl Group Limited of the one part and the Purchaser of the other part now paid by the Purchaser to the Vendor (the receipt whereof the Vendor hereby acknowledges) the Vendor as beneficial owner hereby transfers and assigns unto the Purchaser ALL THAT AND THOSE the Premises TO HOLD the same unto the Purchaser for all the residue now unexpired of the Term subject to the covenants on the part of the lessee and the conditions contained in the Lease.

2. The Purchaser hereby covenants with the Vendor that it the Purchaser will henceforth during the continuance of the Term pay the rent and perform and observance all the covenants on the part of the lessee and the conditions contained in the Lease and will at all times kept the Vendor effectually indemnified against all actions and proceedings, costs, damages, expenses, claims and demands whatsoever by reason or on account of the non-payment of the rent or any part thereof or the breach non-performance and non-observance of the said covenants and conditions or any of them.

IT IS HEREBY CERTIFIED by the parties hereto that the Premises are situate in the County of Dublin.

IT IS HEREBY FURTHER CERTIFIED by the parties for the purposes of the stamping of this instrument that it is not an instrument to which the provisions of Sections 29 or 53 of the Stamp Duties Consolidation Act 1999 apply for the reason that the property transferred consists of commercial premises only.

IT IS HEREBY FURTHER CERTIFIED that no part of the consideration for the premises is attributable (or deemed to be attributable) to residential property.

IN WITNESS whereof the parties hereto have executed these presents in manner hereinafter appearing the day and year first herein written.

SCHEDULE

(The Premises)

Present when the

common seal of the

Vendor was affixed hereto

Present when the

common seal of the

Purchaser was affixed hereto

Dated this day of

[•]

One Part

AND

[•]

Other Part

DEED OF ASSIGNMENT

[•]

ARTHUR COX

Solicitors

Earlsfort Centre

Earlsfort Terrace

Dublin 2

DF5246/ed

SCHEDULE 3

ADDITIONAL CONTRACTS

System Development and Licence Agreement dated 30 June 1999 between (1) NGL and (2) Dataphone (UK) Limited relating to the telephone polling and mediation device.

Letter Agreement dated 12 January 2002 between (1) MCI WorldCom (Ireland) Limited and (2) NGL relating to the provision of telecommunication services (incorporating MCI wholesale master services agreement standard terms).

SCHEDULE 4

NETWORK EQUIPMENT

Site

Manufacturer

Module Type

Module Name

Part Ref

Description

Qty

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

M20BASE-DC

M20 Base Unit: 4 slot Chassis with cooling system, Midplane, Routing Engine (768 MB DRAM, 80 MB flash Drive, 6.4 GB HDD, 110 MB flash PC card), 2 DC power supplies, Full Doc Set (CD ROM)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

RE-600-2048-BB

Included in M20 Base Price - Routing Engine board with 600 MHz Pentium III, 2048 MB DRAM, 128 MB flash drive, 30 GB hard disk drive - Requires JUNOS 5.4 or later

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

RE-600-2048-R

Routing Engine board with 600 MHz Pentium III, 2048 MB DRAM, 128 MB flash drive, 30 GB hard disk drive - redundant option - Requires JUNOS 5.4 or later

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

SSB-E-M20

M20 Enhanced SSB (with Internet Processor II)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

FPC-E

M40/M20 Enhanced Flexible PIC Concentrator (Requires 4.4R2 or later)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

P-1GE-LX-B

M40/M20 PIC: 1x Gigabit Ethernet, LX Optics

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

P-4OC3-SON-SMIR

M40/M20 PIC: 4 port OC3 SDH (SMIR) - SONET/SDH OC3/STM1 PIC, Single-Mode, Intermediate Reach.

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-a

JUNOS-WW

JUNOS Internet Software (WW)World-wide Version

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

M20BASE-DC

M20 Base Unit: 4 slot Chassis with cooling system, Midplane, Routing Engine (768 MB DRAM, 80 MB flash Drive, 6.4 GB HDD, 110 MB flash PC card), 2 DC power supplies, Full Doc Set (CD ROM)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

RE-600-2048-BB

Included in M20 Base Price - Routing Engine board with 600 MHz Pentium III, 2048 MB DRAM, 128 MB flash drive, 30 GB hard disk drive - Requires JUNOS 5.4 or later

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

RE-600-2048-R

Routing Engine board with 600 MHz Pentium III, 2048 MB DRAM, 128 MB flash drive, 30 GB hard disk drive - redundant option - Requires JUNOS 5.4 or later

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

SSB-E-M20

M20 Enhanced SSB (with Internet Processor II)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

FPC-E

M40/M20 Enhanced Flexible PIC Concentrator (Requires 4.4R2 or later)

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

P-1GE-LX-B

M40/M20 PIC: 1x Gigabit Ethernet, LX Optics

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

P-4OC3-SON-SMIR

M40/M20 PIC: 4 port OC3 SDH (SMIR) - SONET/SDH OC3/STM1 PIC, Single-Mode, Intermediate Reach.

Clonshaugh

Juniper

Type 2a Core

dbln-t2core-b

JUNOS-WW

JUNOS Internet Software (WW)World-wide Version

Clonshaugh

Cisco

LAM

dbln-lam-1

CISCO7513/4X2

7513 13-Slot, 2 CyBus, 2 RSP4, Dual PSU

Clonshaugh

Cisco

LAM

dbln-lam-1

PWR-7513/4X2-DC

7513 Dual DC Power Supply Option

Clonshaugh

Cisco

LAM

dbln-lam-1

Various

IOS

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-RSP4-128M

RSP 128 MB DRAM Option

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-RSP4-FLC16M

RSP4 Flash Card: 16MB

Clonshaugh

Cisco

LAM

dbln-lam-1

FR-WPP75

WAN Packet Protocol

Clonshaugh

Cisco

LAM

dbln-lam-1

VIP2-50

VIP2-50 Card

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-VIP250-128M-D=

128 Mbytes DRAM Option for VIP2-50/xIP-50

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-VIP250-8M-S=

8 Mbytes SRAM Option for VIP2-50/xIP-50

Clonshaugh

Cisco

LAM

dbln-lam-1

VIP4-50

VIP4-50 Card

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-VIP4-64M-SD

64 MB SDRAM Option for VIP4 (Default)

Clonshaugh

Cisco

LAM

dbln-lam-1

MEM-VIP4-256M-SD

256 MB SDRAM Option for VIP4

Clonshaugh

Cisco

LAM

dbln-lam-1

PA-POS-OC3MM

1-Port Packet/SONET OC3c/STM1 Multimode Port Adapter

Clonshaugh

Cisco

LAM

dbln-lam-1

PA-4E1G/75

4 port E1 card

Clonshaugh

Cisco

LAM

dbln-lam-1

PA-MC-2E1/120

2 port multichannel E1 port adapter with G.703 120ohm interf

Clonshaugh

Cisco

LAM

dbln-lam-1

PA-MC-8E1/120

8-Port Multichannel E1 120-Ohm Port Adapter

Clonshaugh

Cisco

LAM

dbln-lam-1

PA-2E3

2-Port E3 Serial Port Adapter

Clonshaugh

Cisco

LAM

dbln-lam-2

CISCO7513/4X2

7513 13-Slot, 2 CyBus, 2 RSP4, Dual PSU

Clonshaugh

Cisco

LAM

dbln-lam-2

PWR-7513/4X2-DC

7513 Dual DC Power Supply Option

Clonshaugh

Cisco

LAM

dbln-lam-2

Various

IOS

Clonshaugh

Cisco

LAM

dbln-lam-2

MEM-RSP4-128M

RSP 128 MB DRAM Option

Clonshaugh

Cisco

LAM

dbln-lam-2

MEM-RSP4-FLC16M

RSP4 Flash Card: 16MB

Clonshaugh

Cisco

LAM

dbln-lam-2

FR-WPP75

WAN Packet Protocol

Clonshaugh

Cisco

LAM

dbln-lam-2

VIP4-50

VIP4-50 Card

Clonshaugh

Cisco

LAM

dbln-lam-2

MEM-VIP4-256M-SD

256 MB SDRAM Option for VIP4

Clonshaugh

Cisco

LAM

dbln-lam-2

PA-POS-OC3SMI

1-Port SM STM-1 Port Adaptor (Intermediate Reach)

Clonshaugh

Cisco

LAM

dbln-lam-2

PA-MC-8E1/120

8-Port Multichannel E1 120-Ohm Port Adapter

Clonshaugh

Cisco

DAM

dbln-dam1-a

CISCO7204-DC

Cisco 7204, 4-slot chassis, 1 DC Supply w/IP Software

Clonshaugh

Cisco

DAM

dbln-dam1-a

PWR-7200/2-DC+

Cisco 7200 Dual DC (24V-60V) Power Supply Option

Clonshaugh

Cisco

DAM

dbln-dam1-a

IOS

Various

Clonshaugh

Cisco

DAM

dbln-dam1-a

C7200-I/O-FE

Cisco 7200 Input/Output Controller with Single 10/100 Ethernet

Clonshaugh

Cisco

DAM

dbln-dam1-a

MEM-I/O-FLC20M

Cisco 7200 I/O PCMCIA Flash Memory, 20MB

Clonshaugh

Cisco

DAM

dbln-dam1-a

NPE-150

Network Processing Engine NPE-150

Clonshaugh

Cisco

DAM

dbln-dam1-a

PA-2FE-TX

2-Port Fast Ethernet 100Base TX Port Adapter

Clonshaugh

Cisco

DAM

dbln-dam1-a

PA-POS-OC3SMI

1-Port Packet/SONET OC3c/STM1 Singlemode (IR) Port Adapter

Clonshaugh

Cisco

DAM

dbln-dam1-b

CISCO7204-DC

Cisco 7204, 4-slot chassis, 1 DC Supply w/IP Software

Clonshaugh

Cisco

DAM

dbln-dam1-b

PWR-7200/2-DC+

Cisco 7200 Dual DC (24V-60V) Power Supply Option

Clonshaugh

Cisco

DAM

dbln-dam1-b

IOS

Various

Clonshaugh

Cisco

DAM

dbln-dam1-b

C7200-I/O-FE

Cisco 7200 Input/Output Controller with Single 10/100 Ethernet

Clonshaugh

Cisco

DAM

dbln-dam1-b

MEM-I/O-FLC20M

Cisco 7200 I/O PCMCIA Flash Memory, 20MB

Clonshaugh

Cisco

DAM

dbln-dam1-b

NPE-150

Network Processing Engine NPE-150

Clonshaugh

Cisco

DAM

dbln-dam1-b

PA-2FE-TX

2-Port Fast Ethernet 100Base TX Port Adapter

Clonshaugh

Cisco

DAM

dbln-dam1-b

PA-POS-OC3SMI

1-Port Packet/SONET OC3c/STM1 Singlemode (IR) Port Adapter

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

CISCO7204VXR-DC

Cisco 7204VXR, 4-slot chassis, 1 DC Supply w/IP Software

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

PWR-7200/2-DC+

Cisco 7200 Dual DC (24V-60V) Power Supply Option

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

IOS

Various

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

MEM-NPE-G1-FLD64=

Cisco 7200 Compact Flash Disk for NPE-G1, 64 MB Option

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

NPE-G1=

7200 Network Processing Engine with 3 GE/FE/E ports

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

MEM-NPE-G1-256MB=

Two 128MB mem modules (256MB total) for NPE-G1 in 7200, Spare

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

PA-POS-OC3MM

1-Port Packet/SONET OC3c/STM1 Multimode Port Adapter

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

WS-G5487

1000Base-ZX extended reach GBIC(singlemode)

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1a

WS-G5486

1000BASE-LX/LH long haul GBIC (singlemode or multimode)

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

CISCO7204VXR-DC

Cisco 7204VXR, 4-slot chassis, 1 DC Supply w/IP Software

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

PWR-7200/2-DC+

Cisco 7200 Dual DC (24V-60V) Power Supply Option

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

IOS

Various

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

MEM-NPE-G1-FLD64=

Cisco 7200 Compact Flash Disk for NPE-G1, 64 MB Option

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

NPE-G1=

7200 Network Processing Engine with 3 GE/FE/E ports

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

MEM-NPE-G1-256MB=

Two 128MB mem modules (256MB total) for NPE-G1 in 7200,Spare

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

PA-POS-OC3MM

1-Port Packet/SONET OC3c/STM1 Multimode Port Adapter

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

WS-G5487

1000Base-ZX extended reach GBIC(singlemode)

Clonshaugh

Cisco

Type 1 CAM

dbln-cam-1b

WS-G5486

1000BASE-LX/LH long haul GBIC (singlemode or multimode)

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-C6509

Cat 6509 Chassis, 9slot, 15RU, no Pow Supply, no Fan Tray

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-CAC-1000W

Catalyst 6000 1000W AC Power Supply

Clonshaugh

Cisco

Service Module

dbln-sm-cat

Fan

Fan Tray

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-X6348-RJ-45

Catalyst 6500 48-port 10/100, Upgradable to Voice, RJ-45

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-X6408A-GBIC

Catalyst 6000 8-port GE, Enhanced QoS (Req. GBICs)

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-X6K-S2U-MSFC2

Catalyst 6500 Supervisor 2U, 256MB Supervisor, 512MB MSFC2

Clonshaugh

Cisco

Service Module

dbln-sm-cat

WS-F6K-MSFC2

Catalyst 6000 Multilayer Switch Feature Card (MSFC)II, Spare

Clonshaugh

Compaq

HTTP Cache

dbln-cache-1

Compaq G1/G1 with Traffic Server Software