Form Of Escrow Agent Agreement Among Telewest Communications Plc, Telewest Fin

Exhibit 10.42

SCHEDULE 6: THE ESCROW AGENT AGREEMENT


2004


TELEWEST COMMUNICATIONS PLC


TELEWEST FINANCE (JERSEY) LIMITED


TELEWEST UK LIMITED


TELEWEST GLOBAL, INC.

THE BANK OF NEW YORK


ESCROW AGENT


AGREEMENT


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CONTENTS

PAGE
CLAUSE 1. INTERPRETATION 3 2. COMMENCEMENT 5 3. AGREEMENT TO ACT 5 4. ESTABLISHMENT OF ESCROW ACCOUNTS 5 5. UNDERTAKINGS 6 6. DISTRIBUTIONS TO SHAREHOLDERS 7 7. DETERMINATION OF SCHEME CLAIMS 8 8. INITIAL DISTRIBUTIONS UNDER THE SCHEMES 9 9. FINAL DISTRIBUTION UNDER THE SCHEMES 11 10. TERMINATION DATE 12 11. RIGHTS, POWERS AND DUTIES OF THE ESCROW AGENT 12 12. INVESTMENTS 14 13. TERMINATION 14 14. REPRESENTATIONS AND WARRANTIES 15 15. FEES AND EXPENSES 15 16. FURTHER ASSURANCE 15 17. FURTHER TERMS AND CONDITIONS 15 18. COUNTERPARTS 16 19. NOTICES 16 20. THIRD PARTY RIGHTS 18 21. GOVERNING LAW AND JURISDICTION 18


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THIS AGREEMENT is made by way of deed on [ ] 2004


BETWEEN:

(1) TELEWEST COMMUNICATIONS PLC , a public limited company incorporated in England and Wales with registered number 2983307 ( Telewest ); (2) TELEWEST FINANCE (JERSEY) LIMITED , a limited liability company incorporated in Jersey with registered number 77278 ( Telewest Jersey );

(3) TELEWEST UK LIMITED , a private limited company incorporated in England and Wales with registered number 495679 ( Telewest UK );

(4) TELEWEST GLOBAL, INC , a Delaware corporation ( New Telewest ); and

(5) THE BANK OF NEW YORK , a New York banking corporation acting through its New York branch ( Escrow Agent ).

WHEREAS:

A. Telewest proposes to enter into a creditors' scheme of arrangement (the Telewest Scheme ) under section 425 of the Companies Act 1985 (the Act ) with its Scheme Creditors (as defined in the Telewest Scheme).

B. Telewest Jersey proposes to enter into a separate creditors' scheme of arrangement (the Jersey Scheme ) (on identical terms) under both section 425 of the Act and article 125 of the Companies (Jersey) Law 1991 (the Jersey Act ) with its Jersey Scheme Creditors (as defined in the Jersey Scheme).

C. The Telewest Scheme and the Jersey Scheme are set out in Schedules 1 and 2 to the explanatory statement relating to the Schemes prepared in accordance with section 426 of the Act and article 126 of the Jersey Act and to be filed with the High Court and the Jersey Court on or about [ ] 2004, as either of them may be approved or modified by the relevant courts.

D. The Telewest Scheme and the Jersey Scheme provide for the appointment of the Escrow Agent who will be responsible for, amongst other things, holding the New Shares (as defined in the respective Schemes) in custody for, and distributing the Share Entitlements to, the Scheme Creditors and the relevant number of New Shares to Shareholders in accordance with the terms of the Schemes and this Agreement.

E. In the event that Telewest and Telewest Jersey enter into liquidation, Telewest's and Telewest Jersey's obligations under the Telewest Scheme and the Jersey Scheme will continue to be performed by Telewest and Telewest Jersey in liquidation. However, to the extent that the liquidators of Telewest and Telewest Jersey wish to close the liquidation whilst the obligations of Telewest and Telewest Jersey under the Telewest Scheme and the Jersey Scheme remain to be performed, Telewest UK has agreed to undertake to perform such obligations in the place of Telewest and Telewest Jersey provided always that such obligations do not involve the exercise of discretion on behalf of Telewest UK and, as such, are wholly of a mechanical nature, or, to the extent that such obligations would involve the exercise of discretion on behalf of Telewest UK, that the liquidators of Telewest and Telewest Jersey set out detailed and comprehensive instructions to Telewest UK as to how that discretion should be exercised. In no event, however, shall Telewest UK be obliged to perform any such obligation to the extent that it would, or may be likely to, prevent qualification of the Financial Restructuring as a tax-free reorganisation for US federal income tax purposes.

F. The Escrow Agent will undertake to the High Court and the Jersey Court to act in accordance with the terms of this Agreement. G. This Agreement is entered into as contemplated by the terms of the Schemes.

H. It is the intention of the parties that this Agreement be executed as a deed.


IT IS AGREED AND THIS DEED WITNESSES as follows:

1. INTERPRETATION

1.1 Capitalised terms used in this Agreement shall have the meanings given to them in each Scheme unless otherwise expressly provided in this Agreement.


3 1.2 In this Agreement:

Agreed Scheme Claim means an Agreed Scheme Claim (as defined in the Telewest Scheme) and/or a Jersey Agreed Scheme Claim, as the context requires;


Agreed Scheme Creditor means an Agreed Scheme Creditor (as defined in the Telewest Scheme) and/or a Jersey Agreed Scheme Creditor;


Ancillary Claim means an Ancillary Claim (as defined in the Telewest Scheme) and/or a Jersey Ancillary Claim;

Bar Date means the Bar Date (as defined in the Telewest Scheme);


Bondholder means a Bondholder (as defined in the Telewest Scheme) and/or a Jersey Bondholder;

Business Day means any day other than a Saturday, Sunday or any other day which is a public holiday in England and Wales, Jersey or New York;


Distribution Notice means a notice served by Telewest or Telewest Jersey directing the Escrow Agent to transfer New Shares or cash (as appropriate) comprised in a Scheme Creditor's Share Entitlement in respect of an Agreed Scheme Claim, to a Scheme Creditor or its Nominated Recipient or, in respect of a Scheme Claim of a Bondholder, to its Participant;

DWAC Instruction means a deposit or withdrawal at custodian instruction given through the DTC;

Effective Date means the Effective Date (as defined in the Telewest Scheme) and/or the Jersey Effective Date;


Escrow Account means the Telewest Escrow Account and/or the Jersey Escrow Account, as the context requires and Escrow Accounts means both of them;


Force Majeure means, in relation to any party, any circumstances beyond the reasonable control of that party (including, without limitation, any strike, lock-out or other form of industrial action);


Forms of Proxy means the forms of proxy for use at the Meeting;

Jersey Escrow Account means the account to be established with The Bank of New York to hold New Shares (in physical form or in a DTC account) and cash into which the Escrow Agent will transfer all and any New Shares to which Telewest Jersey becomes entitled from time to time under the terms of the Telewest Scheme;


Jersey Final Distribution Date means the date of the Final Distribution as defined in the Jersey Scheme;


Known Scheme Creditors means Known Scheme Creditors (as defined in the Telewest Scheme) and/or Jersey Known Scheme Creditors;


Notes means the Notes (as defined in the Telewest Scheme) and/or the Jersey Notes;

Notified Ancillary Scheme Claim means a Notified Ancillary Scheme Claim (as defined in the Telewest Scheme) and/or a Jersey Notified Ancillary Scheme Claim;


Notified Scheme Claim means a Notified Scheme Claim (as defined in the Telewest Scheme) and/or a Jersey Notified Scheme Claim;

Notified Scheme Creditor means a Notified Scheme Creditor (as defined in the Telewest Scheme) and/or a Jersey Notified Scheme Creditor;


Schemes means the Telewest Scheme and/or the Jersey Scheme;


Scheme Claim means a Scheme Claim (as defined in the Telewest Scheme) and/or a Jersey Scheme Claim;


Scheme Creditor means a Scheme Creditor (as defined in the Telewest Scheme) and/or a Jersey Scheme Creditor and Scheme Creditors means any one or all of them, as the context requires;

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Shareholder Distribution Notice means the notice as described in clause 6.1;

Telewest Bondholders means Bondholders as defined in the Telewest Scheme;


Telewest Escrow Account means the account to be established with The Bank of New York to hold New Shares (in physical form or in a DTC account) and cash;

Telewest Final Distribution Date means the date of the Final Distribution as defined in the Telewest Scheme;

Transfer Agent means The Bank of New York in its capacity as transfer agent for the shareholders of New Telewest; and


Website means the website to be established by Innisfree M&A Incorporated at www.innisfree-telewest-registration.com for Participants to submit information provided by Bondholders on their Forms of Proxy.

1.3 In this Agreement:

(a) references to a person include an individual, firm, partnership, company, corporation, unincorporated body of persons and any state or state agency; (b) references to a natural person include his estate and personal representatives;

(c) references to a party to this Agreement include references to the successors or assigns (immediate or otherwise) of that party; and (d) references to the singular include the plural and vice versa and words importing one gender shall include all genders. 1.4 Sub-clauses 1.1 to 1.3 above apply unless the contrary intention appears.

1.5 The headings in this Agreement do not affect its interpretation.

2. COMMENCEMENT

2.1 For the avoidance of doubt, the obligations of the parties pursuant to this Agreement shall have effect from the date of execution of this Agreement. 2.2 Telewest and Telewest Jersey shall notify promptly the Escrow Agent upon the occurrence of the Effective Date and the Jersey Effective Date respectively.

3. AGREEMENT TO ACT

3.1 The Escrow Agent hereby appointed by each of Telewest and Telewest Jersey agrees to act as custodian of and hold in escrow the New Shares as at the Effective Date (or as soon as practicable thereafter) and to distribute New Shares to Shareholders and Share Entitlements to Scheme Creditors in accordance with the terms of each Scheme and this Agreement. 3.2 The Escrow Agent covenants with each of the other parties to this Agreement to appear by counsel at the hearings to sanction the Telewest Scheme and the Jersey Scheme to provide an undertaking in the form set out in Schedule 1 to this Agreement to the relevant court.

4. ESTABLISHMENT OF ESCROW ACCOUNTS

4.1 As soon as reasonably practicable after the date of this Agreement and in any event before the Effective Date, the Escrow Agent undertakes to Telewest and Telewest Jersey that it shall establish the Escrow Accounts. The Escrow Agent shall provide to Telewest and Telewest Jersey prompt written confirmation of the establishment of the Escrow Accounts.

4.2 On the Effective Date, or as soon as practicable thereafter, upon notification from Telewest that the Effective Date has occurred, New Telewest will issue and transfer, via the Transfer Agent, all the New Shares into the Telewest Escrow Account.


5 4.3 New Shares and any cash applicable to Shareholders or Notified Scheme Creditors will be held by the Escrow Agent in the relevant Escrow Account as bare trustee for the relevant Shareholders or Notified Scheme Creditors. The Escrow Agent shall at no time whatsoever have any beneficial interest in the New Shares or any cash held by it pursuant to the Schemes. 4.4 Any dividends paid on any New Shares applicable to Shareholders or Notified Scheme Creditors held by the Escrow Agent in the Escrow Account, or any other payment whatsoever made in respect of the New Shares held in the Escrow Account by the Escrow Agent, shall be paid to and received by the Escrow Agent as follows:

(a) in the case of New Shares relating to Agreed Scheme Claims, to be held on bare trust absolutely for the relevant Agreed Scheme Creditor and the Escrow Agent shall pay such amounts to that Agreed Scheme Creditor or to that Agreed Scheme Creditor's Designated DTC Account and/or that Agreed Scheme Creditor's Nominated Recipient (as appropriate) together with any interest which may have accrued thereon at the time any distribution of New Shares, or the Net Proceeds of Sale thereof, is made to the relevant Agreed Scheme Creditor;

(b) in the case of New Shares applicable to Notified Scheme Claims that do not at the time such dividend is paid or other payment is made, constitute Agreed Scheme Claims, the Escrow Agent shall hold such amounts in the relevant Escrow Account on bare trust absolutely for the relevant Notified Scheme Creditor until the receipt of a valid Distribution Notice. On receipt of a valid Distribution Notice, the Escrow Agent shall pay such amounts to the relevant Notified Scheme Creditor or that Notified Scheme Creditor's Designated DTC Account and/or that Notified Scheme Creditor's Nominated Recipient (as appropriate) together with any interest which may have accrued thereon at the time any distribution of New Shares, or the Net Proceeds of Sale thereof, is made to the relevant Scheme Creditor; and

(c) in the case of New Shares relating to Shareholders, to be held on bare trust absolutely for the relevant Shareholder and the Escrow Agent shall pay such amounts together with any interest which may have accrued thereon at the time any distribution of New Shares, or the Net Proceeds of Sale thereof, is made to the relevant Shareholder, to the Registrar for onward transmission to the relevant Shareholder.

4.5 The Escrow Agent shall, promptly after receipt or onward transfer of the same pursuant to any of sub-clauses 4.2 to 4.4 above, provide to Telewest and Telewest Jersey (as appropriate) an acknowledgement of the receipt or onward transfer of each part of the New Shares and/or dividends paid, transferred, issued or allotted to it.

4.6 The entity with which any Escrow Account is held may only be changed by the Escrow Agent if the Escrow Agent obtains the consent of Telewest and/or Telewest Jersey, such consent not to be unreasonably withheld. Telewest or Telewest Jersey may also direct the Escrow Agent to change the entity with which any Escrow Account is held, subject to approval by the Escrow Agent, such approval not to be unreasonably withheld.

4.7 The Escrow Agent shall not have, and shall procure that none of its respective delegates shall have, any right of indemnity, set off, combination of accounts or any other right whatsoever to apply the assets comprised in the Escrow Accounts or any of them in discharge or satisfaction of any cost, right of reimbursement, expense, loss or other liability of the Escrow Agent and all such rights are hereby released by the Escrow Agent.

5. UNDERTAKINGS

5.1 The Escrow Agent agrees that it shall have no discretion in the making or withholding of any New Shares or cash (as applicable) or credit or transfer required by a Distribution Notice or a Shareholder Distribution Notice, or portion thereof. Subject to sub-clause 11.19 below, the Escrow Agent undertakes at all times to comply with the instructions contained in the Distribution Notices and Shareholder Distribution Notices and any other lawful directions given to it by, or on behalf of, Telewest or Telewest Jersey.

5.2

The Escrow Agent undertakes that any distribution or transfer shall only be made following receipt by the Escrow Agent of a Distribution Notice or Shareholder Distribution Notice (as applicable) or


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any other lawful directions given to it by, or on behalf of, Telewest or Telewest Jersey and then only in accordance with the terms of that Distribution Notice, Shareholder Distribution Notice or other lawful direction.

5.3 Subject to sub-clauses 11.18 and 11.19, the Escrow Agent undertakes that it will take any and all action required by Telewest and Telewest Jersey in order to give effect to the provisions of the relevant Scheme provided that its proper costs and expenses of doing so (including legal fees) are paid by Telewest or Telewest Jersey, as appropriate. 5.4 Subject as provided in sub-clauses 5.3, 11.18 and 11.19, the Escrow Agent undertakes that, save with the prior written consent of Telewest or Telewest Jersey, it will not take any action affecting the Escrow Accounts or any part of them except where necessary to give effect to the Schemes or the terms of any Distribution Notice or Shareholder Distribution Notice. 5.5 The Escrow Agent undertakes in favour of Telewest and Telewest Jersey that it will act honestly and in good faith and will exercise the diligence expected of a reasonably prudent escrow agent in the fulfilment and/or exercise of its duties and obligations under this Agreement.

6. DISTRIBUTIONS TO SHAREHOLDERS

6.1 Telewest will procure that the Registrar will notify the Escrow Agent, as soon as reasonably practicable, but in any event before 11:00 a.m. (London time) on the Effective Date, of the following:

(a) the number of New Shares that the ADR Depositary will receive under the Telewest Scheme (excluding, for the avoidance of doubt, any fractional entitlements);

(b) subject to having been provided by Telewest, the Escrow Agent or the Shareholders themselves in advance with the relevant names, the respective numbers of New Shares that certain Shareholders who have elected to receive New Shares through DTC (the DTC Shareholders ) will receive under the Telewest Scheme (excluding, for the avoidance of doubt, any fractional entitlements); (c) the aggregate number of New Shares that Shareholders who will receive their New Shares through CREST will receive under the Telewest Scheme (excluding, for the avoidance of doubt, any fractional entitlements);

(d) the aggregate number of New Shares that Shareholders in jurisdictions outside the US and UK are entitled to receive under the Telewest Scheme (including an analysis per jurisdiction and per individual Shareholder) (excluding, for the avoidance of doubt, any fractional entitlements); and

(e) the number of New Shares that represent the nominal value of the aggregate fractional entitlements of Shareholders under the Telewest Scheme.

Such notice shall be given by the Registrar on behalf of Telewest and shall constitute a Shareholder Distribution Notice instructing the Escrow Agent to comply with its obligations under this Agreement as set out in sub-clauses 6.2 to 6.6.

6.2 As soon as reasonably practicable after receipt of the notification under sub-clause 6.1(a), the Escrow Agent will notify the ADR Depositary of the number of New Shares it will receive under the Telewest Scheme (excluding, for the avoidance of doubt, any fractional entitlements).

6.3 The Escrow Agent undertakes on the Business Day following the Bar Date, subject to clause 6.5, to:

(a) transfer the number of New Shares notified to the Escrow Agent pursuant to sub-clause 6.1(a) to the DTC account of the ADR Depositary; (b) transfer the number of New Shares notified to the Escrow Agent pursuant to sub-clause 6.1(b) above to the respective DTC accounts of those Shareholders who have elected to receive their New Shares through DTC; and

(c) transfer the number of New Shares notified to the Escrow Agent pursuant to sub-clause 6.1(c) above to the DTC account of CREST International Nominees Limited.


7 6.4 The Escrow Agent will, as soon as reasonably practicable after the Business Day following the Bar Date, sell, or procure the sale of, the number of New Shares notified to it pursuant to sub-clause 6.1(e) above on the Open Market and, subject to clauses 6.6 and 6.7, pay the Net Proceeds of Sale of such New Shares to the Registrar for onward transmission to the relevant Shareholders in accordance with their respective fractional entitlements.

6.5 The Escrow Agent will not distribute New Shares, or procure the distribution of New Shares, to Shareholders where such distributions of New Shares to Shareholders in jurisdictions outside the US and the UK would, or might in its opinion (subject to the prior consent from Telewest), be unduly onerous or where Telewest directs the Escrow Agent that such distributions would, or might be, prohibited by any relevant law. If directed by Telewest, the Escrow Agent shall sell, or procure the sale of, such New Shares on the Open Market and, subject to clause 6.6 and 6.7, pay the Net Proceeds of Sale to the Registrar for onward transmission to the Shareholders who would otherwise have been entitled to receive such New Shares.

6.6 The Escrow Agent will convert the Net Proceeds of Sale for the Shareholders, other than the ADR Depositary, into the sterling equivalent. 6.7 The price, terms, timing and manner of any sale under this clause 6, and any currency exchange effected by the Escrow Agent in connection with or related to the sale or the proceeds of the sale, shall be at the Escrow Agent's sole discretion and the Escrow Agent shall have no Liability for any loss or alleged loss arising from such sale or a failure to procure any purchaser for such New Shares (save to the extent such loss or al ...